Today, Sanjay Agarwal , executive vice-president, (head-SME and retail business) Arcil, answers your questions
My credit card was cancelled because I was irregular with my payments. Now that I have cleared all my dues, can I apply for a new card?
Yes, you are eligible to apply for a fresh card. Chances of approval depend on various factors such as the period and amount of default, were there any waivers to clear the dues, your conduct with other loans, credit bureau score, your current income, etc, apart from the credit policies of individual card-issuing entity. You stand a good chance of getting a new card.
My housing finance company recently reduced interest rates. But since I am an old customer, I will have to pay a fee to lower the rate on my loan. Should I pay the fee or continue with my existing equated monthly instalment?
When the floating rate of interest goes up or down, the impact is passed on to the borrower without asking for any fee. But when there is a reset of rates against base rates, sometimes banks/finance companies charge a small fee to pass the benefit. Normally, it is a small sum and much lower than the overall benefit over the years. It is, therefore, advisable to pay this amount to get reduced rates. But you need to calculate the benefit in your case, depending on the balance loan amount, balance tenure and the rate reduction, etc, to take a final decision.
My family home in the village needs repairs. Can I take a top-up on my home loan for my flat in the city? Will the rate be the same as my home loan rate? If I can't repay on time, will my home loan tenure increase?
Yes, you can apply for a top-up loan on your home loan. The interest will be based on the prevailing rates and might be different from the existing home loan ones. Normally, the tenure of top-up loans is co-terminus with that of your home loan.
A friend is applying for a loan and asked me to be a guarantor. What are the implications ? Will I have to repay the loan if my friend defaults?
Being guarantor to a loan is an act of responsibility. It means you step into the shoes of the borrower in the event of default and have to honour all liabilities related to that loan. This will also be captured in the credit bureau records and will have an impact on your credit score, depending on the repayment behaviour.
The views expressed are expert's own. Send your queries to yourmoney@bsmail.in
