#Defaulted loan clearance process

[fincrif]

How to Remove a Personal Loan Default Record from Your Credit Report?

A personal loan can be a great financial tool for handling emergencies, consolidating debt, or funding major expenses. However, missing payments or defaulting on a personal loan can leave a negative mark on your credit report, affecting your ability to secure future loans or credit cards. A loan default record lowers your credit score and can remain on your credit report for up to seven years, making financial recovery difficult.

The good news is that there are ways to remove or rectify a personal loan default record from your credit report. In this guide, we will explore the steps to clear a loan default, how it impacts your financial future, and strategies to improve your creditworthiness.

1. What Happens When You Default on a Personal Loan?

A personal loan default occurs when a borrower fails to repay EMIs (Equated Monthly Installments) for an extended period, usually 90 days or more. Once the default is recorded, the lender reports it to credit bureaus like CIBIL, Experian, or Equifax, leading to a significant drop in the borrower’s credit score.

Consequences of a Personal Loan Default:

Credit Score Drop – A default can lower your credit score by 100 to 150 points.

Loan Rejection – Future loan applications may be denied due to the poor credit history.

Legal Action – In extreme cases, lenders may initiate legal proceedings to recover the outstanding amount.

Difficulty in Renting or Employment – Some landlords and employers check credit reports before approval.

If you have defaulted on a personal loan, taking corrective action immediately can help you recover financially.

2. Steps to Remove a Personal Loan Default Record from Your Credit Report

If you want to remove a personal loan default record, follow these steps:

A. Get a Copy of Your Credit Report

Obtain your credit report from CIBIL, Experian, Equifax, or CRIF Highmark.

Check for errors, incorrect late payments, or discrepancies in your loan default record.

Identify the lender who reported the default and confirm the outstanding balance.

B. Clear Outstanding Dues

If the default is genuine, contact your lender and repay the outstanding balance.

Request a loan settlement or restructuring if you are unable to pay in full.

Obtain a No Objection Certificate (NOC) after full repayment.

C. Negotiate a Loan Settlement with the Lender

Some lenders allow a one-time settlement where you can pay a reduced amount.

Ensure the settlement is reported as “Closed” in your credit report.

Avoid “Settled” status, as it still impacts your credit score negatively.

D. Request the Lender to Update Your Credit Report

Once you clear the dues, ask the lender to update your payment status with credit bureaus.

It takes 30-45 days for the updated report to reflect the changes.

E. Dispute Errors in the Credit Report

If your report contains inaccurate default records, raise a dispute with the credit bureau.

Submit supporting documents such as payment receipts, NOC, and bank statements.

The credit bureau will investigate and correct errors within 30-45 days.

By following these steps, you can improve your credit score and remove the negative impact of a personal loan default.

3. How Long Does a Personal Loan Default Stay on Your Credit Report?

A loan default remains on your credit report for up to 7 years. However, you can speed up the recovery process by:

Repaying outstanding dues and requesting report updates.

Raising disputes for incorrect default records.

Using credit-building strategies to improve your score over time.

If you take corrective action, the impact of a personal loan default can be minimized much sooner.

4. Alternative Ways to Improve Your Credit Score After Default

If a personal loan default has affected your credit score, follow these strategies to rebuild your creditworthiness:

A. Pay Bills and EMIs on Time

Set up auto-debit for loan repayments to avoid future defaults.

Maintain a 100% payment track record to show creditworthiness.

B. Use a Secured Credit Card

Opt for a secured credit card against a fixed deposit to rebuild your score.

Make small purchases and pay bills in full and on time.

C. Reduce Your Credit Utilization Ratio

Keep your credit card usage below 30% of your credit limit.

Paying off existing debts improves your credit profile.

D. Increase Your Credit Mix

Having a mix of secured (home, auto loans) and unsecured loans shows creditworthiness.

Avoid taking multiple personal loans in a short span.

E. Limit Hard Inquiries

Do not apply for multiple loans or credit cards simultaneously.

Hard inquiries lower your score; space out loan applications.

By following these methods, your credit score will gradually improve, increasing your chances of loan approvals in the future.

5. How to Prevent a Personal Loan Default in the Future?

To avoid defaulting on a personal loan, follow these proactive measures:

A. Borrow Only What You Can Repay

Assess your financial capacity before taking a loan.

Use a personal loan EMI calculator to determine affordable repayment amounts.

B. Maintain an Emergency Fund

Save at least 3-6 months’ worth of expenses to cover unexpected financial setbacks.

C. Choose a Longer Loan Tenure for Lower EMIs

If repayment is challenging, opt for a longer tenure to reduce EMI burden.

D. Prioritize Debt Payments

Always pay loans and credit card bills first before discretionary spending.

E. Communicate with Your Lender

If facing financial difficulties, contact your lender early to explore restructuring options.

Taking these precautions will help you avoid personal loan defaults and maintain a healthy credit profile.

Conclusion

A personal loan default can significantly impact your creditworthiness, but it is possible to remove or rectify it with the right approach. The first step is to clear outstanding dues, negotiate with the lender, and request a credit report update. If errors exist, disputing them with the credit bureau can help remove incorrect defaults.

Additionally, rebuilding your credit score through timely payments, secured credit cards, and low credit utilization is crucial for financial recovery. By adopting smart borrowing habits, you can prevent future defaults and regain your financial stability.

If you’re struggling with a personal loan default, take action today to improve your credit score and restore your financial health.

[debtrec]

How to Use NACH and PDC for Hassle-Free Debt Recovery

Debt recovery has consistently posed a considerable obstacle for businesses, financial institutions, and lenders. Guaranteeing prompt repayment is essential for sustaining consistent cash flow and minimizing overdue receivables. In India, two commonly utilized approaches for collecting payments from clients or borrowers are NACH payment and PDC cheque recovery. Though they have different efficiency, security, and compliance needs, both are good techniques.

This blog investigates the comparison between NACH and PDC, how companies may use them for loan EMI collecting, and the benefits they provide in guaranteeing safe business payments following legal standards.

NACH Payment for Debt Recovery

Run under the National Payments Corporation of India (NPCI), National Automated Clearing House (NACH) is an automated payment system. It allows companies to gather payments straight from a borrower's bank account, therefore facilitating smooth electronic transactions.

How Does NACH Work?

Under a payment mandate India approach, NACH works when a borrower permits the lender to automatically debit payments from their bank account on certain dates. The lender can gather EMIs, utility bills, or subscription payments after the NACH registration procedure is over without constant hand-off required.

Benefits of NACH for Debt Recovery

The National Automated Clearing House (NACH) offers several advantages for debt recovery, enhancing the efficiency and security of financial transactions. Here are the key benefits:

Automation of Payments: Eliminates the need for physical cheques and manual follow-ups.

Reduced Risk of Fraud: Digital transactions lower the risk associated with forged or bounced cheques.

Faster Clearance: Transactions occur within a few hours, ensuring quick access to funds.

Lower Administrative Costs: Businesses save time and resources spent on handling physical cheques.

Better Compliance: With predefined legal structures, NACH ensures better adherence to regulatory standards.

NACH Registration Process

The NACH registration process involves the following steps:

The borrower fills out a NACH mandate form, authorizing the lender to debit the specified amount.

The mandate is verified and approved by the borrower's bank.

Once approved, payments are processed automatically on scheduled dates.

By streamlining recurring payments, NACH payment serves as a reliable solution for lenders, reducing the chances of defaults and payment delays.

PDC Cheque Recovery

A Post-Dated Cheque (PDC) is a cheque issued with a future date, allowing businesses to withdraw funds on the specified day. Lenders often collect PDC cheque recovery from borrowers as collateral to ensure timely repayments.

How PDC Works?

When a borrower issues a PDC cheque, the lender holds it until the due date before presenting it for clearance. If sufficient funds are available in the borrower's account, the cheque is honored. However, if the cheque bounces due to insufficient funds, legal action can be taken against the defaulter.

Benefits of Using PDC for Debt Recovery

Post-dated cheques (PDCs) are a widely used tool for debt recovery, offering various benefits that can help lenders secure repayments effectively. Here are the key advantages of using PDCs for debt recovery:

Legal Assurance: Provides a strong legal ground for recovering outstanding dues.

Credibility of Borrower: Borrowers are more likely to maintain adequate balances to avoid penalties.

Acts as Collateral: Lenders can use PDCs as a security measure.

Manual Control: Unlike auto-debit systems, PDCs allow lenders to physically manage the payment process.

PDC Cheque Rules

Businesses and lenders must follow certain PDC cheque rules to ensure compliance:

Cheque Validity: A PDC remains valid for 3 months from the date mentioned.

Legal Action on Bounced Cheques: If a cheque is dishonored, the lender can initiate a case under Section 138 of the Negotiable Instruments Act.

Proper Documentation: The details of the PDCs should be properly recorded to avoid disputes.

Despite being a traditional mode of payment collection, PDCs are still widely used due to their legal backing and enforceability.

NACH vs PDC: Which is Better for Debt Recovery?

When comparing NACH vs PDC, both methods offer advantages, but NACH payment is increasingly preferred due to its efficiency and automation. The table below highlights key differences:

Feature

NACH Payment

PDC Cheque Recovery

Processing Time

Same-day auto-debit

Requires manual cheque clearance

Automation

Fully automated

Manual handling required

Risk of Default

Low, as payments are auto-deducted

High, as cheques can bounce

Legal Compliance

Strong compliance framework

Subject to legal action under NI Act

Cost & Effort

Low operational cost

Higher due to administrative work

Security

Secure electronic transactions

Risk of fraud or cheque tampering

From the comparison, it is evident that NACH payment is a more convenient and reliable solution for lenders, while PDC cheque recovery remains useful in cases where electronic methods are not feasible.

Handling Bounced Cheques and Legal Recourse

One of the major drawbacks of PDC cheque recovery is the risk of dishonored payments. In such cases, lenders can take bounced cheque legal action under the Negotiable Instruments Act, 1881.

Steps to Take for Bounced Cheques:

Issue a Demand Notice: The lender must send a legal notice to the borrower within 30 days of cheque dishonor.

Wait for Response: The borrower has 15 days to make the payment.

File a Legal Case: If payment is not received, the lender can file a complaint in court under Section 138.

Legal Proceedings: The court may impose penalties, including imprisonment or monetary fines.

To avoid such complications, businesses should encourage auto-debit recovery via NACH payment, which minimizes the chances of bounced payments.

Best Practices for Hassle-Free Debt Recovery

To ensure smooth loan EMI collection, businesses should adopt the following best practices:

Use a Hybrid Model: Implement both NACH payment and PDC cheque recovery based on customer preferences and risk factors.

Monitor Payment Mandates: Keep track of payment mandate India approvals to prevent disruptions in auto-debit recovery.

Ensure Timely NACH Registration: Educate borrowers about the NACH registration process and encourage them to opt for it.

Maintain Accurate Records: Whether using NACH vs PDC, maintain thorough documentation of transactions and mandates.

Legal Awareness: Stay updated on PDC cheque rules and the latest regulatory changes to avoid legal pitfalls.

Conclusion

Debt recovery is a critical aspect of financial management for businesses and lenders. While PDC cheque recovery has been a traditional method, it comes with risks such as dishonored payments and legal complexities. On the other hand, NACH payment offers a seamless, automated, and secure way to manage loan EMI collection and other recurring payments.

By understanding NACH vs PDC, leveraging the right payment method, and following best practices, businesses can ensure secure business payments and reduce bad debts. Encouraging digital payment mechanisms like NACH payment not only improves efficiency but also enhances compliance and financial stability.

[propertysalenews]

Rera Approved Property Sale in Greater Noida

Greater Noida, a prominent region in the National Capital Region (NCR), has emerged as a preferred destination for real estate investments. With its well-planned infrastructure, excellent connectivity, and growth potential, Greater Noida attracts homebuyers and investors alike. One critical aspect that has significantly impacted the real estate market here is the introduction of the Real Estate (Regulation and Development) Act, 2016 (RERA). This act has brought transparency, accountability, and standardization to the sector, ensuring that buyers have a safe and secure investment environment. Rera Approved Project ACE Terra / SKA Destiny One / Eldeco La Vida Bella / Fusion Homes

In this comprehensive guide, we will delve into the nuances of RERA-approved property sales in Greater Noida. We will explore the benefits of RERA, the process of buying a RERA-approved property, and some of the top projects to consider in the region.

Understanding RERA and Its Importance

RERA was introduced to address the numerous issues plaguing the real estate sector, such as delays in project delivery, unfair practices by developers, and lack of transparency. The primary objectives of RERA are to:

Ensure Transparency: Developers must register their projects with RERA, providing all necessary details, including project timelines, specifications, and legal clearances.

Protect Buyers’ Interests: The act mandates that developers adhere to the agreed terms and conditions, ensuring timely delivery and quality construction.

Standardize Practices: RERA sets guidelines for fair transactions, reducing disputes and enhancing trust between buyers and developers.

Enhance Accountability: Developers are held accountable for project delays and must compensate buyers for any default.

RERA has been instrumental in restoring confidence in the real estate market, making it safer for buyers and investors.

Benefits of Buying a RERA-Approved Property

Investing in a RERA-approved property offers several advantages:

Transparency: All project details are available on the RERA website, including project status, approvals, and developer information.

Timely Delivery: Developers must adhere to the project timeline, and any delays result in penalties.

Quality Assurance: RERA mandates that developers deliver the property as per the promised specifications.

Legal Safeguards: Buyers have legal recourse in case of any discrepancies, ensuring their rights are protected.

Financial Security: Developers cannot divert funds from one project to another, ensuring financial stability and project completion.

The Process of Buying a RERA-Approved Property

Buying a RERA-approved property involves a systematic process to ensure a safe and informed investment. Here are the steps to follow:

Research and Shortlist Projects: Start by researching RERA-approved projects in Greater Noida. Use the RERA website to verify the project details, developer information, and project status.

Visit the Site: Once you have shortlisted a few projects, visit the sites to get a firsthand look at the construction quality, location, and amenities.

Check Legal Documents: Verify all legal documents, including the title deed, project approvals, and RERA registration certificate. Ensure there are no legal disputes related to the property.

Compare Prices: Compare the prices of similar properties in the area to ensure you are getting a fair deal. Consider factors like location, amenities, and project status.

Financial Planning: Assess your budget and arrange for the necessary funds. Explore home loan options and check for pre-approved loan offers.

Booking and Agreement: Once you have finalized a property, pay the booking amount and sign the agreement for sale. Ensure that the agreement includes all the terms and conditions as per RERA guidelines.

Registration: Register the property with the local sub-registrar office to complete the legal formalities. Ensure that all documents are duly stamped and signed.

Possession and Handover: Upon project completion, take possession of the property. Inspect the property for any defects and ensure that the developer addresses them before final handover.

Top RERA-Approved Projects in Greater Noida

Greater Noida offers a plethora of RERA-approved projects catering to different budgets and preferences. Here are some of the top projects to consider:

ATS Destinaire: Located in Sector 1, Greater Noida West, ATS Destinaire offers luxurious 3 and 4 BHK apartments with world-class amenities, including a clubhouse, swimming pool, and sports facilities.

Gaur City: Spread across 237 acres, Gaur City is a township project offering a mix of residential, commercial, and recreational spaces. It includes 2, 3, and 4 BHK apartments with modern amenities.

Prateek Grand City: Situated in Siddharth Vihar, this project offers premium 2, 3, and 4 BHK apartments. It boasts extensive green spaces, a clubhouse, sports facilities, and more.

Mahagun Mywoods: Located in Greater Noida West, Mahagun Mywoods offers 2, 3, and 4 BHK apartments in a forest-themed township. The project includes ample green spaces, a clubhouse, and sports facilities.

Nirala Estate: This project in Techzone IV, Greater Noida West, offers well-designed 2, 3, and 4 BHK apartments. It features a clubhouse, swimming pool, and landscaped gardens.

Ajnara Le Garden: Situated in Sector 16B, Greater Noida West, Ajnara Le Garden offers affordable 2, 3, and 4 BHK apartments with amenities like a clubhouse, gym, and children’s play area.

Factors to Consider When Buying RERA-Approved Properties

While RERA provides a safeguard for buyers, it is essential to consider several factors before making a purchase:

Developer Reputation: Choose a reputed developer with a proven track record of delivering quality projects on time.

Location: Evaluate the location in terms of connectivity, infrastructure, and proximity to essential services like schools, hospitals, and markets.

Project Amenities: Consider the amenities offered in the project, such as recreational facilities, green spaces, and security features.

Budget: Ensure that the property fits within your budget, including additional costs like registration fees, maintenance charges, and taxes.

Future Growth Potential: Assess the potential for future growth and appreciation in the area. Look for upcoming infrastructure projects and commercial developments.

Legal Clearances: Verify that the project has all necessary legal clearances and approvals from relevant authorities.

Impact of RERA on Greater Noida’s Real Estate Market

The implementation of RERA has had a profound impact on the real estate market in Greater Noida:

Increased Transparency: Buyers have access to accurate and verified information about projects, reducing the risk of fraud and misinformation.

Boosted Buyer Confidence: The assurance of timely delivery and quality construction has restored buyer confidence in the market.

Regulated Developer Practices: Developers are now more accountable and adhere to standardized practices, ensuring fair transactions.

Improved Market Dynamics: RERA has weeded out unscrupulous developers, leading to a more organized and trustworthy market.

Enhanced Investment Potential: The stability and transparency brought by RERA have attracted more investors, driving demand and growth in the sector.

Conclusion

The introduction of RERA has revolutionized the real estate market in Greater Noida, making it a safer and more attractive destination for property investments. Whether you are a homebuyer or an investor, buying a RERA-approved property offers numerous benefits, including transparency, legal protection, and quality assurance. By following the systematic process outlined in this guide and considering the factors mentioned, you can make an informed decision and secure a valuable asset in Greater Noida.

For detailed information about specific projects and their RERA status, it is advisable to visit the official RERA website or consult with a trusted real estate advisor. Investing in a RERA-approved property is a step towards a secure and prosperous future in the dynamic real estate landscape of Greater Noida.

[vakilkarosblog]

Procedure Of Microfinance Company Registration

In today's dynamic economic landscape, Microfinance Companies (MFCs) play a vital role in extending financial assistance to individuals in rural, low-income, and underprivileged communities. Establishing an MFC in India necessitates obtaining Section 8 Microfinance Company Registration from the Reserve Bank of India. Here's a comprehensive overview of the process and the significant benefits and roles associated with MFCs.

Understanding Microfinance Company Registration

Microfinance Companies aim to empower individuals by offering financial services tailored to their needs. To initiate operations in India, securing Section 8 Microfinance Company Registration from the Reserve Bank of India is imperative.

Objectives of Microfinance Companies

Empowering Low-Income Individuals: Facilitating self-sufficiency among low-income groups.

Micro-banking Services: Offering accessible banking services for modest sums.

Supporting Diverse Professions: Extending financial aid to various vocations like transportation, fishing, and construction.

Assisting Small Businesses: Providing financial support to ventures lacking collateral.

Promoting Women's Livelihoods: Enhancing women's participation in sustainable livelihoods.

Ensuring Healthcare Access: Facilitating quality healthcare for underprivileged communities.

Economic Diversification: Expanding income sources for low-income individuals and fostering self-employment opportunities.

Roles of Microfinance Companies

Facilitating Sustainable Livelihoods: Empowering individuals to enhance their living standards through entrepreneurship.

Improving Loan Repayment Rates: Offering loans with lower interest rates, reducing loan default instances.

Encouraging Savings and Investments: Enabling individuals to save, invest in the future, and secure education for their children.

Creating Employment Opportunities: Supporting entrepreneurship and fostering job creation, thereby enhancing income stability.

How to Register a Microfinance Company

To initiate the registration process for a Microfinance Company in India, follow these steps:

Prepare Documentation: Gather necessary documents such as identity proofs, address proofs, and business plans.

Apply for Registration: Submit your application for Microfinance Company Registration to the Reserve Bank of India.

Comply with Regulations: Ensure compliance with regulatory requirements and guidelines.

Await Approval: Wait for the Reserve Bank of India's approval and clearance.

Commence Operations: Upon receiving approval, commence your Microfinance Company's operations.

Different Types Of MFC Registration In India:-

When it comes to registering a Microfinance Company (MFC) in India, there are different avenues to explore, each with its own set of requirements and procedures. From RBI Registered to Section 8 Registered entities, here's a breakdown of the processes involved:

RBI Registered MFC: To establish an MFC as a Non-Banking Financial Company (NBFC) under the purview of the Reserve Bank of India (RBI), the initial step is to incorporate a company as either a Private Limited or Public Limited Company under the Companies Act 2013.

Following this incorporation, the applicant must adhere to the prescribed processes, beginning with meeting the minimum capital requirements and culminating in the submission of the registration application to the regional office of the RBI.

Section 8 Registered MFC: For those opting to form a Section 8 company, the process entails obtaining a Digital Signature Certificate and Directors Identification Number for all prospective directors.

Subsequently, an application for name approval (Form INC – 1) must be submitted, alongside the preparation and submission of Memorandum of Association, Articles of Association, and INC – 12, along with requisite documentation, to secure MFC Registration.

Steps for Obtaining MFC Registration:

Company Registration: Register the company under the Companies Act 2013, with the incorporation facilitated through SPICe + Form via the Ministry of Corporate Affairs (MCA).

Application in SPICe+: Utilize the SPICE+ service under MCA for the incorporation process.

Name Approval: Utilize the auto check for company name approval and furnish all required information related to the company's name.

Capital Acquisition: Raise the necessary capital as per regulatory requirements.

Bank Account Opening: Activate a current bank account, accompanied by obtaining a lien-free certificate from the Apex Bank's regional office.

RBI Application: Submit certified copies of all necessary documents to the RBI regional office, including Incorporation Certificate, Memorandum of Association, Articles of Association, Fixed Deposit Receipt, and others.

Online Application: Complete the online registration application with the RBI to receive a Company Application Reference Number.

Hardcopy Submission: Submit hard copies of documents to the RBI regional office for review and due diligence.

Documents Required for MFC Registration:

Incorporation Certificate

PAN details of Applicant Person

PAN Cards of planned Directors

Digital Signature Certificates of all proposed Directors

Director Identification Number for all nominated Directors

Registered Office proof

Memorandum and Articles of Association

Banker's report and Compliance Certificate

Board Resolution and Auditors' Report

Business strategy and financial reports

No Objection Certificate and No Lien Certificate from Banker

Passport copies (for Indian nationals) or notarized passport copies (for foreign nationals) of recommended directors

Net worth certificates for all prospective directors

It's essential to ensure that all documents provided are up-to-date, not exceeding a two-month validity period.

Read More-

The New Guidelines of RBI on Section 8 Microfinance Companies

Section 8 Microfinance Company: Document, Online Process and Cost

Conclusion: In essence, while both RBI Registered and Section 8 Registered MFCs serve as vehicles for microfinance operations, they differ in regulatory oversight. The Reserve Bank of India Act 1934 governs and regulates the activities of MFCs, ensuring compliance and integrity within the microfinance sector.

For Any Further query or legal help kindly call or whatsapp at 9828-1234-89 or visit at www.vakilkaro.com

[nivarahomefinance]

What loan against property?

A loan against property (LAP), also known as a mortgage loan, is a type of secured loan that allows individuals to borrow money by pledging their property as collateral. It is a loan where the borrower uses their residential or commercial property to secure the loan amount.

Here are some key features and aspects of a loan against property:

Collateral: The property offered by the borrower serves as collateral for the loan. In case of default on loan repayment, the lender has the right to take possession of the property and sell it to recover the outstanding amount.

Loan Amount: The loan amount offered in a loan against property is usually a percentage of the property's market value. Lenders typically provide loans ranging from 50% to 75% of the property's value, depending on factors such as the property type, location, and borrower's income and creditworthiness.

Interest Rates: The interest rates for a loan against property are generally lower compared to unsecured loans, as the loan is backed by collateral. The interest rates can be either fixed or floating, depending on the terms of the loan agreement.

Loan Tenure: The tenure or repayment period for a loan against property is usually longer compared to unsecured loans. It can range from a few years to several decades, depending on the lender's policies and the borrower's preference.

Utilization: The loan amount obtained through a loan against property can be used for various purposes, such as funding business expansion, debt consolidation, education expenses, medical emergencies, home renovations, or other personal financial needs. The lender generally does not impose any specific restrictions on the usage of the loan proceeds.

Eligibility Criteria: To qualify for a loan against property, borrowers typically need to meet certain eligibility criteria set by the lender. This may include factors such as income, credit history, property valuation, and legal clearance of the property.

Processing Time and Fees: The processing time for a loan against property can vary depending on the lender and the documentation process. The borrower is usually required to pay processing fees, which may be a percentage of the loan amount or a fixed amount.

It's important to carefully consider the terms and conditions of a loan against property before applying for one. Make sure you have a repayment plan in place to avoid defaulting on the loan and risking the loss of your property. Consulting with financial advisors or mortgage specialists can provide further guidance on whether a loan against property is the right choice for your specific financial needs and circumstances.

Looking to get a home loan service ? Nivara Home Finance is here to make your dream of owning a home a reality. With flexible options, competitive rates, and personalized service, we are dedicated to helping you find the perfect home loan solution. Apply today and let us guide you on the path to homeownership.

[hdfcsalespvtltd]

Education Loans with and without a Guarantor

To acquire a loan from a bank, you usually need to provide security such as House property, Shares, Fixed Deposits, Bonds, and other forms of collateral to be able to take such a loan. Such a security pledged against any loan is known as a Collateral.

Collaterals are taken so that such lenders and banks can recover their money by selling the security you pledged in an occasion of loan payment defaults. 

At times, the value of the Collateral is a substantial percentage or equal to the value of the loan taken. However, what happens when one cannot afford to attach any securities or property as Collateral? Education Loans are often subject to this situation, but you can get a loan without providing any Collateral. The Credit Guarantee Fund for Education Loans (CGFEL) Scheme offers a guarantee under the Model Education Loan Scheme of Indian Banks' Association (IBA) to individuals for Education Loans disbursed by banks. As per this scheme, one can attain a Collateral-free loan of a value up to Rupees 7.5 Lakhs without the need for assuring any third-party guarantee. Taking an Education Loan is your best bet to a quick, seamless and hassle-free process in the shortest clearance time.

Collateral-Free Loans with HDFC

A Student Loan from HDFC Credila is one of the most convenient and safest methods to secure a great future while not worrying about the money. The interest rates differ as per your loan amount, duration and repayment plan, ranging between 9.55% to 13.25%. You can also acquire an Education Loan for abroad courses, be it part time or full-time studies.

But before you apply, there are things you need to know regarding such unsecured loans:

1.You do not need to pledge Collateral to any Government bank if you are requesting a loan of up to Rupees 4 Lakhs.

2.According to the guidelines set by the Reserve Bank of India, all banks can provide an Education Loan without Collateral of amounts up to Rupees 7.5 Lakhs when the prescribed criteria are met.

3.If one desires to avail an Education Loan amounting more than Rupees 7.5 Lakhs, financial institutions can issue loans up to Rupees 45 Lakhs without Collateral in countries like USA and Canada and up to Rupees 25 Lakhs in countries like India and up to Rupees 20 Lakhs in countries like UK, Ireland, Germany etc.

What is the procedure to acquire an Education Loan without Collateral?

The procedure to apply for an Education Loan collateral-free is simpler as compared to security-based Education Loans. Given below are the steps involved in requesting an Education Loan without any Collateral attached:

1. Fill an application form.

2. Education Loan requires a list of documents that you can submit at the nearest branch or online.

3. Once you submit the documents, the bank will verify them and send them to the loan processing centre.

4.The Loan Processing Officer will verify your application and sanction the Education Loan.

5.When the Education Loan is sanctioned, you will be requested to sign the necessary documents.

6.A disbursement agreement is signed by both parties and finally the disbursement of the amount sanctioned takes place.

Now that you know how convenient it is to take a collateral-free Education Loan with HDFC, why look any further? 

[amitbwadhwani]

Whither RERA? Three years on, rough edges need ironing out

The Real Estate Regulatory Authority (RERA) was brought in to crack the whip on dodgy builders taking unsuspecting homebuyers for a ride. The results are mixed

In March, 2016, Parliament voted into law the Real Estate (Regulation and Development) Act—RERA—a legislation that held out the promise of placing consumers at the center of a new rules-based framework for India’s property market.

RERA, midwifed by two governments—UPA II and the NDA II—between 2009 and the 2016, was necessitated by the growing misery of tens of thousands of harried homebuyers.

Unsuspecting individual customers often complained about getting the short end of the stick, as many builders, some dodgy and some reputed,  exploited regulatory gaps by not delivering promised apartments on time or reneging on size and quality, or sometimes, simply vanishing after collecting funds.

RERA’s primary purpose, apart from defining rules, was to build trust among buyers and builders in a market where opaque deals thriving in grey payment systems operating outside the legitimate financial system had become commonplace.

For instance, customers would often find that the actual size of an apartment would be about 30% smaller than what was originally promised. The reason: “super built up area”, an arbitrary concept that builders used to charge customers for shared spaces such as common passage area, stairs and other areas.

Fund diversion had become a rampant practice in the realty sector. Many builders, large and small, would collect money from consumers for apartments, a part of which would then be channeled to buy land for another project. The net effect: never-ending project delays. This was going on without any checks and balances, and builders had developed the `consumers- be-damned’ attitude. For the banking sector too lending to realty projects became a risky proposition, as project delays resulted in mounting loan defaults.

RERA was brought in to address these.  Three years later, experts reckon, the results, at best, are mixed.

RERA RULES

Under RERA, builders are required to disclose details of “carpet area”, which is the actual apartment’s size, design, structure, layout, time of completion and other project specifications well in advance.

The rules make it mandatory for any project exceeding 500 square metres with eight or more apartments to register with a state’s real estate regulatory authority (RERA) before launching or even advertising a housing scheme.

Also read: Where’s my house? NCR’s Notorious Construction Record

Registration of real estate agents or brokers have also been made mandatory with clear responsibilities and functions. The punitive provisions include de-registration of the project. If the builder defaults on promises made at the time of the launch, the buyer can approach consumer fora in case of disputes with real estate developers. The penal measures were aimed at serving as a deterrent for builders to short change customers and ensure timely project delivery.

It is also now mandatory for builders to park 70% of funds collected from buyers in an escrow account, implying that these funds can only be withdrawn for the specific project for which these were collected.

Under the central law, each state was required to set up its own RERA that can draw upon central rules applicable in union territories.

Maharashtra was the first off the block with MahaRera in May 2017, with other states soon following suit with their own institutions.

MORE THAN A REGISTERING BODY

RERA’s role is not limited to just as a registering agency for realty projects, but was designed to evolve into a body empowered to even complete stuck projects or even allow buyers’ groups to take over unfinished projects.

Three years later, experts say, RERA’s record on this front remains below par. The RERA Act’s Section 8 empowers the authority, buyers’ association or an appropriate government organisation to execute unfinished projects, but arranging funds and buyers’ cooperation remain a critical challenge.

The Amrapali Group, which has unfinished projects peppered across Noida and Greater Noida, is a case in point. The Supreme Court, which which is hearing a batch of pleas of 42,000 home buyers against the embattled group for failing to give the possession of flats, had asked the Noida and Greater Noida Authorities whether they will be able to complete the projects. The authorities responded that they did not have the capability to handle projects of such big scale, but suggested that perhaps UP RERA could take these up.

“While it (UP RERA) certainly cannot complete projects by itself, it can find appropriate solutions by approaching competent authorities or even appoint a project management consultant to finish these,” said Kumar Mihir, lawyer, representing Amrapali homebuyers.

LEAKING ESCROW

Sound as it may appear on paper, in practice, however, too many instances of leaks in builders’ escrow accounts have come to light.

“The problem in most cases has arisen not because of shortage of funds but because monies collected from homebuyers have been siphoned off. This is because builders have exploited gaps in RERA rules of some states. For instance, the Uttar Pradesh RERA rules do not mandate parking funds in an escrow account for projects that started before May 1, 2017. Had it applied to all ongoing projects before May 1, 2017 the funding for most of the incomplete RERA projects would have been sorted,” said a lawyer who did not wish to be identified.

The RERA rules framed for the union territories had categorically stated that promoters of ongoing projects are required to set aside 70% of funds collected for specific project in a separate escrow account.

Some states such as Uttarakhand, Orissa and Bihar have adopted the central RERA rules. Maharashtra and Gujarat rules stipulate that only 70 percent of funds collected in the future, after May 01, 2017, have to be kept aside in an escrow account. The Uttar Pradesh RERA rules are silent, which builders have taken advantage of to siphon off funds.

BUYERS AS BUILDERS

Exasperated buyers are now beginning to come forward to turn builders themselves. RERA rules allow this and the few cases, if successfully tested, can well serve as the proof of concept for this model.

The Maharashtra real estate regulator has already come with a standard operating procedure (SOP) that allowed homebuyers to remove a developer in case the project is not completed on time.

The SOP allows a homebuyers’ association that enjoys the backing of at least 51 percent of its members to remove the developer from a much-delayed project. It even empowers the association to even cancel the developer’s registration under the MahaRERA Act.

Last year, the UP RERA decided to consider a proposal by defrauded homebuyers to take over and complete a project in Noida that had been delayed by several years.

“Prima facie, this appears to be an excellent move and will also set a very good precedent. But, it is also very important to know (a) how the project will be funded and (b) if the builder has taken more money than what work has been done by him and how RERA plans to recover the excess money from him,” said Abhay Upadhyay, President, Forum For People's Collective Efforts.

Experts, however, sounded a caveat. Authorities taking over incomplete projects should be an exception, rather than a norm because under RERA a builder should adhere to the rules, with strict penalties for violation. Also, it may be difficult for RERA to undertake a project from scratch.

“Doing something from scratch is very difficult. We will not advise it. It all depends on the size of the project and should be taken up on a case-to-case basis. It is not something that can be applied across the board,” said a lawyer who did not wish to be identified.

CRISIS OF CONFIDENCE

RERA’s institutionalisation was predicated upon customer centricity. The state bodies were expected to play the role of a strict referee that would instill the fear of law among deceitful builders.

Three years later, customers say, the job remains half done. The two main issues that homebuyers face today are to do with lack of confidence about execution of RERA orders by realty companies, and multiple forums for grievance redressal.

A mere RERA registration does not guarantee that a project will be delivered on time. An under-construction project, therefore, continues to remain a risky bet despite RERA.

“This is because RERA authorities are not taking proactive steps to ensure that all provisions are being complied with by the builder, nor are they monitoring the progress of the projects. They should ensure that projects are granted extension only under exceptional circumstances”, said Upadhyay, president of Fight for RERA, an umbrella body of homebuyers.

There are also instances where realty companies have given different timelines to homebuyers and the authority. “A builder cannot change timelines. At best, he can only ask for a one year extension from the regulatory authority.  If the builder changes timelines he is liabile to pay penalty. Authorities should be on their toes to address the issue,” said lawyer quoted earlier.

What is needed are speedier clearances and cutting down of bureaucratic red tape.

“The government should expedite a single window clearance mechanism for the real estate sector. The clearance and approval process for residential real estate projects has been an impediment for a long time. After RERA was launched, it became all the more important to facilitate smooth clearances and approvals so that there are no execution delays due to procedural hindrances,” said Amit Ruparel, managing director, Ruparel Realty.

Most contracts with homebuyers were changed after RERA came into effect from May 1, 2017. This has complicated timeline commitments.

“For most projects those timelines are almost ending. It is for RERA authorities to now start mapping those projects to see if there are delays and to start sending out show cause notices to developers. RERA’s job is not merely to register a project but also to map the projects and ensure that their timelines are being met,” said the lawyer who did not wish to be identified.

That said, the process is evolving in the right direction, albeit slowly, expert said.

“Things are changing for the better. Generally, players are far more accountable and cannot easily get away with breaking the RERA rules. While the redressal of complaints is not satisfactory for many, consumers are coming forward in large numbers to register complaints across states. The Wild West days of Indian real estate are definitely over”, says Anuj Puri, chairman, ANAROCK Property Consultants.

Project and real estate agent registrations have been rising steadily. For instance, in Andhra Pradesh as many as 307 projects were registered under RERA as on date, a five-fold increase from 61 in November 2018.

Maharashtra is currently the most active state having the highest project registrations with more than 20,718 projects under MahaRERA so far, and nearly 19,699 RERA-registered real estate agents.

Project registration in Karnataka currently stands at 2530 projects and 1342 RERA-registered real estate agents, says data shared by ANAROCK.

Gujarat has 5,317 RERA-registered projects and 899 registered agents and agencies.

“RERA, accompanied by reduced GST rates, has helped in bringing back consumer confidence and the trust factor which the industry lacked,” said Rahul Grover, president, Sales and Operations at Sai Estate Consultants.

This article was originally published in English www.moneycontrol.com

All rights reserved. Any act of copying, reproducing, or distributing this newsletter whether wholly or in part, for any purpose without the permission of Amit B Wadhwani is strictly prohibited and shall be deemed to be copyright infringement.

[sandrafluke]

Effective Uses of Letter of Credit and Import/Export Practices

Given Singapore’s market dominance in the import/export trade, it has well-defined import/export procedures in place. Detailed below is an overview of the various aspects of trading in Singapore including opening a customs account, applying for licenses and permits, types of goods that can be imported/exported, taxes and fees, trade financing options, cargo clearance procedures, goods storage options, letter of credit, and etc.

Step 1: Incorporate a Trading Company

For starting a trading business in Singapore, you will need to incorporate a company first. For detailed information on this, refer to Accounting and Corporate Regulatory Authority (ACRA) in Singapore.

Step 2: Register with Singapore Customs

All importers and exporters are required to activate their account with the Singapore Customs before they can import/export goods in and out of Singapore. Account activation is processed within 1-2 working days after submission of the application and you will be issued a Customs approval letter and is valid for as long as your company exists.

Step 3: Apply for Licences and Permits

You can engage a local freight forwarder to arrange the import and export for your items and they will handle the import/export licenses and permits, taxes and fees, cargo clearance procedures, and goods storage etc for you.

The following is summarised some of the basic information you should make known about.

Import/Export of all Goods

For import of all goods (including controlled and non-controlled items) into Singapore, you are required to obtain an IN Permit through TradeNet before goods are imported into Singapore.

For export of all goods (including controlled and non-controlled items) out of Singapore, you are required to obtain an OUT Permit through TradeNet.

Certain special scenarios such as importing/exporting trade samples of uncontrolled items of a total value not exceeding $400/- on the CIF – (Costs, Insurance, and Freight) value may be imported/exported without a permit.

Import/Export of Controlled Goods

The import/export of some goods are subject to the control of Controlling Agencies and are known as controlled goods. To import/export controlled goods you require a permit, in addition to the IN Permit and OUT Permit. 

You can submit the permit applications to the relevant Controlling Agencies through the TradeNet system or your freight forwarder or cargo agent for processing and approval. Examples of controlled goods include cigarettes and tobacco products, drugs, petrochemicals, animals and food products.

According to the Singapore Customs Department, a broad list of controlled goods includes the following:

– Animals, birds and their by-products.

– Endangered species of wildlife and their by-products.

– Meat and meat products.

– Fish and seafood products.

– Fruits and vegetables.

– Arms and explosives.

– Bullet-proof clothing.

– Toy guns, pistols, and revolvers.

– Weapons, spears, and swords.

– Films, video and video games.

– Publications and audio records.

– Pharmaceuticals.

– Medicines.

– Poisons.

– Telecommunication and Radio Communication Equipment.

SFA License

Traders involved in the following must be licensed by SFA; For license application, you can refer to Licensing and Registration of Traders

import/export/transshipment of meat and fish products

import/transshipment of fresh fruits and vegetables

import/export/transshipment of processed *food products 

**and Food appliances

* Examples of processed food products including raw spices, raw or semi-processed food ingredients, flour, bottled water, liquors, wines, confectioneries, noodles and pasta, beverages, etc.

** Food appliances are used for containing food. Examples would be plastic bowls and porcelain cups.

Not sure whether your products are required to apply for an SFA license? You can contact SFA at Singapore Food Agency Headquarters for the labels of the products for confirmation always (which should include the name, manufacturer and ingredients details).

Besides, you will need to get acceptable regulated source documents from the importing country to certify the safety of these products. The examples of acceptable regulated source documents are as follows:

Certificate of HACCP (Hazard Analysis Critical Control Point)

Certificate of GMP (Good Manufacturing Practices)

Health Certificate (issued by competent food or veterinary authority of exporting country)

Attestation of export (issued by competent food or veterinary authority of exporting country)

Factory license (issued by the regulatory authority of the exporting country)

For other certificates, you will require to get SFA prior approval via email.

If your food product does not fall under the SFA category, you are required to apply for an HSA license or any other applicable license.

For Import of High-Technology Items

Certain high-technology items are subject to export control by the exporting country and the Singapore importer may be asked to provide an Import Certificate and Delivery Verification (ICDV) by the exporter. 

Importers can apply for an ICDV from Singapore Customs. Items covered by an ICDV must be imported into Singapore directly, and are not to be diverted to other countries.

Export of Local Goods

Certain buyers may ask Singapore exporters for a Certificate of Origin (CO), which proves that your goods are made in Singapore. You can apply for a CO through TradeNet or via your freight forwarder or cargo agent.

Trade Financing

In Singapore, businesses often resort to loans, letters of credit and insurance to cover the financial risks involved in trading. However, you will need at least 1 to 2 years of business track records in order to apply for trade financing.

Letter of Credit

Letter of Credit (LC) is the common practice in Singapore where payment to the exporter is guaranteed by the buyer’s bank. This is the preferred payment option both among exporters as well as buyers because the exporter’s payment is secured before the goods are shipped and likewise the buyer needs not make any payments until the goods are received. Types of different LCs are:

Back To Back LC – If an exporter has to procure goods from another third party to fulfill the buyer’s order, he may open an LC with his bank based on the Original LC of the buyer.

Usance LC – LC with a term also known as Deferred Payment Letter of Credit or Time LC or Term LC is a letter of credit payable at a predetermined time / future date after the conforming documents are presented. 

Sight LC – Payment to the seller is made when the conforming documents are submitted.

Trust Receipt – An importer can get a loan from a bank based on the LC and the goods it promises he will be getting.

Loans

Most banks in Singapore have taken cognizance of the huge import/export industry and offer competitive trade finance services including import products, export products, and bank guarantees. Some of the financing options offered by banks are:

Overdraft – You can overdraw your current account up to a maximum amount agreed with the bank. Interest is paid only on what is overdrawn.

Revolving line of credit – You can arrange with a bank to have an agreed amount of funds made available to you at a fee. You can withdraw and top up the funds regularly.

Secured Term Loans – A loan made available against collateral subject to approval by the bank.

P.O. Financing – A loan made against the purchase orders raised to suppliers whereby the bank will pay your supplier on your behalf, giving you time to 

Invoice Financing – Factoring agents like banks and financial institutions provide instant payment against your outstanding invoices. Collective fees of up to 15% per annum may be charged for collecting the payment from the clients depending on the financiers.

Insurance

Trade Credit insurance provides companies with protection against the risk of non-payment by buyers arising from commercial and non-commercial risks. Should buyers default on payment further to the stipulated due date and grace period, the insurer will pay upon verifying the validity of the claim. 

International Enterprise (I.E.) Singapore, a Government initiative, offers trade credit insurance at very attractive premium rates through its TCI Programme

[quikkloan]

Impact of Covid-19 on Indian Economy

To tackle the ongoing COVID-19 pandemic the Indian government has taken several steps to flatten the curve, such as imposing a nationwide lockdown along with a complete ban on travel. The importance of these measures notwithstanding, they have brought down the economy on its knees, impacting both overall consumption and investments. This has prompted several rating agencies to revise downward their FY 2020 GDP growth estimate for India in the range of 2.1–4.0%.The Indian economy is witnessing a significant slowdown, with GDP growth at 4.7% in Q3 2019-20, its lowest in nearly seven years. The COVID-19 outbreak has compounded the challenges and could send the economy hurtling toward a recession. It is obvious that when the global economy is on a slowdown mode no emerging economy can grow at its normal pace. Moreover, the Indian economy was grappling with its own issues and COVID-19 made the matters worse. India’s GDP has been on a consistent decline after peaking out at 7.9 in Q4 of FY 2018 to 4.5 in Q2 of FY 2020. The industry was facing demand problems, due to which business houses were reluctant to undertake capex plans, unemployment was at its peak and exports which were consistently down for several months. A Glance at India’s GDP Growth in the Past Years CountryGDP Growth in 2017 (in %)GDP Growth in 2018 (in %)GDP Growth in 2019 (in %)India6.56.75.3 The impact of the slowing economy was augmented by the pandemic which led to a contraction of around 35 percent in March as all geographical boundaries across the world were closed due to lockdown. Hence, going forward, some individual sectors of the economy can take a big hit. Let’s know more about each sector below. Sector-wise Impact A significant spike in Non Performing Assets for Banking and Finance Bankers and analysts expect a significant spike in NPAs going ahead. Banks in the country are likely to witness a spike in their non-performing assets ratio by 1.9% and credit cost ratios by 130 basis point in 2020, following the economic slowdown on account of COVID-19 crisis  The pain may not be visible immediately since the Reserve Bank of India (RBI) has extended regulatory relaxations. But, that cushion won't be around for long. The moratorium period will end soon and companies and individual borrowers will have to resume repayments from June. With no business happening, workforce availability remaining an issue and rampant pay cuts, it is doubtful how many borrowers will have repayment capacity, according to experts. According to a report by ICRA, about 328 companies have sought moratorium from banks. That tells us about their financial position. It is quite obvious that we are not going to see improvement anytime soon. The worst part is that there is no assessment on the likely impact, according to banking experts. After a prolonged bad loan clean-up exercise, Indian banks' total gross NPAs stood at Rs 7.97 lakh crore as of December-end compared to Rs 8.02  lakh crore a year ago. Uncertain Times Banks are already giving distress signals to investors. On April 28, the mood at Axis Bank's media conference call after the bank's Q4 results was that of high caution. There was no clear guidance from top management on what lies ahead. If you look out of the window, all you can see is that the economic activities have come to a standstill.  What caught analysts by surprise was the unexpected Rs.3,000 crore (out of the Rs.7,730 crore total provisions) provisions set aside to cover the likely impact of COVID-19. The signal was clear. Not just Axis, most other banks expect the likelihood of slippages this year due to the debilitating impact of COVID-19. Private banks like HDFC Bank and ICICI Bank have presented a relatively optimistic scenario while large state-run banks are largely silent on future outlook. It is almost certain that the industry will see a big spike in bad loans. A number of companies are feeling the heat. This stress is not reflecting so far because of the present RBI relaxations such as moratorium on loan payments. But, once this is lifted, the real picture will emerge, as per banking experts.  According to RBI's credit growth data, there was a spike in bank lending in March, particularly in the last fortnight of March in some sectors like non-banking finance companies and industries. But, analysts said some of this growth could be due to earlier sanctions. Still, the overall growth largely remains subdued on a YoY basis. RBI’s  Measures So Far The central bank has announced a slew of measures to help banks and borrowers tide over this crisis. In the first round of measures, RBI announced a 75 basis point rate cut, liquidity measures to the tune of Rs 3.74 lakh crore, including a targeted long term repo operation (TLTRO) worth Rs 1 lakh crore, deferment of interest on working capital facilities and three month moratorium for all term loans extended by lending institutions. In the second round, it announced TLTRO 2.0 worth Rs 50,000 crore, specifically targeting small companies. No Buyers for Stressed Assets? The last credit cycle for banks had seen a sharp surge in bad loans. Indian banks are at the end of a prolonged NPAs clean-up cycle. The hidden stock of bad loans buried deep in the balance sheets, accumulated over the years of the easy money era, prompted the RBI to initiate an Asset Quality Review (AQR) in 2015. By now, that process is almost over with banks having disclosed most of the problematic large corporate accounts. Many large cases of corporate loan defaults have been pushed to the Insolvency and Bankruptcy Code (IBC) court for quicker resolution. But, with the economic activities reduced to nil, it is highly unlikely that there will be buyers for stressed assets, bankers said. In the last round, certain large deals such as Rs.35,000 crore Tata Steel-Bhushan helped bankers recoup some losses. Among the loan categories, fresh loans given to companies including those given to small and medium enterprises (SMEs) face risk if the cash flows of companies remain under pressure, thus impacting their loan repayment ability, bankers said. Tedious Road Ahead for Travel &  Tourism and Entertainment The travel & tourism industry was one of the first sectors to be affected by the outbreak, and most likely will also be the hardest hit. The Indian Association of Tour Operators (IATO) estimates the hotel, travel and aviation sectors to incur losses of up to Rs 8,500 crores due to travel restrictions imposed on foreign tourists. The drop in numbers is already affecting several small and mid-sized players in the tour operating and ticketing space. Liquidity crunch would most likely result in significant job losses in the next few months.  Cancellation of tickets, refunds and low utilization rate of airlines have made matters worse for the already distressed aviation industry in the midst of a cash crunch. The industry association is seeking relief in the form of tax cuts, deferment of GST payment, the addition of jet fuel under GST, reduction in airport charges, a temporary cut in excise duty on jet fuel, and other financial aid to cushion the impact. The Events and Entertainment Management Association (EEMA) has requested for aid to support its 60 million employees in the wake of postponement or cancellation of all major national events due to the pandemic. The industry has a huge section of blue-collared workers on daily wages, whose livelihood is at risk due to the nationwide lockdown. The popular movie industry is not behind. All major releases and shooting of films have been put on hold. The Indian cinema industry will likely face a loss of Rs.200–250 crores over the next 2–3 months. With social distancing becoming a norm, at least for the next few months, both travel & tourism and entertainment sectors are not expected to recover soon. Furthermore, unemployment and fall in income levels would aggravate the situation.      Auto Industry to Witness Massive Revenue Loss Due to Disruption in Supply Chain Globally The automotive sector is feeling the pinch too. In passenger cars alone, the lockdown is estimated to have reduced production by 240,000 units (10% of total annual production). Each day of loss of production is causing the industry a loss of over Rs.2,300 crores in revenue on average, aggregating to over Rs.48,700 crores (2% of total automotive industry revenue) over 21 days. After the lockdown is lifted, financial compulsions and low sentiment may drive roughly 35–40% of consumers to defer their vehicle purchase decisions for the next six months (until September 2020). Hence, annual sales of light motor vehicles and motorcycles are estimated to fall by 4.2 million units in 2020. The spread of the pandemic globally had a whiplash effect across the supply chain. Automotive manufacturers in India depend highly on auto components imported from COVID-19-affected countries such as China, Germany and South Korea. This factor too will adversely impact production. Low Asset Utilization Rate in Logistics and Ports With the movement of people/passengers restricted amid the lockdown, revenues have taken a hit in the railways, bus, airline, and cab segments of the transportation sector. In essential commodities, the Indian government has taken various measures for swift movement of freight across the country. However, players in the logistics sector are struggling to service needs as supply chains across industries have been disrupted. Furthermore, output in factories has decreased dramatically and fewer trucks are on the road. Due to the unavailability of staff, last-mile storage and distribution are also suffering. Activity at seaports has ceased with a decline in export-import trade. Other issues affecting the sector are slow custom clearance, the inability of clearing and forwarding (C&F) agents to play the required cargo from ports to CFS/ICD, and time-consuming manual stuffing and de-stuffing of containers and documentation/cargo handling. Rail freight has been affected as the demand and supply of high volume bulk cargo items (such as imported coal for power plants or iron ore exported via rail to various ports in India for steel mills in China) are subdued. Road freight: According to IFTRT, 50% of the 50 Lakh trucks are off the road due to the unavailability of drivers who fear being stranded as road-side services (restaurants, repair shops) have been crippled. The impact on the sector would be long-term, reflected in the decline in revenue due to the low utilization of assets. Cash flows and working capital of firms in these businesses will also remain strained. FMCG and Retail Players on a War Footing; Foodservice and Institutional Business Decimated Since the imposition of the nationwide lockdown, FMCG companies and retailers are dealing with challenges primarily around three highly interconnected issues: surge in demand & depletion of inventory, reduction in workforce, and supply chain disruption. Panic-induced stockpiling meant supermarket shelves were getting empty faster than they could be replenished. Both traditional and modern retailers bore the brunt, with the likes of DMart, Big Bazaar and Nature’s Basket eventually having to reduce working hours, put limits on the purchase of essential items (like eggs, milk, flour, etc.), or in some cases, even close down for a few days. E-commerce operations of major brick & mortar retailers as well as Amazon and Flipkart were not spared either. As retailers struggle to deliver orders, innovative delivery models are emerging. Some examples are Big Basket and Flipkart tying up with Uber and Swiggy for last-mile delivery of essential items, Zomato launching Zomato Market service to deliver groceries from retail stores, and ITC partnering with Domino’s Pizza for zero contact delivery of Aashirvaad brand of atta and spices. The lockdown has led to the migration of workers to their homes in rural areas, causing a shortage of labourers and, thereby, disruption of supply chains. To contain the impact, some retailers (GROFERS and Spencer’s Retail) are adopting reverse supply chain mechanism, i.e., sending their own trucks and workers to pick goods from distribution centers, while others (DMart and Metro Cash & Carry) are offering additional incentives (Rs.400–500 per day) to their workers. The decision of FMCG players such as HUL, Godrej, and ITC to restart production of essential goods at select plants, albeit at reduced utilization rates, is a welcome step. However, they need to prepare better to address issues likely to emerge in the medium term. Restrictions on travel and hospitality services have wreaked havoc on the bulk institutional sales and foodservice businesses of these FMCG companies. Way Forward: Implications for Companies The pandemic has paralyzed economies, compelling businesses to re-evaluate their strategies. Companies will need to build their financial muscle and focus on developing a lean structure to stir through the uncertain business environment. The global nature of the outbreak, coupled with its high intensity and long duration, is expected to change the business landscape by way of shift in trade flows, investments and consumption patterns. Hence, the priority for businesses should be to draft a comprehensive action and recovery plan to mitigate the risks and address the main challenges. Conclusion: An outbreak of COVID-19 impacted the whole world and has been felt across industries. The outbreak is declared as a national emergency by the World Health Organisation. In India, the three major contributors to GDP namely private consumption, investment and external trade will all get affected. World and Indian economy are attempting to mitigate the health risks of COVID-19 with the economic risks and necessary measures needed will be taken to improve it. Read the full article

[fernandesamelia63-blog]

What is a personal loan for salaried employees?

When do salaried individuals need a personal loan?

How do salaried individuals apply for a personal loan?

Eligibility criteria for availing a personal loan for salaried employees?

What documents are required for a personal loan application?

How to get personal loan approved quickly?

What is a personal loan for salaried individuals?

A personal loan is a loan that is unsecured and is usually provided by financial institutions for those individuals who need funds due to unprecedented circumstances. Unsecured loans are those loans that are granted without the need for any collateral. Since personal loans are granted without any collateral, the rate of interest is quite high.

Personal loan for salaried individuals are granted without asking any questions about the reasons for the loan and are approved based on the credit history of an individual.

Personal loan for salaried individuals is mostly provided for the tenure of 12 months to 60 months.

In the case of personal loans for salaried individuals, the rate of interest is fixed. The “reducing rate method for calculation of interest” is followed for personal loans. It means with every installment that is paid, due to be re-paid keeps on decreasing. This is because the interest will be levied on the remaining principal and not on the original principal amount.

For availing a personal loan, there is no need of much documentation. Only some mandatory documents are needed for the loans to be granted.

Moreover, personal loans can be availed by a salaried employee or a self-employed individual.

When do salaried individuals need a personal loan ?

Employees at times might feel the pinch of cash crunch and personal loans turn out to be saviors in such times. Here are some scenarios where your employees might need the help of a loan

1. Medical emergency

Medical emergencies can come up unexpectedly and the cost of medical facilities is soaring high these days. In such a situation, if an individual does not be having a health insurance policy and also cannot afford to bear the medical expenses by his savings; a personal loan is a savior. A personal loan can help in meeting the unexpected medical expenses. Moreover, the turnaround time of personal loans are quick, which is required for medical emergencies.

2. Wedding expenses

India is famous for its big fat weddings where a lot of money is being spent. In many Indian communities, a big and luxurious wedding is a matter of pride and a status symbol as well. However, there is not always enough savings by salaried individuals to have a luxurious wedding. So, in such a case your employees might want to take a personal loan to meet the huge wedding expenses.

3. Improvements in home

A personal loan can help meet the expenses incurred in the remodeling, renovation or some other improvement work related to the home. An individual can check out the rate of interest and depend upon it can avail of the personal loan.

4. Higher education

Educational loans are available for helping individuals with higher education but they have a very high interest. Moreover, banks usually provide education loans for higher education in prestigious institutions. However, sometimes the education loans are not enough to support the tuition fees, living expenditure, etc. and there will be a need for an additional corpus. This is feasible by a personal loan. A personal loan for salaried individuals will help in meeting the additional expenses associated with higher education like the living costs, the cost involved in relocation, etc.

5. Clearance of a loan with high interest

There might be some urgent situation in which a loan with a high rate of interest might have been taken by an individual. This loan with a high-interest rate can be settled down by taking a personal loan. However, the personal loan should have an interest rate which is less than the interest rate of the previous loan.

How do salaried individuals apply for a personal loan?

To apply for a personal loan, a salaried individual has to meet certain eligibility criteria. On fulfilling the eligibility criterion, a salaried individual can easily apply for the loan online.

The most important step associated with applying a personal loan is to understand the requirements and amount of loan which needs to be applied for. You should have a proper understanding of your requirements and then apply for your loan. By this, you will be able to apply a loan for the exact amount as required by you. Also, you should perform very good research before you apply for the loan.

If you are applying for a personal loan online, you will have to fill the application form and follow a step-by-step procedure.

In the first step, you need to specify your details along with your employment and financial details.

You will obtain the approval online and hence, you need to provide your loan amount and the tenure for which you want to avail the loan.

Then in the next step, the set of necessary documents needs to be submitted. This can be done either by a representative of the bank who will contact you or in many cases the KYC document submission part can be avoided by just providing the Aadhar number.

With this, your procedure for applying for a personal loan is completed and the loan amount is received in your bank account.

However, if you are following the conventional method for applying for a personal loan you will have to visit the nearest branch of your bank. At the bank, you can obtain and duly fill the application form and submit it along with the necessary documents. Then your application would be processed and you can obtain the loan amount.

What are the eligibility criteria for availing a personal loan for salaried employees?

Let us have a look at the basic eligibility criteria which need to be fulfilled by a salaried employee to avail a personal loan. There are a few criteria that are common for all the lenders and there might be some minor differences associated with them.

1. Salary

The applicant of the personal loan must have a minimum salary of Rs. 10,000 for being eligible to avail a personal loan. However, this minimum amount for salary might be higher for those employees who are residing in metropolitan cities.

2. CIBIL score

It is very much necessary for a salaried employee who has applied for a personal loan to have a good CIBIL score. If the applicant does not have a good CIBIL score or has been a defaulter in case of credit payment then his application for a personal loan will be rejected.

CIBIL stands for Credit Information Bureau India Limited and it is the premier agency of India which provides credit scores and credit reports of individuals. CIBIL collects the information of individuals relating to loans and credit cards from various banks and financial institutions. With the help of this information, a CIBIL credit report is being prepared known as CIR i.e. Credit Information Report. The CIBIL Score offered by CIBIL consists of 3 digits and usually lies between 300 and 900. A CIBIL score of 750 and above is considered to be ideal for obtaining a personal loan or a credit card. It is quite necessary to keep your CIBIL Score healthy to get a personal loan approved easily.

You need to be quite disciplined and pay your credit card dues, loan repayments on time. This is the major factor that will have an impact on your CIBIL score. Moreover, you can maintain your credit utilization ratio at a lower value of around 30% to have a good CIBIL score. Also, for a good CIBIL score you can have a combination of a secured and an unsecured debt together. You should keep on monitoring your CIBIL score from time to time and review it regularly. Furthermore, it is suggested to increase your credit limit and review your credit report regularly to have a good CIBIL score.

3. Age

The age of the employee is another important criterion that should be fulfilled for approval of a personal loan. You must be a minimum of 21 years of age and a maximum of 60 years of age by the time of completion of the tenure of your loan.

4. Loan repayment capability

The loan repayment capability of the employee is the most important criterion which needs to be fulfilled for availing a personal loan. The Loan repayment capability can be defined as your earning, the type of work you are doing, your financial liabilities if any, etc. These aspects determine the capability of loan repayment which is necessary to be fulfilled for a personal loan.

Also read: Employee loans – a complete guide

What documents are required for a personal loan application?

There are some major documents for a personal loan to be approved easily. However, the list of necessary documents for a personal loan might vary from one financial institution to another but for the majority of the institutions, they are the same.

1. Residential proof

Photocopy of ration card, electricity bill, telephone bill or a photocopy of the passport will work as an ideal residential proof. It should be kept in mind that the document which is shared must contain the address of the residence where you have been staying since the last 1year-2 years.

2. An identification proof

Photocopy of your passport, Voter ID card, Aadhar card or your valid driving license can be used as an identification proof.

3. Bank statement of the last three months or bank passbook of the last six months

This document is required as proof of your income status and is necessary for validating your financial credentials.

4. Latest salary slip or Form 16 along with current dated salary certificate

These documents help in giving information about your income status. It also helps the financial institution to decide on your financial health and eligibility to obtain a personal loan.

5. Application form for the loan

The application form has to be filled and submitted in the financial institution for the loan in case of applying for the loan in an offline manner. If you are applying for the loan by online means, you can fill in the form on the website of the financial institution.

6. Your photographs

Your self-attested passport-sized photographs are required in the application form for the loan.

Hence, by submitting these necessary documents for personal loan application approval you can avail of a personal loan in minimal time.

How to get personal loan approved quickly?

If you are a salaried employee and have applied for a personal loan, it can get approved quickly without much hassle if some of the conditions are met. Let us have a look at the factors which tell about how to approve personal loan quickly.

1. Eligibility criteria to be met

You should meet all the necessary eligibility criteria to get your loan application approved easily. If you are not aware of the basic eligibility criteria and tend to apply for personal loans, it is quite natural that your application would be rejected. Your loan application would be rejected by the financial institutions due to the non-fulfillment of the necessary criteria. Most importantly, the age limit is the major factor that the financial institutions give utmost importance while approving personal loan applications.

2. Good credit score

Your credit score is another major factor that determines the status of your loan request. If you have a good credit score i.e. around 750 which means you have been quite punctual in re-payment of your old loans and credit card bills, your loan application would be approved soon. However, if you do not have a good credit score you must make efforts on increasing your credit score and then send your loan application form.

Also read: How to improve your credit score?

3. Avoid new loan while the re-payment of an old one

It is always advisable not to apply for a new personal loan when you are having one in your name. Moreover, it is considered ideal if you leave a gap of 6 months between a new loan and an older one. If you already have a personal loan on your name, your application for another personal loan would be rejected by the financial institution.

4. Avoid sending multiple loan applications

You should not send multiple applications for personal loans at a single point of time. This does not increase your probabilities of obtaining a personal loan but rather it will decrease your possibilities as financial institutions can think that your chance of taking a personal loan from them might be less. So, it is advisable to keep your applications for personal loans limited.

5. Decide your loan amount carefully

You should be quite careful while you are selecting your loan amount. Mostly, the financial institutions consider your income before they grant you a personal loan. If your loan amount is too high, financial institutions might find it difficult for you to re-pay the amount within a specified time limit. As a result, your loan application might get rejected by the financial institution.

When these basic conditions are kept in mind while applying for a personal loan, your loan request would be approved easily.

Hence, salaried employees usually have a fixed income and there can be situations in which the need for an additional expenditure might arise. Scenarios like debt payments, down payments, medical and personal emergencies can arise and the need for extra cash also arises. So, personal loans are the best method by which a salaried employee can face such unexpected situations in life. They are quite helpful and can be availed easily in a hassle-free manner. The only necessary things which should be kept in mind are the eligibility criteria and the credit score for availing a personal loan easily.

[transcontriumph-house-blog]

Budget 2019: Top 5 Expectations Of The Real Estate Sector

The aam aadmi always hopes that the union budget will have announcements that will impact their lives positively – for example, by improving their income and helping them to get jobs. Similarly, the real estate sector too hopes that the budget will alleviate their major problems and boost growth in the industry.

1. Solution to funding issues

The real estate sector has been facing a significant funding crunch, which was aggravated by the distress in the NBFC (non-banking financial company) sector. “The realty sector is expecting the government to ease ECB (External Commercial Borrowing) norms, to ensure steady inflow of capital from foreign investors. Similarly, the introduction of housing bonds, granting of special status to HFCs (housing finance companies), at par with the banking sector, will further help in providing the much-needed fillip to the housing segment, across all markets and geographies. For ambitious government welfare schemes, such as the ‘Housing for All’ initiative to be a reality, such reforms are prerequisites,” asserts Anshuman Magazine, chairman and CEO – India, Southeast Asia, Middle-East and Africa, CBRE.

2. Support for affordable housing

While the government has taken several initiatives to boost affordable housing in the country, experts maintain that there is room for more steps. According to Nimish Gupta, MD south Asia, RICS, investments in infrastructure development are likely to have a substantial share. This should help in increasing developers’ access to funds, for the development of affordable housing projects, in addition to initiating rental housing, he adds. “Highest levels of compliances and adoption of business best practices will, therefore, need to overlap with advancements in technology and delivery mechanisms, for the affordable housing scheme,” says Gupta.

3. Tax rationalisation

The real estate sector is also expecting further relaxation in the GST rates. Recommendations, to cut the corporate tax and extend the SEZ program, have also been put forth. There is fear that if the tax incentive for SEZs is withdrawn, it could severely hit the job creation ability of the sector. Praveen Dhabhai, COO, Payworld, points out, “We expect Modi 2.0 to think towards the reduction in GST, for remittances where the margin is wafer thin. The current GST rate is levying a huge burden on the end consumers.”

4. Cross purchasing of residential and commercial properties, from sales proceeds

At present, there are restrictions on tax benefits, if the seller of a residential property uses the sales proceeds, for buying a commercial property, or vice-versa. Analysts are hoping that the government will take the initiative, to allow the use of sale proceeds of residential property to purchase commercial property and vice-versa.

5. Infrastructure development

The union budget should focus on a holistic plan for infrastructure and housing development, in the peripheral locations and tier-2 and tier-3 cities, says Magazine. A boost for infrastructure, will not only benefit the realty sector but also help other industries and create large scale employment in the economy. “For the creation of large-scale housing developments, tax benefits under Section 80-IA and Section 35AD (deductions to encourage private sector participation within the infrastructure sector) should be extended to integrated township projects, by including the same within the definition of infrastructure facility,” Magazine concludes.

Key expectations of the realty sector from Budget 2019

Rationalisation of taxes and subsuming of stamp duty within the GST. Resolving the NBFCs’ woes. Working with the RBI on a mechanism to immediately pass on interest rate cut benefits, to home loan borrowers. Accepting the long-standing demand of single-window clearances for projects. Industry status for the real estate sector. Financial support and wide-scale initiatives towards skill development. Initiatives to promote artificial intelligence (AI) and technology in real estate, to achieve the ‘Housing for All’ mission. Reducing corporate taxes. More support for SEZ development.

5 expectations that Interim Budget 2019 must address, to uplift the real estate sector’s sentiment With the real estate sector facing the problem of high inventory, low liquidity and high input cost, we look at some of the top issues that one hopes the interim budget will address, for a revival of the sector

Update on February 1, 2019:

Tax exemptions proposed in Interim Budget 2019

As a once in a lifetime benefit, the of rollover of capital tax gains is proposed to be increased from investment in one residential house to that in two residential houses, for a tax payer having capital gains of up to Rs 2 crores. Exemption on notional rent on unsold inventory increased from 1 to 2 years – i.e., notional rent wil lbe levied only after 2 years. Affordable housing – Section 80IBA – benefits extended by another year if registered by 2020. TDS exemption on rental income increased from Rs 1.8 lakhs to Rs 2.40 lakhs. TDS threshold on interest earned from banks, FDs, etc. – raised from Rs 10,000 to Rs 40,000. Notional rent to be exempt on second self-occupied house. Standard deduction raised from Rs 40,000 to Rs 50,000 for salaried classs. Individual tax payers with annual income of up to Rs 5 lakhs to get full tax rebate. Those with gross income of Rs 6.5 lakhs may not be required to pay tax, if they do investments in specified savings like VPF, etc.

Aashish Agarwal Head – consulting services at Colliers International India

With exemption on notional rent for self-occupied second homes, the Government has addressed a significant pain point for the middle class, particularly migrants with dependant parents. Along with capital gains exemption for up to two houses, this will allow people to have a diversified portfolio for real estate investment – which will spur demand across the country, including Tier 2 and Tier 3 cities.

Joe Verghese Managing Director (south), Colliers International India

Review of “GST impact on homebuyers” by group of ministers is a positive step, but it is disappointing to note there is no timeline around the changes to be introduced and implemented. It’s will be a wait and watch on this front unfortunately.

The Indian economy is expected to remain one of the fastest growing economies in the world. This is possible, only if India’s realty sector performs well, as it contributes a significant portion to the GDP. Hence, there are hopes that the government will address several challenges faced by the sector, in the interim budget 2019. Some of these pertain to taxes, funding and liquidity, rental housing and project approvals. Experts also maintain that while the affordable housing segment has been granted infrastructure status, it would help if this was extended to other segments of residential housing, as well.

5 concerns that require attention in the interim budget 2019

According to Niranjan Hiranandani, co-founder and MD of the Hiranandani Group, the government should focus on the following concerns, in the interim budget 2019:

“Incentives for rental housing, to meet the acute shortage.

A clear policy roadmap for the creation of rental housing stock and exemption from the burden of tax on notional rental income. Rationalisation of GST in case of under-construction properties – the GST should be pegged at either eight per cent with an input tax credit or five per cent without the input tax credit.

Focus on financial re-engineering concepts, to overcome the NBFC crisis and the challenge caused by the IL&FS default.

Incentives for new asset classes in real estate, like affordable housing, warehousing and logistics, co-working spaces, co-living spaces and light industrial spaces.” Another demand that has been repeated in previous budgets, includes a smooth process for granting permissions and clearances, in a time-bound manner.

hile generous funds were allocated for various highways projects in the previous budget, experts maintain that pace of building roads should increase, as improved connectivity is the lifeblood of the real estate industry.

Apart from that, the creation of more employment in the infrastructure sector can redeem the incumbent government’s well-documented shortfall on that front.

The expectation of the real estate sector, from budget 2019

Ashok Mohanani, chairman of Ekta World and vice-president, NAREDCO West, feels that home loan interest rates are the foremost concern of home buyers. “If the tax deduction limit is increased up to Rs five lakhs from the present Rs two lakhs per annum, there will be a positive impact, which will help home buyers to save money on home loans,” he says.

The finance minister also needs to adopt a holistic view, while making proposals for real estate. As per data available from the Ministry of Housing Affairs, the total estimated investment under the Pradhan Mantri Awas Yojana (PMAY), as on January 2019, was Rs 3.87 lakh crores, of which the central government has sanctioned approximately 27 per cent, while only 32 per cent of the sanctioned amount has been released so far. Evidently, despite the government’s concerted efforts towards achieving its objective of ‘Housing for All by 2022’, the deficit is too large to ignore.

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Source: https://housing.com/news/budget-2018-top-5-expectations-real-estate-sector/

[letscreateafricaorg]

New post in LET'S CREATE AFRICA (L.C.A.): JOBS, JOBS, JOBS: [4/26, 08:08] Nelson Komba: Good morning team EXP is looking to recruit 20 ladies and 20gents for a Safaricom activations. *Please note that the interview on 26/04/2019* *Call time: 9.00Am* Gate will be closed at *11.30pm* *Kindly come with a note book and a photocopy of your ID. Training is tomorrow* Job starts on Monday and runs for 4 days. *Directions to exp, take a 46 at kencom and alight at valley arcade. Then take Muthangari road and walk straight on to braeside gardens. There is a Coca-Cola kiosk and a blue gate. There, ask the watch man to direct you to EXP* *Directions to Exp ,board mat 48A at Odeon,alight at Lavington petrol station, ask where Braeside gardens is. Exp is the big white building behind the Coca cola shop* [4/26, 08:08] Nelson Komba: SOCIAL MEDIA ASSOCIATE The goal is to gradually achieve superior customer engagement and intimacy, website traffic and revenue by strategically exploiting all aspects of the social media marketing roadmap. Tasks • Developing and managing digital marketing campaigns through taking direction via written brief and verbal communication from direct supervisor • Overseeing the Ad networks (Media Buying) & Social media strategy for the company by assisting with creation, conception, and presentation of social media strategy and integrated marketing campaigns. • Responsible for moderating User Generated Content that appears and escalating any issues to the appropriate internal/client teams. • Utilizing a range of techniques including paid search, SEO, PPC (Pay per click) and affiliate marketing • Managing online brand and product campaigns to raise brand awareness. • Review new technologies and keep the company at the forefront of developments in digital marketing. • Summarize insights and conversations to create actionable, client-facing reports that lead to optimization and brand awareness • Evaluating customer research, market conditions and competitor data. • Come up with content relevant to the trade which will enable users of our platform to consume all content from one site • Create and maintain Content Calendars, including writing Facebook, Instagram, Twitter, Youtube and other Social Media Status Updates • Post relevant content in accordance with Content Calendar • Grow and expands company social media presence into new social media platforms, plus increases presence on existing platforms including Facebook, LinkedIn, Twitter, and Instagram • Creates and distributes engaging written or graphic content in the form of e-newsletters, web page and blog content, or social media messages • Monitor ROI and KPIs. • Digital advertising – Support our online advertising efforts, publishing and maintaining paid campaigns on social media, and reorganizing our extensive Google AdWords program. Requirements • Minimum 2 years of digital marketing experience • Marketing degree • At least 27 years old • Digital media buying including Facebook, Twitter, Youtube and Instagram • Knowledge of online marketing and good understanding of major marketing channels • Knowledge and experience in Google, YouTube Analytics as well as Google/Youtube Ads. and • Exceptional communication skills within team. • Very high attention to detail. • proficiency in photography, Videography and graphic design basics • Experience in social media marketing / advertising • Prior experience required in a similar role Email:tufaakenya@gmail.com [4/26, 08:08] Nelson Komba: Debt Collector Task • Organize calling list according to severity of delinquency – severity of delinquency here will be determined by the loan amount; instalment amount for short term loans (3 months and below) and client repayment history. • Possess investigative techniques and processes to identify the true reason for delinquency. • Call debtors before Due dates to remind them to make repayments • Call debtors on due dates to ensure they repay • Receive and record all Promises to Pay from debtors • Negotiate for clearance of arrears/default with clients • Negotiate for most agreeable Promises to Pay from debtors – http://bit.ly/2W71evi

[royalbankpacific]

A standby letter of credit – What is it and how is it used in international trade

If you’re into international trading, you must have come across a standby letter of credit which is a financial instrument that is utilized mainly in domestic and international trade or other construction projects. The standby letter of credit is usually given by a bank and the bank gives a guarantee of making payments to the seller or the beneficiary if the buyer is not able to pay in terms of the contract and provided all the necessary documents are shown.

The standby letters of credit are most commonly used by the buyers to ensure sellers about their creditworthiness and their ability to pay by guaranteeing payment. Just as the bank guarantee works, the standby letter of credit also works without the bank having to commit any of its assets during the transaction. The bank however is liable for payment on presenting the supporting documents.

The standby letter of credit – How does it work? The buyer has to apply for a standby letter of credit at any commercial bank and he has to show either the credit substantiation or the collateral to justify issuance of the standby letter of credit and then pay the fees charged by the bank. As a part and parcel of this process, the buyer offers information on the beneficiary, the shipping documents that are required for payment, the information on that bank that is working on behalf of the beneficiary and the stipulated time period through which the standby letter of credit is valid. In an event where the buyer is not able to pay off the seller, the seller presents all the aforementioned documents listed on the LC within the specific time period. Later the issuing bank pays off the due amount to the advising bank.

Standby letter of credit supporting documents for international trade The standby letter of credit pays in case the buyer falls back on the payments only when the supporting documents are shown. The documents that are required are just a matter of arbitration and it may include anything that has been agreed by the seller and the buyer. Few of the most common documents are packing and invoice list, shipping docs like bill of lading, insurance certificates and transport documents. There are other official documents too like inspections certificates ad certificates for custom clearance. Hence, you can well understand that it is a never-ending list of supporting documents.

Standby letter of credit – What are the requirements? Just as the normal letters of credit, the standby letters of credit are associated with different requirements besides the fact that the buyer pays on presentation of the supported documents. The buyer also has to consult with a shipping (international) specialist on the ‘requirement’ language to include into the standby letter of credit to make sure that all the interests of the buyer are protected and safeguarded.

Letters of Credit and Standby letter of credit – What are the differences? The LOC is a method of paying for your goods and the standby letter of credit is a performance guarantee that will ensure that the payment for the goods will be definitely paid in case the buyer defaults. Since it offers a guarantee of payment, the main advantage of a standby letter of credit is that it involves less hassle and cost as compared with other forms of guarantees. Nevertheless, it can’t be denied that a standby letter of credit is a rather new instrument that doesn’t have too much of history associated with it.

Funding bigger purchases like real estate with standby letter of credit A standby letter of credit can even be used to finance bigger purchases of facilities or machineries. Do you have a bad credit rating? If answered a standby letter of credit could improve your rating and automatically lower the interest rate on the loans. As the bank is guaranteeing the payments, the risk is much lower on loans.

This is especially useful for a contractor who predicts buying a house, renovating it and selling it to a buyer within 60-90 days. There are few standby letters of credit that have longer terms and hence such transactions are easier. 

Therefore, if you wish to expand your business and also enhance your risk profile, you should seek help of a standby letter of credit to reap the above listed benefits.

[inkariasacademyworld]

IL & FS CRISIS

​Background

IL&FS Group is a vast conglomerate with a complex corporate structure that funds infrastructure projects across the world’s fastest-growing major economy like Chenani-Nashri road tunnel, India’s longest and has raised billions of dollars from the country’s corporate debt market.

IL&FS is a Systematically Important Non-Deposit Core Investment Company (CIC-ND-SI) i.e. any crisis at IL&FS would not only impact equity and debt markets but could also stall several infrastructure projects of national importance.

Many major corporates, banks, mutual funds, insurance companies, etc. such as LIC, HDFC and SBI have stakes in the IL&FS group.

Possible Reason for Default As per RBI, CIC-ND-SI is a Non-Banking Financial Company (NBFC)

With asset size of Rs 100 crore and above.

It holds not less than 90% of its net assets in the form of investment in equity shares, preference shares, bonds, debentures, debt or loans in group companies.

Its investments in the equity shares (including instruments compulsorily convertible into equity shares within a period not exceeding 10 years from the date of issue) in group companies constitutes not less than 60% of its net assets.

It does not trade in its investments in shares, bonds, debentures, debt or loans in group companies except through block sale for the purpose of dilution or disinvestment.

It accepts public funds

Shadow Banking System Shadow banking is that part of the financial system where credit intermediation involving entities and activities remains outside the regular banking system. The term was coined by economist Paul McCulley in 2007.

Working structure: They have a higher cost of funding. But the lack of regulatory oversight allows them to take on more risks than banks. So, they can cut corners and earn higher returns. They can also go bust more spectacularly.

Significance: They provides a valuable alternative to bank funding and helps support real economic activity. It is also a welcome source of diversification of credit supply from the banking system, and provides healthy competition for banks.

Critical lapse in Corporate Governance Norms: as Risk Management Committee, constituted met only once between 2015 and 2018.

Shareholder Negligence: Well-known institutions such as LIC, HDFC, etc. which were major shareholder in ILF&S are guilty of negligence. For example, HDFC had not nominated a director to the board of IL&FS since last year.

Asset-liability mismatch and weak corporate bond market: IL&FS owns long-term infrastructure financed with short-term funding because long-term (tenure of more than 10 years) debt is not available in India. This resulted in defaulting in one of the short-term repayment obligation due to various reasons like:

Slow pace of new infrastructure projects in India, and some of IL&FS’s own construction projects, including roads and ports, have faced cost overruns amid delays in land acquisition and approvals. Disputes over contracts have locked about Rs 9,000 crore of payments due from the government.

Lack of Effective Regulation:

RBI which oversees NBFCs like IL&FS and the union finance ministry which oversees major shareholders like LIC, SBI, etc. are at fault here as the crisis was allowed to develop over a period of time.

Impact of Crisis India’s Lehman Brothers moment: IL&FS debt papers enjoyed highest safety status by Credit rating Agency, for a long time on account of factors such as satisfactory liquidity conditions and the backing of major public sector units. However, current crisis reflects Failure of Credit Rating Agencies.

The lack of confidence in the credit ratings is in danger of undermining India’s financial stability, leading to a drying up of credit lines for shadow lenders and wider concerns about the impact on the economy.

Lack of Capital Expenditure: It’s impact may spill over into the wider infrastructure industry, pushing up funding costs and pulling government investment plans for achieving New India by 2022.

Impact on Stock Market: It might witness significant repercussions, including widespread redemption pressures, sell-off in the debt market, liquidity crunch and possible cancellation of licences of as many as 1,500 smaller non-banking financial companies (NBFCs) due to lack of adequate capital.

Liquidity crisis: There are concerns over short-term liquidity in the market for commercial papers raised by NBFCs.

Impact on Shadow Banking: According to RBI, India has about 11,000 shadow financing companies, out of which 248 are systemically important non-deposit taking institutions, who will face greater regulatory scrutiny and short term liquidity crisis, which could impact the sustainability of many NBFC’s.

Other cascading effects of IL&FS’s defaults: Rising borrowing costs, exacerbated by the turmoil in markets in recent days, will lead to a credit crunch in the sector.

Steps Taken by Government Taking Managing Control: Government superseded the IL&FS board under section 241(2) of the Companies Act, 2013, which enables supersession of a company’s board to prevent it from further mismanagement in order to protect public interest. Its Implications are

Increasing Confidence of Lenders by giving them assurance that their outstanding loans to IL&FS will be repaid.

Improving Financial Market Stability: It effectively stops the spread of systemic instability in an inter-connected financial system, especially as panic had started spreading across the financial, money and capital markets.

It helps in restoring the confidence of the financial market and Ease of doing Business in India.

Government has also ordered Serious Fraud Investigation Office (SFIO) to investigate into the affairs of crisis-hit IL & FS and its subsidiaries amid concerns over financial irregularities.

Way Forward

Short Term Measures like finalization of a restructuring plan, identification and valuation of assets, sale of the assets and repayment of outstanding loans.

Government must arrange adequate liquidity for IL&FS to obviate future defaults and ensure smooth implementation of infrastructure projects.

Strenghtening Corporate Governance norms by implementing Kotak panel recommendation and incentivize boards to play a more effective role in supervising company executives.

Shareholders awareness: Shareholders must be more actively involved in keeping tab on the key policy decisions of the companies.

Effective checks and balance system at the firm level to check any discrepencies at initial level.

Leveraging National Financial Reporting Authority for enforcement of auditing standards and ensuring the quality of audits to strengthen quality of audits and enhance investor & public confidence in financial disclosures of companies.

Creating an independent regulator for credit rating agencies, to have rating actions in a proactive manner rather than a reactive manner.

Rating agencies also need better market intelligence and surveillance rather than depending upon historical data and some structure based on past estimates.

Deepening the debt markets: The Centre and the RBI should look at ways to provide access to infrastructure players like ILF&S to borrow long-term funds.

The successful resolution of issues of banks’ non-performing assets (NPAs) through the Insolvency and Bankruptcy Code (IBC) can increase sources of long-term debt.

The Indian corporate bond market is currently skewed towards high-rated debt instruments (AA and AAA) as most regulators in India have set a minimum of ‘AA’ rating for bonds to be eligible for investment. In line with the budget announcement, the government should work with various regulators to allow increased investment in relatively lower-rated bonds.

Timely Project clearances: Ensuring timely clearances, especially to infrastructural projects is a must to minimise cost inflation of these projects. Expanding the “Plug and Play” approach to other sectors can be a possible solution.

Improved Ratings Accuracy: Securities and Exchange Board of India (SEBI) should examine the process for issuing ratings for corporate bonds and figure out why the rating agencies did not spot early signs of the crisis.

There should not be undue importance on who is the promoter backing the company while providing ratings. Instead loan amount, asset quality, profitability, etc. should be basis for assigning rating to the company.

[nationalcashoffer]

How much to budget for expenses after closing

Investing in home ownership is a big step. There are additional costs that are involved, which are linked to getting a mortgage and monthly payments. Closing costs is one of the additional expenses involved in home ownership.

Closing costs need to be paid before closing on your home and add things such as ownership insurance, property taxation, appraisal fee, and title search fee. Closing costs also helps in providing payment to the people who have offered their services throughout the process of loan, such as real estate agents and appraiser.

It is essential to note that even though the name is closing costs, there are instances where you may be required to pay some of them as the action takes place. For instance, home inspection needs to be paid after the inspection.

All the closing costs are provided at closing. It may be prudent to ask the mortgage agent or banker to offer clarifications when things are not as clear as you would want.

    What Is Closing Costs?

Closing costs are one-time fees that are linked to the sale of a home. The closing costs are provided to the buyer for payment, three days before finalizing home purchase. There is an agreed percentage of 3% from most experts, who advice home buyers to set this percentage aside to cover for the home’s closing costs.

Examples of closing costs are down payment and mortgage default insurance. However, this ought not to be included in the 3% calculation. It is also worth noting that mortgage default insurance is needed when the down payment is less than 20%. The mortgage default insurance is factored in mortgage payment to avoid the owner having to pay upfront.

    Who Caters for the Closing Costs?

Homebuyers have the liberty to negotiate with the seller on who will cover for closing costs. Sellers may choose to cover overall closing costs, however, every loan has a different guideline about the amount that the seller can pay. Mortgage bankers can help you learn and understand the different options.

    The Cost of Owning a Home

After moving in your new home, owners learn that there are things that need to be bought. There are purchases that may be need on the first day and others may take months after moving in the house.

  Budget for Closing Costs

Experts in mortgaging and real estate recommend putting up a different account that will help in ease of managing funds for closing costs. If some or all of the closing costs options need to be catered by the buyer, it is important to ensure that the sum is included in the budget.

The budget should be realistic. It should be created in advance and there is need to stick to it. It helps the buyer to be more confident at the closing and minimizes the risks of unexpected surprises. The ability to map out and narrow down the expenses and payments increases the effectiveness of managing the overall costs. There is need to know how much you can afford before putting together an accurate budget.

    Estimate the Closing Costs

Generally, the percentage for closing costs is between 2% and 6%. Therefore, the amount for closing costs is dependent on the budget of the buyer. Mortgage bankers will provide a document after applying for a loan. The document breaks down the interest rate, monthly payment, taxation, insurance, and closing costs. The list of closing costs is a subject of change throughout the process. The indicated closing costs on the document provides a rough idea of what you should expect.

    Managing All the Costs

Working with professionals, such as lawyers, estate agents or movers, may require you to get a detailed estimation prior to avoid surprises. This helps in finding out the amount that the outside services will incur ahead of time. Therefore, the buyer will be in a position to set aside finances for the additional costs. Being aware of and closely tracking the different expenses from different sources is a good start to creating a realistic budget. This is because it helps in accounting for and meeting all the financial obligations.

It is important to seek help and clearance from a mortgage specialist as this helps in identification and sorting out different costs that are associated with closing costs.

    Save Monthly

Saving for the down payment of a house may seem obvious, but there is need to set aside some cash for different expenses that are linked to home ownership. This is inclusive of closing costs as well as other unexpected expenses, such as emergency repairs.

    Tips and Tricks for Saving

In any budget, looking at the current expenditure habit and deciding what requires to be cut down is very essential. This will help in pinpointing where less important budget can be cut and the money to be used in saving. The little savings will eventually be a lot of money and can be used in home ownership.

Another tip is setting aside bonuses or tax returns. Saving can prove to be hard, but putting aside extra or unexpected money that you receive directly in a savings account is necessary. The money saved in a savings account will not be used in irrelevant courses.

  Cut the cable cord. There is need to choose a subscription service rather than streaming online. You will be able to still watch your favorite shows and save the extra money that caters for streaming. Eating at home. Eating out is very expensive. Therefore, meal planning and packing food to work will help in saving money. Cutting down consumption of energy. Leaving the lights on while you are not in the room consumes too much energy. The utility bill can be saved from the simple actions such as lowering the thermostat.

    Conclusion

Although the buyer may not be required to pay closing costs for each loan, it is prudent to pay for hidden costs that are associated with home ownership. Making small but necessary changes can help in starting a saving culture each month. This ensures that there is little money saved in cases of any emergency related to home ownership.

The post How much to budget for expenses after closing appeared first on National Cash Offer.

from https://nationalcashoffer.com/how-much-to-budget-for-expenses-after-closing/

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How to Trade in a Car With a Loan Balance

Can I trade in a car with a loan balance? Yes, you can. Dealerships do this every day because your former lender still gets their full amount on time.

Let’s look at what this process involves and whether you should do it or just retain your current financing plan.

How soon can you trade in a financed car?

Let’s look at some favorable situations.

1. When you have positive equity on the car

When a buyer has positive equity, it means that his car exceeds the loan in value. For instance, you bought a car worth $40,000 and received credit financing worth $30,000. What happens when the car depreciates by 20%  and you pay $10,000 after one year?

The car’s new value amounts to $32,000 while the outstanding balance drops to $20,000. So, your car’s value exceeds the credit by $12,000. You won’t have to top up any balance when buying a car from a different dealership.

Tips:

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2. When your credit score improves significantly

Car buyers with subprime credit ratings pay twice to thrice the interest paid by debtors with excellent scores. A buyer with a rating of 720 gets their financing at 3.07% interest while another with a credit score of 620 pays 9.58%

If your credit score was 689 when you got the original loan but you improve to 720, you can apply for a trade in. Why is this a good move? Because the interest rate on auto financing drops by 50%.

3. When you get a better credit lender

Let’s assume you joined a credit union the same time you got your current auto loan. After two years, the union decides to offer you an auto loan at a more affordable interest rate compared to your current lender. This announcement also coincides with your plans of getting a better car. Is trading in a wise decision?

Yes, it is because it saves you money. If the bank financed you at 5% and your credit union is willing to charge you just 2.5%, ditching your bank is the best financial move. Paying high-interest rates only makes credit lenders rich.

Tip: 8 Amazing Credit Habits You Need to Start Now

4. When you can afford to pay the difference on a negative equity car loan

Let’s assume you’ve just landed a nice break in your business. Now, you’re guaranteed of making thrice the profits you previously made thanks to getting new clients. The obvious boost in your financial situation is so huge that can you can get out of a negative equity car loan with just one payment.

Should you go ahead and trade in the car? Yes, you should because you cannot recoup the high interest incurred through a private sale. Trading in enables you to make the best out of a bad situation by bridging the gap between credit and your car’s value.

What are the benefits?

1. Upgrade to a new car

If you’ve just received a major job promotion and want to reward yourself with a new car, you can ditch your used one by doing a trade-in. Used cars might be affordable but one has to spend extra money replacing old or damaged parts.

Trading in enables you to get a better quality car because dealerships allow you to pick new cars. You just have to meet the laid out requirements for the new financing arrangement. Plus, buying a new car has a greater sense of achievement than settling for a used one.

2. Upgrade to the latest vehicle

Trade-ins make upgrading to the latest vehicles easier because you need less cash for down payment. If you’ve just got a new baby and need a larger family van, this purchasing option ensures that your family enjoys the best safety features in private transport.

This method is ideal for motorists loyal to particular brands. If your favorite brand is Mercedes and you own a previous SUV model, you can easily upgrade to the latest edition by doing a trade-in. Doing this gets you value for money because you get a good offer for what’s most likely your dream car.

3. Builds your auto credit history

What is auto credit history? It’s a record that shows your performance with previous and current car loans. In order to increase your credit limit when it comes to auto finance, you need a rich history. In order to buy a luxury model, credit lenders focus on debtors who have at least three fully paid loans in their auto credit history.

Trading in your car is a direct step towards building sufficient credit history. Your current dealership pays your outstanding balance in full. This doesn’t nullify your previous monthly payments.

Tip: Do Blank Check Auto Loans Really Work?

4. Your credit score still improves

What happens when the new lender repays your outstanding balance? Your credit score on the previous loan improves and so does your overall ratings. This purchasing method ensures that your lender receives all due payments within your agreed repayment plan.

Earlier on, we saw that applying for a trade in boosts your auto credit history. In order to get the best interest rates for future car deals, you need an excellent credit score. Doing a trade in enables you to gain this improvement as well as an upgrade to a better car.

Tip: 7 Things Your Car Dealership Won’t Tell You About a Car Loan

Let’s look at the cons

1.  Is the loan canceled with the trade in?

No, it’s not. Your new lender rolls it over to your current repayment plan for the new car. This is manageable when a debtor owes less than $10,000 on their current auto loan. If your debt exceeds this amount, applying for a trade in might be unwise.

Why is this a bad move? Because the car payments get so high that you might experience struggles keeping up every month. Plus, there are comprehensive insurance payments, which tend to get expensive. Buying a car using this option is unsafe because there’s a high risk of making late payments.

2. You have to follow up with your previous lender

Sometimes, buyers who opt for this method end up with damaged credit scores due to hitches in clearance. After your new dealership pays your outstanding balance, they receive the title of the car you want to trade in. On the other hand, they may not follow up with credit reference bureaus.

If the previous creditor didn’t close your credit account, the digital payment system considers you a defaulter. Each skipped payment date appears in credit reference bureaus and lowers your credit score.

3. Only available to buyers with good credit scores

This type of trade in is limited to buyers with good credit ratings. Creditors feel wary dealing with high-risk borrowers and so they feel hesitant repaying outstanding balances on bad credit auto loans.

4. Defaulting has a terrible impact on one’s auto credit history

If a debtor happens to lose their jobs and can’t afford the car, two things might happen. He or she might decide for a voluntary surrender and bear the consequences. Alternatively, one can post an advert and wait for a private buyer. However, this option has slim chances of success due to the outstanding balance involved.

Apart from affecting your credit score, defaulting represents you badly in the eyes of potential auto finance lenders. It makes it hard to obtain financing beyond your previous limit and this confines your choice of cars.

Tips:

9 Things to Know Before Buying a Used Car

How to Create a Healthy Budget for Your Car Loan

The Bubble: Subprime Auto Loan Delinquency Rates (Should You Care?)

How do you trade in a car with negative equity?

1. Download your credit report before visiting dealerships

Auto finance lenders expect you to present your credit report when applying for a trade in. Make sure you download it a couple of weeks in advance so that you can find out whether your previous lender updated your credit account.

2. Know your outstanding balance

It’s wrong to assume that your lender’s credit statement is accurate. Download your bank statements to confirm whether the deductions in your account appear in the lender’s records. Doing this helps you to know exactly how much you owe so that you can provide correct information in your trade-in application.

3. Compare different trade-in offers

As a rational debtor, your priority is getting credit at the lowest interest rate possible. Take time to evaluate what every lender has to offer by visiting several offices.

4. Know the value of a car

When you approach a dealership for a trade-in, the sales rep will undervalue your car. They do this to sign you up for a high loan principal. It enables them to get larger sales commissions and the dealership makes more interest.

You can rely on Kellys Blue Book to give you an accurate estimation of your car.

Tip: How to Get Cheap Car Insurance for New Drivers Under 25

Should I trade in a car with a loan?

This purchasing method makes sense when you have positive equity and planning to get a better car. It’s also a great way of getting out of an expensive auto loan without damaging your credit score. Boosting your auto credit history enables you to get better cars for your personal or family needs.

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