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.
Tuesday, June 29, 2010
Thursday, June 17, 2010
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.
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.
Wednesday, June 16, 2010
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.
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.
Wednesday, June 9, 2010
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”.
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”.
Thursday, May 27, 2010
SBI has hiked short-term corporate loan rates
The country's largest lender State Bank of India (SBI) has not taken any final decision about continuing its home loan teaser rates but it has hiked short-term corporate loan rates by 0.25-50 basis points.
SBI chairman OP Bhatt, said, “With surplus liquidity gradually disappearing from the system, we have re-priced certain segments of our short-term corporate loans by 0.25-0.50 bps upwards.” He added at present bank has no plans of hiking its deposit rates and agreed that liquidity will remain in the system. SBI said the public sector units will be giving out close to Rs 18,000 crore for 3G auctions.
“We have got requests and demands for that kind of money. At the maximum we will lend Rs 18,000 crore. Having said that, we are still having a surplus liquidity of Rs 26,000,” Bhatt said. On an average there is still a fair amount of liquidity in the system. If you see, the 10-year government security bond is close to 7.40%. There is not much pressure on the liquidity at the moment. It is too early to say if the impact on liquidity will have a temporary or a permanent impact on the liquidity condition,
Meanwhile, Union Bank of India CMD MV Nair said the bank would be giving out Rs 2,000 crore for 3 G auctions. “Liquidity will not be impacted with the money flowing out as we already sitting on adequate liquidity,” he said. Regarding bad loans, Bhatt said in the last few quarters NPAs have decreased and that the worst is over. Talking about recent credit growth numbers, Bhatt agreed there is no improvement in credit growth and it can be due to the drooping season.
He added, “Usually in April there is always a negative growth. So it is too early to say if it is because of the slack season or if there is more to it”.
SBI chairman OP Bhatt, said, “With surplus liquidity gradually disappearing from the system, we have re-priced certain segments of our short-term corporate loans by 0.25-0.50 bps upwards.” He added at present bank has no plans of hiking its deposit rates and agreed that liquidity will remain in the system. SBI said the public sector units will be giving out close to Rs 18,000 crore for 3G auctions.
“We have got requests and demands for that kind of money. At the maximum we will lend Rs 18,000 crore. Having said that, we are still having a surplus liquidity of Rs 26,000,” Bhatt said. On an average there is still a fair amount of liquidity in the system. If you see, the 10-year government security bond is close to 7.40%. There is not much pressure on the liquidity at the moment. It is too early to say if the impact on liquidity will have a temporary or a permanent impact on the liquidity condition,
Meanwhile, Union Bank of India CMD MV Nair said the bank would be giving out Rs 2,000 crore for 3 G auctions. “Liquidity will not be impacted with the money flowing out as we already sitting on adequate liquidity,” he said. Regarding bad loans, Bhatt said in the last few quarters NPAs have decreased and that the worst is over. Talking about recent credit growth numbers, Bhatt agreed there is no improvement in credit growth and it can be due to the drooping season.
He added, “Usually in April there is always a negative growth. So it is too early to say if it is because of the slack season or if there is more to it”.
Wednesday, May 26, 2010
NHB launches reverse mortgage loan-enabled annuity scheme for senior citizens
The reverse mortgage loan (RML) scheme has been specially designed to help senior citizens to get finances to meet their expenses without depending on others. National Housing Bank (NHB) has restructured its reverse mortgage loan. With its new reverse mortgage loan – enabled annuity scheme ensures to offer senior citizens assured lifetime payments instead of the earlier cap of 20 years, thus NHB is expecting there will be more takers of the product. With a view to expand its pool of RML facilitators NHB is having talks with banks and insurance companies.
In just first four and half months since the launch of reverse mortgage loan-enabled annuity scheme (RMLeA) scheme NHB has been able to sanction 40 loans estimating to Rs 100 crore. However in the beginning RML received very low response in India, thus NHB believes that new offering is more attractive to borrowers in terms of higher payments and better risk mitigation.
RV Verma, executive director, NHB explained, “Annuity link provides comfort to participants. The original RML format has seen fairly good response. However, senior citizens were apprehensive about the scheme because of the cap on 20 years on payments. We should see a much bigger offtake in the coming days.”
The lenders pointed out that in the original RML scheme has some limitations which includes the cap of 20 years on payments to senior citizens as well as low quantum of payments. Also, higher the interest rate, lower was the payment. To counter this, NHB launched annuity linked plan in which lifetime payment is made even after the completion of the fixed term of 20 years and also promises nearly 1.5 times higher annuity as compared with the earlier one.
The Central Bank of India in collaboration with Star Union Dai-ichi Life Insurance Co. has launched RML annuity scheme. Verma said the talks are being undertaken to bring major banks and insurance players into the scheme.
He also said that NHB is trying to get tax exemption for annuities offered to senior citizens under its RMLeA scheme with the Central Board of Direct Taxes. To provide information about RML in India, NHB has set up counseling centers in various cities including Delhi, Mumbai, Bangalore, Chennai and Hyderabad.
In just first four and half months since the launch of reverse mortgage loan-enabled annuity scheme (RMLeA) scheme NHB has been able to sanction 40 loans estimating to Rs 100 crore. However in the beginning RML received very low response in India, thus NHB believes that new offering is more attractive to borrowers in terms of higher payments and better risk mitigation.
RV Verma, executive director, NHB explained, “Annuity link provides comfort to participants. The original RML format has seen fairly good response. However, senior citizens were apprehensive about the scheme because of the cap on 20 years on payments. We should see a much bigger offtake in the coming days.”
The lenders pointed out that in the original RML scheme has some limitations which includes the cap of 20 years on payments to senior citizens as well as low quantum of payments. Also, higher the interest rate, lower was the payment. To counter this, NHB launched annuity linked plan in which lifetime payment is made even after the completion of the fixed term of 20 years and also promises nearly 1.5 times higher annuity as compared with the earlier one.
The Central Bank of India in collaboration with Star Union Dai-ichi Life Insurance Co. has launched RML annuity scheme. Verma said the talks are being undertaken to bring major banks and insurance players into the scheme.
He also said that NHB is trying to get tax exemption for annuities offered to senior citizens under its RMLeA scheme with the Central Board of Direct Taxes. To provide information about RML in India, NHB has set up counseling centers in various cities including Delhi, Mumbai, Bangalore, Chennai and Hyderabad.
Thursday, May 13, 2010
Banks planning to expand loan against gold segment to boost their lending biz
Giving loan against gold has boosted lending business of banks, thus many banks and non-banking finance companies are planning to expand this business. In the past few months monetization of the yellow metal has increased in the country. Previously loan against gold was limited to south Indian states where NBFCs like Mannapuram General Finance and Muthoot Finance have strong hold and are aggressively expanding their base in this segment.
According to Ajay Mitra, managing director- India, Middle East & Turkey, and World Gold Council, the monetization of yellow metal will open new sector and increase the circulation of roughly 18,000 tones (worth approximately Rs 30 lakh crore at current prices) back into the economy.
Mitra further said, “Acceptance of gold for loans by banks and financial institutions is an important development that will infuse greater confidence in gold as an asset class. With banks entering gold bar business, availability of infrastructure for storage, and with medallions being accepted for securitization purposes, the role of gold is surely bound to change from a commodity to a monetized asset that would encourage consumers to invest more in gold, a time-tested secure and now a monetized asset class.”
The banks like State Bank of India (SBI), Andhra Bank and HDFC Bank have already entered into this segment with big boom.
Up till now the total anticipated market size of loans against gold is marked at Rs 1,20,000 crore in which 50% of market share is of organized sector like banks and financial institutions. And rest of gold is being deposited with NBFCs and small players like money lenders. SBI has a loan portfolio of Rs 300 crore against gold.
Biju Pillai, executive vice-president & business head, gold loans, HDFC Bank, told, “The bank’s portfolio has been growing at over 60% year-on-year for the last two years. With the opportunity being vast, we will continue to look to grow this portfolio. We plan to increase the number of branches offering gold loans from 150 to 600 over the course of next year.”
Pillai said, there is variation in interest rates which lies between 12% and 15.25%, depending on the tenure of the loan and borrowers’ relationship with the bank.
Andhra Bank, a state-owned bank in just eight-month has witness growth in the segment thus it has ambitious plans to offer loans against gold through all its branches within a couple of month.
M Anjaneya Prasad, general manager (Mumbai zone) of Andhra Bank, said, “We have projected the target to achieve Rs 50-crore loan disbursement as against Rs 10 crore in 2009-10.’’ At present gold loan is being provided at 60 branches of the bank
“We are planning to involve all the branches of the bank for the business by June.’’ Generally Andhra Bank gives 75% of value of gold pledged as loan and is planning to have one value per branch for the appraisal of gold while finalizing loans.
Prasad told the customers will have to bore the fee to be charged by the value.
An anonymous senior official of Mannapuram General Finance, the traditional player of the segment said, the company is targeting to achieve a business growth of Rs 4,500 crore under the segment as against Rs 2,550 crore in 2009-10.
The official added, “Thus, we are looking at a business growth of 50-100% under the segment during the current financial year.”
NBFC offer rate of interest between 12% and 21% depending on the value of the gold pledged.
The rate of interest for the NBFC varies between 12% and 21% depending on the value of the gold pleged.
Though the repayment period can be stretched to one year, in most of cases, Mannapuram gets its loans repaid by customers over a period of 100 days, said the official.
According to Ajay Mitra, managing director- India, Middle East & Turkey, and World Gold Council, the monetization of yellow metal will open new sector and increase the circulation of roughly 18,000 tones (worth approximately Rs 30 lakh crore at current prices) back into the economy.
Mitra further said, “Acceptance of gold for loans by banks and financial institutions is an important development that will infuse greater confidence in gold as an asset class. With banks entering gold bar business, availability of infrastructure for storage, and with medallions being accepted for securitization purposes, the role of gold is surely bound to change from a commodity to a monetized asset that would encourage consumers to invest more in gold, a time-tested secure and now a monetized asset class.”
The banks like State Bank of India (SBI), Andhra Bank and HDFC Bank have already entered into this segment with big boom.
Up till now the total anticipated market size of loans against gold is marked at Rs 1,20,000 crore in which 50% of market share is of organized sector like banks and financial institutions. And rest of gold is being deposited with NBFCs and small players like money lenders. SBI has a loan portfolio of Rs 300 crore against gold.
Biju Pillai, executive vice-president & business head, gold loans, HDFC Bank, told, “The bank’s portfolio has been growing at over 60% year-on-year for the last two years. With the opportunity being vast, we will continue to look to grow this portfolio. We plan to increase the number of branches offering gold loans from 150 to 600 over the course of next year.”
Pillai said, there is variation in interest rates which lies between 12% and 15.25%, depending on the tenure of the loan and borrowers’ relationship with the bank.
Andhra Bank, a state-owned bank in just eight-month has witness growth in the segment thus it has ambitious plans to offer loans against gold through all its branches within a couple of month.
M Anjaneya Prasad, general manager (Mumbai zone) of Andhra Bank, said, “We have projected the target to achieve Rs 50-crore loan disbursement as against Rs 10 crore in 2009-10.’’ At present gold loan is being provided at 60 branches of the bank
“We are planning to involve all the branches of the bank for the business by June.’’ Generally Andhra Bank gives 75% of value of gold pledged as loan and is planning to have one value per branch for the appraisal of gold while finalizing loans.
Prasad told the customers will have to bore the fee to be charged by the value.
An anonymous senior official of Mannapuram General Finance, the traditional player of the segment said, the company is targeting to achieve a business growth of Rs 4,500 crore under the segment as against Rs 2,550 crore in 2009-10.
The official added, “Thus, we are looking at a business growth of 50-100% under the segment during the current financial year.”
NBFC offer rate of interest between 12% and 21% depending on the value of the gold pledged.
The rate of interest for the NBFC varies between 12% and 21% depending on the value of the gold pleged.
Though the repayment period can be stretched to one year, in most of cases, Mannapuram gets its loans repaid by customers over a period of 100 days, said the official.
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