Blog

How Late Payments Affect Your Credit Score?

Personal Finance

-

May 2, 2023

Credit score reflects your creditworthiness and shows the lenders how reliable you are with credit. Credit bureaus give the highest weightage to your repayment history. This is why missed payments or late payments on your loans and credit cards will negatively affect your score. If you check your free credit score from any of the third-party platforms and go through the detailed credit report, you will find the ‘Days Past Due’ section on your report which is directly linked to late payments. How does it affect your score and your ability to avail new credit? Let’s find out.

credit score late payment

What happens when your payment is late?

When you do not pay the minimum amount due on your credit card by the stated due date, it generally attracts late payment charges. Card issuers may also offer up to 3 days of grace period after the due date, in which case the late payments will start after you exceed the grace period.

The amount of late payment fee depends on the total balances that you are carrying on your card. For example, HDFC Bank charges Rs. 500 as late fee if your dues range between Rs. 501 and Rs. 5,000. However, if the dues are between Rs. 25,001 and Rs. 50,000, you will have to pay Rs. 1,100 as late fee.

Similarly, instalment debts like home loan, personal loan and car loan also offer some grace period after the due date. If you do not clear the dues for the month by the grace period, it will attract penalties.

How does a late payment show up on your credit report?

Late payments, whether on a credit card or a loan, show up in the days past due section of your credit report. This section indicates the number of days by which you have missed an EMI or credit card dues. If you have continuously made payments on time, the DPD section should show ‘000’ in all the months. However, say you missed your credit card dues for the last month by 25 days, the DPD section will be marked in red for the said month and show ‘25’ instead of ‘000’.

Sometimes, you can also see ‘XXX’ written in the DPD section. This is possible when the lender has not shared the payment records with the bureau and does not lead to a negative impact.

The DPD section contains your payment timeline for the past 36 months and helps the lenders check how regular you have been with clearing your dues. Occasionally missing payments for a few days might not influence your credit score as much as it would if you frequently miss credit card dues or loan EMIs.

How long do late payment stay on your credit report?

Late payments or any other negative markings stay on your credit report for seven years. However, it does not mean that your credit score will continue to be impacted for those seven years. If you continue to make future payments on time, your credit score should gradually improve. Also, as years go by, lenders will also not give as much importance to the previous late payments as they are more concerned with your recent credit history.

Consumers also wonder whether they can get a late payment removed from their credit report. However, it is not possible to do so. Such negative markings will stay on your report. Their impact, as said above, will reduce over time.

If late payment mistakenly shows up on your report, then you can raise a complaint with the concerned bureau to get it rectified. Such incorrect entries can also lead to a negative impact on your score but, when rectified, it should improve.

How to avoid late payments in the future?

The best way to improve your credit score and maintain an excellent score over time is to make disciplined use of your credit products and be regular with your payments. In order to stay on track with payments, you can:

Set up standing instruction on your account for automatic bill payments
Set up reminders on your calendar
Read your credit report regularly and get inaccurate information corrected
Spend only as much as you can afford to pay back on time
If possible, set aside some funds for emergency or unexpected expenses, which can also be used to cover bills that go out of hand

Occasional delayed payments do not have a major negative affect on your credit score. However, frequent delays and missed payments can be detrimental for your score and could also make availing new credit difficult for you. Hence, you must always clear your credit card dues and loan EMIs on time to build and maintain a good credit score.

5 Reasons Family Life Insurance is a Must-Have

Life Insurance

Shitanshu Kapadia

-

April 28, 2023

0

As a responsible parent, you want to ensure the safety and security of your family. You probably have a savings account and retirement plan in place, but have you considered family life insurance?

It’s a topic that many people avoid, but it’s essential to have a plan in place to protect your family’s financial future.

In this article, I’ll give you 5 reasons family life insurance is a must-have. From covering funeral expenses to replacing lost income, life insurance can help your family financially during a difficult time. Don’t wait until it’s too late to make this important decision for your family’s future.

So, whether you’re a new parent or have been raising a family for years, keep reading to learn why family life insurance is something you should consider adding to your financial plan.

family life insurance

What is Family Life Insurance?

Family life insurance is an important form of financial protection for your family, especially if you died suddenly. Depending on the type of policy chosen, it can pay out a lump sum to cover finances like mortgages, debts and everyday bills.

Note that family life insurance policies aren’t one-size-fits-all. You can choose from different types of policies depending on your specific needs. Common types of coverage include term life insurance and whole life insurance.

Each type may offer different levels of protection at different premiums. It’s important that you speak to an experienced financial advisor or broker before choosing which type best fits your situation.

What is the best kind of life insurance?

When it comes to family life insurance, it’s important to be prepared. Even if you feel like your family is in good financial health, you should still consider getting a policy in place. Life can take unexpected turns and having a plan in place for the future can provide peace of mind and financial security.

There are a lot of different types of life insurance, so it can be hard to decide which is the best option for you and your family. That’s where an experienced advisor or broker can help. They can help you choose the right policy, based on your needs and budget.

Here are a few things to consider when choosing family life insurance:

What is your budget?
How much coverage do you need?
Do you want term life insurance or whole life insurance?

Ultimately, the best kind of life insurance for your family depends on your individual needs and circumstances. Here’s some of the benefits it can provide.

Provides Financial Protection for Your Family

The most important aspect of family life insurance is that it provides financial protection for your family in the event of your death. It ensures that your loved ones won’t have to bear the burden of debt or costs associated with raising children on their own.

Replaces Lost Income

If the primary wage earner in a family passes away, life insurance can help to replace any lost income. This helps to make sure that your family can continue to maintain their current lifestyle without worrying about finances.

Keep in mind that life insurance policies are not intended to be a substitute for income, but a supplement. You should speak with an experienced financial advisor or broker to determine the best type of policy for your situation.

Covers Funeral Expenses

Life insurance also covers funeral expenses, so that your family does not have to pay for a funeral. It can provide funds for burial, cremation tree pod, and other associated costs. This can be an immense relief to your family during an already difficult time, as they won’t have to worry about paying for the funeral while they are grieving.

Can help pay off a mortgage

Family life insurance can also help pay off a mortgage. This is important if you have a large mortgage and don’t want your family to worry about it besides their grieving. If you pass away, the death benefit of your policy can pay off the loan, so that your family will not be stuck with an enormous debt.

How much does life insurance cost?

The cost of life insurance depends on many factors, including:

Your age
Health
Lifestyle
Occupation
The type of cover you want to buy
The amount of cover you need

Younger individuals tend to pay lower premiums, as they are considered to be a lower risk for insurers. On the other hand, those who are older or have medical conditions may pay higher premiums.

The type of policy you choose will also determine the cost. Whole life insurance policies tend to be more expensive than term life insurance, but they provide coverage for your entire life. Whereas term life policies only provide cover for a set amount of years.

Take the time to consider all of your options when it comes to life insurance. Speak with an experienced financial advisor or broker who can help you find the best policy for your situation. They will be able to assess the type of cover you need and how much it will cost in premiums.

Top 10 Online Bill Discounting Platforms in India

Loan

Shitanshu Kapadia

-

April 28, 2023

0

Managing healthy cash flow in a business is extremely important. Bill Discounting or Invoice Discounting is one of the ways to do the same. Bill Discounting helps businesses in improving cash flow so that businesses can fulfill other working capital requirements for the business. Looking at the importance of bill discounting in the business today’s topic is about online bill discounting platforms. So, let’s get started.

What Is Bill Discounting?

Bill discounting is a method to get money from a financial institute or bank by showing an unpaid invoice (business). A lender can offer advance money on behalf of an invoice to the company. The amount would be invoice value, minus a discount fee.

The lender checks risk before lending money. The main thing lender check is the trustworthiness of the company that owes money for the invoices. The lender may demand a purchase order copy. Once the assessment is done lender provides terms and conditions stating how much money can be offered against the invoice and at what fees. On agreement, the process continues.

In case of immediate cash requirement business, generally opt for a traditional bank to avail a loan. However, the time taken by the bank for approval of a loan is slightly higher. Another popular option to get finance is invoice discounting. In India, you will find many online bill discounting platforms that offer such facilities. I have evaluated various online websites and found out Top 10 Online Bill Discounting platforms and here is a detail.

bill discounting platform India

Top 10 Online Bill Discounting Platforms in India

#1 Kredx

Kredx offers multiple services to the business, one of such service is bill discounting. KredX provides a marketplace/platform for business owners to sell and investors to purchase invoices raised on blue chip companies.

To get this service, you need to sign up on Kredx platform and upload essential documents. Once your documents are verified you will be onboarded on Kredx platform. Now you need to upload your invoice and an accredited investor can purchase the invoice. Key features of this platform are given below.

Fund issues from 24 – 72 Hours
Completely paperless process
Real-time online updates
No upper limit on fund sanction
Return of 12-20% annually

#2 Invoicemart

Invoicemart is an online platform supported by Axis Bank. Invoicemart connects MSME suppliers and corporate buyers to multiple financiers. Invoicemart is projected as Trade Receivables Discounting System platform.

Invoicemart works on an open bidding system where the seller creates an invoice and uploads it to the system. Buyer checks and approves the invoice. Approved invoices are available in the bidding system for the financer to check and place the bid. Once bidding is complete you can choose a financer with the rate. Key features of Invoicemart are given below.

You can get paid within 24 hours of selling the invoice.
Multiple Financers & online bidding system to get competitive rates.
Intuitive and best-in-class UI.
Integration capability with client ERP systems through open API

#3 M1xchange

M1xchange is the leading Trade Receivable discounting platform (TReDS) in India. M1xchange provides easy documentation and quicker approval on the portal.

The working of M1xchange is simple. On M1xchange seller uploads the invoice. The buyer accepts the invoice. Financers start bidding for invoices. Once the bid is accepted by the seller the fund disbursal takes place. Key features of M1xchange are given below.

Collateral-free finance.
Quick process of funds usually in 24 hours.
Digital process.
No impact on the balance sheet of the company.

#4 RXIL

RXIL is popular as a receivable exchange in India. RXIL is promoted by SIDBI. RXIL facilitates the financing of trade receivables of MSMEs through multiple financiers. RXIL works on the invoice auction method. Key features of RXIL are given below.

Best discount rate due to the participation of Multiple Financiers in the auction.
Cost & paperwork reduction
Compliance with MSMED Act, 2006.
Access to the wider market.
Reduced operational cost.

#5 Falcon Group

Falcon Group is India’s leading P2P invoice discounting platform. Falcon Group aims to increase investor yields by eliminating mediators like commercial banks, depository institutions, etc. The Falcon group works on dynamic auctions to reduce the price. Key features of the platform offered by falcon are given below.

Get Finance up to 90% of the value of the invoice
No collateral or hidden charges
Credit limit upto INR 50 lacs
Hassle-free borrowing process

#6 TradeCred

TradeCred is a marketplace where regular investors can invest in invoice discounting. The mechanism enables businesses to raise short-term financing from investors in a straightforward manner. TradeCred do multiple checks to establish the trustworthiness of the vendor involved. Key features of TradeCred are given below.

Multiple options including Blue chip invoicing, Leasing, AA debt, and sovereign bonds
Start Investing with 1 lakh or less
Easy access via mobile

#7 Flexiloans

Flexiloans offers multiple loan options to the business such as term loans, loan against POS, and Lines of credit. One such option is vendor financing. SMEs can get quick vendor financing within 72 hours on this platform. It is also known as invoice-backed loans. Key features of vendor financing by Flexiloans are given below.

Loan amount from INR 50000 to 1 Cr
No Hidden Cost
Multiple Repayment options
No Collateral required

#8 InvoiceTrades

InoviceTrades is claimed as India’s most trusted invoice discounting platform. The process of invoice discounting at InvoiceTrades is simple. You need to register on the platform. After that, you need to e-mail the invoice and PDC. You need to pay the platform registration fee and your funds would get credited in 72 hours. Key features of the InvoiceTrades platform are given below.

Receive working capital within 24-72 hours
No need for Collateral
Easy and Simple process
Zero impact on your balance sheet

#9 Clear Invoice Discounting

Clear Invoice Discounting is the platform by Clear Finance. Clear Invoice Discounting enables suppliers to get paid early on their invoices– rather than wait out the long credit periods. it provides multiple ways to easily fund these early payment requests at a mutually-agreed discount. Key features of the Clear Invoice Discounting Platform are given below.

Avail flexible finance options for early invoice payment
Dynamic Bidding to get the best-discounted rates
Unlimited supply options of Bank, NFBC, etc
Completely online process

#10 UpScale

Upscale offers multiple loan options to the business. You can get working capital loans, sales invoice discounting, and a buy now pay later option at Upscale. You can get loan approval on this platform within 2 days. You can get unsecured business loans from 10+ banks & NBFCs on this platform. Key features of UpScale are given below.

Fast approval and disbursement
No Paperwork required
Competitive interest rates

Over to You

Do you use a bill discounting platform for working capital requirements in your business?

Top 5 Business Ideas for College Students

Business Ideas

Shitanshu Kapadia

-

April 27, 2023

0

Many students want to start their own business even before graduation. Starting a business for a student is a great opportunity to realize themselves, put their knowledge into practice, and receive income in addition to scholarships and financial support from their parents.

Business Ideas for College Students

Pros and cons of student business

The data show that it is quite possible to work as a student, and many students want to start their own business as early as possible. But like any activity, such a business has both positive and negative sides. And when choosing to build a business or not, a student needs to evaluate them all in order to determine for themselves whether they can combine their studies with such a load.

By the way, having their own business, students often take it as a basis for their projects at the college. After choosing one of the business research topics that best describes their business, they write research papers and projects with a practical focus. Therefore, business is also a good assistant in learning.

Business benefits for students

By starting to develop a business during your studies, you increase your own income and become independent of outside financial support.
Development of practical skills. If at the university you get theoretical knowledge, then when organizing a business, you need to take it and do it – use knowledge in practice. After all, the more applied experience, the faster mastery and success in the area of interest will come.
Useful acquaintances and communication with interesting people. The more acquaintances, the better. The working contacts that you acquire during the start of your business will be especially useful after graduation and a further improvement in the chosen path.
Accumulation of experience, formation of goals, and own personal values. During the development and start of their business, the student seeks themselves, determines their strengths and weaknesses, and improves in the profession.

Cons of business for students

Lack of time. Work and business development, in any case, will take time. The bigger the business, the more time you have to spend. Combined with education, this is quite difficult.
You will have to make your own decisions and be responsible for them. Being responsible is difficult but very useful for improving your personality and self-organization.
Combining work and study, you need to learn how to prioritize. Something should remain in the foreground, and something should be secondary. Start learning the basics of time man agement and learn to the maximum, not to the detriment of yourself, to have time to do everything.

Business ideas for Students in 2024

There are a lot of business ideas for students. Here are just a few of the simplest ones.

#1 Tutoring

Students who have in-depth knowledge of specialized disciplines can try their hand at tutoring. You can teach any subject because there is a demand for everything. In addition to the basic study of the subject, you can prepare students for exams, help with homework, and more. You can also organize the author’s programming or English courses for children of different ages.

#2 Copywriting and text translation services

Students of philological specialties can earn both by providing copywriting and translation services for private clients. Such a business does not require special costs; it is enough to place an offer of your services on the classifieds website and wait for a response.

#3 Creation and promotion of sites

If you know programming languages and the principles of working in graphics editors, you can start making money by creating websites and blogs, as well as on their promotion. The market is full of offers of this kind, but if you really understand your subject, then you will not be left without customers. Place ads on multiple platforms and offer great deals and value-added services early on to get your first customers. You can start with the simplest orders to gain experience and positive feedback, thereby gradually developing your business.

#4 Promotion of Internet projects

This activity is closely related to the previous one. Today, many have an author’s project or blog on the Internet. For monetization, it is necessary to promote the project and expand the audience, so there are entrepreneurs who are engaged in the promotion of information products – targetologists. There are few professionals in this field who really know their business and own promotion tools, and they are worth their weight in gold, so developing in this niche will be very important due to the growing popularity of online products.

#5 Manicure and make-up services at home

A private manicure and make-up master is more relevant than ever in 2023 because they provide services at clients’ homes. Such a master is mobile, has a flexible schedule, and forms an offer for a specific customer. And with the proper distribution of time and resources, there is no shortage of clients. Today, young mothers are interested, but also busy groups of people do not have the opportunity to visit a stationary salon at all. In such cases, a private master helps to solve this problem. By offering manicure and make-up services and other beauty treatments, you can create a profitable progressive business.