Are You Ready to Invest in a Recurring Deposit?

Your income can be utilized for various purposes. For one, it can be used to satisfy all your financial requirements. Additionally, it can also be used in an investment that will provide you with better returns. There are plenty of options to consider when it comes to investing in in this type of funds. Out of all the available options, termed deposits, such as the recurring deposit has proven to be one of the most favorable options.

There are plenty of benefits to this termed deposit, which include monthly investing as well as ideal interest rates. Additionally, you can also use the recurring deposit calculator to get the ideal investment rates that will suit your needs and provide you with the best returns. Here are a few more factors you need to take into consideration when investing in this account:

Income, expenses and budgeting

One of the main factors you need to take into consideration before applying for the recurring deposit is your current income, expenses and budgeting. This is the first and fundamental step you will need to take. By prioritising your expenses, it will help you distinguish between your needs and your wants. This will go a long way to minimizing any wasteful expenditures. Planning your budget will also go a long way to balance your expenses with your income. You can even using the recurring deposit calculator to help you in this step. Once this step has been taken, you will be able to calculate how much funds is left, that can be used for your savings.

Charting out Financial Goals:

In order to reach a financial goal, you must first need to know the road to the destination. Deviating from the path will not provide you with the required results. In the same way, to manage you funds, you will need to know where to go. Creating a financial goal through recurring deposits will assist you. Additionally, you can create multiple recurring deposits that will go a long way to help you plan and achieve your financial goal. You can even use recurring deposit calculator to help you in this process.

Tax Implications:

Taxed on the recurring deposit can impact your investment immensely. It can take a large amount of your investment without proper planning. The income that you earn on in your investment can be taxed, especially if the income that is earned is more than 10,000 Rs in a financial year. Therefore, you will need to plan your investment in the recurring deposit in such a manner wherein you are not liable to pay taxes.

5 Steps To Take To Improve Your Credit

Many of us do not comprehend the way it work. The card accounts with outstanding balances spoil the scores and rating, when you pay bills on time. If you close an account it lowers the credit scores while a short credit history delays life’s biggest milestones like buying a home, or a car. When debt is unmanaged and bills are paid untimely, it affects the credit scores.

A credit scores range from 250 or 300 to 850 or 900 as every industry sets their own range. It can get overwhelming to improve the scores from low to high and takes a period of one year. However, it is a Herculean task to improve the credit score by 50 points or more over 6 – 12 month period. Here are 5 steps to take to improve your credit according to Fred Franks of Local Realty Service and Katrina Barone of Housesforsaleinocalafl.com:

Step#1 Check the report

Make it a practice to understand your report, scores and the way they work, whilst you do not intend to shop for a house, a car, or another credit card. There are various free online services available like annualcreditreport.com while some others charge $10-$15 for the reports. Once you know your current score, it is easier to monitor the fluctuation and progress in the score.

Step #2 Look for Negative Items on your Report

Transactions that cause creditors to consider your account risky like – late payments, foreclosures, tax liens, bankruptcy, and the account are with the collections department. Clearing the negative information effects on the score takes 7 years from the credit reports.

Review the information from every agency in detail, including the balance and payment history, and inquiries. Look for discrepancies or negative information, and prepare a list of items to dispute. Inform the bureau about the inaccuracy, and explain the dispute. Request for a correction by stating the facts and wait for the report to show accurate information.

Let the creditor know of the dispute, in writing, and wait 90 days for the issue to resolve. If the issue does not resolve, file a complaint to the Consumer Financial Protection Bureau (CFBP). Once the corrections are done, if the credit score is lower than 680, you do not qualify for the loan at low interest rate.

Step#3 Implement a strategy to improve the score

It is crucial to implement a strategy to improve the credit score; fix the credit issues. Credit history forms 35 percent of the score and if you have problems paying bills on time, fix it and get current on past dues and stay current. Implement the strategy to improve the score gradually and maintain it.

Step# 4 Keep a low utilization rate

It is advisable to stay within the utilization limit. At any time the debt utilization rate if it exceeds 30 percent of the credit card limit, this will cause a dent in the scores our credit score will take a hit. If the utilization rate increases further to 50 percent, while the score moves negatively by 20 to 50 points. Another possible strategy is to move credit card debt around to reduce the negative impacts. Avoid credit card debt by purchasing that, which is payable in full, avoid debt accumulation.

If the debt is due to the misuse of your cards, it is advisable to pay the minimum due each month, on time. This will indicate that you are a responsible borrower. Apply for a personal loan; pay the credit card debt as the credit card rate of interest is higher compared to personal loans that may be 4.25 percent.

According to a study, the average increase in the score was 31 percent, using the personal loan to pay off credit card debt. Once this is paid do not accumulate credit card debt.

Step #5 Maintain the Credit card account

Resist the urge to close the credit card account. Instead, maintain the card by making small payable purchases. It is advisable to open a line of credit using a secured credit card. Maintain it by making small payable purchases. The credit scores will increase remarkably.

Follow all the five steps diligently, avoid the mistakes committed and deal with the issues responsibly to improve your credit scores.

The Importance of Using Good Credit Card

Credit cards are very tempting to use. It’s as so easy to handover your card and purchases a car or a designer cloth without spending off the cash you have available. According to a nationwide survey by LearnVest and Chase Blueprint, the average respondent had $5,000 in card debt and confessed that that debt was the biggest obstacle standing between her and her financial goals.

But there are still so many people who use their cards responsibly below their means and rarely carry their balance from one month to another. When used this way, a good credit card could be of great benefit such as helping you budget and get you free deals as long as these payments are being made on time. Here is some importance of using a good credit card:

Protecting your accounts

One great feature that comes with using a good credit card is the fact that it keeps an electronic record of your activity. This is important when you keep tabs of your spending to avoid exceeding your budget. It’s also useful when the card is missing or stolen. Good credit cards have more in-built protection cash or checks don’t have. One great way is fraud protection which most cards will not include if the purchase is not made by you. It’s much easier to cancel or freeze your card than it is to cancel your check and change bank account.

Boost your credit score

This score which ranges between 300 and 850 is usually used by lenders to determine how responsible and trustworthy you can handle credit. It doesn’t solely rely on having a card; the score is calculated using six different criteria which are: Percentage of timely payments, Credit card utilization, derogatory marks, Average length of account, total number of accounts and total hard inquires. When you use your cards regularly as well as make full payments and stay within the given limit, you will most likely get a good credit score.

Get Freebies such as points and cash back

If you don’t use the reward which u get off using a good credit card on airline miles, points or cash back, then you are not maximizing the use of your card. Good credit card rewards usually come in form of miles, points or cash back for virtually all of them. For every particular amount you spend, you get some sort of reward such as plane ticket, a night at a hotel or a check. If you are going to spend money using your card, you will always get rewarded.

The Right Way to Apply For The Best Credit Card

A credit card will go a long way to provide you with the ideal financial support. For one, you can borrow funds from the bank, in order to satisfy any of your financial requirements. Additionally, you can also repay back the funds at your own convenience with no fixed repayment tenure.

However, a credit card is only as good as a banking card, if it matches your financial requirements perfectly. In order to apply for the best credit card that will suit your financial need, here is what you need to consider.

Spending habits

Every individual possess a different financial spending habit. If you are looking to opt for a credit card that will support your financial habit, you will need to look for the particular category. Do you carry a balance every now and then? In this case, you may need to look into a low interest. Do you want to avoid paying down a high interest balance? In this case, a balance transfer credit card will be your ultimate choice. Do you want to spend less, and yet get high returns? Then you can opt for credit card with reward points, which can be further customized to suit your expenditures. With a bit of research and persistence, you can get figure out a credit card that will suit your needs.

Determine your qualification for a credit card

Normally, lenders provide a credit card with features and rates that will suit your needs, while protecting their own interests. In this case, you will need to satisfy certain eligibility criteria before you can apply for this card. As each application and rejection will reflect in your credit score, you will need to be careful about applying for a credit card. Check your lender for any prior eligibility criteria when it comes to a particular credit card in a category. You can either make the necessary adjustments to satisfy the criteria or you can opt for another type of card which will suit your needs.

Read the fine print

Once you have the basic idea of the best credit card that will suit your need, then you can go to the next step of the application process. As a part of the application process, you will be provided with terms and conditions pertaining to your application. You will want to ensure that you understand all the possible fees, interest rates and interest free tenures you will incur once the application process is processed. Ensure that you read this fine print to get a better understanding of how you can use this to its full financial advantage.

Can You Calculate The Ideal Loan Rates For Your Personal Loan?

When a time arises that requires you to opt for a personal loan; you will first need to research all the available options while considering all your financial requirements. As the personal loan comes under the category of unsecured loans, banks and lenders often compensate the acquired risk, by charging a loan rate. This rate, in turn, can be defined by additional factors, such as the borrower’s current income, credit score as well as available liquid assets.

But considering all these factors and taking them into consideration of your financial requirement will be tedious. At the same time, you cannot avoid calculating your idea strategy to repay the loan, as it can further affect your financial situation. This is when the personal loan calculator will provide you with the required assistance to get the ideal rates for your personal loan. You only need to:

• Consider all available options: Shopping around for rates will give you an idea of what is available and what works in your favor. It also gives you an insight on the current market conditions and the possibility of influential market rates. Using the information in your loan shopping, you can use the personal loan calculator and calculate the ideal rates that can work in your favor.

• Get the best offering with a low credit: One of the many factors that can influence your personal loan rates is a low credit score. No doubt, with a low credit score, you will not get the ideal rates you want. However, it will provide you with the awareness and information, to get rates that will not only help your financial situation but also improve your credit. The personal loan calculator is the ideal tool that will help you get the best rates while ensuring that you get the required footing to improve your credit score.

• Help decide on a co – signer: If your credit score is too low to apply for a amount, then you can apply for a co – signer. It will allow you to piggy back on his or her credit worthiness, which in turn will allow you to get better personal loan rates. However, you should be careful while taking this step, as the approved personal loan should not affect your co – signer’s credit score in the process.

• Consider the effects of an added collateral: Although a personal loan is an unsecured option, plenty of lenders have offered with better rates if a collateral of considerable value has been provided. If you have single or multiple collaterals’s available and wish to use it to get better loan rates, you can always use the loan calculator to assist you

Tips to Help You From Defaulting on Your Business Loan

Defaulting on your loan is not a good thing. However, defaulting on your business loan is another matter as you will have several repercussions that extend beyond the affect it has on your credit score. A default on your loan will put your business in danger. When this occurs, you may have to deal with hefty penalties, along with an unresolved amount that has to be repaid. Not only will it make it difficult to secure funding, you will be liable to pay higher interest or opt for unfavorable loan conditions in the near future. All in all, defaulting on your business loan is an expensive if not an unpleasant experience. Given below are some tips you can take into consideration to avoid defaulting on this loan:

Cut down on possible expenses:

The first factor you need to take into consideration are the current expenses you have, and immediately cut down the expendable ones. You can take into consideration in cutting down office space or facilities or even lay off a few employees. While this may seem like an extreme step, this must be considered as a last case scenario if you want to save your business.

Study the fine print of your loan contract:

In the hurry to get the loan from the bank, you may have not realized what you have signed up for in your loan contract. In this way, you may not be completely aware of the details of your repayment conditions. At the same time, you may not have calculated the exact rate you need to pay for your interest. In order to prevent such a potential defaulting due to any ignorance or carelessness on your part, ensure that you are well aware of the terms and conditions of your loan before applying for it.

Seek assistance from a financial expert:

If you feel that you are not financially stable enough, which can risk your business, you must immediately seek a financial expert. This is a great solution to avoid a potential financial crises, although you may be an exceptional strategist or salesperson. Seeking the expertise of a financial specialists will help you correct the possibility of defaulting on your loan, while looking into new strategies that can help prevent this occurrence.

Negotiate with your loan lender:

Not all loan lenders, are cut throat institutes that claim your collateral or business, the instance you default on your loan. If the possibility of defaulting on your loan arises, you can always approach your lender to find a solution to your problem. In this case, you can always re negotiate the terms of your loan, depending on the gravity of your financial situation. However, this depends on your relationship with the bank, and the circumstances that can affect the new repayment terms that will help prevent a possible bankruptcy.

Can You Calculate The Ideal Loan Rates For Your Personal Loan?

When a time arises that requires you to opt for a personal loan; you will first need to research all the available options while considering all your financial requirements. As the personal loan comes under the category of unsecured loans, banks and lenders often compensate the acquired risk, by charging a loan rate. This rate, in turn, can be defined by additional factors, such as the borrower’s current income, credit score as well as available liquid assets.

But considering all these factors and taking them into consideration of your financial requirement will be tedious. At the same time, you cannot avoid calculating your idea strategy to repay the loan, as it can further affect your financial situation. This is when the personal loan calculator will provide you with the required assistance to get the ideal rates for your personal loan. You only need to:

• Consider all available options: Shopping around for rates will give you an idea of what is available and what works in your favor. It also gives you an insight on the current market conditions and the possibility of influential market rates. Using the information in your loan shopping, you can use the personal loan calculator and calculate the ideal rates that can work in your favor.

Get the best offering with a low credit: One of the many factors that can influence your personal loan rates is a low credit score. No doubt, with a low credit score, you will not get the ideal rates you want. However, it will provide you with the awareness and information, to get rates that will not only help your financial situation but also improve your credit. The personal loan calculator is the ideal tool that will help you get the best rates while ensuring that you get the required footing to improve your credit score.

• Help decide on a co – signer: If your credit score is too low to apply for a amount, then you can apply for a co – signer. It will allow you to piggy back on his or her credit worthiness, which in turn will allow you to get better personal loan rates. However, you should be careful while taking this step, as the approved personal loan should not affect your co – signer’s credit score in the process.

• Consider the effects of an added collateral: Although a personal loan is an unsecured option, plenty of lenders have offered with better rates if a collateral of considerable value has been provided. If you have single or multiple collaterals’s available and wish to use it to get better loan rates, you can always use the loan calculator to assist you.

Are You Looking For a Cheap Car Loan?

Over the last few years, there has been an increase of a vast flow of automobile launches in addition to various loan options to select from. With this, purchasing a new car is now made easy. However, your urge for a car purchase can disillusion you from the trapping of loan, especially if it is an expensive one. To avoid such a situation, here are a few factors you need to consider when opting for a cheap car loan.

Negotiate:

While this may seem like ineffective, negotiating is the best way to get the best deal for your auto loan. One way to do so, is to shortlist a minimum of 3 different quotes from different loan lenders. Using the quotes, you can begin negotiating with each lender for the best rates possible. Factors you can focus on when negotiating includes EMIs or even interest rate.

Improve your credit:

Factors of your loan such as the loan amount, interest rate and loan tenure will depend mainly on your credit score. If you have the ideal credit score, you can get the best lowest rate of interest. If you do not have an ideal credit score, you may have to forfeit an ideal loan rate due to your problematic repayment history. In the event you have an issue with your credit score, take the required measures to delay the purchase of your new car in order to take measures to increase your score..

Look out for illicit dealerships

Whether you receive an exceptional loan offer, it is crucial to see who will be selling your car. Plenty of financial agencies have known to have contacts with illicit dealerships. These dealerships are frequently involved in practise where original parts are replaced with fake duplicates especially during servicing times. In this case, it is best to avoid such dealerships.

Purchase a cheaper car

Often the most simplest and practical advice can help get you the best financial deal. In this case, opting for a cheaper car will provide you with the best and affordable loan deal. Over the last few years, the price of vehicles have risen. Therefore, when you are about to purchase one, you should look for beneficial features of a car that will suit your needs, as compared to a flashy one with a price. An expensive car, will lead to an over reliance on a larger loan, which can lead to an economic calamity, in the event a life changing episode occurs during the loan repayment tenure.

The Importance of Getting Proper Housing Finance

While getting a housing finance, home loan interest rate is one of the most vital and deciding factors to determine the amount. If the housing loan rate is low, the borrower can repay the loan in time. However, if the rate tosses up if be difficult for them to make the repayment on time. Home loan is a long term relation with the bank or finance company, therefore it’s extremely important you work with an optimum interest rates so that it doesn’t make a hole in your pockets at the end of the tenure.

Manually calculations are tedious, time-consuming and they cannot guarantee a complete solution. Therefore, banks and finance companies have introduced interest rate calculators that will display complete information on the principal amount to repay, the interest rate applicable, the tenure of the loan and flexible ways to repay the loan.

Your interest rate depends on various factors like availability of money in the market, inflation, and monetary policies, etc. On your personal front, it depends upon your risk appetite, income source, extra income (spouse income), margin money you have in hand, etc. If you opt for a floating rate home loan interest rate, your installment will keep changing the market volatility. Alternatively, a fixed rate loan means the premiums might be slightly higher but it remains consistent through the loan tenure. To keep your interest rate at the minimum consult your financial expert who will guide you whether it’s time to opt for a fixed or a floating rate.

With the abundance of online banks and finance companies in the markets, any prospective loan borrower can compare the best home loan interest rates online and find a suitable loan product to finance their dream home.

While getting a housing finance, home loan interest rate is one of the most vital and deciding factors to determine the amount. If the housing loan rate is low, the borrower can repay the loan in time. However, if the rate tosses up if be difficult for them to make the repayment on time. Home loan is a long term relation with the bank or finance company, therefore it’s extremely important you work with an optimum interest rates so that it doesn’t make a hole in your pockets at the end of the tenure.

Manually calculations are tedious, time-consuming and they cannot guarantee a complete solution. Therefore, banks and finance companies have introduced interest rate calculators that will display complete information on the principal amount to repay, the interest rate applicable, the tenure of the loan and flexible ways to repay the loan.

Your interest rate depends on various factors like availability of money in the market, inflation, and monetary policies, etc. On your personal front, it depends upon your risk appetite, income source, extra income (spouse income), margin money you have in hand, etc. If you opt for a floating rate home loan interest rate, your installment will keep changing the market volatility. Alternatively, a fixed rate loan means the premiums might be slightly higher but it remains consistent through the loan tenure. To keep your interest rate at the minimum consult your financial expert who will guide you whether it’s time to opt for a fixed or a floating rate.

With the abundance of online banks and finance companies in the markets, any prospective loan borrower can compare the best home loan interest rates online and find a suitable loan product to finance their dream home.

Will a Long Term Fixed Deposit Offer Higher Returns

You can open a Fixed Deposit for as many days as 7 days to 10 years. Depending on your need for liquidity, you can choose to hold a Fixed Deposit in a bank or NBFC that offers the best interest rates on FD.

The objective of investing in a Fixed Deposit is to earn interest income. Interest on Fixed Deposits varies across banks and NBFCs and also depends on the tenure of the deposit. While short-term deposits with a maturity of less than a year carry a higher interest rate than that of a 10-year deposit, interest cycle changes and macroeconomic factors like inflation can have a direct bearing on the returns.

Long-term FD v/s Short-term FD

You need savings so that you can be privy to funds when you need them. In such cases, short term deposits work well and give you the dual benefits of returns as well as liquidity. Long term Fixed Deposit, on the other hand, have a longer lock-in period. Breaking the same, which amounts to pre-closure, will attract penalty, thus minimising your returns from the Fixed Deposit.

Hence, it’s recommended that you ladder your Fixed Deposit investments across a time frame so that you earn maximum interest as well as have access to funds when you need them the most.

Pointers in Favour of Investing in Long Term Fixed Deposits

  • Mitigates Reinvestment Risk

If you don’t have an urgent need of funds, you can reinvest the Fixed Deposit upon maturity. If you opted for a short-term Fixed Deposit, and the interest rates have fallen, then you have to compromise on the rate of interest. On the other hand, if you had opted to hold a long-term Fixed Deposit, you will not have to face the reinvestment risk

  • Cushions your Interest Cycles

The rate of interest offered by banks and NBFCs on Fixed Deposits is governed by many factors, which include the rate at which the financial institution lends money, RBI guidelines, inflation, and general trend in the economy. In fact, compared to the past couple of years, where Fixed Deposits held for 5 years earned you close to 10% interest, currently for the same duration, you earn just about 8%.

To cushion the blow against the fluctuating interest cycles, long term Fixed Deposits are the best option to maximise your returns. As per the ongoing trend, interest rates are going south and with the downward slide likely to continue, investing in long term Fixed Deposit is the best bet.

  • RBI Policies

Banks and NBFCs have to adhere to RBI guidelines with respect to their functioning. In a bid to ensure liquidity in the economy, the RBI alters the CRR (Cash Reserve Ratio- the percentage of funds banks have to maintain with the RBI). A tight cash flow situation will result in lower interest rates on Fixed Deposits.

In addition, if the repo rate is also lowered, FD interest rates are bound to fall. Since these factors are beyond an individual’s control, you can safeguard yourself by locking in your savings in long-term Fixed Deposits at a higher interest rate.

  • Tax Benefits

The interest you earn on Fixed Deposits is entirely taxable. If you fall in the highest tax bracket you end up paying tax on interest at the full rate. Further, FD interest is liable to TDS as well. If the interest earned on your Fixed Deposit is more than Rs.10,000 in a particular financial year, tax would be deducted at source by the bank or NBFC.

If you are keen to save tax and thereby maximise your savings from the Fixed Deposit investment, the best bet would be a long-term tax saving Fixed Deposit. Such deposits have a lock-in period of 5 years, thus assuring you greater returns. Further, investment in such deposits qualify for a deduction from your gross total income under section 80C of the Income Tax Act.

Long-term Fixed Deposit can Give Negative Returns

While it can be agreed to a great extent that Fixed Deposits are indeed a safe investment option with assured returns. But, does the FD interest factor the tax component and inflation? By now, you are well aware that FD interest is taxable. You can use Fd calculator to determine earn interest on FD.

So, if you calculate the post-tax return on your Fixed Deposit, it will definitely be less that the rate of interest that appears on your Fixed Deposit receipt. What banks advertise to attract deposits is the pre-tax interest. Think over, what is your real rate of return? Is there an escape from inflation? As the purchasing power of money erodes, in the long term, on a Fixed Deposit held at 8% interest, a double digit inflation scenario can actually give you negative returns.

To conclude, Fixed Deposits are indeed a preferred investment option as they preserve the principal and offer a stable and guaranteed return. In the long run, they hedge against interest cycles and do not expose you to reinvestment risk. As a smart investor, you need to also factor the effects of tax and inflation to determine the real rate of return and invest accordingly choosing a tenure that maximises your return from the Fixed Deposit.