A summary on two-wheeler loans

In the current age, having a vehicle of your own, whether it is a four-wheeler or a two-wheeler has become a necessity in order to make daily life easier. Having a vehicle of your own not only cuts down on transport costs but also saves time that you spend on waiting for your bus to come. Although affording a car is still a far-off dream for many people in India, purchasing a two-wheeler seems like a more achievable goal. Moreover, two-wheelers ensure lesser waiting time during long traffic jams. When it comes to the question of purchasing a two-wheeler, opting for a loan option is a viable and easy option.

The Loan Types

Before you apply for bike loan, here is what you should know about. There are mainly two kinds of two-wheeler loan option in India. These include-

1.    Secured Bike Loans- In a secured bike loan, the borrower mainly has to keep an important asset as a security deposit such as their home or land. This loan option offers the possibility of a lower two-wheeler interest rate. The risk rate is relatively higher due to the possibility of the borrower losing out of their asset.

2.     Unsecured Bike Loans- In an unsecured loan application, the two-wheeler interest rate is much higher. Therefore, the down payment for bike loan is higher because you are not declaring an asset as collateral.

The Loan Application

As you begin your loan application, download the two-wheeler loan app which offers easy processing of your application. Applying for a loan online on a website or through your two-wheeler loan app is simple and quick. Which bank you want to take the amount from will be determined after you have researched the market well based on criteria such as the interest rate, charges, EMI and fees. After you are done comparing and found the loan of your choice you can begin gathering documents and details.

However, if you are an old school person and believe that physically dropping by the bank is the best way to get your needs sorted then the process is slightly different. Once at the bank, you will need to ask for a representative who will guide you in the application process throughout. But in order for you to get a designated representative, you may need to wait long hours in the queue. In order for your loan amount to be disbursed, you will need to meet all your formalities as well as meet the minimum eligibility requirements.

There might be various other rules that a client may need to follow in order to apply for bike loan amount. These features, as well as rules, will invariably differ from bank to bank.

All you need to know about short-term education loan

An education loan usually takes care of the finances for your higher studies. It enables you to study without worries of payment of steep fees. With the growing cost of education, especially professional courses, loans for financing education are extremely common. Banks usually keep the education loan interest rate low and affordable for students. You can pay it back after your studies are complete, over a specific tenure.

If you are contemplating higher education or restarting your education, here is all you need to know about a short-term education loan.

Factors Affecting Education Loan Approval
The lenders the following factors before sanctioning an education loan to students-

Your ability to repay the loan- The credit history of the co-borrower must be clean if you want to be able to borrow the required amount of money.

Academic history- Students with a consistent academic record and higher marks tend to have a more promising future with better-paying jobs.

Hence, such students will get education loans easily.

Course- Your college/university and the academic course you want to pursue must have AICTE (All India Council for Technical Education), UGC (University Grants Commission), or government approval. You must also be able to provide a letter of acceptance to the college/university.

Education Loan Interest Rate and Tenure

Short-term loans are generally paid over a time of 2 years to 5 years. The value usually ranges between Rs. 25,000 to Rs. 2,50,000. The education loan interest rate is generally higher than that for long-term loans.

What Should Your Education Loan Cover?

An ideal education loan should cover-

• Tuition Fees
• Accommodation
• Exam Fees
• Library Fees
• Books and Equipment Fees

Documents You Need

• Letter of admission
• A detailed break-up of the costs pertaining to the course
• Completed application form for the loan
• Photographs
• KYC (Know Your Customer) Document
• Mark Sheets/Passing Certificates
• PAN Card of the parent/ guardian and student
• Any identity proof such as Driving Licence, Passport, Aadhar etc.
• Any residential address proof such as Driving Licence, Passport, Telephone bill, Electricity bill etc.
• Student/Co-borrower/ Guarantor's bank statement for the last half year
• IT assessment/IT return of parent/guardian/ other co-borrower of the last 2 years (if applicable)
• Statement of assets and liabilities of parent/guardian/other co-borrower
• Proof of income such as salary slips or Form 16 of parent/guardian/other co-borrower

Benefits of Education Loan

• Section 80E of Income Tax Act promises tax exemptions on the interest of education loans.
• Money is no longer a hurdle in your path to a good education.
• Repayment of education loan on time helps you build a good credit score for the future.

With a sound education loan, which removes your financial concerns, and hard work, there is no stopping you from getting into your dream career and achieving success.

Factors to consider while taking an education loan

All ambitious youngsters around the world these days aspire to have a good education from a reputed institution so that they can pursue a career and live a well-settled life. However, admission to a recognized educational institute these days has become extremely expensive. That is where the benefit of a student education loan comes in. It comes as a boon to deserving candidates and assures the education that they rightfully deserve.

Important factors to consider for an education loan-

1. Choice of course

Before you apply for a student education loan, it is important that you find the appropriate course for yourself. This is the first most important step that will later determine the kind of job opportunities you can apply for after completing your course. The choice of job will be further essential in determining how much money you earn which will be required to pay back the loan amount that you borrow. Also, when you decide upon the course, ensure to sit down and do a comparative study with other universities from different countries. Make a note of the costs that will be spent on food and lodging, cost of daily travel, etc. This breakdown of the expenses and then in the end summation of the total costs will help you to figure out exactly how much money you need as the loan amount.

2. Future prospects-

Before you get your education loan procedure in processing mode, spend some quality time researching about the career prospects of the course you are deciding to study. Also, decide upon some backup options in case you do not get the job of your desire. The backup option is extremely important because you need to repay your amount and in the initial years of your job, your salary may not be enough to sustain. In such a situation you need to know if your family members are willing to sponsor your partial student education loan amount.

3. The rate of interest-

When you come down finally to the question of the loan amount spend some time researching about the procedure such as how to get education loan of your choice, what are the criteria that need to be met, what documents you need to get ready and so on. With every loan application comes the question of interest rates. Although the interest rate on an education loan is significantly lower as compared to that of a personal loan, the situation has changed in the last few years with the rise in demand of education loans. Last and finally, every education loan procedure becomes a cakewalk affair if you already have a good credit history.

So, above are very crucial factors that you need to keep in mind before taking your education loan amount. For easier application and processing of your loan, you can also download the education loan app.

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.