When you have a regular mortgage, you pay the lender every month to buy your home over time. In a reverse mortgage, you get a loan in which the lender pays you. In Reverse mortgage, Bank takes part of the equity in your home and convert it into payments for you – a kind of advance payment on your home equity. The money you get usually is tax-free.
Generally, you don’t have to pay back the money for as long as you live in your home. When you die, your estate will be used to repay the loan.
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Reverse Mortgage loans are not right for everyone. It may surprise you to hear a lender say this, but it is true. If you are looking for a short-term loan you may be better suited for a different type of financing. A reverse mortgage loan can sometimes require closing costs and upfront mortgage insurance premiums which would make it impractical as a short-term solution in some cases.
However, for those who wish to remain in their homes and need extra cash flow to do so, the Home Equity Conversion Mortgage may be exactly what you are looking for.
Financial distress on account of the Covid-19 pandemic is the biggest challenge to bringing lives, communities and the weakening economy back on track. Millions of people have lost jobs. Millions more have had to take deep pay cuts. Many families have lost their sole breadwinner.
Welcome to FintooInvest!
Are you searching for a quick online loan? Do you need a hassle-free loan? Are you still waiting for the disbursement of a bigger loan and paying out installments from your own pocket?
Now search no more. FintooInvest is committed to assist with quick and easy loan processing. Here is why you should opt for FintooInvest for availing online loans:
- Quick Disbursement
We at FintooInvest, make sure to process the loan requirement quickly, and hence you would receive the disbursement within 2-3 days.
- Minimal Paperwork
We require very few documents for disbursing the loan requirement, unlike traditional loan processing. So you are not buried under documentation requirements.
Since we charge no prepayment fees and also we charge lower interest rates for EMI, it is a Win-Win situation for both of us.
- Amazing support system
We at Fintoinvest brag about our consistent support service before and after loan processing. So, we are at your assistance 24/7
We charge no hidden costs and hence you can be assured that loan processing is transparent.
What types of loans you could obtain from FintooInvest?
- Personal Loan
As the name suggests, FintooInvest can help you avail a quick personal loan, be it for a wedding or for renovation or major repairs or even any medical emergency (of course the part which health insurance does not cover)
- Professional Loan
It so happens that professionals like Chartered Accountants or Engineers or Doctors need some bridge loans while carrying out their practice. FintooInvest is at your service and will help you avail the professional loan.
- Business Loan
Liquidity crunch is the biggest issue that businessmen try to handle by taking a loan from small-time lenders. With FintooInvest, you would be assured that cash crunch will not be a problem anymore for you.
How can you avail online loan from Fintoo Invest?
- Step 1
Create a login ID on FintooInvest or log in from your Google or Facebook account.
- Step 2
Once logged in, you can click on the loans button, which will have a dropdown menu consisting of
- Step 3
Depending on your requirement, click on the loan and you will need to select a preferred loan partner. After selecting, the FintooInvest website will take you to the external website of the preferred loan partner.
- Step 4
Create a linked loan account on the loan partner’s website as per the requirements mentioned on the website. You may need to carry out one-time submission and KYC verification of the documents in this process. And then you are set to go.
- Step 5
The Loan partner will carry out a credit score to check your eligibility to avail of the loan considering that you are able to repay the loan with the existing incomes and liabilities. Don’t worry, this is a standard procedure and is meant to be there so that you would not get into trouble while paying off the loan later on.
Certain pointers to check while applying for online loans:
- Always check the charges like prepayment charges, interest rates, etc to be in the know of the costs carried.
- Always opt for installments to be equal to or less than 50-60% of your in-hand income. EMI’s would otherwise take a huge chunk away from the disposable income.
- You can always check with the loan partner if you could add income of the spouse so that the probability of obtaining the loan increases.
Personal loans can help you out when you need to borrow money for a variety of reasons. This type of lump-sum loan is paid back in monthly installments over a set term, usually ranging from one to seven years.
With any debt, it’s essential to consider how the payment will impact your finances, but there are many situations where a personal loan may be a good choice.
Just like it sounds, a personal loan can be used for personal reasons. Qualifying for a personal loan depends on several factors, including your creditworthiness. The stronger your credit score, the more likely you are to be approved.
A higher credit score can also translate to a lower interest rate on a personal loan. Personal loan lenders can also take into account things like:
- Your income
- Total monthly debt payments
- Whether you rent or own your home
1. Debt consolidation
If you have several outstanding loans with high-interest rates, combining them into one can help you reduce your monthly payment. This is called “debt consolidation,” and it’s one of the most common reasons people take out a personal loan. The personal loan often has a lower interest rate than some of the other debts you may have, which can reduce the total amount you will repay over its term.
Be careful if you use a personal loan to pay off credit card balances. One pitfall could be being tempted to charge new debt on those cards. You’ll need to practice self-control, or you could find yourself worse off than before you consolidated your debt.
2. Cover emergency expenses
A personal loan has a fully-funded emergency account, which covers three to six months of expenses. If something arises, you may need to resort to getting a personal loan. Emergency expenses could consist of unplanned medical fees, expensive car repairs, or even funeral costs. Any of these situations can quickly add up to a few thousand or even more. Even if you have insurance, in some cases you may have to meet a high deductible. A personal loan could help in these situations, which are often stressful.
Related Article: Tips on how to repay the loan on time
3. Make a big purchase
A personal loan could also finance a big purchase, such as a new appliance, car or engagement ring. You can also use it to pay for tuition, a wedding, or a vacation. In these cases, though, it’s best to consider your needs versus your wants. Buying a car can help you get to work. Paying for tuition can help you improve your career outlook. And replacing a defunct refrigerator or stove can help you maximize your food budget. If you’re using a personal loan for a large purchase, make sure the monthly payment comfortably fits your budget. And shop around for the best deal on that large purchase, so you aren’t tempted to get a loan for more than you need.
4. Pay for moving costs
If you’re moving due to a new job or family situation, taking out a personal loan may help you pay for the expenses. You may also need to purchase new furniture or household goods for your new home or pay for travel expenses. Before you take on debt to make a move, make sure that your new income will be enough to cover the monthly loan payment.
5. Remodeling a home
Remodeling your home can increase its value as well as make necessary repairs that protect your investment. A personal loan is one option for getting the funding for projects such as replacing the roof, updating the kitchen or finishing the basement. If you have equity in your home, you may decide to go with a home equity line of credit or home equity loan. However, personal loans could be a good choice since they don’t require collateral, which means you don’t put your home at risk if you’re unable to repay.
6. Start a small business
As the saying goes, “It takes money to make money.” A personal loan can be a good vehicle for getting the funding you need to start your own company. You can use it to hire a website designer, order initial inventory, pay your rent, or cover payroll until you start generating revenue. Make sure your business plan includes a way to make your monthly payments while you’re getting your business off the ground.
7. CIBIL Score Improvement
The CIBIL score of an individual is calculated on the basis of agility in payment of loan repayments and credit card repayment. When you take a personal loan of the loan amount and return it within the fixed time frame, you can improve your CIBIL score as it will improve your credit history and grow your creditworthiness. This also enhances the possibilities of the approved personal loan. Apply for a Personal Loan get a higher loan amount up to 30 lakhs at an attractive rate.
8. Higher education
While you may have prioritized your child’s career aspirations and making regular savings towards it, the ever-increasing education costs may cause some deficit towards such financial goals. One can take a personal loan to bridge such a deficit and enable their child to get admission into the desired college and stream, not allowing any financial constraints to alter such goals.
9. To Pay for long-distance relocations
Relocation within the city itself is an expensive affair. So naturally, when you move from one city to another, a lot of money is involved. You can always consider taking this loan to cover those expenses.
A personal loan could be more of use when there is little possibility for any other type of loans like housing loans, vehicle loans, etc. Personal loans are becoming more popular due to quick disbursal and low documentation. However, the interest rates would be on the higher side due to the lower payback period. In case of liquidity crunch or quick demand for money, personal loans are saviours.
In the unsure times with COVID still on the horizon, you would be wondering how on earth you would be able to repay the loan on time. Here comes the Good News! You can actually do it.
So basically when you repay the loan on time, it means that you
- Would be able to maintain a superb credit score
- Would be able to obtain a loan whenever you need it
- Would be able to enjoy more liquidity than ever
- Would be able to have more purchasing power & so on.
Interested to know more? Please read on.
- 1) Opt for Loan restructuring having higher EMIs
You may feel that lower EMIs with higher tenure may be your best bet for better liquidity management. However, when you opt for higher EMIs to repay the loan, it translates into lower tenure, thereby meaning that you can easily repay the loan on or before time with much less interest out go.
You need to evaluate and analyze which aspect of loan repayment is more beneficial
- Either you can achieve liquidity by opting for lower EMIs
- Or you can choose higher EMIs and in turn, save on interest.
If you can manage the cash availability, it is always better to opt for higher installments, which would result in lowering the loan repayment tenure. In this way, you can easily repay with lower interest cost.
- 2) Strategic liquid funds management
“You should save more than you can spend “ goes the saying. But are you really gaining any benefit by saving? Confused?
There are several financial instruments to help you save and earn income by way of interest or dividend or wealth building. When you are investing a particular sum of money, you expect some gain. But what if you get far lesser than what you are spending? Then does it make sense to invest just to save a part of income that would not even bear the inflation burden in the long run?
So comes an unpopular opinion, that you should divert your funds to reduce the liability rather than spending higher interest and earning a meager interest rate.
Currently, traditional investments like Fixed Deposits are earning far lesser than 7%. If the rate of interest on your loan is anywhere more than 7% effectively, it makes sense to repay the loan with this money.
There Are other conditions like the availability of disposable income or restrictions for loan prepayment etc. However, if all goes well, your money will be strategically allocated towards reducing the liability of interest and in such a case, you will be able to repay the loan on time.
- 3) Gain benefit of Prepayment of loan either partially / substantially
Loan prepayment is an excellent example of putting money to the best alternative use rather than earning a meager or negligible income by investing it elsewhere.
Most of the banks have slashed or waived the prepayment charges where there is full or partial repayment.
Traditionally we are taught to save rather than spend. However, it is wise to reduce the liability on hand first. If you repay the loan faster, you would get pure income on your hand after the closure of the loan. This happens because whatever you will spend will be lesser than what you could have spent on remaining tenure because higher tenure implicates higher interest on the loan.
So if you get a smart sum of lump sum money on hand, then make sure to repay the loan as much as you could. This trick would help you repay the loan on time.
- 4) Choose a Lender with an attractive interest rate
We are at benefit with the open economy because there are many players in the financial markets. Many websites also help in comparing the interest rates of various financial institutions. This means that we can always shift to the next best alternative.
Various financial institutions try to attract customers with attractive rates of interest or floating rate of interest etc. Even after the loan is being serviced, you can opt for any other financial institution with better interest rates.
This would enable you to repay the loan on time.
- 5) Learn to make use of Loan calculators for a better planning
Most of the banks publish the loan EMI calculators, interest rate calculators, etc. for the benefit of the general public. In this way, you would not require any human help or intervention to evaluate the loan repayment schedule.
If you have a handsome amount of money with you, you can use such calculators to understand the impact of prepayment of the partial or substantial loan. You can also evaluate and analyze the change in the rate of interest for the restructuring of the loan. These calculators will help you in decision making and in turn, will benefit you to repay the loan on time.
- 6) Try not deferring the loan repayment to a later point in time
Banks do have mechanisms in place to levy a charge for deferment or delaying or non-payment of loan installments on time. When your cash management is not in place or if you get out of a job then most of the time, you would consider the loan repayment as not a priority. However, if you delay repaying the loan, then the banks may charge you heavily for such deferment.
If you repay the loan on time you would save much on these delay costs.
Related Article : How Can SIP Help You Repay Your Home Loan?
- 7) Try to navigate out of higher interest loans first
Most people nowadays have two or more loans i.e. a home loan, a personal loan or credit card, etc. Servicing all at a time however recommended, would turn to fatal exercise in case of the cash crunch.
As an example suppose you have a housing loan at an interest rate of 9% and a credit card having 15% interest rate. Unfortunately, you get laid off the job, then you have limited cash to settle off all debts at a time.
In such a case, you should opt to settle the credit card liability first since it will dig a deeper hole if left unserviced. A home loan allows you to avail of tax benefits also, so you could go easy on it sometime with the existing rate of interest till you get income. Once you are earning again, you may opt for a higher EMI on a home loan too to repay the loan.
This fund planning will help you repay the loans on time.
Are you in need of money? Is there any medical emergency? Do you want to buy your own house? Are you looking forward to fulfilling your goal of having a luxury car? If yes, then you have ample options in the market to take a loan to fulfill your needs. Nowadays, you get a lot of phone calls, SMS, mails that offer you an instant loan. Most of the time, we get lured by hearing the attractive offers and hope of getting immediate cash in hand. It is easy to fall into this trap and go for the loan. However, before opting for any loan, there are certain things that you should keep in mind.
In this blog, we will discuss such golden rules that you should ponder upon while deciding to take a loan. Let us see what these are.
Borrow only what you can repay
The very first and most important rule of smart borrowing is what the older generation has been telling us all the time. “Don’t go beyond your means”. You should take a loan that you can easily repay with your expected income. One thumb rule says that your EMIs should not exceed 50% of the net monthly income. This will include all your EMIs whether a home loan or a car loan or personal loan.
Opt for shortest tenure possible
It is a wise decision to opt for a shorter tenure. Although it is always tempting to go for longer tenure as it lowers the EMIs. But it adds to the interest cost which is huge. In long-term loans, you unknowingly end up paying a lot more to the lender, than the borrowed amount. On the other hand, when the tenure is short, the EMIs would be a bit high but in this case, the loan can be repaid in a shorter time. Hence, it ensures that you end up paying less amount as interest to the lender.
Ensure timely and regular payment
Your CIBIL score gets adversely affected if you make late repayments. It is considered as indiscipline action which may lead to high penalties as well as spoiling your CIBIL score. Please note that CIBIL is the basic representation of one’s credit and financial history, and late EMIs affect the CIBIL Score. This further affects borrowing credibility and makes it difficult for you to borrow in the future. So make sure that you pay EMIs on time.
It rewards you to be disciplined, especially when it comes to repayment of debt. Whether it is a short-term debt like a credit card bill or a long-term loan for your house, you should make sure not to miss the payment at any cost. Missing an EMI or delaying a payment are among the important factors that can impact your credit score and hinder your chances of getting a loan for other needs later in your life.
Insure big ticket loans
When the loan amount is huge, it is very crucial to have Loan Protection Insurance. Loan insurance safeguards your family’s future by repaying the loan when the borrower fails to repay. Most of the loan insurances cover job loss, major accidents, permanent and temporary disabilities, and death too. So in case of an unfortunate event, the insurance company will pay the remaining EMIs on behalf of the borrower.
Related Article: Is Your Family Ready For Insurance Claim Rejection? – Steps To Avoid That!
Understand the Fine Prints
While applying for any kind of loan the borrower has to sign a loan agreement. One should read the fine print very carefully. You should not sign it in so much hurry that you skip reading at all what the agreement says. The agreement is very important and contains the terms and policies of the loan. Every borrower should understand the importance of reading it in detail. Not understanding these terms may bring a lot of difficulty and surprises in the future when some unexpected charges show up.
Don’t borrow to invest
Last but not the least, never use borrowed money to invest. Investments like fixed deposits and bonds won’t be able to match the rate of interest that you pay on the loan. And investments like equities that offer higher returns are very volatile. If the markets fall, you will not only suffer losses but will be strapped with an EMI as well. Therefore, one should avoid this trap.
These were the six golden rules you should pay attention to before taking the big step to increase your debt. It is always recommended to consult your financial planner to check your financial health. This will ensure the right decision of whether you should be taking a loan or not. Once you take a loan, it is strongly suggested that you try to prepay it as early as possible to reduce the huge interest cost.