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Sanjeev

Sanjeev Govila  | Answer  |Ask -

Financial Planner - Answered on Sep 22, 2023

Colonel Sanjeev Govila (retd) is the founder of Hum Fauji Initiatives, a financial planning company dedicated to the armed forces personnel and their families.
He has over 12 years of experience in financial planning and is a SEBI certified registered investment advisor; he is also accredited with AMFI and IRDA.... more
Asked by Anonymous - Sep 22, 2023Hindi
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I m from Aurangabad Maharashtra my cibil score is 648 according to Equifax but according to experian it show 553 so sir which cibil score should be considered

Ans: When applying for credit or loans, it's essential to check your credit score from multiple bureaus to ensure accuracy and to understand how different lenders may perceive your creditworthiness.

While all these bureaus provide valuable credit information, individual lenders may have their preferences for which bureau's score they rely on. Therefore, monitoring and maintaining a good credit profile across all major credit bureaus can increase your chances of approval for loans and credit cards.
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Ramalingam

Ramalingam Kalirajan  |6508 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Aug 21, 2024

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Hi I have taken credit card year before and ihave not clear the outstanding amount for 3years now it's effectedto my cibil score and if I clear the outstanding amount my cibil will increase or not . If I need to close with out effect to my cibil score what need to do .
Ans: You have an outstanding credit card debt that hasn't been cleared for three years. This has negatively impacted your CIBIL score, and you are concerned about how clearing the debt might affect your score.

Impact of Clearing the Outstanding Amount on CIBIL Score
Positive Impact: Clearing the outstanding amount will positively impact your CIBIL score over time. Your credit score improves when you settle debts, demonstrating responsible financial behavior to lenders.

Time Frame for Improvement: While clearing the debt will help, it may take a few months for your CIBIL score to reflect the improvement. Consistent, timely payments in the future will further boost your score.

Steps to Close the Credit Card Without Further Impact on CIBIL Score
Negotiate a Settlement: Contact the bank and negotiate a settlement for a lower amount. Ensure that the settlement is reported as "Paid in Full" rather than "Settled," as "Settled" can negatively affect your CIBIL score.

Full Payment: If possible, pay the full outstanding amount. This will ensure the account is closed cleanly and positively influence your CIBIL score.

Obtain a No Dues Certificate: After clearing the outstanding amount, request a No Dues Certificate from the bank. This document serves as proof that your account is fully settled.

Check Your CIBIL Report: After settling the debt, regularly check your CIBIL report to ensure the payment is reflected correctly. If there are discrepancies, raise a dispute with CIBIL.

Maintaining and Improving Your CIBIL Score
Timely Payments: Make sure to pay all future credit card bills and loan EMIs on time. This is crucial for maintaining and improving your CIBIL score.

Limit Credit Utilization: Keep your credit card utilization below 30% of the credit limit. High utilization can negatively affect your score.

Diversify Credit: Having a mix of secured (like home loans) and unsecured credit (like credit cards) can positively impact your score.

Monitor Your Credit: Regularly monitor your CIBIL score and report. This will help you stay informed about your credit health and take corrective measures if necessary.

Final Insights
Clearing your outstanding credit card debt is the first step towards improving your CIBIL score. While it might take some time for your score to reflect this improvement, consistent and responsible financial behavior will ensure a positive impact. Negotiating a settlement or paying the full amount, obtaining a No Dues Certificate, and monitoring your CIBIL report are key steps to closing the credit card account without further negative impact.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

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Moneywize

Moneywize   |165 Answers  |Ask -

Financial Planner - Answered on Oct 06, 2024

Asked by Anonymous - Oct 05, 2024Hindi
Money
I’m from Pune. I’m 48 with two children. Should I invest in ELSS funds to save tax, or should I focus on traditional instruments like PPF and fixed deposits?
Ans: Deciding between Equity Linked Savings Schemes (ELSS) and traditional investment instruments like Public Provident Fund (PPF) and Fixed Deposits (FDs) depends on various factors, including your financial goals, risk tolerance, investment horizon, and tax-saving needs. Here's a comprehensive comparison to help you make an informed decision:

1. Understanding the Investment Options

a. ELSS (Equity Linked Savings Schemes)

• Nature: Equity Mutual Funds with a tax-saving component.
• Lock-In Period: 3 years (shortest among tax-saving instruments under Section 80C).
• Returns: Potentially higher returns as they are invested in equities, but subject to market volatility.
• Tax Benefits: Investments up to ?1.5 lakh per annum are eligible for deduction under Section 80C.
• Liquidity: Relatively higher liquidity post the lock-in period compared to other tax-saving instruments.

b. PPF (Public Provident Fund)

• Nature: Government-backed long-term savings scheme.
• Lock-In Period: 15 years.
• Returns: Moderate and tax-free returns, revised periodically by the government (typically around 7-8% p.a.).
• Tax Benefits: Investments up to ?1.5 lakh per annum qualify for deduction under Section 80C. The interest earned and the maturity amount are tax-free.
• Safety: Very low risk as it's backed by the government.

c. Fixed Deposits (FDs)

• Nature: Fixed-term investment with banks or post offices.
• Lock-In Period: Varies; typically no lock-in for regular FDs, but tax-saving FDs have a 5-year lock-in.
• Returns: Fixed interest rates, generally lower than ELSS but higher than savings accounts. Current rates vary but are around 5-7% p.a. for tax-saving FDs.
• Tax Benefits: Investments up to ?1.5 lakh in tax-saving FDs qualify for deduction under Section 80C.
• Safety: Low risk, especially with reputable banks.

2. Factors to Consider

a. Risk Appetite

• ELSS: Suitable if you are willing to take on market-related risks for potentially higher returns.
• PPF & FDs: Ideal for conservative investors seeking capital protection and guaranteed returns.

b. Investment Horizon

• ELSS: 3-year lock-in period, but generally better for medium to long-term goals.
• PPF: 15-year commitment, suitable for long-term goals like retirement or children's education.
• FDs: Flexible, but tax-saving FDs require a 5-year lock-in, suitable for medium-term goals.

c. Returns

• ELSS: Historically, ELSS funds have outperformed PPF and FDs over the long term, but with higher volatility.
• PPF: Offers stable and tax-free returns, which are beneficial in a low-interest-rate environment.
• FDs: Provide guaranteed returns, useful for capital preservation but may lag behind inflation and equity returns over time.

d. Tax Efficiency

• ELSS: Returns are subject to capital gains tax. Short-term (if held for less than 3 years) gains are taxed as per your income slab, while long-term gains (exceeding ?1 lakh) are taxed at 10%.
• PPF: Completely tax-free returns.
• FDs: Interest earned is taxable as per your income slab, which can reduce the effective returns.

3. Recommendations Based on Your Profile

Given that you are 48 years old with two children, your investment strategy should balance between growth and safety, considering your proximity to retirement and financial responsibilities.

a. Diversified Approach

A balanced portfolio that includes both ELSS and traditional instruments like PPF and FDs can help mitigate risks while aiming for reasonable growth.

• ELSS: Allocate a portion (e.g., 30-40%) to ELSS to benefit from potential equity growth, which can help in wealth accumulation for retirement or funding children's education.
• PPF: Continue contributing to PPF for long-term, stable, and tax-free returns. Given its 15-year tenure, it aligns well with retirement planning.
• FDs: Use FDs for short to medium-term goals or as a part of your emergency fund, ensuring liquidity and capital preservation.

b. Consider Your Tax Bracket

If you are in a higher tax bracket, maximizing tax-saving instruments under Section 80C can provide significant tax relief. ELSS, PPF, and tax-saving FDs all qualify, so diversifying among them can spread risk and optimize tax benefits.

c. Assess Liquidity Needs

Ensure you have sufficient liquidity for unforeseen expenses. While ELSS has a shorter lock-in compared to PPF, both still tie up funds for a few years. Maintain a separate emergency fund in a more liquid form, such as a savings account or liquid mutual funds.

d. Review Your Risk Tolerance

At 48, with retirement possibly 10-20 years away, a moderate risk appetite might be suitable. ELSS can offer growth potential, while PPF and FDs provide stability.

4. Additional Considerations

• Emergency Fund: Ensure you have 6-12 months' worth of expenses saved in a highly liquid form.
• Insurance: Adequate health and life insurance are crucial, especially with dependents.
• Debt Management: If you have any high-interest debt, prioritize paying it off before locking funds in fixed instruments.

5. Consult a Financial Advisor

While the above guidelines provide a general framework, it's advisable to consult with a certified financial planner or advisor. They can offer personalized advice tailored to your specific financial situation, goals, and risk tolerance.

Finally, both ELSS and traditional instruments like PPF and FDs have their unique advantages. A diversified investment strategy that leverages the strengths of each can help you achieve a balanced portfolio, ensuring both growth and security. Given your age and family responsibilities, striking the right balance between risk and safety is essential for long-term financial well-being.

...Read more

Kanchan

Kanchan Rai  |364 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Oct 06, 2024

Asked by Anonymous - Aug 11, 2024Hindi
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Relationship
This is urgent. Pls help. My son 18 yrs has been in a relationship with his classmate. He is intelligent and very venerable as he is innocent.She has been abetting him and his behaviour on the family has changed. He shouts at us and kind of surrendered himself to her. Anything we say irritates him. He has started telling lies. He locks the room and is on the phone hours together. Even if he tells that he is sleepy, she doesn't allow him to sleep. He doesn't know that we are aware of it. We tried to indirectly talk but he doesn't care about anything as he blindly follows her instructions. He doesn't listen to anyone. We feel something is wrong. Should we talk to her parents or use some law? Making them sit and advice doesn't work.
Ans: The challenge here is that he’s likely in a highly emotional and intense phase of his life, where his attachment to this person may feel all-consuming. When someone feels like they're being judged or controlled, they tend to push back harder, and it seems that's what’s happening with your son. Approaching him with confrontation or involving legal measures may only cause him to withdraw even more.

What he needs right now, even if he doesn't realize it, is understanding and connection. If you can find a way to express your concern for his well-being, not just your disapproval of his relationship, it might open up a space for dialogue. He may feel trapped in this relationship in ways he can't yet see. Your role can be to help him feel safe enough to reflect on his own choices, rather than feel he has to defend them.

This is a delicate situation, and while it may seem urgent, sometimes a softer approach allows for a deeper breakthrough. Your patience, love, and ability to listen might be the key to guiding him through this

...Read more

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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