Dilzer Consultants - Investments and Financial Planning

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Investors should always keep in mind that the most important metric is not the returns achieved but the returns weighed against the risks incurred. Ultimately, nothing should be more important to investors than the ability to sleep soundly at night.

~ Seth Klarman

Dilshad is by far, amongst the best investment consultant and advisor I have met. Extremely competent, well -informed, transparent and customer-need focussed, her interaction style makes all the difference.

Dilshad has the rare ability to assess the perfect mix of investment options depending on each individual requirement and vision, all with a professional yet friendly approach.

I would recommend Dilshad's services to anyone who is seeking sensible, well- informed investment advice while enjoying the benefits of being serviced by a super efficient and adaptive thinking investment consultant whose prime focus is in ensuring growth, stability, and relevancy for your investment mix.

~ Suraj Hattangadi

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What is debt refinancing and how will it help in reducing your EMI?

                Nowadays, one of the most frequent query which we face from our clients is, how can I restructure my debts, what are the different ways to reduce my monthly loan commitments, Currently my loan interest is on a higher side how can I reduce it etc. Actually, the answer for all these questions is the same – debt refinancing. But, what is debt refinancing?   

               The “refinancing” is a term which most of us Indians are less familiar with. Most of us tend to carry our loans or investments till the end of their term and are reluctant to change it. In the current era of frequently changing interest rate, refinancing can revolutionize your debt planning. The recent regulatory changes in interest calculation for debt have also impacted investors to explore more on debt refinancing or debt restructuring.

                The debt refinancing is the process by which you replace your existing loan with a new loan, with new terms and conditions prevailing in the current market condition. The new loan pays off the current debt, so the debt is not eliminated when you refinance. However, the new loan will have better terms or features that improve your finances.

The process goes like this

  1. You have an existing loan that you would like to improve in some way.
  2. You find a lender with better loan terms, and you apply for the new loan.
  3. The new loan pays off the existing debt completely.
  4. You make payments on the new loan with new conditions until you pay it off or refinance.

The refinancing may be a time consuming process and most of the times, it comes with a fee. So, why go through the process?  Let’s have a look at the several potential benefits to refinancing.

Benefits of refinancing

Save your money

 The common reason for refinancing of debt is to save money on the interest cost of your debt. The loans which were taken at a time when the interest rates were on a higher side, will fetch a higher cost when the current interest rate is much lower than that. By doing refinancing, you can save that interest rate difference which will reduce your loan burden.

For example, Mr.Ramkumar has taken a home loan for his new house in Bangalore on 01st July 2008 the following are the details.

 After ten years, If Mr. Ramkumar goes for a loan refinancing the following will be the benefits.

By refinancing his home loan, Mr. Ramkumar has saved Rs.4,91,198 on the total interest for the next 10 years’ term.

Reduce your financial commitments

The other benefit of refinancing is that it leads to lower required monthly payments. The result is easier cash flow management and more money available in the budget for other monthly expenses. If we look at Mr. Ramkumar’s case, by refinancing, he gets the following benefits:

By refinancing his loan, Mr. Ramkumar has reduced his EMI by Rs.4093.08 which will give him a total benefit of Rs.4,91,170 during his whole tenure of the loan. The amount he has saved on the EMI can be reinvested and he will benefit from that investment growth too.

Some people also increase the tenure of the new loan as the principle of the loan is lower than the original loan. This will help them in reducing the EMI further low, sacrificing a longer tenure.

Increase the limits rather than availing a different loan on higher interest.

The debt refinancing helps to increase the limits of the existing loan at the time of requirement rather than going for a new loan with higher interest. The best example is to refinance the home loan to a higher limit rather than going for an auto loan or a personal loan which have higher interest rates than home loan. This helps to save the interest cost. For eg:- the prevailing interest rate for home loan is 8.80% whereas the interest rate for auto loan is 9.2% to 9.7% and personal loan 12.3% to 14.9%.

Helps in consolidation of debts

               If you are having multiple loans, it is pretty difficult to manage too many number of loans and it is very hard to remember the EMI dates if the number increases. The debt rebalancing helps to consolidate different loans in to one and reduces your effort of managing too many loans at a time. This can also help you to streamline the interest of different loans and get the benefit of interest cost reduction.

Shifting from a high interest loans to a lower one

               The best way to know one’s personal finance management capability is to look at his ability to manage his debt. Nowadays, credit card and other fast credits like personal loans etc. are the integral part of an individual’s finance. Most of the people who handle this type of credit do not know the consequence of missing a monthly payment. The biggest example is a credit card which charges a higher rate of interest which can go up to 30% in a year along with the other charges when you miss an EMI. The loan refinancing helps an individual to shift this outstanding to a less interest loan and help him to repay it on a longer term and thus helps him to align his finance management properly.

Change your loan type

 There are two types of interest systems prevailing in the debt market – the fixed rate and floating rate. In a fixed rate system, the interest rate will be fixed till the end of the term of the loan and in a floating rate system, the interest rate will be changed according to the prevailing interest rate. Both these systems have their merits and demerits. The fixed rate will always be higher than the floating rate at the time of taking the loan. The fixed rate will be more beneficial in increasing interest scenario where as the floating will be beneficial in reducing scenario. The refinancing of the loan helps you to shift from one type of interest system to another and vice-versa without paying any extra charges.    

Helps in tax planning

The refinancing also helps you in your tax planning too. In India there are certain tax benefits for some categories of loans especially home loans, where as some loans do not have any tax benefit example an auto or a personal loan. We can do our tax planning by shifting the loans to a tax benefit loan and thus avail the benefit of tax planning.

Conclusion

The refinancing will benefit an individual, when there is a difference between his loan interest and the current interest rate. Sometimes, the process of refinancing may incur cost and further documentation. In such cases, the individuals can negotiate with the bankers on the charges. The best time to do the refinancing is the end of every financial year when the banks usually come up with lot of fee waivers. Even if the refinancing is done there will not be any changes in the debt balance, collateral and mode of payments.

Ranjith

Dilzer Consultants Pvt Ltd

Reference:-

https://en.wikipedia.org/wiki/Refinancing

https://www.forbes.com/sites/nextavenue/2016/07/26/4-ways-to-refinance-your-debt-and-save-money/#100c8b5862a7

https://economictimes.indiatimes.com/tdmc/your-money/5-reasons-to-go-for-home-loan-refinance/tomorrowmakersshow/52293509.cms

https://blogs.scientificamerican.com/mind-guest-blog/why-don-t-people-manage-debt-better/

 

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Testimonials

\"I know Dilshad for over 11 years and she is the one who is guiding me in all my financial investments. Her versatility about the market gives her that competitive edge... I would say she is very genuine...thinks in line with the client requirement…approaches the business in a very professional wa...
“Dilshad is by far, amongst the best investment consultant and advisor I have met. Extremely competent, well -informed, transparent and customer-need focussed, her interaction style makes all the difference. Dilshad has the rare ability to assess the perfect mix of investment options depending on ...
\"Dilshad is an expert financial planner who has an eye for detail and is very personable. She take meticulous care of the requirements and is extremely competent in her financial planning skill. Having known her for the last ten years I have no hesitation in recommending her and her team at all.\"...
\"Dilshad has been extremely watchful about my investment portfolio into MFs and has always been recommending necessary changes only if and when needed, in my best interest. Extremely dedicated and self driven to help safe-guard the interests of her clients. Very professional in her work.\"\nNovember 3...
“I know Dilshad professionally (my financial advisor ) for the past 6 years. I always trust her recommendations and instincts.”...
It was nice meeting you today regarding the discussion we had. Your suggestions had helped us to see the things in a better way through all the clutter and has made it easier for us to take certain decisions. We really appreciate your approach of listening to your clients, guiding them towards thei...
I had done a few planning exercises in the past, where the consultant had taken my inputs on my goals and the timelines. This was the first time that the the data gathering exercise was so comprehensive. Just going through the process forced me to clear my thinking about my objectives, and also brou...
\"Dilshad has always given great advice. she is very professional and on time. She always talks sense. would recommend her to anyone.\"\r\nService Category: Finacial Advisor\r\nYear first hired: 2005 (hired more than once)\r\nTop Qualities: Expert, Good Value, High Integrity...
Dilshad is a brilliant professional. Her promptness at expediting work issues is worth recommending. I would recommend her professionalism to whoever appreciates hard work with intelligent knowledge at financial planning.\r\n\r\nFebruary 20, 2013, Firdaus was Dilshad\'s client\r\n\r\nAircraft Maintenance Eng...
“I am yet to come across a more thorough professional thatn Dilshad....and her knowledge of the financial markets is exceptional. Her insights are valuable, and she makes sure that your money is treated the same way as she would treat hers....
I would like to express my appreciation for the thoughtful financial guidance I received from you. As a military family pensioner, I was not sure how to allocate my pension fund for my needs. Your sound advice eased my anxiety by clarifying my financial position with regard to my savings, expenses a...
“Dilshad is intelligent,highly focused,to the point and always ahead of time in term of her financial advisory and makes your feel involved & comfortable to take decisions with her elegant charm & personality. She always stands by you & facilitates right decisions with her pulse of mar...
Dilshad is a through professional and a true leader in her field of financial consulting. I have been working with her last 5 years and truly impressed with her depth of knowledge both for mutual funds and investment market at a macro level. She meticulously works with her clients to help them move ...
We have used Dilshad\'s services over the last one year and have been very happy with the outcomes. I have found her to be very professional and thorough in her approach, she makes time to fully explain the details when ever I have had any questions or needed clarity on any of her recommendations. Sh...
“Trusting one\'s investments with a financial planner is always a tricky choice - My investment choices were haphazard - to say the least - till I met Dilshad. Over last 5+ years, I have received a candid advise from her She is mild mannered - but well read in her field of business. Very sensitive ...
“Dilshad has a very proactive approach. Her calm and soft demeanor is definitely an asset. I would definitely recommend her for her business sense and other valuable attributes.”...
“I have been investing with Dilshad for well over 5 years now. My experience suggests that Dilshad is a very good financial advisor for people with long term investing aspirations and very little time to investigate Mutual Funds, track them & do other associated paperwork. Every fund recommend...
“Dilshad is a thorough Professional. She has a good knowledge of the market. Advises suitably for one\'s financial investments. She has been a very good help in my Financial Planning.”...
\"I have known Dilshad since 1984 through his father who was not only professionally connected, but also we lived as neighbors. Dilshad has been a brilliant person right from her school/college days. She has been carrying out the Financial Advisory Service assignment that she took after her studies i...
\"Dilshad has been our family financial advisor for several years now – and we have been satisfied clients\nHer detailed retirement planning has been valuable in understanding investing for long term.\nWe’ve also benefited from her advice on diversifying investments across various categories.\nDilsh...
\"Dilshad has been handling my financial planning for a few years now. I find that she brings in the right blend of professionalism, interest in my well-being and financial health to the job. She made it a point, over many discussion, to understand my goals, my status and requirements without being a...
\"I have known Dilshad for over 7 years and has been managing my investments and providing finacial advice to me. She is extremely thorough in her work and understands the clients requirement very well before giving advice. She is very well informed on her subject and provides service very appropriat...
I have known Dilshad since 1984 through his father who was not only professionally connected, but also we lived as neighbors.\n\nDilshad has been a brilliant person right from her school/college days. She has been carrying out the Financial Advisory Service assignment that she took after her studies i...
\"I have been taking her support in Financial services in Mutual funds and Insurance for the last 13 years. She has responded very well to my needs and taken good care of the investments.She is so good that I continue to use her support.\"...
Dilshad is an excellent financial planner - I appreciate the personalised attention, she\'s always available to assist and explain the finer points of planning that I often miss. I also appreciate the frequent information she gives us through mailers. Helps make informed choices.  Thanks Dilshad!...
\"Dilshad is a sincere, hard working lady, who gives great importance to my queries, helps me out in my financial planning, thereby give good valuable advise in my finance managment\"...
“Dilshad is a very knowledgeable and talented financial adviser. Dilshad offered wonderful personalized financial investment advise and assistance. She guided me whenever I called her with a financial problem. Shares, insurance, mutual funds, and whatever financial product it may be, she will be t...
\"Dilshad is a meticulous, diligent and highly efficient Financial Planner. She is extremely knowledgable about all financial aspects and developments. The service she has provided us has been consistently good and useful. It also helps that she is easily accessable for any query.\"...
\"Dilshad has a good understanding of the markets, and her recommendations are pragmatic, reasonably safe, and I always get the feeling that they are what she would do herself. Her office has been extremely supportive of the follow-throughs with different Financial Institutions. I think at the end of...
Dilshad is a committed professional who works with her clients to help them meet their goals. Her investment in improving her skill sets to service her clients better gives one the confidence of being in good and safe hands. She has her ears to the ground and provides sound and balanced advise to he...
For over a decade now Dilshad has been my Investment Consultant guiding me on my investments, especially Mutual Funds. I have followed her sound advice and acted on her timely inputs provided thru regular updates, alerts and newsletters and watched my investments grow at a steady and healthy pace. S...

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