Consumer Finance Application Form Home Equity Loan: Fill & Download for Free

There’s no one answer to the question in the way you’ve asked it, but I’ll give you some general guidelines.First, the credit score—commonly referred to as the “FICO score” in the U.S.—is a mathematical risk projector with several components. Among them arePayment history (35%)Amount of debt (30%)Age of accounts (15%)Types of credit (10%)Inquiries (10%)The first is obvious, but there are a couple of facts to be aware of in addition. While a delinquent payment will lower your score—sometimes by a lot—as it gets older, it has a diminishing effect on your score—sort of an “inverse square law,” for you physicists out there. Once late payments are two years old or more, their effect is comparatively minor. Within this 35% weighting are also sub-factors, such as being over-limit on a credit card, collection accounts and other public record items, like liens and judgments. These will all affect the score more severely than simple late payments.“Amount of debt” refers to balances on revolving accounts (credit cards). Once the outstanding balances exceeds 30% of the credit limit, the score starts to suffer—sometimes by a lot. We have seen occasions where mortgage applicants have had cards with low limits—$300 to $600— and were close to maxed out on them. By paying the balances down by just a couple of hundred dollars, we’ve seen immediate improvements of 20 points or more.“Age of accounts” is a tricky one. When you open a brand new account, like a credit card or car loan, your score may suffer a few points because it is an “unseasoned account.” Once it is about 90 days old or more, the score should recover, everything else staying the same. On the positive side, a ten-year-old credit card in good standing can add tent or twenty points to your score, and sometimes more. Please note: it is NOT necessary to carry a balance on any credit card to have it positively reported. One popular, self-described financial “guru” with a syndicated radio program is adamantly against all forms of consumer credit. In fact, he refers to the FICO score as an “I-love-debt score.” This is simply false. It is NEVER necessary to pay a single penny of interest on any credit card; simply be sure to pay off the balance within the typical 25-day grace period.“Types of credit” means a certain credit “mix.” In my experience, the people with very high credit scores (800–850) typically have three or four very old credit cards, all with zero balances, and often not so much as a car loan or even a mortgage. We do see a decline in scores, however, when someone has an account with a “payday” lender (BAD) or other high-priced consumer finance company. These kinds of accounts tend to indicate some level of desperation, and can depress someone’s score as much as 25 points, even when paid as agreed.Inquiries: Many people are reluctant to have anyone pull their credit report until they are absolutely sure they’ll be approved for whatever account they’re applying for because they’re worried their score will suffer. It is true that many inquiries over a short period of time may take 5 points or so off one’s score, but several inquiries over a very short time for the same purpose, such as a mortgage, will have a minimal effect. All the similar inquiries inside a three-week “window” count as one single inquiry.Most of the factors going into the credit score model seem to have a more pronounced effect on people with a somewhat troubled credit history. If someone has three maxed-out credit cards and several 30-day lates on two of them, the effect on the score seems to be cumulative. Similarly, a lower-score borrower who’s applying for numerous types of credit over a short time may see a more pronounced score drop, since the FICO model considers them (probably accurately) a greater credit risk.Now that I’ve given you she short course on FICO credit scoring, I’ll try to answer your question.If your score is very low—let’s say below 600—you will likely have some combination of the following factors:Currently delinquent accountsCollection acccountsPublic records, such as liens and judgmentsHigh revolving account (credit card) balancesI wrote about this very subject just a few days ago. Rather than rewriting everything I set down in that answer, I recommend that you visit that answer for the details. You say you have “a lot of bills.” By that, I’ll assume that you’re living hand-to-mouth and are spending every penny your bring in. That would make getting out of debt problematic. You must do either or both of the following:Reduce your expendituresIncrease your incomeFor THIS I went to a great university!Before you can get your financial house in order, you have to know what it looks like—right down to the foundation, studs and rafters (that’s my only metaphor, I promise). Know what your net income is (after deductions) and know your outgo—every penny.Regarding your net income: do you get a tax refund at the end of the year? While this may seem like—hooray!—found money, you’re getting it because you overpaid your taxes during the year. You can increase your take-home pay by increasing the exemptions you claim on form W-4, which you can get from the IRS website. You should earmark the higher net pay to reduce your debt.Look carefully at your expenses. You may have no control over some of them, like rent or mortgage, but others may be subject to reduction. Do you go out for coffee during the week? Stop it. Those $4.00 lattes add up. Do you have lunch at a restaurant? Pack a lunch at least some days. How about car expenses? Is there a way to consolidate your errands and other trips? The direct cost of driving your car is about 15¢ a mile—and that’s just gas, not the long-term cost of repairs and replacements. There’s a reason the IRS allows you to deduct 53.5¢ a mile for business use. Cars are expensive to operate—but if you can cut out just 20 miles a week, you can free up a surprising amount of money.Look at your discretionary spending. How often do you go out do dinner? Do you eat out because you “don’t feel like cooking?” Stop it. Make dining out more of a special occasion—maybe a reward for paying off a credit card.You get the idea. There are are more places to shave expenses than you might think—and reducing them doesn’t mean living like a pauper, or denying yourself all pleasures. Just be clear with yourself why you’re spending the money you do.The important thing is to know where you are now—that’s the budgeting part, knowing where your money is going now—and making a specific plan to retire your debt.Many people accrue a lot of debt because their income was interrupted, or they had emergencies, like suddenly needing new tires, or both. Many are accustomed to a certain lifestyle, which they finance using credit cards. While some have drawn a fallacious parallel between the Federal government’s deficit spending and household finances, the fact is that the U.S. has essentially unlimited borrowing power. We, as individuals, don’t; so we have to make our personal adjustments to keep out of trouble.If you take a fearless, searching look at your outgo and find that there’s literally nothing you can cut out, then you have to figure out some way to balance your budget and stop the bleeding. Here are some possibilities that come to mind:If you have a large asset with a loan on it (like a car), consider selling it and replacing it with a lesser vehicle for cash. If you have no equity in your financed car, see if you can trade it for a less expensive vehicle with a lower payment.If you have possessions that you can do without, sell as many of them as you can. Use the proceeds of the sale to retire debt. Remember that every $100 of revolving debt you get rid of will improve your cash flow by $3.00 per month. It adds up.Take a hard look at your income. Is there a way to increase it on your job? Is overtime available? When was the last time you got a raise? Maybe it’s time to ask for one. Some managers only grant raises when asked. If the income on your present job is static, ask yourself whether it’s time to change jobs. If that’s not an option, look into part-time work. I used to live in a rather tony community. I was chatting with a lady after church, and she mentioned that she had a paper route. She told me this with no embarrassment, and even some pride. Her husband was a professional earning a good income, but she decided that getting up at 5:00 AM to throw newspapers five days a week—for $1,000 a month—was worthwhile. They set aside the money for their daughter’s senior year abroad.After nearly three decades of reading clients’ financial statements and credit reports, I can state confidently that many people who find themselves in financial distress get there because of they just haven’t been paying attention to their finances. They spend money on impulse, slapping down the plastic with abandon (or going click-click-click) to buy things they don’t even want—but the balances mount up very quickly. And with interest rates consistently in double digits, the cost of that credit mounts up as well. A close examination of your financial situation—the spreadsheet is your friend—can open some ways to improve your situation.I hope this somewhat lengthy (TL;DR?) essay was helpful. I wish you well.

Market Place vs. on Balance Sheet Lending. Great Question. Thanks to whomever posted it. By way of background, I’m part of a VC firm based in San Francisco that focuses exclusively on FinTech, Green Visor Capital. Our team includes some of most respected professionals in finance. We have lived through a few cycles. We also have depth in this area and have spent a good bit of time internally debating this topic. I’m happy to share some thoughts below. Let me begin with a few points to provide some background and context.The challenge for all new lenders, incuding tech enabled ones, is that getting lending operations started requires a significant amount of capital. The problem never goes away and only grows as one scales the business.Some reading this may say, “but what about marketplaces — they don't keep the loans on their balance sheet, they sell the loans they originate to other investors?” The reality is that even if the FinTech lender is looking to sell the loans they originate, even the marketplace lender still needs capital. More on this below.In the early days of a startup lender, all of the first loans are typically funded by the startup’s equity. As the startup company demonstrates competency with their origination, underwriting and servicing capabilities, they will attract providers of debt capital to help fund future loans.It is important to note that capital providers in the early days will not provide 100% of the capital necessary to fund the loans — typically only about 80%. (This is called an “advance rate” and advance rates vary significantly by quality of the asset class, data available and strength of the team.) That means the startup lender needs to come up with the rest. So, if you’re looking to originate $10 mm in loans (a tiny amount), the debt providers (the structure most often used is a “borrowing base credit facility”) will expect the startup lender to have $2 mm in equity to fund the loans.The debt provider wants “equity” in every loan because if there are unforeseen losses in the loan book they don’t take the first losses on the loans, the originator of loans does. (This amount of the start up lender’s capital put at risk is referred to as “haircut capital” by institutional debt providers.) Think about how a mortgage works. The mortgage provider wants equity in the home to avoid a first loss in the case of a loan default. This is why a down payment is necessary in buying a home, and why haircut capital is a prerequisite of the debt providers to either the a Marketplace or On-balance sheet lender.I would argue that the most critical choice any founder looking to start a new FinTech lender needs to make isn’t the decision over Marketplace or On-Balance sheet model, but rather how to stack the team with operational depth that, among other things, can devise a credible funding strategy. As an aside, what surprises my colleagues and me, is the number of founders that we’ve met that are looking to create a tech-enabled lending businesses that fail to understand this critical business tenet. As the example above illustrates, a would be set of founders in FinTech lending need to think carefully about how they are going to fund their enterprise (i.e., the startup) AND the equity (i.e., the haircut capital) needed in each loan.Now, jumping into the answer of the question at hand.Like anything else in business or life for that matter, there are trade offs in which model to choose. I’m not going to go into detail on that here because there’s already so much on the Net about these points. Rather, I’m going to talk about some of things founders may not be as familiar.First, the models are actually converging and were not as different as some would have you believe.The events that have unfolded around Lending Club has created significant reverberations in the market for both types of lenders. How Lending Club’s Biggest Fanboy Uncovered Shady Loans. As a result, new religion has been found on the part of tech-enabled lenders regarding the importance of balance sheet construction and liquidity management.You’re even hearing some start up founders go so far as to say that they now want to get a banking license, create funds to invest in their loans, and / or partner with banks directly. (So much of the talk in FinTech even up to a few months ago was about “disruption.” The tone and rhetoric among founders in Silicon Valley has softened in recent weeks.)We do not buy into the notion that by selling all of your loan assets via a marketplace is materially different from what on balance sheet lenders actually do. On balance sheet lenders often securitize their loans as a way of funding their loan originations and operations.In either model, licensing is required. Founders can go to the trouble of going state by state to get approvals for lending activities. Others simply partner with a bank to leverage the instution’s banking charter.Second, the disappointing run that tech enabled lenders have had in their public market debut’s (look at OnDeck and LendingClub’s stock price performances post IPO — the stocks trade at a small percentage of where the IPOs were priced), the institutional investor community is having a hard time buying into the supposition that a MarketPlace lender is a tech company that should be priced on a price-to-revenue multiple and should trade at a hefty premium to an On Balance sheet lender.Third, non-bank lenders often do not survive market downturns. Don’t be steered into thinking that a MarketPlace lender is any less risky. It too can succumb to market downturns. Why? They don’t have a balance sheet (see footnote below for further details on what I mean.(1)Fourth, whether your’re building a Marketplace or an On Balance sheet lender, more regulations are headed this way. The rapid growth of FinTech has been nearly unfettered by regulation to date, and it has drawn the ire of traditional financial institutions. Battle lines over FinTech have been drawn in Washington and in many prominent states (e.g, NY and CA), and at the urging of industry incumbents.The banking regulators — i.e., the Federal Reserve; the Federal Deposit Insurance Corporation; the Office of the Comptroller of the Currency; and the Consumer Financial Protection Bureau — are all now stepping up efforts to provide oversight of FinTech.A term you will hear time and time again from regulators is “responsible innovation.” Thomas Curry, Comptroller of the Currency recently asked: “Are these [FinTech] companies providing products and services that banks are authorized to offer? What are the prudential requirements for these types of institutions? How does the innovation promote financial inclusion?”Consider also a recent statement from the CFPB: “The CFPB is interested in encouraging consumer-friendly developments in the marketplace, such as extending affordable, responsible lending to more people. At the same time we must ensure companies play by the rules.”Mary Jo White, Chairman of the SEC, in a recent speech at Stanford University raised concerns that venture capitalists and private companies are an environment that encourages cutting corners, inflated expectations and fast money.Last but not least, the reality is that most FinTech lenders and their business models are still unproven. Worth repeating here is that you have to stack the team with deep operational talent. Having lived through market cycles, we fear for the founders that believe that credit is simply a math problem to be solved and they have have built a far better underwriting model.Consider the recent comments by the US Department of the Treasury in a white paper published in May of this year (https://www.treasury.gov/press-c...). Two quotes jump out from the paper:“While data-driven algorithms may expedite credit assessments and reduce costs, they also carry the risk of disparate impact in credit outcomes and the potential for fair lending violations. Importantly, applicants do not have the opportunity to check and correct data potentially being used in underwriting decisions.”“New business models and underwriting tools have been developed in a period of very low interest rates, declining unemployment, and strong overall credit conditions. However, this industry remains untested through a complete credit cycle. Higher charge offs and delinquency rates for recent vintage consumer loans may augur increased concern if and when credit conditions deteriorate.”Furthermore, the Treasury Department warned of the potential fragility of some lenders’ business models, noting that many had no experience of operating “through a complete credit cycle.”Hope that this helps.Note (1): When, I refer to a “balance sheet”, I’m specifically referring to the right hand side of it. A structural advantage of a bank, for example, is that they have diversification in funding. Deposits at banks are arguably the most important source of funding and, in this interest rate environment, a very cheap (in terms of interest paid away by the banks) form of capital. Depositors are also very sticky. By law, only institutions with banking or thrift charters can have a deposit franchise.

This is a great question and warrants an elaborate answer. I’ll break down my answer into following parts-What is BFSI and sub-sectorsWhat are the current usage of analytics and data scienceEmerging trends and key drivers in BFSI SectorWhat skills are required to be successful in this fieldLet’s begin-What is BFSI and sub-sectorsBFSI is an acronym for Banking, Financial Services and Insurance and cover a whole gamut of activities and business models. Let’s talk about few of themCards- This broadly covers the plastic money or cashless transactions facilitation by the the banks. Credit cards, debit cards, pre-paid cards, forex cards, co-branded cards, travel cards etc. are few such productsRetail Banking- Deposit Products- First of all, let’s clarify that a retail bank provides basic banking services to individual consumers. Deposit products constitute a vast area and captures any consumer activities where they deposit their money with the bank for the security, convenience, interest earning, tax saving, future planning etc. Some key products include- checking account, saving account, fixed deposit, salary accounts, pension accounts, recurring deposit, certificate of deposit, tax saving instruments etc.Retail Banking- Loan Products- Consumer ( or retail customers) borrow money from Bank by a variety of instruments- personal loans, mortgage/home loan, gold loan, loan against a property, motor loan, education loan etc.Insurance- A company or consumer buys an insurance policy from the bank to financially protect them from a variety of unforeseeable and unpredictable events such as fire, accident, accident, health issues, theft etc. Some noteworthy products are- general insurance, motor insurance, life insurance, travel insurance, medical insurance, theft protection, accidental coverage, health insurance etc.Investment Banking- This constitutes investment advisory for consumer, corporate or any other institutions. fixed income, equity, funds, merger and acquisition, sale of equity or bonds, valuations etc. are some of the key focus areasCorporate Banking- This banks focus primarily on corporate clients and provide host of services such as treasury and risk management, loans, transactions facilitation, trade financeWealth Management- Investment, estate planning, cash management etc. for high net worth clientsExchanges/Trading/Brokerage- Sales and exchange of equities and mutual funds, commodities and metals, currency, options and futuresThere are various others business that BFSI incorporates and the above list is not exhaustive my any means.What are the current usage of analytics and data science in BFSIGenerally speaking, Data Scientists and Analytics Professionals try to answer following questions via their analysis-Descriptive Analytics ( What has happened?)Diagnostic Analytics ( Why it has happened?)Predictive Analytics ( What may happen in future?)Prescriptive Analytics ( What plan of action we should follow?)Data science is used in almost all areas of banking and financial services and it’s application is growing many fold at each passing year due to the explosion of data, digitization, technology advancements, competition, customer centricity, regulatory and compliance requirements among other factors.Here are key modeling / statistical techniques that are used across the customer life cycle-Here are few specific use cases of Data Science in Banking and Financial Services-Customer Experience- A more satisfied customer is a generally more engaged and more profitable customer. Banks leverage ML/AI in many ways in this particular area. Few notable examples are-1. A/B testing for App and site designs to provide best customer experience.2. Chat-bots and robo-advisors to provide timely and automated advice and query resolutions related to products or investments.3. Customization of products, services and communication for each customer ( Segment size of 1)4. Account security and privacy protection via facial recognition and retina scan5. Natural Language Processing (NLP) to decipher call logs and customer feedback to drive corrective actionsOperational Efficiency- One of the biggest cost items besides the cost of funds is operational expenses such as call center staff and tellers etc. AI driven automation may help bank lower the cost multiple notches in this area.Sales and Marketing Budget Optimization- Similar to operational expense, sales and marketing is another big expense for a financial company. ML drives significant improvement by targeting customer at the right time and right place with right product or service with right communication strategy. Few examples from this area are- customer segmentation, recommendation engine and real time next best product or next best offer.Compliance with Regulations- To protect consumer, companies, banks, and overall economy from any risks associated with the banking and maintain transparency, governments and regulatory bodies across the world have built several regulatory framework and entities such as Basel, Dodd- Frank, Disparate Impact, Fair Lending ( FDIC), Consumer Financial Protection Bureau ( CFPB), General Data Protection Regulation ( GDPR). To comply with these guidelines and restrictions and avoid hefty penalties, it’s imperative that the banks and financial institutes maintain data quality and do timely and accurate reporting of the key numbers leveraging best practices from Analytics and Reporting areas.Risk and Fraud- Traditional risk and fraud underwriting models are making way for ML / AI driven models for variety of reasons. However this trend is primarily driven by the following factors-Big Data ( Volume, Velocity, Variety). Per IBM, 90% of the data that we have in the world today has been generated in last 2 years!! Everyday we are generating 2.5 Quintilian Bytes ( 2,500,000 Terabytes) of data. This data comes in from all over the place such as social media, sensors, transactions, pictures, videos and so on. The growth of this data is expected to be growing exponentially in coming decades.Faster computational speed and Cheap storage of data- The storage cost and capacity is following Moore’s law- storage per unit area doubles every 2 years or so and cost halves.Real Time and Customized Decisioning- Present-day customer wants to have a right product or service at the right time and in the right place. Machine learning and deep learning facilitate real time analytics driven decisions that will bring maximum value for the customers and companies alike.Multi-Modality and Heterogeneity - Data comes from different platforms and in all shapes and forms such as videos, text, images, social interactions, comments and so onEmerging trends and key drivers in BFSI analyticsPersonalization of Products and Services- One size fits all doesn’t apply anymoreDigitization and Apps- more and more customers (particularly millennials) would prefer to do banking using digital channelsAny Time- Any Where Real Time Banking- customers want to get the right product or services at the right time at the right price at the right place using the right channelDiminishing Customer Loyalty- Customers are not as loyal to a bank as they used to be earlier and will switch for better products or servicesStiffer Regulations- Every year new regulations are being passed which make warrants BFSI industry to realign as needed.New Entrants- People don’t need banks, they need banking. Traditional banks are facing stiff competition from online lenders and other fintech playersInternet of Things ( IOT) and New Data Streams- Suddenly there is tons of information available on customers such as Geo location, shopping habits, social networks, click stream data and customer online journeyConsistent Omnichannel Experience- Customer expects to get the consistent and great customer experience using any and all channels at their disposal such as online, app, phone banking, SMS, email, branchesWhat skills are required to be successful in this fieldLove for numbers and quantitative stuffGood understanding of banking productsGrit to keep on learningCoding skills ( Python, R, SAS, SQL, Excel others)Presentation and story telling skillsCustomer centricityStructured thinking approachPassion for solving problemsWillingness to learn statistical conceptsHope this helps.Cheers!Disclaimer: The views expressed here are solely those of the writer in his private capacity.