A new house, great bike, cool car, travels, further studies and much more will be on your to-do list. This is not only when you are fresh out of college but anytime in your life.

Loans these days have made the dreams come true with much more ease than it was earlier. There are different types of loans available in market to acquire things you want at an early basis than you had thought you could. A Loan is basically giving you an option to live the life you thought you could live few years down the line.

Now a days, there is also an option of tailor made loans, specially designed for you!

But for a new person who has never taken a loan, the questions arises are :

How to take loan?

You definitely know what are you planning for which requires a loan. Like to buy a house you need to take a Home Loan, to buy 2 wheeler or 4 wheeler you need Auto Loan, if you are planning to go on a huge vacation you would want a Travel Loan, if you are planning to study further you take an Educational Loan, if you are planning a start-up you need Business Loan. There are few types of other loans which are available like Gold Loan, Loan Against Property, and most important a Personal Loan.

For any of these kind of loan, you would do a lot of research and select the best suitable option for you.

Who all gives loan?

There are banks, who can give you loans, then there are NBFCs (Non Banking Financial Companies) or you have private lenders who all can give you loans.

What is the percent of interest I have to pay for loan?

 Different financial institutions offer different percentage of interest on loans. It also depends on the Credit score.

What all is required in taking a loan?

• KYC documents
• Photograph
• Your income proof
• Some specific requirement are for few of the loans.

What are the factors I should look for while taking a loan?

• The Disbursal time
• Loan processing fees
• Rate of interest

are the 3 major things you should check before finalizing the loan.

Now the whole question arises is : how are the interest rates calculated?

The interest rate is mainly calculate on the credit score.

What is a credit score?

                A credit score is a 3 digit number from 300-900 which is calculated by your repayment behaviors of the loans and credit cards you have taken.

But What if I have never taken any loan or credit card?

                If you have never taken any loan, or you do not have any credit card, then in that case you are a No History customer. It takes 6 months to start building a score. If you are a no history customer, let’s follow the tactics mentioned below in order to give a perfect start. However, there is an option of personal loan without cibil score, where the loan is given checking other criteria.

• Best way to start is with mixed credits : i.e. Secured and Unsecured credit and also Revolving and installment based credits.

Revolving credits includes Credit Cards of secured and unsecured type.

In Installment Based Credit : The secured once are Gold Loan, Home Loan, Auto Loan and Loan against Property. Where the unsecured are Personal Loan and Business Loans.

The best practice is having a combination of such all credits. Make sure if it is a credit card, you use 30-40 % of the limit allocated. Pay all the bills on time which is on the billing cycle. Do not over use the credit card so that it becomes difficult for you to pay the amount. Be patient and responsible enough while you take the loan.

CIBIL score calculation is majorly done on these parameters. Your payment history and the outstanding balance comprises of 70% or more in any bureau.

Be smart enough to take these credits and smarter enough while paying them! If worked responsibly, you will always maintain the score of 700 and plus which will make you eligible for any loan at lower interest rates!

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