Looking for a loan----Check your purpose of taking loan?

Looking for a loan…

Check this before striking a deal with your bank as you can better negotiate with your bank on these grounds and set your attitude as well for best offer.

Before initiating communication process with your bank try to fix these concepts in your mind so that you can approach accordingly….
• Purpose
• Rate of Interest
• Disbursal Period
• Documents required

Purpose:
Purpose refers to the reason for taking loan i.e. having a goal behind availing loan that can be for fulfilling the end-requirement. It may include
• Cash
• Home
• Car

Cash
Cash refers to ready money. It can be required for various reasons like emergency, investment, consumer durable purchase, daughters wedding or debt-consolidation.

For Emergency:
It refers to the urgency of funds i.e. cash is need of the hour for you. The options you can access for availing funds is cash against your credit card limit or you can pledge your securities for cash

For Investment:
It refers to funds required for the purpose of speculation & saving or earning/expecting higher returns than the borrowing rate. The preference you can give for having cash is on the basis of your Salary/ITR or against your car track record else loan against property if looking for higher amount. Overdraft limit is the best option to avail cash for investment as it gives you an option that interest is only charged on the amount, which is being used by the customer.

For Purchasing Consumer Durables:
You want to purchase electronic gadget right from refrigerator to washing machine to music system you can buy anything but running short of money. All you have to do is choose from the wide range of financiers but let me clear you about a fact that people who are offering loan at 0% interest are actually taking your discount and charging you as interest For ex- Refrigerator sold to you at Rs.20000/- out of which company offered a discount of Rs.3000/- on it which is taken by the bank and they charge extra 1-2% as processing fee from you so, if you had bought it for cash you would have saved Rs.3000 as discount plus Rs.500 as file charges summing up to rs.3500/- so in all you paid interest of 17.5% flat this is an illustration so, its better to take personal loan or credit card at lower rate of interest.

Home
Home is a place where a person lives, spends much of his time, or feels generally comfortable with. While a house is often referred to as a home, and is home to many people, the concept of "home" is broader than a physical dwelling. Home is often a place of refuge and safety, where worldly cares fade; with things and people you love becoming the focus. Home is central to one's life, primarily emotional, and partially physical. Loan is required for purchasing, renovating & constructing home

For purchasing home:
The preference you can give for availing loan for purchasing property is home loan & money saver home loan. In money saver home loan plan you can save your interest money as you can get your current account linked with home loan account and you can earn the interest on the money parked at your current account at the same rate at which you have taken the home loan and the same interest earned will be deducted from the home loan interest but it is only available with floating home loan rates. Check for the floating & fixed rate difference as floating rate of interest refers to rate which keep on fluctuating according to the market conditions and it is slightly lower than the fixed rate of interest and fixed rate of interest is fixed throughout the tenure of home loan.

Home improvement loans:
Your home needs a makeover and you want to get it modernize but you wonder from where to get the finance for fixing it up you can ask your bank for home improvement loan which can help you fix problems like external repairs, tiling & flooring, internal & external painting, plumbing& electrical work, waterproofing & roofing, grills & aluminum windows, waterproofing on terrace, construction of underground/overhead water tank, paving of compound wall, bore well etc., you can get 85% of the cost of improvement subject to the market value of the property.

Home Extension loan:
You see your family is growing and so is the need of the space is growing in your home larger bathrooms, separate bedroom to your children, bigger dinning rooms in short you are adding space to your home. You can get 85% of the cost of extension subject to market value of the property.

Home construction loan:
You can use this loan for the construction of the property. You can go for a home loan else you can opt for a overdraft facility against your home and construct your home this will save your interest as it is being charged on the amount of withdrawal.

Home Conversion loans:
This is available for those who have financed the present home with a home loan and wish to purchase and move to another home for which some extra funds are required. Through home conversion loan, the existing loan is transferred to the new home including the extra amount required, eliminating the need of pre-payment of the previous loan.

Land Purchase loans:
You want to purchase land for investment or for constructing your dream home at your kind of a location but doesn’t have enough money to fund your land so contact your bank and ask for land purchasing loan from them. You can avail 85% of the market value of the property depending on paying capacity.

Bridge loans:
Bridge loans are designed for people who wish to sell the existing home and purchase another one. The bridge loans help finance the new home, until a buyer is found for the home.

These are all the options that you can access to avail loan for your home.

Car

New Car: If you are looking for a brand new car for yourself and the price tag they carry is beyond the reach of yours then the answer to own your dream car is to finance your dream car by the car loan providers. You can avail cash discount for your new car and special schemes from the bank with which you are holding accounts.

Old/Used Car: You have received an alluring offer from your colleague, as he is moving abroad and you always dreamt of having vehicle like him and he is selling the same vehicle and offered you to purchase it but you are running short of money and you don’t want to lose the offer what you can do is go for used car finance from your bank to fulfill your delight.

Car Overdraft facility: Need cash? Having decent set of wheels your car can get you enough cash to meet your needs without making you embarrassed by just getting your car hypothecated or on the track record of car loan repayment. Car overdraft facility charges interest only on the amount used by you as well as pay amount at your comfort level.

These are all the options that you can access to avail loan for car
So, before going for any loan check your purpose of taking loan and then take decision which option to be availed.

“Firmness of purpose is one of the most necessary sinews of character, and one of the best instruments of success. Without it genius wastes its efforts in a maze of inconsistencies.”