Gold loan is cheaper than loan on credit card

Q) I have locked all my money in investments and now I need some for a family function. I have a personal loan of Rs 3 lakh for one year. Should I opt for a loan on my credit card or get my credit limit extended?

Loans against credit card works just like a personal loan but without the cumbersome documentation. Not all banks have a facility to extend a loan on the credit card. Even the banks that do offer this facility, it may not be available to everyone. Banks provide this loan to credit card customers with high credit standing. This means that if you have been using a particular bank's credit card for some time and have a consistent payment track record, then you are most likely to be eligible for a loan on credit card.

This is useful only when there is an urgent need for liquid funds since any other loan will take at least a week to process. One big issue is the service tax on interest which may be payable on loan against credit card but not on a regular personal loan. Extending the credit limit is also at the discretion of the credit card issuing bank. Both these options are expensive. You should try getting loan against some of your investments like gold, life insurance policy (with good surrender value), NSC, shares, etc. The loan against tangible assets is far cheaper than any other unsecured loans. Better still, it will probably make sense to liquidate your investments rather than take an expensive loan.

* I took a personal loan from the bank and settled it about two years back. However, the bank is not providing a no-objection certificate and forcing me to pay further. Also, I have applied for a credit report on the CIBIL website. But I did not get it due to change in address. Please suggest what can I do?

Please lodge a complaint on the bank's website. If you don't get a satisfactory answer for the same within four weeks, please appro-ach the banking ombudsman. You can get more details at www.bank-ingombudsman.rbi.org.in [1]. The credit report is also available online now. You can apply for it online and answer three authentication questions and get the credit report and credit score by email.

You should use this link http://www.cibil.com/credit-score [2]. If you are not able to get the report online due to some problems as mentioned by you, you can make an application for getting it offline by following the process described on the above link.

* I am a farmer. I have property worth Rs 1 crore, which I want to dispose off. After this, where can I invest this money?
If it is agricultural land, which is more than eight kilometres from a municipality or a cantonment board, then capital gains on the sale of such land is not chargeable to tax. If the capital gains are taxable, then you can invest up to Rs 50 lakh in any one financial year in a capital gain bond, within six months of the transfer. If the question is relating to the tax-free income from the proceeds and not about capital gains, then there are several options available including tax-free bonds. But you should seek professional advice before investing such huge money.

Harsh Roongta is the CEO of Apnapaisa.com. You can send in your queries to movingmoney@deccanmail.com [3]