Borrower should check credit report before applying for loan says bankers

Many people have faced this situation when their loan applications have been rejected because their in front of your credit report it is written defaulted in repayment of loan or credit cards. To avoid rejection of loan one should check his/her credit report with Credit Information Bureau of India (Cibil) before starting negotiations for the loan.

According to bankers if the borrowers have the prior knowledge of their credit report it might help many from facing the situation of loan rejection due to an adverse report on credit history, especially loans to be taken for purchases such as buying a house.

The State Bank of India official handling retail banking said, “It is advisable that borrowers who have had past loans or have had credit cards should check out their credit score with Cibil before scouting for the best loan deal available. If the report has some adverse remarks, the person should try and get the issue resolved with the concerned bank which had reported the adverse credit history.”

According to officials to know about the credit report is very important for people who want to apply for a housing loan. The SBI official added, “Buying a house is often a once-in-a-lifetime purchase. Being denied a loan could be traumatic for the person who has identified the property.”

C S Jain, head of personal banking, IDBI Bank points out that people who might have any past disputes with lender or have some doubt that there might be some adverse remarks from Cibil due to default in repayment must try to gain prior knowledge of their credit history. Jain said, “If a person has a doubt that some past defaults might find a place in the Cibil report, he or she should approach Cibil for the details. However, it might not be required for persons who are sure about their past banking history.”

Cibil has the database of borrowers of 175 lending institutions which include banks, housing finance companies, financial institutions and non-banking finance companies, among others. These lending institutions can access the database which helps them to assess the history of those who have applied for loan, to avoid defaults, frauds and minimize non-performing loans. If there is any adverse remark from Cibil in a person credit report can endanger the chances of getting loans.

Recently Financial Chronicle has reported that, in many such instances it has been noticed that borrowers loan application are rejected by the lenders due to adverse credit report from Cibil showing past defaults or credit card transactions of which the borrowers are not aware.

Cibil’s managing director, Arun Thukral, told FC that borrowers can avail the Cibil window that provides individuals access to their credit history. Thukral said, “We provide the individual the details of their credit history on payment of a nominal fee.”

He said that the credit report provided to the individual will have the exact detail of the transaction on which the default is understood to have happened in the past.

But the credit history that is shared with lenders does not show the names of the institutions with which the individual has been in default. Thukral said, “If there is any dispute over the defaults, the individual can approach us or the bank in question to get the issue sorted out before taking a loan.”

Cibil’s credit information report (CIR) can be obtained by sending an email along with documents such as providing an identity proof, address proof and the requisite fees.

SBI offering loan up to Rs 2 lakh to ex-Servicemen under Jai Jawan Scheme

The State Bank of India (SBI), largest public sector lender has launched a special loan scheme Jai Jawan Scheme for ex-Servicemen.

B M Sangrolli, president of Dharwad unit of National Ex-Servicemen Co-ordination Committee, in a convention of ex-Servicemen said that ex-Servicemen who have completed 50 year of age can avail loan of up to Rs 2 lakh under Jai Jawan Scheme of SBI.

He also apprised the ex-Servicemen about the various schemes introduced by the central and state governments for them. The convention was attended by more than 300 ex-Servicemen.

Vidya Sahakari bank offers three new loan schemes on its 36th anniversary

Vidya Sahakari Bank has launched three new loan schemes called ‘Hafta Band Karz Yojana’, ‘Pramanik Karz Yojana’ and ‘Sone Kharidi Karz Yojana’ on the occasion of its 36th anniversary celebration.

According to a bank press release, “It has been observed that the salaried customers face acute financial crisis during the months of October and November because of the increase in expenses on the occasion of Dussehra. So we have come with “Hafta Band Karz Yojana” wherein during such months the respective customers will be given a break from the payment of installments.”

The release added, in ''Pramanik Karz Yojana” bank will give 1% rebate in the interest rate on takeover of the loan for customers who have paid loan installments regularly for three years with previous bank. Under ''Sone Kharidi Karz Yojana” customers will be given loan for purchase of gold. The customer can take loan of any amount but bank will charge 25% margin money without any identity proof or any guarantor, as the gold will be kept as security with the bank itself. The customers will have freedom to sell the gold when the price rises and earn profits. If the customer takes loan of one lakh or less, it can avail early installment scheme.

HDFC re-launches its ‘Loan against Property’ scheme

The resident Indians who have a property of their own get good opportunity with HDFC bank re-launching its product ‘Loan against Property’ (LAP). People who own property can take loan from bank against their property to meet business requirements, marriage in the family or for emergencies in the form of a medical crisis or any such needs. Under this product customers can leverage their equity in the property without disposing it off.

However the existing home loan customers of HDFC bank can avail 60% of the market value including the present loan outstanding, whereas all other customers are eligible for 50% of the market value of the property. But in both cases, the loan amount is subject to their loan eligibility. In this scheme bank offers attractive interest rates of 11.25% pa for loans up to Rs. 1 crore and 11.00% pa for loans above Rs. 1 crore. The loan tenure period can be set up to 15 years for both residential properties and non-residential properties.

As Renu Sud Karnad, Managing Director, HDFC Ltd. explains, “One may not always be able to plan for a lot of things in life as both, opportunities and emergencies can be unexpected and could be equally important to be ignored. HDFC’s ‘Loan Against Property’ helps customers take advantage of such opportunities or attend to emergencies by making available one of the important ingredients required in both cases, which is funds. If you own a property, it can probably serve as the best possible avenue to generate a decent amount of funds within a short period of time while you continue to comfortably live in the house. Availing a personal loan from a lending institution may also be an option. However the advantage of LAP is that not only is the interest rate lower than a personal loan, but the tenure of the loan is also much longer. This enables a person to take a larger loan as compared to a personal loan where the period is very short which has a huge impact on the cash flow and thus the repaying capacity”.