Tax Benefits of Taking a Joint Home Loan

Many aspiring home buyers in India prefer applying for a joint home loan to enhance their eligibility and get a higher amount. Apart from being a feasible way to get the desired funds for home purchase, applying for a joint loan is a great way to get added tax benefits. There is no doubt that a home loan is an excellent tax-saving instrument, but do you know that when you apply for a joint home loan, both the co-applicants can avail of tax benefits individually. However, for the partners to get the tax benefits guaranteed under different sections of the Indian Income Tax Act, you must meet specific requirements.

One of the most critical prerequisites to get tax benefit on a joint home loan is that you must be a co-owner of the property. This means the property you have purchased must be registered in your name as the co-owner. There have been many situations where the property is owned by a parent, and they apply for a joint loan with their child who takes the responsibility of repayment. In such a situation, if the child is not a co-owner, they are not eligible to claim tax benefits.

Conditions that you must meet to get tax benefits on a joint home loan.

  • As mentioned earlier, one of the important criteria for claiming tax benefit on a joint house loan is that you must be a co-owner of the property.
  • Apart from being a co-owner of the property, you must also be a co-applicant of the loan as per the loan documents. Property owners who are not borrowers and don’t contribute to the loan repayment cannot avail tax benefits on the joint home loan.
  • If you have availed of a joint home loan for buying an under-construction property, you can claim the tax benefits only from the financial year in which the property construction is completed. You cannot claim tax benefits on an under-construction property.

What tax benefits are available on a joint home loan?

If the property you purchase is self-occupied, then each co-owner who is also a co-borrower of the loan can claim a deduction up to Rs. 2 lakhs in a financial year on the repayment of the home loan interest. This deduction is guaranteed under Section 24 of the Indian Income Tax Act.

An important thing to note here is that the total interest repaid on the loan is allocated to each co-owner in the ratio of the ownership. This means the total deduction you claim on the interest repayment cannot be more than the total interest you have repaid.

Let us understand this without an example. If you and your spouse have availed of a home loan and have repaid Rs. 4, 50,00 in interest in a financial year and you share the property ownership in 50:50 ownership, then you both can claim Rs. 2,00,000 while filing your tax returns.

Additionally, each co-owner can claim a tax benefit of Rs. 1.5 lakhs in a financial year on the repayment of the principal amount under Section 80C of the IT Act.

Final Word

Thus, applying for a joint home loan allows you to get greater tax benefits as a family. Make sure that you are aware of the tax provisions and benefits available to you and make the most out of it.




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Personal loans are available to fund different kinds of personal expenses at a cost-efficient manner. These unsecured loans aren’t only easy to access, but also give you enough funds to manage crises you might be facing. You may easily receive a loan amount up to $25 lakh without any difficulties or extensive paperwork. Apart from that, on account of this collateral-free character of such loans, they have an easy and speedy application, acceptance, and disbursal process.


The preparation stage involves a number of steps, such as finalising the amount of the loan, comparing the loan conditions, finding the ideal interest rate, and deciding the repayment tenor. As a borrower, you must carefully assess your financial capacity and select a manageable instalment. Normally, it is sensible to make certain your personal loan EMIs do not exceed 30-40percent of your earnings, as this provides you considerable sum to satisfy your additional monthly expenses and also save some for a crisis.


Compared to a long tenor, a short tenor increases the amount of your monthly EMIs but reduces the entire interest amount you pay for the loan. This is because a brief tenor usually means your loan amount needs to be distributed among a fewer amount of instalments. As a result, you might find it challenging to handle your EMIs consistently, especially if the instalment amount represents a significant percentage of your monthly income, or if you are already paying for debt.

Select a figure methodically, you may use a personal loan EMI calculator. It’s a free online tool which you can use to calculate your EMIs in line with the loan tenor and loan number chosen. Using this calculator, you can change the loan term and choose the one which most fits your repayment capacity. Both short and long loan tenors have their advantages and disadvantages. Thus, remember the below-mentioned advice before you lock in your loan tenor.


Selecting your loan tenor without due thought is able to make your payments hard and drain your finances. So, take a little time and choose the ideal loan term to avoid any unnecessary strain.


This will only increase the load on your monthly budget and make it difficult for you to pay your EMIs punctually. Try to have a loan only after clearing your other debts first. Doing this will also boost your credit rating.


Are you due for a promotion soon? Are you expecting a bonus shortly? Foresee your fiscal prospects and plan accordingly. The higher income you have, the easier it becomes for you to repay the loan. As your income grows, you can also make pre-payments on your loan to decrease the burden.

Consider ways to increase your income too, like taking a part-time job, taking some additional work, or getting better returns on investments.


Analyse your income and also look into any bonuses that you anticipate in the forthcoming months. Also, consider any assessments and promotions you’re due for. Consider these income hikes while choosing the right tenor for your loan. You can use surplus funds to make pre-payments and maintain a high credit rating.

While you’re available to pick a personal loan deal, you must decide on a lender that provides you the flexibility of repayment.

Aside from that, you also profit from the easy acceptance and disbursal procedure.


Ideally, after paying your EMIs and fulfilling your monthly expenses, you should still have some money left, which you can save for emergencies. As soon as you pick an amount that you are comfortable with, select your loan tenor accordingly. This will ensure that you pay your EMIs comfortably without delaying or lacking any obligations.

Create a monthly budget to cut down your expenses. As a result, you can choose a shorter loan tenor with higher EMIs so that you can eliminate your loan immediately.

Planning to apply for a private loan? Learn how to strike a balance between your monthly instalments along with your loan tenor using the information provided above. As soon as you choose your loan tenor employing the personal loan EMI calculator, fill our application form here, provide your information, and receive your documents verified online. Accept the loan offer and proceed forward with the application process. Once the process is complete, you get your loan approval within 15 minutes.

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Importance of Obtaining NOC After Closing Your Home Loan

If you wish to avail a home loan, you must be aware of the various procedures involved both before applying for a loan and after repaying the loan. Read on to know the importance of getting a NOC after you repay the full home loan amount.

If you have repaid the entire home loan, you would be elated that you have a huge responsibility off your shoulder. You may feel you need not run around the lender, and focus on other important goals in life. But, amidst the feeling of joy and delight, you must not forget to undertake one more important task, which is to get the NOC or No Objection Certificate from your lender.

What is NOC?

The NOC, which is also commonly known as NDC (No Dues Certificate) is a legal document that you must procure from the lending institution after you repay your last home loan EMI. The document essentially states that you no longer have any dues towards the lender.

A lot of home loan borrowers are not aware of this crucial process. The lenders do not provide the certificate voluntarily; you must request the lender for it. Once you get the certificate, you must submit a copy of it to the registrar of properties, and only then the lien of hypothecation is struck off.

 Why is obtaining a NOC essential?

  • If you fail to get the NOC from the lender and submit it to the registrar of the property, the lender will continue to be the owner of the property despite you have repaid the entire loan. Also, unless you have the NOC, you cannot sell the property to anyone.
  • Getting the No Objection Certificate is like clearing the last hurdle toward achieving a clean credit score. So, if you are repaid the loan and wish to close the loan account, you must take the NOC from the lender. A loan account is wholly closed only after you have received the NOC. Often the loan borrowers request the lender to issue a no-objection certificate but fail to follow up. This kind of complacency can harm your creditworthiness.
  • When you request for a NOC, make sure that you diligently follow up with the lender. You can place a request for the certificate online through the lender’s website, or you can personally visit the lender’s branch. When you receive the document, make sure that you review it carefully and check if all the loan-related details are listed correctly, and it has the words ‘No Objection’ mentioned on it. Once you receive the NOC, your CIBIL score will be automatically updated by the lender, and you will be marked as a trustworthy borrower.
  • When you apply for a loan, you must purchase an insurance cover against the loan; it is a part of the home loan application When you get the NOC after repaying the loan, the lender will not have any charge over the property. This means, in case of destruction of the property, the insurance company will pay the settlement to you instead of the lender.

So, once you have repaid the last instalment of your home loan EMI make sure that you contact the lender for NOC within the stipulated time. Getting the NOC promptly will help you take full ownership of the property. Also, when you have the NOC, you can sell the property or even apply for a new home loan as the lender and the buyer will ask for the NOC.

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The Top Reasons Your Loan Application May Be Declined

Nobody wants to read these words, “Your loan application is rejected.” Unfortunately, that is the reality of eighteen per cent of Australian borrowers who have applied for a loan.

According to a recent survey, one in five Australians has had their home loan application rejected. One in ten has been denied a loan in the past by the big four banks. That is a significant number of people who cannot access credit.

Here are some of the top reasons financial institutions turn down loan applications from potential borrowers.

Poor credit history

A credit track record is by far the most critical signal banks rely on to decide whether to accept or decline a loan application.

A high credit score of say 750 is desirable. A high score shows the bank the borrower is reliable, has a steady source of income and can repay the loan on time.

A low credit rating of say below 610, on the other hand, could mean there are inherent issues with the borrower’s finance. If the prospective borrower has defaulted on previous loans or has filed for bankruptcy in the past, they could count against them when applying for a new loan.

Your credit history indicates how well you have managed your finances in the past. So, before applying for a loan, you may want to find out your credit history to boost your chances of getting approved.

While you are rebuilding your credit, you can still apply for a loan even with bad credit. However, you will have to dig a bit deeper to find alternative loan providers who offer loans for people with bad credit.

Debt to income ratio

Another common reason why banks turn down loan applications is the debt to income ratio of the applicant.

Banks use the debt to income ratio to evaluate whether a borrower can comfortably repay the loan without negatively impacting their standard of living.

To calculate your debt to ratio, the bank will divide all your recurring monthly debt commitment by your net income after deducting tax.

The implication is that even with a perfect credit score, your loan application can still be rejected if you carry a lot of other debts.

So, to ensure a more friendly debt to income ratio, you may want to list all your income in the application form.

Several loan requests made in the past

For each loan request you make, the lender will first retrieve your credit history to access whether you are a suitable candidate for the credit line or not – this credit check is called a hard inquiry. And usually, these checks are entered on your credit report.

The problem starts if you have applied to several lenders within a short period as these hard inquiries stack up and can impact your credit score.

Lenders, interpret these hard inquiries as a sign that you are in financial distress and hence a high-risk customer which would, in turn, lead to a decline of your loan application.

Mistakes while filling loan application forms

A single mistake or misrepresentation of facts or failing to submit all necessary paperwork could lead lenders and credit providers to decline a loan application.

Please pay close attention when filling the income document as it is usually a common area where a loan application may be rejected. Lenders will often require that you provide several months of income statement from which they would make their decision about the stability of your income.

Employment history

Your employment history also plays a role in whether your loan application is declined or accepted.

For example, the survey referenced above shows that twenty-six per cent of potential borrowers were turned down for being either self-employed or a part-time worker.

Lenders consider how long you have been in paid employment when making decisions on your loan application. So, if you are relatively new in your job or often changing jobs, your application is likely to be declined.

So, there you have it. Some tips on how to avoid your loan application being rejected.

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7 Mistakes People Make While Consolidating Federal Student Loans

Most Americans are living with financial regret, while paying off student loans for 18.5 years, starting at age 26 and ending at 45. Spending a significant portion of your life repaying on college tuition fees is a reality many Americans.

While struggling with multiple student loans, you can consolidate any federal student loans listed so far into one main pile of money that will count as one account with one monthly payment to the same company every month.

Usually, the newly obtained and fixed interest rate is equal to the average of the interest rates on the loans being consolidated.

Unfortunately, many students who have heard about how to consolidate the federal student loan rush into it without enough thought.

These are some of the more common student loan consolidation mistakes that students from all the United States of America make every year, repeatedly:

  1. Choose to consolidate a student loan because it worked well for a friend or for a colleague

Even if consolidations worked for 90% of your friends, it does not mean you already know how to consolidate federal student loans and this is the best solution for you. You must realize that everyone has their own unique priorities, financial goals, and lifestyle preferences. However, before you decide to follow in their footsteps, give some thought to whether refinancing or consolidating your loans will work for you in the same way.

  1. Not exploring all the available debt management options

Consolidation may be among the more popular solutions for student borrowers looking to manage their debt. However, they certainly aren’t the only solutions out there. There are a few cons to choosing either refinance or consolidation. Perhaps the biggest is losing any federal perks when you refinance or consolidate federal loans. It is important to explore all other available solutions before you can say with certainty that refinance or consolidation is the best one for your situation. Every solution has its own benefits and downsides. You must weigh the pros and cons of each carefully before you deciding on what works best for you.

  1. Signing up with the first available financial institution

After exploring all the available options and decide that consolidation is the best option for you. Your next step now is to look for a lender to work with. One mistake many student borrowers make is signing up with the first lender they talk to. They want to get it over and done with and also the lender’s terms sound really attractive.

  • Not comparing offers from various financial entities

When it comes to student loan consolidation or refinancing, comparison shopping is the key. Every lender may offer completely different deals, from different rates of interest to different payment terms and even different penalties for delayed payments. If you sign up with the first lender you find, you could very well have missed out on a better deal had you only checked around a little more.

You absolutely must check the terms and conditions, as well as the interest rates with different lenders before choosing one that seems right for you. The good news is you can directly compare lenders online, so there is absolutely no excuse for missing out on this step. After you’ve done your online comparison, you can shortlist a few that seem like the best options and visit these personally.

  • How to consolidate all the student loans 

When you consolidate any student loan, the refinanced or consolidated loan is treated as a new loan. This means you lose all the benefits associated with the original loan. This may not be in your best interest, especially if there are any associated benefits that you may want to take in the future.

You must make strategic decisions. Make sure it benefits you both in the short and long term. Go through the terms, conditions, and benefits associated with each loan carefully. Weigh the merits of each loan before deciding which ones to refinance/consolidate and which to leave as is. You may end up deciding to refinance or consolidate all of your loans but when you go through this process, you are less likely to make a wrong decision.

  1. Relinquishing Federal Student Loan Protection Unknowingly

This is one of the more common mistakes many student borrowers make. They do not read the fine print in detail and only realize that they forfeited their federal student loan protection after refinancing or consolidating. By then, it is too late.

You must explore other ways to manage your loans. One such viable alternative is signing up for an Income-Based Repayment plan. With and Income-Based repayment plan your monthly payment is calculated as a percentage of your income.

More importantly, it allows you to maintain all benefits and protections associated with the loan.

  • When Your Federal Student Loans Are in Default

Loan consolidation is another option to get out of default.  You’ll need to make three consecutive monthly payments on your defaulted loan before you can consolidate it.

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Unsecured Business Loans: What You Need to Know

There are literally hundreds of different types of business loans that you can choose from. However, almost all loans can be broadly categorised into two options: secured and unsecured business loans. A secured loan is generally the most common type of loan given by banks and credit lending agencies. The concept is simple: the company will give you the loan amount but will take something as collateral. This is security so that in case you fail to pay back the loan, they will have something of equal or higher value which can be sold to get the money back.

An unsecured loan is also a pretty common option. Companies that give out unsecured loans don’t take anything in the way of security but they are more cautious when giving out the loan. They vet every application carefully and also charge a slightly higher interest rate because they take on more risk. If you are thinking of doing business and need some money to get started, you might want to consider applying for an unsecured business loan. Here are just a few things that you should know about taking out the loan.

An Injection of Cash

A business loan doesn’t have to be paid back immediately. The company is going to charge an interest rate and the payback period is usually over a year. You will simply have to pay back a fixed monthly instalment that includes the premium and the interest being charged on the amount. Because you don’t have to pay back the loan right away, you can plan it in such a way that you can just pay back the amount every month from the company’s profits. It’s that initial injection of cash that poses a problem for many people.

Compare Your Options

If you are interested in getting an unsecured loan, the first step that you need to take is to look for different companies that offer such loans. Compare their eligibility criteria and see if you fall in it. If you do, you can then check the interest rates and other variables before making a decision. Once you have gone through the terms and conditions and have made your decision, you can then send in an application. If your application is accepted, you will need to sign the papers and agree with the terms and conditions; within a few days, the loan amount will be transferred to your bank.

Getting an unsecured loan is one of the best ways to start a business. If you don’t have any assets to your name, you will be protected and the money will be easy to pay off, making it an excellent way to get things rolling.

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Why Mortgage Lenders Make Customers Jump through Hoops

Head down to your local bank to apply for a mortgage and you’ll find yourself jumping through one hoop after another just to get approval. The long, drawn out application process could result in you waiting weeks to actually get your mortgage. By contrast, a real estate investor or small business owner could secure a hard money loan in a matter of days. So what’s the difference?

Much of the difference boils down to who assumes the majority of risk on a loan. A bank making a 30-year mortgage is doing so with the understanding that it can sell said mortgage to Fannie Mae or Freddie Mac, thereby reducing its risk substantially. A hard money lender, on the other hand, assumes almost all the risk of lending.

Of course, such a simple explanation doesn’t really help you understand what’s going on here. So let’s look at it in more detail. Suffice it to say that the 30-year bank mortgage is not all it’s cracked up to be.

Strict Lending Requirements

Banks obviously have their own lending requirements in place. They have to if they want to mitigate as much risk as possible. But consider this: risk increases the longer a mortgage lasts. So why would banks offer 30-year mortgages? For that answer, we go back to the end of World War II and the post-war housing boom.

The 30-year mortgage was essentially a government creation intended to get more people to buy homes. The thinking at the time was that a 30-year mortgage made home ownership more affordable by giving people more time to pay the bill. Then along came Fannie and Freddie. Through these two programs, the government essentially encouraged banks to grant mortgages to people who really couldn’t afford them by ensuring such mortgages against loss.

In exchange for the insurance, lenders were required to adopt new lending practices they otherwise would not have utilized. Those practices were made even more strict following the 2008 housing crash. Today’s borrowers have to jump through a lot more hoops because government regulators want it that way. Ironically, Freddie and Fannie continue to encourage lenders to offer mortgages to people who really cannot afford them.

Hard Money is the Polar Opposite

You would never use a hard money loan to buy a home that would act as your primary residence. Still, understanding how hard money loans work offers a stark contrast to the way traditional banks do business. When an investor or business owner applies for hard money, there are no hoops at all to jump through.

Remember, the government takes on most of the risk of a typical 30-year mortgage. The risk in hard money rests solely on the lender. With that in mind, hard money lenders focus primarily on how they can recoup their money in the event of borrower default. There is only one way to do that: repossess and sell the collateral offered as backing for the loan.

According to Salt Lake City’s Actium Partners, property is the most commonly used form of collateral for hard money lending. Lenders care mainly about the value of the property and its current marketability. They are less interested in a borrower’s personal income, credit history, employment, etc. As long as the collateral is solid and valuable enough, risk is minimized.

You jump through hoops to get a 30-year mortgage because, like everything else controlled by the government, bureaucracy requires it. There are no hoops in hard money lending because it is a completely private enterprise between two parties. And now you know.

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5 Common Reasons Why You Could be Refused a Personal Loan

Have you applied for a personal loan only to be refused by the lender? Although it’s not a nice feeling, you’re certainly not the only one who has had a loan application turned down. There are several common reasons why you might be declined a personal loan, and although some of them may be indicative of an unhealthy financial situation, others may simply be due to an oversight on your behalf or your particular circumstances.

If you’ve been declined a personal loan, make sure you know the reason why, as every personal loan application you make counts as an enquiry on your credit report. Make too many unsuccessful enquiries and that will turn into a red flag.

So, what are some of the common reasons why you might be declined a personal loan?

  1. You’re self-employed

Being self-employed can bring numerous benefits, but it can also have some unexpected drawbacks. Many lenders like to see that you are in full-time employment or have a secure contract with plenty of time left to run, as that provides added reassurance that you’ll be able to repay the loan.

For that reason, if you are self-employed and have a fluctuating level of income, some lenders may think twice about offering you a personal loan. However, not every lender will be so reluctant. For example, the short-term lender Wonga states it will not explicitly decline a borrower just because they’re self-employed, although you will have to provide evidence that you’re able to make the minimum monthly repayments.

  1. You have a bad credit score

Even borrowers with high salaries and stable jobs can be rejected for a personal loan. What many people don’t realise is that even with a good level of income, lenders will be put off by an adverse credit record that shows unreliable behaviour as a borrower. Maxed out credit cards and loan defaults will all contribute to a bad credit score. Thankfully, there are steps you can take to repair your credit score.

  1. Your application is inconsistent or incomplete

You must provide all the information you are asked for on your personal loan application and ensure that all your details are accurate and up to date. If you don’t double-check important information or provide comprehensive responses to the lenders’ questions, there’s a far greater chance that your loan application will be rejected.

  1. You don’t meet the eligibility requirements

Some lenders are quite specific about who they lend to, and if you don’t meet their eligibility criteria, the likelihood is you’ll be declined. Make sure you carefully read the lender’s criteria before you apply for a loan to save you time and reduce the likelihood of a refusal. The good news is that there are plenty of other lenders out there that will accept your loan application even if you have bad credit. You just have to find them.

  1. The loan amount is too high

On the loan application form, you’ll be asked to enter your desired loan amount. The temptation might be to borrow a bit more than is absolutely necessary, but if you enter an amount the lender believes you might struggle to repay, you’re likely to be declined. Instead, only borrow the money you need and use a loan affordability calculator to check it’s an amount you can comfortably afford to repay based on your current income.

Have you encountered any other reasons for a loan application refusal? Please share your experiences with our readers in the comments below.

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4 Reasons That Can Cost You Your VA Loan Plano Application

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For most people, one of the best ways to buy a house is through a mortgage application. This is especially true if you haven’t got enough cash on hand to pay for the full price yourself. For vets ad service members, you can take advantage of a VA Loan Plano to make your dream home purchase a reality.

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Good Read: The Many Advantages Of VA Loans

What does it take to qualify for a VA mortgage? A VA Loan Plano has its own set of criteria for vets and service members who wish to acquire a home loan. The following are eligible for a VA mortgage.

  • you’re able to commit active service no lower than 90 consecutive days during a war
  • you’re able to commit active service of at least 181 consecutive days during peacetime
  • you performed duties in the National Guard or even in the reserves for six years
  • your spouse was a vet who was killed while on duty
  • can produce a COE or Certificate of Eligibility

This is to say that not all active service members and vets get mortgage approval. So, you’re planning on applying for a VA Loan Plano, it pays to check what could cause your lender to decline your home loan application. These are as follows.

You applied for a VA mortgage to buy a vacation home

Note is that a VA loan is only for those eligible vets and service members who want to buy a primary residential house. If you’re wish to invest in real estate or want to buy another house as a vacation home, you’re wasting your time applying for a VA loan. This type of mortgage is only for owner-occupied residences.

You applied for foreclosure or bankruptcy in the past

The Department of Veterans Affairs is indeed keen on helping eligible members acquire a home through the VA loan. However, you’re still required to show your lender that you’re able to pay off a mortgage. If you hit a rough financial patch such as a foreclosure or bankruptcy, then you’re most likely to get a no from your lender. You will need to wait a few years and work your way into showing lenders you’re capable and responsible enough to qualify for a VA loan.

You have a bad credit score

VA loans do not require its members a high credit score to qualify for a home loan. However, a reputable lender has the right to deny your mortgage application if your credit score comes up too low. The cause can be anything – bankruptcy, foreclosure, and poor debt payments. If you plan on getting a VA mortgage in the future, make sure to start building up your credit score up to at least 620.

Good Read: The Side Effects of Bad Credit

You have a high Debt-To-Income Ratio

Most lenders allow their borrowers a mortgage as long as they don’t go beyond a DTI ratio of 41%. Your DTI ratio is your monthly gross income compared to your debt obligation each month. This means you, as a borrower, need to have a decent amount of cash left even after you pay your monthly debts.

VA mortgage is an excellent home loan option for those eligible vets and service members. If you don’t want to get denied for this type of mortgage, keep these facts in mind. You’ll get better chances of a mortgage approval with a good credit score, low DTI ratio, a good credit report, and by using the loan to buy a residential home. 

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5 Ways for Employee of Proprietorship Company to Get a Personal Loan

In the case of an emergency, the best way to arrange for money is via a Personal Loan that can be given over all the other alternative options, such as one’s own savings or taking help from acquaintances fails to meet the requirement.

It turns into a challenge to secure finance if someone works in a proprietor firm. The reason behind this is that the lender has to check the credibility of the company that the applicant works for. In the case of a proprietorship company, ownership is held by one person; hence it does involve risks such as sustainability and turnover. These risks always exist in the case of a proprietorship company. An example is that if anything unfortunate were to happen to the proprietor, then the entire business could come to a standstill and there would be uncertainty in the job of employees. As the company could shut down or all the workers may not have gotten their salary and so on. It is in such cases, that any employee who gets a Personal Loan, the repayment shall become difficult due to the lack of income.

In choosing a bank for your Personal Loan, you need to compare the rates offered by these banks. This is to guide you in making the best and right choice. Carry out a research on the Personal Loan interest rates of these banks and picks the one that suits you. Apart from the loan charges, you also need to consider the processing fees, insurance premium, prepayment, and foreclosure. All these should be done so as to be sure you are making the right decision about your Personal Loan application.

Banks and other financial institutions provide several Types of Personal loans, which you could avail by keeping securities as collateral with the lender. This article lists such types of different financing options.

5 Ways for Employee of Proprietorship Company to Get Personal Loan are given below:

  1. Against fixed deposit:In the eventuality that the borrower has a Fixed Deposit (FD) account with the bank, then they can get a Personal Loan against this FD. The Personal Loan that is sanctioned by the bank is also at a lower interest rate. Additionally, the loan that is sanctioned against a fixed deposit also requires minimal documentation. In this type of a Personal Loan, where the guarantee is an FD along with the bank itself, the bank shall not be checking the employer’s credibility. The above-mentioned type of loan is secured only because the FD is pledged with the bank. The applicant shall get a loan amount which is almost 80% – 90% of the FD amount.
  2. High income:There is a greater chance of approval for a Personal Loan for Proprietorship Company, if the applicant works in a proprietor run company but draws a more than sufficient salary per month. If their income is higher than the required value by the ender, their loan requests are approved quickly. Also, if the company in consideration has been into business for a long period of time and if it has been profitable as well, then too the chances of getting a Personal Loan increase considerably. The salary slip and the bank statement shall be required by the lender to help in proving the individual’s income.
  3. Against securities:Employees who hail from proprietorship firms could also get a Personal Loan by keeping gold, keeping mutual funds, keeping LIC policy, or by keeping ETF, and savings bonds as a security with the bank. With each financer, the calculation of the loan amount varies. While a few may have a cap on the amount there are others that may lend money in accordance with the market value of the pledged security.
  4. Private money lenders:This particular option is part of this list, and does find mention. However, it must be avoided as far as possible as the private money lenders take control of your assets which include all forms of property such as gold, land deeds or any other form of assets until the entire loan amount is repaid.

In addition to this, there have been cases of fraudulent activities undertaken by these lenders as well. Most of these cases involve the forging of documents in order to take control of your assets. Some of the other disadvantages of taking a Personal Loan from such private money lenders are that the interest rate which is charged by them is extremely high while the recovery process employed by them is very bad. These risks and downfalls also come with a few benefits which include no credit history check, flexi-repayment option, quick disbursal of money, and so on.

  1. Peer lenders:In the eventuality that all of the above solutions fail then an individual who works at a proprietorship company can apply for a Personal Loan at peer to peer online loan marketplaces. Here the applicant gets the option to choose the investors or in other words, basically money lenders and while the applicant makes a choice, he or she can bargain at the same time for best interest rates. Despite every P2P lending company having its own eligibility criteria, the applicant does end up having vast options to choose a lender from. This is also known as PTPL, as these marketplaces are a safe method of getting a Personal Loan and the charges are extremely less in comparison to the banks.

So as seen in the points that were discussed above, there were multiple options for an employee of a proprietor owned company to ensure that he or she Gets Personal Loan for Proprietorship Company. An important point for all those whose loan applications have been approved or those who are in the middle of repaying the loan must remember to payback all the EMIs on time and it is this which shall entirely help in getting a good CIBIL score. This means that there should be no bounced cheques, insufficient balance, or anything of the sort, as a good CIBIL score is extremely important.

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