A little financial planning will help you to study abroad

With the dollar remaining strong, studying in a reputed foreign institution seems to be a distant dream. While most banks are willing to offer education loans for higher studies, but is it enough for us to just sign the documents without any planning?

We list down a few tips for a better financial planning before you go overseas for your higher education.

Scout for the best loan option

It is a tedious job but it is extremely important for anyone to go through and compare the various loan options available to you. And once, you zero in on the offer that you feel suits you, you can negotiate the terms and conditions.

Remember fluctuating rupee

It is important to remember that fluctuation in rupee value will impact your loan. One must remember that the loan will be rupee denominated and hence on conversion into your desired foreign currency, the amount will be lower.

"A student has to be prepared to bear this foreign exchange risk. For example, a student applies for an education loan of Rs 20 lakh. However, if the rupee weakens further due to exchange rate fluctuations, there would be an increase in the cost of education from the rupee perspective," said Harshala Chandorkar, senior vice president, Consumer Services at CIBIL.

Plan your course of action

In most cases, parents often sign up as a guarantor for the loan availed by you. So, its better to plan your course of action beforehand because if you delay the EMIs or default on them, it will adversely impact their CIBIL report as well.

"Rupee depreciation also adds to the woes of many parents who fund their children's education from their savings as they have to shell out more money. As a guarantor on your education loan your father / mother is liable for its repayment in case you fail to pay the EMIs. His / her credit report will show the details of this education loan and defaults will also show if you do not repay the EMIs on the loan. Thus, your repayment behavior will also impact your parents' credit score," she added.

Spend carefully

While you are overseas, pursuing your higher studies, it is important to do budgeting and know how much can you spend. Becoming a spend thrift can put additional burden on your financials, thus forcing you to delay or default on your loan repayments, negatively affecting your CIBIL report. In case, you cannot avoid certain expenses, consider taking up a job to meet your additional expenses.

"If you have taken a loan to study abroad, timely repayment should be the top most priority. Like any other loans and credit cards, education loans are also reported to the CIBIL and get reflected in the borrower's CIBIL Report. Transactions related to repayment of your education loan will also get reflected in your CIBIL Report and impact your CIBIL Transunion Score. Irregular or non-repayment of EMIs on your education loan will lead to an unhealthy CIBIL Report which can hamper your chances of availing any other loan or credit card in the future," said Chandorkar.


Author :- http://www.businessinsider.in/
Reposted By :- http://credit4loan.com/

All that you should know about your CIBIL score

Often, while applying for a loan, we are clueless about what our credit history is all about. The typical jargons used for credit score such as CIBIL report and CIBIL TransUnion Score unnerve us and we often end up feeling confused by the end of the loan application. But hey, don't worry! Harshala Chandorkar, senior vice president, Consumer Services and Communications, CIBIL told BI India some of the common myths about credit score.

CIBIL decides the cut-off score for credit institutions

CIBIL does not recommend any cut-off score to banks to help them arrive at any lending decisions. Each bank has a different risk appetite and they decide what the cut off score should be for their bank. What may be a good credit score for Bank A may or may not be a good credit score for Bank B.

In addition to a good credit score credit institutions may also consider other critical factors like your income to debt ratio, your residential status, professional qualifications etc. while deciding on your loan application. Therefore along with a good credit score you must also ensure that all these factors are well placed before applying for the loan.

Banks and credit institutions can access an individual's CIBIL Report

Consumers can directly access their own CIBIL Report and CIBIL Transunion Score on CIBIL's website in 3 easy steps. A user will have to fill up an online form and make a payment through net banking, debit, credit or cash card. The final step would require online authentication based on the user's credit history.

If you are successfully authenticated, your CIBIL Report and CIBIL TransUnion Score will appear on the screen and you shall also receive it via e-mail. If you fail the authentication then you can upload a scanned copy of your identity proof and address proof on CIBIL's website. The report will then get delivered to you via express delivery.

A poor score will haunt me forever.

An individual with a low credit score can gradually work towards improving it. Credit report and credit scores are dynamic and change according to the credit behavior of the borrower. Once the borrower has paid all the unpaid EMIs and has again started regularly paying the installments on the loan, his credit report will improve and reflect the regular payments accordingly. The credit score may also improve gradually.


Author :- http://www.businessinsider.in/
Reposted By :- http://credit4loan.com/

You may be five steps away from a perfect CIBIL score

Maintaining a high credit score is not at all difficult. You just have to ensure prudent use of credit.
Have you ever wondered why there is such a clamor of late to maintain a high CIBIL score? Is all the information you are absorbing about CIBIL score and CIBIL report confusing to you and you have no idea how to get the perfect CIBIL score? What is the formula for success when it comes to achieving the perfect CIBIL score! Well, you may be happy to know that it is not difficult at all, and you may just be a few steps away from the perfect CIBIL score. Read on to find out how you can get there soon.

The importance of your CIBIL score

Your CIBIL score plays a very important role in your life today. Unless you have a perfect CIBIL score of 750 and above, it is unlikely that you will get access to credit when you need it. The Reserve Bank of India has made it mandatory for all lenders to look at the CIBIL score of any individual as a part of their credit assessment process. This means every time you apply for a new loan or a credit card, the lender looks at your CIBIL score to assess whether or not you are credit worthy.

In fact, your CIBIL score is not just relevant to your possibility of getting credit but may also impact your employment prospects. Corporations these days are increasingly asking for probable candidates to submit their CIBIL report along with other documents to assess whether or not they are responsible with their own credit and thus may prove to be an asset to the company by way of trustworthiness and responsibility.

Thus, there is no doubt about the fact that maintaining a high CIBIL score is of paramount importance. A perfect CIBIL score of 750 and above will open up doors of credit when you need it the most. But what must one do to achieve it? Well here are five steps that will take you closer to your goal.

No late payments

This is numero uno among rules when it comes to using credit. Whenever you have availed of a loan or a credit card, make sure that you are making timely payments or keeping your accounts furnished for an EMI to be deducted. Even a single late payment of 30 days and above will impact your CIBIL score negatively. In fact, with CIBIL considering mobile and other utility payments as a part of credit score assessment you must remember to pay all your bills on time too, to have the perfect CIBIL score.

Credit utilization

This is another important factor when it comes to your CIBIL score. Financial prudence says that your total credit utilization or the amount of credit you are using as against the total amount of credit been made available to you should not exceed 30%. This is a discipline you must maintain when you are using your credit cards. If used judiciously, your credit cards can build your CIBIL score, but if you tend to go overboard and end up overspending on it, you not only run the risk of lowering your CIBIL score, you may end up in a debt trap that may be difficult to get out of in a hurry.

Mix of credit

You must keep in mind that when it comes to your CIBIL score the type of credit that you are using also matters. Having too many unsecured loans such as too many credit cards or personal loans will impact your CIBIL score negatively. On the other hand, if you have a good mix of credit say a home loan and couple of credit cards or a vehicle loan and a personal loan, i.e a mix of secured and unsecured debt, your CIBIL score will remain high.

Too many hard inquiries

If you are in the habit of applying for every new credit card that come your way or checking out a loan for its prospects by making an application for the same, you need to stop doing so immediately. Each new application for credit results in a hard inquiry in your CIBIL report as the lender you have applied to checks out your CIBIL report. Too many hard inquiries on your CIBIL report does not augur well for you as it portrays you as “credit hungry” and makes lenders wary of lending to you.

An error free CIBIL report

CIBIL has to handle a large amount of data that comes in daily from the lenders who send information about their loan and credit card accounts to CIBIL. There is no way for CIBIL to apply a filter and see that all the information that is coming in from the lenders is correct. The onus is therefore on you to check whether the information that is relevant to you is correct. Thus it becomes very important for you to keep a strict vigil on your CIBIL report by checking it out at least once or twice annually. This is to ensure that your CIBIL report remains error free and your financial health is up to the mark

Thus as you can see, attaining the perfect CIBIL score is not at all difficult. By just maintaining financial discipline and consistency in good usage of credit you can ensure that your CIBIL score remains perfect at all times.

Author:- www.moneycontrol.com
Reposted:- www.credit4loan.com