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Your Queries: If you stop paying EMI on a home loan, you may be sued by your bank

Can I stop making EMI payments on a home loan, if I don’t get the possession by the builder?

There are two enforceable agreements between the parties here. The builder and the buyer enter into a selling agreement. Another participant in the loan arrangement with the buyer is the home loan provider. If the builder has not yet granted the buyers ownership, they may go to court as a group to seek justice.

Your Queries: If you stop paying EMI on a home loan

If the EMI is stopped, the debt goes into default, and the borrower’s CIBIL rating decreases. The bank has mortgage rights to the proposed property, and if the bank does not get a valuation from there, there is the risk of further litigation with the bank.

I have a mortgage for a house with HDFC Ltd. Now I’m looking for a second loan. Can I payback the top-up loan since I anticipate to get money after a year?

Yes, you may go ahead and pay off in the loan account if you have extra cash.

Should I get a house loan that is tied to the repo rate or a loan from an HFC?

It is better to get a loan that is tied to the repo rate.

Your Queries: If you stop paying EMI on a home loan, you may be sued
What is the maximum loan repayment period for an education loan? Can I get a tax break for the whole term of the loan?

A typical student loan has a maximum repayment period of seven years. The tax benefit is the deduction of loan interest from the taxable income of the individual paying the EMIs. If the father pays the EMI, he is eligible for the tax break. Once the student begins working and paying the EMI, they may claim the tax advantage immediately.

My daughter attends college and makes money through tuition. Can she get a vehicle loan?

The borrower must demonstrate his or her capacity to repay the car loan by providing proof of income. Normally non-salaried people shoe their latest three years’ income tax returns for this purpose.

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Gold Loan: Check out banks & NBFCs offering lowest interest rates on Rs 5 lakh loan

During a liquidity crunch, a gold loan is a reasonable borrowing alternative as it is easy to acquire by offering your household gold as security. Furthermore, gold loans involve minimal documentation and allow quick disbursement. Thus, making it easier for you to deal with a financial emergency.

Gold loans : bank offering lowest interest rates

Due to a growth in platforms other than banks making loans against gold, gold loans have become increasingly popular. The majority of financial institutions are willing to provide gold loans because the collateral reduces the risk.

If you’re thinking about taking out a gold loan, be sure it’s from a reputable company or bank. Finally, the loan has the collateral of your gold, thus the safety of your asset is critical.

A gold loan is offered up to 75% of the market value of the pledged gold. If gold prices decrease, the amount of loan you are qualified for will also decline. Check the gold prices before taking out a gold loan. The lender may require you to commit additional gold if gold prices decline.

check out banks and nbfc offering lowest interest rates for gold loans

Gold loans are available from both public and commercial banks, as well as non-banking financing firms (NBFCs). You should choose the loan amount based on your needs and repayment capacity. If you have a financial emergency, a gold loan may be beneficial.

Avoid taking out a loan to pay for your wants or to cover your normal expenses. After all, a loan, no matter how simple to obtain, is still a loan that one must repay on time and in full. Remember if you don’t pay back your gold loan, lenders will liquidate your pledged item to recoup their losses.

Before finalizing your decision on a gold loan, examine the loan offered based on interest rates, processing costs, pre-closure expenses (if applicable), and repayment mode.

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Planning to buy a new car? Check out which bank is offering the lowest interest rate

For some, purchasing a new car is a dream, while for others, it is a need. Whatever the case may be, purchasing a car is a significant financial investment. Significant enough to potentially deplete your resources or necessitate the usage of a car loan.

check out which bank is offering lowest interest rate

An unsecured loan, such as a personal loan, has a higher interest rate than a car loan. Thus, it makes more sense to take a vehicle loan/ car loan for the purchase of your new car.

When looking for a car loan, make careful to compare the numerous options offered by different institutions. Some lenders may have exclusive relationships with dealers, allowing them to provide much faster processing and lower rates. Some lenders also provide pre-approved vehicle loans to a small group of customers, as well as favorable rates to existing home loan borrowers. As a result, in order to receive the greatest bargain, you must evaluate vehicle loan offers from various lenders.

planning for a car loan?

However, keep in mind that vehicle loan interest rates are determined after considering your credit score and income. The majority of banks have made credit ratings a factor in their lending rates. A credit score of 750 or above can help you receive a loan with lower interest rates. However, a low credit score may prevent you from getting a car loan or force you to accept a loan with a higher interest rate. According to BankBazaar, you should verify your credit records before applying for a car loan.

Aside from interest rates, you should also look into other fees like processing fees, payback fees, and so on; which vary according to the lender’s policy.

Daily News

Your Money: Looking for a professional loan? Here’s how to get it

Personal loans are loans that you can take out for your own personal purposes. Borrowers who take out this loan utilize the funds to purchase items, pay tuition fees, pay for medical expenses and prescriptions, and supplement their monthly budget.

As there are no collateral requirements, this form of loan is easier to apply for. You can easily obtain a loan if you are employed and your salary falls under the loan’s eligibility criteria. Your credit score, in addition to your salary, is a consideration.

how to get loans

A good credit score can make the process go much more smoothly. A strong credit score is accompanied by good credit history. Lenders examine your credit scores and history to determine whether you are a responsible borrower. They rely on your payment history because there is no collateral.

Personal loans

Personal loans are generally smaller in contrast to Mortgages. You can’t use this loan to buy a house, a car, or other similar assets because the loan aims to cater to personal requirements. Personal loans may not be the best option if you need to buy assets other than what you need for your personal expenses.
You could also be asking who is eligible for personal loans. Unlike any other sort of loan that has restrictions on a specific class or group of people. Personal loans are available to anybody who is of legal age to borrow, is employed, and has sufficient documentation to show the lender. You can receive personal loans regardless of your financial situation as long as you meet all of the standards.

Professional loans

Unlike personal loans, professional loans are exclusively available to working professionals like accountants and doctors. You can’t get a professional loan if you work in another industry and don’t have a white-collar job designation.

This form of loan is customizable to the specific demands of working professionals. Professional loans, according to their definition, are designed to assist these individuals in funding or expanding their enterprises in order to practice their profession. For example, if you are a doctor who wants to start a clinic in India, you can apply for a professional loan to help you realize your dreams.

professional loan

This loan is ideal for working professionals because it is customizable according to their requirements. Your income and financial ability to pay are also considered by the lender. You can get large loans with low-interest rates for your needs, and the application can approve in as little as a day, depending on the lender.

How to get the loan?

The next step is to choose a lender to take out a loan from. But where do you look for one and how do you pick one? Previously, you had to go to the bank and go through a series of procedures before submitting your application. Everything can now be done online, thanks to technological advancements. Personal and professional loans are available from online lenders. These loans are available from a variety of online lenders. In reality, you can now apply online by simply uploading your paperwork to the lender’s official website.

Just make sure you evaluate numerous criteria when picking a lender, including the interest rate, possible fines, and penalties if you fail or pay late, and processing fees.

Daily News

What is a top-up loan and when should you go for it?

A top-up loan, along with a personal loan, a credit card, and other loan options, is an excellent way to obtain emergency cash. However, experts advise that at first, you must understand what a top-up loan is. And, when should you go for it?

Banks, housing finance firms, and other financial institutions offer top-up loans; which allow borrowers to borrow a specific amount of money in addition to their home loans. As a result, they are financing choices for borrowers who already have a loan with the lender, such as a home loan. Borrowers are normally only eligible for a top-up loan in this situation if they have been paying their EMIs on time and without default for at least a year.

“A borrower’s track record of repayments is one of the primary determining elements for the eligibility for top-up loans,” says Gaurav Jalan, CEO, and Founder of mpocket. This type of loan normally comes with the same terms and conditions as the original.”

In the event of an emergency, most people will either take out a personal loan. Or they will liquidate assets such as gold and property to get money. Experts believe that in some cases, a top-up loan on an existing house loan is a preferable option. Since top-up loans are readily available and come with a low interest rate.

Why top-up loan is right for you?

The most significant advantage of a top-up loan is that the borrower only has to complete minimal documents. Simply put, their existing loan EMIs will increase in proportion to the increased borrowing. It eliminates the need for the borrower to apply for a new loan; because it is approved based on the borrower’s existing loan with the lender. This streamlines the procedure and speeds up disbursement. As a result, this loan is a considerable choice for immediate funding.

Top Up Loan

“This makes it a perfect option in case of an urgent need for money,” Jalan explains. These loans are available for similar use as the original loan, but with fewer restrictions”. A home loan, for example, can only be used for that specific purpose. However, because a top-up loan is tied to an existing home loan, the borrower is not obligated to use the money for refurbishment or house repair. So this kind of loan is a good choice to borrow funds for house repairs or furnishing; as well as larger needs like business expansion, kid education, medical emergencies, and weddings. In summary, top-up loans have no restriction for their use.

“These loans are a perfect alternative in case of unanticipated occurrences or whenever one requires a personal loan, a loan against their property, or even gold,” Jalan continues. It’s a more convenient and hassle-free option in such situations.

Daily News

Reforms help banks recover Rs 5.5 lakh crore of bad debt: Govt

Reforms help banks recover Rs 5.5 lakh crore of bad debt, according to the central government. The government took many steps in the pursuit of recovering the bad debt in the country. These reforms hugely contributed to the active recovery of the money stuck in these bad loans.

money bad debt

The steps taken by the government such as enacting the Insolvency & Bankruptcy Code (IBC) helped in the recovery of around Rs 5.5 lakh crore of bad debt. Out of this, an approximate value of Rs 1 lakh crores was recovered from accounts that were technically written off.

Considering that the build-up of non-performing assets (NPAs) is lower than anticipated. The government is also positive in its beliefs that the state-run lenders are well poised to meet credit requirements. As per the state government sources, a provision coverage ratio of 83.7 percent is protecting the public sector banks against any potential hit.

How pandemic is affecting the recovery?

A senior finance ministry official mentioned that despite the ongoing pandemic, the turnaround for public sector banks has been remarkable. According to the official, the recent reforms and the proposed asset reconstruction company will further clean up their balance sheets. Moreover, it will make fresh capital available from the sale of bad assets, which will again push credit growth.

The government believes that the Rs 8 lakh crore of write-offs in the past seven years are technical in nature. These write-offs will bring adequate transparency to the bank balance sheets.

bad debt recovery

The official said that the banks put forth every attempt to recover even after writing off a loan. A sum of Rs 99,996 crore is recovered from such loan accounts. Which includes the IBC process in cases of Bhushan Steel, Bhushan Power & Steel, and Essar Steel. Banks also recovered their money from other write-offs as well such as Kingfisher.

Since 2018, the government has reportedly recovered Rs 3.1 lakh crore. However, the process is still ongoing and it will expectedly recover from more such loans. In the process, Banks used multiple sources such as internal accruals, fundraising from the market, and capital infusion by the government, in order to comply with the regulatory requirement.

For more such updates, keep watching this space!

Daily News

Collection Efficiency of Bank Loans Improves in June

An observation tells that the collection efficiency of bank loans improves in June. The banks started witnessing an improvement in loan collection efficiency in June. This observation came after the relaxation of multiple lockdowns in various states as the second Covid wave recedes.

For Equitas Small Finance Bank, the gross advances grew 15 percent YoY in the June quarter ending to Rs 17,839 crore. Earlier, it was Rs 15,573 crore in the corresponding quarter, last fiscal year. Sequentially, the bank’s gross advances have remained flat compared to Rs 17,925 crore in Q4FY21.

equitas small finance bank

Equitas Small Finance Bank (ESFB) on Wednesday said its collection efficiency had improved to 83.49 percent in June, up from 77.8 percent in May. However, there is a decline in efficiency from the April figure of 105.16 percent. The billing efficiency of the bank has also inched up to 69.52% in June from 66.97% in the previous month. These trends are available as per the provisional figures filed by the ESFB with the stock exchanges. In April, the bank had clocked a billing efficiency of 84.68%.

A few reasons for the observed collection

Its MD & CEO P N Vasudevan, “The bank’s borrowers are largely in the informal segments, dealing in daily use products and services. There is a temporary disruption in the supply chain for these products and services due to the imposition of Covid-19 restrictions. However, during the month of June 2021, states in the west and north experienced improved collection efficiencies as lockdowns eased while southern states opened up towards the end of the month. We anticipate a sharp improvement in collections in the coming months as Covid wave two recedes.”

Indian Overseas Bank

For Indian Overseas Bank, an improvement in the loan collection efficiency rate for small loans, vehicle, and housing loans is observed. The loan collection efficiency is seen at 85% between June and July from 70%-75% in May. The state-owned bank expects the recovery to be better in the September quarter.

Motilal Oswal has come out with its first-quarter (April-June 21) earnings estimates for the bank and insurance sector. The brokerage house expects Kotak Mahindra Bank to report a net profit of Rs. 1,563.4 crore up 25.6% year-on-year (down 7.1% quarter-on-quarter).

In a research note from Kotak on banks’ asset quality, the recovery environment showed improvement in 1QFY22. Although, even after the improvements it is still not fully normal. More discussion on the recovery environment will come as a trend for 2QFY22 given the impact of the second Covid wave. Besides small loans, the report expects banks to provide a positive outlook on corporate recovery. Especially, due to a few large resolutions that have been completed or will be completed soon.

For more such updates, keep watching this space!

Business Daily News

PM Modi Calls the Inclusion of Retail, Wholesale Traders as MSMEs ‘landmark’ Step, Says Committed to Empowering Traders.

Prime Minister Narendra Modi termed revised guidelines for MSMEs as a landmark step. He said that this move would help the traders boost business. It would also give them various benefits. Traders were waiting for this decision for since long.

Union Minister of MSMEs and Road Transport and Highways, Nitin Gadkari on Friday announced revised guidelines for MSMEs with the inclusion of retail and wholesale trade as MSMEs. Official sources explain that the move will have an immediate impact on smaller retailers and wholesalers with businesses up to Rs. 2.5 crores. He tweeted that retailers and wholesalers will come under the definition of MSMEs.

Earlier traders and wholesalers were facing lots of problems when they were not considered MSMEs.While applying for the loan they were not considered in the definition of MSMEs and hence never get any financial benefit out of it. Now every business person can get the benefits for the same. This is really an appreciable step for all traders and businessmen.

What is Udyam Registration Portal?

udyam portal

Udyam Registration Portal helps the business person to get the Government tenders. Due to Udyam, the loans get cheaper. The interest rate on these loans is up to 1.5% lower than the interest rate on regular loans. For the facilities, Higher preference is always given to businesses that are registered under Udyam for Government licence and certification.

All the traders and wholesalers will now be able to register themselves on the Udyam portal under newly revised guidelines.

How much time does it take?

Udyam registration takes around four to five working days for the issuance of the certificate. Usually, you get an email alert with the registration number and important details regarding the certification.

Is GST mandatory for Udyam MSME registration?

No, the GSTIN number is not mandatory for registration. The Ministry of Micro, Small, and Medium Enterprises notified that there is no need for GSTIN for MSME Udyam registration.

With this Traders will be availing of immediate-term finance as part of various schemes announced under the “Atma-nirbhar Bharat” program. this landmark decision will have a structural impact on the sector. It will be further formalized by giving better finance options for businesses that went to get structured. In addition to it, it will give retail MSMEs the support they need to survive, revive and thrive.

Interestingly, Retail and trade associations have welcomed the move. They say it will enable traders to get access to needed capital having been impacted greatly due to the pandemic.

For more such updates, keep watching this space!