Points to remember before applying for loan

POINTS TO REMEMBER BEFORE APPLYING FOR A LOAN

 

The tenure

A longer repayment tenure would mean more interest payments on your loan. Before you set out to complete the paperwork for a loan calculate the Equated Monthly Installments (EMI) to know how much you are expected to pay and whether you have the capacity to pay that in time.

 

The Loan Costs

Never forget the fee charged for disbursing a loan to you. Some banks have a higher fees than others. You need to take care of this important component of loan disbursements.

 

The Prepayment Dilemma

Many public sector banks do not charge you a penalty for prepayment of loans whereas many private banks ask for a penalty payment. Check this out upfront.

 

The Fixed Interest Rate

You need to know well in advance that interest rates do not fluctuate. If they fluctuate the choice is yours. There are quite a few fixed interest rate loans and if you are worried about variable interest rates then the best option is to go for a fixed interest rate to avoid suprises.

 

Monthly or Annual Repayments?

You need to check out the repayment burden on yourself and see if an annual payment suits you. If not then go for the monthly plan.

 

Taxes on loans

One can claim a deduction of up to Rs. 40,000 on the amount paid out of the taxable income in the previous year. This is a comprehensive limit, and includes principal and interest, if any.

One can claim the deduction if you've taken a loan from a financial institution or an approved charitable institution to pursue full-time courses for graduate or post-graduate level studies in engineering (including architecture), medicine and management or a post-graduate course in applied sciences or pure sciences, including mathematics and statistics.

The deduction is allowed for the first assessment year relevant to the previous year when the assessee starts repaying the loan and for seven assessment years immediately following thereafter. In other words, the deduction is available for a maximum period of eight years from the first year of repayment. The deduction shall be allowed for the period of loan and interest repayment, if it is repaid in full before the end of the above period.

Note: This deduction cannot be claimed by parents who have taken loans for the higher education of their children.

 

The Relevant section/rule is Section 80E of the Income Tax Act.

 

DOCUMENTATION REQUIRED

 

Typically the following are the basic minimum documentation to be provided to the bank while availing of loans from them:

Mark sheet of last qualifying examination for school and graduate studies in India
 

Proof of admission to the course
 

Schedule of expenses for the course
 

Statement of Bank account for the last six months of borrower
 

Income tax assessment order not more than 2 years old
 

Brief statement of assets and liabilities of borrower
 

Identity and give proof of residence.
 

Copies of letter confirming scholarship, etc.
 

Copies of foreign exchange permit, if applicable.
 

PROCESSING TIME

 

Most bank claim to disburse the loan money within one to two days after the required papers are submitted to them. A checklist is provided to the person seeking loan giving the details of the required documents like proof of age, address, admission expenses, assets and liabilities of co-obligants, details of collateral security, certificate of last qualifying examination etc.

However experienced loan-seekers say getting loan from banks is an uphill task. There are students who could get the loan, but after the deadline for fee deposit had expired!

 

DOCUMENTATION TERMINOLOGY

 

Adjustable Rate Loan
Adjustable rate loan is one where the rate of interest is linked to the Prime Lending Rate. It is also known as "Floating Rate Loan". If you have opted for adjustable rate loan, then you stand to gain if interest rates drop. Likewise you need to be prepared to take the risk when interest rate increase. Therefore, in this case the gain/ loss of interest rates fluctuation is borne by the borrower. The rate on loan is generally revised on regular intervals.

Application
A form used to apply for a loan, on which you'll put relevant information about yourself. Also refers to the whole process of applying for a loan.

Appreciation
An increase in the value of a property due to changes in market conditions, or for other reasons. The opposite of depreciation.

Asset
Anything with a rupee value that you own. Your assets are tallied up when the bank is trying to figure out what it can afford to lend you. You don't have to own something "free and clear" for it to be considered an asset. Say you have a house, on which you owe money to a bank or mortgage company. The amount you owe is considered a liability; the amount you've already paid off is an asset.

Bonafide
In good faith, real, not fraudulent.

Borrower Classification

Lenders classify borrower based on their personal and professional profile. Most common borrower classifications are:

Salaried Individuals
 

Self Employed professionals
 

Self Employed Individuals.

Breach
A violation of any legal obligation.

Check-off Facility
This is a facility by which the employer of the borrower agrees to deduct the installment amount from his salary and pay the same directly of the lender. In some cases the lender imposes special lien on payment of borrower's provident fund. This facility offer's a kind of security of the lender towards repayment of loan.

Co-applicant
A person who applies to the lender along with the applicant to avail a personal loan. The income of the co-applicant is clubbed with that of the applicant to arrive at the maximum loan amount. Some lenders insist on a co-applicant when the amount of loan sought is more than certain pre-specified limit.

Collateral
Assets that can be used to back up a loan which you obtain with a finance company. If you fail to pay the loan as agreed, the finance company can take these assets.

Collection
The process of forcing a borrower to pay what he owes on a loan and, if it comes to that, to proceed with foreclosure.

Compound Interest
The interest calculated on the principal balance as well as the accumulated interest is called compound interest. It is usually higher than the simple interest.

Credit History
The record of how you've borrowed and repaid debts.

Credit Limit
The maximum amount that you can borrow. Your credit limit is calculated based on a lot of factors such as your personal profile, credit history, net income, etc. More commonly it is a multiple of your net income.

Credit Report
Credit report is a documentation of the credit history containing information about your credit experiences, such as your bill-paying history, the number and type of accounts you have, late payments, collection actions, outstanding debt, and the age of your accounts, is collected from your credit application and your credit report.

Credit Scoring System
A Statistical system used by creditors to compare your credit history with the credit performance of other consumers with similar profiles. A credit scoring system awards points for each factor that helps predict who is most likely to repay a debt. A total number of points- a credit score-helps predict your creditworthiness.

Debt
An amount of money owed by one person, company, organization or other entity to another.

Default
Failure to meet legal obligations in a contract; specifically, failure to make the monthly payments on a mortgage. IF this happens, you can end up losing the house.

Delinquency
Failure to make payments on time. This can lead to foreclosure.

Depreciation
A Decline in the value of property or asset over time.

EMI
Equated Monthly Installments (EMI) are installments towards repayment of a loan, lease or hire purchase agreement. As banks and finance companies conduct very high volumes of retail business it becomes easier for them to monitor and manage installments that are constant in amount.

Guarantor
The person who promises to pay a debt or perform an obligation contracted by another if the original party fails to pay or perform according to a contract.

Guarantee
A promise made by one party to pay a debt or perform an obligation contracted by another if the original party fails to pay or perform according to a contract.

Fixed Rate lending
When in a contract of loan the rate of interest is fixed and there is no clause as to the change in the rate of the interest with some other rate as the benchmark it is called Fixed Rate Lending. In this type of lending the rate of Interest does not changes during the period of the contract.

Flat Rate of Interest
A method of calculating the interest rate based on the total outflow of money. The method does not take into consideration the time value of money and is thus a crude measure. Flat rate of interest is the % paid in excess of the finance amount, and is calculated on per year basis.

Hypothecation
A hypothecation is an equitable charge on the goods without possession, but not amounting to a mortgage. The contract is done to secure a debt.

Distant learning MBa programme

A Distance Learning MBA Makes You Marketable One of the main rules of the job search is that you must be able to market yourself. Employers need to see what puts you a cut above the rest of the job-seekers who are vying for the same position. They want to know what makes you viable and unique. If you want to know what makes you invaluable to an employer, you may consider getting a distance learning MBA. It is always good to know a little bit about everything. However, it can be much more advantageous to know a great deal about one thing – your discipline. A distance learning MBA helps you to become an expert in your line of work. It makes you more valuable to businesses. You can stay ahead in the corporate world by earning a distance learning MBA through learning new business procedures and methods.

The knowledge you acquire through an online master’s program can be applied to decisions that need to be made on your job and in everyday life. You will become equipped with tools that lead to better corporate strategies, decision-making, and policies. When you use these tools on the job, you will impact your entire work environment with your knowledge.  The advancement opportunities are tremendous for those with advanced degrees like a distance learning MBA. Investing in your career could lead to raises and promotions. With your expertise, you will be eligible to climb higher up the corporate ladder. Most managers, top executives, and CEO’s have reached those positions because they have attained sophisticated degrees in their line of work. They steadily rose from an entry-level employee. Each subsequent step led to higher and higher ranks within the company until they finally reached the height of their careers.  Yet, moving up the corporate ladder is not your only option when moving ahead in the workforce. Many people become entrepreneurs and start their own businesses. The knowledge that you gain from pursuing a master’s degree is focused and in-depth. Many people take this knowledge and start their own careers from the ground up. This gives them the freedom to do something they love and work for themselves at their own pace.  An enormous benefit of earning a distance learning MBA is that you can tailor the curriculum to fit your specific needs. You can choose which courses you want to take so that you can enhance your educational experience. You select courses that apply specifically to your current occupation or a profession that you would like in the future. The program allows you a flexibility that you otherwise might not obtain from a traditional college curriculum.  The courses are taught by professors who have similar experience in your field. Many of these instructors have already published books that have received exceptional reviews. These books are based on their own success stories in the corporate world. The techniques and strategies they teach have been proven to work and have lead to new business theories and organizational change.  Impress your prospective employers with a distance learning MBA. It will put you on the cutting edge of the business market and a step ahead of the competition.

Different MBA fields to choose from

MBA in Education	MBA in Criminal Justice
MBA in e-Business	MBA in Education
MBA in Engineering	MBA in Entrepreneurship
MBA in Executive	MBA in Finance
MBA in General management	MBA in Global management
MBA in Health Care	MBA in Hospitality and Tourism
MBA in Human resources	MBA in Information systems
MBA in Industrial management	MBA in Leadership
MBA in Knowledge management	MBA in Marketing
MBA in Media	MBA in Nonprofit and Goverment
MBA in Organizational	MBA in Sport management
MBA in Technology management	MBA in Telecommunications

Advantages Of MBA

The Mba is a testing study modify for the accompanying explanations:

There is an extraordinary bargain of fascinating material to osmose

An exceptional study form

An encountered and worldwide assemblage of roused Mba understudies

The Mba Studies arrangement is requesting if you pick full time or low maintenance. A robust readiness to every class session and class investment are deliberately imperative as astounding measure of material is secured throughout every day. Instructing sessions are amazingly intuitive; the differentiated work experience and inventiveness are profoundly esteemed throughout in-class examinations.

Expert and animated demeanor are normal besides inside teamwork sessions. For the same explanations the Mba Programme is involved and well in touch with the legitimate business planet. All these add to the quality and nature of the Programme. Also this is the reason it is imperative to attempt to snatch the encounter others are putting forth; just as significant is to advance your work encounter to others. Your chance used at a Mba School will turn into your focused preference deliberately and in monetary terms, sometime.

Throughout the Mba Studies you and your partners shape bonds that will generally likely stay until the end of time, the result being, on top of everything else: "talking the same dialect". This system will be productive all through your working life and past, and regularly you will discover your associates from the slightest wanted corners of the planet.

I should concede that I have just had the ability to completely acknowledge the preferences of my Mba Studies years after my graduation; after different employments and positions held I could completely put into practice what I had studied. I likewise frequently appropriated assistance and given an encouraging hand to a hefty portion of my Mba ex-partners.

Your inspiration is the expert the earth, the pace with which you assimilate new things, and the imagination encompassing you. In the event that you pick the creative school that takes after the necessities of the business as for viable business operations for instance e-business, telecommunications), you will study considerably more and truly feel at the highest point of the innovative improvements.

In any case, what you truly study throughout your Mba studies is time administration and prioritizing. What you might as well know as of recently before coming to study a Mba, is that quality is deliberately essential good to go life and past.

Value of MBA

In difficult economic times, going back to school to build new skills -- and make yourself more attractive to future employers -- becomes extremely popular, even for people with full-time jobs. MBAs are especially popular since the degree is usually meant to prepare someone for more advanced, leadership roles in business (or even government). But is an MBA degree worth the extra years of schooling -- especially when you could be spending that time working full-time?  At first glance, the numbers indicate that the answer is a definite yes. A recent survey of accounting/financial workers of varying skill and seniority levels found that CFOs without a degree had an average salary of only $38,920, those with a Bachelors Degree earned $88,836, and MBAs earned an average of $104,284. The return on investment for an MBA certainly seems worthwhile.  Factors to Keep in Mind  There are some other factors to consider, though. For instance, nearly any advanced degree will earn you more money over the long haul -- MBAs are not unique in that regard. So the question then becomes whether an MBA is the degree you really need. Perhaps your skills and goals would be better served by earning a CPA or just a financial planning certification. Money isn't everything -- first and foremost, look at the skills you want to develop and the career goals you've set.  Another thing to remember is that the salary figures quoted above are fairly flexible and can vary widely based on a number of factors. For instance, the type of work you're going into can make a huge difference; consulting jobs will often pay more than finance/accounting jobs, though each could have a different compensation/bonus structure. Your previous experience also speaks volumes. If you're fresh out of business school and go hunting for an investment banking job after years in a marketing firm, odds are good that your starting salary will be much lower than someone with greater comparable experience.  A Mountain of MBA Potential  The numbers are still very persuasive. Statistics from the Graduate Management Admissions Council (the folks who administer the GMAT) indicate that in many cases someone's pre- and post-MBA salary can jump 50% or more. For example, someone working in marketing making an average of $42,000 before getting their MBA can make an average of $80,000 after receiving their degree. That's nearly doubling your money!  An MBA may not be equivalent to a lottery ticket, but the odds are good that your earnings will increase after earning your degree -- making those extra years of school worthwhile. Just be sure that you're pursuing the right degree for the right reasons and, of course, good luck with that graduate school application!

What is MBA DEgree

Full-time Mba Program

Full-time projects are customarily 2 years, or 21 months, in length. There are additionally various 1-year projects, chiefly in Europe. Two-year project takes into consideration a 10-to 12-week internship period between the first and second year.

People in full-time systems can think completely about the Mba encounter, which can include noteworthy extracurricular exercises, significant for improving systems, profession, and authority chances.

Full-time projects are normally shorter time than low maintenance arrangements. Talking for the most part, full-time people might influence the profits of the degree speedier. The steady loss rate for full-time systems is flat when contrasted with low maintenance and official systems, basically on the grounds that learners make a critical duty to the project.

Generally full-time projects allot huge assets to a vocation administration enterprise. Comprehension that their scholars are utilizing the degree to improve their vocations, they give the system and contacts to interface with potential bosses.

The chance expenses of full-time study are high; you have to acknowledge both the misfortune of livelihood and surrendering work to take part in the project. These expenses are decreased with the one-year model. Full-time understudies are not commonly supported by their managers.

Two-year Mba modifies regularly offer a center choice of courses in the first year and the chance to study electives for the remnant of the system. Some Mba projects permit scholars to spend significant time in a specific field, or a major, while seeking after a general administration skeleton. The capacity to practice may be vital in the event that you are fascinated by a specific field.

The major preference of a 1-year system is its length, which lessens chance costs. Two-year projects permit more time for extracurricular encounters and internship chances between the first and second years. The point when recognizing the decision between the two, perceive how schools parity these issues and make chances. Additionally determine you comprehend how they operate the whole educational module throughout 1 year.

One-year systems may be suited for appointees further along their profession ways, competitors with business undergraduate degrees, and those who are represent considerable authority in a corner, in spite of the fact that a portion of the more prestigious 1-year Mba systems are basically general administration in centering. Two-year projects may be more qualified to those searching for a complete Mba experience, incorporating chances to get included outside the classroom, and for those who need to increase encounter outside of their flow vocations.

Additionally recognize the relative notoriety of the separate Mba arrangements. In Europe, 1-year projects have been exceptionally auspicious and incorporate a portion of the locale's generally prestigious projects. In the U.s., this is not frequently the situation, in spite of the fact that projects may offer the adaptability to complete your scholastic studies early.

Why MBA?

Industries might as well genuinely acknowledge Mba assuming that they accept they could and ought to be making an improved showing tapping the full potential of their representatives' information, experience and aptitudes in performing the conglomeration's destinations.

This conviction may have come up because of issues identified with deals, product/service quality and conveyance, after deals benefit or any of the different parts of the conglomeration's operations bringing about less than optimal productivity.

To the degree that these issues are established in "individuals issues", they may be the aftereffect of workers not thinking about their employment or the association, being unwilling to go the additional mile or assume ownership over their activities, and unfortunate teamwork or collaboration between distinctive groups and branches. Such representative mentality and conducts are regularly established in unfortunate correspondences and an absence of shared trust and regard. In scenarios where correspondences, trust and appreciation are needing, especially between administration and workers, associations changelessly encounter "individuals issues" that reason unnecessary liability and decrease benefit. Mba is interestingly intended to address these issues.

All things considered, associations refer to an assortment of explanations behind embracing Mba:

Need to enhance the association's exhibition: When administration closes they require the animated assistance and inclusion of the whole conglomeration to enhance the association's exhibition.

Need to turnaround a negative society: When administration feel their enterprises to go places with the association are, no doubt, being de-railed by an absence of true uphold or collaboration around the representatives.

Acknowledgement that there must be an improved way: When administration distinguishes they no more drawn out could or might as well convey the whole trouble of avocation regarding the association's victory or disappointment on their shoulders separated from everyone else.

Conviction that you get what you give: When administration accepts representatives react to an exceptional nature's domain, testing chances and an evenhanded payment modify by being more gainful.

Yearning to give something over to the representatives: When administration needs to compensate representatives by offering them a stake in the association's money related triumph and by giving them chances to further their professions.

Numerous Mba associations seem to have been moderately illuminated in their administration practices preceding receiving Mba in any case, for an assortment of explanations, neglected to tap the full potential of their conglomeration's abilities. It's the reconciliation of the different administration hones or parts of the Mba framework and the order requested by the framework that has the ability to realize the society of proprietorship and upgraded exhibition.