Because it is an unsecured loan which means lender/banks trust only on your income, repayment capacity and credit history to take the risk of the money. And, high return is charged for incorporating high risk
What are the different types of home loan rates?
There are two types of interest rates available in the market:
Fixed Rate: In this option, interest rate for initial few years or for complete tenure remain fixed as decided in the initial agreement irrespective of market interest rate conditions.
Floating Rate: As the name suggests, the interest rate is dependent on economic conditions hence keep on fluctuating.
What should be kept in mind while taking a home loan?
Though usually the home loan interest rates in the market remains almost the same and very competitive among the bank but there can be enough difference in the loan tenure. One should take a comfortable tenure.
One should borrow only the max amount which he/she can repay comfortably. Missing on your EMIs or defaulting on your home loans will adversely affect the CIBIL score and thereby reducing chance to avail any other loan in future.
Is credit card really beneficial?
Yes, you get interest free loan for 45-50 days, you get emergency fund, you get freedom from keeping huge cash every time in pocket & at home and you get lot of exciting offers. Credit card is definitely good if used sensibly.
What is Balance Transfer?
Balance transfer is a facility provided by few credit cards through which you can transfer the outstanding balance of one credit card to other, thereby extending the interest free period of borrowing. Few credit card charge a flat fee to do the same, few doesn't allow balance transfer at all.
If I forgot to pay in time, will my credit card be closed?
No, your credit card will remain active but a heavy penalty to the tune of 30-40% is levied. In case, you are frequent traveler or a person who forgets to pay in time then you can link your card to your account and set for Auto Bill Pay on due date to avoid such charges.
Can I Prepay my Car/Bike loan similar to Home Loan?
Yes, you can prepay your car/bike loan but unlike in case of home laon, here bank may charge for prepayment penalty. Many a times prepayment penalty applies till certain duration but since it varies from bank to bank & the agreement one has with bank, one should take such charges into account while making part payment of complete closure of loan.
Can I get better rate from same bank?
One can definitely negotiate with bank on various charges & rate of interest while applying for loan. Depending on your credit score, amount of loan & other parameters, bank can revise it charges exclusively for you. Make sure, such negotiated values are mentioned in the agreement you have with bank.
Can I get loan for 100% on road price of car?
Yes, but very few banks make such offers that too based on some special terms & conditions. Sometimes, some bank have special tie ups with certain car manufacturers, in such cases 100% on-road value financing can be seen.
How would value of my property is determined?
The value of the property would be determined through a valuation conducted by the Loan Provider
How much time does a bank takes to disburse the loan?
The processing of the loans usually takes 7 to 10 working days once all the documents are submitted. It also depends upon your profile and documentation.
Does the property against which I want loan, need to be insured?
Yes the property has to be insured against fire, flood, earthquakes and other appropriate hazards during the tenure of the loan