1. Skip the introductory rate (Honeymoon)Beware of lenders bearing gifts! Introductory or honeymoon rates have long been an important marketing tool for lenders. You are initially offered a cheap rate on your loan to get you in the door but once the honeymoon period is over, the lender will switch you to a higher variable rate of interest. An example of this is an Adjustable Rate Mortgage (ARM).There are two problems with this scenario. First, the variable rate is often higher than some of the lower basic loans available so you could end up paying more. Second, you need to clearly understand that a honeymoon rate applies only for the first year or two of the loan and is a minor consideration compared to the actual variable rate that will determine your repayments over the next 20 or so years.You may also be hit with fairly steep exit penalties if you want to refinance in the first two or three years to a cheaper loan. So make sure you fully understand what you are letting yourself in before setting off on a “honeymoon” with your lender.2. Pay it off quicklyTime is money. There are all sorts of strategies for paying less interest on your loan, but most of them boil down to one thing: Pay your loan off as fast as you can. For example, if take out a loan of $300,000 at 6.5 per cent for 30 years, your repayment will be about be about $1,896. This equates to a total repayment of $682,632 over the term of your loan.If you pay the loan out over 15 years rather than 30, your monthly payment will be $2,613 a month (ouch!). But the total amount you will repay over the term of the loan will be only $470,397 – saving you a whopping $212,235· Make repayments at a higher rateA good way to get ahead of your mortgage commitments is to pay it off as if you have a higher rate of interest. Get a loan at the lowest interest rate you can and add 2 or 3 points to your repayment amount. So if you have a loan at about 6.5 percent and pay it off at 10 per cent, you won’t even notice if rates go up. Best of all, you’ll be paying off your loan quicker and saving yourself a packet.· Make more frequent paymentsThe simple things in life are often the best. One of the simplest and best strategies for reducing the term and cost of your loan (and thus your exposure should interest rates rise) is to make your repayment on a fortnightly (bi-weekly) rather than monthly basis. How can this make a difference I hear you ask? It works like this:Split your monthly payment in two and pay every fortnight. You’ll hardly feel the difference in terms of your disposable income, but it could make thousands of dollars and years difference over the term of your loan. The reason for this is that there are 26 fortnights in a year, but only 12 months. Paying fortnightly (bi-weekly) means that you will be effectively making 13 monthly payments every year. And this can make a big difference.Using our example from above, by paying monthly, you will end uprepaying $682,632 over the term of your loan. But, by paying fortnightly (bi-weekly), you will save $87,254 in interest and 5.8 years off the loan. Zero pain to you, major benefit to your pocket.· Hit the principal earlyOver the first few years of your mortgage, it may seem that you are only paying interest and the principal isn’t reducing at all. Unfortunately, you’re probably right, as this is one of the unfortunate effects of compound interest. So you need to try everything you can to get some of the principal repaid early and you’ll notice the difference.Every dollar you put into your mortgage above your repayment amount attacks the capital, which means down the track you’ll be paying interest on a smaller amount. Extra lump sums or regular additional repayments will help you cut many years off the term of your loan.· Forego those minor luxuriesThis is the bit you don’t want to read. Once you have a mortgage, your life is likely to be luxury-free (or at least pretty close to it). Think of all the weight you will lose by giving up your favourite indulgent snack. For the sake of your health you should quit smoking and drink less anyway. Take your lunch from home and save on bad fast food. Trust me, your body will thank you for it.If you’re still not convinced consider the following example. A typical day may include a pack of cigarettes ($10), a coffee and donut ($5), lunch ($12) and a couple of beers after work ($8). That’s $35 a day or $175 a week or $750 a month or $9,100 a year.Assuming a mortgage of $300,000 at 6.5 per cent over 30 years, by making $750 in extra repayments each month, you’d save more than $216,000 in interest and be mortgage free in just over 14.5 years.No one is saying you should live a convict existence but just cutting down a little on your expenses will see you reap huge financial benefits.3. Get a packageSpeak to your lender about the financial packages they have on offer. Common inclusions are discounted home insurance, fee-free credit cards, a free consultation with a financial adviser or even a fee-free transaction account. While these things may seem small beer compared to what you are paying on your home loan, every little bit counts and so you can use the little savings on other financial services to turn them into big savings on your home loan.There are also “professional” packages on offer for amounts over a certain limit, which can be as little as $150,000. Some lenders offer discounts to specific professional groups or members of professional organizations. Ask your lender if your occupation qualifies you for any discount. You might be pleasantly surprised. There are all sorts of discounts and reductions attached to these packages so make sure you ask your lender about them.4. Consolidate your debtsOne of the best ways of ensuring you continue to pay off your loan quickly is to protect yourself against interest rate rises. If your home loan rate starts to rise, you can be absolutely positive about one thing – your personal loan rate will rise and so will your credit card rate and any hire purchase rate you may happen to have.This is not a good thing as the interest rates on your credit cards and personal loans are much higher than the interest rate on your home loan. Many lenders will allow you to consolidate – re-finance – all of your debt under the umbrella of your home loan. This means that instead of paying 15 to 20 per cent on your credit card or personal loan, you can transfer these debts to your home loan and pay it off at 7.32 per cent.As always, any extra repayments or lump sums will benefit you in the long run.5. Split your loanMany borrowers worry about interest rates and whether they will go up but don’t want to be tied down by a fixed loan. A good compromise is a split loan, or combination loan as they are often known, which allows you to take part of your loan as fixed and part as variable. Essentially this allows you to hedge your bets as to whether interest rates are going to rise and by how much.If interest rates rise you will have the security of knowing part of your loan is safely fixed and won’t move. However, if interest rates don’t go up (or if they rise only slightly or slowly) then you can use the flexibility of the variable portion of your loan and pay that part off more quickly.6. Make your mortgage your key financial productMortgage products known as all-in-one loans, revolving line-of-credit or 100 percent offset loans allow you to use your mortgage as your key financial product. This means you have one account into which you can pay all of your income and draw from for your living expenses by using a credit card, EFTPOS or a checkbook, as well as making your mortgage repayments..These types of accounts can make a huge difference to the speed at which you pay off your loan. Because your whole pay goes into your mortgage account you are reducing the principal on which interest is charged. Sure, you might take a couple of steps back as you withdraw living expenses but careful use of this sort of product can get you thousands of dollars ahead of where you’d be with a “plain vanilla, pay once a month” home loan.These loans work well when you are able to make additional payments towards the loan. If you are only able to make the equivalent of the minimum repayment on your loan (and not put in any extra) you may be better off with a cheaper standard variable or basic variable loan. However, it’s not unusual for dedicated borrowers using these types of loans to cut the term of a 30 year-old loan to less than ten.7. Use your equityIf you have already paid off some of your home, you are said to have equity. Equity is the difference between the current value of your property and the amount you owe the lender. For example, if you have a property worth $500,000 on which you owe $150,000, you are said to have home equity of $350,000, which you can re-borrow without having to go through the approval process by accessing it through your existing loan.Many lenders will allow you to borrow using your equity as collateral. Most lenders will allow you to borrow up to about 80 per cent of the loan-to-value ratio (LVR) of your available equity. If you are careful, you can use this equity to your advantage and help to pay off your home loan sooner.Using an equity loan to improve your property could be a good way to ensure that your home increases in value over time. But larger expenses such as cars and holidays that would have been paid by credit card are more affordable on the lower rate of your home loan.8. Switch to a lender with a lower rate (But do your sums)It may sound like a simple idea but switching out of your current loan and taking out a loan at a lower rate can mean the difference of years and thousands of dollars. If you have a loan that is tricked up with all the features, or even if you have a standard variable loan, you might find that you could get a no frills rate that is as much as a percentage point cheaper than your current loan.However, before you jump the gun, check out what it will cost you to switch loans. For example, there may be exit fees payable on your old loan and establishment fees and stamp duty on your new loan. Work it all out and if it makes sense, go for it.9. Stay informed – don’t forget about your mortgage
Visit Mortgage Loan Hints.comWith any long-term commitment, there is always the temptation to let your mortgage roll along, make your repayments as they fall due and think as little about it as possible. As long as you keep up the repayments, there’s not much else you need to do, right?This attitude can be a big mistake. Keep yourself up to date with what’s happening in the marketplace. You might find that there’s an opportunity to put yourself well ahead of the game. Rates change, new products and changes in the market itself may allow you to seize an opportunity or negotiate a better deal.Stay informed and stay ahead of the game.10. Get a cheap rate and invest the differenceWhen interest rates are low, like now, it is usually safe to say that inflation is also low. Thus, bricks and mortar may not be the best place to invest. Try getting the cheapest home loan you can find and make the minimum repayment. This allows you to use the extra cash to invest in other, more profitable areas.You may find that the return you get on shares or some other type of investment means that you have created a nice little nest egg which you can use to pay off a bigger chunk of your home loan than you might otherwise have been able to do.But beware – high returns often mean high risks. Before undertaking any investment, invest in a consultation with a qualified financial adviser.11. Run an offset accountInstead of earning interest, any money you have in your offset account works to offset the interest you are paying on your home loan. For example you may have a mortgage of $300,000 at 6.5 percent and an offset account with $50,000 in it earning 3 percent.This means that $250,000 of your loan is accruing interest at 6.5 percent but the rest is accruing interest at just over 3.5 percent (6.5 percent on your loan less the 3 percent the $50,000 in your offset account is earning). Imagine how much you can save!Of course, the best sort of offset account pays the same rate as your loan (100 per cent offset).12. Pay all your mortgage fees and charges up frontSome lenders allow you to add to the amount you borrow instead of coming up with cash for your upfront costs. While this can seem a blessing try to avoid doing this. Consider the following example:Borrower A borrows $300,000 over 30 years at 6.5 percent. Her upfront costs are $1,000 but she has enough cash to make sure she can cover these. Her total repayment over 30 years will be $682,632Borrower B takes out the same loan but doesn’t have enough cash to cover the upfront costs. So he borrows $301,000, at the same rate. Her total repayment over 30 years will be $684,907.Two thousand odd-dollars might not sound like a huge amount but what could you buy with it if it stayed in your pocket?13. Pay your first instalment before it’s dueWith most new loans, the first instalment may not become due for a month after settlement. If you can manage it (and your lender will let you), pay the first instalment on the settlement date. If you do this, you will be one step ahead of the lender for the term of your loan. Every little bit counts.14. Shop around and make sure your lender knows itOne of the most powerful tools you can have in the search for the best home loan is information. Make sure you have rung half a dozen lenders and brokers (as well done some internet research) before you start talking to your preferred lender about getting a new loan or refinancing your existing loan.Make sure you know what rates and features are offered by each of your lender’s competitors on comparable products. Be ready to tell the lender what you are looking for and don’t be afraid to ask for extras. If they want your business, and know you know what you are talking about, they may be prepared to work that little bit harder to get your business.Don’t be afraid to walk out if you aren’t getting the best possible deal you can.15. Make sure your loan is portableIf there is any chance that you will move house during the course of your loan (and let’s face it, there is a strong chance), make sure that your lender will allow you to transfer your loan to a new property and that it won’t charge you the earth for the privilege.Be careful. If you sell up and buy a new house, you could find yourself down thousands in discharge costs on your old loan and establishment fees on your new one.16. Avoid bridging financeSomeone once said bridging finance is so called because it allows you to “pylon” the debt. The joke’s appalling, but so is bridging finance. Unless you get your timing right you could find yourself with two home loans at the same time – with the bridging finance element costing you an extra couple of percent premium on the standard variable rate.Consider using a deposit bond or selling before you buy, as it will be much more cost effective for you than another loan.17. Choose the loan that suits your needsChoosing a loan is about knowing what you want. Draw up a table of potential home loans and rank them. Make a list of all the features that are important to you and rank them according to importance. Give each feature a score out of 5 – one for unimportant right through to 5 for indispensable.Use this technique for ranking the loans on offer and pretty soon you’ll see the one that’s right for you. Remember, different loans have different purposes so you need to match a loan to your need. Taking out an interest only loan suitable for investors if you are planning to live in the house is just foolish.Ditching the features you don’t need can save you up to 1 per cent on the interest rate of your loan. Over 30 years that’s a whole lot of money you’ve just saved yourself.18. Don’t be afraid of smaller lenders with cheap ratesSince the advent of the mortgage managers over the past five or six years there’s been a lot of talk about smaller and “non-traditional lenders” and how they have forced interest rates down. With the property boom, plenty of opportunities sprang up for smart lenders with low fees willing to take on traditional lenders and many have done very well indeed.Some borrowers worry about what might happen if their lender gets into financial trouble. Keep in mind that you’ve got their money – so don’t worry too much. There are some smaller lenders whose names might not be readily familiar but whose rates might be enough reason to get in touch.Be wary, however. Some of these smaller lenders can have huge hidden fees and charges. It is true that the interest rate might be much lower, but in many cases, they exit (or penalty) fees can be very high if you refinance or pay off your mortgage in the first couple of years. Of course, if you’re planning on staying with that lender for some time, then these fees will not impact your pocket at all.

The main features are:
It is a unsecured loan suitable for any purpose Like:- Education
- Marriage
- Medical purpose
- Purchase of Property or Assets
- Repay old loans
- Investments
- Holidays
- Gifts…etc.It is hassle free. No guarantors or security /collateral required. Loans to salaried & self-employed. Special offers for Professionals like Doctors, Chartered accountants, Engineers, Architects, Company secretaries, MBA’s etc. Loans are available from Rs. 50, 000/- to Rs. 20 lakh. Repayment options from 12 to 60 months in easy EMI’s. Loans available against surrogate income of any auto, personal or home loan.Minimum documentation & fast approval. What are the Various types of personal loans available? Personal loans can be broadly divided into income based and non income based. Income based loans are given on the basis of income per month/per year for salaried and self employed respectively. Non income based loans also know as surrogate loans are given based on repayment track records of existing personal loans, car loans, home loans and Credit cards from approved banks. Minimum instalments paid/Months on books required is 9-12 months.WHAT ARE THE ELIGIBILITY CRITERIAS?
The eligibility criteria for salaried and self employed are:SALARIED:
Applicant should be Indian citizens working and residing in Mumbai.
Minimum age required is 21 years and Maximum 58/60 years.
Minimum Work Experience-1 month in current company and 3 years overall.
Minimum Net Take Home – Rs. 20, 000/- per month.
Residence-either Owned, rented or company provided.
Telephone/mobile mandatory at residence.
Currently most of the banks are providing unsecured personal loans only to employees of Private Ltd , Limited and multinational companies.SELF EMPLOYED:
Applicant should be Indian Citizens Working and residing in Mumbai.
Minimum age required is 23/25 years and Maximum 65 years.
Minimum 3 years experience in same business.
Minimum income Rs. 2. 50 lakh per anum.
Residence/Office -either Owned, rented or company provided. Either residence or office should be self owned.
Telephone/mobile mandatory at residence and office.
Partnership firms , Private Ltd. companies and deemed Limited companies are eligible.HOW IS ELIGIBILITY CALCULATED? Different banks have different ways of calculating the eligibility. In the case of Salaried generally most of the banks would calculate eligibility to be 1/1. 5 times of annual income. Factors such as existing loan liabilities , average bank balance, track record on existing loans , company profile & loan tenure also plays a part in deciding eligibility.
In the case of Self Employed’s the eligibility would depend on the turnover, existing track record, net profit, cash credit /overdraft limit enjoyed, line of business, cash flow, bank statement, existing loan liability amongst other things. Generally the loan amount is limited at 1. 25 to 4 times of cash profit generated less existing liabilities or a certain percentage of turnover less existing liabilities.WHAT IS THE LOAN TENURE?Loan tenure is the period within which the applicant wants to repay the loan. Loans can be repaid from 1 year to 5 years. The rule of the thumb being longer the tenure higher would be the loan eligibility and vice versa. The age of the applicant along with period of service left also influences the loan tenure.WHAT ARE SERVICE CHARGES?Service charges, loan processing charges , bank charges are various ways of describing the fees which the bank charges for processing and disbursing loans. It is deducted directly from the loan amount and is generally restricted to 2% to 3 % of the loan amount. It is a one time fee.WHAT ARE THE DOCUMENTS REQUIRED?SALARIED:- Photograph.
- Pan card copy.
- Current residence proof.
- Salary slips for 3 months.
- Bank statement for 6 months.
- Appointment letter and proof of work experience.
- Sanction letters of existing/closed loans.SELF EMPLOYED:- Photograph.
- Pan card copy.
- Residence and office address proof(Either residence or
- Office should be self owned).
- IT Returns – CA certified copies for 2 years complete set.
- Business continuity/existence proof 3 years old.
- Business banking 6 months.
- All existing loan sanction letters.
- Qualification proof for professionals.WHAT IS THE LOAN PROCESS?One can apply for a personal loan any time in anticipation of a quick, hassle free and unsecured finance for any purpose. The verification process at residence and office is physically done within 2/3 days on submission of all documents required. There is a simultaneous credit check done to find out the credit history of the applicant in the bank applied as also other banks. If all the checks are positive the credit officer normally has either a telephonic or physical discussion with the applicant at his office/place of work.Subject to the discussion being positive the applicant has to sign an agreement and also hand over PDC’c(Post Dated Checks) or authorization for ECS(Electronic Clearing System). The applicant generally gets either a direct credit in his/her account or receives a Draft within 2/3 working days after executing the agreement. The entire Process may take 5/7 working days.WHO CAN APPLY?Salaried individuals and Self employed individuals, Partnership firms, Pvt. Ltd. and Deemed Ltd. companies can apply.What are the Income Criterias for Salaried?
A Salaried Individual needs to have Minimum NTH(Net Take Home Salary) Of Rs. 20000/- pm.What are the income criteria for self employed?
Minimum Income of Rs. 2. 5 to Rs. 3 lakh per annum is the accepted norm.What is the minimum and maximum loan amount?
The minimum loan amount for salaried is Rs. 50, 000/- and maximum Rs. 15 lakhs. For Self employed the minimum loan is Rs. 1 lakh and maximum 20 lakh.WHAT ARE THE AGE CRITERIAS?
For salaried the minimum age is 21 years and maximum 60 years.
For Self employed’s the Minimum age required is 25 years and maximum 65 years.Is a no income Proof loan available?
Yes, salaried individuals and self employed’s can apply on the basis of existing personal loan, auto loan & home loan tracks on which minimum 9/12 EMI’s have been paid.WHAT IS THE LOAN TENURE?
The minimum loan tenure is 1 year and maximum 5 years.Is securities or guarantors required for a personal loan?
No security, hypothecation, guarantors or mortgages is required in a personal Loan.Can a person staying on rent apply?
Yes, applicants staying either on owned, rented or company provided accommodation can apply. Permanent residence address proof may be required in case of rented/leased, company provided accommodation.WHAT ARE THE INTEREST CHARGES?
Interest charges depends on various factors like the Loan Amount, Company profile, qualification & Income etc. It could vary from 16 % to 26% on a monthly reducing basis.CAN THE LOAN BE PREPAID?
Yes, the loan can be prepaid after paying 6 installment.ARE THERE PREPAYMENT CHARGES?
Generally all banks charge 4% to 5% of the principle outstanding as prepayment charges.

Anyone remotely involved with small businesses, whether as a consultant, lender, supplier, leasing specialist, trade association, or simply as a consumer who is tired of driving by sections of town and wondering why your favorite business unceremoniously threw in the towel, would very much like to hear some good news. Not to mention the small business owner itself. After all, there are 27 million small businesses that deserve to be thriving in this nation, but too often were ignored by the Bush administration. Classically non-complainers by nature, they just want a scrap of hope thrown their way. And I’m not talking about wide-eyed idealists looking for handouts-in all due respect to Emily Dickinson, they’re not looking for the”thing with feathers that perches in the soul”. Just give us a few bucks and we will run with it. This is a continuing article (20 in all) on the subject: Help. Is anyone out there loaning to small businesses anymore?Fortunately there is a loan program out there and SBA lenders are actually making loans currently: the Community Express Loan Program. This gives unsecured small business loans between $5,000 and $50,000 with very little paperwork, answers typically in two days, interest rates presently at 7.75%, funding and two weeks, and monies wired directly to your business account. There are still lenders participating in this program, although Congress has failed to make the program permanent and still has a 10% cap on the number of loans.Enter the Obama stimulus bill. Let us look how it affects this program and small business lending as a whole.If you have tried to wade through the 1,100 or so pages of the new stimulus bill (American Recovery and Reinvestment Act of 2009), you know its like chipping through granite. But let me pull out a little gem. It now allows the U.S. Small Business Administration (SBA to you) to guarantee up to 90% of loans made by private lenders under their program. Let me explain. This is great for Community Express.When the Small Business Act was enacted in 1958, it had a very simple mission. Find a way to get loans to small businesses that couldn’t get them through traditional channels. It did this in an ingenious way. They knew banks where reluctant to loan to small businesses, especially startups, because of fear of failure. So the SBA collected a fee on each loan and used this as a fund to pay banks if there was a default. Bingo, there was invented the SBA guarantee fee. It doesn’t take a degree in rocket science from MIT and an MBA from Harvard to know this gives incentives to the banks to make more loans.SBA loan programs have guarantees from 50% to 85%. Specifically, the SBA currently has an 85% guarantee on loans up to $150,000 and up to 75% on loans above $150,000. On the other hand, there are some programs that only go as high as 50%, including the Express Loan program (for those types of loans the new guarantee will not change). With the new stimulus bill, the SBA has the right to increase these fees to 90%.Think about this for a moment. Simple math tells us more guarantee, the greater the likelihood of the bank making the loan. For goodness sakes, 90% is tapping on the door of a 100% guarantee! Also note the guaranteed portion is typically sold on the secondary market (which has recently shut down to almost nothing) so there is more chance for loans to be sold and more money to go back into the coffers of the banks for further lending.Notice I said the SBA has the right to increase it to 90%. It can pick which program. And it has not occurred yet. But if I was a betting person, I would say they would be seriously looking at most of the programs because everyone is scraping for ideas to revive the economy.For those addicted to primary source documents, this is what the new statute, in relevant part (my attorney wanted me to add that) says:SEC. 502. ECONOMIC STIMULUS LENDING PROGRAM FOR SMALL BUSINESSES. (a) PURPOSE- The purpose of this section is to permit the Small Business Administration to guarantee up to 90 percent of qualifying small business loans made by eligible lenders.
(b) DEFINITIONS- For purposes of this section:
(1) The term ‘Administrator’ means the Administrator of the Small Business Administration.
(2) The term ‘qualifying small business loan’ means any loan to a small business concern pursuant to section 7(a) of the Small Business Act (15 U.S.C. 636) or title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 and following) except for such loans made under section 7(a)(31).There is also a sunset provision under Subparagraph (f) that the guarantees are only good for one year after enactment of the bill, unless extended by Congress.So what does it do for me now as a small business owner? Well now the not so good news. I predict the SBA will be increasing many of its programs to 90%. But to get the banks in the lending mood again, there has to be a secondary market. There is also new legislation on that, which we will discuss in another article. But once we have a secondary market, I predict that they banks will not only loan, but do so in a big way. For three reasons:First, history tells us when there is economic inactivity due primarily to depressed conditions, when the cycle changes for the better, like a sling shot affect, it changes dramatically. Remember when people were unable to refinance or purchase their homes because of tight markets and high interest rates? The rates went down and many jumped at the chance to refinance, improve their homes, and purchase (some say too precipitously) with abundance. Although this is an overstatement and also depends upon other factors such as employment, standards of living, etc., the analogy holds that when things loosen up, there will be a substantial number of business loans.Secondly, banks are in large part in the business of making loans and they have not been doing so for some time. They will be anxious to make profits again.Lastly, simple economics tells us when there is a vacuum in the market; capital will rush in and take advantage of that open market and initial lack of competition. Large banks are not making business loans so small community banks are starting to rush in to take over the arena. Give them a secondary market and they will explode.So for the small business owner, I think this news of 90 % guarantees is favorable. Why did it take them so long?