Financial concerns to be aware of when traveling abroad!

Traveling to a different country raises financial concerns that don’t apply when traveling domestically. Here are some things to keep in mind if you’re planning a trip abroad:

Tracking exchange rates is easy. Thanks to the internet, it’s easier than ever to figure out the exchange rate for foreign currencies. Google has a simple converter that’s easy to use.

Get some foreign currency before you go. When you arrive in a foreign country, it’s a good idea to already have some local currency on hand to pay for expenses like transportation and meals. You can order foreign currency online through some banks and services, and most large chain branches can get you foreign currency if you give them advance notice. The rate they exchange your money for will be lower than what you see online, so you may want to shop around for the best rate.

Know how you’ll get additional cash while abroad. Check with your bank to see if your ATM card can be used at your destination to obtain additional cash, and ascertain what types of fees you’ll be responsible for. If the fees will be high, you may want to take as much cash with you as possible, but if fees are reasonable, you might want to wait to see if you actually need additional cash while you’re there.

Be aware of credit card conversion fees. You can likely use your credit card while abroad, but before you go on your trip, find out if you will have to pay any foreign currency conversion fees, or a fee for letting you make charges in a foreign currency. There are cards that don’t charge any conversion fees, so if your card issuer does impose a fee, you might want to get a new credit card before your trip. Alternatively, you can try to limit your card use while you’re abroad to locations that will charge you in dollars, rather than the local currency.

Carry a chip and PIN credit card. In other countries, merchants may only accept credit cards with chip and PIN technology because such cards are generally considered to be more secure (the card’s information is stored on the chip, rather than in a magnetic strip). If you intend to use a credit card while abroad, be sure to check which type of card is more common at your destination.

Consider the safety of your destination before departing. Some destinations, like Japan, are generally very safe for tourists, and many of the locals carry large amounts of cash without hesitation. In other countries, however, pickpockets are common, and tourists are a popular target of crime. Before you depart, check to see what kind of precautions are recommended for your destination. You may want to purchase certain types of gear, such as a money belt, to protect your valuables.

Travel with adequate insurance. Before you go abroad, check with your insurance providers – including your health insurance and driving insurance providers if you plan to drive – to make sure you’ll be covered. If your coverage is insufficient, purchase travel insurance for your trip. You hopefully won’t need it, but you’ll be happy you have it if you do.

Research the customs of your destination. Customs vary dramatically by country, so be sure to do your research before you leave home. Find out if tipping is common at your destination, and if so, is it normally added to your bill or are you supposed to calculate it yourself? How much is customary? Do merchants at your destination haggle, and if so, what’s the best practice for foreigners? If you know these types of issues before you arrive, you can avoid unpleasant surprises!

Declare your acquisitions when you return. When you return to the your country, you’ll have to fill out a customs declaration form and list what you acquired while abroad. Therefore, it can be extremely helpful to keep a list of your acquisitions as you make them, and to keep receipts for your purchases.

Visit: http://www.cibilconsultants.com/
Source- Secondary

Credit Affects You! See How?

How Your Credit Score Affects The Interest Rate You Receive

Of course, you know that the higher your credit score is, the better interest rate you will get on your credit cards and loans, whether that be for a mortgage, car loan, consolidation loan, or any other type of loan you need.  The reverse is also true; the lower your credit score, the higher interest rate you’ll have to pay.

The interest rate you get is important because it has the potential to save you thousands of rupees.

3 Ways Your Credit Affects You That You May Have Never Thought Of:

Most of us understand the relationship between credit score and interest rate received.  However, there are many other ways your credit score affects you that you may have never considered:
                                 

Rate for Car Insurance.  Crazy, right?  Your credit score can affect your car insurance rate, but it is just one of the factors that are used to determine your insurance premium.  Insurers create a credit-based insurance score that is computed by looking at your credit history, geographic location, age, driving and claims history, among other things.

For the credit portion of your insurance score, these factors are important: payment history, including delinquencies or late payments; length of credit history; and types of credit, such as credit cards and loans.  The good news (if you have a good credit history) is that about half of existing customers receive a rate decrease based on credit score.. The opposite is also true.  Those with lower credit will likely pay more.

Ability to Rent an Apartment.  Put yourself in a landlord’s position.  Would you want to rent to someone who had a high likelihood of not paying and that you would have to spend months trying to evict?  That doesn’t sound like a good time, not to mention all of the money the landlord would lose while the tenant is not paying.  For this reason, more and more landlords are checking credit scores before renting to people.

Job Prospects.  How you handle your credit and how you perform at your job should be two separate issues, right? Not so for some employers.  An employer can only look at your credit history with your permission, but for some employers, if you don’t give permission, you won’t get any further in the interviewing process.

While the majority of employers will not ask to see your credit, in particular fields, asking is routine. A bad credit rating is likely to be more of a factor in certain industries like financial services

Credit scores affect more areas of your life than you may realize.The more responsible you can be financially, the higher you can make your credit score. The higher your credit score, the less you’ll pay in many areas of your life. Have you knowingly been affected in these unexpected ways by a high or low credit score?

Visit: www.cibilconsultants.com
Source: Secondary

Financial health implications

No matter how reputed and reliable your brokerage house, bank and financial planner are, remember that it’s your money. Get involved. They will keep coming to you with numerous tips that they say are ideal for you; they may hard sell the products that they have to offer; they make call after call and send you mail after mail extolling the benefits of strategies. While considering everything that they say, do your homework and finally settle for what you think fits your portfolio requirement.

Here are a few simple snippets which will help you bring financial disciple in your life.
             

Never buy a product which you don’t understand

No matter what the company’s sales representative promises you or convinces you to believe, never put your money on something which you find too complex to fully comprehend and whose benefits you are not convinced about. So, first clear any doubts that you may have with the sales person and only then agree to buy it.

Shop for the best deal

If you are investing in a financial product, whether it is a loan or any other funds, involves your hard earned money. So it is important that you take time off to look at various options available in the market, compare them and then take a well-informed decision while choosing the right product. Each financial entity has its own terms and fees, and it is in your best interest to compare all the choices available and then pick out the best deal for you. A reduction of few basis points in the interest rate of your home loan or personal loan can end up in saving thousands of rupees for you over the long term.

Perform online research

As you get prepared for availing a loan, do not forget to carry out an online research on the best rates and schemes offered by different banks. There are different loan products available in the market as per different requirements. In addition to speeding up the buying process and making it less cumbersome, you also stand a great chance of getting your desired products at discounted rates.

Reveal the hidden costs

When you buy a financial product, you may forget to factor in the hidden costs involved which can influence the total cost of the product. Hidden costs involved vary from one financial entity in the market to another and some institutions may wave these completely, if you negotiate. So, ask the financial institution to give you details on the fees and charges involved.

Negotiate to gain a best deal

Every financial institution has its own interest rates and fees structure for customers which provide some scope to us to bargain for a better deal. However, before sitting on the negotiation table, you need to do your homework and get information on rates and charges prevalent in the market so as to assess the level to which you can bring down the price.

Visit www.cibilconsultants.com

Source-secondary

How to get fit for a home loan?

Know what you can afford
When it comes to Home Loan before thinking of putting up an offer on your property. You shall receive a pre-qualification certificate once the process of pre-qualification is complete, this shall clarify the amount you could lend from the bank. Once you are aware of the amount, you can check the rates and then negotiate the price with possible sellers.

Know your credit scores and credit ratings
This shall give you a fair amount of understanding on what kind of loan you shall qualify for and how you could choose the best bank for yourself for a Home Loan.

Know your Credit History
Every lending amount transaction is tracked by a bank/lender and reported to the Credit bureaus who keep a track of all the lenders on one report which is also called Credit report. This report is a snapshot of all your credit history i.e. all your lending transactions and your repayments on the same. It shows the numbers of dues you have to pay in comparison to the amount you have borrowed.

There are pre-approved mortgages. If you have a good credit rating and your credit history doesn't have any kind of outstanding dues, the lender might give you an upfront pre-approved mortgage. Having a consistent and good credit rating can save a lot of money and time when you need to buy a house.

Source: Secondary

Guaranteeing a loan can affect your credit score and history

Nowadays, access to your house or car or that dream holiday has been made easier by lending companies offering credit and loans at increasingly competitive rates. However, one must note that taking a loan doesn’t solely depend on the borrower’s financial standing. If lenders feel that the financial health of the end borrower cannot be determined standalone, or in case the borrower has no source of income, another option to get a loan processed includes involving a guarantor. Apart from facilitating an individual to fund his education or business, such an arrangement propels financial inclusion, thereby enabling the economy to grow holistically. 

Naturally, for a financial institution, it is of paramount importance to make sure that the borrower has the capacity to repay the loan with due interest. In case the primary borrower defaults, a guarantor’s role is extremely crucial, as they become the fall-back option for the lender. Lenders insist on guarantors for loans in which there is no appropriate collateral, such as education and unsecured installment loans. For other loans too, lenders can insist on one, especially if the lender has a reservation on the repayment ability of the primary borrower. Data shows that loans backed by guarantors have lower default rates than the average of the portfolio in products like commercial vehicles. Hence, the creditworthiness of the guarantor is of substantial importance.

  

In India, several loan accounts, specifically education loans, are backed by guarantors. In the case of education loans, over 80 percent of the loans are booked with guarantors since the primary borrower would not be earning for the duration of his/her education. In most cases, a loan gets approved at the behest of a guarantor, who indirectly assumes the responsibility of furnishing the loan though he is not the end borrower. Guarantors are legally responsible to assume the liability if the primary borrower defaults. A guarantor’s role doesn’t end with the disbursal of the loan; this is where the responsibility actuality just begins. There are several issues that guarantors need to know, who choose to be good Samaritans for their friends’ or family members’ cause. 

Most importantly, a loan sanctioned will directly impact the guarantor’s credit report and score. Though a guarantor might be financially prudent and disciplined in paying his or her own equated monthly installments (EMIs), credit card bills, the friend or relative who they are backing might not emulate that same responsibility. Should the friend or family member miss a payment or make a late payment, the guarantor’s credit history and score would be negatively impacted. Therefore, one should keep in mind that the moment they sign as a guarantor for a loan, it shows up in their credit report with a clear indication that they are the guarantor. The guaranteed loan will reflect on the guarantor’s credit report and will be used by the lending institution when eligibility for a loan is calculated. 

Additionally, it is advised that the following facts are taken into consideration before signing up as a loan guarantor. One must also remember that a guarantor cannot take a stance on deciding the limit of liability towards the loan. The very purpose of getting a guarantor for a loan is to make sure that the bank has an alternate source of recovery if the principal debtor defaults. So, one must not always go by the credit repaying capability of the end borrower alone. Instead, a guarantor must calculate his own financial capability before signing up. 

At the same time a guarantor needs to bear in mind his own financial goals. If the prospects of purchasing a new home or starting up a business are on the horizon, the guarantor should stick to backing small loans that will not weigh heavy on a credit report. A financial institution might refuse credit or might reduce the amount of credit to the guarantor if he or she is already backing another loan of a fairly large amount. If at all one has to become a guarantor, getting another guarantor to go in on the loan, as the liability could then be split between the two guarantors. The strength of the relationship with the primary borrower based on which one becomes a guarantor needs to be borne in mind as especially in long term loans. 

There have been cases where a guarantor has been penalized for the principal applicant’s delinquency. Hence, it is not wrong to assume that a guarantor’s liability could be more than the principal borrower’s. Even if the guarantor has a good track record of repayments or good credit history, a delinquency could act as a deciding factor for creditworthiness when banks access credit reports. So before signing on the dotted line, a guarantor should weigh all of the pros and cons associated with the financial backing of friends and family.

Source: Secondary

Go for loan if you really need one !

A number of these requests within a very short span of time can have a negative impact on the credit score.Let us understand it with an example :

Rahul who is a top official at a large brokerage firm was incensed with his prospective home loan lender. He had approached them on the advice of his colleague to whom the lender had given an excellent rate. While the lender was more than happy to give him the loan, they were offering him a slightly higher rate.  When he enquired about the reason, he was informally told that his credit score was lower than his colleague and hence the higher rate.

He asked for and got a copy of his credit report from the prospective lender and confirmed that the credit report was in order and had correctly showed that he had paid all his dues on time. He had also requested his colleague to get the credit report from the same lender.

When Rahul compared the two reports he was amazed that his credit score was lower than his colleague’s score.  Hence, he called me to throw some light on the matter.

I asked him to take his colleague’s permission and send the two credit reports to me. The look at two reports was quite illuminating.

Both had excellent repayment records and good credit scores though his colleague’s score was little higher than Rahul’s. The only visible difference was that Rahul had about four credit cards (all showed an impeccable repayment record on the credit report) against only two credit cards for his colleague. However, a closer look revealed that there had been four enquiries for his credit report for a personal loan of `300,000 just four months back, though no personal loan showed up on his report.

When I checked with Rahul, I was told that he was considering taking a personal loan for a foreign holiday but had ultimately dropped the idea. He had applied to four banks but ultimately did not take the personal loan though it was sanctioned. The banks, once they received the request from him for a personal loan, had sent a request to Cibil for his credit report.

The credit report also contains information about how many times Cibil got a request for the credit score of a particular person and for what products and amounts.

Now it is not known how Cibil exactly determines your credit score but a number of these requests within a very short span of time, especially for unsecured credit (indicating hunger for credit), can have a negative impact on the credit score.

So, at least for now I asked Rahul to live with it (after all his credit score was not bad). But for the future I told him to be careful while shopping for credit. First make up your mind if you need credit or not before applying for it. Sometimes the sheer fact that you applied for credit (that you did not ultimately need) may result in a small reduction in your credit score even though you did not end up taking the loan.

These kinds of errors are to be reported immediately to Cibil and the concerned banks. The banks should be asked to get the records amended in Cibil records. If they do not respond to your request within a month, you should file a complaint with the banking ombudsman. A mistake in your credit record can prove very expensive, hence pursue these steps seriously.

You should apply for a loan or credit card only and only if you see no error in your Cibil report.

Once you get your credit report and it is error-free, you should go ahead shopping for credit card or a loan product.

But before applying for many of them to know more about the scheme aligned with them, you should always do some smart shopping online.

You can compare various credit products and then apply only for the product that suits your requirement the best. This will ensure that only one bank makes an inquiry for you credit record, hence your high credit score can be safeguarded.

Get personalized services related to credit report and generation of score by just booking an appointment at www.cibilconsultants.com

Source-secondary

Mortgage and Credit Score

In simple words, a mortgage is a way to use property like land, building etc. as a guarantee to get a loan. Credit score affects mortgage to a great extent as it is one of the eligibility criteria in getting a mortgage loan. The reason for this is that lenders want to make sure that their investment would make profit or at least get recovered. Your Credit score defines what kind of mortgage rate you would get, which would in turn help you identify what kind of home you can afford.

When you are looking to get qualified for a mortgage, your credit score and credit history are the first things in which the lender would be interested in to check your eligibility.

A good credit rating always helps when you are getting a mortgage. Even during financial crisis, people with good credit scores get mortgages with very less down payments. Analyzing your credit report, the lender makes decisions about the terms of qualification of your loan. Therefore building your credit score is the first step you can do to qualify for a mortgage.

Mortgage eligibility credit score recommended is usually above 500. A credit score of 500 to 520 is the lowest what lenders would go, anything less than that would disqualify you for the mortgage loan. People with high credit scores above 750 are the ones who get varied loan choices and also low interest rates.

Your credit history, other than contributing to your credit score, also influences the lender’s decision. The lender would want to see if you have been bankrupt, your payment history and also If you have had any collections. This will help the lender analyse your financial behavior and if you are about paying off debts or not.

Since, we saw above how credit score is important ingesting qualified for a mortgage loan, let us now deal with what a credit score is-

It is a calculation based on credit history which would help in determining your credit worthiness. It is important because it helps the lender figure out if his money would be safe with you or not.
Lenders rely on the information given by  CIBIL to determine whether lending you money is a smart move or not. If your credit is more than 750, then lenders would deem you credit worthy for a mortgage and give you their standard loan options.

Your best bet to get a good mortgage rate is to have a credit score more than 750. A CIBIL score of 500 is bad and would h. Some lenders would also expect you to part with at least 50% of the purchase values if you are trying to get a mortgage with such low scores.

So, all this shows how credit score affects mortgage and how important it is to have a good credit score.For score improvement and repair opt for service packages available at www.cibilconsultants.com
hurry book an appointment now !

Source: Secondary