Personal loans are handy when you are in a spot and need some urgent cash. However, personal loan are tricky and you need to know as much as possible about their basics before applying for one.
Before you choose your personal loan:
Calculate the inexpensive loan offer: Personal loans come with very high interest rates ranging from 14% to 24%. Compare personal loan interest rates and get the complete picture by understanding the annualized interest rates for each offer.
Then figure out the total amount of repayment you need to shell out with all the offers before opting for the loan of your choice.
Processing fee et al: You need to keep in mind the processing fee and other fees that will be levied when you apply for your personal loan.
Prepayment penalty check: Ask upfront if there would be any penalty payments for prepayment of the loan at any point in time. More often than not loan consumers tend to pay up their loans earlier than planned to be rid of debt. Hence, its important to know if your personal loan offer allows part prepayments.
If that is the case, then you should be aware from what time frame in the loan period you can start prepaying and understand the cost you incur due to such prepayments in part or full.
EMI and tenure: Evaluate all loan offers. The first condition for loan offer selection is the total money outflow that the loan will cost. The second factor is the EMI. A loan offer with a lower EMI and a longer tenure may seem attractive, as it could be easy on your purse strings, however not all such loans prove to be cost effective in the long run.
Hence, first calculate the total loan cost and then try to opt for a higher EMI, which you can comfortably manage to enable shorter loan tenure.
Tuesday, November 16, 2010
Tuesday, September 28, 2010
Mumbai banks plan to stay loan rates unaffected
Many banks in Mumbai are reconsidering their plans to hike home loan rates next month because of the upcoming holiday season, which will increase the demand for those loans.
This comes after the decision last week by the Reserve Bank of India to change policy rates. The banks said that they will potentially increase their lending rates next month when a review of the base rate is done.
Indian festivals such as Dessehra and Diwali in the next two months are expected to create a big demand for home, car, and personal loans because of the belief that this period is an auspicious time to acquire things.
“Banks may not hike home loan rates immediately since sales are expected to pick up soon after the Pitr Paksha is over,” said Oriental Bank of Commerce CMD Ty Prabhu.
The Hindu festival of Pitr Paksha is considered an inauspicious time to invest so loan rates may remain unchanged at this time.
This comes after the decision last week by the Reserve Bank of India to change policy rates. The banks said that they will potentially increase their lending rates next month when a review of the base rate is done.
Indian festivals such as Dessehra and Diwali in the next two months are expected to create a big demand for home, car, and personal loans because of the belief that this period is an auspicious time to acquire things.
“Banks may not hike home loan rates immediately since sales are expected to pick up soon after the Pitr Paksha is over,” said Oriental Bank of Commerce CMD Ty Prabhu.
The Hindu festival of Pitr Paksha is considered an inauspicious time to invest so loan rates may remain unchanged at this time.
Tuesday, June 8, 2010
How to find the Lowest Personal Loan Rates
Two people creation the same income, walk into the same bank, wanting the same amount for personal loans. While they both get the loans they were seeking, one gets a much better interest rate and thus gets a much superior deal.
Why Do Some People Get Better Rates Than Others?
First, there is no law saying how much of an interest rate a bank can charge. This means the bank can decide how much and at what interest rate they are willing to offer a personal loans. In most cases, the better rates and the better terms go to those with the better credit score.
How to Improve Your Credit Score
Since your credit score does more than determine the interest rates on personal loans, it is important to do everything you can to keep that score high. People use your credit score to determine job eligibility, insurance premiums, interest rates, availability of personal loans, and so much more. Here are some things you can do to either raise your score or keep it high.
Pay Hospital Bills – Many people are unaware that as long as you pay part of your bill you are ok. Therefore, every month pay something on all your medical bills.
Only have 1 or 2 Credit Cards – Revolving credit is a tricky thing. On the one hand, you need some revolving credit to get a credit score. However, too many credit cards or too many request for credit cards can lower your score.
Keep Balances Low - Paying off your credit cards each month is ideal. If you must roll over a balance, then pay it off as soon as possible. You need to keep a low debt to income ratio.
Pay off Bad Debt - Many people believe that once a debt goes bad, there is nothing you can do. However, paying off charge offs and slow pays will still be better than nothing.
Negotiate Large Debt – Even after a debt has gone to collections or been written off, you can call and try to negotiate a smaller fee. You may be surprised to find the creditor is willing to settle for pennies on the dollar.
The best thing you can do about your credit score is to watch it. Take advantage of the free yearly credit card report to keep the right information on and faulty credit information off.
Why Do Some People Get Better Rates Than Others?
First, there is no law saying how much of an interest rate a bank can charge. This means the bank can decide how much and at what interest rate they are willing to offer a personal loans. In most cases, the better rates and the better terms go to those with the better credit score.
How to Improve Your Credit Score
Since your credit score does more than determine the interest rates on personal loans, it is important to do everything you can to keep that score high. People use your credit score to determine job eligibility, insurance premiums, interest rates, availability of personal loans, and so much more. Here are some things you can do to either raise your score or keep it high.
Pay Hospital Bills – Many people are unaware that as long as you pay part of your bill you are ok. Therefore, every month pay something on all your medical bills.
Only have 1 or 2 Credit Cards – Revolving credit is a tricky thing. On the one hand, you need some revolving credit to get a credit score. However, too many credit cards or too many request for credit cards can lower your score.
Keep Balances Low - Paying off your credit cards each month is ideal. If you must roll over a balance, then pay it off as soon as possible. You need to keep a low debt to income ratio.
Pay off Bad Debt - Many people believe that once a debt goes bad, there is nothing you can do. However, paying off charge offs and slow pays will still be better than nothing.
Negotiate Large Debt – Even after a debt has gone to collections or been written off, you can call and try to negotiate a smaller fee. You may be surprised to find the creditor is willing to settle for pennies on the dollar.
The best thing you can do about your credit score is to watch it. Take advantage of the free yearly credit card report to keep the right information on and faulty credit information off.
Tuesday, May 25, 2010
Gold loan: A more precious debt option
If you have gold jewellery to offer as collateral for personal loan, procedural hassles are minimal and banks don't check your credit score.
The amount of documentation and the excessive verifications before your personal loan gets processed can be a nightmare.
Here is where your jewels can lend a hand, specifically gold.
With the current interest rate fluctuations, opting for a jewel loan as against a personal loan is more lucrative. Not only are your overall costs reduced, this will save a lot of your time.
The Credit Information Bureau (India) Ltd Score which reflect an individual's credit history are beginning to play an important role in acquiring personal loans. However, a jewel loan requires no such score.
While the requisite documents for a jewel loan differ across lenders, most normally require no more than a proof of income or address.
The clincher: the interest rates between a jewel loan and a personal loan can differ by as much as 5-8 per cent for the same amount loaned.
Some lenders charge a nominal fee for processing and others a small fee as closing charges. Co-operative banks require you to be a member, charges for which, again, can be as low as Rs 5.
Jewel loans can be availed of at co-operative banks, public sector banks, private sector banks and other private lenders. Some banks, however, offer it only in certain regions, the only disadvantage.
While private lenders process the loan in less than a couple of hours, some co-operative and public sector banks may take up to a day to issue the loan.
In any case, the time is much less than the minimum three days of processing time for a personal loan. Loan to value, or the maximum ratio of a loan's size to the value of the asset, for a jewel loan is on par with that of a personal loan.
The Reserve Bank of India has no strict policy on jewel loans.
In late 2007, the RBI had issued a notification which permitted bullet repayment (a lump sum payment of the principal at maturity) of gold loans.
Subject to specific guidelines from the apex bank, each bank may fix its rate for gold, reflecting the market price at that point of time.
Care should be exercised if you have defaulted on a loan earlier, be it personal or any other. Your jewels might not be returned at the end of the loan tenure if you approach the same branch.
Approaching another branch or bank in this case would be one solution, as they would not have any record of your default history.
A State Bank of India official, however, cautioned that some time in the near future, they would start looking at Cibil scores before approving a jewel loan.
The loan tenure is not uniform across banks. With private lenders like HDFC Bank and some co-operative banks, the tenure is annual.
Non-banking financial companies like Mannapuram Finance have one-month tenure. But, an advantage with monthly renewals is that the loan value also increases every month with the appreciation of gold.
At SBI, the individual must repay some amount of the principal along with the interest every month, as non-repayment for a continuous period of three months will render the loan a non-performing asset.
Considering the advantage a jewel loan offers in terms of a rent-free locker, a little bit of juggling can even help you save renting a locker for your jewels! (Obtain a fixed deposit on the loan, which should work out lesser than the rent charged on lockers.)
Of course, it makes more sense to opt for a jewel loan from a public sector bank or a co-op bank, as some private lenders have had a history of shutting down and not returning the gold.
The amount of documentation and the excessive verifications before your personal loan gets processed can be a nightmare.
Here is where your jewels can lend a hand, specifically gold.
With the current interest rate fluctuations, opting for a jewel loan as against a personal loan is more lucrative. Not only are your overall costs reduced, this will save a lot of your time.
The Credit Information Bureau (India) Ltd Score which reflect an individual's credit history are beginning to play an important role in acquiring personal loans. However, a jewel loan requires no such score.
While the requisite documents for a jewel loan differ across lenders, most normally require no more than a proof of income or address.
The clincher: the interest rates between a jewel loan and a personal loan can differ by as much as 5-8 per cent for the same amount loaned.
Some lenders charge a nominal fee for processing and others a small fee as closing charges. Co-operative banks require you to be a member, charges for which, again, can be as low as Rs 5.
Jewel loans can be availed of at co-operative banks, public sector banks, private sector banks and other private lenders. Some banks, however, offer it only in certain regions, the only disadvantage.
While private lenders process the loan in less than a couple of hours, some co-operative and public sector banks may take up to a day to issue the loan.
In any case, the time is much less than the minimum three days of processing time for a personal loan. Loan to value, or the maximum ratio of a loan's size to the value of the asset, for a jewel loan is on par with that of a personal loan.
The Reserve Bank of India has no strict policy on jewel loans.
In late 2007, the RBI had issued a notification which permitted bullet repayment (a lump sum payment of the principal at maturity) of gold loans.
Subject to specific guidelines from the apex bank, each bank may fix its rate for gold, reflecting the market price at that point of time.
Care should be exercised if you have defaulted on a loan earlier, be it personal or any other. Your jewels might not be returned at the end of the loan tenure if you approach the same branch.
Approaching another branch or bank in this case would be one solution, as they would not have any record of your default history.
A State Bank of India official, however, cautioned that some time in the near future, they would start looking at Cibil scores before approving a jewel loan.
The loan tenure is not uniform across banks. With private lenders like HDFC Bank and some co-operative banks, the tenure is annual.
Non-banking financial companies like Mannapuram Finance have one-month tenure. But, an advantage with monthly renewals is that the loan value also increases every month with the appreciation of gold.
At SBI, the individual must repay some amount of the principal along with the interest every month, as non-repayment for a continuous period of three months will render the loan a non-performing asset.
Considering the advantage a jewel loan offers in terms of a rent-free locker, a little bit of juggling can even help you save renting a locker for your jewels! (Obtain a fixed deposit on the loan, which should work out lesser than the rent charged on lockers.)
Of course, it makes more sense to opt for a jewel loan from a public sector bank or a co-op bank, as some private lenders have had a history of shutting down and not returning the gold.
Wednesday, April 28, 2010
Personal loan and loans of personal use
Personal loans are loans supposing by financial institutions without objects or security. Personal loans are unsecured loans for personal needs and can be used for any purpose. In India, personal loans are normally at the level of life are to manage, weddings, business graduation losses and investments in opposite monetary arrangements. These personal loans are really gentle and encounter all your needs. The volume of the personal loan of Rs 50 000 can Vary – R. 20 lacs and the generation of the amends of the loan varies personal 1-5 years.
In India, high-interest in isolation loans since the bank takes a incomparable series of risks, by personal loans without security. In India, personal loans from banks such as SBI, ICICI, HDFC and monetary institutions like Reliance etc. This supposing banks / monetary institutions rest on personal loans for people with seductiveness rates of in between 16-25%.
You can request for loans and might not benefit from these personal loans immediately. It is not required to the unchanging use of borrowed money divulge I. e for the role of borrowing for home loans. The banks are endangered that if the borrower does not pay off the loan with seductiveness before the due date or not, and they reliable by a review of income, practice or business and other factors of the borrower.
The support process is in the personal loan fast cumulative loans in more aged to others. Personal loan and other charges on credit by the lender, the stroke on the overall cost of personal loans and contingency as a more aged with the banks. You can additionally request online to the information accessible on personal loans. The particular websites of assorted banks and finance associated websites for other applicable information to guide the people for a personal loan.
In India, high-interest in isolation loans since the bank takes a incomparable series of risks, by personal loans without security. In India, personal loans from banks such as SBI, ICICI, HDFC and monetary institutions like Reliance etc. This supposing banks / monetary institutions rest on personal loans for people with seductiveness rates of in between 16-25%.
You can request for loans and might not benefit from these personal loans immediately. It is not required to the unchanging use of borrowed money divulge I. e for the role of borrowing for home loans. The banks are endangered that if the borrower does not pay off the loan with seductiveness before the due date or not, and they reliable by a review of income, practice or business and other factors of the borrower.
The support process is in the personal loan fast cumulative loans in more aged to others. Personal loan and other charges on credit by the lender, the stroke on the overall cost of personal loans and contingency as a more aged with the banks. You can additionally request online to the information accessible on personal loans. The particular websites of assorted banks and finance associated websites for other applicable information to guide the people for a personal loan.
Saturday, April 24, 2010
personal loan disbursals down to 4.7%
Growth in personal loans was muted in 2009-10, data from by the Reserve Bank of India’s (RBI) macroeconomic report shows. However, education loan and home loans have not as fared as badly as the rest of the personal loan constituents.
Personal loans grew 4.7% annually as on February 26, 2010, as against a 6.6% growth a year ago. Loans to education sector grew by 31.2% (33.8%) annually while housing loans grew by 8.3% (6.4%).
The Macroeconomic and Monetary Developments in 2009-10 report, is a background to the annual monetary policy statement for 2010-11 that will be announced today.
“Low home loan (teaser) rates helped the growth in disbursements,” said Hatim Brochwala, banking analyst, Khandwala Securities. During the recovery from the global economic downturn, the housing loan segment witnessed a tide of teaser home loan schemes from banks which offered low fixed interest rates in the first few years and floating rates thereafter.
Most of these schemes have been discontinued but some have been revised with changes in interest rates and tenure.
“Teaser rates may not stay for more than 2-3 months as interest rates are going up. So the growth in home loans may come down slightly,” said Brochwala.
Growth in educational loans can also be attributed to higher demand. “During the downturn, many people went for further studies for which they had taken bank loans,” said M Narendra, executive director, Bank of India. “Now that the economy is recovering they can effectively use their higher qualifications pursued during the time of recession,” he said.
“The government has been emphasising on education loans, which is reflected in its guidelines stating that an educational loan can only be rejected by the highest authority. So almost all educational loans applied for are sanctioned,” said C S Jain, head (personal banking), IDBI Bank. Moreover, loans of up to Rs 4 lakh do not need a security, according to RBI guidelines.
The personal loans segment also includes advances against fixed deposits, credit cards and consumer durables.
The credit card segment took a hit due to heightened caution on the unsecured loans front by banks post recession. Issuances were restricted to individuals holding salaried accounts or having multiple relations (fixed deposits account, insurance etc.) with the bank in some cases. This segment declined by 28.3% annually.
Personal loans grew 4.7% annually as on February 26, 2010, as against a 6.6% growth a year ago. Loans to education sector grew by 31.2% (33.8%) annually while housing loans grew by 8.3% (6.4%).
The Macroeconomic and Monetary Developments in 2009-10 report, is a background to the annual monetary policy statement for 2010-11 that will be announced today.
“Low home loan (teaser) rates helped the growth in disbursements,” said Hatim Brochwala, banking analyst, Khandwala Securities. During the recovery from the global economic downturn, the housing loan segment witnessed a tide of teaser home loan schemes from banks which offered low fixed interest rates in the first few years and floating rates thereafter.
Most of these schemes have been discontinued but some have been revised with changes in interest rates and tenure.
“Teaser rates may not stay for more than 2-3 months as interest rates are going up. So the growth in home loans may come down slightly,” said Brochwala.
Growth in educational loans can also be attributed to higher demand. “During the downturn, many people went for further studies for which they had taken bank loans,” said M Narendra, executive director, Bank of India. “Now that the economy is recovering they can effectively use their higher qualifications pursued during the time of recession,” he said.
“The government has been emphasising on education loans, which is reflected in its guidelines stating that an educational loan can only be rejected by the highest authority. So almost all educational loans applied for are sanctioned,” said C S Jain, head (personal banking), IDBI Bank. Moreover, loans of up to Rs 4 lakh do not need a security, according to RBI guidelines.
The personal loans segment also includes advances against fixed deposits, credit cards and consumer durables.
The credit card segment took a hit due to heightened caution on the unsecured loans front by banks post recession. Issuances were restricted to individuals holding salaried accounts or having multiple relations (fixed deposits account, insurance etc.) with the bank in some cases. This segment declined by 28.3% annually.
Friday, April 23, 2010
HSBC to rebuild retail loans book
HSBC Bank Plans to focus on credit cards and home loans this year.
After booking losses on its consumer banking business for three straight years, Hong Kong and Shanghai Banking Corporation (HSBC) looks to rebuild its retail loan book in 2010, aided by an improving credit environment.
The UK-based bank, the third-largest foreign lender in India by assets, plans to focus on credit cards and home loans, where lending was virtually at a standstill till the second half of 2009.
The bank is now disbursing home loans worth Rs 100-150 crore every month. “Our focus for 2010 is to expand our mortgages business profitably,” said Rajneesh Bahl, country head, personal financial services.
In 2009, the lender cut exposure to mortgages in India by 20 per cent to Rs 4,061 crore from Rs 5,115.2 crore at the end of 2008 to keep a lid on losses.
“There is no doubt the economy is looking up again and customer confidence is on the rise. As the market picks up, so does the demand for affordable housing; we believe the overall pie will get only bigger, which could result in an increased market share for all players,” Bahl said.
After months, the bank is expanding its credit card portfolio. And as a sign of growing confidence in the market, HSBC has started sourcing credit cards from the open market this week onwards, according to bank sources. During the consolidation phase, the bank will only service specific requests for credit cards and not solicit customers.
“We never stopped open-market sourcing. For some time now, we have opted to grow selectively. We continue to offer cards to customers with a good profile and track record,” said Bahl.
In a departure from its earlier policy, the bank introduced co-branded credit cards last year. “Earlier, our thinking was that the HSBC credit card brand is strong and we should not dilute its value by co-branding. However, seeing the success of co-branded credit cards, we decided to introduce our own cards,” said a senior executive at the bank.
Among foreign banks, HSBC was one of the hardest hit by the downturn, reporting a loss of $219 million (about Rs 1,007 crore) on its consumer banking portfolio in 2009.
Standard Chartered Bank, the second largest foreign lender in the country by assets, reported an operating profit of Rs 248.4 crore from its consumer banking division in 2009.
Citigroup’s non-banking finance company, Citi Financial, reported a loss of Rs 729 crore for the year ended March 31, 2009.
HSBC saw stress on its consumer banking book even before the onset of the economic downturn in India. It reported a retail banking loss of $70 million in 2007. The loss widened to $155 million and $219 million in 2008 and 2009, respectively.
In 2009, loan impairment charges on consumer banking at the global level rose 9 per cent to $649 million, mainly due to rising delinquencies in unsecured consumer lending businesses in India and Indonesia.
“The delinquencies in India began to moderate in the second half of 2009 as measures implemented by HSBC in the second half of 2008 to mitigate loan losses, including ceasing consumer finance loan origination and tightening lending criteria on other unsecured lending products, began to take effect,” HSBC had said in its 2009 Annual Report.
After booking losses on its consumer banking business for three straight years, Hong Kong and Shanghai Banking Corporation (HSBC) looks to rebuild its retail loan book in 2010, aided by an improving credit environment.
The UK-based bank, the third-largest foreign lender in India by assets, plans to focus on credit cards and home loans, where lending was virtually at a standstill till the second half of 2009.
The bank is now disbursing home loans worth Rs 100-150 crore every month. “Our focus for 2010 is to expand our mortgages business profitably,” said Rajneesh Bahl, country head, personal financial services.
In 2009, the lender cut exposure to mortgages in India by 20 per cent to Rs 4,061 crore from Rs 5,115.2 crore at the end of 2008 to keep a lid on losses.
“There is no doubt the economy is looking up again and customer confidence is on the rise. As the market picks up, so does the demand for affordable housing; we believe the overall pie will get only bigger, which could result in an increased market share for all players,” Bahl said.
After months, the bank is expanding its credit card portfolio. And as a sign of growing confidence in the market, HSBC has started sourcing credit cards from the open market this week onwards, according to bank sources. During the consolidation phase, the bank will only service specific requests for credit cards and not solicit customers.
“We never stopped open-market sourcing. For some time now, we have opted to grow selectively. We continue to offer cards to customers with a good profile and track record,” said Bahl.
In a departure from its earlier policy, the bank introduced co-branded credit cards last year. “Earlier, our thinking was that the HSBC credit card brand is strong and we should not dilute its value by co-branding. However, seeing the success of co-branded credit cards, we decided to introduce our own cards,” said a senior executive at the bank.
Among foreign banks, HSBC was one of the hardest hit by the downturn, reporting a loss of $219 million (about Rs 1,007 crore) on its consumer banking portfolio in 2009.
Standard Chartered Bank, the second largest foreign lender in the country by assets, reported an operating profit of Rs 248.4 crore from its consumer banking division in 2009.
Citigroup’s non-banking finance company, Citi Financial, reported a loss of Rs 729 crore for the year ended March 31, 2009.
HSBC saw stress on its consumer banking book even before the onset of the economic downturn in India. It reported a retail banking loss of $70 million in 2007. The loss widened to $155 million and $219 million in 2008 and 2009, respectively.
In 2009, loan impairment charges on consumer banking at the global level rose 9 per cent to $649 million, mainly due to rising delinquencies in unsecured consumer lending businesses in India and Indonesia.
“The delinquencies in India began to moderate in the second half of 2009 as measures implemented by HSBC in the second half of 2008 to mitigate loan losses, including ceasing consumer finance loan origination and tightening lending criteria on other unsecured lending products, began to take effect,” HSBC had said in its 2009 Annual Report.
Friday, April 2, 2010
Personal loans for jobless, Live Tension free life
Living a tension free life during unemployed status is very hard to live as a person has to be thrifty and stingy. During such time, a person can bear all this except meeting of high-end needs and desires. To sort out such a problem, unemployed or jobless people can avail personal loans for unemployed. Under this option, the borrowers can avail either secured or unsecured loans.
Secured Personal loan option is availed by those jobless people who have valuable collateral to boost on. The collateral can be anything that can fetch good amount for meeting the necessities. Usually, the lender accepts home, building, real estate, etc as asset against the loan. The borrower can avail amount depending upon the collateral’s value. Larger the collateral value larger will be loan amount with flexible repaying option. The interest rate charged is quite feasible as lender feels secured for his amount.
Usually, the borrowers can avail amount ranging from 50000- 150000. This amount has to be repaid back in flexible period of time say 1-10 years. The interest rate charged is quite feasible in nature. The amount can be extended according to the equity value of collateral. The borrower can avail 125 % of amount from his collateral.
Secured Personal loan option is availed by those jobless people who have valuable collateral to boost on. The collateral can be anything that can fetch good amount for meeting the necessities. Usually, the lender accepts home, building, real estate, etc as asset against the loan. The borrower can avail amount depending upon the collateral’s value. Larger the collateral value larger will be loan amount with flexible repaying option. The interest rate charged is quite feasible as lender feels secured for his amount.
Usually, the borrowers can avail amount ranging from 50000- 150000. This amount has to be repaid back in flexible period of time say 1-10 years. The interest rate charged is quite feasible in nature. The amount can be extended according to the equity value of collateral. The borrower can avail 125 % of amount from his collateral.
Monday, March 29, 2010
So far so good
The Financial Stability Report (FSR) released by the Reserve Bank of India (RBI) is mostly reassuring. It confirms what the Committee on Financial Sector Assessment, headed by then-deputy governor Rakesh Mohan, had concluded almost exactly a year ago. The Indian banking sector is largely healthy. Banks are well-capitalised as far as regulatory capital adequacy ratios go and stress tests for credit and market risk show they can withstand ‘unexpected levels of stress. The problem, as the financial crisis showed, is that in the financial sector, it is hard to quantify the ‘unexpected’ , and when things begin to unravel, it doesn’t take long for even the big boys to go under; Lehman Bros being the classic example. So, while it is good to know that even if all the restructured loans were to turn non-performing, there would be no risk to the system and banks would continue to be well-capitalised , it would be naïve to ignore the reality that in the Indian context, a great deal of this robustness has to do with perceived confidence that comes from public ownership of close to 70% of the banking sector. Thus, even when Indian Bank’s capital was entirely eroded, there was no run on its deposits; in contrast to the bout of public anxiety over ICICI Bank, though its financial position was not endangered. Hence, as private sector players become larger, the RBI will need to be extra vigilant.
For the rest, the areas that need special attention include the potential asset-liability mismatch inherent in banks getting into infrastructure finance in a big way. As the report points out, a significant part of recent credit growth has been in infrastructure and commercial real estate, both requiring longer-term funding. However, bank deposits are essentially short term and, more important, are repayable on demand. Another area of concern is over-reliance on bulk deposits of the here-today-gone-tomorrow variety. Post the crisis, central counter-parties (exchanges) are being hailed as the answer to risks posed by trading in derivatives. However, as with securitisation, once seen as a win-win answer to risk mitigation, it would be unwise to see central counter-parties as fail-safe . They need to be regulated and monitored no less than banks and other financial sector players, as also rating agencies.
For the rest, the areas that need special attention include the potential asset-liability mismatch inherent in banks getting into infrastructure finance in a big way. As the report points out, a significant part of recent credit growth has been in infrastructure and commercial real estate, both requiring longer-term funding. However, bank deposits are essentially short term and, more important, are repayable on demand. Another area of concern is over-reliance on bulk deposits of the here-today-gone-tomorrow variety. Post the crisis, central counter-parties (exchanges) are being hailed as the answer to risks posed by trading in derivatives. However, as with securitisation, once seen as a win-win answer to risk mitigation, it would be unwise to see central counter-parties as fail-safe . They need to be regulated and monitored no less than banks and other financial sector players, as also rating agencies.
Tuesday, March 16, 2010
ICICI Bank aims at 15% growth
After having raised its ratio of low-cost deposits and pared unsecured loans, ICICI Bank plans to grow its balance sheet size by 15% in 2010-11, improving upon this year’s flat growth.
The bank would continue to grow its retail loans portfolio, project finance and working capital loans but would see the share of unsecured loans shrink, CEO & MD Chanda Kochhar said at the Idea Exchange programme of The Indian Express on Monday.
“The focus this year has been to change the composition of deposits and assets. We would probably end up with a flat balance sheet, but within that one could see a substantial change in the mix, with CASA (current account savings account) deposits going up and wholesale deposits coming down. Similarly, on the assets side, the secured loans might go up and the proportion of unsecured Personal loan and credit cards could come down,” Kochhar said. The bank’s CASA ratio has improved from 28% in 2008-09 to 38% now, she said.
She said the bank’s asset base will increase in 2010-11, with the pick-up in investments and credit demand in the second half of the next fiscal. “My estimate is that in these businesses (home, car loans and project and working capital finance) that we want to grow, we will be able to achieve 20-22% growth. Because some parts (unsecured loans and credit card) of our balance sheet will come down, net-net we may grow at 15% in the coming year,” Kochhar said. This would expectedly help ICICI Bank improve the market share it has been losing to rival banks.
While State Bank of India’s market share of assets rose from 15.9% in 2007-08 to 18.4% in 2008-9, ICICI Bank’s share fell from 9.7% to 7.2% during the years. HDFC Bank raised its market share from 2.6% to 3.1% in the same period. ICICI Banks’ asset base declined to Rs 3.8 lakh crore in 2008-09 from Rs 4 lakh crore in 2007-08. In the first quarters of the current fiscal, the asset base went further down to Rs 3.56 lakh crore.
She also expected investment to become the next driver of economic growth, supplementing the consumption-led growth seen in the past.
“The peculiar thing about India is that investments are being driven by underlying demand. Unlike other countries which have to force investment today, I think our investments are just fundamentally driven by demand and that is why they are much more productive.”
She said corporates are gearing up to invest and there is an up-tick in loan approvals. When asked what reform measures are needed to boost investment, she said procedural changes in areas like land acquisition, model concession agreements, termination clauses and dispute resolution would be of tremendous help. “That is more important for us to kick start investments. I don’t see big-bang reforms are required,” she added.
On the new banking licences proposed by the government, she said, “I think competition is always good for the customer. But what one has to see is the prudence and regulations in giving licences to new players. I am sure the RBI will take all that into account and come up with the detailed guidelines.”...
The bank would continue to grow its retail loans portfolio, project finance and working capital loans but would see the share of unsecured loans shrink, CEO & MD Chanda Kochhar said at the Idea Exchange programme of The Indian Express on Monday.
“The focus this year has been to change the composition of deposits and assets. We would probably end up with a flat balance sheet, but within that one could see a substantial change in the mix, with CASA (current account savings account) deposits going up and wholesale deposits coming down. Similarly, on the assets side, the secured loans might go up and the proportion of unsecured Personal loan and credit cards could come down,” Kochhar said. The bank’s CASA ratio has improved from 28% in 2008-09 to 38% now, she said.
She said the bank’s asset base will increase in 2010-11, with the pick-up in investments and credit demand in the second half of the next fiscal. “My estimate is that in these businesses (home, car loans and project and working capital finance) that we want to grow, we will be able to achieve 20-22% growth. Because some parts (unsecured loans and credit card) of our balance sheet will come down, net-net we may grow at 15% in the coming year,” Kochhar said. This would expectedly help ICICI Bank improve the market share it has been losing to rival banks.
While State Bank of India’s market share of assets rose from 15.9% in 2007-08 to 18.4% in 2008-9, ICICI Bank’s share fell from 9.7% to 7.2% during the years. HDFC Bank raised its market share from 2.6% to 3.1% in the same period. ICICI Banks’ asset base declined to Rs 3.8 lakh crore in 2008-09 from Rs 4 lakh crore in 2007-08. In the first quarters of the current fiscal, the asset base went further down to Rs 3.56 lakh crore.
She also expected investment to become the next driver of economic growth, supplementing the consumption-led growth seen in the past.
“The peculiar thing about India is that investments are being driven by underlying demand. Unlike other countries which have to force investment today, I think our investments are just fundamentally driven by demand and that is why they are much more productive.”
She said corporates are gearing up to invest and there is an up-tick in loan approvals. When asked what reform measures are needed to boost investment, she said procedural changes in areas like land acquisition, model concession agreements, termination clauses and dispute resolution would be of tremendous help. “That is more important for us to kick start investments. I don’t see big-bang reforms are required,” she added.
On the new banking licences proposed by the government, she said, “I think competition is always good for the customer. But what one has to see is the prudence and regulations in giving licences to new players. I am sure the RBI will take all that into account and come up with the detailed guidelines.”...
Monday, March 15, 2010
Caution is key word at banks as NPAs fly
Banks’ non-performing assets have shot up nearly 30% at the end of calendar 2009 from a year ago due to stress in many sectors and farm loan waiver, indicating sharply lower profits for banks and possibility of curbs on exposure to sectors that have contributed to the bad assets.
In a reply to the Rajya Sabha, the government said the overall NPAs have increased to Rs 80,023 crore at the end of December 2009 from Rs 61,647crore at the end of December 2008, an increase of over 30%. “Banks will be more cautious towards lending to sectors such as real estate, exports and even retail loans,” says a senior banker with a private bank. A number of private banks have already curtailed their retail lending, specially personal loan.
A recent report by Fitch ratings on ‘banks’ restructuring loan portfolio’ pointed that restructured bank loan worth Rs 30,675 crore may turn bad in 2010-11 and further push up banks’ gross non-performing assets (NPAs) on an average by one percentage point.
State-owned banks, however, feel that the rising NPAs will not impact their profitability and that NPAs are minuscule as compared to the total advances.
“If you look at our figures, the gross NPAs are at 1.8% of our total advances. Besides, all banks have been making provisions for these loans, which have been reflected in third quarterly results. There will be some caution but it’s not over-exercised,” said CGM Punjab National Bank, RIS Sidhu.
The bank reported a flat 1% increase in the net profit to Rs 1011.31 crore for the third quarter of this financial year.
Country’s largest lender, State Bank of India (SBI) also feels that increase in NPAs would not result in lending curbs. “There are no indications that loans to a particular sector has totally gone bad. Every sector has reported bad assets and there seems no reason to stop lending to any particular sector,” said chief financial officer SBI, SS Ranjan.
Incidentally, the gross NPAs to gross advances for the public sector banks has also shown an increase of 0.27% as compared with last year.
In a move that could put more pressure on PSBs, the government has allowed an extension for loan repayments to large farmers under the Agricultural Debt Waiver and Debt Relief Scheme. The total amount under the one time settlement (OTS) for large farmers is estimated at Rs 10,000 crore.
In a reply to the Rajya Sabha, the government said the overall NPAs have increased to Rs 80,023 crore at the end of December 2009 from Rs 61,647crore at the end of December 2008, an increase of over 30%. “Banks will be more cautious towards lending to sectors such as real estate, exports and even retail loans,” says a senior banker with a private bank. A number of private banks have already curtailed their retail lending, specially personal loan.
A recent report by Fitch ratings on ‘banks’ restructuring loan portfolio’ pointed that restructured bank loan worth Rs 30,675 crore may turn bad in 2010-11 and further push up banks’ gross non-performing assets (NPAs) on an average by one percentage point.
State-owned banks, however, feel that the rising NPAs will not impact their profitability and that NPAs are minuscule as compared to the total advances.
“If you look at our figures, the gross NPAs are at 1.8% of our total advances. Besides, all banks have been making provisions for these loans, which have been reflected in third quarterly results. There will be some caution but it’s not over-exercised,” said CGM Punjab National Bank, RIS Sidhu.
The bank reported a flat 1% increase in the net profit to Rs 1011.31 crore for the third quarter of this financial year.
Country’s largest lender, State Bank of India (SBI) also feels that increase in NPAs would not result in lending curbs. “There are no indications that loans to a particular sector has totally gone bad. Every sector has reported bad assets and there seems no reason to stop lending to any particular sector,” said chief financial officer SBI, SS Ranjan.
Incidentally, the gross NPAs to gross advances for the public sector banks has also shown an increase of 0.27% as compared with last year.
In a move that could put more pressure on PSBs, the government has allowed an extension for loan repayments to large farmers under the Agricultural Debt Waiver and Debt Relief Scheme. The total amount under the one time settlement (OTS) for large farmers is estimated at Rs 10,000 crore.
Wednesday, March 3, 2010
Standard chartered India operating profit up 19%
With a outstanding income growth driven by a very strong performance in wholesale banking, partly offset by lower income in consumer banking, the Indian operations of Standard Chartered Bank a reported a 19 per cent increase in operating profit to $ 1.06 billion (Rs 4,886 cr) for 2009, compared to the last year
Excluding proceeds from the sale of the bank’s mutual fund recognised in the 2008 results, the growth in operating profit was 42 %.
Wholesale banking recorded a 49 % increase in operating profit to $ 1.06 billion from $ 674 million in 2008.
However, consumer banking saw a 24 % drop in operating profit to $ 54 million (Rs 248.4 cr) from $ 71 million in the previous year.
Impairments, which were mostly on the consumer banking side, grew 16 % to $ 182 million (Rs 837.2 cr).
Regional Chief Executive, India and South Asia , Neeraj Swaroop, said, “We have seen some increase in impairments in 2009 due to adverse global market conditions but we have not stopped lending and our credit growth is 10 per cent till December-end. We expect to achieve 10-20 per cent growth in 2010,”.
The bank’s net non-performing assets stood at 1.9 %, while gross NPAs stood at 2.9 % as on December 31, 2009.
Regional Chief Executive also said the bank has sought the Reserve Bank of India’s approval to open more branches, and said it would install 100 automated teller machines in 2010. “The bank is also looking to hire over 2,500 people this year.”
Click Here to Know More About :-
Standard Chartered Home Loan
Standard Chartered Personal Loan
Excluding proceeds from the sale of the bank’s mutual fund recognised in the 2008 results, the growth in operating profit was 42 %.
Wholesale banking recorded a 49 % increase in operating profit to $ 1.06 billion from $ 674 million in 2008.
However, consumer banking saw a 24 % drop in operating profit to $ 54 million (Rs 248.4 cr) from $ 71 million in the previous year.
Impairments, which were mostly on the consumer banking side, grew 16 % to $ 182 million (Rs 837.2 cr).
Regional Chief Executive, India and South Asia , Neeraj Swaroop, said, “We have seen some increase in impairments in 2009 due to adverse global market conditions but we have not stopped lending and our credit growth is 10 per cent till December-end. We expect to achieve 10-20 per cent growth in 2010,”.
The bank’s net non-performing assets stood at 1.9 %, while gross NPAs stood at 2.9 % as on December 31, 2009.
Regional Chief Executive also said the bank has sought the Reserve Bank of India’s approval to open more branches, and said it would install 100 automated teller machines in 2010. “The bank is also looking to hire over 2,500 people this year.”
Click Here to Know More About :-
Standard Chartered Home Loan
Standard Chartered Personal Loan
Tuesday, February 23, 2010
Personal loan as a short-term finance option
In the last few weeks, calls from telemarketers have already gone up asking you to sign up for personal loans. The difference this time is that most banks want to lend to their own customers and in many cases, customers are being offered pre-approved loans to cut down on processing time.
While a personal loan is a short-term finance option, it is often used by many for long-term needs. In the process, a borrower ends up paying up a higher interest amount if he fails to clear the loan on the due date. On the contrary, a personal loan can be a handy option if chosen with care.
How to make better use of a personal loan?
Some tips to help you make better use of a personal loan:
Compare total interest payable
A personal loan with an interest rate of 14-28 percent is a better option than a high cost credit card loan as the latter charges interest in excess of 35 percent.
The same holds good for those who are in the habit of taking hand loans which carry higher rates. For such borrowers, a personal loan would be a cost-effective option and more importantly, it enables the borrower to repay the loan in totality.
Repay the loan in short to medium terms
Often, salaried professionals use a personal loan as a component of property investment. The margin money of the property cost is funded by a personal loan.
The idea is good provided the borrower is in anticipation of some funds coming in a few months later, and is in a position to clear the loan. Or else, the loan amount should not be more than a few lakhs so that it does not pinch the borrower considerably.
For instance, if a property investor is short of funding to the extent of Rs 2-5 lakhs for a property which is valued in excess of Rs 50 lakhs, the implications would not be severe. On the contrary, if the borrower depends on the personal loan to take care of more than 25-30 percent of the property cost, the chances are that he would be unable to repay the loan in the short to medium terms.
EMI a determining factor in personal loan
Keep track of EMI
Unlike other loan products, the EMI is the determining factor in a personal loan.
Since the loan is for a shorter period of time, the EMI is much higher, which is also the reason why some struggle with their cash positions after signing up for a personal loan. Hence, a personal loan should be determined by the EMI component rather than just eligibility.
This will help the borrower to be realistic with the loan repaying capabilities and not get into a default.
Keeping good credit track record
Be a good borrower
Signing up for a personal loan may be the easiest thing to do but make sure to be a good borrower as non-repayment or lack of commitment towards repayment can tarnish the creditworthiness. With banks providing details of all borrowers to the common database under the Credit Information Bureau (India) Ltd (CIBIL), a negative entry relating to payment history can make it tough for all future loans.
Also, borrowers need to make sure to complete the documentation relating to disputed loans as a failure to do so may make it difficult for future borrowing.
While a personal loan is a short-term finance option, it is often used by many for long-term needs. In the process, a borrower ends up paying up a higher interest amount if he fails to clear the loan on the due date. On the contrary, a personal loan can be a handy option if chosen with care.
How to make better use of a personal loan?
Some tips to help you make better use of a personal loan:
Compare total interest payable
A personal loan with an interest rate of 14-28 percent is a better option than a high cost credit card loan as the latter charges interest in excess of 35 percent.
The same holds good for those who are in the habit of taking hand loans which carry higher rates. For such borrowers, a personal loan would be a cost-effective option and more importantly, it enables the borrower to repay the loan in totality.
Repay the loan in short to medium terms
Often, salaried professionals use a personal loan as a component of property investment. The margin money of the property cost is funded by a personal loan.
The idea is good provided the borrower is in anticipation of some funds coming in a few months later, and is in a position to clear the loan. Or else, the loan amount should not be more than a few lakhs so that it does not pinch the borrower considerably.
For instance, if a property investor is short of funding to the extent of Rs 2-5 lakhs for a property which is valued in excess of Rs 50 lakhs, the implications would not be severe. On the contrary, if the borrower depends on the personal loan to take care of more than 25-30 percent of the property cost, the chances are that he would be unable to repay the loan in the short to medium terms.
EMI a determining factor in personal loan
Keep track of EMI
Unlike other loan products, the EMI is the determining factor in a personal loan.
Since the loan is for a shorter period of time, the EMI is much higher, which is also the reason why some struggle with their cash positions after signing up for a personal loan. Hence, a personal loan should be determined by the EMI component rather than just eligibility.
This will help the borrower to be realistic with the loan repaying capabilities and not get into a default.
Keeping good credit track record
Be a good borrower
Signing up for a personal loan may be the easiest thing to do but make sure to be a good borrower as non-repayment or lack of commitment towards repayment can tarnish the creditworthiness. With banks providing details of all borrowers to the common database under the Credit Information Bureau (India) Ltd (CIBIL), a negative entry relating to payment history can make it tough for all future loans.
Also, borrowers need to make sure to complete the documentation relating to disputed loans as a failure to do so may make it difficult for future borrowing.
Tuesday, February 16, 2010
Loan Against Property- An easy way to fulfill your Financial Needs
Loan against property is cheaper than personal loans.
Banks have aggressively beefed up their loan against property portfolio, in the last one year. but in October 2008 the credit crunch, bankers looked for products that were secured and Loan against property (Lap) was a clear choice.
Loan against property was basically a domain of multi-national and private banks. They offered the product to fund their self-employed customers’ business-related needs. Lately, all banks are offering this product including the public sector banks.
This has come as a boon for borrowers who need large sum of money to fund their urgent situation financial needs. Bankers said that mostly salaried customers take Lap when they need money for marriage or foreign education of kids, when they are buying a new property and are renovating their house. Self-employed seek this loan to fund their business needs and to pay off debt.
In Lap, customers can avail up to 50 % loan of the existing property value. The interest rate in Lap is around 200-300 basis point higher than bank home loan. This is a floating rate loan. “Lenders see more risk in this product and so price it higher,” said a banker. The current rate can range between 12-14 %.
The minimum loan that banks disburse in this product is around Rs 2 lac – example -HDFC Bank. Foreign banks, have higher limits, some look for minimum loan size of Rs 20 lac.
"The amount of loan disbursed depends on the end use. For instance, if the property is Rs 2 crore, obviously we will not sanction a loan of Rs 1 crore for renovation of the house," said head of retail assets with a foreign bank. Before taking the loan, the borrower needs to sign a declaration stating the end-use of fund.
If the property is currently not under any mortgage, the process to avail a Lap is simpler as compared to a mortgaged one. In the former, the process is similar to taking a housing loan. The customer needs to give evidence for being able to pay the instalments. For this, the borrower needs to submit a salary proof and income tax certificates. The bank, then, comes down to evaluate the property. A no-objection certificate, is also required, from the society.
In case of a mortgaged property, the person can go for a top-up loan with the bank he has an ongoing loan with. In this case, the bank will fund the difference between the outstanding and the original loan taken. For example: A person has taken a Rs 30 lac loan for the property that was worth Rs 40 lac at the time of purchase. He has an outstanding is Rs 20 lac. The same bank will give him a top-up loan equal to the difference between the outstanding and the original loan, even if the property cost has risen. Here, it would be Rs 10 lac.
On the other hand, if fund requirement is higher the borrower can approach another bank and opt for a product called 'balance transfer plus top-up'. This is part of Loan against property. The other bank will take fresh look at the property value, take over the loan and lend up to 50 % of the existing value. In the above example, if the house price is now Rs 70 lac, the bank will take over the Rs 20 lac outstanding. The customer can avail funds up to Rs 15 lac (50 per cent of the property value, which is Rs 35 lac, minus the existing loan of Rs 20 lac).
Banks have aggressively beefed up their loan against property portfolio, in the last one year. but in October 2008 the credit crunch, bankers looked for products that were secured and Loan against property (Lap) was a clear choice.
Loan against property was basically a domain of multi-national and private banks. They offered the product to fund their self-employed customers’ business-related needs. Lately, all banks are offering this product including the public sector banks.
This has come as a boon for borrowers who need large sum of money to fund their urgent situation financial needs. Bankers said that mostly salaried customers take Lap when they need money for marriage or foreign education of kids, when they are buying a new property and are renovating their house. Self-employed seek this loan to fund their business needs and to pay off debt.
In Lap, customers can avail up to 50 % loan of the existing property value. The interest rate in Lap is around 200-300 basis point higher than bank home loan. This is a floating rate loan. “Lenders see more risk in this product and so price it higher,” said a banker. The current rate can range between 12-14 %.
The minimum loan that banks disburse in this product is around Rs 2 lac – example -HDFC Bank. Foreign banks, have higher limits, some look for minimum loan size of Rs 20 lac.
"The amount of loan disbursed depends on the end use. For instance, if the property is Rs 2 crore, obviously we will not sanction a loan of Rs 1 crore for renovation of the house," said head of retail assets with a foreign bank. Before taking the loan, the borrower needs to sign a declaration stating the end-use of fund.
If the property is currently not under any mortgage, the process to avail a Lap is simpler as compared to a mortgaged one. In the former, the process is similar to taking a housing loan. The customer needs to give evidence for being able to pay the instalments. For this, the borrower needs to submit a salary proof and income tax certificates. The bank, then, comes down to evaluate the property. A no-objection certificate, is also required, from the society.
In case of a mortgaged property, the person can go for a top-up loan with the bank he has an ongoing loan with. In this case, the bank will fund the difference between the outstanding and the original loan taken. For example: A person has taken a Rs 30 lac loan for the property that was worth Rs 40 lac at the time of purchase. He has an outstanding is Rs 20 lac. The same bank will give him a top-up loan equal to the difference between the outstanding and the original loan, even if the property cost has risen. Here, it would be Rs 10 lac.
On the other hand, if fund requirement is higher the borrower can approach another bank and opt for a product called 'balance transfer plus top-up'. This is part of Loan against property. The other bank will take fresh look at the property value, take over the loan and lend up to 50 % of the existing value. In the above example, if the house price is now Rs 70 lac, the bank will take over the Rs 20 lac outstanding. The customer can avail funds up to Rs 15 lac (50 per cent of the property value, which is Rs 35 lac, minus the existing loan of Rs 20 lac).
Friday, February 5, 2010
ICICI Bank cuts down unsecured loan offtake
The country’s largest private sector bank ICICI Bank said that it is pruning its portfolio of unsecured retail loans, including personal loans, small-ticket loans and credit cards.
“As far as credit growth is concerned, for the past three quarters, ICICI bank constantly letting unsecured retail portfolio to go down. ICICI are growing corporate finance book both on project finance and trade finance. ICICI bank are growing 20 per cent in the auto and housing sectors. It’s the other products such as personal loans, small-ticket loans and credit cards, which are coming down,” Chanda Kochhar, managing director and chief executive officer of ICICI Bank, said
Kochhar said there has been a pickup in credit during recent times. “A lot of investment activities have started to take place. Lots of projects have seen financial closure. They have started initial investment. Demand for credit will pick up in a big way in the next financial year. Deposits are picking up substantially, if you see quarter-on-quarter our CASA (current account savings account) deposits have show reasonable growth, both in terms of absolute volumes and in value,” she added.
In the recent past, the Indian banking system has witnessed a very low credit growth. As the economy recovers and investment activities coming back to normalcy, credit offtake is also like to witness gradual growth.
K V Kamath, chairman, ICICI Bank, concurred with Kochhar and said that RBI’s move will not impact interest rates during the coming nine months. “For the first nine months, I don’t think there is a real pressure on interest rates. There is still enough liquidity in the system. I think liquidity needs to come down to push up interest rates,” Kamath said.
Kochhar said there would not be any immediate impact on interest rates if the cash reserve ratio (CRR) is hiked by the Reserve Bank of India (RBI). "Interest rates are driven not just by policy announcements, but more by demand and supply of credit and liquidity,” she said.
“As far as credit growth is concerned, for the past three quarters, ICICI bank constantly letting unsecured retail portfolio to go down. ICICI are growing corporate finance book both on project finance and trade finance. ICICI bank are growing 20 per cent in the auto and housing sectors. It’s the other products such as personal loans, small-ticket loans and credit cards, which are coming down,” Chanda Kochhar, managing director and chief executive officer of ICICI Bank, said
Kochhar said there has been a pickup in credit during recent times. “A lot of investment activities have started to take place. Lots of projects have seen financial closure. They have started initial investment. Demand for credit will pick up in a big way in the next financial year. Deposits are picking up substantially, if you see quarter-on-quarter our CASA (current account savings account) deposits have show reasonable growth, both in terms of absolute volumes and in value,” she added.
In the recent past, the Indian banking system has witnessed a very low credit growth. As the economy recovers and investment activities coming back to normalcy, credit offtake is also like to witness gradual growth.
K V Kamath, chairman, ICICI Bank, concurred with Kochhar and said that RBI’s move will not impact interest rates during the coming nine months. “For the first nine months, I don’t think there is a real pressure on interest rates. There is still enough liquidity in the system. I think liquidity needs to come down to push up interest rates,” Kamath said.
Kochhar said there would not be any immediate impact on interest rates if the cash reserve ratio (CRR) is hiked by the Reserve Bank of India (RBI). "Interest rates are driven not just by policy announcements, but more by demand and supply of credit and liquidity,” she said.
Thursday, January 28, 2010
Personal Loan v/s Credit Card Withdrawals
V/S 
A personal loan is easy to get, but do your research on cost, term and services.
Personal loans enable you to take care of instant necessities without much hassle. You do not have to provide security or guarantor; you can utilise the amount of loan for any purpose, except speculation. But, before taking, you should plan your requirements and assign the operating expense to be met with this loan.
The amount approved will depend on your eligibility, based mostly on your income. The repayment is monthly and the tenure varies from one to five years. Since personal loans do not require any security or hypothecation of resources, the banks charge higher interest rate compared to other secured or protected loan like home loan.
On the other hand, let's say you want to take the loan money through your credit card. How does this compare?
Foremost, withdrawing cash using a credit card can be very costly if you do not repay quickly. Interest rates on credit card loan withdrawals can range from 20-40 per cent on an annual basis. For nearly all cards, the interest rate on cash withdrawals and credit outstanding for purchases made are the same. But here is the kicker - for the purchases you make through your card, you get an interest-free period to pay back. Cash withdrawals on your card have no such benefits; interest is charged from the moment you withdraw the cash.
And, do not forget the transaction charge, levied on the withdrawal at the ATM. The average interest rate charged for a personal loan is in the range of 12-22 per cent , whereas the average interest rate is 20-40 per cent for withdrawal from a credit card.
Therefore, unless in a very real emergency where you need instant cash, it is advisable to not withdraw cash on your credit card. It is always better to go for a personal loan. It is the fastest of all retail loan products and the interest rates are a lot lesser than those on credit card withdrawals.
How Personal Loan process works.
A personal loan is easy to get, but do your research on cost, term and services.
Personal loans enable you to take care of instant necessities without much hassle. You do not have to provide security or guarantor; you can utilise the amount of loan for any purpose, except speculation. But, before taking, you should plan your requirements and assign the operating expense to be met with this loan.
The amount approved will depend on your eligibility, based mostly on your income. The repayment is monthly and the tenure varies from one to five years. Since personal loans do not require any security or hypothecation of resources, the banks charge higher interest rate compared to other secured or protected loan like home loan.
The process of Apply for personal loan is explained below:
Get in contact with a lender but first check which bank is offering the best rates and services. You can compare personal loan interest rates with any other reputed price comparison site like www.deal4loans.com. After listing a handful, get in touch with as many lenders as possible and know their offers. Then, negotiate for the best rate. Check if there are any unique offers. After finalising the lender, their direct selling agent will visit and collect documents supporting proof of income, residence and identity. You may have to create copies of income tax returns, salary slip, bank statements, ration card, passport, driving licence and other relevant documents. These requirements vary from banks to banks.
Then, a field examiner will visit your home to double-check the facts provided. It is essential that you are present during this visit, else, he could report that the facts provided do not add up.
Once the lender is satisfied with the authenticity of your documents, the loan is approved. The amount is then disbursed by cheques or demand drafts (DD).
Personal loans enable you to take care of instant necessities without much hassle. You do not have to provide security or guarantor; you can utilise the amount of loan for any purpose, except speculation. But, before taking, you should plan your requirements and assign the operating expense to be met with this loan.
The amount approved will depend on your eligibility, based mostly on your income. The repayment is monthly and the tenure varies from one to five years. Since personal loans do not require any security or hypothecation of resources, the banks charge higher interest rate compared to other secured or protected loan like home loan.
The process of Apply for personal loan is explained below:
Get in contact with a lender but first check which bank is offering the best rates and services. You can compare personal loan interest rates with any other reputed price comparison site like www.deal4loans.com. After listing a handful, get in touch with as many lenders as possible and know their offers. Then, negotiate for the best rate. Check if there are any unique offers. After finalising the lender, their direct selling agent will visit and collect documents supporting proof of income, residence and identity. You may have to create copies of income tax returns, salary slip, bank statements, ration card, passport, driving licence and other relevant documents. These requirements vary from banks to banks.
Then, a field examiner will visit your home to double-check the facts provided. It is essential that you are present during this visit, else, he could report that the facts provided do not add up.
Once the lender is satisfied with the authenticity of your documents, the loan is approved. The amount is then disbursed by cheques or demand drafts (DD).
Wednesday, January 27, 2010
Andhra Bank profit up 29 % in Q3
Andhra Bank posted a profit of Rs. 275 crore during the third quarter ended December 31, 2009, a growth of 29.5 per cent over the previous year.
Announcing the results in the absence of Chairman R. S. Reddy at a press conference here on Monday, Executive Director Anil Girotra termed the bank’s performance in the three quarters as “stellar” with the profit zooming to Rs. 806 crore from Rs. 452 crore in the first nine months of the last financial year.
He attributed the growth in Q3 profit mainly to retail credit, which had jumped by 40.73 per cent, with major contribution from housing loans and non-agriculture gold loans.
Disbursement of housing loans was about Rs. 860 crore and gold loans had exceed Rs. 1,000 crore during the current fiscal year so far.
Another healthy achievement was the increase in total income by 14.73 per cent, but the increase in total expenditure was only 10.27 per cent. The bank had also launched India First Insurance Company jointly with Bank of Baroda and Legal and General of the U.K. and the new life insurance company had commenced operations earlier this month, Mr. Girotra said.
Click on Link For Apply Andhra bank Personal Loan
Wednesday, January 6, 2010
Know more about Personal Loan
Personal loan is always said as an easy way to fulfill your short term money requirement. But from last one year Banks are not focusing on Personal Loan; the way they were doing till 2008. Pre approved personal loans and loan against credit card were quite popular.
But today things has changed, there is no such facilities that banks offer. The rate of interest on personal loan has drastically increased. But still the demand of personal loan is there, this is because it is the only that takes minimum time in disbursal. For an instant requirement of loan, personal loan is the best loan.
But one should not take any decision in hurry. If you have an urgent requirement of a loan, it doesn’t mean that you should pay more interest on them. In fact, it is your responsibility to check out the latest interest rates being offered by various banks and should go for a best or at least a good deal.
Here are few tips on the basis of which you can choose a best deal for your Personal Loan
1) Rate of interest : The Personal Loan Interest Rates varies from 14% to 30%.It depends upon customer profile and upon the bank from where you are taking this personal loan. The basis factors that determine rate of interest are customers net income, age, residential status, age, martial status, work experience and many more.
2) Fee & Charges: When every a loan is disbursed from a Bank, there are some charges that bank takes from us. At times these charges are known to us and some are hidden that get reveled at the time of disbursal. So to confirm these charges is an important task.
3) Loan Processing Charges: When a DD or funds transferred is done at the time of sanction of a loan, a percentage of amounts are charged by the bank. It is said as the processing fee. Processing fee is an upfront charge that banks takes from us at the time of disbursal. Again it varies from bank to bank.
a)Prepayment Charges: If you wish to close your loan after paying 6emi’s or thereafter, then you are liable to pay an extra charge on the outstanding amount . This charge is known as Prepayment charge.
4) Documentation: The most important part of any loan is its documentation. At times customers get pissed off with the documentation formalities. So before going for a loan you need to check that what all documentations they require for your loan application. The basic documents that banks usually ask are income proof, address proof, banks statement, passport size photograph and etc.
5) Disbursal time: Personal loan is said as a loan that fulfill your requirement of money instantly. So, the disbursal time is the most important aspect as it is very important that you get the money in the time of urgency. The time that bank usually takes in disbursing the loan is 5 to 10 working days. So do check the time taken by bank in disbursing your loan.
6) EMI deduction date: The problem that customer usually face once there loan get sanctioned, is the date on which the emi of loan will get deducted from the account. For example your emi deduction date is 1st of every month whereas your salary gets credited on 7th; there is a chance that your emi might get bounced because of insufficient balance in the account. So choose the date in such a way that there should not be any chance of cheque bounce.
So, do keep all these thing in your mind before going for a Personal Loan from any Bank. Always follow a rule of Compare & Choose to get the best deal.
But today things has changed, there is no such facilities that banks offer. The rate of interest on personal loan has drastically increased. But still the demand of personal loan is there, this is because it is the only that takes minimum time in disbursal. For an instant requirement of loan, personal loan is the best loan.
But one should not take any decision in hurry. If you have an urgent requirement of a loan, it doesn’t mean that you should pay more interest on them. In fact, it is your responsibility to check out the latest interest rates being offered by various banks and should go for a best or at least a good deal.
Here are few tips on the basis of which you can choose a best deal for your Personal Loan
1) Rate of interest : The Personal Loan Interest Rates varies from 14% to 30%.It depends upon customer profile and upon the bank from where you are taking this personal loan. The basis factors that determine rate of interest are customers net income, age, residential status, age, martial status, work experience and many more.
2) Fee & Charges: When every a loan is disbursed from a Bank, there are some charges that bank takes from us. At times these charges are known to us and some are hidden that get reveled at the time of disbursal. So to confirm these charges is an important task.
3) Loan Processing Charges: When a DD or funds transferred is done at the time of sanction of a loan, a percentage of amounts are charged by the bank. It is said as the processing fee. Processing fee is an upfront charge that banks takes from us at the time of disbursal. Again it varies from bank to bank.
a)Prepayment Charges: If you wish to close your loan after paying 6emi’s or thereafter, then you are liable to pay an extra charge on the outstanding amount . This charge is known as Prepayment charge.
4) Documentation: The most important part of any loan is its documentation. At times customers get pissed off with the documentation formalities. So before going for a loan you need to check that what all documentations they require for your loan application. The basic documents that banks usually ask are income proof, address proof, banks statement, passport size photograph and etc.
5) Disbursal time: Personal loan is said as a loan that fulfill your requirement of money instantly. So, the disbursal time is the most important aspect as it is very important that you get the money in the time of urgency. The time that bank usually takes in disbursing the loan is 5 to 10 working days. So do check the time taken by bank in disbursing your loan.
6) EMI deduction date: The problem that customer usually face once there loan get sanctioned, is the date on which the emi of loan will get deducted from the account. For example your emi deduction date is 1st of every month whereas your salary gets credited on 7th; there is a chance that your emi might get bounced because of insufficient balance in the account. So choose the date in such a way that there should not be any chance of cheque bounce.
So, do keep all these thing in your mind before going for a Personal Loan from any Bank. Always follow a rule of Compare & Choose to get the best deal.
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