OBJECTIVES To know about various types of secured loans.

To understand meaning of home loan , loan against property. To know more about what Term loans. To know about various products offered by Private sector banks and MNCs. To know more about Credit cards and their working. To know about the advantages and disadvantages of secured and unsecured loan. To understand what is CIBIL rating and how is it related to person applying for the loan.
Free Powerpoint Templates Page 1

SECURED LOAN
A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as collateral for the loan, which then becomes a secured debt owed to the creditor who gives the loan. In the event that the borrower defaults, the creditor takes possession of the asset used as collateral and may sell it to regain some or all of the amount originally lent to the borrower, for example, foreclosure of a home. From the creditor's perspective this is a category of debt in which a lender has been granted a portion of the bundle of rights to specified property. If the sale of the collateral does not raise enough money to pay off the debt, the creditor can often obtain a deficiency judgment against the borrower for the remaining amount.

Free Powerpoint Templates

Page 2

CLASSIFICATION HOME LOAN LOAN AGAINST PROPERTY TERM LOANS OTHER TYPES INCLUDECASH CREDIT OVERDRAFT

Free Powerpoint Templates

Page 3

HOME LOAN
A home loan, or mortgage, is a secured loan that borrowers obtain in order to purchase a home.

Types of home loan Home Purchase Loans: This loan is availed for the purchasing of new home. Home Construction Loan: It involves funding for construction of existing home or new plot. Home Extension Loan: This is given for expanding or extending an existing home. For eg: addition of an extra room, bathroom etc. Home Improvement Loans: These loans are funded for executing repair works and renovations for a home you have already occupied. Free Powerpoint Templates Page 4

Home Conversion Loan: This is available for those who have financed the present home with a home loan and wish to purchase and move to another home for which some extra funds are required. Through home conversion loan, the existing loan is transferred to the new home including the extra amount required, eliminating the need of prepayment of the previous loan. Bridge Loans: As the name suggests are those loans that help the customer to bridge the gap between the new plot purchased and old sold. The difference of amount between the two is funded by bridge loans. Land Purchase Loans: This loan is available for purchase of land for either construction or investment purposes.

Free Powerpoint Templates

Page 5

VARIOUS STAGES INVOLVED IN TAKING A HOME LOAN

Step 1: Application form Step 2: Personal Discussion Step 3: Bank's Field Investigation Step 4: Credit appraisal by the bank and loan sanction Step 5: Offer Letter Step 6: Submission of legal documents & legal check Step 7: Technical / Valuation check Step 8: Valuation Step 9: Registration of property documents Step 10: Signing of agreements and submitting post-dated cheques Step 11: Disbursement

Free Powerpoint Templates

Page 6

UNSECURED LOANS

Free Powerpoint Templates

Page 7

Personal loan

Free Powerpoint Templates

Page 8

Student Loans
Student loan: a loan provided to finance part of the expenses a student incurs while pursuing a degree Loan may be provided to either the student or the student s parents Repayment typically deferred until student is out of school Interest may be tax deductible
Free Powerpoint Templates Page 9

Secured Versus Unsecured Loans

Secured Guaranteed by a specific asset. If loan payments are not covered, the asset is seized. Collateral reduces risk, so lower interest rate.

Unsecured Requires no collateral. Large loans given only to those with excellent credit. Quite expensive, since lender only has the borrower s promise to pay.
Page 10

Free Powerpoint Templates

Advantages and disadvantages of secured loans.

Affordability based on income rather than multiples Adverse considered on most plans Our lenders are looking to lend Most purposes of a secured loan are acceptable Quicker turnaround than the average mortgage Client can leave their prime mortgage in place without paying exorbitant exit fee No up front fees Self employed self cert available A loan may be considered best advice in the right circumstances

Free Powerpoint Templates

Page 11

Disadvantages of unsecured loans

Affordability based on income multiples May have had problems with their current lender Their mortgage company might not be granting further advance

Free Powerpoint Templates

Page 12

Advantages of unsecured loans

The most popular advantage of unsecured personal loans is that no collateral is needed to secures the funds. If you default on the loan your assets will be protected. If you do not own a home or have any assets, you can get the money you need with an unsecured personal loan. Sometimes when you get a loan your approval is contingent on your use for the funds or your use is limited by the loan terms. This is usually not the case with an unsecured loan giving you the freedom to use the funds for any purpose. If you do not have a good credit history or have not had time to establish one, paying responsibly on an unsecured loan will help you to strengthen or build your credit history. Having good credit is a must and helps you obtain the best interest rates.
Free Powerpoint Templates Page 13

Disadvantages of unsecured loans

Maximum term is normally 5 years Maximum amount is normally 15k which is rarely offered Very low acceptance rates

Free Powerpoint Templates

Page 14

CREDIT CARDS
A credit card is a small plastic card issued to users as a system of payment. It allows its holder to buy goods and services based on the holder's promise to pay for these goods and services. The issuer of the card creates a revolving account and grants a line of credit to the consumer (or the user) from which the user can borrow money for payment to a merchant or as a cash advance to the user. A credit card is different from a charge card: a charge card requires the balance to be paid in full each month. In contrast, credit cards allow the consumers a continuing balance of debt, subject to interest being charged. A credit card also differs from a cash card, which can be used like currency by the owner of the card. Most credit cards are issued by banks or credit unions, and are the shape and size specified by the ISO/IEC 7810 standard as ID-1. This is defined as 85.60 53.98 mm (33/8 21/8 in) in size

Free Powerpoint Templates

Page 15

CREDIT CARD-WORKING
Credit cards are issued by a credit card issuer, such as a bank or credit union, after an account has been approved by the credit provider, after which cardholders can use it to make purchases at merchants accepting that card. When a purchase is made, the credit card user agrees to pay the card issuer. The cardholder indicates consent to pay by signing a receipt with a record of the card details and indicating the amount to be paid or by entering a personal identification number (PIN). Also, many merchants now accept verbal authorizations via telephone and electronic authorization using the Internet, known as a card not present transaction (CNP). Electronic verification systems allow merchants to verify in a few seconds that the card is valid and the credit card customer has sufficient credit to cover the purchase, allowing the verification to happen at time of purchase. The verification is performed using a credit card payment terminal or point-of-sale (POS) system with a communications link to the merchant's acquiring bank.

Free Powerpoint Templates

Page 16

LOAN PRODUCTS

Free Powerpoint Templates

Page 17

PRIVATE BANK
Loan Against Securities
You have to do is pledge your securities in favour of ICICI Bank. We will then grant you an overdraft facility up to a value determined on the basis of the securities pledged by you. A current account will be opened and you can withdraw money as and when you require. Interest will be charged only on the amount withdrawn and for the time span utilised. This facility is available against the following securities Demat Shares Mutual Funds Units Fixed Maturity Plans (FMP) Exchange Traded Funds (ETF) Insurance Policies Savings Bonds NSC/KVP (Demat form)

Free Powerpoint Templates

Page 18

 Commercial Vehicle Loans

Funding of new vehicles, finance on used vehicles, top up on existing loans, working capital loans & other banking products.

Office Premises Loan

A self-employed businessman or professional needs a permanent address to set up his business. Non-Residential Premises Loans you can do that, easily and conveniently. These loans cover purchase, construction, extension and improvement of office premises. The loan may also be packaged to include the estimated renovation expenses

Lease Rental Discounting

Lease Rental Discounting helps to raise funds against the future expected rentals of self owned commercial property. The property should be occupied by the Lessee. Similar to Home Equity Loans, LRD can be provided for any personal requirements of the customer viz. Marriage. Child Education. Business. Purchase of Property (Where mortgage is not possible). Improvement of Property. Free Powerpoint Templates Page 19 Medical Treatment.

 EMI Under Construction

EMI Under Construction is offered for structuring a home loan to enable individuals to commence his EMI in a partly disbursed under construction project. Commencement of EMI ensures re-payment towards principal amount leading to savings in interest and faster repayment of the loan. The EMI paid is as per the sanctioned loan amount and remains constant during the tenure of the loan. The tenure of the loan keeps moving up with additional amount being disbursed

Free Powerpoint Templates

Page 20

PUBLIC BANK
Corporate loan Foreign Currency Loan Loans for Pensioners Loans for Senior Citizens Loans for Medical Practitioners Loans for Salary A/C holder
Free Powerpoint Templates Page 21

NBFC
Gold loans

Free Powerpoint Templates

Page 22

Unsecured product mix v/s Secured product mix for a banking Institution and their advantages and disadvantages for both bank and Customer.

-Presented by Kanika Chhabra Nakul Singhania Mayank Kumar Pankaj Bharti

Free Powerpoint Templates Page 23

CIBIL
Credit information Bureau (India) Limited (CIBIL)

CIBIL- was incorporated in 2000.The relationship between CIBIL and the Banks is that of close interdependence. Banks provide Cibil the information of its customers who have taken credit and there payments behavior and track record. CIBIL on the basis of information collated from all Banks, helps its member Banks to make faster credit decisions when they acquire new customers as they will be able to check his previous credit history.

Free Powerpoint Templates

Page 24

The CIBIL Credit Score System

It will be on a scale ranging from 100 to 999. Cibil collates data from its member Banks and creates a track of all loans, Credit taken by an individual and impart him a score based on his behavior of repayments of EMIs and Credit card from member Banks. Lower the CIBIL credit score lower the chances of getting money on credit. Say if your credit score is close to 100, then this implies, outright refusal of credit, requirement of additional security / guarantee, higher down payment, shorter duration and higher interest rates. If you have a very high CIBIL credit score, say 800, this implies, lower interest rates, waiver of processing fees and faster disbursement of funds.
Free Powerpoint Templates Page 25

IMPACT OF BAD CIBIL

This score plays a very important role in fetching you a high or low interest rate from your lender on a secured or unsecured loan. Secured loan is something in which you put something as a guarantee and an unsecured loan is a one, wherein nothing is kept as a guarantee and the funding is based on your income financials. Cibil score impacts secured and unsecured loan in equal way. People might think that, they are keeping their property papers as a guarantee, which is a big deal and so cibil score would not matter much. But this thinking is wrong; you need to keep in mind that your lender would not grant you funds, if you are a defaulter. It would not matter, whether you are going for a secured loan or unsecured loan; the interest rate would be high if your cibil score is low and rate would be low if the score would be high. You may have to face rejection in both the cases, if the cibil score is below average. No point would be taken into consideration for a secured loan, as they are considered to be less risky. The policies of a secured loan are different from that of an unsecured loan, and so the funds granting decision would depend on several factors. There might be a possibility that you may get some waivers on your case, if something is coming out of the policy, but cibil rules are same for both secured and unsecured funding with no much difference.

Free Powerpoint Templates

Page 26

CIBIL Sample Report

Field Description

CIBIL

User Name running the report with Date and time Personal details of the borrower

Date on which the addresses were first reported

Addresses of the applicant will show multiple ( max 4) address wherever applicable 27 Page

Free Powerpoint Templates

CIBIL Sample Report

FI name not disclosed ( because we are also not mentioning ours to other members) Product Sanctioned amt If suit not filed would be blank , pl refer Note 1 Recent reporting date for the case Latest updation from the FI Track record for the case, with the Leftmost being the latest status refer note 2 Disb date ; Latest payment date ; A/c close date

Free Powerpoint Templates

Page 28

CIBIL Sample Report

Reading this report  FI name not disclosed  Product - Others  Disb date 24 Dec03  Last payt 13 Mar04  Live Loan ( close detail is blank)  Sanctioned amt Rs 2.5 Lacs  Current Balance Rs 2.39 Lacs  Amt overdue Rs 28,260  Suit not filed Blank  Last updated in May04  DPD 84 Days past due (latest Free Powerpoint Templates status) Page 29

CIBIL Sample Report Note 1. Suit status - FIL : Suit is filed - TRL : Trail stage - DCR : Decree - DEX : Decree executed In case of Blank No suit filed 2. Track record - STD : Standard - SMA : Special Mention account - SUB : Sub stanard - DBT : Doubtful - LSS : Loss And/Or the DPD status would be mentioned Left side being the latest status.
Free Powerpoint Templates Page 30