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The Pros and Cons of Taking Out an Installment Loan

Loan

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December 7, 2022

The Pros and Cons of Taking Out an Installment Loan

If you need to finance a small or large expense, an installment loan should be on your radar. It can help you spread out the cost of more expensive purchases like a house, car, roof repair, kitchen remodel, vacation, or just about anything else you may have a need for.

Let’s take a closer look at how installment loans work as well as their benefits and drawbacks.

Pros Cons Installment Loan

How installment loans work

Installment loans are loans you pay back through a series of monthly payments or installments over an agreed-upon term, ranging from a few years to several years or even longer. In most cases, they come with fixed interest rates that remain the same over their life.

Some of the most common types of installment loans include:

Personal loans
Auto loans
Home loans
Home equity loans
Student loans

Pros of Installment Loans

The most significant advantages of installment loans include:

Ability to easily cover expenses: An installment loan is a great option if you don’t have the cash to pay for an expense. You can spread out the cost of a purchase over time.
Predictable repayments: Since installment loans typically have fixed rates, you’ll be able to budget for your payments in advance. You don’t have to worry about sudden increases that wreak havoc on your finances.
Many options: There is no shortage of installment loans on the market. If you shop around for them at banks, credit unions, and online lenders, you’re sure to find the right loan for your unique situation.
Chance to refinance: If interest rates decrease or your credit score improves, you can refinance your installment loan. This may reduce your monthly payments or shorten your repayment schedule.

Cons of installment loans

These are the greatest disadvantages of installment loans.

Interest charges: Unfortunately, installment loans are not free. You’ll be on the hook for interest plus your principal or the amount you initially borrowed.
Potential fees: Most lenders who offer installment loans charge fees in addition to the interest, which can increase your overall cost of borrowing. These may include origination fees, late fees, prepayment penalties, and closing costs.
Will need to apply for another loan for more funding: An installment loan is not a revolving line of credit. This means you’ll have to apply for and take out another installment loan once you use up all your funds.
Must meet specific requirements: There’s no guarantee you’ll get approved for an installment loan. Lenders often look for a particular credit score and debt-to-income ratio.

The Bottom Line

There are a variety of installment loans available. Therefore, it’s in your best interest to shop around and compare rates, terms, fees, and special perks. By doing so, you can find the ideal option for your budget and needs.

Notice: Information provided in this article is for information purposes only and does not necessarily reflect the views of Moneyexcel or its employees. Please be sure to consult your financial advisor about your financial circumstances and options. This site may receive compensation from advertisers for links to third-party websites.

LIC New Jeevan Amar Policy – Review

Life Insurance

Shitanshu Kapadia

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December 5, 2022

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LIC’s New Jeevan Amar replaces the old LIC Jeevan Amar Plan. LIC New Jeevan Amar Plan 955 is a Non-Linked, Non-participating, Individual, Pure Risk Premium Life Insurance Plan, which provides financial protection to the insured’s family in case of his/her unfortunate death during the policy term.

This Plan can be purchased Offline through Licensed agents, Corporate Agents, Brokers, and Insurance Marketing Firms. This plan is launched along with LIC’s New Tech Term Plan. The New Tech Term plan is a copy of the old plan except for the premium rate. In this post, I shall review LIC New Jeevan Amar Policy and share my findings. I am sure these findings shall help you while buying this plan.

LIC New Jeevan Amar Policy Review

Key Features of LIC New Jeevan Amar Plan

Flexibility to choose from two benefit options: Level Sum Assured and Increasing Sum Assured.
Flexibility to
- Choose from Single Premium, Regular Premium, and Limited Premium Payment
- Choose the Policy Term/Premium Paying Term
- Opt for payment of benefits in installments.
Special rates for women.
The benefit of an attractive High Sum Assured Rebate.
Two categories of premium rates namely (1) Non-Smoker rates and (2) Smoker rates. The application of Non-Smoker rates shall be based on the findings of the Urinary Cotinine test. In all other cases, the Smoker rates will be applicable.
Option to enhance coverage by opting for Accident Benefit Rider on payment of additional premium for the rider benefit.

Benefits

Benefits payable under an in-force policy shall be as under

#1 Death Benefit

The death benefit payable on the death of the Life Assured during the policy term after the date of commencement of risk but before the date of maturity, provided the policy is in force and the claim is admissible shall be “Sum Assured on Death”.

For Regular premium and Limited premium payment policy, “Sum Assured on Death” is defined as the highest of:

7 times of Annualised Premium; or
105% of “Total Premiums Paid”upto the date of death; or
Absolute amount assured to be paid on death.

For Single premium policy, “Sum Assured on Death” is defined as the higher of:

125% of Single Premium.
Absolute amount assured to be paid on death.

Where,

i. “Annualized Premium” shall be the premium payable in a year chosen by the policyholder, excluding the taxes, rider premiums, underwriting extra premiums, and loadings for modal premiums, if any, and

ii. “Total Premiums Paid” means a total of all the premiums received, excluding any extra premium, any rider premium and taxes.

iii. Absolute amount assured to be paid on death shall depend on Death Benefit Option chosen at the time of taking this policy and is as under:

Option I: Level Sum Assured Absolute amount assured to be paid on death shall be an amount equal to Basic Sum Assured, which shall remain the same throughout the policy term.

Option II: Increasing Sum Assured Absolute amount assured to be paid on death shall remain equal to the Basic Sum Assured till completion of fifth policy year. Thereafter, it increases by 10% of Basic Sum Assured each year from the sixth policy year till fifteenth policy year till it becomes twice the Basic Sum Assured. This increase will continue under an inforce policy till the end of policy term; or till the Date of Death; or till the fifteenth policy year, whichever is earlier. From sixteenth policy year and onwards, the Absolute amount assured to be paid on death remains constant i.e. twice the Basic Sum Assured till the policy term ends. For example, Absolute amount assured to be paid on death under a policy with Basic Sum Assured of Rs. X will be Rs. X till the end of fifth policy year, ` 1.1X during the sixth policy year, 1.2X during the seventh policy year, increasing so on by 10% of Basic Sum Assured each year till it becomes 2X in fifteenth policy year. From the sixteenth policy year and onwards, the Absolute amount assured to be paid on death will be 2X.

The Death Benefit Option once chosen cannot be changed later.

#2 Maturity Benefit

On survival of the life assured to the end of the policy term, no maturity benefit is payable.

Eligibility

a) Minimum Age at entry : [18] years (Last Birthday)

b) Maximum Age at entry : [65] years (Last Birthday)

c) Maximum age at Maturity : [80] years (Last Birthday)

d) Minimum Basic Sum Assured : ` 25,00,000/-.

e) Maximum Basic Sum Assured : No Limit

f) Policy Term : [10 to 40] years

g) Premium Paying Term

Regular Premium : Same as policy term

Limited Premium :

[Policy Term minus 5] years for Policy Term [10 to 40] years,

[Policy Term minus 10] years for Policy Term [15 to 40] years

Single Premium : NA

LIC New Jeevan Amar Plan Premium

The sample illustrative premiums for both Option I (Level Sum Assured) and Option II (Increasing Sum Assured) for Basic Sum Assured of ` 50 Lakh for Non-Smoker, Male, Standard lives under different Premium Payment options are as under –

LIC New Jeevan Amar Premium

LIC New Jeevan Amar Plan Review

LIC New Jeevan Amar Plan is a pure-term plan. As it is sold offline the premium rate of the New Jeevan Amar Plan is higher compared to LIC New Tech Term Plan.

One additional difference I noticed is that compared to the earlier Jeevan Amar Plan this new plan is costly. You need to pay more premiums in order to purchase LIC New Jeevan Amar Plan.

All plan features are the same as that of a previous plan. It is like old wine in a new bottle with a new name.

If you don’t have a term plan you can plan to buy one. If you are thinking to buy the LIC term plan, I would advise you to go for the LIC New Tech Term plan instead of the LIC New Jeevan Amar Plan.

To know more about LIC’s New Jeevan Amar Plan Please visit LIC’s Website.

What Are Car Repair Loans?

Loan

Shitanshu Kapadia

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December 2, 2022

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Having a car is great most of the time, but there will be moments when you wish you never had one. These moments of madness usually occur when you’ve got to pay a large amount of money to get it fixed but you don’t have enough to actually pay for it. However, there are tools out there that can help you through these kinds of situations. One of the best tools you can use are car repair loans, but if you’re unsure what they are, keep reading!

What Is Car Repair Loans?

Essentially, a car repair loan is a loan that allows you to pay for the upfront costs it will take to repair your car. Because it’s a loan, you’re able to repay it back over time, allowing you to manage your money way better than if you were to go into your overdraft or use your whole wages. You won’t have to miss any bill repayments because you can’t afford them after spending all your money on your car repairs either thanks to the loan. Car repair loans cover things like accident damage, MOT repairs, and even new tyres. So, as you can see, there is a lot that a car repair loan can help you with in your time of need!

If your car needs repair and service, you can experience exceptional service at East Coast Toyota, where expert technicians use genuine parts to ensure your vehicle receives the highest quality care.

How Does car repair loan It Work?

These loans work the same way all other loans do, so they’re pretty straightforward. You’ll apply for a certain amount of money to help pay for your car repairs, then you’ll either be approved or denied. If approved, you’ll receive the money and have to pay it back over time with interest. Like other loans, your car repair loan repayments will be determined by how much you borrow. Essentially, the more you borrow, the more you’ll pay back. Interest rates can vary too, so make sure you shop around for the best deal before committing to just one lender. Your repayments will be taken automatically each month via a Direct Debit, so you won’t have to worry about making phone calls to try and pay it off. It’s worth noting that you will most likely incur late fees and additional charges should you miss a repayment. The criteria for each lender will be different too, so make sure you understand how you fit into it before applying. This way, you’ll give yourself the best chance of being approved.

How Much Can I Borrow?

The amount that you can borrow will depend on numerous different factors. Firstly, most car repair loan lenders allow you to borrow anywhere between £500 and £5000 but some do allow for amounts as small as £100. It will also depend on what your affordability is as well. Lenders don’t want to offer out more than you can actually pay back, otherwise, they’ll just be losing money. The shorter the term of your loan, the higher the interest rate usually is too, so make sure you pay close attention to what yours is.

Where Can I Get One?

Typically, car repair loans can be found online via a direct lender or a loan broker. All you need to do is a simple search online, and you’ll be presented with lots of different options. Using a comparison site can be helpful as they’ll be able to show you a rough guide of what each lender can offer you. You’ll also know that the comparison site is only showing you approved, accredited lenders too.

If I Have Bad Credit, Can I Get One?

Just like there are regular loans for people with bad credit, there are car repair loans to help people with less than ideal credit scores too. However, the interest rates are probably going to be a whole lot higher, as you’re much riskier for the lender to approve. This is because a bad credit score indicates to them that you can’t afford the loan and you’ve not been able to keep up with other repayments you’ve had in the past. But these lenders are out there, so if you have bad credit, you aren’t completely on your own.

Car repair loans can be a great way for you to get your car fixed when money isn’t perhaps flowing freely for you in that moment. Sometimes car troubles come out of the blue, and you don’t always have the funds to back it up. However, a car repair loan could see you through your time of trouble and really help you get your car back on the road once again.

Finance – 4 Smart Things for Newlyweds to Think About

Financial Planning

Shitanshu Kapadia

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November 30, 2022

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Congratulations! You’ve just had the wedding of your dreams (hopefully) and are ready to ride off into the sunset. Whether you’ve been together for several years or several weeks, here are a few things to consider when making plans for your joint future as newlyweds.

finance new wedding

Finance – Things for Newlyweds to Think About

Financial security

Talking about your combined financial future is an important conversation to have—and to keep having throughout your relationship, as financial status and financial goals can change. Even couples who have been together for years could benefit from reassessing their finances at such a pivotal time, especially as you may be filing taxes jointly and are combining incomes.

While having a conversation about your finances can seem less than thrilling, it does not have to be stressful. You might want to be prepared with a full list of your account information, any debts, income information, and financial goals. Now may also be a good time to talk about items related to your joint finances and future. What are your financial priorities? How do you prefer to manage your money? Would it make sense to have joint bank account? Would it be better to be on the same health insurance? Do you both have life insurance to replace lost income if one of you passed away unexpectedly? Do you need to add your spouse as your beneficiary? Asking questions like this can help you get on the same page.

Where you want to live

Deciding where you want to settle down might be one of the most daunting tasks to embark on as newlyweds; it is also potentially one of the important conversations to have. A good starting point might be to list your priorities and must-haves in a home and then work toward a shared list. Perhaps one of you wants to live in a big city while the other would prefer an acre or two of land—maybe you can compromise on a house within commuting distance to the city. If you are planning to grow your family, you might also want to search for homes in certain school districts or close to your emotional support system.

Future plans

Just after you get married is a great time to go over your long-term goals. Discussing your future plans means you can be on the same page and support each other as you work toward your goals. While it might not be as fun as cake testing (but potentially more fun than picking out the table settings), future planning is an important step. Depending on both your short and long-term plans, some topics to consider might include career goals, where you want to travel, or when you might want to buy a house.

Checking in with each other

What you want out of life is constantly evolving. Just because you decided something when you were a twenty-something does not mean you have to stick with it forever. Goals shift and you can’t always do things on your original timeline. It is important to continue to check in with each other to make sure you are still happy with your plans and comfortable with the path you are on together.