There are two types of interest rates in mathematics, simple interest rates and compound interest rates. Simple Interest rates it is the normal interest calculation which uses all of us for our normal daily calculation with percent calculation. All the PSU banks, Private sector banks and all financial institutions are applying simple interest which is the composition of interest and principle amount portion. Normally banks use the interest rate with reducing balance and it works as reducing interest amount and increasing principle balance and goes up to the ending of the loan. Private financial lenders normally use the compound interest rates for lending the funds as loans to customers. Apart from these banks uses the compound interest for fixed deposit and other recurring deposit for investment of the money by the account holders. Interest rate is subject to change from bank to bank.
Repayment Capacity: As per banks credit parameter, EMI is equals to your repaying capacity of total debt burden. All the banks have wide range of loan programs. Millions of loan applications are processed in these banks in every month. Credit manager play the most important role while processing any of the loan application. Credit teams arrange a personal discussion with the respective customers after calculating the loan eligibility and asks some specified questions with the customers like,
• Why are you applying for loan?
• What is the expectation of the amount?
• How much amount can be paid by the customer as repayment of monthly EMI?
• What is the specific endues of the loan funds? Means for what reason the customer is taking this financial instruments?
After providing positive answers of these questions, if the credit team is satisfied with all the business visits and other verifications, and completely agree with the customers than only send the application for approvals of the loan. Otherwise the application goes for rejection and case is declined. All the bankers are doing very hard credit at the time of processing all applications. There are compulsory guidelines from the RBI and banks are dedicated for the fair practices. Hard credit is better to cure with the NPA and it helps to build the strong and healthy relation with the customers. All NBFCs which are doing very well in market and providing the loan facility to the customers. They also ask for the end use of the funds which is very important thing. This analysis is most effective and helps to collect the intention of the borrower. That ensures if he is the right candidate and should bank fund him or not? Is he going to repay the loan timely? Many more questions come up at the time of personal discussion with the customers. So it is the very important part of loan disbursal process.
How to swap ECS account?
Normally it is done when customers existing bank account is getting some problem or the account got closed for any specific reason. The customer needs to contact the existing loan providers and inform about the situation. He should ask the bankers to provide the new ECS form and the customer has to verify the ECS form from the new bankers where the borrowers has opened a new account or their additional existing bank accounts. After submission of the new ECS mandate to the loan providers they start the repayment of the loan from the new account. The lender may take some charges for the swapping of the ECS to the new accounts. Generally it takes time of around 15 days. So borrower need to be careful till the transaction of the ECS is not completed. Borrowers also needs to be very careful about bounces in loans as it affects the credit score and as result shows DPD in CIBIL. CIBIL rating is the most important parts of any kinds of loans. Banks and NBFC’s are generating the CIBIL score for processing of even the small ticket like loan against gold and other consumer loans.
Do you believe in borrowing cash from your friends or relatives when you have unpaid bills? Does your home need renovation? Then you would probably need to find quick cash to compensate for all these needs. Personal loans will be a perfect solution. We are one of the best loan comparison service provider portals.
Normally it is easy for someone who needs quick cash for a short period of time. It is also considered as unsecured loans because you do not need to provide any guaranty as collateral for payment. Because personal loans enable you to have access of cash within a week process the documentations and you will be availed the cash after 24 hours from approval of your application. They are considered as quick cash remedies. Personal loans are timely solutions especially when you need to get quick cash for emergency situations. There are also online applications so you don’t need to leave your home in order to apply.
Many people opt to get loans even with low income and bad credit. In fact, you are given a chance to improve your credit score. By applying for this loan, you can improve the payment of your bills and other credit cards. Moreover, when you repay the loan in time, you can improve your credit rating. After paying in full, you may request your personal loan lender to report your payment to a credit bureau of information limited in order to record your loan payment history.
So, it will not only be a help in times of urgent need, but will also. Since these are unsecured loans, some lenders will charge high interest rates and other fees for the risk they take. It is therefore important to borrow only what you really need and pay actually when due date arrives.
Do you want to apply for Personal Loans?
You just need to visit our website. Here are some of the requirements to qualify for the best deal of personal loan. Personal loans are available for even for low income range. The requirements include candidate being 21 years or older, being employed, and possessing an active checking account. You also need to be a legal citizen of the country and should have a stable monthly income.
The advantage of availing personal loans even with low income is that there is no need to provide any guaranty. Only a verification of the information you supply. Personal loan lenders check your credit report along with your current employer, except as verification of your employment. To speed up your approval of the loan, maximum one week will be required to complete all the loan disbursement process.
The federal government has given clear massage to their bankers for be careful at the time of mortgage loan funding to their customers. Govt said it is the biggest reason for sub prime slow down in market. Financial institutes need to do hard underwriting in all loan applications and should avoid funding to all financially unhealthy customers. Banks should focus on small and medium ticket size funding against mortgage loan rather then doing big ticket size cases under loan against property or Home loans. Lenders should be very careful while funding property mortgage loan. Book size of bank will stuck when a little amount of account will default in paying their repayments. Balance transfer of any loan account is also very risky for the banks. NPA account should not be more then 1% of over all account of books.
In India all banks should start doing the same thing in their execution. All the banks should start doing hard credit in India. We are going in to another sub prime if we do not take strong steps. Mortgage loan and home loans are long tenure loan and if any default happens in loan repayments, banks has to be bear a big loss. So if we want to save our economy then we will have to take these kind of steps on daily basis in India. Private sector bank in India like HDFC Bank, ICICI Bank, Axis Bank have very strong set up of their credit team. They do very strong credit on all loan applications, apart from banks all NBFCs like HDB, Reliance, Tata Capital, DHFL and many more financial institutions are doing very aggressive work on secured products.
They are doing medium size of loans and small size of ticket size of loan in market. India bulls has already stop funding of more then 1 crore of amount in Mortgage loan. Current focus of all NBFC is small ticket size of customers and most of them are new to mortgage loan. Credit tested customer is one of the good pieces in market and every financial company wants to fund them. All the NBFC in India are doing very well in market and this time very good competition comes in market and this is very good for customers. Normally Banks and NBFC in India has very healthy book size of customer base and they have very good market in secured and unsecured segments. Banks have healthy customer portfolio in their bucket and they use it very strongly. So banks need to do hard underwrite in Mortgage Loan Process.
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