When you apply for a loan, your primary aim is to reduce the interest rate of the loan. And that’s a fair concern too. We assume that the interest (the cost of the loan) will be calculated properly. However, the Reserve Bank of India, the banking regulator, has found during examination that certain lenders have… Continue Reading
I will give you Rs 1 lacs. You have to pay me 5% interest. Sounds like a good deal? I will add a few caveats. You must pay 5% interest upfront. Pay off the loan in 3 equal monthly installments of Rs 33,333 each. Is this a joke? No, it is not. This is the… Continue Reading
RBI released a very important circular on April 15, 2024 about Key Facts Statement (KFS) for loans and advances. The circular aims to enhance transparency in the loan costs and charges for the retail borrowers. Usually, the loan agreements have all the information about various costs and charges, but loan agreements are lengthy documents, and… Continue Reading
Ever wondered how refunds from failed/reversal/refund transactions are adjusted to your credit card bills? You may think, since the transaction will eventually be reversed, the bank will not charge you for the transaction. You are right, but the timing of the reversal/refund may sometimes complicate things a bit for you. RBI has specified the adjustment… Continue Reading
Can you spend beyond the sanctioned limit on your credit card? Let us say the sanctioned credit limit is Rs 1 lac. Can you do a purchase transaction of Rs 1.25 lacs? Or can the total unbilled transaction add up to more than Rs 1 lac? Apparently, you can. You can spend beyond the sanctioned… Continue Reading
Have you ever received an unsolicited card? OR received a card that you applied for but now think that you shouldn’t have applied for this card. As per regulations, the banks are prohibited from issuing unsolicited cards and are required to seek consent from the customer before issuing a card. Reproducing an excerpt from RBI… Continue Reading
You take a personal loan of Rs 2 lacs from a bank. Interest rate is 10% p.a. What is the cost of the loan? 10% p.a., right? Isn’t interest rate the cost of loan? Yes, but only if the bank levies no other charges. If the bank does levy additional charges, then the cost of… Continue Reading
You are taking a home loan. You are worried, who will repay the loan if you were not around? The lenders (the banks and NBFCs) are bothered about this too. And this is a genuine problem for every stakeholder. You, your family, and the lender. How will the loan be repaid if the borrower passes… Continue Reading
The Reserve Bank has recently increased the risk weights on personal loans and credit card receivables. Many questions would have popped up in your mind. What are risk-weights? And how do these risk-weights affect the cost of your loans? In this post, let’s find out. Can the Banks Lend Whatever They Want? We know that… Continue Reading
Credit scores are becoming more and more important. Your credit score reflects your credit worthiness. A good credit score can not only improve the odds of approval of your loan application but can also lower your loan interest rate. Not just that, but a good credit score can be helpful in other aspects of life… Continue Reading