Mortgages, Short Term Loan, Payday Loans, A boon or bane for the economy?

by ExpertBlogger 2. October 2018 15:00

The attractive option of getting the loan on same day and repaying it back the next payday without suffering a huge debt or credit check is the major advantage of payday loans. A small provisional loan taken to conduit the borrower's cash flow gap between paydays, is referred to as a payday loan. They are loose, but have high-interest and for a short-term and can be aptly referred as micro loans. These loans are usually settled in cash, and the lender processes the cheque or takes out from the borrower's active account on the date of maturity of the loan. 

As evident from the name, the loans are usually taken and repaid within a period as long as of 30 days. Also, the payday loans are usually repaid on next payday, therefore one can see that they are always in control of their payday loans irrespective of what others would say. Giving each one of us a viewpoint that we are our own masters of our payday loans is the most fruitful strategy charted by the providers of these loans. This is because the payday loans have highest rate of interest as they are repaid in less than a span of 30 days. 

So with this the banks and the lenders will definitely opt for Payday loans because even if a bank has or bad loans and stuff. For the lender it is low hanging fruit and as it is an easy money. However, according to a research survey it has been recorded that after subtracting the fixed operational cost and the default losses, the payday loans company does not make considerable profit. There have been cases of fake cheques presented by borrowers as security, and as a result, such cheques bounce when being en-cashed by the bank.

In developing economies like India payday loans are not very popular because of the gravest reasons like a pile-up of bad loans, Indian Banks seem to be pursuing the wrong race. The non-performing assets (NPA) accumulated by Indian lenders are higher than those of Indian banks as contrast to many of the major economies of the world, including USA, UK, China and Japan. Indian banks' gross non-performing assets (NPAs), or bad loans, stand at INR 10.25 lakh crore reported on 31 March 2018. This pie of the cake now accounts for 11.8 percent of the total loans given by the banking industry. For financial year 2018, the total bad loans of these banks rose by a whopping amount of INR 3.13 lakh crores.  It will take years before these banks can get rid of NPAs, accumulated over the years on account of multiple factors.

 Also even the lenders are not easy-going on their customers. Quite often these payday lenders are criticized. They are called the merciless loan sharks attacking the poorer section, low income areas, which are unable to realize the time value of money. Many people find the interest rate on the payday loan puts the weaker section in difficulties, whereas the richer community can afford to pay even up to 25% interest or so on their credit cards.

Pay-day loan is a benefit for customers because they can save you in times of distress. Had it been possible to know or predict financial emergencies, then payday loans would not have happened! Many at times you may find yourself caught in unexpected situations and you may not be well equipped to deal with the situation. Like when you fall sick, or your car breaks down, you would have to bear on your planning budget for the month. So for these kinds of short-term money crunch situations, payday loans are of great help as one can get instant cash right when needed. Pay-day loans can be applied for online as well and the money gets deposited into lender’s account directly and instantly.

To conclude, in the long run if the bad loans increased due to pay day loans then it would be because of the lenders who do not do a thorough check of the credit history of the customers or burrowers. However the things go smoothly and if proper background checks are conducted on both sides then they are very beneficial for the middle income strata and also the banks or financial institutes that give these micro loans on short-term basis.

Things to Remember while Buying Car Insurance

by ExpertBlogger 2. July 2018 09:53

Buying a car is a big decision considering it as a depreciative asset and also the changing technology is the prime reason for investing rightly in a brand. After buying the car the most important decision an owner has to take is getting the asset covered with proper motor insurance in order to safeguard the vehicle from all types of unforeseen damages that may happen to, it once it gets launched on the road. There are many factors both varying and unvarying that determine a good insurance for an automobile. 

In a state like there are multiple factors taken into consideration before zeroing on a good insurance plan. To start with following are the checks to be borne in mind:

a. The credit score of the insurance buyer matters as the insurer would be interested in selling the policy to the party who has a clean credit card history and more responsible in clearing their bills.

b. A good driving history with fewer penalties and tickets for over speeding or driving under the influence of alcohol makes a driver being perceived as more prone to accidents and hence would be charged the premium accordingly.

c. A person’s gender also contributes to an extent in the insurance premium as male drivers are considered to be more hazardous than the female ones.

d. The age factor of the buyer is also an important aspect for an insurance company. Driver below the age of 25 are considered as rash drivers and irrespective of one’s driving pattern a person has to pay the premium higher because of his/her age.

e. The taxi or the cab drivers are liable for a higher premium because the chances of a damage to the vehicle are far more than a private car.

f. A vehicle’s cost, its make, and model also contributes in the insurance that needs to be bought for it. A low range car like a hatchback does not require a costly policy but a trendy sports car or multi-utility vehicle with advanced features would call for a higher premium to be paid.

g. Many insurance companies also decide the premium based on the location of the buyer, because people who drive on mountains or hills or plateaus are more likely to meet with an accident than the people who drive on plains.

The above-mentioned points were considered by an insurer while selling the policy to the buyer. There are certain checks to be performed by the buyers too on the insurer:

a. A buyer should evaluate his/her state’s minimum requirements for the insurance.

b. A buyer should perform a comprehensive market research by comparing the quotes from various insurers before zeroing on one.

c. A buyer should review the insurer’s standing in the market in terms of reliability and also in terms of discounts before finalizing a deal. One should always pick a top-rated insurer irrespective of the cost.

d. Setting up a higher deductible which will ensure a good cut in the premium cost.

e. Usage-based insurance is something where the insurer would track the buyer’s mileage covered and give away discount on the basis of miles driven in a year.

There are few types of covers that should be included in a car insurance:

Liability cover: This is a third party insurance wherein the damage done by the car owner to the other person or person’s vehicle should be covered by the car policy.

No-Fault insurance: It is the cover given by the insurance company to the buyer in case he/she met with an accident that is not the car owner’s fault.

Personal injury Protection: It is the type of cover provided to anyone who travels in the car owner’s vehicle and happens to meet with an accident.

Uninsured motorist insurance: this is a type of cover that gives a protection to the car owner against those who do not have an insured vehicle.

Bottom line is While finalizing the insurance policy a buyer must ensure complete transparency to the insurer by providing all the history of accidents, drink and drive cases etc. else this may lead to denial of the claim by the insurer at the time of mishappening.  

Financial Boom or Sustainable Growth , Where We are Heading..

by ExpertBlogger 7. June 2018 13:13

Economic boom refers to as an increase of business, industry and growth of the sales and goods that would lead to a nation’s overall economic expansion. The global economies contribute in the rise and fall of world trade and economy and hence observes the global economic phenomena of recession and boom. The market fluctuations are bound to occur as they are affected by numerous factors which can’t be predicted by market researchers and analysts with complete accuracy. The various economies of the world are so closely connected that economists could only take calculated risks of prophesying the market volatility.


Many under developed and developing economies show the signs of an economic boom every now and then. The revealing signs of an economic boom in a country are:
a.    Low inflation rate: A booming economy should maintain a lower inflation rate and it is be as low as 2% for developed economies.
b.    Double digit GDP growth: A booming economy should register a GDP growth which should be at least a positive figure and if it’s in double digit with promising signs of converting into developed economy. A GDP is the determining factor of a nation’s growing economy. It is a sum total of consumption of products and government expenditures and exports of the country in that year, all this and minus the imports done by that country in that year.
c.    Rise in employment: In an economy that shows the promising signs of expansion creation of jobs for its citizens is a big factor for showing economic growth.
d.    Increased consumerism: Better employment rate will result in more demand and supply of consumer goods as it will lead to economic stability of the various sections of the society.
e.    The Sensex rise: A booming economy lures investors from around the globe. The market should exhibit bullish growth in the stocks and bearish growth of the bonds.
f.    Bank lending: Banks should contribute in the growth by increasing their capacity to lend to the owners of small businesses hence leading to economic sustainability by progressing the smaller merchants.
g.    The currency circulation: It is the currency of the country and its value that would decide the appreciation of the country’s currency in the world market.
h.    Producer price index: this is the index that determines the cost of major goods producing sectors like agriculture, manufacturing, mining, fisheries, dairy products etc.
i.    Real estate boom: A surge in the real estate businesses is a strong indicator of a booming economic growth as they are the drivers towards making a stronger economy. The increase in the buying of the new homes reflects good employment creation and increased consumer confidence.
j.    Lower interest rates: Banks will levy lower rate of interest on the loans for property and automobile and hence enabling more property deals and creating a surge in the housing and finance industry.
k.    Strengthening the labor: A developed economy will always work towards firming its labor force by skilling them in their crafts and work because they in turn would generate goods and services for the country.
l.    Tax cut: In order to make a robust economy a government should curtail on taxes on consumer goods and services provided. The income tax reduction also boosts the citizens’ morale to save more and spend with confidence making sure that it should not lead to deficit.
m.    Increased government spending: rise in government’s expenditure like construction roads, railways and airports is an indicator of state’s well being programs for making a prosperous society.
n.    Income imbalance: In a booming economy the poor will become rich and gain stability and rise from above the poverty line hence creating a society of economic balance.
o.    FDI: encouraging more foreign investors in the country for the services and goods they get and hence creating more income and jobs in the country.
A sustainable growth in all the above mentioned categories will lead to an economic boom in a country as well as it will help to shape the world economy. The government’s policies play an important role in defining the economic growth of a country. A stable government and a stable geopolitical atmosphere leads to technological as well as advancement in other sectors.

Rise & Fall of Crypto, someone’s gain is someone’s loos

by ExpertBlogger 6. February 2018 17:42

It is not that long when I was shopping for holidays and cash counter the cashier were just having general conversation and he asked me that did you see bitcoin it is going to touch 20k, I said yes but “Isn’t that imaginary and very volatile” I said he said “yes” but he was looking happy, “Do you have any?” I asked, he said yes I have and I am going to buy more, I was imagining that he Is cashier and who earn his money working hard and he is putting that money into something probably he don’t understand. May be some has told him that this is good investment to grow your money. Now after 2 months when I saw bitcoin rate, it reminded me of that cashier and I was thinking that what would have happen to his hard earned money, does he sold in time or he was waiting for price to go up and now his investment is cut into half.

I was reading about cryptocurrency and I was bit skeptical that should go for it or not, one of my friend suggested that you should buy some but again I said I don’t have strong heart that I can stand if I lose all my money in just couple of hours. There might been some different point of view looking at it but if you apply fundamental of investment that if you are taking highest possible risk to make highest money in small time then you should be strong enough to handle any situation which you have to face may be this could be good or bad. But again when we look at crypto this not regulated if you have lot of money and you lose there is no one who can take responsibility of that. 

 

According to many analysts this is something driving by the speculation and interest of people in something new and everyone is looking for making quick bucks and run out of this , they still think that our economy is not mature enough to handle this type of alternative currency and trade in day todays activities , when someone say it is currency then it should have some fixed value which someone cash in but rather that everyone use it as some kind of equity stock where there is not actual value for buying but we are just investing on the speculated value.

We don’t know that in the long term this might pick up or stables but at this point analysts only saying that some people made lot of money overnight and some people lost lot of money those who earn they are happy they are keeping their profits and again betting for good time to come.

Crypto can go in any direction it not even advice that be away from that because you might lose something which will be great down the line after 5 years but analysts fair advice it don’t do over of anything and just like alternative word to this currency, your investment should be like yet another alternative. 

"Any Investment is good till you know what you are doing"

New Year, What's Next!!

by ExpertBlogger 2. January 2018 17:41

New Year is already here and everyone has welcomed New Year with joy and fresh resolution for coming year, it is always amazing to welcome New Year with fresh attitude and new perspective, looking at what we have done wrong in past year and correcting those mistake and doing better in coming days.

We always take a resolution for yourself and at this new year when we entering into 2018 we wish that people should consider and take up things which are generally overlooked we should take resolution to take make this world a better place and think that how we can make our contribution to the society in term of helping those who are in need and giving them level field to compete in this competitive world.

So this New Year talk take up resolution to do some social work or community work. Spend you valuable time with people who do not have anybody around , visit places where humanity still exists and finally to some charity which will help those next generation for better tomorrow , and when you are doing this have you kids with you because that is most important thing because you need to pass these values to next generation and your kids will learn this great thing you are doing and encourage them to care about society and increase their social awareness which is most important thing to have.

We have seen that these days people are connected through digital media but in really they are socially so much apart that it is very difficult to do social interaction as everybody feels like it is the last thing they need to consider and believe me this gap is just going to increase in coming days and we have huge responsibility in our hand to teach our kids that , this is not just you matters , this is us , people around us makes us social and responsible. If we could not do this then we will be living in isolated world in crowded city.

This New Year let look around and try to do thing which we are missing in this digital world, give time to real people rather than phone calls and video call. Feel the real touch and hold the hand who need you hand because at the end you take nothing with you it is your memories and how people see you when you are gone.

And lastly have Great Year ahead!!