Your queries: Loans – Credit card history is sufficient to give you a credit score | The Financial Express

Your queries: Loans – Credit card history is sufficient to give you a credit score

Even if you have not availed of a loan, a credit card history is sufficient to give you a credit score.

Your queries: Loans – Credit card history is sufficient to give you a credit score
Opting for a fixed interest loan in today’s times would be advisable only if the loan tenure is 5 years or less.

By Chaitali Dutta

I want to avail an education loan for my daughter’s higher education. I have never taken any loan and have five years of service left. Whose’s credit score will the bank check for the loan?
—Ashok Joshi

Usually, the credit score is checked for the parent in case of an education loan. Even if you have not availed of a loan, a credit card history is sufficient to give you a credit score.

I am planning to take a home loan for Rs 40 lakh. Should I opt for a fixed or floating rate loan?
—Rajiv Kamath

Generally, it may be a good idea to opt for a floating rate as home loans are longer in tenure. However, please check if there is an option to take a loan where for the initial three years the interest rate is fixed, and thereafter it is floating. Opting for a fixed interest loan in today’s times would be advisable only if the loan tenure is 5 years or less.

Also Read: Luxury housing in the fast lane – Here’s why

I could not pay EMI on my car loan for two months. When I went to pay the EMI for two months, the bank insisted that I pay interest at 20%. What should I do now?
—S K Raghav

Check the sanction letter and see if such a clause had been mentioned. Only if it is mentioned as part of the terms and conditions, then you are obligated to pay the penal interest.

To buy a used car, can I get a bank loan? If so, how do I approach the bank and with what documents?
—Aditya Pratap

A used car is also financed. The documents are like your income details and creditworthiness. As for the car, it needs to be loan free (with no lien registered) and the bank/FI will ask the owner to sign a number of RTO forms that are required for transfer of ownership as well as to register the lien on the car. The bank/FI will also do an independent valuation of the car to assess the loan amount feasibility.

My parents had a vacation home in the hills with adjoining land. After their death, I now want to convert the property into a guest house. Will I get a bank loan for the construction as the papers are still in my parent’s name?
—Nitin Pant

The property has to be transferred to your name first. Only then will you have the right to construct anything in the land with borrowed capital.

Is it possible to repay the full amount of a top-up home loan within two years of taking it? Will the housing finance company levy any penalty?
—Arvind Kumar

Usually, for a floating rate loan, the top-up loan may be repaid as and when you have funds available. There should not be any penalty on this pre-payment. However, do have a detailed view of the sanction letter of the top-up loan.

The writer is a personal finance wellness expert and founder of AZUKE Finance.Send your
queries to fepersonalfinance@expressindia.com

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