How Payday Loans Can Help in Dire Financial Situations

Written By Ranjan Paul on Thursday, July 28, 2016 | 6:00 PM

No matter how adept you are at managing your personal finances, there’s always the possibility that something unexpected can upturn your entire financial strategy. That could entail a car accident, a medical expense, a natural disaster, or even the urgent needs of a close friend or family member. These kinds of unexpected incidences are difficult to plan for, simply because that’s exactly what they are-unexpected. Often times, your only solution to making it through these precarious situations may be to take out a payday loan. Read on to learn more about how payday loans can be of utmost importance in dire events.

How Do Payday Loans Work?
Payday loans are simply short-term loans that a lender may take out with an expected two week pay period. They’re designed to assist those who are living from paycheck to paycheck, so that they can avoid a financial catastrophe, should they not have the monetary means to cover urgent expenses. These loans usually range between $50 to $5,000, and come with a 15% fee. For example, if you were to take out a $100 loan, you can expect to pay back $115.

What's the Advantage of Payday Loans? The greatest advantage of payday loans is the fact that they are effortlessly immediate and convenient. Short-term payday loans can be completed very quickly-you may be able to walk out of a payday lender with money in your pocket within fifteen minutes. This quick turnaround can be essential, depending on the type of issue or incident.

While it’s always wise to proceed with caution when you find yourself in a dire financial situation, there are some cases when a payday loan can turn out to be a lifesaver. Like any loan-issuing department, payday loan companies can be disastrous for irresponsible lenders; but with a solid payback plan, it’s possible to make the most of your payday loan.

Payday Loan Saves the Day
Payday loans can be beneficial in situations where you would lose more than the price of the loan interest. For example, if you are running late to a job interview due to a malfunctioning car problem, it may be rational to take out a quick payday loan and take your car into the shop for repairs. Otherwise, not only will you be out of the potential job offer, your automobile will still be unreliable and broken down.

Payday loans can provide you with immediate financial security, and ensure that you can sustain your stability through any unexpected circumstance. For the cost of merely 15% of the amount of the loan, which is insignificant in the long-term, you can be guaranteed a safety net from any financial troubles and woes.

While there will be always be irresponsible ways to approach the payday loan system and dig yourself into a financial hole, there are also ways to use it responsibly, securing valuable and financial assistance in times of great need. Learn how to be responsible with your finances and use essential short-term services available to your greatest long-term advantage.

Frankie Little is a financial advisor, debt settlement agent, and a freelance financial writer from Seattle, Washington. With over 10 years of experience in the industry, he has worked with many reputable debt settlement companies, most recently Financial Solutions of America. Having helped many clients reach their financial goals and pay off their debts, he is well-versed on how to attain financial freedom. During his free time, he enjoys kayaking, fishing, and reading.
6:00 PM | 5 comments

Significance of Filing the Income Tax Return Form

Written By Ranjan Paul on Friday, July 22, 2016 | 4:00 AM

Income tax return is the declaration or a summary document on which the taxpayer makes an annual statement of income and personal circumstances. It includes the income under all the sources and calculates the due taxes after discarding all the eligible deductions. It is used by the income tax department to assess all the liabilities of the tax. Filing the income tax returns establish the fact that the taxpayer has no dues or any kind of outstanding obligations. The government prescribes the basic exempt limit as taxable income for the taxpayer for that financial year and they have to file the return before the last date. Every year, July 31st is the deadline to file the tax returns by all the taxpayers.

There are certain documents and papers required by the taxpayer while filing the return form, which will make the job easier. They are:

Bank Account: While filing the tax returns the taxpayer must have all the bank statements of all the accounts that are active and operating in that year to calculate the interest income that are earned in that financial year.

Tax Challans: An individual must submit their tax payments details when they have made self-assessment payments or paid the tax in advance.

Form 16A: This form is issued by all the payers who have deducted the tax while making the payments in that year, like the banks in which the taxpayer has an FD.

Form 16: This form is issued by the employer which has the details about the income of the taxpayer from the salary and TDS.

Contract notes: The taxpayer must have the contract notes of all the purchases and sales they have made during that year and to calculate the capital gains.

Property details: If the taxpayer has bought a property by taking loan during that year, they have to provide the details of the loan certificate for the principal and interest amount, or if they have rented a property then they have to produce the details about the rent amount and the papers related to the municipal tax.

Apart from these documents, the taxpayer has to have the authorized papers that involve tax implications. These documents are required by the taxpayer to help them in filing the tax return form and are not required to submit the copy or originals of these documents to the Income tax department. They must furnish the forms only when they are asked to submit them by the department.

Before filing the income tax return, the taxpayer must determine the source of their overall income. This includes their salary, the amount they earn from the rent, the interest they receive from the savings account from the bank, the capital gains or profits from other sources.

According to the Income Tax Act under each section, the sources of income are categorized into different heads like the Salary, Renal income from the House property, Profit and Gain from Profession or Business, Capital gains on sale of capital asset or shares or mutual funds and Other source like bank income. Thus, while filing the tax return, the taxpayer has to add their income under each head and calculate their taxes. If the taxpayer has a minor child, the income received by them is included with the parent’s income. The income is inclusive of the interest amount received by the minor child from the FD.

There is a false belief among the people about the tax return that if a person does not have to pay the tax for the financial year, they are not required to file the income tax return. Because, according to the income tax department, a person has to file the return if the overall income before allowing the deductions under the Income tax Act under Section 80C to 80U exceeds 2.5 lakh in the tax year and if the amount exceeds three lakh for the taxpayers who are above 60 years and five lakh for those above eighty years. But if the person has no taxable income, they have to file the tax return if they qualify as resident of India and have any financial interest or assets in any foreign entity.

There is another misconception among the taxpayer is that if all the due taxes are deducted at the source in the form of TDS, and then the taxpayers need not file their income tax return. But this fact is not valid in all the cases because normally as a statutory duty, the employer deducts taxes, according to the declaration submitted by the taxpayer from the estimated income, and the taxes are also deducted at the source of other incomes like the rent, interest, commission, etc at a standard rate. Thus, while combining all this incomes with the salary along with the deductions applicable to the taxpayer turns out to be different from TDS. So the taxpayer has to either acquire refund or the payable tax will be higher and on both the scenario the taxpayer has to file the tax so that they can claim refunds or discharge the dues.

Many people fail to file the income tax return form, but it is a legal obligation that an individual must fulfill without fail. And most of all it provides a detailed information about the overall income earned by the taxpayer and the total tax paid by them. It is accepted as proof of income by many agencies and offices and there are many other benefits of filing the tax return. Some of them are,

Visa Processing: To move to another country for a job opportunity or immigrating to a foreign land, an individual must be prepared with all the documents and papers. And for visa processing, many Consultants and Embassies ask to furnish all the copies of the income tax returns. This is applied while applying for the countries like Europe, Canada, US or UK.

Loan Processing: The banks ask the individuals to submit the tax returns of the past two to three years when they apply for a housing loan or vehicle loan. This will help the banks to know about the financial position and the ability to repay the loan by the applicant. The loan applications are approved faster if the tax return is submitted.

Tax refund: A taxpayer can claim for their tax returns only if they file the tax return. They will lose the refund if they fail to do so.

Carry forward: According to the Income tax Act, it allows an individual to carry forward some losses against the future income or gain. They can carry forward the losses for consecutive 8 years, succeeding the year when the loss was incurred and if there are taxable income in the particular year, they will have some losses to carry forward which can be adjusted against the gains in future years when they receive higher incomes.

A report released by the Income tax department shows that only one percent of the overall people in the country have filed their tax return while the rest have not filed their return. The main reason that the citizens fail to file the tax return is because of their laziness, they either forget or fail to file the return. Another reason is that the Income tax department fails to send immediate notice to those who fail to pay the tax. But the tax department will find out the people who fail to pay their tax and are those who are irregular by following their database.

People all give lame reasons for not filing the tax, like they are not aware of the process of files their return. Like the type of form they have to use, date of submission, the details they have to provide in the form and so on, but all these information is available on the internet and even the tax department has included this basic information on their official website to educate the public.

According to the Income tax Act under Section 27IF and 234A, if an individual fails to file their income tax returns or have not filed the tax returns, the tax authorities will impose a fine of five thousand as fine amount and if they owe taxable income and yet failed to pay the taxes must be liable to pay additional interest including the penalties. According to Section 276CC, if the tax amount to be paid is less than twenty five lakh, the tax authorities penalize along with an imprisonment from three months to two years. And if the taxable amount is more than twenty five thousand, along with the penalty the taxpayer might be sentenced to 6 months to seven years of imprisonment. But these punishments are levied in rare cases where the taxpayer has to pay an interest at the rate of one percent for the late deposit of tax.

Anand Rajendran is a freelance writer living in Chennai, India. His interest in personal finance and budgeting began when he was earning an MFA in theater, living in one of the most expensive cities in the country (Chennai, TN) on a student's budget. Today, he writes for a number of websites and keeps up his own Tax Consultancy Services named Uptra.
4:00 AM | 2 comments

The Power of Small Savings

Written By Ranjan Paul on Saturday, May 9, 2015 | 6:00 AM

People generally tend to not pay much importance to the role of small savings in providing a big enough saving. Small savings do not seem significant enough. However, that is an erroneous attitude towards money. Small savings, completed on a daily and monthly basis, can add up to a big total over time, say a year. In fact, you can make small savings that will contribute to a big investment you want to make.

Here are some smart tips to save more money.

Pay Credit Card Bills on Time
Credit card fines are big enough to make you feel the pinch. That is, if you fail to pay the minimum amount due within the stipulated period. If that is still not scary enough, consider this statistic: in the US, credit card holders who fail to pay the minimum amount due for more than 60 days face an average penalty of 28.45% interest rate. Even if you are unable to pay the entire outstanding, make sure you pay the minimum due before the stipulated last date.

Pay Off the Entire Credit Card Outstanding
Credit card outstanding bills, when carried over time, can attract exorbitant charges such as 48% annually. If possible, pay the entire credit card outstanding. Else, pay as much as is possible without affecting your finances too much.

Book Air Tickets Well in Advance
The earlier you buy an air ticket, the lesser is it going to cost. Plan your vacations or travel well in advance, may be 6 months or more and look for discounted tickets. Airfares vary depending on airliners, so look for the cheapest available tickets. Look for offers provided by the airlines and grab them. You may also book return airfares on the same airline so that it costs lesser.

Stay Close to Your Workplace
That way, you will not only save a lot of money and gas but also avoid a lot of commute-related stress.

When Shopping, Look for Discounts
Sometimes, departmental stores offer huge discounts on products they sell. Usually, there are certain time periods such as Christmas and Black Friday. Plan your purchases, especially the costlier products around those periods.

Let Your Money Not Stay Idle
Do not stash cash at home; it is not going to grow. At least put it in the bank so that it earns some interest. Even better, constantly look for investment avenues that can earn you handsome returns. Let your money work hard for you. For that, you need to put it into a field where it can play, work and grow. That, however, does not mean that you should put your money into speculative investments.

Stay Below Your Means
While it is in human nature to crave, you need to balance your cravings. If anything that you crave is not a necessity, it is not going to cause any harm if you cancel or postpone the decision to buy. Instead, put the money away for investment or other useful purpose. You are going to benefit a lot from your decision in the future.

Alex is an expert financial advisor and blogger. Whenever he finds some tips and tricks useful for sound financial health he spread those ideas throughout the internet so that other people can get help from that. With his long term association with Snug Loans, he met many people with different financial issues and always tried to fetch a reasonable solution for them.
6:00 AM | 8 comments

What Are The Top 5 Things to Know Before You Can Sell Your Condo?

Written By Ranjan Paul on Thursday, April 30, 2015 | 5:00 PM

If you are thinking of selling your condominium it is time to talk to the best realtors. You need a customized plan for marketing your condo and a realtor will be able to help you do that. He will evaluate the criteria required for selling such a property including time of the year, features of the unit as well as regional market trends. Go through the top 5 things you should know before you are ready to sell your property.

1. Is it The Right Time to Sell Your Condo?
The best time to sell any kid of real estate is spring according to agents. However, the locality you own your condo in may not agree with this concept. The specifics of the property location are a very important factor in determining whether or not it is the right time to sell your home. Based on careful evaluations, your real estate agent should be able to tell you if it is the perfect time for you to sell your condo. He may also suggest a specific timing to sell if you own the condo in a resort destination.

2. Have You De-Cluttered Your Condo?
Like all real estate property your condo needs to look appealing to the buyer. Your real estate agent will tell you that you need to de-clutter the house before you put it out in the market. Make sure you keep it clean and rectify any minor errors that it might have. Buyers have a keen eye for mistakes. They will find out a crack in the window and see it as a bigger issue than it is. Remove any personal item that you do not want your buyer to see. Organize magazines or office supplies as well as storage areas.

3. Does Your Realtor Specialize in Selling Condos?
Condos can be hard to sell compared to houses and other real estate. A best realtor who is specialized in selling condos will already be aware of the challenges involved in selling such properties. If he also knows the market, this can be an additional advantage for you as a seller. He should know what people are looking for in a condo and should be able to guide you in making the property more appealing. In fact, you can do your own bit of personal research and find out how other popular realtors have listed condos on their websites. Take hint from the good ones.

4. What Features should You Accentuate?
Buyers look for comfort when they are looking out to buy a condo. Maybe you could accentuate with a hot tub, a fitness center and the works. Seek help from an agent and find out the how best to accentuate your condo and perk it up for sale.

5. Do You Need Disclosures?
In many states, the law dictates sellers to disclose any physical defects there might be in the condo before selling it. Ask your California’s best realtor about such laws in your area before selling your property.

Alex Brain is a contributing writer at Agentace, Santa Monica, California. Agentace is a non-traditional real estate Web site that helps consumers to find the best real estate agent in his area. Learn more at Agent Ace. Alex writes frequently on real estate, mortgage, finance and related issues.
5:00 PM | 20 comments

How Do Life Insurance Companies Evaluate Your Life Insurance?

Written By Ranjan Paul on Monday, March 2, 2015 | 4:00 PM

Life insurance premiums differ from company to company. It is therefore recommended that individuals start looking around for life insurance online to get a quote. However, do keep in mind that many a time, insurance premiums quoted online are to some extent different from the actual premiums charged.

This difference between the quote and the actual premiums can be accredited to the way the insurance premium is calculated. Life insurance companies keep changing guidelines and selection criteria in an effort to stay competitive in the market. This is also followed in order to ensure that their risk management practices are in good order.

How is the Risk Class Evaluated?
The risk class of a policy buyer is determined by a countersigning process wherein a life insurance company decides whether or not to issue the policy to the buyer. The mortality can be determined by the life insurance companies based on several factors such as age, sex, medical history, habits, and profession etc.

It is up to the life insurance company to decide whether to issue the life insurance policy or not, depending on the information supplied in the application form. The process is further evaluated based on the medical examination report provided. It is important that the policy buyer stays truthful whilst filling in the form. This could help the life insurance company in being fair in its assessment of the risks involved.

Every customer who applies for insurance has to go through the evaluation and underwriting process. This process involves investigation into inherited diseases, analysis of medical history via medical reports and motor vehicle reports. Once the information is collected and analyzed, they are usually analyzed by a statistician, hired by the insurance companies.

Let’s check out some basic parameters insurance companies in India consider while issuing life insurance policies to its buyers.

  • Income – It is important that you qualify financially for the amount of term life insurance you want. Insurance companies could also consider factors like outstanding debt, credit history, payment history, loans, and monthly account balance to determine your monthly premium. 
  • Medical History – Insurance companies evaluate your past and present medical conditions, such as diabetes, blood pressure, or familial diseases such can cancer or heart problems. Hypertension is a common cause for higher premiums. Your medical history plays a big role in determining your policy cost. Life insurance companies usually provide a clean chit to buyers with the lowest possible risk of filing a claim.
  • Cholesterol – Your cholesterol needs to be under control. High levels or Cholesterol-to-HDL ratios could mean heavy premiums.
  • Tobacco Use - Tobacco and nicotine users have to pay almost 4 times more on an average for their policy.
  • Family History - It may not seem fair but the presence of cancer or heart problems in familiar history could affect your policy issuance and premiums.
  • Travel & Adventure Activities – For individuals whose profession involves lot of travelling, or activities like scuba diving, rock climbing, or car racing, the insurance could cost a little more. Travelling to different countries is considered dangerous and could result in higher premiums. There are chances that your application could get rejected in certain cases.

It is, therefore, important that policy buyers do their homework on understanding life insurance products before they opt for any policy. This will not only help them in making sensible decisions, but also help them build a better and secure financial future.

HDFC Life, one of India's leading private life insurance companies promoted by HDFC Ltd. & Standard Life Ltd., offers a range of individual and group insurance solutions. HDFC Life's product portfolio comprises solutions, which meet various customer needs such as Protection, Pension, Savings, Investment and Health.
4:00 PM | 7 comments

Here is How Social Media is Changing the Education System

Written By Ranjan Paul on Saturday, January 24, 2015 | 10:00 PM

We see numerous articles and studies on how social media is affecting our education system and young children for good or bad and many researches on negative or positive impact of social media on the education of the new generation. The fact is that the change is inevitable. As social media is affecting and changing various other aspects of our lives, its influence on education was bound to happen.
Let us look into some of the changes, good and bad, that have happened as we have introduced social media as a tool in education.

Communication between Parents/ Teachers and Children
With the advent of social media, it has become easier for students to communicate with each other.
Although, there are some laws that restrict teachers from adding students on social media websites, these sites are a great way of communication between parents and teachers. Many schools have their own pages that they use to give helpful information to parents as well as students.
Social media websites are also a helpful tool in communication between parents and children. Parents can easily keep an eye on their children and their activities once they are added as friends.

Conversations about Important Issues
Social media websites are frequently used as a medium for discussion of important issues worldwide. It has been noted that even students are now participating in serious issue discussions.
For example, bullying is very common in schools around the world. Social media has given a new tool is the hands of bullies to find new victims. But, it has been noted that schools have taken a stand on cyber bullying after this issue was brought to light via many social media platforms.
Many students also have taken a stand on unfair school policies and have forced schools to reform them just by starting a petition on the social media.

Class Activities and Fun Ways to Learn:
The best part about social media is that it provides a new and fun way to learn for students who are bored of learning through conventional mediums. YouTube, Twitter and Facebook provide endless opportunities for students to make their lessons more entertaining and enriched with engaging content. For example YouTube has various tutorials and fun videos that can make a boring lecture interesting, a Facebook group can be used to conduct a healthy discussion and so on and so forth.

Availability of Helpful Materials:
Students now have easy access to free materials that they had to pay for before. There are Facebook groups that share books, research articles and journals. Some groups also buy and sell used books at a discounted price, this has helped many students to save money on buying new books. Many groups also service as virtual libraries, where students can lend books to each other. On the flip side, many students use these groups to find ghost writers and buy assignments online.

As we have established that there is no way we can prevent social media sites to stop infiltrating our lives, the only way we can stop the bad effects to impact us and our children is to educate our children.

Mary Fernando is a highly prominent content writer. She loves to read in her free time and writing is her passion. Currently, she is working for a highly regarded academic writing agency.
10:00 PM | 6 comments

Life Insurance - Your Best Bet against Rising Healthcare Costs

Written By Ranjan Paul on Friday, October 24, 2014 | 2:00 PM

Private healthcare accounts for 60-80% of all forms of medical services available in India. This makes the healthcare system in India, one of the most privatised in the world. It is no secret that patients are made to pay through their teeth by healthcare professionals even for minor procedures. The cost of healthcare is indeed getting out of hand.

Government aided public health services can at best be described as abysmal, so turning to public healthcare system is not even considered an option by most. According to experts, prohibitive healthcare cost is the prime reason for many Indians to slip below the poverty line each year. In such a scenario where can one look for decent affordable healthcare?

The common man's salvation lies in buying a good health insurance policy. But blindly choosing and selecting a plan could turn counterproductive so one has to do their fair share of homework before getting a healthcare plan that clicks.

A health insurance policy provides a financial cover for your medical expenses. It's a contract between the consenting parties to provide health cover to the insured person by the company in exchange for a premium.

Firstly, a choice has to be made wisely in selection of an appropriate plan depending on one’s needs. There are different types of insurance policies for different needs. A hospital cash insurance policy gives a fixed amount of cash if you are admitted to a hospital. Critical illness insurance reduces the financial burden if a critical disease is diagnosed such as cancer etc. While, accident disability cover provides partial or total cover in case of loss of income from permanent or temporary disability due to accident.

If you have a family, a family floater plan will augur well for you since premium-per-person turns out to be lower in these plans and all family members are covered under this.

Reap Benefits when You are Young
This is a strategic marketing mantra to get consumers hooked onto certain lifestyles but this mantra works well with young people while buying insurance. The likelihood of the young being diagnosed with diseases is low and therefore the premium is low as well.

Do the math
In most cases the insurance agent will explain in detail about the ‘sum assured’. It is the maximum cover an insurance company will give you at the time of claiming the amount. Also, the insurance company assumes that hospital bed amounts to 1 percent of the sum assured. Therefore, if your sum assured is Rs 2 lakh, the cover for hospital will be Rs 2 thousand per day. If hospitalisation cost per day is any more, you could end up shelling the difference from your pocket.

Read the Fine Print
The devil lies in the detail and therefore it of utmost important to know your policy inside out. Your agent will definitely tell you the merits of your policy and what all charges and diseases it covers. But it is your job to know what all your insurance policy does not cover. For example, no insurance policies will cover pre-existing diseases, many diseases aren’t covered in the first year of policy cover and likewise.

Like all salespersons, insurance agents too have unrealistic deadlines and targets, not all but some agents do try to sell them by all means possible. Misselling is an ugly truth of the insurance business and therefore it is your duty to double check your agents’ sales pitch regarding the merits of the said policy.

HDFC Life, one of India's leading private life insurance companies promoted by HDFC Ltd. & Standard Life Ltd., offers a range of individual and group insurance solutions. HDFC Life's product portfolio comprises solutions, which meet various customer needs such as Protection, Pension, Savings, Investment and Health.
2:00 PM | 10 comments

6 Myths about Life Insurance Debunked

Written By Ranjan Paul on Sunday, October 19, 2014 | 8:00 PM

What are the top three priorities on everyone’s mind when it comes to allocating money? For most of us this about spending it on some of the most coveted gadgets or goods in the market. Usually, those with a family of their own, prefer to think about savings in a good FD or savings scheme. Of the numerous options, very few of us allocate funds towards insurance. Why? It’s simple, we don’t believe it’s important.

Sounds familiar? Many of us who work in MNCs find ourselves in a similar situation. Life insurance policy is often the last item on our financial plans. Add to this, insurance jargons, constant bombarding of various policy types through media and a pushy agent - all this makes us cringe when we hear the term "life insurance". Further, lack of knowledge, fuels myths which take a life of their own. This article debunks six myths about life insurance.

Myth 1: My employer provides insurance coverage as part of my compensation package, so I don’t need a separate cover.
Fact: While it’s a great benefit to be covered under your company’s insurance scheme, it also means that this coverage is temporary. In other words, the coverage will cease to exist the minute you leave your current job. In case an unfortunate event were to occur in the brief period between jobs, your family will not get any insurance benefits.

Further, if you plan to purchase a policy post-retirement then it is important to keep in mind that you would be considered "high risk". Most insurance companies would be reluctant to provide cover or may offer only limited cover and at a very high cost in such cases.

Myth 2: I am too young to purchase a life insurance policy.
Fact:In order to enjoy the maximum benefit of your policy, it is best to purchase it when you are young. Premiums are calculated using complicated algorithms and some of the factors influencing it are age, health, lifestyle and earning capacity. The older you get and the closer to retirement, the more difficult it is to get a really beneficial insurance plan.

Myth 3: Life insurance is only death insurance.
Fact:The primary benefit of a life insurance policy is to provide financial protection to your family after your death. However, several policies can also help you at different milestones in your life. Policies such as ULIPs, endowment plans, retirement plans and money-back plans are some examples of policies that may be used during your lifetime.

Myth 4: Life insurance is very expensive.
Fact:Term-life policies are amongst the cheapest plans available in the market. Further, if you prefer a traditional policy (also known as a whole life policy), then it is easiest on your pocketbook to purchase one when you are young. Besides, as and when you feel that you need enhanced cover, you can purchase a new policy for the differential amount.

Myth 5: Life insurance is only meant for those who have dependents.
Fact:Even if you are not married or don’t have any children, you must consider purchasing a life insurance policy. Your parents and siblings may benefit from these in case of an unfortunate turn of events.

Myth 6: Life insurance is just a tax-saving instrument.
Fact:While premiums are tax-deductible, don’t purchase an insurance policy solely for the purpose of tax saving. Its main objective is to provide financial protection to your loved ones; so, focus on getting a policy that supports this aim the best.

A little time and effort spent in the direction of understanding various life insurance policies available today can help you get the most beneficial one for your family's needs.

HDFC Life, one of India's leading private life insurance companies promoted by HDFC Ltd. & Standard Life Ltd., offers a range of individual and group insurance solutions. HDFC Life's product portfolio comprises solutions, which meet various customer needs such as Protection, Pension, Savings, Investment and Health.
8:00 PM | 2 comments

How to Get a Desirable Credit Score

Written By Ranjan Paul on Wednesday, October 8, 2014 | 8:00 AM

Have you been contemplating of applying for your very first home loan? Your cash on hand exceeds what you need. You have already spotted the right mortgage plan that meets your preferences. It will have no effect against the expenses and fees you are obliged to pay on time. Everything is set to go, but have you checked your score – the credit score?

We thought getting a perfect score only resides inside the four corners of a classroom. However, once we enter the "real world" the scoring doesn't stop after we got our diploma or earn a degree. A credit score is a kind of score we must maintain at its highest all throughout our lives. A poor credit score could prevent someone to buy a new home or new car. It could lower the chances of being hired or opening a savings account. Can you see how much damage a mere credit score could affect you in terms of venturing on any financial undertakings?

A credit score is not just a "mere" score you could easily take for granted. It serves as a barometer of your credit worthiness. It reflects how many loan approvals you could get from various banks, lenders, and credit unions. The most commonly used is the FICO® (Fair Isaac Corporation) Score, which is a three-digit rating with the ff. criteria:

35% = Payment History
30% = Amounts Owed
15% = Length of Credit History
10% = New Credit
10% = Types of Credit Used

The score ranges from 300-850. Unfortunately, the basis of your score is not by passing an exam but through real life situations. What actions one must take to achieve a perfect or high credit rating? You should:

  • Handle your finances well. Always pay your dues on time. Avoid late payments as possible.
  • Monitor your credit limit. Never exceed and avoid being an impulsive buyer. Handle your spending habits wisely.
  • Avoid at all costs being in the "Hall of Delinquent Accounts" of a Collection department. Aside from the Collection people constantly breathing on your neck, it is an indication you are a delinquent client and therefore can’t be trusted.
  • Establish a mature financial history. The longer you've been a responsible borrower, say, counting in years, the better.
  • Have a healthy mix of accounts. Healthy in a sense your payments are on time. While a mix of accounts means you've managed acquiring, for example, a variety of loans such as mortgage, auto loan, insurance and credit card.
  • Don't default on your loan. If this happens, it means you're not financially sound. Banks or lenders may perceive you an unfit candidate and not capable of fulfilling your credit obligations.
  • Keep your credit file void of any negative reports. The big words to be wary of would be bankruptcy, liens, complaints, foreclosures and getting a judgment.
  • Keep the number of your credit cards in check. Don't fall into a habit of applying for a new credit card in a frequent manner with short time intervals.

Now, you are aware how to get a better score, the next step will be checking it out. Are you ready to know how you faired these past few years? You could get your credit file from the three major credit bureaus like Equifax, Experian, and TransUnion.

Japs Buidon is a finance researcher and a part-time writer at
8:00 AM | 2 comments

Why You Should Take a Home Loan to Build Your Dream Home

Written By Ranjan Paul on Monday, May 12, 2014 | 10:00 PM

To have a home that stands out from the rest is the ultimate dream of a homeowner. While investing in an apartment may be convenient; building a house that fulfills your every requirement is an experience few are lucky to have. In fact, you could be among the privileged few to be able to design your home to match your lifestyle.

Home loans taken for the purpose of building a house are also referred to as construction loans. Some of the ways they may be put to use are:

  • Buying a plot of land for immediate construction
  • Paying for the construction
  • Extending your existing home 

Is Constructing Your Home a Good Idea?
If you are uncertain about constructing your home, here are a few thoughts to mull over before applying for a home loan:

  • You will be able to design a home that matches your lifestyle needs.
  • You will be able to create a layout for rooms based on your specifications and will not be restricted by apartment styles that created by a builder.
  • You will have a better say in aspects related to Vastu Shastra or Feng Shui arrangements for your home.
  • Hiring contractors approved by lending institutions will help you design a home to suit your budget.
  • Building your own home gives you the freedom to begin construction when you are ready to do so. Some banks include a clause which says construction must begin in 6 months. This gives you time to put things in order.
  • Once construction begins, it may be paced within your financial constraints.

A Comparison with Loans for Land Purchase
A loan taken simply to purchase a piece of land will not entitle you to income tax deductions on the interest you are paying. A home loan taken to purchase land and construct, on the other hand, entitles you to tax benefits. In such a case, the tax deductions will be made only in the year the construction is completed and a certificate to the effect is submitted by the relevant authorities.

Loans for land plots require that you pay a higher down payment. A home loan, however, stipulates that you pay a maximum of 20% only. Only basic documentation is needed and the application process is quite simple. A home loan interest rate is available in various slabs depending on your eligibility and repayment abilities.

A good tip is to try and pre-qualify for a loan. Once you know the quantum of loan you are eligible for, you may choose a site accordingly. It also helps in understanding the budget you have to work with in terms of getting a professional to design and have your home constructed.

Building the home of your dreams is a real possibility, even in the currently volatile economy. All you need to do is understand the right way to go about it. A home loan may just be the perfect solution for you.

For more information on Home Loans, visit Tata Capital.
10:00 PM | 3 comments

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