How To Select A Car Loan

Car buyer’s ‘belief’ has improved and to strike into this opportunity, the car manufacturers are all set with a number of new launches and lucrative deals to pace up their opinions. Experts say that almost 80% of new car purchases are financed through loans. Most of the banks and NBFCs (Non Banking Financial Company) attract consumers with a discount of about 0.25-1% on interest rate of car loans during the festive season. Dealers also offer good cash discounts and freebies at this time.

If you too are planning to buy a new car, and a car loan for it, you can contact either a bank or an auto finance company. And to help bag a deal that ideally fits to your requirements, we at Cardekho have brought best way to make your choice from the various options of financial services in collaboration with Bankbazaar.com

First and foremost, choose the car that suits your requirements and fits in your decided budget. List at least 2 cars in the similar price range so that you can compare them and select the one with the best finance deal.
After choosing the car, search for the loans being offered by different banks/finance companies. While examining the loan schemes provided by the various financial institutes you should keep in mind certain points:

Check with your bank if they provide any scheme for the existing customers. There is a possibility of finding a better deal if you have a good credit history with your bank.
Fixing the tenure of the loan will certainly help you to compare loan schemes offered by various financial institutes. While the auto loan tenure offered by a car finance company may typically last for as much as 5 years (60 months), the banks offer a longer duration of up to 7 years (84 months).

The next deciding term that may affect your choice of best car loan deal is interest rates. Banks usually apply same interest rate for most of the customers whereas car finance companies offer rates on a preferential basis to maintain customer “loyalty”.

This brings us to the next question: who offers a better rate? You can get the answer by visiting our car loan section to compare the interest rates offered by a list of various banks and car financing agencies. Car finance companies often provide loans at cheaper rates on specific models or variants. Some banks might give you loan at lesser interest rate at high processing fee while others might not charge processing fee at all on higher interest rates. Calculate the final cost of loan before considering one out of the two options.

Before finalizing the loan source, compare the schemes on the basis of eligibility, rate and cost. For comparing the interest rates and cost offered by various financial institutes, visit cardekho.com’s Car Loan section. It has been noticed that manufacturers periodically subsidize the loans without reducing the sticker price of the vehicle. Transparency in the terms and conditions of the loan are significant so that there are no issues later. Always give importance on the aspects such as speed of sanction and disbursement and quality of service, both prior and post-disbursement. Whether a bank or a car finance company, the basic steps don’t change so research about the auto loan that are being offered online on the first base. Visit the online finance portals such as Cardekho Car Loan. Then compare the total cost of the loan and EMIs and evaluate your repayment ability and after that, choose a lender that is most suitable to your requirements.

Loan With A Purpose

Many smaller investors are willing to offer loans to borrowers who do not want a loan from a traditional financial institution.  The slightly higher costs of the loan are often worth it, considering borrowers will avoid the many hassles and daunting requirements of traditional lenders.

With a willing lender and a willing borrower, what could possibly go wrong?  The short answer is that a lot can go wrong.  Besides the obvious, such as defaulting on the loan, there is one trap for the unwary lender that should not be ignored: the loan’s purpose.

Why does the purpose of the loan matter?  Because when a default does occur on a loan, the stated purpose of the loan may have a dramatic effect on the lender.  There are many varieties and types of loans, but they all fit into one of two categories: business or personal.

Let us say that as a smaller investor, you want to make loans of a business nature.  The borrower comes to you and says that the loan is for construction for a business.  To most it would seem to be a no brainer: it’s a business loan.  If it is a business loan, then all of the documents need to state the business loan as the purpose.

Why is it important to state the purpose of the loan in the loan documents?  Because if the purpose of the loan is not stated in the documents, and the loan defaults, the lender could be found to be a usurious lender in the state of Washington.  The Washington Supreme Court recently issued an unpublished opinion in which a small investor was found to have charged a usurious rate of interest because it did not state the loan’s purpose as business within the loan documents.  It was therefore a personal loan.  Personal loans have far more controls regarding interest rates than do business loans, and the lender was substantially financially penalized for charging too high of an interest rate on what was deemed as a personal loan.  No Oregon case has directly confronted this issue.  A perusal of cases would indicate a potentially similar result in Oregon if brought through the courts.

The test for whether a loan is a business or personal loan is seen from the eyes of the borrower, not the lender.  If the loan documents do not say anything, then the loan purpose is determined by the borrower’s subjective statements of the purpose.  The takeaway?  The borrower and lender need to agree to the purpose of the loan and put it in writing in the contract.

It is not hard to make a loan business instead of personal in nature, if in fact it is for business.  A clause simply needs to be inserted into the loan documents that states the business purpose of the loan.  The clause just needs to say that the borrower and lender agree that the loan’s purpose is for business with a brief mention about the ultimate use of the loan proceeds.  If the lender requires a personal guarantee for a loan made to a business, then similar language also needs to be included in the personal guarantee.  It is important to note that placing a statement of business purpose for a loan in the recitals of the loan document, if there is a recitals portion, may not work for creating a business purpose in the loan documents, unless the recitals become incorporated into the operative portion of the contract.

Sometimes simple things get overlooked.  If you are offering small loans, make sure you do not overlook the importance of stating the purpose of a business loan in the loan documents and any guarantees.  Without paying attention to the addition of the “business purpose” clause to each of the loan documents, a small investor making loans could end up on the wrong end of a court decision.

Many smaller investors are willing to offer loans to borrowers who do not want a loan from a traditional financial institution.  The slightly higher costs of the loan are often worth it, considering borrowers will avoid the many hassles and daunting requirements of traditional lenders.

With a willing lender and a willing borrower, what could possibly go wrong?  The short answer is that a lot can go wrong.  Besides the obvious, such as defaulting on the loan, there is one trap for the unwary lender that should not be ignored: the loan’s purpose.

Why does the purpose of the loan matter?  Because when a default does occur on a loan, the stated purpose of the loan may have a dramatic effect on the lender.  There are many varieties and types of loans, but they all fit into one of two categories: business or personal.

Let us say that as a smaller investor, you want to make loans of a business nature.  The borrower comes to you and says that the loan is for construction for a business.  To most it would seem to be a no brainer: it’s a business loan.  If it is a business loan, then all of the documents need to state the business loan as the purpose.

Why is it important to state the purpose of the loan in the loan documents?  Because if the purpose of the loan is not stated in the documents, and the loan defaults, the lender could be found to be a usurious lender in the state of Washington.  The Washington Supreme Court recently issued an unpublished opinion in which a small investor was found to have charged a usurious rate of interest because it did not state the loan’s purpose as business within the loan documents.  It was therefore a personal loan.  Personal loans have far more controls regarding interest rates than do business loans, and the lender was substantially financially penalized for charging too high of an interest rate on what was deemed as a personal loan.  No Oregon case has directly confronted this issue.  A perusal of cases would indicate a potentially similar result in Oregon if brought through the courts.

The test for whether a loan is a business or personal loan is seen from the eyes of the borrower, not the lender.  If the loan documents do not say anything, then the loan purpose is determined by the borrower’s subjective statements of the purpose.  The takeaway?  The borrower and lender need to agree to the purpose of the loan and put it in writing in the contract.

It is not hard to make a loan business instead of personal in nature, if in fact it is for business.  A clause simply needs to be inserted into the loan documents that states the business purpose of the loan.  The clause just needs to say that the borrower and lender agree that the loan’s purpose is for business with a brief mention about the ultimate use of the loan proceeds.  If the lender requires a personal guarantee for a loan made to a business, then similar language also needs to be included in the personal guarantee.  It is important to note that placing a statement of business purpose for a loan in the recitals of the loan document, if there is a recitals portion, may not work for creating a business purpose in the loan documents, unless the recitals become incorporated into the operative portion of the contract.

Sometimes simple things get overlooked.  If you are offering small loans, make sure you do not overlook the importance of stating the purpose of a business loan in the loan documents and any guarantees.  Without paying attention to the addition of the “business purpose” clause to each of the loan documents, a small investor making loans could end up on the wrong end of a court decision.

A Personal Loan

There are several ways to apply for a loan; however you should always get yours from a financial or banking institution that is licensed by Bank Negara Malaysia. You must avoid borrowing from illegal moneylenders, as you may end up further in debt from their unregulated interest charges and practices.

Instead, you should always choose to use a reputable bank that offers you great service and one that can cater to your financial needs at all times.

Ideally, you should always keep your debt service ratio below 60% to ensure you have the best chances of getting your loan approved. You should also keep in mind that banks may calculate the interest based on the total amount, the loan tenure and your credit score.

When applying for a personal loan, banks will usually agree to let you borrow up to three to four times of your monthly income to ensure you don’t overextend your finances. Most banks in Malaysia also issue personal loans at an average amount of RM20,000 – RM50,000 based on factors like the borrowers’ debt service ratio, monthly income and credit history.

It was mentioned earlier about how the banks will calculate the interest rate on personal loans (the total amount, loan tenure and your credit score) that you need to know.  So, one way is to choose a shorter loan tenure with higher monthly instalments that you can pay off quickly to save on the interest charges.

There is more to getting the best deal on your personal loan than just looking for low interest rates.  For example, if the personal loan offers cash back on interest paid, this would mean that if you took a personal loan at an interest rate of 10%, a 20% cash back on interest paid would mean that you are actually repaying the bank at an interest rate of 8%!

With that in mind, make sure you check out what deals the banks have to offer, as you could save yourself hundreds of Ringgit!

The approval process is much faster these days and you can now even get your personal loan approved within 48 hours to even under an hour. Remember to bring along your MyKad and any necessary documents required by the bank to speed up the process even further!

Start Up Financing

When starting a business, your first investor should be yourself—either with your own cash or with collateral on your assets. This proves to investors and bankers that you have a long-term commitment to your project and that you are ready to take risks.

This is money loaned by a spouse, parents, family or friends. Investors and bankers considers this as “patient capital”, which is money that will be repaid later as your business profits increase.

When borrowing love money, you should be aware that:

  • Family and friends rarely have much capital
  • They may want to have equity in your business
  • A business relationship with family or friends should never be taken lightly

The first thing to keep in mind is that venture capital is not necessarily for all entrepreneurs. Right from the start, you should be aware that venture capitalists are looking for technology-driven businesses and companies with high-growth potential in sectors such as information technology, communications and biotechnology.

Venture capitalists take an equity position in the company to help it carry out a promising but higher risk project. This involves giving up some ownership or equity in your business to an external party. Venture capitalists also expect a healthy return on their investment, often generated when the business starts selling shares to the public. Be sure to look for investors who bring relevant experience and knowledge to your business.

BDC has a venture capital team that supports leading-edge companies strategically positioned in a promising market. Like most other venture capital companies, it gets involved in start-ups with high-growth potential, preferring to focus on major interventions when a company needs a large amount of financing to get established in its market.

Business incubators (or “accelerators”) generally focus on the high-tech sector by providing support for new businesses in various stages of development. However, there are also local economic development incubators, which are focused on areas such as job creation, revitalization and hosting and sharing services.

Commonly, incubators will invite future businesses and other fledgling companies to share their premises, as well as their administrative, logistical and technical resources. For example, an incubator might share the use of its laboratories so that a new business can develop and test its products more cheaply before beginning production.

Generally, the incubation phase can last up to two years. Once the product is ready, the business usually leaves the incubator’s premises to enter its industrial production phase and is on its own.

Businesses that receive this kind of support often operate within state-of-the-art sectors such as biotechnology, information technology, multimedia, or industrial technology.

Bank loans are the most commonly used source of funding for small and medium-sized businesses. Consider the fact that all banks offer different advantages, whether it’s personalized service or customized repayment. It’s a good idea to shop around and find the bank that meets your specific needs.

In general, you should know bankers are looking for companies with a sound track record and that have excellent credit. A good idea is not enough; it has to be backed up with a solid business plan. Start-up loans will also typically require a personal guarantee from the entrepreneurs.

An Important Career Finance

Industrialization, globalization, and liberal policies of government about foreign direct investment in recent years have generated tough competition between companies to maximize profits. In order to survive in highly competitive market companies needs to reduce overhead cost, pay back maximum return to investors and attract potential buyers as well as to retain them. Healthy finance is the key for growth of any individual or organization. To compete with peer group companies, in industry, one needs to put oneself up ahead of others. All this created needs of eligible finance professionals to manage finances, minimize losses and maximizes profits.

There are many paths in academics following which one can become part of finance industry. Students can pursue graduation and post graduation in finance related disciplines like accounts, commerce, business, economics, statistics etc and further start work in finance and investment sector. Another option is to obtain technical professional qualification in finance like MBA Finance or Obtain CFA Certification etc to be part of Finance industry. Entry into finance field is open to both commerce and non commerce stream students.

To start work in industry in core financial capacity like Financial Manager etc one needs at least post graduate degree in finance. MBA Finance is one such course which helps you in getting job as Financial Manager in a company. Students with post graduate degree in MBA Finance i.e. Financial Management can get work opportunities with government and public sector companies as finance officer, risk manager, insurance manager, treasures, manager finance & accounts, to name a few. Though, designations may vary according to company profile. Companies also hire financial managers as consultants who advise senior managers on various business issues. Government also receives advice from financial experts in various issues related to finance and investment.

These are professionals who provide valuable information about financial records of a company. A chartered account is called ‘watch dog’ of a company who always tries best to save the organization from possible financial hazards if crisis occurs. These professionals also helps in financial and budget and taxation planning in a great way. To start career as chartered accountant in India one needs qualification from Institute of Chartered Accountant of India (ICAI). The institute offers course Chartered Accountancy (CA) to under graduate and graduate students. CA is professional qualification as well as post graduate qualification

Finance And Accounting

Finance and Accounting are two separate disciples that often are lumped together (as we obviously have done). At a high level, Finance is the science of planning the distribution of a business’ assets. Accounting is the art of the recording and reporting financial transactions. People tend to group Finance and Accounting because both functions deal with the administration of a business’ assets.

Those who work in the financial department of a business are concerned with planning the distribution of the business’ assets. This includes the coordination of capital investments and debt backed investments for the purpose of improving the value of the business. Those in Finance also plan the exit strategy for the investors of the business, which is the way in which those that invest in the business receive their financial reward. The financial goals and objectives of the business are designed by the business’ Chief Financial Officer, who is supported by people focused on Financial Analysis, Financial Management, Budgeting, Purchasing, and Accounting.

Those who work in the Accounting function of a business are concerned with tracking and reporting the financial transactions of a business. Those in the Accounting field are responsible for managing the general ledger, cash flow management, collections, recognizing revenue, analyzing profitability, reporting earnings, managing debt, and—of course—paying taxes. Accountants research and report the financial transactions and health of the business using a standard set of rules and principles, known as the Generally Accepted Accounting Principles (GAAP), as well as Section 446 of the Internal Revenue Code. Jobs in the Accounting function include Financial Reporting Accountants, Auditors, Bookkeepers, Accounts Receivable Clerks, Accounts Payable Clerks, Controllers, Treasurers, and Tax Accountants. Typically, the entire Accounting organization will report into the Chief Financial Officer.

Broadly speaking, Finance revolves around planning future financial transactions while Accounting revolves around reporting past financial transactions. While these are two separate functions that require different skill sets, they do both revolve around the management of assets; therefore, they are grouped together more often than not.

The Banking Industry

s natural language processing technology evolves, consumers find it increasingly difficult to distinguish between a voice bot and a human customer service representative. This stems from improved abilities on the part of voice and chatbots to resolve customer issues without human intervention.

The benefits to banks of customer service automation are obvious: AI could lead to significant cost reductions. A recent study by Autonomous predicted that AI could lead to 1.2 million jobs being cut in the banking and lending industry, resulting in up to $450 billion in industrysavings by 2030.

Despite the potential rewards customer service automation promises, banks and other businesses need to proceed with caution in relying too heavily on voice and chatbots. The popularity of GetHuman illustrates this: It’s a website that connects consumers with human CSRs to resolve their issue. In fact, voice and chatbots often work best when augmenting rather than replacing humans. At a minimum, the option to speak to a human, if necessary, should be readily available.

Want an example of how banks are creatively employing AI to serve customers? The Swiss bank UBS, ranked number 35 globally for its volume of assets, according to Accuity’s August 2018 global bank rankings — has partnered with Amazon to incorporate its “Ask UBS” service into Alexa-powered Echo speaker devices.

Ask UBS, which is aimed at UBS’s European wealth management clients, enables users to receive wide-ranging advice and analysis on global financial markets just by “asking” Alexa. “Ask UBS” also acts as a teaching resource, offering definitions and examples of acronyms and jargon related to the financial industry.

Banks have access to a wealth of customer data, including detailed demographics, website analytics and records of online and offline transactions. By utilizing machine learning to integrate and analyze information from multiple, discrete databases to form a 360-degree customer view, banks are better positioned to personalize products, services and interactions based on the behavior of individual clients.

According to James Eardley, global director of industry marketing for enterprise software giant SAP, “The next step within the digital service model is for banks to price for the individual, and to negotiate that price in real time, taking personalization to the ultimate level.”

While personalized pricing of this kind may only become prevalent in the future, banks are already utilizing AI-processed behavioral data to advise individual clients on appropriate credit and savings products, based on their goals and habits. Santander, the world’s 14th largest bank, measured by its current assets, even hosted a competition, with a prize of $60,000, on the machine learning crowdsourcing site Kaggle, encouraging data scientists to write code that better “pairs products with people.”

The fintech revolution is still in its infancy, but alongside AI, it has already had a substantial impact on the way traditional banks do business. This presents digital entrepreneurs and investors with myriad opportunities for improvement.

Essay On Internet Banking

With the growth of internet and wireless communication technologies, telecommunications etc. in recent years, the structure and nature of banking and financial services have gone for a sea change. Internet banking or e-banking is the latest in this series of technological wonders in the recent past which involves use of internet for delivery of banking products and services.

Even the Morgan Stanley Dean Witter Internet Research emphasised that web is more important for retail financial services than that for many other industries. Internet banking or e-banking is changing the banking and its structure and is having major effects on banking relationships.

Banking activity is now no longer confined to the branches where a customer has to approach the branch in person, for withdrawing cash or deposit a cheque or request for a statement of Accounts.

In accessing a true internet banking, any inquiry or transaction is processed online without any reference to the branch (anywhere banking) at any time. Thus providing Internet banking is gradually becoming a “need to have” than a “nice to have” service.

The net banking is, therefore, more of a norm rather than an exception in many developed countries because it is the cheapest way of providing banking services. Under this system, online banking is possible where every bank customer is provided with a personal identification number (PIN) for making online transactions with the bank through internet connections.

Even the Morgan Stanley Dean Witter Internet Research emphasised that web is more important for retail financial services than that for many other industries. Internet banking or e-banking is changing the banking and its structure and is having major effects on banking relationships.

Banking activity is now no longer confined to the branches where a customer has to approach the branch in person, for withdrawing cash or deposit a cheque or request for a statement of Accounts.

In accessing a true internet banking, any inquiry or transaction is processed online without any reference to the branch (anywhere banking) at any time. Thus providing Internet banking is gradually becoming a “need to have” than a “nice to have” service.

The net banking is, therefore, more of a norm rather than an exception in many developed countries because it is the cheapest way of providing banking services. Under this system, online banking is possible where every bank customer is provided with a personal identification number (PIN) for making online transactions with the bank through internet connections.

In order to support internet banking facilities another new concept of banking i.e., core or anywhere banking is introduced. Initially introduced by the foreign banks, the same concept in new increasingly adopted by public sector banks and also the private sector banks.

Under this concept of banking, bank customers who have an account with any select branch can easily operate his account from different designated branches on the bank spread throughout the country.

Under this system, a customer can avail cash withdrawal, cash deposit, transfer of funds, inter-city and intra-city transactions, collection of draft and cheques etc. facilities from any of such designated branches conveniently irrespective of its locations.

Core banking concept has improved the standard of the banking services with the help of modern technology. In present times, most of the public sector banks have already adopted this concept and started extending these facilities to its customers gradually by including more and more of its important branches under this category.

Security Precautions:

In order to make their bank account safe, one should follow certain security precautions. Customer should never share personal information like PIN number, passwords etc. with anyone, including employees of the bank. It is important that documents that contain confidential information are safeguarded. PIN or password should be changed immediately and memorized before destroying the mailers.

Customers are also advised not to provide sensitive account-related information over unsecured e-mails or over the phone. He must take simple precautions like changing the ATM, PIN and online login and transaction passwords on a regular basis. It is also important to ensure that the logged in session is properly signed out.

Online Banking Safe

When you bank online, you trust that your account is safe from hackers. Even so, online accounts can seem to consumers like easy targets: Instead of robbing a bank, a criminal could simply whisk away your money with a few keystrokes.

To combat these concerns — and protect your cash — banks and credit unions have a number of policies to keep online customer accounts secure. Standard measures include using firewalls, anti-virus protection on bank computers, fraud monitoring and website encryption, which scrambles data so only the intended recipient can read it. If you bank online, chances are your financial institution employs these security measures.

Large-scale data breaches get the headlines, but criminals also work on a smaller scale by attacking consumers directly. For example, fraudsters often use so-called phishing scams, in which they send out emails pretending to represent a financial institution in the hopes of hooking an unsuspecting consumer.

The email might suggest there’s a problem with your account and ask for your bank password or Social Security number. Or it might say you won $100 million, but your account information is needed to wire the funds. If you reply, the criminal could use the information to illegally make purchases or withdraw money from your account. Don’t respond to emails that are too good — or bad — to be true.

Skip public Wi-Fi for private banking. With a public network, you can’t be totally sure who sees what you send online, unless each page you visit is encrypted. The security of your private home network is ideal. If you have to log in while away from home, consider using your cellular data plan instead of Wi-Fi, or a virtual private network, known as a VPN. However you choose to log in, check for web page encryption by making sure the address on the browser starts with “https.” The “s” signals that the page is secure.

Keep anti-virus software current. Make sure yours is up to date on your home computers and mobile devices.

Choose an institution that uses industry-standard security. You probably already want a bank or credit union that offers accounts with low fees and high interest rates. Add “top notch security” to your checklist. Then, make sure your online accounts are backed by robust technology.

An example is multifactor authentication. Here’s how it works: When logging in, instead of just asking for a username and password, the financial institution requires you to provide another piece of information, or factor, to verify yourself. It could be a unique passcode sent to your smartphone as a text message, or even your own fingerprint. The point is it’s another layer, one not so easy to steal.

Many of the larger online banks — and traditional institutions with online accounts — adhere to these standards, so it should be easy to find a bank or credit union that fits the bill.

Change passwords regularly. Use combinations that are difficult to guess, such as a mix of uppercase and lowercase letters, numbers and symbols. The more complex the password, the harder it will be to crack and the more likely it will provide protection against hackers.

Ask for text alerts. Many institutions let customers choose to receive alerts via text or email whenever large transactions are made on their accounts, or if the balance drops to a certain amount. That way, customers can reach out to the bank immediately if they see a purchase or transfer they didn’t make, and protect their account against further fraudulent activity. In addition, customers can dispute unauthorized charges for 60 days after the date of their bank statement.