Gold Loan Vs. Loan Against Property- Which Is Better

Loans are a financial instrument that saves you from financial crunch situations and fulfils your many needs. Getting a secured loan against gold is often the most sought-after method to escape financial troubles. This is because the loan against property and gold loan interest rate is much lower than unsecured loans. Loan against property or gold can also allow you to get sanctions for a larger amount.

However, a large number of people have a hard time deciding which to pledge- gold or property. To figure this out, you need to know what advantages one has over the other.

Gold Loan

Most Indian households own a fair share of gold jewellery. This can be used as collateral to secure a gold loan. The advantages of gold loans over property loan include-

• The evaluation process of gold jewellery is fast and done by an in-house evaluator.
• Processing time is quicker for gold loans. They are therefore more suitable for emergencies.
• Gold loan schemes are very flexible in terms of interest rate and tenure. You can choose to pay the gold loan interest rate during the tenure and pay the principal at the end of that period.
• You only need an identity proof and PAN card for getting a gold loan.
• You do not have to pay a pre-payment penalty in case you want to pay off your loan earlier than the stipulated time.
• In case you are unable to repay your loan, you only lose your jewellery.

The downsides of a gold loan are-

• It does not add to your credit rating.
• The gold loan interest rate fluctuates with the market price of gold.
• Lower loan-to-value ratio, which means you have to pledge gold jewellery that is worth much more than the cash you require.

Property Loan

Loan against property is sanctioned against a residential property or a commercial property that you own. Although you can continue to use the property, you cannot sell or transfer the ownership before you repay the loan. The advantages of pledging property over gold are-

• The interest rate for property loan is much lower than a gold loan.
• You can get loans of higher value.
• The tenure of loan against property is much longer.
• It adds to your credit score.
However, property loans have their own share of difficulties that include-
• Longer evaluation and processing period. It takes weeks before the evaluation of your property is complete and you can get the loan.
• You have to submit the property documents to the lender.
• In case there are multiple owners of a property, all the owners must sign as co-applicants.
• Getting a loan against property requires a large number of documents such as identity proof, address proof, property documents, PAN Card, and proof of income.
• Pre-payment penalty applies to property loans.
• If you are unable to repay the loan, the lender will seize your property.

Before you jump to pledge gold or property, evaluate how soon you need the funds and how soon you would be able to repay the amount. It is better to take a gold loan for smaller amounts that do not require much time to repay. It gives you a quick solution to your crisis with low risks. However, if you need a higher amount, loan against property is the best option for you.

3 Benefits of Taking Loan against Gold

A loan is a sum of money given out by the lender to the borrower in exchange for a definite repayment in the future along with additional interest rates as well as other financial charges. Before the money is lent, certain terms of agreement need to be met, to which both the parties have to agree. A gold loan, however, is a kind of loan given to the borrower in exchange for gold as a collateral. This gold can be in the form of jewellery, gold bars or even bank issued gold coins. The gold is kept as a security measure by the organization, a guarantee that the amount will be repaid in the near future.

Gold loans are processed for a short duration of time, usually from a month to a couple of years. If the borrower is in need of money urgently and is of the belief that he or she can pay it back quickly then a gold loan is a suitable option.

Benefits of taking a loan against gold
Here is a look at the key benefits of taking a gold loan-

1. Interest rates

The interest rates for a gold loan are markedly lower than that of other kinds of loans. The reason for this is because a gold loan is a low-risk loan option for the lenders since they keep the gold of the customer as a form of security deposit. The interest rates are different depending on how much gold is being kept as the collateral. If the amount taken as the loan is less than half as compared to the actual value of the loan, then the interest rates will be evidently lower. But if the amount is equivalent to the value of the gold then the interest rates will be really high.

2. Quick processing

A gold loan, as opposed to various other kinds of loans, does not require the necessity of
going through the client’s credit score history because the gold serves as the security deposit. Therefore, the processing time for a gold loan is very less.

3. Proof of income is not necessary

 Submitting the salary certificate becomes an optional affair in the case of a gold loan. According to a gold loan calculator, you are eligible to apply for one irrespective of the fact whether you are currently unemployed or have a poor credit score record.

Gold is celebrated as a very important means of asset keeping in India. Not only is gold used for important family occasions such as marriage but it also displays the affluence of the family and is generally passed down from generations. Therefore, going for a gold loan policy is a more viable option in India.

5 factors that affect car loan application

Buying a car is among the important milestones in a person’s life. A car loan is almost always necessary to buy a car. After demonetisation, the car loan interest rate has also reduced significantly. Although a large number of companies are offering loans at tempting interest rates, most companies check your credibility before approving a loan. A surprisingly large number of individuals fail here, as they are not sure how to go about the application process.

Here is a list of the major factors that affect the success of your car loan application.

Your Credit Score
Your credit score reflects how well you have dealt with your previous loans. It includes previous and current credit accounts and payment history that assures the bank that you will repay the loan they forward to you. Loan approval becomes easier with better credit scores and vice versa. You can also bargain your car loan interest rate if you have a high credit score.

Income Vs debt
If your income is greater than your debt, your ability to repay the car loan increases. Therefore, the lender has more confidence in you and your chances of getting approval increases.

Down payment
The money you pay at the time of car purchase is the down payment. If your down payment is large, the bank has to pay less and the chances of approval are greater. Also, you can save on your car loan interest rate.

Duration of Loan
Shorter duration of repayment of loans increases your equated monthly instalments. It is best to choose tenure so that your equated monthly instalments do not cross 40% of your monthly income. However, lower tenure enhances the chance of approval.

Age of the Car
In case you are unable to repay your loan, the lender will seize and sell your car. A newer car with better resale value earns the lender better profits compared to an older car with low resale value. Thus, if you are buying a new car, the chances are you will get low-interest rates on your car loan.

With the knowledge to make the most of your car loan application, all you need to do is look for the best car loan that suits your needs at the lowest rates. With your application form, loan-processing fee and down payment ready, all you need to do is drive home in your brand new vehicle!

How Your Credit Score Affects Your Car Loan

A car loan is a type of loan option that is given to a consumer allowing them to purchase a four-wheeler vehicle of their choice. It is a specific sum of money that either a business or an individual borrows. The party lending out the money is referred to as a lender and the individual or party receiving the sum is known as the borrower. When borrowing the money, the borrower agrees to pay back the sum by means of monthly instalments within a certain date.

While applying for car finance the borrower has to follow certain procedural guidelines both at the time of borrowing the money and returning it. These rules and regulations applied are more or less similar to those followed for other loan types. At the time of returning the amount, the borrower has to also pay the interest amount, additionally. This interest rate is decided based on the borrower’s credit score history.

Credit score history and loan amount

Good credit score-

The credit score history of the borrower is extremely important as it will directly determine the car type which the borrower can ultimately afford. The higher a person’s credit score, the greater is the chance that the borrower will pay back the amount on the specified time. Also, a party having a good credit score will benefit from facing low-interest rates as well as the chances of 0% financing.

Poor credit score-

Unfortunately, for those having a low credit score will not only be required to pay a higher interest amount but will also be required to put a higher amount down on the desired car. The party with a previous record of a low credit score comes off as a risky candidate to the lender. Therefore, the party lending the money will inadvertently wish to recover the lent money faster and in larger amounts.

In other cases, if you are opting for car finance and your credit score is really low, your application also stands the high risk of getting rejected. Candidates with poor credit score records will generally be allowed to borrow a car loan of a smaller value.

Whether it is for a second-hand model or a completely new one, if you wish to purchase the car of your dreams on a loan with a low interest rate, it is essential that you hold a track record of a good credit score.

All you need to know about forex cards

Travelling has become part and parcel of everyone's life nowadays. Be it for business or leisure purpose; travelling is no more an arduous journey fraught with peril. While the travel category is keeping pace with technology and convenience, the way you pay your expenses overseas has also changed over time. Enter forex cards. 

What are forex cards?

Also known as prepaid cards, is slowly becoming a fad amongst the frequent travellers. A forex card is just like a debit/credit card that you can swipe and use at any merchant as well as ATMs abroad. These cards are loaded with multiple currencies that differ from bank to bank. It is a successor to travel currency cards. You can apply for a forex card online as well.

There are two different kinds of forex cards:

1) Single-currency forex card: You can only preload one particular currency in the card. You can reload the card as and when required.

2) Multi-currency forex card: You can preload the card with multiple currencies. There are different cards available under this category that banks, other institutions and travel agencies offer to the customers

Some of the forex card benefits are:

1) They are cheaper than exchanging currency. Even banks enjoy the perk of supplying a forex card as the customers receive better conversion rate

2) In this case, you need not share a great rapport with the bank. You can choose from an array of forex cards  as per your suitability

3) They are safer than carrying hard-cash. These cards come with  inbuilt pin and chip. Forex cards are also not connected with your bank account. So, it is a secured means of finance as well

4) One of the important forex card benefits is that if the card gets stolen, you can use the extra card given to you  by the bank via the kit. However, you first have to file a report of theft post which you can use the spare card  

5) Forex cards are universally accepted and recognised

6) You can block the card as you return from your trip. You can then unlock it when you travel to another country. This is done free of cost

7) You have dedicated customer care assistance in case of any query

When applying for forex card online or offline, you have to have the following documents handy:

1) Application form
2) Passport original as well as a copy
3) Visa copy (if you are travelling to many countries)
4) Copy of the air ticket
5) PAN card

A forex card is a boon for travellers who are looking for a fitting  and secure way of making payments abroad.

What is health insurance? 5 advantages of taking a health insurance policy

Today, we are constantly running to earn money, become a wealthy person and lead a fulfilled life. But in this rat-race, we ignore our health. This negligence takes a toll on our body and the next day we find ourselves in the hospital. With hospitalisation comes the tension of expenses. Thus, to avoid last-minute loan and borrowing money from near & dear ones, people are opting for a health insurance plan.

What is health insurance?

It is a policy that protects you from unforeseen medical costs that you or your family member may require. All insurance compani  es offer health insurance in Indi     a. They reimburse the medical expenses incurred by you when you fall ill. You also get repayment of the amount in case of surgeries, common diseases,   or anything that take you to the hospital.     
         
There are different types of health insurance plan available catering to various segments such as senior citizens, women,  minors, family, personal, and others. They are, however, dependent on factors such as age, amount, etc. The mandate for a health insurance scheme is usually 1 year. You can also buy a plan for 2 or 3 years, based on your requirement and budget.
 
What are the benefits of  health insurance in India?

1) Protection: The most significant advantage that you receive by taking up   health insurance in India is protection. Apart from safeguarding your body, it also pays your health debts and provides additional benefits like counselling, body check-ups, etc. These other coverages are  free of cost.     

2) Savings: Many times we have to use our savings and monthly salary to cover our hospitalisation costs. That becomes a burden on our home budget. If you seriously fall ill, the price may seem burdensome.   This is where a health insurance plan comes as a saviour. You will get complete treatment, without worry about the expenses.  

3) Monetary aid: At the time of emergencies, we generally look up to our family members and friends for some financial help.   But the insurance companies offer cashless treatment so that you or your family member get the attention on time. You do not have to wait until the cash accumulates to take care of the urgent situation.   

4) Top-up plans: These are like additional covers that you can use to settle the remaining hospital dues once your initial sum exhausts. To avail of the top-up schemes, you have to pay extra premiums. It is better to get them when you apply for your primary   health insurance plan.  

5) Critical illness: Some health insurance in India also provide coverage for dangerous diseases like cancer,     paralysis, kidney-disorder, diabetes and others. The insured is free from the stress of hefty costs. Again, these require you to pay extra premiums.
 
These are certain benefits that may guide you to opt for the right health insurance plan. Remember, do not compromise on your health.

8 unknown facts about NRO accounts

When you settle abroad, the question that arises is what you will do with the existing accounts? Usually, any savings account that you held in India would be ineffective as your foreign earnings cannot be stored in these accounts. So, how will you protect the  hard-earned cash that you have got in India and where will you save your upcoming income? The only option that you have is to opt for the non-resident Indian (NRI) accounts that the banks offer. 

These accounts are of two kinds:

1) Non-resident External (NRE) Account 
2) Non-Resident Ordinary (NRO) Account

What is an NRO account?

It is similar to a current or savings account. It is the best account to vouch for to save your incomes in India. You can either open an NRO savings account, NRO current account or an NRO recurring account. Some banks also offer debit cum ATM card for NRO accounts. The type of cash that you can keep in the NRO account are:

1) Rental costs
2) Investment interests
3) Pension
4) Dividends

The interest that you earn on an NRO account is  subject to tax. Unlike an NRE account, you cannot repatriate until a chartered account provides a certificate for the same. You can, however, open a joint account with an Indian or an NRI. You can open the account with an Indian resident only after submitting a letter of authority.

Some of the unknown facts and NRO account features are as follows:

1) The account follows only Indian currency policy.
The sole credit allowed in an NRO account are:  

- Rupees coming from a non-resident account
- Remittances in acceptable currency coming from outside India via regular banking   
- Valid dues of the account holder like rent, pension, interest, etc.

2) An NRI can withdraw cash from the NRO account. The amount should not exceed USD 1 million per annum. 
3) You cannot repatriate the balance in the NRO account without prior permission from Reserve Bank of India (RBI)
4) You can opt for the nomination policy under the NRO account
5) You or the third-party person are subject to loans by the banks against the fixed deposits. The terms and conditions may vary from bank to bank
6) Facilities such as net banking can be availed of for an NRO account
7) You have to maintain a minimum balance of INR 10,000 per annum in the account
8) You can get lower tax rate on this account by submitting the Tax Residency Certificate

You have to handle your finances well before leaving abroad for employment. It helps your family members to access the income during an emergency.