Debt Counselling: Sanjay Agarwal

I'm in urgent need of money. Should I take a loan from my office, apply for a personal loan or take a loan against my life insurance policy?
The decision points could be the amount of loan, urgency, interest rates and equated monthly instalments. You need to compare your loan options with these factors. Normally, office loans are preferable, being the cheapest, fastest, need least documentation, have the longest repayment period, and don't consume your other credit limits.

I got a mail from my bank saying I'm eligible for a pre-approved personal loan. However, when I applied, it got rejected, saying the documents were not in order. How's that possible? What should I do?

Pre-approved loans are given by banks for existing customers after checking creditworthiness. Income documents are not relevant. Either they don't take any documents or at best ask only KYC (Know Your Customer) documents for identity and records. Ask the bank about the discrepancy, which should be easy for you to resolve.

My mutual fund investments have increased quite a bit, as the markets are giving good returns. I'm planning to redeem part of it and pay off my home loan. Or should I continue to pay the home loan EMI and avail of the tax exemption benefit? I have another five to six EMIs of the loan and paying interest of 10.5 per cent.

We foresee interest rates falling and the economy growing better in the coming months. This means equity markets are likely to give higher returns in the medium to long term and floating interest loans such as home loans will see a rate reduction. I'd suggest you stay invested in mutual funds and don't foreclose the loans.
The views expressed are the expert's own. Send your queries to yourmoney@bsmail.in

Sanjay Agarwal, executive vice-president (head-SME & retail business),Arcil, answers your questions