Home Loan Eligibility Guide India

Home Loan Eligibility Guide India

Buying a dream home is everybody’s desire. But well, Home loan eligibility criteria in India are not that much easy like western countries and that’s why you should first of all check your eligibility before applying for a Home loan. Keep in mind the following criteria before applying for a Home Loan.

Income Level

Before applying for a Home Loan, our income level must be fulfilled the minimum income level as per the guidelines of the bank. So if your income level is not so good than first of all make all the efforts to increase your income level. This is the prime criteria for getting rejected.

Credit Report

Now, a days Indian banks see your credit report before applying for the home loan. Your credit report is the score of your credit worthiness and it can be easily available with CIBIL.

Whenever you take any kind of loan from any financial institute or bank, your payment history will be stored with CIBIL for the future references. So never get default on any kind of loan if you someday in your life want to apply for the home loan.

Paperwork

This is really necessary means you MUST have clear property title and NOC certificate from your builder. There are lots of property reports that will be required before applying for the home loan. So first of all prepare all the paperwork than and only apply for the Home loan.

SBI Gold Loan interest Rate

SBI Gold Loan interest rate

Taking a loan against gold in India is a wise financial decision than taking a personal loan or credit card loans. This is because the gold loans offer very less interest rates.

SBI Gold Loan is India’s one of the cheapest gold loan in India. Its interest rate is 12-14% per annum.

And you get a loan up to 80% of the market value of the gold. And on the top of this, no income proof is required and even low income group of individuals can also easily get approved for the loan.

Just keep i mind that, here you pledge your gold. So in case, if you default, you will loose the control over your gold. And remember that, Indians have emotional attachment with this traditional asset class and that’s why always take a loan against gold after thinking 100 times.

Here is the procedure to take a gold loan with SBI.

Take Loan Against Gold to Get Richer

Take Loan Against Gold to Get Richer

Gold Loan in India is the new type of loan which is now freely available in many Indian cities. Borrowing money against gold is not the new concept in India. It is the centuries old concept. However, up to now, this segment was highly unorganized. But now the various banks and financial institutes have entered in this sector in the organized form.

As the Gold price is rising day by day, smart investors and entrepreneurs have started taking a loan against their gold to finance their investments, businesses and assets.

Well, yes. It is true. The smart investors are now financing their assets by taking a gold loan. What I personally don’t like about the gold is its non-income producing capacity. Gold is the idle asset class means it doesn’t generate any cashflow/income for you. If you own Rs.1 crore of gold and Rs.1 crore of business than Rs.1 crore of business can give you annual Rs.10-20 lakhs of cashflow but the gold can’t give you any kind of cashflow.

This is the major limitation of gold as an asset class. But well, smart investors are right now taking a loan against their gold to finance their businesses and other cashflow assets. And you can also do the same thing.

The main advantage of taking a loan against gold is that, it has just 11-14% per annum interest rates while if you take a personal loan than you will have to pay 15-30% of annual interest depending on your credit history.

Thus, you can now take a loan against gold in India and use this money to acquire more assets. Well, let me tell you that never take a loan against gold for your personal expenses. You will ultimately loose the control over your gold if you default.

So be a smart investor and finance your assets by taking a gold loan.

Gold Loan Vs Personal Loan

Gold Loan Vs Personal Loan: Which is Better?

Many readers ask me that which loan is better – A Gold loan or a personal loan? Well, it really depends. Most of the personal finance advisors say that gold loan is better than personal loans. Well, I do agree with them but for particular circumstances only.

Let me explain you How?

Most of the finance gurus say that gold loan is better than personal loans for two reasons.

 

01) Gold loans don’t require any Income proof or huge salary. Anyone who has gold can apply for the gold loan. While for taking a personal loan, you will need to submit lots of income proof and other required documents.

02) The second advantage of gold loan is – Low Interest rates. Gold Loan Interest rates are just 12-14% per annum. While personal loan interest rates can be higher than this.

Thus, because of the above two reasons, gurus advise to take a gold loan rather than personal loan.

But well, my opinion is little bit different. What my opinion is that, if you are going to finance the assets (Education, Business, Real Estate or any other Investment) out of your borrowed money than and only go for the gold loan, otherwise go for the personal loans if you are going to finance the liabilities (Tours & Travels, Car, Status items..etc..).

This is because in case of personal loans, if you will default than you will only damage your credit value with the lenders. But if you will default on gold loan than you will lose the control over this precious asset class.

So only go for gold loan if you are going to finance the assets. But if you are going to finance liabilities than go for the personal loans.

Remember, the smart people are those who use debt to finance the assets while the dumb people are those who use debt to finance the liabilities.

Take Loan Against Gold to Finance Assets India

 

Take Loan Against Gold to Finance Assets India

The gold price is ballooning like hell. Recently the gold price has touched the new height of Rs.21,000 per 10 grams. And after the news of Quantitative easing 1 (QE2) by the US Government, it is likely that the gold price will further shoot up.

What I personally don’t like about gold is, its non-productive aspect. The gold is the non-income producing asset class. Means suppose if you have Rs. 1 Crore value of gold in your possession today than your this asset will sit idle in your home or bank lockers and does not produce any Cashflow/Income for you.

While on the other hand, you are working hard to earn that money. While suppose if you own Rs.1 Crore valuation of Business than that business can make you Rs.10-15 lakhs (10-15%) of annual cashflow without you working hard for the money.

So What here I want to say that, don’t work hard for the money but make your money work hard for you. And now, you can do this by taking a loan against gold.

Well, see. Your gold has ballooned in its valuations since 2005. The gold has almost tripled since than. So What the smart investors can do is, they can pledge their gold and take a loan against this gold and start their own business or finance any other assets out of this borrowed money.

Well, I am not saying that it’s risk-free. But well, after all everybody has to take a risk to become successful in the life. The following Indian Banks/Financial Institutions are giving a loan against gold.

1. Allahabad Bank
2. Muthoot Finance
3. Manappuram Finance
4. Federal Bank
5. Central Bank of India
6. HDFC Bank

Here are the Gold Loan Interest Rates India

This is the great chance to finance your new business (or any other asset) by pledging your gold and taking a loan against gold. This is the best chance to use your non-income producing asset (Gold) by borrowing money against it and financing your own cashflow producing asset (Business).

So Don’t miss this chance.

Gold Loan Interest Rates India

Gold Loan Interest Rates Comparison in India

Gold Loan is the new kind of loan available in India. Here just like any other asset, you pledge your gold and the bank will give you a loan against it.

Usually the Banks/Financial Institutes will give you 70-95% loan as that of the value of the gold. Here is the Comparison table of Gold Loan interest rates of various banks and financial institutions of India.

Lender	Interest Rate (%) per Annum	Maximum Loan Amount (Rs.)
Allahabad Bank	12.0	5,00,000
Muthoot Finance	12.0	1,00,00,000
Manappuram Finance	12-24.0	1,00,00,000
Federal Bank	12.75	75,00,000
Central Bank of India	11.5-12.5	10,00,000
HDFC Bank	14.0	10,00,000

 

The above 6 are the Top most lenders of India who give loan against gold. Usually the interest rates vary from 12-14% per annum.

Remember that, there is no prepayment penalty on gold loans. Also remember that, the banks usually lend only against the jewellery.

Home Loan Income Tax Rebate India

Home Loan Income Tax Rebate India

Home Loan Income Tax Rebate is different for Principal payment and interest payment in India. Grossly the Home loan income tax rebate in India is divided into two things.

01) Tax Treatment for Principal of your Home Loan – Section 80C

02) Tax Treatment for Interest Payment – Section 24(b)

Thus, you can get tax benefits on to things – Principal and Interest.

Home Loan Tax Benefits for Principal – Section 80C:

The principal of your home loan comes under Section 80C Deductions up to the maximum amount of Rs.1 Lakh in any Financial year. So you can deduct up to Maximum Rs.1 lakh of your home loan principal under Section 80C.

However, only one problem is that, there are lots of things that come under Section 80C deductions. So after deducting several other things from Rs.1 lakh limit, very little remains towards the home loan principal payment.

There is only one condition here – principal repayment can be considered as a valid investment under section 80C only if it is made for a self occupied house. That is, you should be living in the house for which you are making the principal repayment.

Home Loan Tax Rebate for Interest – Section 24(b):

The interest that you pay for your home loan comes under Section 24(b). The maximum limit for the principal payment that is tax deductible under Section 24b is Rs.1.5 lakh per annum.

Thus, totally you can get a Maximum of Rs.2.5 lakh of Tax deductions for your home loan in any financial year under Section 80C (Up to Rs.1 Lakh) + Section 24b (Up to Rs.1.5 Lakh).

The best part is that there is no restriction of “self occupied property” for claiming the tax break on interest paid under sec 24. In fact, if you have rented out the house, and the rent you receive is more than Rs. 1.5 Lakhs per year, ALL interest paid (even if it is more than Rs. 1.5 Lakhs) is deductible from the rent received.

And remember, just like the principal repayment, there is no restriction on the number of houses for this benefit – the only restriction is the limit of Rs. 1.5 Lakhs.

What is Reverse Mortgage in India?

What is Reverse Mortgage in India?

Reverse Mortgage is a new concept in India and not much popular. However, in the developed countries of the world, it is a well-known concept. Let me tell you in layman’s language that what is reverse mortgage and how it works?

Well, suppose your age is above 60 years. And you have no family. And the medical costs and other expenses are rising day by day and your income from pension plans and your savings is not enough to meet the end. Well, in that case you go for reverse mortgage. In Reverse mortgage, you go with a bank and give your home to your bank and it will give you every month maximum up to Rs.50,000 up to maximum 20 years.

So the advantage of the reverse mortgage is that, as long as you live, you can live in your same home and after your death, your bank will sell your home and give the surplus money to your nominees.

In this way, you can live in your own home without selling it as long as you live. You have emotional attachment with your home so no need to sell it as long as you live.

This is the main advantage of reverse mortgage. Many major Indian banks are giving you this facility and that’s why you can go for it.

The only criteria is that, your age should be above 60 years and you should be the owner of your home.

However, if you have family than reverse mortgage may not be the good option for you because according to my opinion, you should pass on your wealth to your offsprings.

Private Personal Loans

Private Personal Loan - Is it Really Worth?

There are lots of personal lenders in the market from which you can take a private personal loan. However, you should keep in mind that these private lenders will ask for high interest rates than the traditional banks and financial institutes.

This is because most of the time it is believed that people who are not qualified for the traditional loans go with the private lenders. And that's why they charge higher interest rates than the traditional interest rates.

Now, the question is that is it really worth to take a private personal loan? Well, it really depends on which things you are going to spend this money. Basically there are 2 kind of debts. One is a good debt and the other is a bad debt. Good debt is one when you borrow money to buy assets and a bad debt is one when you borrow money to acquire liabilities (Depreciating items).

The Good Debt is a good because at the end of repaying the debt, the asset develops which appreciate year after year. While a bad debt is bad because even after repaying all of that debt, the thing that you had acquired will be worthless or depreciated severly.

Thus, it really depends on the borrower that where he spends this money. Most of the people take a bad debt. Most of the time it is a debt to fuel their high status life style. While very few people in the world take a good debt and become richer than ever after repaying their debt.

Thus, before taking a Private Personal Loan, ask yourself that weather Is it a Good Debt or a Bad Debt? Remember, a Good Debt will make you more richer and a Bad Debt will make you more poorer.

Startup Business Private Personal Loan

Startup Business & Private Personal Loan

If you have just started your own Business or you want to start your own Business in future and you need to raise the capital for your Business than Private Personal Loans are the good options for your Business. Usually Angel Investors are such kind of private personal loan lenders.

Now, the thing is that, How to find and contact such Private Personal Loan lenders who are willing to take risk and want to finance startup Business. Well, I will advise you few things about it.

First of all contact your local city small business chamber of commerce. Notify them about your Business and Capital needs. Several Private Lenders work for such kind of entities to find good Investment opportunities for their money.

Another advise, I would like to give you is that, prepare a complete Business Plan having all the Financial details, Executive Summary, Marketing & Sales Plan & Future Financial Projections. Once you are done with a complete Business Plan, Go with Angel Investors.

Make sure that, you present everything clear and in detail about your business in front of the angel investor. Don’t hide anything or try to look over smart. You will definitely get a Personal loan for your start up business.

Home Loans Versus Bridging Loans

Home Loans Versus Bridging Loans

Home loans and bridging loans are 2 different kinds of loans. Almost everyone of you know that what is a Home loan but many few people know that What it means by Bridging Loans? In this Article, I will teach you in Layman’s Language that what is Bridging Loan?

A Bridging Loan is a Loan taken out for a period of 2 weeks to 3 years pending the arrangement of long term financing (Home Loan).

In other words, As the name suggests, Bridging loans are for bridging the gap. Bridging loans are the intermediate financing loan for an Individual or Business until permanent or the next level of financing is obtained.

Money from the new financing is generally used to pay back the bridge loan. Now, Say For Example, If you have applied for the Home loan but the process is going to take 3 months because you have to fulfill some documents and that will take 3 months, Than you can take a Bridge Loan to finance your home.

This is because the seller sometimes can’t wait until you approved for a Home Loan. Thus, Bridging loan fulfills the gap between this period. Bridge Loans are usually used for Commercial real estate purchase. Bridge Loan rates as higher. They can be 12-15% per annum.

Real Estate Investors use the Bridge loans often to finance large property acquisitions.

Domain Capital: Loan Against Domain Names

Domain Capital: Loan Against Domain Names

Domain names are the real estate of the Internet. Without Domain Names, you can not do your web business. And of course, Domain Names are limited. Some Generic name domain names are worth of millions of dollars such as Loan.com, Car.com, Fund.com, Investment.com…etc…

2-character and 3 character domain names are also valuable assets. Many Investors from all around the world are investing in the Domain Names. Now, you will ask me that, If Domain Names are the real estate of the Internet than Why can’t we get a loan on them? Because in the real world, we can get a mortgage loan against our home or real estate.

Well, You can now take a loan against Domain Names. Go to DomainCapital.com and you will know in great detail that how you can borrow money against Internet’s valuable Real Asset – Domain Names.

Domain Capital is just like a housing mortgage company. It gives you a loan against the premium domain names. First of all it will do a fair valuation of your portfolio of domain names or a premium domain name and later on it will give you a loan against it.

You can use your Domain Name Portfolio to borrow money and than expand your Business and once your Business is established, you can repay your loan ang get back your domain portfolio.

It’s just like borrowing money against your home or a piece of real estate.

Domain Capital is a Domain Financing Company. It’s the entirely new concept. And if this concept will work, Believe me, in the next generation a school going kid will also invest in the real estate of the Internet and make much mrore money than a pre-retirement age group (50-55) of people.

The main advantage of Domain Names investing is that, they are digital so they are virtual. So it remains in the servers of the domain company. Thus, they are protected and nobody ever knows that you are the owner of the valuable virtual property.

Home Mortgage Selection Tips

Home Mortgage Selection Tips

Most of the people want to live in a high status neighbourhood. And that’s why they take a huge mortgage loan. And thus, nothing left at the end of month for the long term investing and thus, they can never become wealthy.

The Golden Tip is that,
“If you are not Wealthy today and want to become wealthy someday in your life than never purchase a home that requires a home mortgage loan that is more than twice your household’s Total Realized Annual Income”.

And if you don’t do this, you will never be able to accumulate any serious amount of wealth. Living in less costly area will help you to spend less, save more and invest more. The reason why most of the people take a huge home mortgage is because they are qualified for huge mortgage loan.

But well, you are qualified for large mortgage that doesn’t mean that you should go for it. Most of the people do this and that’s why they suffer financially in the future.

Home mortgage is very important financial decision and you should go for it wisely. Only one decision can make you wealthy or poor over the time.

It is advisable to live in less high status areas if you really want to become wealthy and later on once you become wealthy, you can anytime go for luxurious home. Becoming wealthy is more important than showing high status. Most of the people do exactly opposite and that’s why they suffer financially.

So chose your Home Mortgage wisely.

Domain Capital: Domain Financial Service

Domain Capital: Domain Financial Service

How to get loan against your Domain Portfolio?

How to Raise Capital to acquire Premium Domain Names?

Which are the various Financial products related to the Domain Names – Internet’s Virtual Real Estate?

The answer of all of the above questions is – Domain Capital

So What is the DomainCapital.com and how it really works? Well, in simple language, Domain Capital is the Company that finance you against domain names. It’s just like the Mortgage Company of the real world.

Ask your self that, What the Mortgage Company does in the real world? Well, Mortgage Company has several services and financial products for the customers. One is they give the loan against your real estate property. Which is commonly known as Home Equity Loan. Second is the mortgage company help you to acquire a real estate property by putting a Down payment and giving you a mortgage loan for that property.

The same is true for Domain Capital. Domain Capital helps you in 2 broad ways. One is it gives you a loan against your Domain Portfolio after doing proper valuation of it. It’s just like taking a loan against your stocks portfolio, bonds, life insurance policies, mutual funds or any other paper assets.

Here you will be given loan against Internet’s Virtual Real Estate – Domain Names after doing the fair valuation of it.

Second is, Domain Capital will finance you to acquire the premium Domain Names. Isn’t it amazing? You want to acquire a premium domain name for your new web business but you don’t have money so the Domain Capital will finance you to acquire a premium domain name.

So Now it is possible to take a loan against this Internet’s virtual asset cum Real Estate. Domain Names are intellectual properties in the purest form and thus, it is now possible to get a loan against your domain names.

Well, This is really amazing. These people are giving loan against Virtual Assets. Their logic is amazing. After all, we get a loan against assets such as stocks, bonds, gold, real estate, businesses and mutual funds. Now, suppose if we consider Domain Names as the new asset class than why can’t we get a loan against it?

If you want to build your own Domain Name portfolio than why can’t you get a finance for it? This is really a new concept and a great new Business idea….!!!

Loan Against Securities

You can get Loan Against any of the following Securities at any Bank in India.

- Equity Shares
- Mutual Fund Units(Equity,Debt,FMPs)
- Gold Exchange Traded Fund(ETF)
- NABARD's Bhavishya Nirman Bonds
- RBI Bonds
- Policies issued by LIC & Select Private Insurance Companies
- NSC, KVP and Gold Deposit Certificates

Yes, You can get  a loan against virtually any kind of securities. Here Securities means Paper Assets. You just pledge those papers and take a loan against it.

If you take a loan against your Stock Portfolio (Equity) than still you can enjoy all the right of its ownership and dividends.

Benefits of Loan Against Securities -

• No EMIs
• No Post Dated cheques
• No Pre-payment charges
• Interest charged only on utilised amount.
• Exhaustive number of approved securities
• Upto 80% Loan

Overdraft can be availed against,

• Equity Shares* - Demat Shares up to 50% of the value.
  See approved scrips.
• Mutual Fund units* - Mutual Funds up to 50% of NAV (Net Asset Value). See approved Mutual Fund Schemes.
• Gold ETF
• NABARD's Bhavishya Nirman Bonds
• RBI Bonds (8% Savings Bonds 2003 (Taxable))
• Life Insurance Policies issued by LIC & Select Private Insurance Companies See approved Life Insurance Policies.
• National Savings Certificate (NSC)
• Kisan Vikas Patra(KVP)
• Gold Deposit Certificates (GDC)

Thus, you can pledge any of your paper asset and take a loan against it. For availing the overdraft facility, the securities need not necessarily be in your name. Shares can be pledged from any Depository (NSDL or CDSL) and any Depository Participant across the country.

How Does Gold Loan Work?

How Gold Loan Works?

Recently, private sector banks of India have entered into the highly un organized market, The market of loan against gold (Gold Loan). Yes, HDFC, SBI and ICICI Bank have entered into this highly un organized market.

So How Gold Loan Works? -

Well, once you decide to borrow money against your gold, you can simply walk to your nearest Bank branch. You can borrow loan against Gold Bars, jewellery, Gold ETF or any other form of Gold. You just fill up the loan application and the amount of loan you want to take.

Usually the bank will give you up to the 80% loan of the gold price. The Best part about getting this loan is that, No Income proof is requires. Because here you are putting a Gold, the most precious asset as a security so NO Income proofs required. Even if you come from low income category, you can get this loan.

Within few hours, the bank will process your application and open a Loan account in name of you. You will be charged the interest rate only on the amount that you withdraw from the loan account.

You have to check the interest rate table for availing a gold loan from the websites of the bank.

Banks and Financial institutes in India are entering into this market because they know that, Indian people have an attachment with gold and they can’t afford to default on a loan against gold. And more over, taking a loan against gold is a family decision and not the individual decision in Indian families.

How Billionaires Take Loans?

How Do Billionaires Take Loans?

Have you ever think that, How Billionaires borrow money? How do they take loans? If you want a loan for personal expenses than you get a Personal (Signature) Loan on your Income Statement. But How do Billionaires take Loans?

Well, Billionaires take loans in following broad 2 ways.

01) Via their Businesses (Company) &

02) By Pledging their shares in their own Business (Usually Publically Listed).

One way by which Billionaires take loans is via their Businesses. They do everything in the name of their Company. They also borrow money in the name of their Company. They never take any loan in their own name.

Second way by which Billionaires take loans is by pledging their shares in their own Businesses. Their Stake in their own Publically listed Businesses is an Asset and they take a loan against that Security. But this is somewhat risky way to raise money. Because if they can’t repay that loan, they will not only loose their shares but they will also loose the ownership control over their company.

And on the top of this, it is acceptable that if they borrow money by pledging their shares to fund the growth and expansion of their own business but if they pledge their shares to fuel their billionaire lifestyle than it will have a bad impact on the other investors of the company and thus the prices of the shares of their publically listed company may go down.

Usually, Smart Billionaires prefer the first way to borrow money. They take loans in the name of their Company. This is the safe way in comparison to the second way…

How Can I Use my Gold to Get a Loan?

How Can I Use my Gold to Get a Loan?

Many people have the above question. Up to now, market of loan against gold in India was highly un organized and the organized players were not in the market. But now, it is possible to get a loan against gold in India.

HDFC, ICICI & SBI banks are giving loan against gold. They are giving the loan up to 80% of the value of the Gold jewellery, Gold Bars, Demat Gold or any other variety of Gold.

How to get a Loan against Gold?

Well, you have to just walk in to your nearest ICICI, SBI or HDFC Bank branch with your gold. You will have to fill the application and submit the required documents at the branch. They will verify the Document and within few hours, they will issue a loan cheque to you.

Its that simple. The main advantage of Gold Loan is that, you don’t need to qualify for any kind of High Income Individual. Even if you are a low Income individual, you can get a loan against gold. Indians hold world’s largest quantity of gold than any other country in this world. And that’s why now private sector banks are entered into this highly un organized sector.

Since Centuries, the practice of giving loan against gold has been practiced in India. Many Indian Entrepreneurs have put their wives’, parents’ or family gold as a security and taken a gold loan and started their own Venture. And today they are Success….!!!!

People of India have an emotional attachment towards the gold and that’s why it is highly unlikely that, they will default in its loan payment against gold. And on the top of this, taking a loan against gold will be a family decision and not just the individual decision and this will markedly reduce the probability of defaulting…!!!!

Nobody Ever goes Broke that Doesn’t Owe Money

Nobody Ever goes broke that doesn’t owe Money -

This is the saying by Warren Buffet. According to this legendary investor also known as “Oracle of Omaha”, You can never be broke if you don’t owe money. In other words, the people, companies or governments who go broke have taken excessive debt.

Since last 2 decades, US Fed Government, Corporates & Individuals are taking more and more debt to fuel their life styles, expansion and growth of businesses. But today the US Economy, Companies & Individuals are facing trouble.

Many Individuals are Broke. Large Companies like GM Motors & Lehman Brothers are Bankrupt. All because of the excessive debt. Remember, Warren Buffet has never ever taken any kind of Debt and that’s why he is second rich person of the world.

His Company Berkshire Hathaway is debt free through out its history.

According to Warren Buffet, you should never invest with borrowed money. While what the most of the world is doing? Well, they invest with borrowed money, they fuel their high status life style with borrowed money and companies fuel their unbelievable growth with debt.

But the truth since centuries that, if you want to accumulate serious wealth than you should stay away from any kind of debt. In other words, If you never want to go broke than never borrow money. And today if you are in debt than simply get out of that debt as early as possible in your life. Try vigorously to get out of that debt.

The first step of getting out of debt is stop borrowing money and cut down all of your credit cards. If you don't stop borrowing money, you can never get out of debt. Now just logically think that, if you never ever borrow money in your life for anything, reduce your expenses, increase your income and cashflow (Income – Expense) and divert that cashflow towards acquiring assets (Investments) than you will become very rich over the time.

Remember my words, Whenever you take a debt, You are doing nothing but just increasing your chances of going broke…!!!

How to Get out of Personal Loan Trap

Getting out of Personal Loan (Signature Loan) Trap

It’s never been easy to escape from the debt trap. Debt is a disease. People borrow money to fuel their status life style and ultimately one day when they wake up in the morning, they find themselves in a deep debt up to their eye balls and from that day they can’t stop working.

Let me give you an Example of my recently married friend. He has borrowed money during his marriage for expensive shopping and to look cool and rich. He scratched all of his credit cards and taken a huge personal loan. Today almost a year after his marriage he is still repaying that debt. and recently he started defaulting in his personal loan payments because they come with higher interest rates.

This is the scenario of many people. Means they take personal loans to fuel their status life style and ultimately caught into a debt trap. Here are few things that you can do if you find yourself trapped in a Personal Loam Trap someday -

01) Monetise your assets such as Car, Home, Insurance policies, stocks, bonds, FDs, Mutual funds, Gold, Real Estate…etc… to get rid of this debt. I mean to say that, sell some of your assets to repay all of that debt at single go. I know that you will feel very sad while selling your assets but believe me it’s worth it. The Best investment is repaying your debts. If you repay all of your debts, you can later on build those assets anytime.

02) Consult Financial Advisor – This is the another option. If you don’t know how to get out of this trap, it is better to consult a good financial advisor. He will advise you that how to get out of this bad loan.

03) Go for Debt Consolidation – This is the option for many people. Here all of your debt portfolio components are combined by one lender and than you have to pay just one monthly installment which is relatively lower than all your combined payments over a longer tenure. In other words, all of your loans are converted into a single low interest rate loan typically backed by your home and than you have to pay only one installment per year.

However, it is always advisable that, you stay away from this worst type of loan. Remember my words,

“Nobody ever goes broke that doesn’t owe Money”