Spending on a credit card can offer several benefits – but you should also be aware of the possible downsides too. Our guide explains the advantages and disadvantages to using credit.
Advantages of using a credit card
If you use them properly, credit cards can have several advantages over debit cards and cash payments. These include:
- Improving your credit score
- Buying now to pay later
- Spreading purchases out
- Having purchase protection
- Interest free spending
- Getting cashback, benefits and rewards
- Cutting down your debt
A loan is an amount of money borrowed for a set period within an agreed repayment schedule. The repayment amount will depend on the size and duration of the loan and the rate of interest.
Even if you have enough funds to buy a house, a home loan offers benefits such as saving tax, ensuring enough liquidity and the opportunity to let your funds grow.
A loan, when managed well, is the biggest realizer of our dreams. And when it comes to a life goal as significant as buying a home, a home loan is a tool that benefits countless people. However, there are many among us who have funds to buy a home without requiring the help of a loan. They often face a dilemma: should they exhaust their savings to purchase a property and avoid debt or take a loan instead? There’s no “one-size-fits-all” answer to this.
The main benefits of taking a Home Loan are
Opportunity to grow your fund
Even if you can buy a home using your own fund, you may still want to avail a home loan facility to save on taxes. You can thus invest your funds to earn an attractive return. For example, the current interest rates on floating rate home loans range between 7.9% to 8.3% per annum depending on your credit score, loan amount, and tenure. These record-low rates are currently being offered after RBI’s directive to lenders to link retail loan rates to an external benchmark like the repo rate.
Liquidity benefit
When you face a liquidity crunch and are forced to take a financing facility like a personal loan or a collateralized loan, it may cost you much more in interest compared to your home loan interest amount. So, why use your own funds and live in a liquidity crunch to buy a home? Your funds will protect you against life’s uncertainties and help meet other important financial goals.
Due diligence of property by the bank
Banks exercise strict due diligence before financing a project, something that reduces your risk to a great level. They verify the project-related documents, their title, and legal clearances before approving a loan on it. So, when you take a home loan from a bank that has already approved the project, it becomes safer than an unapproved project.
Here are some of the key advantages of Personal Loans.
Hassle-free loan processing: The application process is quick and the documentation is minimal
Instant disbursal: You could get your approved Personal Loan in less than 3 working days
Free to use the funds for any purpose: One of the biggest advantages of Personal Loans is that you can use your funds for any purpose you like – be it a wedding, a holiday, a gadget, business investment, home renovation etc. A Home Loan or a Car Loan must be used for the purpose that you borrow it.
No need to provide collaterals against the loan: Personal Loans are unsecured loans – this means you do not have to mortgage collateral such as your home or shares to get the loan.
Easy documentation: The paperwork and the processing time required for a Personal Loan is much lower than for most other loans. You can get a loan with the following documents: ID proof, address proof and income proof. If you are pre-approved for a Personal Loan, you may not even need to submit any documents.
Pocket-friendly repayment: You can pay off your Personal Loan in easy instalments or EMIs. The payment terms are usually flexible, and you can choose a tenure that allows you to optimize your monthly outgo according to your needs. HDFC Bank offers tenures of 12 to 60 months with EMIs as low as Rs 2,162 per lac. You can check your Personal Loan EMI calculator.
With so many benefits, a Personal Loan offers the ideal financial assistance, to JioBindass!
- Project financing is a loan structure that relies primarily on the project’s cash flow for repayment, with the project’s assets, rights, and interests held as secondary collateral. Project finance is especially attractive to the private sector because companies can fund major projects off-balance sheets.
- Project finance is the funding (financing) of long-term infrastructure, industrial projects, and public services using a non-recourse or limited recourse financial structure.
- A debtor with a non-recourse loan cannot be pursued for any additional payment beyond the seizure of the asset.
- Project debt is typically held in enough minority subsidiary not consolidated on the balance sheet of the respective shareholders (i.e., it is an off-balance sheet item.)