Finance Basics

1.      What are ULIPs?
Unit-linked insurance policies or ULIPs are contemporary life insurance policies that offer investment benefits along with life cover. It is similar to traditional life insurance policies such as endowment, money-back and whole-life, but with one major difference. Unlike traditional policies, in ULIPS investment risks are borne by policyholder and not with the [...]

Let us look at the various loan products to answer the question.

Particulars
Personal Loan
Credit card cash advance
Loan against property (LAP)
Loan against security
Gold loans

Meaning
This is an unsecured loan taken for personal use.
This is an unsecured loan taken for personal use.
Secured loan [...]

Assess the amount your loan requirement and then decide the amount of loan you need. Do not borrow more than you need just because your bank is providing you with it. After all it comes at a cost and in this case at a high cost. Also let the loan amount be such that you [...]

Prove your creditworthiness: A good credit score will improve your bargaining power. Banks would go the extra mile to have you as a customer if you have a clean credit history. Therefore you may get a discounted rate. To ensure that you have a good credit score, make sure you have an impeccable repayment history.
Compare [...]

Interest rate: This is the key cost of taking a personal loan. Being an unsecured loan, the rate of interest is high. In fact it is lower to only credit cards in the loan segment. The rate of interest charged, can be anywhere between 14% and 23%, depending on the type of borrower. Borrowers with [...]

This is a fee that is recovered from the borrower at the start of the loan itself. This amount has to be paid to the lender even before the loan is actually used, so this represents a cost for the borrower and he/she will be able to use only the remaining amount of the loan. [...]

A loan that is not backed by any security for the lender. In this situation, the lender does not have any backup to rely on in case the borrower defaults on the loan repayment. There is no safety net present for the lender in such a type of loan and the recovery will have to [...]

A loan where a lump sum is available for the borrower and the interest is calculated on this lump sum amount. The repayment schedule considers the payment of this amount back to the lender.

These are conditions related to the operation of the loan that are common among all lenders or even across various offerings of the lenders. This involves things like the manner of the disbursement of funds or the manner of repayment like using monthly instalments and so on.

A purpose or route where there is a chance that the person could gain or lose their money. This is usually a matter of luck or chance where the person could lose the entire money that he/she has used for the purpose. In this situation, there is often no base on which the decision is [...]