Eileen FitzGerald: College students need better money sense

College males were less healthy in almost every aspect of financial behavior than female students despite having higher levels of financial knowledge, a new report finds.

Students who had some previous financial literacy education, which was roughly 30 percent of those surveyed, were significantly more responsible in nearly every aspect of planned behavior, loan behavior, banking behavior and credit behavior.

These students had more healthy attitudes toward money management, too, since they were more financially cautious, less accepting of debt as a necessity, less fixated on possessions and more averse to incurring debt in general.

Money Matters on Campus details the findings of a survey of 40,000 first-year college students from across the US that was conducted by EverFi and sponsored by Higher One.

Students were surveyed on a variety of topics about banking, savings, credit cards and school loans.

This is the second year of the report, and for the first time students answered some financial knowledge questions.

In addition, it was the first time there was analyses related to gender and the socio-economic status of students.

The implications are that if you provide for financial literacy education at the collegiate level you have to keep these differences in mind, said Mary Johnson, the financial literacy expert for Higher One, who has more than 25 years of experience in higher education finance and state student financial aid administration. Were hoping this report will help move the needle about the value of literacy in affecting financial behavior.

Students in private institutions got more answers correct than those in public institutions, which reflected the more affluent backgrounds of the private school students.

On average, students only got 2.3 of the six questions correct, but the average increased as the parental education increased and the student financial literacy education increased.

Both public and private school students did better than private religious schools, which Johnson could not explain.

In the survey, males and females were similar in their rates of taking out student loans, their amount and their likelihood to pay them back, to have a credit card and their amount of credit card debt.

Males scored higher than females on knowledge questions, but males were worried less about debt, more accepting of incurring debt, more likely to report risky financial behaviors and less likely to pay credit card bills on time.

This finding suggests that young adults who know the most about money arent necessarily the ones behaving the most responsibly, Johnson said.

The study also found that as credit card debt and/or school loan debt increased, students were more likely to demonstrate unhealthy attitudes and behaviors toward spending, saving, and debt.

Having a checking account was found to significantly predict responsible behaviors, such as budgeting, saving, and managing debt, the survey found.

Technology has made financial transactions easier, Johnson said, but at the same time, no one is balancing their checkbook these days, which is not good.

Ideally, Johnson said, students should have some financial literacy education in high school.

Seventeen states now require a course as part of their graduation requirement, but it will take a long time before everyone will require that, she said.

Some colleges have taken an aggressive stance in helping their students become financially literate by integrating courses into the freshmen orientation or transition courses, Johnson said.

For instance, Sam Houston University in Texas has a money management center, with trained staff and students ready to help students who have questions, and they run programs on financial management.

The challenge, Johnson said, is that financial literacy does not fall into one specific office. Its not really financial aid or student affairs.

But we tell colleges that it (financial literacy class) is going to help you make sure your students stay in school, Johnson said. Finances are a major stressor for students and often one of the reasons students leave college.

eileenf@newstimes.com; 203-731-3333

Lending Club Launches Business Loans

SAN FRANCISCO, March 20, 2014 /PRNewswire/ –With the launch of a new business loan platform (apply at www.lendingclub.com/business), Lending Club (https://www.lendingclub.com), the nations leading peer-to-peer lender, has officially entered the business lending arena.

Everyone recognizes that small businesses are an engine of job creation and economic growth, yet their access to capital has been constrained, said Lending Club CEO Renaud Laplanche. We look forward to delivering the same customer-friendly, transparent and affordable financing options to small business owners as we have been providing on the consumer side.

Lending Club has facilitated over $3.8 billion in consumer loans since inception, growing at a pace of over $750 million a quarter. Lending Club business loans will range from $15,000 to $100,000 initially, increasing to $300,000 in the future. The loans carry affordable fixed interest rates starting at 5.9% with terms of one to five years, no hidden fees and no prepayment penalties. The application process is simple and available online.

We designed this product to fit the needs of small business owners, continued Laplanche. Bigger businesses can get large loans from banks, but smaller businesses are not well served by existing banking products from traditional banks. We believe our technology-driven solution can bring costs down and make credit more available and more affordable to small businesses in America.

Since facilitating its first loan in June 2007, Lending Club has more than doubled annual loan volume each year. By using technology and automating processes online, Lending Clubs platform is able to offer more affordable credit to borrowers and attractive yields to investors.

About Lending Club
Lending Club utilizes technology and innovation to reduce costs and offer borrowers better rates and investors better returns. Over $3.8 billion in personal loans have been issued through the Lending Club platform, which has more than doubled annual loan volume each year since launching in 2007.The Company has been prominently recognized as a leader for its growth and innovation, including being named one of Forbes Americas Most Promising Companies three years in a row, a 2012 World Economic Forum Technology Pioneer, and one of The Worlds 10 Most Innovative Companies in Finance by Fast Company in 2013. Lending Club is based in San Francisco, California. More information is available at:https://www.lendingclub.com.Currently only residents of the following states may invest in Lending Club notes: CA, CO, CT, DE, FL, GA, HI, ID, IL, KY (accredited investors), LA, MN, MO, MS, MT, NH, NV, NY, RI, SD, UT, VA, WA, WI, WV, or WY.

Some of the statements in this above are forward-looking statements. The words anticipate, believe, estimate, expect, intend, may, plan, predict, project, will, would and similar expressions may identify forward-looking statements, although not all forward-looking statements contain these identifying words. The Company may not actually achieve the plans, intentions or expectations disclosed in forward-looking statements, and you should not place undue reliance on forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in forward-looking statements. The Company does not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Information in this press release is not an offer to sell securities or the solicitation of an offer to buy securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
Additional information about Lending Club is available in the prospectus for Lending Clubs notes, which can be obtained on Lending Clubs website at https://www.lendingclub.com/info/prospectus.action.

Photo – http://photos.prnewswire.com/prnh/20140320/SF87069-INFO

SOURCE Lending Club


Clydesdale and Yorkshire Banks launch 4.4% personal loans

So Clydesdale Bank, Yorkshire Bank and Zopa now all offer a rate of just 4.4%, the lowest on record for medium-sized loans.

Zopa is a peer-to-peer lender rather than a traditional bank, so it works a little differently. It cuts out the middle man the bank so investors lend directly to borrowers. The thinking is that investors get a better rate on their cash and borrowers enjoy more competitive rates on their loans. As the table above demonstrates, its clearly working.

While Zopa is known for cherry picking only the best applicants, it does at least offer a soft search quote. This means you know whether youll get accepted without any record of an application being left on your credit report.

Rates come tumbling down

As the table demonstrates, borrowers have plenty of options with relatively small differences in cost when it comes to personal loans at the moment. Its even more incredible when you look back 12 months, when the top loans came with a rate of 5.1%.

On a pound;10,000 loan repaid over a five-year period, that would equate to a total repayment of pound;11,318.40, more than pound;150 more expensive than all of the loans above. It just shows how rates across the board have tumbled on personal loans. Last month, financial data provider Moneyfacts declared that the average interest rates on personal loans had fallen to their lowest levels since 2006.

Will I get the best rate?

A word of warning though. Even if your application is successful, you may not be offered one of the great rates detailed above. Thats because lenders are only obliged to offer the Representative APR to 51% of successful applicants.

For more information read:

Credit myths: what actually damages your credit rating?

The seven hidden threats to your credit score

Six fixes for credit rating problems

Survey of 65000 College Students Shows Need for High School Financial …

The second-year results of Money
Matters on Campus, a survey of 65,000 first-year college
students across the US, show that policy makers, practitioners and
educators should encourage more and differentiated financial literacy
education components in K-12 environments. Further, results indicate
that colleges and universities should provide financial education early
on in the college experience to maximize the likelihood that students
will make sound financial decisions and increase their chance of degree

The study#x2014;conducted by EverFi
and sponsored by Higher
One#x2014;surveyed students on banking, savings, credit cards and school
loans, as well as a series of questions designed to assess students#x2019;
financial knowledge. Researchers found significant differences in the
financial capabilities of students based on age, race, gender and
institution type#x2014;as well as data that supports mandatory financial
literacy education in high school, highlighting the strong connection
between knowledge, attitudes and behaviors in this area.

In fact, findings show that students who received financial literacy
education in high school scored significantly higher than their peers on
financial knowledge questions and are significantly more responsible
when it comes to money.

Further, while no group of students scored particularly well on the
knowledge-based questions, with students on average getting 2.3 out of
six questions correct, financial knowledge significantly increased with
responsible fiscal attitudes and behaviors, age, high school financial
literacy education experience and socio-economic status. And while males
scored higher on the financial knowledge questions, females exhibited
more responsible fiscal behaviors overall.

#x201C;These results show the need to start financial literacy education in
the K-12 setting and for institutions to provide educational programs
early on in a student#x2019;s college experience that take into account
attitudinal, behavioral and demographic differences,#x201D; said Mary Johnson,
Director of Financial Literacy and Student Aid Policy at Higher One.
#x201C;It#x2019;s critical that young adults receive a sound financial education as
they make long-lasting decisions about college and how to finance their

Student responses to this year#x2019;s Money Matters on Campus survey
support last year#x2019;s results that several predictive actions and
attitudes indicate positive or negative outcomes on a student#x2019;s fiscal
behaviors. For instance, having a checking account was again found to
significantly predict fiscal behaviors such as budgeting, saving and
managing debt. Additionally, this research shows that as credit card
debt and/or school loan debt increased, students were more likely to
demonstrate unhealthy attitudes and behaviors towards spending, saving
and debt.

#x201C;Money Matters on Campus outlines implications for practitioners
and investigators in the financial literacy space to help turn these
findings into actionable plans and positive outcomes,#x201D; said Daniel Zapp,
PhD, Director of Research at EverFi. #x201C;The replication of data across
two years of this study provides strong evidence to support the
recommendations that financial literacy efforts on the post-secondary
level need to be augmented with behavioral components to increase their
impact on real world decision-making.#x201D;

Traditional financial literacy education focuses primarily on providing
simple financial knowledge and reactionary tools, without accounting for
a student#x2019;s individual attitudes, motivation and behaviors. Money
Matters on Campus details the need for a new, proactive approach to
financial literacy education based on identified existing attitudes and
behaviors and provides data that can be used to create and implement
such approaches.

A full copy of Money Matters on Campus, as well as an infographic
summarizing the report#x2019;s key findings, can be downloaded at www.moneymattersoncampus.org.

About Higher One

Higher One Holdings, Inc. (NYSE:ONE) partners with colleges and
universities to lower their administrative costs and to improve
graduation rates. We provide a broad array of payment, refund
disbursement and data analytics and management tools to institutions
that help them save money and enhance institutional effectiveness. And
for students, we offer financial literacy programs and convenient,
flexible and affordable transaction options to help them manage their
finances. Higher One is a leader in higher education, supporting more
than 1,900 schools and 13 million enrolled students. More information
about Higher One can be found at www.higherone.com.

About EverFi, Inc.

EverFi, Inc., is the leading education technology company focused on
teaching, assessing, and certifying K-12 and college students in the
critical skills they need for life. The company is powering a national
movement in 50 states that enables students to learn using the latest
technology, including rich media, 3D gaming, simulations, social
networking, and virtual worlds. EverFi#x2019;s AlcoholEdu#xAE; for College is one
of the few education technology programs proven to reduce student
alcohol use and negative consequences, as demonstrated through
independently conducted, empirical research funded by the National
Institutes of Health. EverFi has reached more than 7 million students
with its online learning platforms. Learn more at www.everfi.com.

Estate Planning: Good news for trusts that manage real estate

In the recent Frank Aragona Trust case, 142 TC No. 9 (2014), the US Tax Court reached a taxpayer favorable decision, one that benefits trusts that materially participate in real estate business activities.

For years, the IRS has steadfastly refused to allow trusts to deduct net operating losses related to real estate activities against other ordinary income unrelated to the real estate; based on the so-called “passive activity loss” limitations.

Now, it may be possible for such trusts to deduct the losses associated with the real estate against other profitable activities to reduce income taxes.

In Frank Aragona Trust, the trust owned rental real-estate properties and was involved in other real-estate business activities such as holding real estate and developing real estate that are considered per se passive activities unless the Trust qualified for the “material participating exception.”

At issue was whether the activities of the individual trustees would be treated as materially participating in real-property trades or businesses.

That is, could the trustee(s)’ own involvement in the operation of real-property trades or businesses on a regular, continuous, and substantial basis count as material participation.

The material participation exception applies when more than one-half of the personal services performed in trades or businesses by the taxpayer are performed in real-property trades or businesses where the taxpayer materially participates and performs more than 750 hours of services during the year in real-property trades or businesses in which the taxpayer materially participates.

The Tax Court held that, “[a] trust is capable of performing personal services within the meaning [because …] services performed by individual trustees on behalf of the trust may be considered personal services performed by the trust.”

The Tax Court rejected the IRS’s argument that a trust is incapable of providing personal services, reasoning that, “[I]f the trustees are individuals, and they work on a trade or business as part of their trustee duties, their work can be considered ‘work performed by an individual in connection with a trade or business.'”

Also, the Tax Court rejected the IRS’s argument the work of certain trustees as employees of an LLC that managed most of the Trust’s rental real estate properties – which was wholly owned by the Trust – should not count because such work was performed as employees and not as trustees.

The Tax Court counted the work of the trustees which they performed as employees of the Trust’s wholly owned LLC because, “trustees are not relieved of their duties of loyalty to beneficiaries by conducting activities through a corporation wholly owned by the trust.”

However, the Tax Court did, “not decide whether the activities of the trust’s nontrustee employees should be disregarded.”

Given that the IRS expressly disregards the work of non trustee employees towards the material participation test, what is certain is that trusts can count the work of their trustees (even if performed as employees of a corporation wholly owned by the same trust).

Work performed by trustees as employees of a corporation that is unrelated to the trust might not count.

The Frank Aragona Trust decision is good news for those ongoing trusts that actively manage real properties as a business and have income tax losses in such activities. It may now be possible for such losses to be deducted against other activities.

While the case resolves some uncertainties it does not resolve all uncertainties, most importantly whether to include the activities of trust employees who are not themselves trustees towards satisfaction of the material participation requirement.

Dennis A. Fordham, attorney (LLM tax studies), is a State Bar Certified Specialist in Estate Planning, Probate and Trust Law. His office is at 870 S. Main St., Lakeport, California. Fordham can be reached by e-mail at dennis@dennisfordhamlaw.com or by phone at 707-263-3235. Visit his Web site at www.dennisfordhamlaw.com .

Business Wire

Prosper (www.prosper.com),
a leading peer-to-peer financing platform, today announced it has
surpassed $1
billion in personal loans. Prosper has experienced tremendous growth
over the past year, as more borrowers turn to the site for everything
from debt consolidation to financing large purchases and projects such
as small businesses, vacations and home improvements. To date, more than
93,000 people have taken a loan through Prosper, and more than 75,000
individual investors have invested money through the platform.

In March, Prosper reported $77.3 million in loan originations, its
largest month ever. This is up 413% from March 2013, when Prosper
reported $15 million in loans. Prosper did a total of $357 million loans
in 2013, a 133% increase over 2012 and a 376% increase over 2011.

“We’ve seen an incredible spike this year in peer-to-peer lending and
interest in the space, but there are still millions of Americans who
don’t know how easy it is to get a loan through Prosper that can help
them start a small business, refinance a high-interest credit card or
fund a large purchase or project,” said Aaron Vermut, CEO, Prosper.
“This awareness presents a huge opportunity for us in 2014. We’re on
track to see even more unprecedented growth – both at Prosper and across
the entire industry.”

In addition to record interest from individual and institutional
lenders, a driving factor in the company’s growth has been the ease with
which people can obtain a loan through Prosper compared to traditional
methods of lending. Over 50% of the loans on the Prosper platform are
funded within two days of the borrower starting the application process,
and rates and loan options can be checked within a matter of seconds
with no impact to a person’s credit score. Loans are competitively
priced, and based on a person’s personal credit, rather than a generic
rate across the board. They are also fixed-rate, fixed-term loans with
no prepayment penalties. In addition, borrowers have the convenience of
applying anytime day or night online, and receive their FICO score for
free as part of the application process.

To view an infographic illustrating Prosper’s $1 billion dollar
milestone visit http://pspr.co/q1.

About Prosper

Prosper Funding LLC (“Prosper”) owns a leading peer-to-peer financing
platform to invest and borrow money (the platform). The Prosper
platform connects people who want to invest money with people who want
to borrow money. On the Prosper platform, borrowers list loan requests
between $2,000 and $35,000, and individual and institutional lenders
invest as little as $25 in each loan listing they select. Institutional
investors can also elect to participate in the Whole Loan Program. Over
the past six years, more than one billion dollars in personal loans have
originated through the Prosper platform. The unsecured personal loans
are used by Prosper borrowers for a variety of purposes including paying
down high interest rate debt and helping with small business funding.
Learn more at www.prosper.com.
Prosper Marketplace, Inc. is the parent company of Prosper Funding LLC.

Most types of consumer loan delinquency are on the decline

Call off the repo man. Banks and other lenders are mailing fewer delinquency notices as consumers do a better job of managing their finances in an improving economy.

The American Bankers Association reports the composite ratio of eight installment loan categories fell to a record low of 1.59 percent in the fourth quarter, well below the 15-year average of 2.34 percent.

As jobs, income and household wealth improve, people have a greater capacity to meet their financial obligations,” James Chessen, the ABA’s chief economist,  said in a release. “Improving consumer finances and closer attention to managing debt are the key factors behind these better numbers.”

Among the loan delinquency categories to fall were direct and indirect auto loans; RV loans; property improvement and home equity loans. Personal loans and mobile home loan delinquencies ticked up slightly, while marine loan delinquencies held steady.

Earlier this month the bankers group reported that consumers are doing a better job of  paying down credit card debt.

Mark Holan covers the economy and money — banking, finance, private equity, corporate accountability and professional services.

Lending Club Offers Loans to Businesses

P2P crowdfunding platform Lending Club has announced they are officially entering the business loan sector.

Everyone recognizes that small businesses are an engine of job creation and economic growth, yet their access to capital has been constrained, said Lending Club CEO Renaud Laplanche. We look forward to delivering the same customer-friendly, transparent and affordable financing options to small business owners as we have been providing on the consumer side.

Since inception, Lending Club has facilitated over $3.8 billion in consumer loans, growing at a pace of over $750 million a quarter. Lending Club business loans will range from $15,000 to $100,000 initially, increasing to $300,000 in the future. The loans carry affordable fixed interest rates starting at 5.9% with terms of one to five years, no hidden fees and no prepayment penalties. The application process is simple and available online.

We designed this product to fit the needs of small business owners, continued Laplanche. Bigger businesses can get large loans from banks, but smaller businesses are not well served by existing banking products from traditional banks. We believe our technology-driven solution can bring costs down and make credit more available and more affordable to small businesses in America.

Since facilitating its first loan in June 2007, Lending Club has more than doubled annual loan volume each year. By using technology and automating processes online, Lending Club’s platform is able to offer more affordable credit to borrowers and attractive yields to investors

Lending Club utilizes technology and innovation to reduce the cost of traditional banking and offer borrowers better rates and investors better returns. Over $3 billion in personal loans have been issued through the Lending Club platform, which has more than doubled annual loan volume each year since launching in 2007. The Company is profitable.

ESTATE PLANNING: Planning for a pet

In last weeks column I wrote about the importance of including your pet in your estate plan. Well, maybe importance is a bit or an overstatement. But it is important to consider what will happen to your furry, feathery or scaly friend should something happen to you.

If after careful consideration, you decide your pets well being should be included in your estate plan, what should you do?

The first and most important thing to consider is who is going to take custody of your pet. Its important to remember not everyone is able to care for an animal. Maybe they dont have the room or the financial ability to care for an animal. Maybe they just arent pet kind of people; not everyone is.

I think its a good idea to talk to the person that you are considering naming first to make sure they are able and willing to assume the responsibility. Im sure you would hate to see your pet end up in a place where they wont be loved, or worse, abandoned at a shelter.

If after discussing your intentions, its clear the person that you are considering cant or wont take care of your pet, dont think too poorly of them. Like I said, not everyone is a pet kind of person. Just consider your options and talk to someone else.

Once you decided where your pet will go, update your will or trust to reflect your choice. At this point you can stop or you can take it one step further.

Since you own a pet, you know how expensive they can be. Food and medical care can be a drain on the family budget. An annual checkup and shots alone can easily cost a $150.

To help offset the costs of caring for your pet, consider including a financial provision in your estate plan. Im not suggesting that you leave Cuddles money, but you can use a simple pet trust to help with the cost of taking care of your pet. You dont need to fund the trust with a lot of money. Just enough to help offset the costs of pet ownership.

If you are feeling even more inspired when planning for your pet, consider including a provision to help one of the fine organizations that care for unwanted and abandoned animals. Again, you dont have to make a large donation. Im sure any amount would be welcomed.

Making sure our loved ones are taken care of after our death is a big reason for planning. Shouldnt your pet be included in that list of loved ones?

Check out: Cheaper alternative options to personal loan

Nikolai Kirtikar
Apna Paisa

Personal loans are unsecured loans offered by financial institutions without taking any collateral security though some PSU banks may insist on a guarantor. The end purpose of personal loan is not monitored and can be used for any personal need like marriage to holidaying or maybe to buy a lifestyle product or medical emergencies or maybe the down payment for purchase of home.

As the process of applying for personal is quite hassle-free with minimum documentation and disbursement in real quick time, it continues to remains one of the most favourite option to the borrowers.

The personal loan amount and rate of interest is dependent on three major factors ie borrowers income and his ability to service the loan, credit history of the borrower and the company for which the borrower is working (so be prepare to pay higher interest rate if you are not an employee of their list of preferred employers)

Being classified as unsecured loans, personal loan is usually more expensive in terms of interest rate compare to any other loan taken against collateral security. In current scenario (April 2014) the prevailing rate for personal loan varies from 14% to as high as 48% pa.

So, lets look at the cheaper options to personal loan in case of short-term financial needs.

Friendly Loan from Family, Friends and Relatives:

Borrowing from family, friends and relatives is the easiest and safest option of borrowing as they may lend you at a better terms and conditions than the financial institutes. Secondly, whenever you have additional funds to prepay you can foreclose the loan without paying any penalty.

Loan against Fixed Deposits:

One can borrow up to 90% of his / her fixed deposit amount in the concerned bank. Interests charged on such loans are generally 1 % – 2% higher than the interest rate you receive on your fixed deposits. Hence, if you are earning 9% pa on your fixed deposits, the interest you will have to pay on your loan overdraft will be around 10% – 11% pa

Here one must note that you cannot avail loan against tax saving Fixed Deposits.

Loan against Gold Jewelry:

You can pledge your gold jewelry and avail up to 75% of the realizable value of gold jewelry / ornaments though banks can and do provide a higher percentage of the realizable value of the jewelry as well. Gold loan is usually available for tenure of one year and it can be further extended at the prevailing rate of that time. You just need to walk into any branch office of the lender along with the gold jewelry. The lender will evaluate the jewelry and provide the loan based on their valuation rather than the cost mentioned in your purchase bill. Depending on the LTV opted by you, the rate of interest will vary from 11.25% – 25% pa.

The trick to get lower rate of interest is to ensure that your loan amount does not exceed more than 50% – 60% of the jewelry value. Muthoot Finance and Manapurram Finance are two very active players in loan against gold jewelry.

Loan against Property:

Typically you can get up to 50% – 60% of the value of the property or twice your annual income (whichever is lower) as a loan against your immovable property. It is available for a period of 5 years to 15 years and the rate of interest will be in the range of 12.50% 15.75% pa Loan against property is usually a time consuming lengthy process and is not ideal for people who have a relatively smaller cash requirement of couple of lakhs.

Loan against Securities:

This loan is available against pledging of securities like Mutual Funds, Demat shares, Insurance policies (ideally traditional policy like endowment policy) with high surrender value, National Savings Certificate / Kisan Vikas Patra, Bonds, etc. Lending institutes generally have their own list of approved mutual funds and shares and will provide loans against this list only. Since the value of mutual funds and shares fluctuate frequently, the lenders will keep a higher margin while financing against these securities.
The rate of interest on these loans will be around 12.5% – 15% pa.

Loan against Public Provident Fund:

A subscriber can take loan against his public provident fund balance only for specific purposes like education, marriage, medical expenses, etc. subject to restrictive terms and conditions. Subscriber can avail the loan facility from 3rd financial year up to the end of 5th financial year. However one cannot take loan after the end of 6th financial year.
The repayment of loan can be made in lump sum or in 2 or more monthly installments but within 36 months from the date of disbursement of loan. The rate of interest charged on this loan is 2% pa higher than the interest you get on your PPF account.

Top-up Loan:

If you are an existing home loan borrower, you can ask your lender to give you a top up loan on the security of the house. You will be eligible for a top up loan only if your repayment track record is good and your income is sufficient to service both the home loan and the top up loan. It is also important that the property value also is sufficiently large to provide an appropriate margin for both the loans put together. The top up loan is likely to be slightly higher than your existing home loan but lower rate than the personal loan and hence it is a good idea.

Loan from Employer:-
Under certain circumstances your employer might agree to offer you the loan and adjust the amount against your monthly salary.

All the above options are not only cheaper than personal loan but can be availed even if your credit rating is poor. The exception to the rule is Loan against Property and Top-up loan, where your credit history will play a major role in getting your loan sanctioned.

Apna Paisa is Indias Online marketplace for loans amp; investments. Author can be reached at www.facebook.com/apnapaisa .