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Fixed Deposits Versus Mutual Funds

In our financial space, we come to a state, where we have sufficient funds, and we wish to invest a chunk of it for future plans and goals.
Two very popularly used media for investment are Fixed deposits and Mutual Funds. We will distinguish between the two after we define them properly.

Fixed Deposits
Here we deposit money in a bank for a specific period of time that ranges from 7 days to 10 years. The amount invested earns an interest based on the tenure of deposition. It can be as high as 9% per annum(varies according to the banks and it’s schemes). After the tenure ends, the money is returned to us topped with the interest earned.

Mutual Funds
Mutual funds can be best described as a place where funds are consolidated by numerous investors. The fund accumulated is invested in one or many asset classes like equity, debt, liquid assets etc.
It carries the tag mutual because all the perils, awards, gains and losses in the invested sum are shared by all the investors in accordance to their contributions.

Difference between Fixed Deposits and Mutual Funds

Rates of Interests:

In case of Fixed deposits, the rate of interests are pre-determined and remain intact during the entire tenure of investment. The rates of interest vary for mutual funds as per the market conditions. In case of an uphill in the market scenario, the benefits of mutual funds surpass those of fixed deposits, as the returns are higher. While a downhill situation in the market renders fixed deposits as the winners in terms of the returns that are offered.

Liquidity:
In case of Fixed deposits, the tenure is fixed, and they offer medium and low liquidity options until you complete the entire tenure of deposit. Mutual Funds offer liquidity to the investors but with certain sets of terms and conditions.
There would be some penalty associated with pre-mature withdrawal of our fixed deposits, hence we would lose a chunk of our expected return. For mutual funds, after the minimum holding period is over the liquidity rate is high. However if we immediately withdraw after we invest that is within a year, then we are liable to pay an exit load cost of 1 percent.

Risk Factor
Fixed deposits are for investors with low risk appetite. However mutual funds are for people with high-risk appetite.

Investment Cost
There are certain costs associated with the mutual funds that we invest in, however fixed deposits do not levy any expense on the investor. The expense incurred depends on the kind of mutual fund that we choose. Liquid funds may have a low expense of up to 1% p.a., debt mutual funds may have anywhere between 0.5% p.a. to 2.25% p.a., and the expense of equity mutual funds may be up to 3% p.a. This expense is adjusted in your returns

Tax Scenario
We would all love to receive more amount of money post the tax returns from our investment
In case of mutual funds, you need not pay any long term capital gain tax on your investment in equity mutual funds
However for a short term gain, we need to pay taxes at 15 percent. The gains in long term investment in debt mutual funds are taxed at 20 percent with indexation and 10 percent without indexation. For liquid mutual funds, the tax is as per the tax slab.
Regardless of the tenure in fixed deposits, the interest that is earned in totality is taxable according to the tax slabs.

We have drawn a line of differentiation between Fixed deposits and Mutual funds. Hope this helps you out better with investment plans. Happy investing.

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Social Media Score can affect your credit score

We are aware of how vast and effective Social Media has become. In fact we owe our ability to be aware about what is going on to social media.
Social media has ceased to be just a platform for interacting and socialising. It is much more now.
Traditional verification to evaluate our monetary potential fails at times. Smart organisations have therefore found out these smarter ways to assess our abilities to pay back.
Credit agencies now assess your financial caliber on the basis of your social media existence and life.
For Lending platforms,having a good character value is critically important to them, because that is what allows them to have faith on our repaying ability.

There are many things that the credit agencies/bureaus look at before lowering or upping our credit score. Let’s jot down some primary elements that are considered by the credit agencies to grant or not grant loans.

1. Our lifestyles and daily routines can be well investigated through social media platforms like Facebook, Linkedin and Twitter.
2. They might look at whether we are into alcohol or drugs or at slightest of possibilities that can affect our ability to continue your job.
These results can potentially reduce our credit score
3. A pattern is cemented around our social behaviour on the basis of our activities and behaviour on social media. This is used to trace the ability in us to repay.
4. Our creditworthiness is judged through our two c’s on social media, they are: – contacts that we have and the contents that we post.
5. There are certain keywords encircled by the credit agencies. The profiles with words like wasted, trashed, smashed etc are scrutinised or put under the black list.
They might be potential defaulters in the eyes of the credit givers.
Posts that talk about Casinos, or the posts with ALL CAPS or that contain bad English are again looked at.
6. Our circle of friends is also encircled and pin pointed at in case of any doubts. So if there is anything off the road there, we might land up in their caution radar.
Most of the credit agencies utilise the social media for people who do not have a credit score, or have a very newly built credit history. This is also for people who have just migrated.
Also it is fair on the part of credit agencies to get acquainted with the borrower properly so that lending is a risk-free process for them.
We need to safeguard our creditworthiness by being cautious about what we post on our social media accounts. Also we need to discuss within our family and educate others about the potential decrease in the creditworthiness in case of a bad social media score

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Understanding Loan Repayment: A Comprehensive Guide

Have you ever looked at your loan statement and wondered, ‘How do I repay my personal loan faster without feeling broke every month?’ Well, you’re not the only one who feels like this. Most of us take loans at some point. Sometimes for emergencies, sometimes for big goals and then suddenly the EMIs start to feel heavier than expected. The stress usually kicks in not because the loan is bad, but because the repayments aren’t planned well.

The good news? You can actually take control of your EMIs, reduce your interest outgo and even shorten your loan tenure with a few smart tweaks. And none of these require big sacrifices. Curious how?
Let’s break down some simple, practical ways that genuinely help you repay your personal loan faster and feel financially lighter again.

1. Go for Bi-weekly Payments

One of the easiest ways to speed up loan repayment is by switching from monthly EMIs to bi-weekly payments. Instead of paying once a month, you make half your EMI every two weeks. This reduces your outstanding principal more frequently, which means you pay less interest over time.

Since your principal drops faster, your loan tenure also reduces naturally. Always check with your lender beforehand to ensure there are no restrictions or charges for increasing EMI frequency. If allowed, this method can help you close your loan much sooner without feeling a heavy financial impact.

2. Part-prepay your loan with every salary hike

Each time your salary increases, use a part of that hike to prepay your loan. Even small increases can make a big difference.

Allocate 4–5% of your salary hike towards increasing your EMI.

A higher EMI reduces your principal faster.

You end up saving a significant amount on interest.

Your loan tenure shortens naturally.

This strategy works well if your income grows steadily every year.

3. Refinance when you have many loans

If you’re handling multiple loans at once, refinancing can simplify your life and reduce your costs.

Take a new loan at a lower interest rate to close existing high-interest loans.

This helps reduce your overall debt burden.

You can also choose a shorter tenure for faster repayment.

It is effective if you have a stable income and a good repayment track record.

Refinancing often results in more manageable EMIs and reduced interest outflow.

4. Convert credit card dues to EMIs

Credit card interest rates are usually quite high and unpaid bills can quickly spiral into major debt. Converting dues to EMIs helps bring balance back to your finances.

Most credit card issuers allow conversion of large outstanding amounts into EMIs.

You can choose 6, 12, or even 24-month tenures based on comfort.

This reduces financial pressure and prevents late payment penalties.

It also helps protect your credit score.

EMI conversion makes big bills more manageable and predictable.

5. Bring in a wave of change in your lifestyle

Repayment becomes easier when your spending habits support your financial goals. Review your monthly expenses and identify areas where you can cut down like frequent online orders, entertainment subscriptions, impulse buys, or unnecessary travel.

Even a small reduction in lifestyle expenses can free up money for part-prepayments or increased EMIs. This not only helps you close your loan earlier but also prevents recurring debt cycles. Staying disciplined and avoiding late payments protects your credit score and keeps you financially stable in the long run.

FAQs on How to Repay a Loan Quickly

How to repay a loan faster?

To repay your loan quickly, you can shift to bi-weekly EMIs, increase EMI amounts after a salary hike, convert credit card dues to EMIs, refinance high-interest loans and control unnecessary expenses.

Will my interest reduce if I repay a personal loan early?

Yes. Whether you make a part-prepayment or foreclose your loan, the principal reduces, which lowers the total interest payable. However, always check if the lender applies any prepayment or foreclosure charges.

Planning for Retirement

“Retirement” .Do we need to think about it at all? If no, then perhaps now is the time to stop giving a cold shoulder to it.

Being ignorant does not help carve a secure future.

Though we are young and quite able at this stage in our lives. But do we think of times when “un” gets added to our ability.

Reality covering us from all four sides has changed now. We cannot wait till the RIGHT age.

Money control and Money management is imperative and so is wise investment.

We would want to jot down some essential tips that would assist you better with financial planning.

Compounding it is!
One of the strongest instruments in the financial world is compounding.
So how do we go about the process?

Start investing early, even if it is Rs10,000 a month, go for it. Putting in a small amount is okay, what is critical here is the interest that compounds with the passing time.

Also,Save your bucks! Saving is always a great idea to keep. Saving not only for retirement but for other purposes aids at various stages of our lives. The sooner you start saving , the more time your money has to bloom. Pooling in some money for retirement should be your utmost priority. Financial Goal setting is important, however sticking to those goals, and not wavering is even more critical.

It is time to go digital!

Start using an e-wallet!
This has advantages of cash back and it is safer
The flexibility, security and the usability of the wallets have cemented faith in the people using them.
You can put an amount as tiny as Rs 10 to Rs10,000.
Convenience blended with rewards incites people to use it again and again.

Sail the boat of Direct mutual funds!
Investing in direct plans of mutual funds renders higher returns. The difference in returns is more pronounced in case of equity funds. In debt funds the the returns are moderate in amount. And the returns are the lowest in liquid funds out of the three.

Swap Fixed Deposits with Debt Funds!!
Safety and Fixed deposits go hand in hand. However when it comes to tax benefits, they are not very efficient. A better path to tread on is Short-term debts, that has the combined credit risk almost equal to FD’s. Though there is not a vast difference on the interest rates generated on short-term debt funds, however the actual return on these is much if they are held for a span of more than three years

Brick a building of buferable cash!
The economic conditions waver like the wind. For example, a hike in prices in the US can subsequently leads to a market fall in India!
Having some cash as buffer, will be handy in such situations. This money can be used to buy at cheap rates and sell at higher rates.

Be wary of Debts/Mortgages!
Being freed of mortgages or any lingering mortgages is a fantastic step towards retirement planning. You do not want to get nightmares of debts when you are greying.

Also lets chart out a plan for someone who is close to us and has just entered his/her retirement phase
We will go step by step.
1. Firstly we need to calculate their monthly expenses and needs
2. We then come to her various sources of income
3. Changing their status in the bank is a wise option. Transfer their corpus to a senior citizen savings account. That gets better interest.
4. Get their 15H form signed and deposited at the Bank so TDS in not deduced at source on her FDs. This also reduces agony of chasing for Tax refund.
5. Go for opening a Mutual Fund Folio. Do you know once you have done a KYC with one Mutual fund, it is valid for all investment across all Mutual funds.
6. Divide their portfolio into Four segments
6. 1 Monthly income (if pension is not there or less) – In Fixed Income Mutual funds go for a standing instruction to transfer a fixed sum to their saving account monthly.
6.2 Diversify Equity Mutual funds for long-term steady income
6.3 Invest 10% of the corpus in Blue chip companies
6.4 Build an Emergency fund
7. Activate confirmation emails and SMS on your and their phones
8. Make sure their health insurance plan is secured.
9. Ensure all assets have nominees as per their wish.
10. Make their will

Retirement is the a faraway destination, but we need to cement a path from now to reach there in a financially healthier state.
We hope that our recommendations will help you in deciding clearly and taking informed steps.

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Tips to Consider before Lending Money to Friends

Lending money to friends becomes a difficult choice at times. Money has the tendency to create rifts between closely bonded people. Yet money is a topic that becomes unavoidable.

Lending and borrowing between friends can lead to sequences of debts, debt traps, uninvited apprehension and animosity. Situations where the money is borrowed, and half-returned, partially returned or in the worst case scenario not returned creates an unpleasant situation

However we can create a space of clarity in the money matters between friends if we follow some ground rules. They are listed below.

- 1. Lending should always be a situational process. You should assess the urgency of the situation. . If a friend asks us to open a credit card in our name for their use or asks us to guarantee their loan, then you should consider its consequences. We should not put ourselves in a situation where some one else’s actions can affect our credit. Their wrong usage can disrupt our credit score, thus lowering our chances of getting loans.
- 2. Lending should be within limits. Even if it is a friend that we are talking about, we need to still evaluate the amount that we lend. Do not nod in agreement for an amount that can push you in a debt trap.
- 3. It is also imperative to gain access to the details of where the money would be utilised. Here we are not talking about the trust, of course we trust the people here who borrow. But knowing where the money would be spent will give us a better knowledge of whether it is being put in the right use or now. It will also help us in acknowledging whether the situation deserves a loan or not.
- 4. Discussing it clearly might seem like an awkward idea to begin with. However having the terms and conditions set in the beginning leads to a smoothly painted financial end. Repayment period, interest rates and the loan amount itself should be discussed in detail to avoid any misconception or a possible rift.
- 5. Draft an agreement. In case you are lending a large sum of money, having a financial agreement worded in paper is always a good idea. Both the parties know the exact details of when, how and why. This just clears the air and avoids conflicts.
- 6. Also a great option for them is to borrow through the new-age and financially sound institutions.
  EarlySalary is one such platform that provides instant cash at ease without the hassle and obstacles. So refer EarlySalary to your friend and be a friend in need.

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Setting Personal Budgets

In our lives today, it seems that we are constantly in our running shoes, because all we do is race to fulfilling our duties, necessities and obligations.
Expenses are never-ending. How we wished that we could count the expenses on our fingers, but unfortunately we cannot.

It has become extremely necessary to have a budget made. Having a budget in place allows more breathing space when it comes to financial decisioning. We can actually take a pause, and direct our expenses better, without being hasty about money matters

We will talk about how we can focus on administering our expenses and savings.

1. Track your spends and earns for every month. Figure out what you spend and where you spend. It goes for your earnings too.
2. Also prioritize your bills. The necessities have to be thought about first. Rent, Groceries, Electricity tops the list.
3. Now is the time to plan for your future goals and dreams. Start saving and investing to make the dreams turn into reality. Sit and discuss your goals with your family, and ask them to give in inputs too about what they want to achieve, lets say in the next five years. Such brainstorming is always productive.
4. Create categories for your goals. Tag them as short-term, mid-term and long-term.
Your short-term goals could be buying a refrigerator next month, or purchasing a car next year.

Mid-term goals could be about you wanting to go on a vacation with your family to Malaysia

Long-term goals would be you thinking about retirement plans and policies.
5. While we have created goals, we need to also assess the value associated with them. Inflation is a factor that can cause an upheaval in our financial dreams. Short-term goals would not be affected by inflation. However mid-term and long-term goals can be affected by inflation. So you need to be wise enough to invest also side by side.
This will help your money boom too over the course of time.
Also having a correct estimate on the value of assets is imperative.
6. After estimations, and goal settings comes the most difficult part. Now you have to save for your goals. That means you need to keep aside some money for your different goals. Shelling out money at appropriate intervals will help you in achieving all the goals that you want.
7. A great way to track, monitor and create a more systematic budget is through the innumerable money management apps available in the technical horizon. These apps act as your financial advisors and guides and they accurately advise and calculate spends and earns.
Some of the most popularly used money management apps are Wally, Mint, Homebudget etc.
You can get a detailed description of the same at money-management-apps

Managing money seems like a task impossible. But we assure you that with budgeting and prioritizing your monetary needs, it is a task really easy.

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Learn Income Tax Return Filing For Any Income in India

If handling finances wasn’t enough, we have taxes in place too to give us gripping nightmares.
However tax payment and filing income tax returns are both crucial for achieving a financial stability in life.
ITR filing is mandatory is a person’s gross total pay exceeds 2.5 lakhs.
The basic motive for filling income tax return is to showcase accountability and to display that appropriate tax has been paid.

There are both online and offline ways of filing income tax returns. However the income tax department made it mandatory for individuals with an income of more than 5 lakhs to file their income tax returns through the online route only.
We will write down about ways in which you can go ahead with this.

The offline Route:
If you have an income of less than 5 lakh per annum, and you decide to go ahead with the offline process then you can easily download the forms from the income tax website, or you can collect it from an income tax office. You will have to fill in some necessary documents including the ITR form and acknowledgement form(This contains the summary of ITR). The stamped copy of the acknowledgement form is handed back to you.
While Offline is the conventional route, Online is the more convenient one.

The Online Route:
It saves time. With technology popping up from everywhere, it becomes easy for you to file the returns of income tax. You do not have to fill in bank related details (such as the PAN number) over and over, all of that is auto-filled for you by the software. Thanks to the digital era!
The software is considerate and helps you calculate the tax amount payable or the refund amount due based on your income and deductions mentioned in the income tax report. This again saves time, is more efficient and reduces fallacies.
While you have chosen the online route, you will be happy to know that there are many options to opt for while filing income tax returns.

Apart from the income tax department’s websites. There are other deputed websites to carry out the same work. Some of the popular websites are Cleartax.in TaxSpanner.com, Makemyreturns.com etc.

There would be variations in these websites in terms of the packages offered, the costs associated, the procedures involved . Also many portals provide the process of filling taxes for free. These are for people with the income below a certain level.
So while opting for a package, you usually choose a cheap package if your income is through your salary. The package choice may turn to a costlier one, if the income is from various sources(Business, Capital gains, House properties etc)
You need to also ascertain the service provider. These are your finances that we are talking about and hence we need to be careful. You will be filling in information like investments, savings, bank account details etc, and hence you need to evaluate the confidentiality and privacy policy of the portal that you choose.

You do not have to do much while filling it through the government website. You can fill the details online itself on the ITR form and upload the form directly.
After the upload and submit, an acknowledgement is generated. This would be emailed to you as well.

For most of service providers, there is already a system built in for filling forms with ease, that suits the need of the users. Some service providers even have a question and answer format for form filling.
Once the acknowledgement is signed, it is received by the tax department to assess the calculative errors, wrong claims or deductions filled in by the tax payer for that year.
After rigorous evaluation, when the data filled in by the taxpayer is matched with the in-house data, an email is sent to the individual which is termed as intimation under section 143(1). This is to notify the individual that the acknowledgement has been received and is ready to be processed.

Tax consultants
Apart from these routes, you have many tax consultancies too in place. These consultancies have expertise on tax .These consultancies help individuals like you by providing the know-how around taxes. The organization provides complete and intact information on how to file the income tax returns. Examples are H&R Block, TaxConsultantsIndia etc.

Now we believe that filing income tax should not be a formidable task for you. With so many options the ease around them, you do not have to ever worry about getting stuck anywhere.

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How Net Banking Can Save Time?

Let’s first have a conversation on what net banking is. In the simple words, we can monitor our bank account online and even carry out transactions with net banking.
This electronic payment system frees us of the task of physically going to a bank. We can carry out multiple transactions on the bank/financial institution’s website is with the click of the mouse.
Financial institutions and banks have their own websites, built up beautifully enhanced by user friendliness. These websites can be accessed with utter ease, and are fully secure.

Time is Money! Net banking actually saves a lot of your time and your money!

Benefits of net banking are endless. Be it starting a new account online, or starting a retirement account, or move money into a holiday savings account or applying for loans, everything is easy and accessible to us.
Many financial institutions also have live customer service through Internet chat.
Even Gifts and pre-loaded debit cards can be ordered through Internet banking services.
Ways in which Net banking saves a great deal of time: –

1. We do not have to encircle dates on the calendar for going to our local financial institutions.
Going to a bank, leads to a transportation cost. But with Net banking in place, Transferring funds, paying bills, all of this is managed from home.
With net banking, you will never have to stand in cues waiting for the other person to get done with his work. The moment you finish a transaction, the net banking system processes it.
2. Monthly bills can be made on time. Financial planning is much easier now. There is an option for automated payment as well. By setting up vendor information and choosing a monthly repayment date, you cannot possibly forget to repay.
3. The paper work is zero. Writing checks, cross –checking envelopes to be sent, filling forms manually will all be just not required.
4. When you have made all or most of the payments, you will need fewer checks. You will not spend time on ordering check books, and waiting for them too.
5. Net banking is available all the time for 24 hours. You would not have to race to the bank before it shuts down. You also would not be disappointed on a bank holiday.
6.Fund transfer from one account to another will also be a swift process. This happens within 24 to 48 hours depending on the bank’s policies. This saves considerable time, wherein you have to write a check from one account, and subsequently deposit into another account.
7. Net Banking can be carried out via NEFT, IMPS and RTGS. We will quickly explain what each of them stands for.
- a. NEFT – National Electronic Funds Transfer is usually used to transfer small amounts. The minimum amount could be Rs 1, but the maximum is 10 lakh. The transfer protocols are managed by RBI. In this process funds are transferred in batches.
  The operational hours are 8am to 6:30 pm on weekdays, and 8am to 12:30 pm on Saturday in hourly batches. Timings might vary a bit depending upon the different banks. Transactions carried out during this time slot are settled within the same day, and the ones carried out later are carried out the next day. So when a person transfers money from one account to another, it would not be instantly credited. It would be done in the next settlement cycle that happens at 60 minutes intervals.
- b. RTGS or Real Time Gross Settlement- Here the fund transfer takes place between bank accounts in real time. RTGS is a fast process, and is handled by huge organisations for real time transactions. So basically as soon as the transaction is processed the funds are credited to the beneficiary. Here RBI manages the transfer protocols. Here the minimum amount should be 2 lakhs, and the maximum amount would be 10 lakhs.
- c. IMPS stands for Immediate payment services. Through this mechanism, you can transfer money using the mobile phone. Numerous banks allow transactional transfer through this mechanism. It is also being extended through other channels such as ATM, Internet Banking, etc.
  Here the minimum amount is Rs 1 and maximum is 2 lakh.
There are different transactional charges involved too for transferring cash to and from the account in all of these cases.
We want you to direct your expenses better, and control your money in the most efficient and time-saving fashion.

Hope we have helped you in getting a better understanding of net banking.

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Education Loans

Quality and Quantity seem to come hand in hand. In present scenario, quality education burns a hole in the pockets of parents because of the huge quantity of fees charged for it.
Education loans offered by numerous financial institutions are a boon to the vast sea of students.
Students can breathe a sigh of relief with the numerous loan options served across to them, choosing their careers is easier now.
Parents also can be complacent about the fact that they have a monetary pillar to recline on.
However there are some factors that we need to be vigilant about.

1. Your educational institution is looked at with a microscope before a loan can be granted. The colleges that offer good placement opportunities are given a green signal. The educational institutions that are not well recognized are given low priority for giving out loans.
2. The CIBIL score for both parents and students is one of the key factors that leads to an approval or disapproval of the education loan. The credit history needs to be up to the mark, and there should be no traces of regular defaults. This holds integral for students, who have just entered college and also have started working. These youngsters might apply for various credit cards with a low repayment capacity resulting into a disrupted CIBIL score. For the parents who are the guarantors, it is imperative to have a good credit score.They are the ones who guarantee the repayment of the loan.
3. Your academic performance also one of the deciding factors for the lenders to grant you a loan. So if you do not fit in the eligibility criteria that the financial institution possesses, then your loan request might be rejected. The banks/financial institution thinks that you would fall in the category of a non-performer and not earn enough to repay.
4. The type of course that you have applied for ascertains the loan approval. If the loan is for a part-time course, then chances are that the bank might reject your loan application. Financial institutions/banks approve loans that are meant for a full-time course abroad or in the same country.
5. The income of your parents is a crucial factor that can turn the tables. Since your parents essay the role of guarantors, and if you fail to repay the loan, then it is on them to repay the amount. If it is fairly low, then the lending institution will not hesitate to disapprove your loan request.
6. Financial institutions do not rely on “Age No bar”. There is a certain age limit upto which loans can be approved and that is 30 years.
7. Whenever you take a loan of more than 7.5 lakhs, then it is necessary to have a collateral and joint borrower in place. If you are unable to provide these, then you might get the loan disapproved. Having a collateral in place, gives a sense of guarantee to the lending elements. They feel that they can recover the amount loaned in case of failed repayment. For an amount lesser than 4 lakhs, you are not required to have a collateral in place. However even such an amount necessitates the involvement of a guardian/parent.

Taking loans for education that is a step taken in many people’s lives. Hence we wanted you to be aware of the obstacles that might come in future planning and career decisioning. Being cautious will help you in better financial planning and control of money.

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Important Tips to Consider Before Taking a Home Loan

Getting a home loan on salary offers a great way to finance the purchase of your dream home. The increasing real estate prices can make buying a house an expensive ordeal and accumulating the required wealth can take years. But when you apply for a home loan, you can get your dream home without any wait.

However, simply knowing how to apply for a home loan is not enough. You also need to understand the nuances of this borrowing to ensure you make an informed decision. So, read on to learn some crucial tips you should remember while getting a home loan.

Tips to remember before you apply for a Home Loan

Here are some tips to remember when you apply for a home loan online:

1. Stable income and employment

Firstly, to get a home loan, you need a decent salary and a secured job. You should be regular with income tax payments and filing of the returns. You should also get your Form 16 from your employer.

2. Maintain a healthy Credit Score

Having a good credit score while applying for a home loan is crucial. The financial institution may reject your loan request without a good credit score. You should pay your debt before the due date to maintain a good credit history, which can help increase your credit score.

3. Select a suitable loan option

You also need to keep a check on any other loans that you have applied for and taken. Financial institutions monitor your capability to repay. For example, if you have taken many loans that occupy 50% or more of your salary, you may find it difficult to repay them.

4. Get a mortgage banker

You need to get a mortgage banker involved in the process of selection of loans.

There are innumerable loan options that the lender provides and a mortgage banker helps make faster decisions with efficacy.

5. Provide documents and details

As mentioned, financial institutions evaluate your repayment capabilities. These are generally included in the list of documents required to apply for a home loan. The lenders also ask for your investment data. You need to share the details of your bank account/s, post office savings schemes, insurance plans, employment details, etc.

If you are a freelancer or self-employed, you need to give the details of your income, income tax return and balance sheets, among other documents.

6. Choose the right property

It is very important to assess the kind of property that you choose to get a loan for. It may become a little difficult to get the loan sanctioned if the property is a resale property of age 10-15 years. The financial institutions also evaluate the construction stages of the property.

7. Keep the down payment ready

While applying for a home loan, you need to be ready with the down payment. Most banks give an allowance for eighty-five per cent of your loan. You need to pay the remaining amount as a down payment. So, make the necessary arrangements to have the required amount ready.

8. Choose the right tenure

The repayment time is also an essential factor to contemplate. Most lenders allow you to choose the timeline to repay your loan. But while deciding the time limit, you need to consider the fact that a longer repayment period will lead to lower EMIs but higher rates of interest.

9. Involve a guarantor

The financial institutions do not press on the need to have a guarantor. However, having a sense of guarantee leads to an increment in your credibility. Also, there are cases where it becomes mandatory for you to have a guarantor.

The guarantor could be your friend or family and he/she takes guarantee in the legal space. Note that the guarantor also needs to meet the lender’s eligibility criteria. Remember, in case you become delinquent and are unable to pay back, then it is your guarantor’s responsibility to repay the loan.

10. Apply with your spouse

If you apply for a certain loan amount and it is not getting sanctioned, then you can choose to apply for the loan with your spouse. The chances of getting approval on your home loan increase this way as the lender will also consider your credit profile.

11. Get an appraiser

Having an appraiser in place helps all the parties aware that you are paying a reasonable price. The financial institutions arrange for an appraiser who essays the role of a third party. The appraiser evaluates and gives an estimate of the value of the house that you intend to buy.

Remember, at the end of the process, there is certain paperwork that you need to complete. It takes a few days for the lender to fund your loan after the completion of the paperwork. As such, the whole process can take some time and you should apply accordingly.

If you simply plan to get funds to renovate your home, you can get an Instant Personal Loan online. With Fibe, you can get a loan of up to ₹5 lakhs instantly with minimum documentation. Download the Personal Loan App or go to our website and apply for quick and hassle-free personal financing.

FAQs on Applying for a Home Loan

How to close a home loan early?

To close your home loan before tenure, you need to reduce your outstanding balance. For this, you can choose any of the methods:

Increase your EMI amount
Opt for a balance transfer
Reduce your loan tenure
Pay more than your monthly payment amount
Repay a substantial amount as prepayment

Remember, the lender may levy some charges if you plan to close the loan early. Be sure to consider this and other terms before proceeding.

How to get a home loan preapproval?

Banks offer preapproved home loans to customers based on their repayment capacity. Therefore, you must have a good credit score and a steady income to get preapproval on your home loan. You can check your offer from the lender’s website.

How to reduce home loan EMIs?

To reduce your home loan EMI, here are some points that you must consider:

Increase your loan tenure
Improve your credit score and request a lower EMI
Negotiate with lenders for better interest rates
Make a part payment or prepay your loan to reduce the principal amount
Get a home loan balance transfer

How can I get a loan for my house?

There are numerous financial institutions offering competitive home loans. You can choose one that offers the best deal for your current and future finances. Once done, you can apply online or offline, as per your preference.