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March 8, 2018

Key Mistakes You Should Avoid When Getting A Personal Loan

about personal loansIt’s always a stressful situation whenever you’re bombarded with numerous financial responsibilities at the same time – you know, those instances when your house bills, children’s tuition fee bills, business expenses are piling up on you. This kind of situation might force you to seek for immediate financial refuge, and in this context, a personal loan might just be the most comfortable solution for you to take. There’s nothing wrong in acquiring for a personal loan – that’s your decision and if you, think that this is the only way you can resolve all our financial woes, by all means, go ahead and file for one! However, if this is your first time to apply for a personal loan, there are certain things which you should avoid to make sure that your entire personal loan experience will be hassle-free.

Applying for a personal loan requires your time. It entails a lot of processes which you’re required to go through. The entire process is something that you should be careful since it will require resources from you. And to ensure that this process will go as smoothly as possible, stray away from committing any of these mistakes:

● You don’t have the clarity for the purpose of the loan: You might be enticed to apply for a personal loan because it doesn’t require rigorous background checking and it only requires minimal requirements from you. If these are the sole reasons pushing you to get a personal loan, you’re doing it all wrong. You should get a personal loan because you have an immediate financial need – you might be financing your sibling’s studies abroad or you might be saving up for a business. Whatever it is, you should have a clear picture of where the money will be spent on. Sure, personal loans might have low interest rates but you’re still paying more than what you’ve borrowed, that’s why you should be very keen on how and where you should spend your borrowed money.

● You don’t consider your repayment capacity: Once you’ve decided to apply for a personal loan, the only thing you might have in mind is how you will spend your borrowed money. This is normal, and there’s, nothing wrong with that notion but you should also remember that in this process, you’re a borrower and you’re expected to pay a certain amount to your lender. You should think first if you can actually repay the amount you’ve borrowed within the time frame given to you. Don’t borrow an amount which will require you to have significant adjustments in your life. Instead, opt for an amount which you’re confident in repaying from your monthly income.

● You approach too many lenders: While it’s always good to look for possible lenders which you can acquire personal loans, going overboard with this might have negative effects on your credit score. This happens because whenever you approach too many lenders in a short span of time, all of these queries will gradually reduce your credit score. In the eyes of banks and other credit company, you’re now considered as a credit hungry person and that’s not a good thing. Banks and other companies might have the assumption that you don’t know how to manage your finances that’s why you ended up asking help from too many lenders, and this might hinder you from securing approval for your loans in the future.

● You don’t disclose existing loan details: Remember the quote that says, “Honesty is the best policy”? Yep, this one’s still applicable in the financial context. The moment you talk with your lender about your personal loan application, be honest in informing the other party if you have existing loans. This is important because by doing so, you’re giving the lender more reasons to trust you (so it’ll also be easier for them to trust you with their money), and you can make negotiations with your lender regarding your repayment terms to ensure that you can still manage to pay all of your loans on time. But if you decide to mum this information to yourself, you might end up paying higher interest rates or worse, your loan application might be disapproved once the lender learns about this information from other sources.

● You don’t read through the fine print: Not everyone has the patience and the willingness to read through a document which consists of, let’s say, five pages of texts. Yes, it’s something that requires too much time and focus but if you’ve decided to apply for a personal loan in the coming days, you should be able to change your mindset. You should know how important it is to read whatever documents you and the lender might share throughout the entire process. Once you’re handed with any document, take the time to thoroughly read everything – and not just skim through it – and make sure that you understand everything that was written there. If you see terms or charges which are unclear to you, never be hesitant to ask your lender. You might trust the lender but all of your agreements will boil down to your signature, being used in the supporting documents.

● You don’t check your credit report: Your credit report plays a vital role in the approval or disapproval of your personal loan. Since personal loans do not require any collateral before the lender can allow you to borrow a certain amount of money, your credit report might be one of the strongest determinative factors for a lender’s decision. This will be an evidence of whether you have a good credit standing and if you still have enough finances to pay for another loan. If you want your personal loans to be approved, religiously check your credit report and get necessary corrections if needed. You don’t want to check your credit score the moment you apply for a loan as this might delay the entire process, check this for LendingKey reviews.

If the concept of personal loan is still new to you, you might have endless questions of how this works. While personal loans can give you the financial salvation you need right now, you should also be careful in managing it because failure to do so might damage your financial standing in the long run. Since you know what mistakes to avoid when getting a personal loan, you’re now a step closer to securing that seal of approval for your personal loan application!

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September 5, 2017

Why property investment should be a key part of Estate Planning?

plan for your estatePeople underestimate the importance of property investments within estate planning until it’s too late. Estate planning is your declaration after you pass away. You may not want your family to receive money and other assets you intended for your wife and children. Molly McCollough found out how essential property investment within estate planning is the hard way.

Meet Molly

Molly McCollough is a 54 year old woman who is the founder of Theature Company. Molly thought she and her husband has everything figured out. They never thought they needed life insurance or a strategy for financial planning because they were married and didn’t have children, so everything would be left to Molly. After her husband, Joe died, Molly found out being his wife didn’t carry much weight in collecting his estate.

The Issue

Molly’s husband didn’t have a will, and the money he left behind was in a foreign bank account that did not have her name on it. Because Molly’s name was not on any of the accounts, she didn’t have access to anything.

Molly was afraid and mourning the death of her husband. Molly needed to figure out a way to gain access to his estate before his family tried to claim any part of the estate. Molly felt her husband was hiding secrets, and she didn’t know where to turn or who she could trust.

Molly said, “There’s just something about death and greed and money and long-buried resentment that bubbles to the surface when there’s any substantial inheritance. It tears families apart. People lie and steal and cheat.” In her situation, she was right. Joe’s family did just what Molly hoped they wouldn’t. They came and took all of his estate and left her with nothing. Inheritance drama is something no one wants to deal with and it can cause years of frustration, and put a rift between families.

Life insurance, financial planning, and estate planning are things you need to discuss with your partner before it’s too late. Make sure you and your partner have a will whether you have children or not. If these things are not in place before you pass away, the state will do what they see fit, and most of the time, it’s not what you wanted.

The Solution

At Unified Lawyers, we work tirelessly to help people who don’t understand wills, trusts, estate planning, and similar assets. We understand the urgency in these situations and always put our best foot forward. We are not a traditional law firm. We believe in helping people instead of collecting a check. All our fees and costs are straightforward so each of our clients know how every cent of their money was spent. We are here to help you get your situation resolved.

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June 10, 2017

Time to Honor your Parents by gifting them a House

property to giftNo matter who you are and where you are, you can never fully repay your parents for all the care, love and sacrifices that they have made. Isn’t it?

But increasingly, many people who have already taken care off their financial responsibilities (like buying a house, paying for children’s education, etc.), are honoring their parents by gifting them a house. Also, father’s day is around the corner.

This is indeed a great gesture that shouldn’t be only evaluated from the financial angle.

Gift or not, there is no doubt that house purchases are major decisions. And they cost a lot of money. But if you too are planning to gift your parents a house, then it shouldn’t be a problem as home loans are easily available at very low rates. Ofcourse you need to have a good credit history and a reasonably good repayment capacity to avail home loans.

But even before getting into the financial aspect of the house purchase, you need to be careful before selecting a house for your parents. More so if they would be living in that house.

Any house that is to be occupied by senior people should be built keeping in mind the ease-of-use from seniors’ angle. Like if you are looking to buy a flat, then it should have the lift facility or it should be on the ground floor. To ensure proper ventilation and lighting, its better to opt for a house/flat that has more open windows/balconies.

Security is another factor while selecting a property for parents. If the flat being considered is in a residential society, then security aspect is taken care off. But if it’s a standalone house, then you need to think about how secure would the property be, if the parents were to live there alone. Of course all these factors will reduce the number of options (properties) that fit all your criteria. But that is necessary considering the limitations that seniors have.

So all in all, once you have taken care of most of your financial responsibilities, go ahead and surprise your parents with the biggest gift of their lives.

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December 14, 2016

How is your Home Loan Eligibility Impacted by CIBIL Score?

home loan appliedWhen you find that house of your dreams, the first thing that springs to mind is to apply for home loan since it’s your ticket to funding the big purchase. But sometimes, loan applications get rejected for various reasons, among which the most common is a low CIBIL or credit score. It is major factor that determines your loan approval, loan amount and even rate of interest.

Why is high and low credit score important?

While a high credit score is viewed as a low probability of a default, a low credit score reflects the opposite, making financial institutions wary of the person applying for a home loan.

Credit score is a three digit number that ranges between 300 and 900. It reflects your creditworthiness as it is a summary of your payment history, outstanding balances, number of loans, total credit limit, credit utilization, every loan detail taken from different lenders. Higher credit scores are great for you if you are applying for a home loan. On an average, a credit score of 750 is great for borrowers as lenders find themselves at less risk. Moreover, at this score, you can get good deals on your home loan and better rates of interest.

Your credit score is impacted positively by:

● Consistent payment of loan EMIs
● Credit card bill payments on time
● No over-leveraging
● Payment of credit card bills in full as opposed to minimum due amount each time
● Good financial records
● Many types of credits, especially unsecured personal loans in family
● Good utilization of credit limit on cards

Your credit score is impacted negatively by:

● A lot of credit report enquiries by banks and financial institutions
● Dishonoured or bounced cheques
● Loan repayment irregularity
● Defaults on credit repayments and even defaulting as a guarantor
● Late payments on credit cards or making part payments consistently
● Number of unsecured credit (multiple personal loans)
● Numerous applications for unsecured loan, especially when rejected
● Going beyond the approved credit limit and even high utilization of it

Other than these, your credit score can also be impacted negatively when banks or financial institutions you are dealing with make errors in their records. Hence, it’s important that you keep checking whether or not your banks are submitting the right information. It comes really handy if you request and maintain a copy of your credit history personally as compared to a financial institution doing that for you.

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December 13, 2016

Why you need Good CIBIL Score for Home Loan Approval

approved loan for your homeCIBIL Score is a crucial aspect in determining your home loan eligibility. Every time you apply for home loan, your lender checks this score for approving/disapproving your application. It is a summary of your credit history as per your credit behaviour. It depends on the following factors:

Past payments: All your previous payments, whether on time or delayed, are recorded with CIBIL. Consistency in making payments is considered good whereas more recent delays are seen negatively.

Settlements, defaults and write-offs: Multiple write-offs, defaults on previous loans and more recent write-offs (as opposed to older ones) have negative effects on your credit score. Defaults and delays on secured loans are worse than on unsecured loans.

Credit as proportion of income: The higher the loan balance you have, the lower your credit score will be. Less loan balance shows smart credit utilization on your part.

Credit cards: If you have high credit card balances, your credit score will be low. Consistency in repaying credit card debts improves the score. Credit cards (unsecured loans) are viewed negatively by lenders as compared to secured loans.

Different ranges of CIBIL Score

Every person with a financial history has a CIBIL score and it can range anywhere between 300 and 900, with 900 being the highest. A person can also have a score of 0 or -1, which means that they have no credit history in terms of loans and credit cards. So to get the credit history started, you must have at least one credit card or applied for a loan. Here is a breakup of CIBIL scores and what it means:

  • 550 – 650: It is a fair score and accepted by many lenders. This score shows that you have been quite regular with your repayments, other than a few exceptions. Most lenders trust borrowers with this score and approve their home loans but usually with a higher interest rates.
  • 300 – 550: This is the worst score anybody can have and it means that you have been defaulting on your payments. With such a score, getting credit is extremely difficult.
  • 650 – 750: For home loan eligibility, this score is very promising. And if you have this credit score, you will not face any issue regarding approval of application.
  • 750 – 900: It is the best possible score anybody can have and it indicates your expertise at managing your finances. Lenders will approve even a larger loan amount to you at great rates when you apply for home loan.
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