Running out of funds while your home renovation is still in progress is an embittering experience. However, it is a reality that bothers many Singaporeans. Whether you have taken a renovation loan or not, running out of your reserves before the completion of your project can lead to a number of problems.
Leaving your home renovation unfinished can affect you in the following ways:
- Affects the aesthetic appeal and look of your home
- Can make your home less liveable
- Can affect the resale value of your home
- Can affect the rental value of your home
Common Issues Leading to Budget Overrun
Some of the common issues that can lead to cost escalation and budget overrun are as follows:
- Heavy structural changes
- Deviations from the original plan
- Poor workmanship
- Encountering unexpected design-related problems
- Failure to properly forecast total cost of renovation
Smart Solutions for Your Problem
The most important thing that you need to keep in mind is that the liveability and safety of the residents of your home shouldn’t be compromised even if you can’t fully complete the project. The following ideas will help you deal with this problem smartly:
Know what to finish first
Getting stuck with an unfinished renovation project could be frustrating, especially if it is due to lack of funds. However, through proper planning and by setting priorities, you can still add value to your home. If it’s a major renovation or improvement project, you’ll have to break it down into parts and prioritise them in terms of importance. A bathroom or electricity project can’t be left unfinished, it’s purely functional in nature.
However, a painting project or cosmetic upgrades can be put on hold temporarily till arrangement for extra funds can be made. If you were planning to add new fixtures or mood lights to the living room or replace your old lights, you can put it on hold. Your master bedroom should ideally be fully completed, since this is where you spend most of the time.
However, your living room, which requires detailing to work and naturally more investments, can be kept for later. Prioritise structural reinforcements over simple facelifts.
Scout for additional funds
This seems to be an obvious step. However, arranging for additional funds at a short notice may not be easy. You can explore the following options:
- Use your emergency fund: If you have been maintaining a separate emergency fund for all sorts of emergencies, this may be a good time to use it. Using your own funds will save you interest payments.
- Ask for help: If your friends or family can help you arrange the additional funds immediately, you can finish renovating your home or at least the important parts of it. This will give you time to arrange for money to pay back the dues without having to worry about interest payment.
- Take a home renovation loan: If you haven’t taken a renovation loan and you were paying for renovation out of your own pocket, you may apply for a renovation loan. You can borrow up to S$50,000 in renovation loans in Singapore and is often considered the smartest way to finish a renovation project on time. However, if you have already taken a renovation loan and have run out of money, you may have to look for alternatives. Try to broker a deal with the lender. Sometimes, if you can find a guarantor, the lender may agree to offer you a line of credit with higher limits. Of course, your current financial standing and ability to repay will be evaluated.
- Take a personal loan: A low-interest personal loan is another option that you can explore for additional funds. Usually, an EIR of 8-10% p.a. will be applied on your loan. A balance transfer is another smart choice.
- Use your credit card to take a loan: Although taking a loan with your credit card isn’t an ideal choice because you may have to pay interests at the rate of 24-28% p.a., it may be the only option left to you if you have exhausted all other options and are still falling short by a few hundred or thousand dollars.
- Use a secured overdraft: If you have a valuable asset that can be used as a collateral, you may make use of the secured overdraft facility to get a line of credit, where the credit limit is decided by the value of the pledged asset. It gives you extra cash without forcing you to liquidate your funds/assets. Most assets like FDs, structured funds, bonds and securities will have clauses under which heavy deductions will be made for premature withdrawal, leading to a real or notional loss.
If you were planning to rent out your flat and think that leaving it fully or partially unfurnished may affect the rental value of your home, your apprehensions may not be totally unfounded. On the bright side, you can still have a rental income if your tenant is okay with an unfurnished/semi-furnished property. You can deal with the aesthetic aspects of your project in a phased manner.
If you think that your contractor is overpricing services, it’s best to look elsewhere. The longer you take to finish a project, the higher are the chances of cost escalations.
Wanna Know How to Get Lowest Home Loan Interest Rate? Read This
When it comes to buying a home loan, everyone wants to avail the same at the lowest home loan interest rate. And, why not, after all, interest rates play a crucial role in the overall loan journey of an applicant. You can say rates are the deciding factors that can either make or break the situation for you.
Now there are many lenders that offer you this credit facility. So what are the best ways that help you get the attractive rates? Moreover, to help you out in this situation, here we are. Yes, all you need to do is just go through this article below:
Ways to Get Lowest Interest Rates on Home Loan
Talking about the interest rates of an online home loan, they are both fixed and floating. Basically, there are certain factors based on which the rates offered by the lender are as follow
Buying a Property in a Good Location: If the property that you are going to buy,lies in an approved society, area or colony, you have the maximum chances to get the loan for a maximum loan amount and that too at an attractive interest rate. The maximum loan amount that you can get is 70%-90% of the property value in such a situation.
Maintain a Good CIBIL Score: On maintaining a good cibil score, you are eligible to get the best deal. If your score is good, say 650 or above, it would be easier for you to enjoy the competitive rates. Yes, because before offering you the credit, most of the lenders do check your three-digit numeric summary so as to know your creditworthiness. And, going through the credit history and repayment record is one of the most effective ways to have a quick access to an individual financial profile.
Choose Your Existing Lender: If you have maintained the good terms with your existing bank, you can definitely bargain for the best deal. Now you must be wondering how it is possible? Well, a good understanding and fruitful relations with your lender allow you to further negotiate for a higher loan amount. Not only this, you can also grab the lucrative deal and that too at lowest home loan interest rates without any hassle. Sounds great, isn’t it?
Balance Transfer: In order to enjoy the attractive rates on your HL, you can also opt for a balance transfer facility. With the help of the same facility, you can transfer your existing home loan online to a lender who is offering the attractive rates. While doing so, you can save big on your loan repayment, hence can enjoy the huge savings.
Earn More: Whether you are salaried or self-employed, if you earn a higher income, it helps you in getting the higher loan amount. With a higher income, you can easily repay the borrowed amount, which in return increases your home loan eligibility also.
Hope now you know the best possible ways to enjoy the attractive home loan rates!
How MRF Stock is Beneficial for Long Term Investment?
Madras Rubber Factory (MRF), India’s largest tyre maker has been creating in the buzz in the stock market owing to high share prices. In April 2018, the company’s share hit a lifetime high of Rs.80,000. In August 2001, the price of the share was in the level of Rs.500. This essentially means, the investors who own MRF shares have received amazing increase of a whopping 15,800% since August 2001. In the past 17 years, the shares have multiplied 50 times from Rs.1,218 in January 2001. The price of the share as on 29 June 2018 is a little over Rs.75,300. Owing to strong annual revenues since past few years, the stock of the company has performed well as the company bagged some important landmarks. According to a couple of analysts, the MRF share price is expected to hit the six-figure mark of Rs.1,00,000. MRF forayed the stock market in September 1996 and has since then seen a remarkable increase in the stock prices. It has become the most expensive stock on the indices. In the past over 15 years, MRF has delivered superb returns annually. As on 29 June 2018, the market capitalisation of the company is Rs.31,700 crore. In FY 2018, the tyre behemoth recorded a 25% drop in its net profit for the fiscal ended March 31, 2018 to Rs 1,092.08 crore. MRF’s total income (net of excise duty) saw an increase of 11.22% to Rs 15,104.40 crore for fiscal 2018. Meanwhile, the company’s profit before tax (PBT) stood at Rs.1,601.91 crore for the year.
Currently, MRF’s earning per share (EPS) is higher than its competitors such as Apollo Tyres , JK Tyre and CEAT. The company’s share price is trading at twelve-months price-to-equity ratio (P/E) of 22.32 times, which is lower than the industry PE of 23.15 times. The share price has been quite stable and is projected to be stable as the company is expected to multiply its earnings over the next few years by over 50%. Hence, it is safe to say that MRF has a majorly optimistic future going forward. As a result, the company could witness a more robust cash flow that could eventually lead to an increase in the share value. At a market cap of little over Rs.2500 crore, MRF announced a capex in excess of Rs.6,000 crore.
As per experts, MRF is a very strong band and cannot be treated as a commodity. Another reason for an increase in the stock price is the comparatively small equity base. MRF has a total of nine manufacturing facilities across India and exports to over 65 countries. At present, the market leader in tyres, manufactures over 8-9 lakh tyres per month across these facilities.
By the year 2020-21, MRF Tyres plans to increase its revenue to around Rs 20,000-22,000 crore. The company is looking forward to invest around Rs.800-1,000 crore every year on products and brown field expansion. In addition, the investment will also be used towards automation, expansion of existing manufacturing facilities, research & development (R&D) and others.
Automobile sales in India have been expanding thanks to an increasing demand by a record two-wheelers and truck volumes. The company is expected to continue its strong performance and garner better revenue growth thanks to the stability in rubber prices. MRF has also expanded its portfolio beyond tyres and have made a mark in other business such as conveyor belts, toys, tubes, and paints, and others. Last year, MRF introduced PERFINZA, a new luxury and premium range of passenger car tyres which is aimed at serving high-end automobiles.
The stock has seen a major jump of nearly 48% between January 2016 and March 2017 alone. It was at Rs.40,546 in 2016 and touched the Rs.70,000 mark in 2017. As mentioned earlier the share price of MRF touched Rs.80,000 in April this year, which suggests an increase of Rs.10000. In FY 2017-18, the company also recommended a final dividend of Rs.54 per share. It had already paid two interim dividends of Rs.3 per share for the financial year ended 31 March 2018.
Investing in stocks needs patience and you can get great results only if you invest them for a longer time. The share price of MRF has shown a tremendous increase in over the years and it has a great potential to grow further. However, it is strongly recommended to do thorough research while investing in stocks as they are volatile in nature and there is a possibility that you will lose your hard-earned money due to a poor judgement or lack of research. There is ample amount of literature available on the websites like Bankbazaar.com about various kinds of stocks. Going through them can help the investor a great deal.
The Worst Advice About Credit Cards That You Should Never Follow!
Owning a credit card comes with its own advantages and disadvantages. At times things work out well, whereas at other times you may end up using your card in a wrong way. The key to use a credit card properly is knowing what works and what does not.
Family and friends do shell out advice constantly about cards. But not all advice are correct. Some common notions about cards are not worth considering at all. Know what these are and use your card wisely. Let’s check the worst advice about credit card usage.
1. Own as Many Cards as Possible
Usually this advice is doled out to emphasise that you can earn maximum benefits with maximum cards. And it will always be shared by someone who can afford so many cards. But that is not the case with everyone else. Multiple cards can make you develop a habit of spending unnecessarily just to enjoy the benefits.
This can lead to credit card debt. If you are unable to afford the annual fees and bills, then any benefit you derive from any card is nullified. So, do not go by the lifestyle of others. Check your budget and financial standing while choosing to own credit cards.
Tip: Own a card or cards only if you are able to afford them.
2. Pay Only the Minimum Due
This advice is quite common among cardholders. Usually, this advice is given by those who pay only minimum due each month. It is like bearing as minimum responsibility as possible while trying to ignore the bigger picture.
Paying only the minimum due will prolong your card debt. Additionally, you will incur more costs with your payable interest. The wise decision would be to clear your debt as soon as possible.
Tip: Pay the full amount each month and save money on interest charges.
3. Max Your Credit Limit
This advice is usually offered by those who can afford maxed out card bills or those who pay only minimum due. Maxing out your credit limit not only adds to your debt, but also decreases your credit score.
The recommended usage is 30% of your credit limit. Anything more than that, will affect your credit score. And reaching the maximum limit will result in high interest rates if you do not pay immediately. Other reason to not max out your card is that you need available limit for any unforeseen emergency.
Tip: Utilise up to 30% of your total credit limit.
4. Close Unused Card Accounts
This advice will be offered only by those who do not know exactly how card accounts co-relate to credit score. An essential factor of your credit score is the length of the credit history. This means closing any old card account would make it look as if you have a short credit history.
Banks prefer a long and excellent credit history, especially while lending financing for a mortgage or for a high amount. The longer your credit history is, the better is your credibility.
Tip: Do not close old or unused card accounts.
5. Apply For Multiple Cards at the Same Time
This advice will be given by those who do not know that multiple applications can affect the credit score. When you apply for multiple cards with different banks, each bank would perform a credit check on you. Each check would decrease your score.
Additionally, banks would know that you have applied at multiple sources, and may reject your application if you seem too desperate. The best thing to do is to research on all cards that you are eligible for, and choose to apply for the one that is the most suitable.
Tip: Compare quotes on different cards before you apply for a card.
6. Credit Cards Are Not Required
This advice will be given by those who have no need to build a credit score due to ample savings or inherited wealth. Credit cards are quite important to establish your credit score. Debit cards do not contribute to your score.
Any working individual should have a credit score for purchasing various financial products and services in the future. So, get a credit card, but use it wisely. Do not use your card for unnecessary expenses. Pay off the full balance each month.
Tip: Manage your card properly to establish an excellent credit score.
Things to Do With Your Credit Card
- Own only the cards that you can afford.
- Do not carry a balance into the next month.
- Use only 30% of your credit card limit.
- Do not close old or unused card accounts.
- Pay your card bills on time.
- Monitor your card usage each month.
- Use your card to build a reputable credit score.
Make the Best Use of Your Credit Card
A credit card will prove to be a valuable financial tool if you use it wisely. Learn more about credit cards and how they operate to know exactly what to do with them. Before you follow any advice on card usage shared by others, research on it to check whether it is true.
Follow any advice only if it benefits you, now and in the long run. Build a credible history with your card now, and easily get access to various banking products and services when required.
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