If you are a home buyer in the last couple of years and paying the EMI amount, you would have noticed that the interest rates gone up several times and the EMI burden would have increased. At the time of buying the house, the interest rates are cheap and bought the house with low EMI, but now the situation is different. If you are a non-financial background and don’t have knowledge on basics of finance, then you are puzzling to find the reason for the interest rates increase.

The intention of this article is to explain the readers in very simple words, the reason for the frequent interest rate hikes and what are the changes in the market impact the interest rates. After reading this article, you would have some basic idea on the interest rates.

What is Repo and Reverse-Repo Interest Rates?

Repo (Repurchase) rate is the rate at which the RBI lends shot-term money to the banks. When the repo rate increases borrowing from RBI becomes more expensive.  Therefore, we can say that in case,  RBI wants to make it more expensive for the banks to borrow money, it increases the repo rate; similarly, if it wants to make it cheaper for banks to borrow money, it reduces the repo rate.

Reverse Repo rate is the rate at which banks park their short-term excess liquidity with the RBI. The RBI uses this tool when it feels there is too much money floating in the banking system.  An increase in the reverse repo rate  means that the RBI will borrow money from the banks at a higher rate  of interest. As a result, banks would prefer to keep their money with the RBI.

How to Control Inflation?

High inflation (What is Inflation?) is the rising concern on Indian Economy. If the inflation is not controlled by the govt. it would derailed the growth of Indian economy and result in recession. In order to contain the inflation, govt. and RBI must take number of precaution measures that would reduce the inflation and save the economy from the high risk.

If you look into the main reason why inflation is high, the products in the market is on high demand because the liquidity (cash available in the market) is more. Customers can easily get the loans and purchase the goods. As we have seen in the above sections, RBI would increase the key rates to reduce the liquidity in the market. When money available in the market is reduced and cost of borrowing the money is expensive, demand will be reduced and seller forced to reduce the prices. This could reduce the inflation.

But, it will not always the correct option to handle the inflation, unfortunately RBI decided to use the rate hikes weapon several times in a year. There are no action from the govt. to prevent the inflation, rather they increase the fuel prices. It is not going to come down unless god forgives this corrupted politicians and gives good monsoon this year;).

Banks to Increase the Interest Rates

I have explained the repo rates and why RBI needs to increase the repo rates. What I have explained is the basic or most common reason why RBI raises the key rates which is resulted in increase in the personal loan interest rates. There could be several other reason to change the key rates by RBI. So, now you got some idea on the rates related to RBI and need for increase in key rates.

Once RBI has increased the rates, now banks left with the less money to lend. If the rates are the same, it could affect their margin(profitability) because the total amount they can lend to the public is reduced. The only way to bring more money into the system is increasing the deposit rates. It will stimulate the people to invest their money to deposits like fixed deposit.

Now, banks got the money from public as the fixed deposit with more interest rates, when they are lending it outside, the interest rates should be higher to get the profit. This is the very basic understand why the interest rates are increased.

Summary

I hope this article would have given the basic understanding on how the interest rates hiked by the banks. It is important to understand if you are borrower from the banks, this knowledge will help you to anticipate any future hikes and try to repay the existing loans sooner. If you have any thoughts, please post it in the comments section.

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Introduction

Personal loans are offered for not any specific purposes like buying house, buying gold or education. If you have any emergency need to get the money for meeting your medical expenses or any kind of expense. It is easy to get the personal loans if you are getting the monthly salary. But, it is expensive to get personal loans. Many people not aware that personal loans are costly and you will have to pay more interest amount compare to other type of loans. This blog post presents few tips for you to manage your personal loans and close it sooner. If you have any great ideas please post it in the comments section.

1. Jewellery Loans

Read: Idle Jewellry can bring you cheaper loan

You can get the gold loans for the less interest rates in some of the banks. For example, if you get the gold loans from the corporate banks because you or your father is the regular customer, they will give you the loans against your Jewellery. The interest rates would be lower then the personal loans. In that case, get that loan and repay your outstanding personal loans.

2. Take Loans for Short Tenure

It is very common assumption among the loan buyers that taking the loan for long period would reduce their EMI outgo.  But, they are not aware or giving less important for how much interest amount they are paying for each EMI installment.  You can look into the EMI schedule from your bank statements, the proportion of the Principal and Interest for each month. In the initial period, the interest amount will be higher than the Principal part.  When you have loan for the longer period, the total interest paid will be more.

If you don’t have any other expenses are can pay more EMI amount, please decide the tenure of the loan based on how much you can pay as EMI per month.

3. Avoid taking the Personal Loans

Before taking the personal loans, think twice and discuss with your family whether you can manage without applying for the personal loans. If you have fixed deposit or shares, you can close it and pay your loans. Because, the returns you got from these investments may be less than the loan’s interest rates. If you have long term investment for your child or family, don’t close it. It all depends on your personal financial strength and decision.

Summary

I hope this article would help readers to understand the seriousness on applying for the personal loans. The clear message in this story is to avoid personal loans unless it is very urgent or you are financially well and can afford to repay the personal loans in the short period. If you are in the same boat and need advice, please post it in the comments section.

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Introduction

In this article I will be writing about the one of the fastest way to get the loans for any urgent need. These loans are not available in India, but most commonly used in the western countries like USA, UK, etc. This article presents the nature of payday loans and how to apply for it. Subscribe to our future articles here.

Why Payday Loans or Cash Advance?

When you need money in a hurry, you need money in a hurry. That’s why we remove all the obstacles and get your pay day loan as fast as possible. If you’re in employment, you get your salary paid into your current account, and you have a chequebook and a debit card, a payday loan should be a breeze

Requirements for the Payday Loans

• You need to have a job in which your salary is paid into your current account.
• You need a chequebook and a debit card for your current account.
• You need to be at least 18 years old.

Summary

Payday advance loans are very helpful when in the need of urgent money. Note that it is not suitable for taking the long term loans. The interest rates will be higher than the normal loans. Thanks you for reading this article.

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In this article I will be writing about the few tips for the easy debt relief and provide you one website address where you can find more explanations related to the debt relief. In the current scenario, many people would need this service because we are always have the debts on our credit cards, banks, etc. Hope this articles will be useful. Please subscribe to our future articles here.

What is Debt Relief Solutions?

If we are in the credit card debt for longer period, it will increase the stress level and leads to the unhappy end. It needs proper understanding on how to solve our debts and settle all the dues on time. To handle this situation, we need proper knowledge on financial planning and money management. There is many companies providing these services for the reasonable prices. Credit can be abused easily if it’s not managed right. In this article I will explain you some of the ways how one can reduce the debt.

Debt Settlement

It is one of the approach to solve the credit card debts. If you are not aware that, credit card companies will lower the amount you have to pay when they find that you are in trouble to repay the entire amount. You can negotiate to the credit card company and reduce the amount. This technique will help only when you are in trouble to repay the amount.

Debt Consolidation

It is another good approach. If you have debts in different banks or credit cards, you can consolidate by paying the high interest rates loans first using the low interest rates loans. This way you can reduce the debt burden.

Credit Counselling

This approach is to reduce the interest rates for the consumers who are paying the high interest rates.

Asset liquidation

If you have any assets like Cars, Second Home, Jewell, etc. to sell and make the money to resolve the debt.  These are called liquid assets and will be the first ones taken in a bankruptcy.

Remember that there is a difference between all of these methods, and you should think carefully before choosing; one option may benefit you more than another. For example, depending on your situation, you might find that debt settlement works for you much more than credit counseling. Study your options carefully; this decision should not be taken lightly.

Summary

You have to choose the debt relief companies based on their experience on the filed and case study of their work already done. If If you are choosing a good company, then it will be easy for you to resolve the debts easily. Thank you for reading this article. If you have any doubts please post it in the comments section.

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Introduction

In this article I will be writing about the another type of loans which can be availed using the gold. Many people not aware of this and applying for the personal loans with high interest rates. In this article I will be explaining few important points related to getting the loans using your Gold. If you have any doubts please post it in the comments section. Please subscribe to our articles here.

Avoid Personal Loans

There may be situation when you need money urgently. Most of the people will apply for the personal loans because nowadays getting personal loans are very easy and all the banks providing the personal loans with few documents. The drawback with personal loans are:

• The interest rates are very high
• You have to pay the EMI for years to complete the loan.
• Minimum duration will be 6 months for the personals loans.
• If you want to preclose the personal, you will end up paying the penalty.

For the above reason, following section gives you another alternative to get the money for your urgent needs.

Loan for Gold

If you have Jewellery, Gold bars or gold ETFs then it is easy for you to get the loan from any banks. Every bank and finance institutions giving the loans by accepting the gold. You may ask question why we should keep our gold to get the loans instead of personal loans. The advantags with loans against gold is:

• The interest rates charged for this kind of loan is reasonable compare to the personal loans.
• You will not pay the EMI.  Which means you only need to service the interest.
• You can repay the entire loan when it is possible. There is no charges for pre closing the loans.

Summary

I hope this article was useful and more informative. so the next time you think of taking a personal loan, think again. There may be a cheaper option available if you have some gold stashed away. Thank you for reading this article. Please post your feedback in the comments section. Thank you for reading this article!!

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Introduction

In this article I will be writing about the different types of loans available in India. I am not going to explain every type in detail, but I will give you brief idea about the loan and when the type of loans can be applied.

Home Loans

Home Loans are given for the property like houses or apartments bought in your name. This type of loans are very common in the salaried employees to buy the house.  The eligible limit for the home loans will be based on the financial strength of the app0licant. Nowadays all the banks are tightening the loan restriction because of economy crisis.

One advantage with the home loans is tax savings. You can read more about the tax benefits on home loans. Also you can read the list of articles on home loans.

Auto Loans

Personal car loans are loans which you obtain in your own name for the purpose of purchasing a car. They cannot be used for other expenses, or for other purchases. They must be spent on a car, which the lender then uses as collateral to secure the loan. They are repaid to the lender monthly, or at some other period agreed upon by both parties. Personal car loans are the responsibility of the individual who signed for the loan, and not their company or business.

Personal Loans

Personal loans are tricky – you never can quite make out whether it is absolutely necessary or if it is just a luxury you will be paying back for the next few years. That new computer, or that credit card outstanding, or the house refurnishing…the need for personal loans is never ending. This site helps to get online cash advance through online application.

Summary

In this article I have written about the different types  loans and the purpose of the loans. It is only the basic details about the loans. In the future articles I will be writing about the specific loan types. Happy Reading!!!

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What are the minimum and maximum loan amounts?
You can avail of loans ranging from Rs 1,00,000/- to Rs 15,00,000/- depending on your eligibility, income and repayment capacity.

What are the loan tenure options?
The loan can be repaid over a period of 12 to 60 months.
Are there any additional charges?
A processing fee of 2 % or 3 % depending on the location of the loan amount is payable upfront. This fee will be deducted from the disbursal amount payable to you.
How much time will it take for my loan to be approved?
Loans are approved within 72 hours of submission of complete documentation.
Do I have to provide any security, collateral or guarantors?
No security, collateral or guarantors are required for obtaining a Personal Loan.
How do I repay the loan?
You can repay the loan in Equated Monthly Instalments (EMI’s) through post-dated cheques favouring ICICI Bank Limited, or if you have an ICICI Bank account you can mandate us to directly debit the same.
Can I prepay my loan?
Yes, you can prepay the entire loan outstanding after paying 6 installments of availing the same. Prepayment charges as applicable would be levied on the outstanding loan amount. No part prepayment is allowed.
Do I need to open an account with ICICI Bank for availing and/or servicing the loan?
We will encourage you to start a banking relationship with us so that we will be able to offer a host of other value added services, which are complementary to the loan, however opening an account with us is not mandatory.

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This blog post put down few key facts on ICICI Bank personal loans.

1. Prepayment of the loan is possible after 180 days of availing the loan.
2. Foreclosure charges as applicable would be levied on the outstanding loan.
3. Foreclosure charges as applicable would be levied on the outstanding loan.
4. No other fees or commitment charges are levied.
5. Loan Processing Charges / Origination Charges – 2% or 3 % depending on the location of loan amount + Origination Charges of 1.5% of loan amount
6. Prepayment Charges – 5% on the principal outstanding
7. Charges for late payment – 2% per month
8. Interest rates for the personal loans in ICICI Bank – 14%

http://icicibank.com/Pfsuser/loans/personalloans/plhomepage.htm

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This blog just posts information for ForClosure the personal loans availed. This is common practice to close the loan before the period is over. For example if you got 2 lakhs as Personal Loan in the ICICI Bank, then EMI for the two years tenure would be Rs.9556. Assume the rate of interest is 14% p.a..

Now you have completed the one years EMI Payment and you want to pay the remaining amount and close the loan account. Note that ForClosure is possible only after 6 months incase of ICICI Bank. By doing the forclosure you can save some extra interest money for the remaining period.

ICICI Bank charges 5% if you want to close the loan account. This 5% will be charged on the remaining principal amount. In the future posts I will be writing about the Personal Loans in the other banks and merits and demerits of the Personal Loans. Happy reading till my next post….Please post your comments below.

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