Loans

Using Credit cards ?

Responsible use of credit is a critical financial learning.

Pros
1) Interest-Free Period
2) Emergency Payments
3) EMI facility
4) Incentives & Credit History

Cons
1) Overspending (can lead to Debt)
2) High-Interest Rates - bills not paid are carried with more 3% intrest per month
3) Invisible costs (hidden costs,joining fees and late payment fees)

Good to know
1) Grace Period
2) Fees and Charges Related to the Credit Card
3) Late Payment Penalty
4) Credit Utilization Ratio
5) EMI Facility

Buy Now Pay Later (BNPL)

Type of installment loan where the amount spent is paid via Equated Monthly Installments (EMIs)

Pros

Convenient payment method
Accessible and transparent
No-cost EMIs
Alternative to credit cards

Cons

Interest charges and penalties
High interest rates
Potential for increased debt
Limited usage

Buying Car ?

Car Loan Tips:

Budget <50% of Anual Income
20/10/4 formula : Downpayment-20% /one-3rd , EMI <10% Income : Loan Tenure: <4Yrs
Transferring your Car Loan : Provider with lower intrest rate
Debt Consolidation :all your different loans into a single large loan
Repayment Options:minimum or nil prepayment charges, if any plan to pre-close the loan
Financier tie-ups:Car dealers -associated lenders can offer better deals.
Alternative to Loan: Instead of new loan,Opt for loan against securities or any other secured loan.

New cars

Benefits: Yearend sales, Latest features, Warranty, Financing options & Lower maintenance costs

Used Cars

Benefits: Lower price, less Depreciation, Lower insurance costs & no hidden fees

Use http://www.indianbluebook.com/ to evaluate price of used cars.

Looking for a used car (few Preferences)

--> Ownership : 1st owner
--> Model : 2011+
--> Size : Small car like Hyundai Eon, i10, Alto k10 etc
--> Budget : Budget around 2 to 3Lakhs
--> Condition : Well maintained, Good Engine Condition
--> Others : 1) No loans on Vehicle (Any?)
2) Registration (TS,AP,KA etc)
3) Kms Drivern over yrs
4) history of any accidents /Any scratches
5) Why owner is selling?
6) Re-Sale vaule of car
7) Car Test via Test drive & by mechanic
Read more
Which is Better - Getting a Car Loan or Savings and then Buying a Car? (etmoney.com)

Taking Homeloan ?

Check List Read more at 1 , 2
Checklist of important documents before buying a property

1) Interest payments - Floating/ Fixed
2) Loan Tenure & Amount
3) Downpayment
4) Associated charges
a) should have zero prepayment charges & no hidden charges
b) Processing fees
c) Late payment penalties
d) stamp duty, registration charges and documentation.
5) Credit score - High Score (>750) helps with loan at low-interest rates
6) Documentation -- KYC Documents ,Income Documents & Property Documents
7) Others points to consider
a)Home Loan Insurance
b)Home Loan Transfer and Foreclosure
c)Loan to Value ratio (LTV)
d) under construction or resale (age and maintenance) & actual value of the property
e) Legal and Technical Check (Bank will do)

For Huge interest savings in home loan, (if no difficulty in paying EMI)

Prepayment Options: opt for Reduce tenure over EMI
Interest Increase: opt for Increase EMI over tenure Read 1
Interest Decrease: opt for Lower tenure over EMI

Additional expenses on Home Loan?

Processing fees
Prepayment charges
Conversion fees (floating to fixed interest)
Stamp duty and registration charges
Legal/Technical/Valuation fees

What is not included in the home loan?

Stamp Duty/Registration Charges
Home Insurance Premiums
Processing/Administrative Fees
Legal/Conveyancing Fees
Home Inspection/Valuation Fees

TOOLS
Buy or Rent your Property | Buy Vs Rent Calculator | Magicbricks Advice

Useful Info

Home Loan Rates : https://www.mymoneymantra.com/best-home-loan-interest-rates
Gold Loan Rates : https://www.mymoneymantra.com/gold-loan-interest-rates

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