Blog – New Delhi Financial https://blog.newdelhifinancial.com Tue, 06 Jul 2021 07:25:25 +0000 en-US hourly 1 https://wordpress.org/?v=5.3.17 https://blog.newdelhifinancial.com/wp-content/uploads/2020/04/news-logo.png Blog – New Delhi Financial https://blog.newdelhifinancial.com 32 32 Loans on Builder Homes- Your Checklist https://blog.newdelhifinancial.com/loans-on-builder-homes-your-checklist/ https://blog.newdelhifinancial.com/loans-on-builder-homes-your-checklist/#respond Tue, 28 Jul 2020 12:08:48 +0000 https://blog.newdelhifinancial.com/?p=286 Buying a home is a major decision for everyone and for many it is one of their life’s biggest objectives. It usually involves a substantial investment on part of the buyer. As a result, right from choosing the most suitable place to obtaining the necessary finances- everything needs to be done properly. Every prospective buyer […]

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Buying a home is a major decision for everyone and for many it is one of their life’s biggest objectives. It usually involves a substantial investment on part of the buyer. As a result, right from choosing the most suitable place to obtaining the necessary finances- everything needs to be done properly.

Every prospective buyer on the verge of applying for a home loan should be comprehensive in their research. They should find out how to check home loan eligibility and ensure they qualify. Getting information on home loan interest rates is equally crucial. Buyers should also get to know about the category of homes eligible for loans as determined by Banks, NBFCs and housing finance companies.

Different lending institutions have their well-defined internal benchmark for approval and disbursement of loans. However, some parameters for exclusion and inclusion of homes under the approved category for loans are common to all. In this article, we will tell you about the various ineligible and eligible categories of homes for loans.

Let’s take a look at the things you need to check about your builder home before you apply for loans.

  • Approval by Real Estate Regulatory Authority (RERA)- After the Real Estate (Regulation & Development) Act of 2016 came into force, it has become mandatory for builders to get all their projects approved by the RERA. In case, your home isn’t RERA validated, getting a loan for it would be extremely difficult.
  • Municipal Corporation/ Development Authority certification- You must keep in mind that all constructions in cities/ towns require certification of the building plan by the local Municipality or Development Authority. Hence, before you purchase a home and think about applying for loans, you must ensure that it’s building plan/ map has been approved.
  • Reputation of the builder- The track record of builders in terms of project completion and adherence to all relevant rules and regulations matters a lot. Builders who are affiliated to CREDAI or Builders Association of India must be

Homes outside the eligibility criteria

All prospective home buyers who will initiate the purchase on the basis of home loan should be aware of home categories for which loans are not approved by lending institutions. In general, Banks, NBFCs as well as housing finance companies do not approve loans for the following types of homes.

  1. Property being sold on the basis of Power of Attorney (POA)
  2. Property being sold by Gram Panchayat
  3. Abadi Properties & Lal Dora Properties
  4. Properties with ownership disputes
  5. Property sold by unlicensed builders
  6. Homes built in contravention of approved building plan

Taking into account these facts will help you make the right decision and get seamless approval for your home loans.

We, at New Delhi Financial; work with almost all lending institutions and will be able to guide you to choose a property before / at the time of purchase which on which loan can be availed.

New Delhi Financial

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]]> https://blog.newdelhifinancial.com/loans-on-builder-homes-your-checklist/feed/ 0 Is this the right time for you to buy a new home? https://blog.newdelhifinancial.com/is-this-the-right-time-for-you-to-buy-a-new-home/ https://blog.newdelhifinancial.com/is-this-the-right-time-for-you-to-buy-a-new-home/#respond Sat, 25 Jul 2020 12:04:21 +0000 https://blog.newdelhifinancial.com/?p=266 Buying a new home is a major decision for everyone. Prospective buyers need to take into account several factors. Property prices, location of the property, and prevailing home loan interest rates are definitely three of the most crucial aspects of investing in real estate. After an in-depth analysis of the current scenario in the real […]

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Buying a new home is a major decision for everyone. Prospective buyers need to take into account several factors. Property prices, location of the property, and prevailing home loan interest rates are definitely three of the most crucial aspects of investing in real estate.

After an in-depth analysis of the current scenario in the real estate and banking industry, most of you will realize that ‘now’ is the perfect time to buy real estate property. Why?

Well, here are the details.

Stability in property prices

The most basic principle of economics simply states- when supply exceeds demand, the prices of goods are bound to go down. The real estate industry is no exception to this rule.

Buying property when prices have been on the rise for a long time is seldom the right move. At these times, the market has already seen a substantial upside and it may not continue the upward trend.

Without a shred of doubt, the real estate industry has been under some turmoil for the past 3-4 years. The prices of properties (land as well as houses) haven’t undergone any major increase during this period. So, if you make a purchase in the next 2-3 months you wouldn’t be spending too much more than the money you would have invested in 2016-2017.

Plenty of completed projects

Nobody wants to invest in real estate and then wait for years before the project is completed. Sadly, this has been the case on numerous occasions in the past two decades. Projects get delayed because of several reasons such as shortage of funds and land disputes among others.  Issues with approvals and certifications from the competent government authorities have also been common.

Presently, the situation favours the buyers on all counts. A substantial number of completed projects with a ‘ready to move’ status can be found with a lot of ease. If your search is comprehensive, you will be able to locate several projects providing possession in the next 2-3 months. As a home prospective home buyer, this is a great time for you!

Depreciation in home loan interest rates

After the arrival of the Covid 19 pandemic and the countrywide lockdown that followed, several measures have been taken by the Central Government and RBI to revive the economic downturn. They have been encouraging banks, NBFCs and housing finance companies to provide loans at lower interest rates.

Consistent decrease in the Repo Rate has ensured that the interest rates on home loans are brought down significantly. At the same time, RLLR based interest rates have ensured that benefits of rate cuts are transferred to the consumers quickly and completely. At present the interest on home loans is the lowest in more than a decade.

The conclusion

Yes, investments in real estate require a lot of thought and plenty of consideration. However, the prevailing circumstances where buyers can choose from several completed projects available at affordable prices under home loans with reasonable interest rate provide numerous incentives for you to buy your dream home now!

At NDF, we keep ourselves abreast of all such projects. You can reach out to us in case you are looking at buying a property, our team will help you assess the approved projects and advise you on getting loans as per your requirement.

New Delhi Financial

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]]> https://blog.newdelhifinancial.com/is-this-the-right-time-for-you-to-buy-a-new-home/feed/ 0 Unsecured Business Loans- All You Need To Know https://blog.newdelhifinancial.com/unsecured-business-loans-all-you-need-to-know/ https://blog.newdelhifinancial.com/unsecured-business-loans-all-you-need-to-know/#respond Wed, 22 Jul 2020 13:12:00 +0000 https://blog.newdelhifinancial.com/?p=260 When it comes to business loans, financial institutions want to ensure repayment in a smooth and seamless fashion. Defaults in payments make things tough for lenders by adding on to their NPAs. Most Banks/ NBFCs take into account Capacity of the applicant, Collaterals presented, Capital available, applicant’s credibility and prevailing business Conditions while assessing loan […]

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When it comes to business loans, financial institutions want to ensure repayment in a smooth and seamless fashion. Defaults in payments make things tough for lenders by adding on to their NPAs. Most Banks/ NBFCs take into account Capacity of the applicant, Collaterals presented, Capital available, applicant’s credibility and prevailing business Conditions while assessing loan applications. However, unsecured business loans are an exception to this guiding principle where loans are disbursed in the absence of Collaterals.

As a result, companies and individuals applying for unsecured business loans need to be top-notch on all the other facets which Banks and NBFCs consider for loan approval. The obvious question that comes into the borrowers’ mind is- How can you ensure that your application for unsecured business loans is approved smoothly and conveniently? Well, the answer lies in details but it is not as complicated as some of you might perceive.

The Ideal Plan of Action for Business loan Applicants

When you apply for a business loan, your approach must be highly comprehensive. You should find out about the factors that decide the fate of business loan applications. At the same time, you must gather information about the different types of business loans and the chief points of distinction between them. It will allow you to choose the best product for your requirements.

Some research about the approval policy of different financial institutions where you are applying for business loans will also be highly beneficial. In fact, it can allow you to bridge the missing links and shortcomings in your application. So, the more you research the higher will be the chances of your application being accepted.

The fact that banks/ NBFCs approve loans without collaterals/ security means that they are taking a bigger risk. As a result, unsecured business loans are disbursed at higher rates of interest. Hence, prospective borrowers must assess whether it would be sensible to pay EMIs of greater value for the same loan amount when compared to loans with collateral.

How Do Banks Assess Unsecured Business Loan Applications?

Different Banks, NBFCs, and other financial institutions have their internal criteria for loan approval. However, some vital factors are generally considered by all lenders. These intricacies and nuances often create the line of distinction between successful and rejected applications. So, let’s take a look at some of the crucial business loan assessment parameters:

  • Turnover and net worth- The net worth or turnover of businesses enables financial institutions to analyze the repayment capacity of businesses. Banks/ NBFCs usually take into account the turnover of a company in order to make their assessment. In any case, the turnover of your business not only matters in the acceptance or rejection of your application but also when it comes to the determining the loan amount that can be disbursed as per the internal criteria of lending institutions.
  • Creditworthiness of the applicant- All prospective borrowers, should attempt to have a strong Credit Score; preferably above 700. For the approval of your unsecured business loan applications, this is often the ‘make or break’ factor. A robust credit history with a track record for timely payments will enable you to get unsecured business loans from most financial institutions.
  • Debt to Equity (D/E) Ratio & Debt to Income (D/I) Ratio- When applying for unsecured business loans, you must assess the D/E and D/I ratios of your business because it is a crucial factor from lenders’ point of view. All financial institutions prefer to approve applications of companies having lower debts and higher incomes and greater equity. Businesses with debts higher than income or equities find it tough to obtain unsecured business loans.
  • Longevity of business- Another vital factor that all financial institutions take into account is the number of years for which your business has been operational. If you have been in business for a substantial amount of time, your credibility in the eyes of the lending institutions goes up by several notches. Businesses functioning for more than 3 years having turned decent profits would be the ideal applicants for unsecured business loans. On a strong contrary, newly established businesses find it hard to obtain unsecured business loans- even those with excellent ideas and a lot of potential.
  • The performance of your business- It is one of the obvious facets of unsecured business loan eligibility criteria. If your business has a healthy balance sheet and is generally performing well, the likelihood of loan approval will be boosted to a great extent. If your company has optimum liquidity and the revenue aspect of the business is healthy, your application would have a higher chance of approval. Companies earning steady profits in the past few years find it easy to obtain unsecured business loans from most lenders.

As a conclusion, we can safely say that the approval of unsecured loan applications depends on the above-mentioned parameters along with the quality of your pre-application research. We, at NDF, partner with our clients in their research and provide them with a comprehensive understanding of policies adopted by financial institutions to maximize the chances of loan approval.

Prospective borrowers having proven repayment history with well-placed key financial ratios along with desired levels of liquidity are always more likely to obtain unsecured business loans.

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]]> https://blog.newdelhifinancial.com/unsecured-business-loans-all-you-need-to-know/feed/ 0 Why Should You Get Your Home Loan Insured? https://blog.newdelhifinancial.com/why-should-you-get-your-home-loan-insured/ https://blog.newdelhifinancial.com/why-should-you-get-your-home-loan-insured/#respond Sat, 04 Jul 2020 11:52:41 +0000 https://blog.newdelhifinancial.com/?p=243 Buying a home is a dream for many individuals and opting for home loans is always the smarter way to turn this dream into reality. With real estate prices dropping significantly along with consistent depreciations in home loan interest rates, buying your dream house has become easier than ever. However, keeping things safe and secure […]

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Buying a home is a dream for many individuals and opting for home loans is always the smarter way to turn this dream into reality. With real estate prices dropping significantly along with consistent depreciations in home loan interest rates, buying your dream house has become easier than ever. However, keeping things safe and secure is essential because life can be unpredictable.

You can never be absolutely sure about what’s in store for you in the near and long-term future. The tenure of home loans can last up to 30 years making the situation quite tricky. Ensuring that your EMIs don’t turn into a nightmare in case of unforeseen situations is crucial. As a result, home loan insurance plans also known as home loan protection schemes come into the picture.

 

Basics of Home Loan Insurance Schemes

Essentially, insurance on home loans cover specific circumstances that lead to non-payment of EMIs. So, when you fail to pay your EMIs as a result of any of the events covered under your insurance plans, then the insurance company will handle the settlement of outstanding loan with the lender institution i.e. Banks, NBFCs or housing finance companies.

Unpleasant eventualities tend to make it difficult for you to repay your loan. Under some circumstances like critical illness, loss of employment and untimely death, regular payment of EMIs is simply impossible. In case of early death, the burden of loan repayment will fall on your close relatives putting their financial health at risk.

If the dependent family members of the borrower fail to repay the loan, then the home and other collaterals may be seized by the lending institution. Hence, home loan insurance plans are not only about protecting yourself but also your family in case of eventualities. It will also ensure that they always have a roof on their head even in the worst scenario.

Insuring your home loan/ mortgage will bring about several benefits and help you tackle your responsibilities effectively. Depending on the type of insurance you choose, you can get coverage for a wide variety of situations. Here are all the things you need to know about home loan insurance plans to make a prudent choice.

Factors You Need To Consider

Well, it is important to note that the events & circumstances covered under different home loan insurance schemes are different. Hence, selecting the right plan covering the highest number of eventualities can give you optimum protection.

Most borrowers choose to get their home loan insured by the lending institution. However, this is not mandatory. You also have the option of getting your home loan/ mortgage insured by other insurance companies.

Another crucial factor you must consider is your timing. You may get your home loan insured some months or years after loan disbursement. However, it is always more prudent to opt for mortgage insurance at the time of loan approval and disbursement.

Borrowers should also note that many home loan protection plans give you the option of making a one-time premium payment towards insuring your loan for the entire tenure. Opting for this provision allows borrowers to club the premium amount with the home loan. Hence, the overall liability decreases because you don’t have to separate insurance premiums while paying loan EMIs.

 

Types of Home Loan Insurance

In general, insurance companies and lenders offer three distinct types of home loan insurance products. We are listing and describing them below for your understanding.

  • Plans with Level Coverage- In this case, the coverage amount does not change at any point of time.
  • Plans with Hybrid Coverage- In such policies, the coverage amount equals the loan amount in the first year. From the second year onwards, the coverage amount continues to decrease with reduction in outstanding loan amount.
  • Plans with Reducing Coverage- Here, the coverage amount starts depreciating after the first day of loan approval & disbursement.

So, when you are on the verge of selecting home loan insurance plans you must take into account the facts mentioned above in order to make the most suitable decision as per your requirements.

 

Benefits of Home Loan Insurance Schemes

Home loan insurance schemes are highly beneficial for borrowers and lead to significant reductions in financial liabilities in case of eventualities. Apart from the obvious advantages, these schemes prove exceedingly valuable in various other ways as listed below:

  1. Most schemes offer lump-sum benefits allowing borrowers to repay outstanding loan amount easily.
  2. Borrowers can avail tax benefits under sections 80 (C) as well as 80 (D) of the Income Tax Act.
  3. The best plans provide coverage not only in case of early death but also critical illnesses and loss of employment.
  4. In case of joint loans, all the borrowers can get coverage for their share of the loan.
  5. The option of clubbing one-time premium with the home loan principal amount makes it extremely convenient for borrowers.

Even though Home Loan/ Mortgage insurance is not mandatory for approval & disbursement of loans, it makes sense to get insured. Most lending institutions provide this facility in a seamless and convenient fashion and borrowers don’t have to face any useless hassles in the process.

All in all, we can safely say that Home Loan Insurance Plans are exceedingly advantageous for borrowers leading to substantial reduction of the financial burden in case of unforeseen situations. Hence, it is always prudent and sensible to opt for these schemes with even small insurance premiums leading to several long-term and large-scale advantages. 

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]]> https://blog.newdelhifinancial.com/why-should-you-get-your-home-loan-insured/feed/ 0 Seeking Investors versus Applying for Loans- What’s the Best Way Forward? https://blog.newdelhifinancial.com/seeking-investors-versus-applying-for-loans-whats-the-best-way-forward/ https://blog.newdelhifinancial.com/seeking-investors-versus-applying-for-loans-whats-the-best-way-forward/#respond Tue, 30 Jun 2020 07:13:05 +0000 https://blog.newdelhifinancial.com/?p=236 It doesn’t matter whether you are on the verge of starting a business or making attempts to expand it, the need for additional funds can’t be ignored. Many startups and other small businesses often have to choose between funding and fund raising to obtain the necessary capital. And well, the fact is that there’s no […]

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It doesn’t matter whether you are on the verge of starting a business or making attempts to expand it, the need for additional funds can’t be ignored. Many startups and other small businesses often have to choose between funding and fund raising to obtain the necessary capital. And well, the fact is that there’s no hard and fast rule or principle that can be applied to all situations.

The ideal strategy should be to take into account the amount of money that you require and pros and cons of funding & fund raising before you make a decision. When you are fully aware of the benefits and drawbacks of both of these methods, you will get sufficient clarity about the most suitable course of action for you. You must remember that the patch you choose will impact the shape of your business not only in the near future but also from a long-term perspective.

Here’s a detailed analysis of all the factors and parameters that matter in the overall scheme of things.

Opting for Business Working Loans

Getting a business loan allows you to get the necessary capital required for setting up your business or expanding it without losing even a small portion of the company. The primary features include.

  • Easy repayment with fixed EMIs- Paying back the principal amount and interest can be done conveniently in Equated Monthly Installments. You will always be aware of the money that needs to be paid back every month.
  • Make use of the government schemes- GOI and state governments have come with several scheme to promote businesses and manufacturing. Even banks and NBFCs have launched various loan products in order to boost businesses during the Covid-19 resultant lockdown. Hence, the process of getting loans has become relatively simple with less paperwork and newly defined eligibility criteria.
  • Simplicity in relationships- Business loans are simple- you get funding and you pay it back. The lender will not play any role in the day to day activities of your business. They will not try to influence any of your business decisions.
  • Loan approval isn’t easy- It must be noted that banks and NBFCs do no approve loan applications of startups for unsecured loans on the basis of an idea with great potential. In most cases, you might be required to put up collaterals which can be foreclosed if you default on payments. However, this is not always the case and lenders ask for collaterals only when the approved loan is high value. Lenders can also use this approach in case your personal credit history isn’t at par with the requirements of banks/ NBFCs
  • Limited money comes your way- In case of business loans, the net worth of your business, assets held and other factors limit the loan amount approved by financial institutions. You need to assess whether the approved loan amount is sufficient for your present requirements.

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Seeking investors

When you opt for fund raising, you may get Personal Investors, Angel Investors, Venture Capitalists or even Peer-to-Peer lending. In most cases, you will have to provide them with equity i.e. ownership rights in your business. The most prominent aspects you need to consider in this scenario are:

  • Reduced decision-making ability- Investors are given equity in your business and they tend to influence major & minor business decisions. As a result, you might end up losing the freedom to make plans and execute them as per your desire. At times, their guidance might even prove beneficial but your control is diluted.
  • Discretion of investors- Whether or not they want to invest money in your business is entirely up to them. They will assess all aspects of your company based on their benchmarks. Hence, meeting of the minds and having a shared vision is essential for a long-term and mutually beneficial relationship
  • Mutual understanding and common goals- In case you are able to establish a relationship of trust, investors can invest substantial sums of money in your business. It must be reiterated that the amount of money they put up and the terms of investment depend not only on negotiations but also the extent to which your ideas impress the potential investors.
  • Dilution is a possibility- Investors might pull back their investment at their discretion, if things don’t work out as per their expectations. So, keeping investors satisfied becomes hugely crucial. They also have the option of selling or diluting their equity which can lead to complex problems for you including complete loss of control if they hold a substantial percentage of shares.
  • Sharing of profits and dividends- All investors come on board in order to make money from your business. In case, you want to sell your company, you’ll have to pay investors based on the percentage of equity held by them. Also, in case of dividends a portion of profits will also go to them.

Now, after due analysis of all the significant factors, we can easily say that both funding and fund raising have their own sets of benefits and shortcomings. However, startups and other businesses need to take a call keeping in view the parameters listed above. At the same time, they need to figure out which approach will benefit them the most.

Your business objectives, vision and the requirements must be given their due importance if you want yourdecision to be the most profitable one for you company.

Still have queries?

Click the link below and get the perfect advice & guidance from the in-house experts of New Delhi Financial.

Click here

Still have queries?

Click the link below and get the perfect advice & guidance from the in-house experts of New Delhi Financial.

Click here

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]]> https://blog.newdelhifinancial.com/seeking-investors-versus-applying-for-loans-whats-the-best-way-forward/feed/ 0 Insights On Banks Extending And Giving Fresh Loans During The COVID Crisis https://blog.newdelhifinancial.com/insights-on-banks-extending-and-giving-fresh-loans-during-the-covid-crisis/ https://blog.newdelhifinancial.com/insights-on-banks-extending-and-giving-fresh-loans-during-the-covid-crisis/#respond Wed, 27 May 2020 11:42:32 +0000 https://blog.newdelhifinancial.com/?p=230 The COVID 19 pandemic has severely impacted different facets of the Indian economy. The MSME sector is no exception and has taken a significant hit. The entire country is under lockdown and the MSME businesses are face to face with grave challenges maintaining their credit lines with lenders because of almost two months of inactivity. […]

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The COVID 19 pandemic has severely impacted different facets of the Indian economy. The MSME sector is no exception and has taken a significant hit. The entire country is under lockdown and the MSME businesses are face to face with grave challenges maintaining their credit lines with lenders because of almost two months of inactivity. The upheavals in the supply chain have made things tougher along with and labor shortage and a lack of sufficient cash reserves.

The question above all other questions for the MSME sector is ‘Can this be turned into an opportunity for growth and expansion?’ It might come as a pleasant surprise, but the answer to this question is in the affirmative.

In a bid to help these businesses, GOI has announced stimulus packages. But what does it mean to these businesses? Does it provide loans or extend repayment terms? Read below to know more.

Will the RBI Refinancing facility help?

 

The central bank is providing liquidity to the tune of Rs 50,000 crore to financial institutions like the NABARD (National Bank for Agriculture and Rural Development), the SIDBI (Small Industries Development Bank of India) and the NHB (National Housing Bank).

The SIDBI which finances loans for essential commodity manufacturers can use this money raised at repo rate for lending loans to small businesses. This comes at a time when essential commodity manufacturers are in dire need of credit to pay for the salaries of their employees. At present, the demand for essential commodities is on the rise.

Manufacturing units in different parts of the nation are compelled to work in shifts ensuring that the country doesn’t face a shortage. While doing so, there is a need to increase cash flow and fulfill other economic needs. The benefits offered by banks and the government will help immensely in providing relief. Hence, these businesses can be hopeful of availing fresh credit lines through banks that come under their purview.

Let’s Let’s take a look at how this benefits the MSME sector and the take away from these credit relief packages.

How are Banks Rolling out Loans?

The SIDBI, in an attempt, to help the small and mid-sized businesses deal with the impact of the COVID 19 pandemic has launched a digital platform for remote handling of affairs. The platform is designed to tackle issues related to regulations. They have also implemented digital payments and borrowing.

Several schemes offered by the central and state governments, banks- private as well as public, and other financial associations will help businesses. They will provide the required liquidity to these banks and microfinance institutions for lending to micro, small, and medium businesses that are affected by COVID-19.

Banks Offering COVID Loans

India’s premier government-owned bank, the State Bank of India has launched credit lines for its customers who have been impacted by this pandemic. It is called the COVID Emergency Line of Credit, CECL, and allows borrowers to take loans of up to 200 crores or 10% of the fund-based working capital at an interest rate of 7.25%.

Private lenders have also come up with schemes for extending credits to MSMEs. In particular, Axis Bank has allocated a fund of Rs 100 crore to help its customers fight the virus. This leading private lender has also provided borrowers with deferment/ moratorium options on the existing loans. Hence, the burden of EMI payment has been reduced not only for the MSME sector but also for other borrowers.

The same approach has also been adopted by other private banks including ICICI, HDFC, and Kotak Mahindra. It must also be noted that the processes of giving out fresh loans during these troubling times have also been made easier with substantial emphasis on digital applications for loans by these private lenders.

Surprisingly, Yes Bank- which was in the news for all the wrong reasons, has also continued with its Yes SAMRIDDHI which focuses on providing business loans to the micro, small and medium enterprises.

All in all, we can safely say that the situation isn’t as gloomy for the MSME sector and they can avail the benefits of the various schemes being offered by private and public lenders.

The Beneficiaries

As per the Indian Chamber of Commerce, there are about 6 crore small businesses in India. However, only 91 lacs are registered on the government portal for MSMEs. Hence, only registered businesses will have access to the credit lines offered by banks.

The loans will be processed through online portals and will be highly beneficial to businesses with GST records, IT returns, and bank statements. Other businesses may not access schemes but considering the prevailing in informal sectors, an announcement of credit lines even for them doesn’t seem far away.

There are reports that the Indian government is pushing banks to boost lending. It is making all efforts to increase the number of loans sanctioned in state-run banks. This push has come after the RBI made a 75 basis point rate cut to rescue the failing economy. So, small or medium scale essential commodity manufacturers with good credit ratings can avail these loans. With the lockdown easing in many parts of the country, this comes as a lifeline to get the businesses up and running again.

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]]> https://blog.newdelhifinancial.com/insights-on-banks-extending-and-giving-fresh-loans-during-the-covid-crisis/feed/ 0 Do direct sales associates analyze the financial statements before they put the case for credit appraisal in the banks? https://blog.newdelhifinancial.com/do-direct-sales-associates-analyze-the-financial-statements-before-they-put-the-case-for-credit-appraisal-in-the-banks/ https://blog.newdelhifinancial.com/do-direct-sales-associates-analyze-the-financial-statements-before-they-put-the-case-for-credit-appraisal-in-the-banks/#respond Wed, 20 May 2020 11:15:00 +0000 https://blog.newdelhifinancial.com/?p=221 Have you ever required a loan? Obviously, we all must have had at some point of time in our lives been to a situation where we might have required a loan. Why is loan required? May be for some business expansion, longer working capital cycle etc. At that very moment we always approach to a […]

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Have you ever required a loan? Obviously, we all must have had at some point of time in our lives been to a situation where we might have required a loan. Why is loan required? May be for some business expansion, longer working capital cycle etc. At that very moment we always approach to a bank. But is it so easy to find the right bank that understands our requirements, or don’t we have lack of time as we need to take care of our other important tasks as well?

Mr. Anil Goyal, a reputed industrialist, owns majority share in ABCD ltd. He is aiming to add a new division in his garment manufacturing division, which would cater to the middle and upper middle section of society. To fulfill this, his credit demand is fifteen crores needed over the next 8 months. The credit availed is for acquiring new machineries, and capital for day to day operations like raw material costs, staff remunerations, packing charges, etc. He planned to service the debt obligations through revenue generated from sales operations and product deliveries. He is ready to put his multiple properties offered as collateral.

Isn’t it a great opportunity for the banks to give out their loan facility to such a prospect? But who would help Mr. Goyal to identify an apt bank and how will bank reach and check on such a customer? Thus, he should reach out to an appropriate bank through a DSA- New Delhi Financials (NDF) who will manage his financial needs smartly for him.

Direct Sales Associate

DSA are most commonly found working for banks who sell their banking products like loans, mutual funds etc. They act as public face of the bank and is responsible for dealing with any or all customer questions about the products and services the bank offers. A DSA is also expected to be continuously updating their knowledge of the company products, services, and policies. Complaint handling is a critical part, and turning a frustrated customer into a happy customer, while adhering to company policies, requires a combination of compassion and sensitivity.

Shouldn’t the DSA act as one point of contact for both Mr. Goyal and bank to make things easier and quick? Suppose you as a customer need for a credit appraisal on your loan application, who comes first in your mind to contact? Credit appraisal basically refers to assessing a loan application or proposal in a thorough manner in order to measure the repayment ability of the loan applicant.

Credit Appraisal

Whether one applies individually or as an entity, a lending bank will always conduct a detailed and systematic credit appraisal process before giving a loan. A successful credit appraisal starts with a question and end with an answer. It is about identifying applicable risks and questioning the borrower about them, advises them to alleviate those risks with some structuring, then presenting to credit committee acting as good cop and bad cop both.

Under credit appraisal, the bank will have to check the organization’s costs, expenses, estimated revenues, nature of the business, evaluate its demand and supply in the market, in order to understand if the company will be able to repay the loan without any trouble. This is very crucial as this determines the interest income and the capital of the bank. The repayment behavior of a borrower directly affects the performance of the bank.

But who does the credit appraisal process for both bank as well as the customer? As a customer do you feel comfortable sharing your whole financial and confidential information again and again with different people. Wouldn’t it be tedious and risky to do?

Roles and responsibility

How about having a one person do this all for you before presenting your financial statements in front of bank. Here comes another important role of NDF- financial consultant. Every financial institution will have certain norms, rules, and standards to assess the creditworthiness of a loan applicant. If a borrower has a high creditworthiness, there is high probability that his or her loan application will be accepted by the bank. NDF is one such organization who has knowledge and skills to do this for you as well as banks and make this process easier for both.

We keep updating our customer information and verifying accuracy as needed. We help in processing, evaluating and completing financial analysis on loan requests, monitoring and maintaining the overall credit quality of existing loan facilities, making sure that all required documentation is obtained complete and do the necessary negotiations amongst both the parties so that both ends meet at some point.

NDF assess your solvency by comparing credit history, loan amount, income, time taken to pay different equated monthly installments (EMIs), credit score given by credit bureau like CIBIL which should ideally be 750 and above, repayment capacity, and your overall expenses. Generally, banks and NBFCs look at certain ratios like Fixed obligation to income ratio (FOIR) which help to assess if a certain portion of your income is enough to manage EMIs for the loan, profitability ratios, debt to income ratios etc. in order to check your loan eligibility.

To apply for credit appraisal, you will be required to mandatorily furnish certain government-approved documents such as proofs for Income, Age, Repayment ability, present and former loans, monthly expenses, future liabilities, tax history, assets owned etc. NDF is thorough in all aspects of credit appraisal and makes things easier and quick in completing the process.

So, finally when banks are satisfied with the overall efficacy of Mr. Goyal, he will get a loan appraisal of fifteen crores approved and will go on to start his new division of garment business, however, what the future holds can never be foretold, when a loan appraisal is sanctioned.

Conclusion

The task is huge – but NDF take a structured approach in this challenging task. We at NDF know how to identify a good proposal comparing different banks, how to save yourself by smartly following strong terms and conditions, ensure compliance of lending protocols and always ready to respond to inquiries from lenders and clients along with assisting in client audits. Banks & Financial Institutions have faith in our ability to assess and understand each case. We are given priority for our credit appraisal services as we have in-house developed software which uses the relevant algorithm to come up with an assessment as close to what the bank will appraise. We pay attention to every detail, and effectively communicate decisions and solutions and the reasons for them. We have built a rapport and trust with banks and our clients by discharging our duties efficiently and due to our unmatched knowledge, efficacies, systems and quality.

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]]> https://blog.newdelhifinancial.com/do-direct-sales-associates-analyze-the-financial-statements-before-they-put-the-case-for-credit-appraisal-in-the-banks/feed/ 0 BANKING STRATEGIES – PLAN NOW & AFTER COVID-19 LOCKDOWN https://blog.newdelhifinancial.com/banking-strategies-plan-now-after-covid-19-lockdown/ https://blog.newdelhifinancial.com/banking-strategies-plan-now-after-covid-19-lockdown/#respond Thu, 14 May 2020 13:08:10 +0000 https://blog.newdelhifinancial.com/?p=195 INDIA GDP at 1.9%, HIGHEST AMONGST THE G-20 ”Capitalization of deferred loan payment must be done with due diligence….” She says ”Great-Lockdown”, Gita Gopinath the present Economic-Counsellor at the International Monetary Federation-(IMF), compares the present C-19 economic choke with the Great Depression, a known financial leech of it’s time.  Global GDP suffers $ 9 trillion […]

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INDIA GDP at 1.9%, HIGHEST AMONGST THE G-20

”Capitalization of deferred loan payment must be done with due diligence….”

She says ”Great-Lockdown”, Gita Gopinath the present Economic-Counsellor at the International Monetary Federation-(IMF), compares the present C-19 economic choke with the Great Depression, a known financial leech of it’s time.  Global GDP suffers $ 9 trillion loss, but India has lesser dark clouds as it manages to hook-grip it’s GDP at 1.9%, the highest amongst the G-20. The current Indian government has an organized and efficient intellect team chairing the Administrative affairs. Ordinances that float are the strategic compose of scholars, intellects, fiscal spinners & financial regulators, they are, Mrs Nirmala Seetharaman, FM-India, both the Financial Heads of the Public and Private banks including RBI, apex financial governing body. The chemistry between humans and mother earth has its own legacy. Together they have surpassed all high-low eco-bumps and notorious-corona too shall sweep-off. To combat Covid-19 the needs are for maintaining social distancing and formulating sustainable Economic strategies. The Private banks should indulge in mentoring its customers about the concept and usage of E-commerce in banking activities in user-friendly mode which is easily interpreted. There is no fast track strategy to instantaneously revive a draining Economy. Banks now operate remotely and digitally the priority operations. Standard protocol is in play as all the banks have a common enemy, Coronavirus. The World Bank stage-roles as mentor in lockdown strategizing it cripples on three aspects, Prepare, Cope & Recover. All Banking bodies prioritize promoting C-19 hygiene norms and bliss of digitalization, importance of the Arogya Setu application and beneficial alarming features it equips with in alarming corona infected zones.

The core activity of Private Banks now is to cater stand-still transactions on FIFO base, consider periodical assess-reassess of working strategies/ amend, if necessary. Have no expectations for incentives/ surplus/ revenue gain till clear prospects arise. But this doesn’t mean freezing the routine track-check activities of your bank’s financial-metrics and cash-flow. Be very mindful of pros-cons on errors/omissions. Banks should have handy access to customer’s data while working remotely and equip with the quality infrastructure especially, the high-speed net connectivity to avoid communication barriers.

The only essence now is maintaining the digital connect. The utmost critical activity that shall fall immediately after lockdown is the treatment of accumulated deferred payments that has been temporarily postponed. Capitalization of the deferred loan payment must be done with due diligence by every bank. During lockdown, banks must carefully incorporate transactions of Loan Accounts and must maintain it under respective heads, like “MIS-LOAN” & “NON-MIS-LOAN”. Post-lockdown, banks need to produce mis detailing loans disbursed during the lockdown period. Loans exceeding 5 crores & above shall have records in MIS-LOAN REPORT.

 

The tele-connect services should be in functional mode at branch offices. The ”On-Call” customer service facility must be functional to cater customer’s grievances /tech-support including escalations. The Automated Teller Machines must frequently be checked for cash shortages and sanitizers deployed with usage-demo pics.

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Authentic report of daily cash withdrawals and monitoring fund position must be done timely and shared ensuring consensus. Most banks have a good reputation built with sources that infuse finance during cash deficits, known as ”Money at call”. It can be used during critical urgency. Proper accounting of credit collections, credit cycles and the bad debts must be included in the list.

In the COVID-19 epidemic majority experience bitter-swallows in financial matters. Banks are subject to certain limitations and cannot go beyond that. Loan applications undergo stringent procedural norms before it reaches sanction stage and involves considerable time play. Any haste-chase attempt by loan applicants in fund release might not work out at all.

After partial uplift of lockdown, hope re-kindles.

There is no magic wand to revive the sinking economy but dedicated efforts always fruits.

Have open ears to ideas/suggestions. You never know what might workout. On careful analysis through opportunity glass, one can see a thin-line of hope camouflaged in COVID-19 relief kit. In the COVID-19 lock-down, free ration relief kits are provided to the public by GOI.

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]]> https://blog.newdelhifinancial.com/banking-strategies-plan-now-after-covid-19-lockdown/feed/ 0 Digital transformation in the times of Lockdown for Retail Lending https://blog.newdelhifinancial.com/digital-transformation-in-the-times-of-lockdown-for-retail-lending/ https://blog.newdelhifinancial.com/digital-transformation-in-the-times-of-lockdown-for-retail-lending/#respond Tue, 05 May 2020 10:57:48 +0000 https://blog.newdelhifinancial.com/?p=189 The global events have taken a swift and uncertain turn in recent days. The economy is being riddled with uncertainty as to the future, with the force of every industrial sector behind it. The banking sector has not been left alone and faces the brunt of the current pandemic and subsequent lockdown all over the […]

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The global events have taken a swift and uncertain turn in recent days. The economy is being riddled with uncertainty as to the future, with the force of every industrial sector behind it. The banking sector has not been left alone and faces the brunt of the current pandemic and subsequent lockdown all over the country. Retail lenders have been rendered vulnerable, seeking ways to earn some degree of stability in the current scenario. However, the shift in the events following the lockdown has also opened up various opportunities for this sector. Active participants are now rushing to adopt a mobile approach to offer their services, all the while maintaining a strict focus on satisfying customers.

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The Evolving Digital Scenario

The retail lending sector has been quick to adopt a digital approach, modifying its service offering in a remote structure. Here are a few digital retorts, which have been fuelling the business operations of retail lenders.

Virtual assistant:

When the streets go empty, and you cannot have personnel out there to check up on your customers, bot processes can do the deeds through SMSs and WhatsApp. Customers can get basic information on services through this network, which will significantly bring down the load of traffic on the web services. 

Live Chat:

Keeping the customer at the center of digital transformation, retail lenders can offer support through chatbots, which can be hosted outside the main website of the institute. Live chat support systems can be launched and supported almost anywhere in the world, where the customer is available. This service adds a hint of human touch to the service and is a great initiative to keep the customer engaged.

Marketing automation platform: 

For various products and services, retail lenders can host a secondary platform to automate their delivery to the customer. Such platforms can be operated from anywhere and offer real-time data on customer selection.  Telephone networking: As the markets dwindle and businesses find themselves off the track, it is vital now more than ever to ensure that customer retention is maintained. At the same time, every effort should be made to attract new customers as well. With the lockdown is likely to be in place for an unforeseen period of time, it makes sense to engage customers through a conversational platform, which gives them a sense of security and understanding of your work. To support these measures, digital services can be exploited further to allow the exchange of documents and uploading and downloading activities. The wide availability of digital devices and network resources plays a major role in this setting.

In Conclusion

With the surge of the COVID-19 pandemic, countries have been rendered helpless amid unforeseen circumstances. To ensure business continuity, consultants for loans and personal finance options can thrive on the aforementioned measures to control their business operations up to a large extent. Do you wish to seek a reliable finance option for yourself today? You can seek expert advice on the matter with us with complete trust and assurance.

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]]> https://blog.newdelhifinancial.com/digital-transformation-in-the-times-of-lockdown-for-retail-lending/feed/ 0 How does Car Loan Works? https://blog.newdelhifinancial.com/how-does-car-loan-works/ https://blog.newdelhifinancial.com/how-does-car-loan-works/#respond Mon, 06 Apr 2020 01:32:01 +0000 https://blog.newdelhifinancial.com/?p=177 If you are looking for a new or a second-hand car, there are lots of financing options available in the market. If you do not have enough savings to buy your dream car either new or used, you might consider taking a loan. Before taking a car loan, it is important to know about car loans and how it works. A Car […]

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If you are looking for a new or a second-hand car, there are lots of financing options available in the market. If you do not have enough savings to buy your dream car either new or used, you might consider taking a loan. Before taking a car loan, it is important to know about car loans and how it works. A Car loan is also the fastest medium of getting a loan; for a short term gap or an emergency that one wants to overcome. A Car Loan / Vehicle loan can be taken from a Bank / Non-Banking Financial Institution.

What is a Car Loan?

A car loan is a loan that is taken for the motive of buying a vehicle; either new or second-hand for personal / commercial. It is a Secured loan taken against the vehicle you propose to buy or an existing vehicle you own.

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New car Loan

When you have identified which car to buy; you can either look up various options for finding the best bank and product suitable to your need and apply. You can also approach consultants like us; who can guide & manage the entire process for you. You can get up to 100% of the on-road price of the car.

Used Car Loan

A used car loan is like a personal loan with a lower Rate of Interest. You can avail up to 125% of the car’s cost valuated by the bank.

Factors of Car Loan Approval in India

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Cibil Score

CIBIL scores play a key role when it comes to car loan approval in India. The Cibil score is a three-digit numeric summary of your credit history, rating and report, ranging from 300 to 900. The closer your loan is to 900; the better your credit rating is. The CIBIL score is given by the Bureau of Cibil which is usually based on old loan repayment.

Repayment Period

The Car loan repayment period in India usually comes between 1 to 7 years. It is comforting for the borrower to decide what payment term he or she would like to opt for. The return period is a crucial factor in deciding monthly EMIs. If the duration is longer, the EMIs are lower and if the duration is shorter, the EMIs will naturally be higher. However;  it is better that buyers fix the short payment period as they would otherwise have to pay higher interest rates.

Age of the Vehicle

In case of used car loan, The age and condition of the vehicle is a very important factor that the lenders consider when offering a vehicle loan in India. By the model and condition of vehicle, lenders determine the actual value of the loan to be given against the vehicle.  

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