How failed home loan payments reduce your credit score

Anisha wanted to purchase her dream house and was delighted at having her home loan application approved. A few years later when she decided to get her first car, she put in an application for a car loan. Much to her dismay, the loan was declined this time, and Anisha checked her credit report for possible answers. She realised that her credit score had taken a dive because she had defaulted on some of her home loan EMI repayments. This put Anisha’s dream on hold – a situation that could well have been avoided, had she been regular with her home loan EMIs.

Falling behind on payments can be one of the worst things you can do for your credit score. When you avail of a credit card or loan, ensure the strictest financial discipline in terms of loan repayment. Given the importance of the credit score in an individual’s financial life, it cannot be ignored or taken lightly.

What factors determine the credit score?

Below are the factors that impact your credit score. You will notice that of these, your payment history is the largest chunk. In a nutshell, even a single delayed or missed payment can bring your credit score down drastically. Thus, when you apply for a personal loan for low CIBIL score, for instance, chances that your application gets rejected are rather high.

Now that we have discussed the various factors that a credit bureau considers when determining the score, let’s move on to your further course of action.

Know where you currently stand

First things first – get a free credit score from one of India’s credit bureaus. There are currently four of them. This report will indicate the factors that determine your score, and what exactly is impacting your score. In fact, it’s a good idea to monitor your score on a regular basis – experts recommend that checking on this important aspect once a year may not be a bad idea at all.

Once you are armed with this information, you can look at ways and means of bettering your score.

How do late or missed payments affect the credit score?

Failed home loan payments have a negative impact on the credit score – just how severe the impact is, will be determined by a number of factors.

Firstly, a lot depends on how late your payment is. Let’s say your payment was due on June 30, but you wind up paying on July 1. In all likelihood the lender will overlook this day’s lapse and the failed payment will not be reported to the credit bureaus. Thus, your credit score may not get hit. However, a payment that is say for instance 30 days past the due date will not go unnoticed, be it towards a home loan or any other loan EMI or a credit card outstanding. Remember the other downside is financial loss: you wind up shelling out a fair amount by way of late payment fees and related charges and taxes.

A couple of missed payments may impact your credit score in the short term, say for a few months. However, the impact of consistently missing or delaying payments on your credit score can be a long one, sometimes lasting even a few years. This means that each time you apply for credit subsequently, your low score will come under the scanner. When your score is low, it’s not easy to get further loans such as a personal loan for low CIBIL score or credit cards at competitive rates of interest. It’s entirely possible that a lender will decline the loan altogether.

How to rectify the damage caused by late or missed payments

For the time being, while the damage is done, you can ensure that it is not long-lasting. Begin by correcting your errors: make sure all payments are up to date. The sooner you get on track, the sooner you can start rebuilding your score.

It’s also a good idea to avail of an ECS mandate or auto debit facility from your bank account in order to ensure that your loan repayment is taken care of on the due date itself. This will mean no more delayed or missed payments, which will help boost your credit score, given time.

In conclusion

A copy of your free credit score can help you understand where to start off with rebuilding your score. Fix your credit report by paying bills and EMIs on time, and in full. Ensure you have a healthy mix of both unsecured and secured loan products in your portfolio. Keep credit utilisation low so that you don’t appear to be relying on credit to make ends meet.

With these tips, take charge of your financial future at the earliest and make sure that you always have a healthy or good credit score.

What Factors do Lenders Consider When Approving Loans?

Banks and NBFCs offer all kinds of loans to their customers- personal loans, home loans, business loans, etc. However, irrespective of the nature of a loan or its size, there is always some level of risk when it’s approved by a loan officer. This is why the banks consider several factors when someone applies for a loan. These are:

1. Credit Score

In case you don’t know, getting a loan for low Cibil score can be a herculean task. This is because credit score is the most important thing that a bank checks when it evaluates a loan application.

Your credit score signifies your creditworthiness. So, the higher is the score, the more you are “worthy” of receiving credit. This is because the score itself is calculated on factors like your repayment history, existing debt, credit utilization ratio, etc. If you have paid other loans in the past on time and without defaulting with any, then your score will be high, and it will let the bank know that you can be trusted with a new loan.

If you don’t know what your existing credit score is, then you can download your credit report online which can tell you the score and other important details as well which include your repayment history about loan EMIs and credit card bills, number of loan inquiries made recently, etc. You may also qualify for a free Cibil report if you didn’t download the report this year earlier. This is because as the per the norms of the central bank, all credit rating agencies are required to provide one free report to each user every year.

2. Income

You can’t take a massive loan with EMI of Rs. 30,000, when you are earning 40,000 a month. In other words, your income should be high enough to accommodate the EMIs of the loan you are interested in and also have room for your household expenses. There should be enough margin between the EMI and income so that the bank can have the assurance that you can easily pay the EMIs even if there is a financial emergency and you need to spend a portion of your income for that.

3. Debt-to-Income Ratio

If you are already repaying a loan, then the same is also taken into consideration during the analysis of your loan application through debt-to-income ratio which is self-explanatory. Again, this has to do with basic logic. If you are already paying the EMis of two loans and your income is just high enough to accommodate them and your expenses, then there won’t be room for another EMI. So, a bank won’t approve a loan knowing that you are earning barely enough to get by. You can find all the details regaring this in your free Cibil report.

4. Repayment History

When a bank approves a loan, they want the borrower to pay it back on time. This is because it’s not just about one borrower- there are hundreds of them in their portfolio. This is why if there are a large number of borrowers that delay payments, then it can affect the cash flow of the entire institution. So, the banks check the credit report of applicants to ensure that they have paid most of the EMIs, if not all, on time without delays. This is the reason why it’s so difficult to get a loan for low CIbil score and you have to take personal finance seriously to be financially secure.

5. Assets

If you own assets like stocks, real estate, jewelry, then you can get a loan by offering them as collateral. When you get a loan under this arrangement, then it’s called a secured loan for obvious reasons. In fact, a secured loan is easy to get compared to traditional loans as the bank can sell off the assets in case the borrower is unable to repay the loan. So, it’s easier for them to approve the loans. That said, these loans are risky for the borrowers because if you are unable to pay the loans, then you can lose your prized possessions.

So, these were some of the factors that lenders consider when they check loan applications. Do note that your credit rating is the most important factor here. So, make sure that you increase it as much as possible before you send the application.

How to Protect Credit Card from Online Fraud

Credit cards are used by a large number of people today. This is because they allow them to make cashless payments, improve CIBIL score, and purchase expensive items under an EMI arrangement. However, you have to be careful if you are a user as credit card frauds are also quite common today.

When you are shopping or paying for bills with credit cards online, then you become vulnerable to certain risks. The following are some of the ways you can avert them and continue using the cards without a worry:

1. Shop Only from Reputed Websites

There is nothing wrong with shopping online. However, you should not be lured towards unrecognized platforms that offer huge discounts and instead stick to just popular ones like Amazon and Flipkart. This is because reputed ecommerce stores take the online privacy and security of their customers seriously. The small online stores, on the other hand, may not go that extra mile to safeguard your financial information.

2. Use Technology

Before mobile banking was a thing, i.e. a decade ago or so, managing bank accounts was quite tedious. You had to pay a visit to your bank branch to deposit or withdraw money, open a new account, invest in a particular scheme, etc. Today, you can use technology to perform a variety of personal banking tasks effortlessly. For instance, you can monitor your credit card transactions via your bank’s official app that can also update you when new transactions are made or when abnormal purchase activities are identified in your accounts.

You can use a mobile app or your online banking account to enable security features that can alert you about unrecognized transactions and prevent frauds.

3. Check Credit Report

Finance experts highly recommend that you check your credit report every once in a while so that you can keep tabs on your financial activities. For instance, you can check the details of the payments of credit card bills, loans, etc. that were made in the past. You can also identify discrepancies and mistakes in the report so that you can have them removed and improve CIBIL score.

Checking your credit report can help in prevent credit card frauds. This is because if there are transactions made with your cards but without your approval, then you can find them in the report. In the same way, you can learn if there is a new credit card under your name, which is often the case with identity thefts. At any rate, this information can help you prevent credit card frauds to a huge extent.

Note: As per new rules, all the credit rating agencies including CIBIL have to provide their users a free CIBIL score and report at least once every year. So, in case you haven’t got yours this year, then you can apply today for free!

4. Avoid Sharing Credit Card Information Online

All the top online stores and merchants allow you to store your credit card details on their websites so that you don’t have to enter them every time you need to buy or pay for something. This is to make your experience more comfortable, and the websites promise the highest level of security. However, if you don’t want to take any chances, then it’s best to avoid storing the details in the first place. This is because you never know if a major cyber attack may take place that compromises all the records. The only way to protect your information is to keep it to yourself and share only at the time of payment, even if it’s a little inconvenient.

5. Avoid Sharing Credit Card Details on Public Computers

When you are traveling and use a computer in a cyber café or a library, then avoid accessing websites where you need to share your credit card details. You should also keep the same in mind when you connect to the Internet with a public Wi-Fi connection. This is because these connections can be tapped into by hackers.

Credit cards have their uses but they can also be misused by fraud entities. So, if you want to prevent financial frauds online, then be sure to follow the tips above.

What is the procedure to increase your credit score from low to high?

Your credit score is an important factor when it comes to your financial life. This is because lenders use this information when you apply for fresh credit, to determine whether to approve your loan or credit card application. Typically, a higher score will yield you the best deals especially in terms of interest rates – which makes it reason enough to ensure that your credit score is consistently high.

If you’re looking to improve CIBIL score and don’t know whom to ask, you’re in the right place! Read on to know more.

What is the credit score?

A three-digit number that represents your credit report, the score is generated by a credit bureau. There are currently four such bureaus in India, of which CIBIL is one. These scores range between 300 and 900, and a score above 750 is considered to be good.

What influences the credit score?

There are several factors that a credit bureau considers when generating your credit score. Let’s take a look at them:

Tips to increase your credit score

Now that we’ve established the importance a credit score holds when it comes to your financial health, let’s discuss the ways by which you can improve your score.

• Call for your credit report. To begin with, get your free credit score from any of the bureaus. This is a great starting point for you to know where you stand. It’s simple: once you know exactly how good or bad is your credit score, you’ll also be able to understand what it will take to build the score. Further, check the report carefully to ensure that the information therein pertains to you. Any errors need to be highlighted to the concerned bureau immediately, as these can impact your score negatively. It is also a safeguard against identity theft.

• Make timely payments. If you have an existing credit card or loan, you’ll know what we’re talking about. Given that your payment history is such an important aspect, it is only prudent to make timely payments. Making complete payments is ideal, so that you don’t fall into the debt trap of rolling over payments month on month. If you’re not able to keep track of EMI or card payment due dates, consider setting up an ECS facility from your bank. Sit back and relax while your payments go through seamlessly!

• Use an existing account well. Do you have a credit card that you possibly no longer use, but have maintained well? By this we mean timely and complete payments. If the answer is yes, we’d advise you to hold on to this account, because it can have a positive impact on your score and in fact help boost the numbers. This is because to a lender, a card that is paid off in a timely manner indicates that the cardholder is likely to be creditworthy. Make an old account count!

• Don’t apply for cards if you don’t need them. Here’s another golden rule! Every time you apply for fresh credit, be it a card or loan, a hard enquiry is made against your credit report. This brings down your score for a while, which can be fairly damaging. You can also head straight for debt, by getting tempted to overspend since there is credit at hand. It’s best then, to apply for credit only when you absolutely need it.

• Have a healthy credit mix. A lender looks more favourably at a person who is able to handle all types of debt well, be it a credit card, personal loan or car loan – essentially a mix of both secured and unsecured loan products.

• Manage your credit utilisation ratio well. Experts recommend that you do not use more than 30 percent of the credit limit across all cards. When you come close to maxing out your cards, a lender tends to view you more unfavourably as a person who is heavily dependent on debt to make ends meet. Keep on mind that your score will suffer if you don’t keep a close eye on those card balances! This is also a good way to ensure that you do not overspend.

• Determine what you need to fix. Once you have your free credit score in hand, you are on the right track. Draw up details of your income versus expenditure so that you know just how much you can repay on an EMI. Similarly, understand how much you have to pay by way of credit card payments. Inculcating financial discipline will help you greatly.

The bottom line

It is never too early nor too late to improve CIBIL score. All it takes is time and effort, and the discipline to monitor your expenditure. Taking care of your credit score can be your gateway to good financial health, so start now!

Which is the fast way to increase cibil score

We are in an ear where everything that we want is instant. Instant is good. But it creates a lot of anxiety, impulse, and impatience. Everything instant is not good. Despite getting the results too soon, it’s always not necessarily perfect. There are many instances where the perfection or accuracy is not maintained at the speed of achieving it. While speaking over credit score and it’s rate of increasing or decreasing often has many myths. Let’s get those busted. There is no magic that can happen and would get your score to optimum great over a day or month. Also, the speed of increase also depends on the score which is currently. If the score is 450 and if the score is 650, definitely the time required to get 750 which is considered optimum best, differs. The one which has 650 will take lesser time compared to the one which has 450.

A CIBIL Score is a three digit number which is determined by payment history, the amount owed, new credits, credit mix and length of credits. Where, 35% is comprised of payment history which means how one has been making payments over the tenure of credit accounts opened. Credit consists of the credit card usage and the loans taken. 30% is for the amount owed. The total amount that has been taken, I.e. the credit limit one has for the credit card and the loan amount taken also has a major role in making the credit score. Length of credit history is 15%. How long have been the credit accounts are open, is the factor that is also considered. Rest both, new credits, credit mix are given 10% each. New credits are the one which is applied. But, if there are multiple attempts for opening new credit accounts can drag the score down. As it makes the creditors think that one is in dire need of funds which is also called credit hungry behavior. Credit mix is the combination of a secured and unsecured type of credit along with the fixed and revolving type of credits. These are the parameters and the weightage of them.

Now, on individual history, these scores are made. Any mistakes in these parameters will mess up with the score. The details information is mentioned in the CIBIL report. How long have been the account open, how and when are the payments made, any defaults, missed or delayed payments are all mentioned in the report. Also, the inquiries made for applying the credit are also mentioned. The first score is established after 6 months of an active account. Then the score is updated almost every month. Credit utilization is also a factor which affects the score. This is specifically for credit cards. One should not use more than 35% – 40% of the total credit limit of the card one has. To increase the score, the first and the foremost thing which has to be done is rectifying the old mistakes. There may be any missed payments, default accounts, unpaid dues, etc. work on them. Talk to the banker, tell the issues you had. Try clearing all those first. Then, use your credit card upto 35% of its limit. If your usage is more, apply for a new card. And use the mix. As you apply for a new card, new credit factor is also considered. But yes, do not overdo! Try taking a secured loan, say a gold loan or secured credit card. This will be a good of credit mix as well.

Once this is achieved, make sure you do not miss any more payments or delay in payments. Organize the payments. Keep reminders. Do not miss the repayment dates. While you follow this practice for over few months, a good credit score is no far! Again, there can’t be any finite time that is calculated to get a 750 score, but it is always achievable if the above mentioned points are taken care of!

Procedure that individuals who maintain a credit score of 750+ follow

There is no doubt that a high or good credit score can make a significant impact to your financial life. It can offer you the best interest rates on loans and get your credit card application approved. In some countries globally, even prospective employers and insurers go through a person’s credit report to determine their creditworthiness. You never know when bagging your dream job is the result of a good credit score!

So, does it mean that there will never be a loan for low CIBIL score? Well, not exactly, but such a loan does not come at the best terms. For instance, you can wind up paying a much higher rate of interest than you would if your score had been higher.

What is a credit score?

We know what a credit score does and how important it is, but let’s take a quick look at what constitutes the credit score, shall we? It is a numerical representation of your credit report, an all-important document generated by a credit bureau. There are currently four credit bureaus in India, each offering a report. A score ranges between 300 and 900, and a higher score is always a plus point.

Lenders consider a score of 750 and above a near-perfect score. This score essentially gives them the comfort of lending to a creditworthy individual and that’s what makes the score so important. How about calling for your free CIBIL report to know where you stand currently?

Factors that determine the credit score

Let’s take a diagrammatic look at the factors which determine the CIBIL score:

Keeping these factors in mind, your next step is to understand how to get a good credit score – and keep it that way.

How to get a good credit score

So, what is it that people who consistently have a high or good score of above 750 do regularly? Is it something drastically different? Here, we clue you in on their habits so that you too can work towards building and maintaining a similar credit score. Read on!

• Payment history: It is crucial to make timely payments, so once your loan EMI or card statement is due, pay off the amount on or before the due date without fail. Remember that a delayed payment – or one that is skipped entirely – can pull down your score drastically. If you look at it from a lender’s perspective, they would not want to extend further credit to someone who doesn’t manage their existing debt well. So, set up payment reminders or avail of an ECS facility to maintain a clean repayment track record.

• Manage your credit utilisation: While the credit utilisation limit is calculated across all your accounts and not just on a single credit card, remember that it is prudent to stay well within a utilisation ratio of 30 percent. A higher usage indicates that you could be in a spot or more of financial trouble and are heavily dependent on debt to manage your finances.

• New credit: Every time you apply for fresh credit, a hard enquiry is made against your CIBIL report. While temporary – say for a few months – each such enquiry will drag your score down a little bit each time. So, ensure that you apply for a fresh line of credit – be it a loan or card – only if you absolutely need it. This also helps you stay away from unnecessarily walking into a debt trap.

• Old accounts: Like the saying goes, old is gold! But, in this case, only if it is an account you’ve managed well, such as a credit card that has always had good payment history. Even if you don’t use this card at present, don’t close an old, good account. This can add weightage to your credit score.

• Apply for a credit card: If you’re a first-time entrant to the financial world with no credit history whatsoever until now, this is the time to apply for a credit card. This can be your first step towards building a robust credit history. Do make sure that you pay on time and ideally in full, so that the card proves to be an asset over the long run, as far as your credit score is concerned.

• Manage a healthy credit mix: When your score is calculated and also when a potential lender looks at this score, they’re happy to see a report that contains a well-balanced mix of all types of credit. This could include both secured and unsecured loans.

Your next steps

Now that you’re aware of what a high credit score can do for you, don’t forget to request for a free CIBIL report at the earliest. To take charge of your financial health it’s important to know just how your credit report fares. Remember that there will likely be a loan for low CIBIL score with some financer offering the option, but that is not the place you want to be.

Take charge of your financial health starting now!

Do banks check the CIBIL score before loan approval? Here’s what you should know!

Your credit score is a huge determining factor when it comes to loan approval. It is one of the first things that a bank or financial institution checks when you approach them, making it an important aspect of your financial life that you just can’t afford to ignore. Of course, your complete profile will also be considered, but do take special care of your score.

A good starting point would be to get a free CIBIL score from the credit bureau so that you know where you stand. This is an especially crucial step prior to loan application. Read on to know more about the credit score, and how it impacts you.

What is a credit score?

A three-digit number between 300 and 900, the credit score is generated by a credit bureau. It is a crisp overview of your credit report, which tells a lender about your creditworthiness. A high or good credit score can open doors in the financial world for you, when it comes to making an application for a loan or credit card. While every lender’s criteria may differ slightly, there is no doubt that a score of 750 and above will make anyone sit up and take notice!

What goes into a credit score?

Wondering what are the parameters at play when it comes to your credit score? Read on to know more!

• Payment history on past as well as current loans and credit card accounts

• New credit that you have availed of

• The length of credit history, i.e. how old your accounts are

• A credit mix, which consists of various debt products

• The credit utilisation ratio, which indicates just how much you seem to rely on credit

Other factors that banks consider

In addition to the credit score, banks also consider certain other factors such as your income and the amount you currently owe on existing loans and credit cards. They also look at the amount of loan you have requested for, together with the loan tenure. Whether your application is for a secured or unsecured loan will also have a role to play, especially keeping in mind your income and expenses.

However, here’s why the credit score is important. Say for instance you apply for a personal loan for low CIBIL score. Here, a bank may not reject your application outright because of the other factors being considered. However, a low score may not give a lender the confidence to offer you the best rate of interest since they too need to hedge their bets.

How to improve your credit score

Given the above, you’d agree that it is indeed important to make sure that your credit score is not just high but that it remains that way as well. Here are some crucial tips that should help you on your journey to improve your credit score.

• Making payments in time: Being late on your credit card and loan payments can pull your score down. The situation is further complicated if you skip making the payment entirely, as this looks alarming from a lender’s perspective.

• Do not default on loans: Charged off or settled loan and card accounts reflect negatively on your credit report, as do accounts that have gone into collections. Do make sure that you work out a solution to repay existing debt if you don’t want your score to dip drastically as a result of these charges.

• Maintain old credit cards: Don’t shorten the length of your credit history if you have a good, old card account. If you have maintained it well by ensuring timely payments, this can in fact give your score a boost.

• Applying for fresh credit: It’s simple, really – if you don’t need a loan or card, don’t apply for one! Not only does it make you look like you’re constantly in need of credit within a short interval, but every such application results in a hard enquiry on your credit report. This impacts the score, albeit temporarily.

• Apply for a credit card: The above doesn’t hold true if you want to start building a credit score, however! Apply for a new card and be sure to use it prudently – this can instantly help boost your credit score.

• Check your credit report: At regular intervals, do make sure that you check what’s in your report, because any erroneous or inaccurate information can prove detrimental to your score. Further, you need to make sure that every account mentioned therein belongs to you – protect yourself from identity theft even as you protect your credit score!

In conclusion

It’s important to remember that while a personal loan for low CIBIL score is not impossible, it is also not optimal at the same time. Instead, with some perseverance and patience it is better to improve your credit score.

Start with availing a free CIBIL score from a credit bureau today, so that you can take charge of your financial health confidently, now and well into the future!

Good Credit Score is Beneficial for Instant Loan Approvals

People take loans all the time- home loans, personal loans, auto loans- the options are plenty. However, the process of applying for a loan and actually receiving the funds is a long and tedious one. There are many people who don’t get loans at all, even after numerous attempts. So, what can you do to get a loan as quickly as possible? If there is one thing that you can do, then it has to be credit score improvement!

How Does Good Credit Score Benefit Loan Applications?

When a bank receives a loan application, then it checks a variety of things before approving the same. These include the applicant’s repayment history, existing debt, credit utilization ratio, length of credit history, etc. However, the most important thing that it considers is the credit score.

Your credit score lets the bank know how high your creditworthiness is. So, if your score is low, then it would suggest that you face problems with credit and personal finance management. However, if your score is high, then it would know that it can count on you for the loan’s repayment and that the risk of defaulting is minimum. Hence, it would approve your loan application rather quickly.

Apart from instant loan approvals, high credit score also helps in the following ways:

1. Better Rates

If you seek more affordable loans, then you have a very good reason to increase credit score. This is because those who have a good score are able to get lower interest rates from the banks. When your score is high, then you know you have the leverage at the time you want to negotiate with the bank. You can urge the lender to offer better interest rates in light of your good track record as evident by the good rating. More often than not, they agree without giving you a hard time.

2. Bigger Loans

As the loan amount increases, so does the risk for the lender. So, if you want a big loan, then you can increase the odds of getting approval by checking your free credit score first. If you see that your score isn’t up to the mark, then you can work on it before you submit the applications. Otherwise, when you need a loan on an urgent basis, then you might be able to get only a small portion of the same from the bank.

3. More Options for Jobs

You may find it surprising but many companies, especially in the finance domain, now review the credit reports of the candidates who appear for jobs. Usually, they check if they i.e. the candidates have ever defaulted on a loan in the past or if their score is up to the mark. The idea behind this measure is that if someone has a bad credit history, then they are also unlikely to be suited for a professional job. This again has to do with the usual association of bad credit rating with personality traits like lack of discipline, time management problems, etc.

You may not necessarily be judged on the basis of your credit rating when you appear for job interviews. However, if you don’t want to take any chances, then it’s strongly recommended that you increase credit score as much as possible before proceeding.

4. Higher Credit Card Limits

Most credit cards come with fixed limits and you can only spend within these limits and not a penny more. Naturally, you would want the highest limits possible so that when you are in a cash crunch or in case there is a financial emergency, then you can use your credit cards for help. Now, here is the thing- the lenders are usually more willing to increase the limits when the users have a good credit rating. So, if it’s high credit limits you seek, then you should check your free credit score today itself and see if it needs some improvement.

As you can see, there are numerous benefits of a good credit score. So, if you ignored yours so far, it’s time to take control and make improvements. Always remember- a good rating will help in your entire life!

Worried About Life After Retirement? Get Income in Your 60’s

Planning your retirement doesn’t have to be challenging. There are many ways to boost your savings for the twilight years and live life comfortably even after you have retired from your job permanently. The following are some of the best options to consider:

1. Senior Citizen Savings Scheme (SCSS)

SCSS is one of the most popular savings schemes for retirement as offers a high interest rate of 8.4% and also allows for tax deduction at the time of investment. However, there is one downside to this scheme which is that the maximum amount that you can invest is Rs. 15 lakhs. If your spouse also invests, then the limit can be increased to Rs. 30 lakhs.

2. Public Provident Fund (PPF)

The Public Provident Fund (PPF) is another popular long-term investment plan which has a tenure of 15 years. It offers a tax-free interest rate of 8% which is compounded, meaning that the returns are quite high. Also, both the principle and interest are supported by sovereign guarantee to make it a safe investment.

3. Atal Pension Yojana (APY)

If you are within the age group of 18-40 years, then you can invest in Atal Pension Yojana i.e. APY. As the name suggests, it’s a pension scheme in which you can deposit money on a regular basis to receive a regular pension after you retire. You get the option to receive a monthly pension of Rs. 1,000, Rs. 2,000, Rs. 3,000, Rs. 4,000, and Rs. 5,000. If you pass away during the tenure, then your spouse can receive the pension instead.

Apart from the popular investment schemes that are discussed above, you can take certain measures to save more money for your retirement:

Take Loans Once When You Have to

It’s possible that from time to time you may need to take a small business loan or personal loan. However, you should be careful with debt, especially when you are close to retirement. So, take a loan when you have no other option. Also, try to clear all your debt by the time you turn 60 and avoid getting lured by attractive interest rates or pre-approved loans that your lender may offer you on the account of your good credit score.

Take Care of Your Health

Staying healthy becomes more and more important as you age. Not only poor health affects your lifestyle, but it can also make a big dent in your savings that you might be saving for your retirement. So, try to improve your diet, exercise on a regular basis, and take measures to lower stress as much as possible.

Educate Yourself on Investments

There are all kinds of investment options depending on your budget and requirements. While there are standard pension schemes that are discussed above, there are other options as well which include mutual funds, stocks, bonds, etc. You can earn a lot more through these options, granted you know what you are doing. So, whenever you get free time, try to learn more about these investments and how you can maximize your earnings.

Protect Your Credit Score

Your credit rating is something that you need to protect all your life. This is because the score affects everything- the interest rate on a home loan, business loan, credit cards, etc. also your job prospects. You may have to pay high health and auto insurance premiums if the insurer checks your credit score before calculating the amount.

Save on Taxes

Did you know that there are many ways you can reduce your taxes? For instance, if you are investing in PF scheme, 5-year tax-saver fixed deposit accounts, etc. and paying a premium for health insurance, etc. then you can deduct these amounts from your taxable income and pay fewer taxes to the government.

Bottom Line

It’s understandable if you are anxious about your retirement. When you are old, then it becomes difficult to do lots of things that you are able to do today without any problems. However, financial planning can make your twilight years safe and stress-free to a huge extent. This is why it’s best to start working on a roadmap as soon as you can. Good luck!

High credit score can get you a cheaper personal loan

One of the best loans which are available in the market is a personal loan. With no strings attached to it, you can use the funds in any way you want. Despite of having other loan options like car loans, bike loans, loan against property and many more, people are taking personal loan to satisfy their needs and wants. It is so easy to avail one that you get your loan sanctioned within minutes. In some cases you already have a pre-approved loan available towards your account and you can get it with a few clicks and voila, you get the money credited towards your account.

Want to have the above scenario with yourself? Did you just logged in to your bank account just to check if you have a pre-approved loan offer? Not many banks offer such service unless you have an account with HDFC. HDFC personal loan is the best and they offer the best there is in the market. Apart from the banking irony, what is more important for such kind of a privilege is your credit score.

A credit score plays an important role when it comes to loan sanctions. On the other hand if you have a high cibil score, is rest assured that the offers will keep rolling in towards your account and you can use these offers at your ease. Not only will you get a loan on a cheaper interest rate, but also you will get the best personal loan offers.

What is the range of a great cibil score?

A typical credit score falls in the range of 300-900. You are considered to be a good profile if you happen to have a score above 750. But on the other hand if you are in the range of 800 and above you are considered to be the best of loan eligibility and the lenders will be always after you offering great financial products.

Benefits of high cibil score

You are always a first customer to be offered a loan if you need one. The lender has special rights for people with high score and they are considered to be a valuable customer. Not only this, when you opt for a loan, you have the power to negotiate terms with the lender all by yourself. You can negotiate on the processing fees and also the interest rates. You can set terms with the lender and get the loan processed according to your will.

How to improve your good cibil to best cibil?

Well, the answer to this is it will take a lot of time to get through to a great cibil. If you have been a defaulter in the past or you have a settlement towards your report, you can simply kiss your dream a goodbye because defaults and settlements stay on your report for a very long time.

On the other hand, you can start building your credit by making all your payments on time, fix errors on your credit report if you find any, increase credit limit of your credit card and so on. You can still get a loan for low cibil score in the market but you will encounter a lot of problems and you will end up paying high processing charges and high interests on the loan as compared to market standards.

A great cibil score comes with a lot of dedication and financial integrity. A lot of us just pay the minimum due amount every month thinking this will not affect the credit but unfortunately it does and you end up not only paying the late charges and interest but also your financial peace.