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Millennials are the people who were born between the early 1980s and mid-1990s, and they represent a large portion of India's population. As they are growing older, they are realising the significance of financial planning and securing their future.
Managing finances can be difficult due to lack of information and experience. In this article, we will discuss the top 10 essential financial products for millennials in India that can help them to make financial planning easier and ensure long-term financial stability.

**1. Savings Bank Account :** First and foremost, a savings bank account is the best place to save money and earn interest that every millennial in India should have. It's the safest and most reliable way to keep your hard-earned money, earn interest, and easily access it when required.

**2. Fixed deposit:** Creating a fixed deposit is also popular among Indian millennials. It's a low-risk investment option that offers higher returns than a savings account. In 2023, you should consider a secured credit card, which allows you to use your FD money and earn a 7% return on it. There are several lifetime-free credit cards that also offer great cashback on all transactions, making them a highly beneficial way to manage your finances and maximize your returns.

**3. Credit Cards:** Credit cards are also a must-have financial product for millennials in India as they provide a convenient and secure way to make purchases, build credit history, and earn best rewards points that can be redeemed for various benefits. It is easy to get credit cards in India if you have a good credit score. 

**4. Health Insurance:** For Indian millennials, having health insurance is crucial because it offers financial security against unforeseen medical costs and ensures access to quality healthcare. It's an essential financial product that provides peace of mind knowing that you are financially protected and can receive the necessary medical treatment when needed.

**5. Life Insurance:** For Indian millennials who have dependents, life insurance is an important financial product to consider. It offers financial security to their loved ones in case something unexpected happens to them. Having life insurance ensures that their family will be taken care of financially in the event of their untimely passing.

**6. Mutual Funds:** Mutual funds can be a smart investment choice for millennials. With the prevalence of smartphones, there are many apps available that provide comprehensive details about various funds, including projected returns and performance history. If you're looking for a long-term investment option, mutual funds can be a good choice.

**7. Public Provident Fund (PPF):** PPF is a long-term investment option that provides tax benefits to Indian millennials. It's a secure investment option that offers higher returns than fixed deposits.

**8. National Pension System (NPS) :** NPS is a government-backed retirement savings scheme that Indian millennials can opt for. It provides tax benefits and assists them in saving for retirement.

**9. Gold:** Gold is a well-liked investment option among Indian millennials. It's a secure investment option that can help them diversify their portfolio.

**10. Real Estate:** Real estate is a long-term investment option that Indian millennials can consider. It provides the potential for long-term capital appreciation and rental income.


Indian millennials need to invest in these 10 financial products to ensure they are financially secure and can achieve their goals. However, they should understand their financial needs and goals before investing in any of these products.


To find the most suitable financial products, such as credit cards, savings accounts, and more, millennials can [install the ZET App](https://play.google.com/store/apps/details?id=in.onecode.app) and easily discover them. The ZET App can also be used as a passive income source, allowing millennials to earn extra income by referring financial products to their colleagues, family, or friends

**Looking for the best zero balance account option in India?**

Consider checking out the following:
- Kotak 811
- AU Small Finance Bank
- Axis Digital Saving Account
- Yes Bank Digital Savings Account

If you want to explore more options and what they offer, the ZET App can provide you with a detailed list.

10 Must Have Financial Products for Millennials in India

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Indian financial systems offer various loan options to meet diverse financial needs, from purchasing a new car to expanding a business. However, with so many options available, it can be overwhelming to understand the differences between each loan type and choose the one that best suits your needs. This blog provides an overview of the various types of loans available in India, helping you make an informed decision about your borrowing needs from lenders.

**Different Types of Loans in India**
Based on the security provided, loans can be of two types:

**1. Secured Loans:** A secured loan is a loan that requires you to pledge collateral. The pledged collateral is security in case the borrowers default on repayment. The lender holds the right to seize the collateralized asset to recover the loan dues. Typically, due to this security lying with the lender, the interest rate for the borrower is comparatively lesser.

**2. Unsecured Loans:** On the other hand, unsecured loans do not require collateral. The loan eligibility and terms are primarily based on your credit score, income, and repayment capacity. Due to the inherent default risk for the lender in an unsecured loan, the interest rate is comparatively higher. You can sell unsecured loans like personal and business loans while [earning on the ZET app](https://play.google.com/store/apps/details?id=in.onecode.app).

**Different Types of Secured Loans in India**
Now that you are aware of what is a secured loan, let’s see some of its examples-

**1. Home Loans:** Being an Indian, everyone aspires to own a home. However, it can be difficult to build one without a home loan. Home loans are secured loans that are used to purchase a house or apartment where the property is used as collateral for the loan. The interest rate for a home loan can be comparatively lower than an unsecured loan. It is typically for a long-term period, usually up to 30 years.

**2. Car Loans:** Car loans are used to finance the purchase of a new or used car. These loans are secured, with the car serving as collateral for the loan. Car loans typically have shorter repayment periods than home loans. A vehicle loan is a more broad term for a loan taken to buy any vehicle.

**3. Gold Loans:** Unlike the above two examples, a gold loan is not what the name suggests. Gold loans are secured loans that are given against the collateral of gold for almost any purpose. The loan amount is usually a percentage of the gold's value which according to the RBI guidelines can go up to 90% of the gold value. Gold loans are typically short-term loans and have a high-interest rate.

**4. Loan against Property:** A loan against property or LAP is a secured loan that is given against the collateral of a property. The loan amount is usually a percentage of the property's value. One of the distinguishing features of a LAP is that it can be used for any purpose, such as business expansion or debt consolidation.

Apart from the above, you can avail of loans against your insurance policies, provident funds, fixed deposits, mutual funds, and shares.

**Different Types of Unsecured Loans in India**
Now that you are aware of what is an unsecured loan, let’s see some of its examples-

**1. Personal Loans:** Personal loans are unsecured loans that you can use for any purpose, such as medical expenses, home renovation, or travel. The interest rates on personal loans highly depend on your creditworthiness and repayment capacity. 
Business Loans: Business loans can be secured or unsecured and used to finance business operations or a new venture. [ZET app ](https://play.google.com/store/apps/details?id=in.onecode.app) allows you to sell personal and business loans through which you can earn up to ₹3,800 on every sale.

**2. Education Loans:** Education loans are used to finance the cost of higher education, such as tuition fees, accommodation expenses, and books. They are typically unsecured loans and can have a longer repayment period, depending on the amount borrowed. While typically education loans are unsecured, in some cases, lenders can ask for collateral or a guarantor before approving the loan.

**3. Agricultural loans:** This type of loan is specially offered for farming-related activities. Financial institutions in India provide monetary aid to farmers with varied schemes.

**4. Flexi Loans:** A unique loan where you can borrow money from a pre-approved credit limit, which can be used as per their requirements. You can withdraw any amount within the credit limit as and when needed, and only pay interest on the amount withdrawn.

**Secured vs. Unsecured- which is best for you?**
Your decision to avail of a secured or unsecured loan should ideally depend on your financial situation and needs. You should keep the following differentiating factors in mind-

![Screenshot 2023-05-24 101840.png](https://zet-blog-images.s3.ap-south-1.amazonaws.com/Screenshot_2023_05_24_101840_d09939bdb9.png)

You should consider the above factors and choose the best according to your financial capacity, and requirements. You can opt for a secured loan in case you have the resources and want an instant loan and don’t want to wait for an unsecured loan’s longer procedure.

**Frequently Asked Questions**

**Q.1: What is a loan-to-value ratio?**

Ans: Loan-to-value ratio (LTV) is a metric for determining the loan amount and the appraised value of the asset being used as collateral for a secured loan. For example, LTV for a gold loan is up to 90%. It means you can borrow up to 90% of the value of the pledged gold.

**Q.2: Is there a cap on the loan limit for all types of loans?**

Ans: From 2021 onwards, the maximum loan limit has been increased from Rs. 25 lakhs to Rs. 5 crores.


9 Different Types of Loans in India

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Credit cards have become a huge part of our financial lives, don't you agree? Nowadays, with the rise of digital payments, more and more people are using credit cards. And you know what? One of the major reasons people prefer to have a credit card is because of the rewards they offer!

In India, various banks and financial institutions offer [different types of credit cards](https://play.google.com/store/apps/details?id=in.onecode.app), each with their unique reward programs. However, with so many different reward offerings available, many people are often confused about how these rewards work and how to make the most of them. 

In this article, we will guide you through everything you need to know about credit card rewards and how they can help you save while you spend. Sounds good? Let's get into it!

**What are Credit Card Rewards?**

To put it simply, you get rewarded every time you make a purchase with your credit card. These rewards can come in various forms such as cashback, reward points, discounts, and other benefits. The more you use your credit card, the more rewards you can earn. It's a win-win situation!

**Types of Credit Card Rewards in India:**

**1. Cashback:** Whenever you use your credit card to make a payment, you get a percentage of the purchase price back in the form of cashback. For example, let's say your card gives you 5% cashback on all your purchases, and you spend Rs. 10,000. That means you get Rs. 500 back as cashback! You can either redeem your cashback as actual cash or credit it to your bank account at the end of each billing cycle. 

**2. Reward Points:** This is one of the most common types of credit card rewards. You can earn a certain number of reward points based on the payment you make via your credit card. For instance, if your credit card offers one reward point for every Rs. 100 spent, and you spend Rs. 10,000 on your card. That means you get 100 reward points! And the best part? You can redeem these points for various rewards, like discounts on shopping or dining, gift vouchers, air miles, and much more. 

**3. Air Miles:** Are you someone who loves to travel? Well, then you might want to check out credit cards with travel rewards which you can use to get some awesome perks like free flight tickets, upgrades, or other travel-related benefits. You can even use your air miles rewards to book hotels. 

**4. Other Rewards:** Some credit cards offer bonus rewards for specific types of spending, like dining or travel. And that's not all - some cards also come with other awesome rewards, like free movie tickets, hotel stays, and more. These rewards are often part of special promotional offers or exclusive features of the credit card. 

**How to choose the best rewards card for you?**

Most of the credit cards offer exciting rewards programs, and it can be confusing to pick the one that is best for you. Choosing the right rewards offering that matches your spending habits and budget can be a real game-changer! It can not only help you pay off your credit card bill, but also make your favourite things more affordable. 

**How to Earn Credit Card Rewards in India?**

Now that you know about the [different types of credit card rewards available in India](https://play.google.com/store/apps/details?id=in.onecode.app), you're probably wondering how to actually earn them. Well, it's pretty simple - all you need to do is use your credit card for your everyday purchases.

Here are some ways to get started:

**1. Choose a rewards credit card:** Look for a credit card that offers maximum rewards and sign up for one that fits your lifestyle and spending habits.

**2. Spend regularly:** To maximise your rewards, use your credit card for all purchases, including groceries, dining, bills and more.

**3. Make large purchases:** Some credit card issuers offer bonus reward points for large purchases or for meeting specific spending goals. Check your card's terms and conditions for details.

**4. Track your rewards:** Keep track of your credit card rewards and their expiry dates to ensure that you use them before they expire.

**5. Check for bonus offers:** Some credit cards offer bonus rewards points or cashback for certain types of purchases or during certain periods of time. Keep an eye out for these offers and take advantage of them when you can.

Credit card rewards can be redeemed for various options such as statement credit, merchandise, gift vouchers, travel bookings, and more. It's important to check the redemption options available and choose the one that suits you the most.

However, to be eligible for credit card rewards, you usually need to have a decent credit score of at least 670. But don't worry if your score is lower than that - you can still work on improving it by using secured credit cards. Secured credit cards are backed by a fixed deposit and help you build your credit score. So, if you're eager to start earning rewards and reaping the benefits, get yourself a secured credit card & start shopping instantly!


[Apply for the best credit cards](https://play.google.com/store/apps/details?id=in.onecode.app) available on the ZET app today and start earning amazing rewards every time you use your card. Through ZET, you can easily discover a credit card that matches your unique needs and helps you maximise your rewards.

**FAQs:**

**1. Do we need a credit score to earn credit card rewards?**

Yes, in most cases, you need a good credit score to earn credit card rewards. However, with secured credit cards, you can earn credit card rewards even with a low credit score.  

**2. Which is the best credit card that offers rewards in India?**

Here are some of the most rewarding credit cards in India:
- SBI Prime Credit Card
- Standard Chartered Platinum Rewards Credit Card
- American Express SmartEarn™ Credit Card
- IDFC FIRST Select Credit Card
- HDFC Regalia Credit Card

You can find more options along with their offering on the ZET App.

Understanding Credit Card Rewards in India: Your Key to Increasing Your Savings

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In India, personal loans are a popular way to access quick funds for various purposes such as home renovation, medical expenses, travel, wedding finance, or debt consolidation. However, getting a personal loan is not as simple as it may seem. There are several factors that need to be taken into account to ensure that one gets the best deal and is successful in avoiding any pitfalls. 

Here are five common mistakes to avoid when applying for a personal loan:

**1. Not checking your credit score in advance:**

One of the most common mistakes people make when applying for a personal loan in India is not checking their credit score beforehand. Your credit score is an essential factor that determines whether you qualify for a loan and the interest rate you are eligible for. A low credit score may result in the rejection of your loan application, or you may get a higher interest rate. Therefore, before applying for a personal loan, make sure you check your credit score. You can [log in to the ZET app](https://play.google.com/store/apps/details?id=in.onecode.app) and check your credit score for free without any hassle. A good credit score for loan will increase your chances of getting a loan at a lower interest rate. If your score is low, you can take steps to improve it, such as paying off outstanding debts or credit card bills.

**2. Applying for multiple loans simultaneously:**

Another mistake people make is applying for multiple loans simultaneously. This is not a good idea as it can negatively affect your credit score and reduce your chances of getting a loan. Each time you apply for a loan, it is recorded in your credit report, and multiple applications can signal to lenders that you are desperate for funds. In order to find the right lender for your needs, research the various lenders and their interest rates before applying for a personal loan. Applying to multiple lenders can also result in multiple rejections, which can damage your credit score.

**3. Not comparing interest rates and fees from different lenders:**

Different lenders of personal loans offer varying interest rates, processing fees, and repayment terms. Failing to compare these factors can result in higher interest rates and fees, making your loan more expensive in the long run. You need to choose a low interest loan that is affordable and suitable for your financial behaviour. Before applying for any loans, research the different lenders and compare their interest rates and fees. You can use online comparison websites to make this process easier. Additionally, ensure you read the terms and conditions carefully to understand any additional charges that may apply.

**4. Not reading the fine print before signing the loan agreement:**

The loan agreement contains crucial information about loan terms, interest rates, fees, and repayment terms. Failure to read and understand these terms can result in unexpected charges or penalties. So, before signing the loan agreement, read and understand the terms and conditions carefully. If you have any doubts, clarify them with the lender before signing. Ensure you know the exact repayment amount, the interest rate, and any additional fees.

**5. Borrowing more than you can repay:**

Personal loans are easy to access, and the temptation to borrow more than you need can be high. However, borrowing more than you can repay can result in a debt trap, affecting your credit score and financial stability. Calculate your expenses properly and determine the amount you need before applying for a personal loan. Additionally, ensure you can comfortably repay the loan amount within the loan term without affecting your finances negatively by calculating the loan EMI amount. You can use the [free loan EMI calculator on the ZET app](https://play.google.com/store/apps/details?id=in.onecode.app). 

Applying for a personal loan in India can be a useful way to access quick cash for various purposes. However, one needs to exercise caution. It's essential to avoid these common mistakes to ensure you get the best deal. You can make the most out of your personal loan and achieve your financial goals but remember to be responsible with your finances and plan your repayments accordingly.

**FAQs:**

**1. What is a personal loan?**

Personal loans are unsecured loans offered by banks or financial institutions to individuals for various purposes such as home renovation, medical expenses, travel, or debt consolidation.

**2. How can I improve my credit score?**

You can improve your credit score by paying off outstanding debts or credit card bills, ensuring timely payments of bills and loans, and maintaining a healthy credit utilisation ratio.

**3. Can I apply for a personal loan with a low credit score?**

Yes, you can apply for a personal loan even if you have a low credit score, but your chances of approval may be low, and you may end up paying a higher interest rate.

**4. What factors should I consider before applying for a personal loan?**

Before applying for a personal loan, you should consider your credit score, the interest rate and fees charged by the lender, the repayment terms, and the amount you need to borrow.

**5. Can I apply for multiple personal loans at the same time?**

Actually, you should only apply for one personal loan at a time. Applying for multiple loans simultaneously can negatively affect your credit score and reduce your chances of approval.

**6. How can I choose the right lender for a personal loan?**

You can choose the right lender for a personal loan by researching various lenders, comparing their interest rates and fees, and reading the terms and conditions carefully. You can also use online comparison websites to make this process easier.



5 Common Mistakes to Avoid When Applying for a Personal Loan in India

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Credit cards have made their way into the lives of people residing in almost every part of the country. A credit card offers numerous benefits to users such as cashback, rewards, and discounts on various purchases. However, to be able to avail of maximum benefits, individuals need to maintain a good credit score. In this article, we will help you understand the most crucial part of credit- the credit score, and how your credit card usage impacts it.

## What is a credit score?

A credit score or CIBIL score is a three-digit number that indicates your creditworthiness. It ranges between 300 and 900 in India, 900 being the highest. A good credit score reflects your ability to repay debts on time, which can help you access credit facilities like credit cards, loans, and mortgages with favorable terms and conditions.

## How is credit score calculated?

Credit bureaus, such as CIBIL (Credit Information Bureau (India) Limited), Experian, Equifax, and CRIF High Mark calculate your credit score. These authorized bureaus use complex algorithms to calculate your credit score. It depends on factors like credit card usage, loans, and repayment behaviour. There is no fixed formula that is used for calculating a credit score. Different credit bureaus have different algorithms and hence, your credit score may vary for each credit bureau.

You can check your credit score on the above-mentioned bureaus’ website easily. You just need to enter your PAN card and basic information and you’ll receive your credit report. In India, you are entitled to one free credit report and score from each credit bureau once a year. You can also _[check your free credit score through the ZET app](https://play.google.com/store/apps/details?id=in.onecode.app)_.

## How does credit card usage impact your credit score?

**1. Payment history:** The most crucial factor that impacts your credit score is your bill clearance history. Late payments would not only impact your credit score but may also cost you an additional late fee.

**2. Credit utilization ratio:** The credit utilization ratio is the percentage of the credit limit an individual uses. A higher credit utilisation ratio can indicate a high credit risk and can negatively affect the credit score. Typically, you should use less than 30% of your credit limit.

**3. Credit history:** Credit history is the length of time an individual has been using credit facilities, such as credit cards and loans. A longer credit history can positively impact the credit score.

**4. Credit mix:** Credit mix refers to the different types of credit facilities an individual uses, such as secured loans, unsecured loans, and credit cards. A diverse credit mix can have a positive impact on the credit score.

**5. Recent credit inquiries:** Recent credit inquiries can also affect credit scores. Multiple credit inquiries within a short period can negatively impact the credit score.

## How to improve and maintain your credit score?

A healthy credit score is a must to obtain credit with favorable terms and conditions. To improve and maintain a good credit score, you must follow the below suggestions-

**1. Avoid late payments or defaults:** You must ensure timely payment of your credit card bills or loan EMIs to maintain and enhance your credit score. Defaulting on your deadline can impact your credit score negatively.

**2. Stay within your credit limit:** Credit card companies in India provide a credit limit on your credit cards. It is important to stay well within your credit limit to keep up with a good credit score. It is recommended to keep your credit utilisation below 30% of your credit limit.

**3. Review your CIBIL report periodically:** This is one of the most critical factors affecting your creditworthiness. You can check your credit report for inaccurate or incorrect information shown on your credit report. If there is a name mismatch or the changed address is not updated, you can dispute it to resolve the issue. This exercise will help you improve your CIBIL score.

**4. Manage a good credit mix:** A good mix of both secured & unsecured loans is essential for a good credit score as the risk factor will give you better credit in return. A healthy loan mix does not see applicants as risky borrowers, so banks stay out of trouble.

**5. Avoid frequent or multiple inquiries:** Do not apply for multiple loans at the same time. This shows your credit-hungry behaviour towards the lender. Frequent loan applications adversely affect your credit score and increase the likelihood of loan denials. Therefore, apply for a new loan only if you need it. 

## How to start building a credit score?

You require a credit history to build your credit score and require a credit score to get credit. So how do you build it in the first place? Well, there are multiple ways to build your credit score. One of the easiest ways to build your credit score is by having a secured credit card. 

A secured credit card is a credit card that requires the applicant to give an asset as security. This asset is known as collateral and is typically a Fixed Deposit (FD) or gold. 

Secured credit cards are one of the best ways for New-To-Credit (NTC) customers to start building their credit scores and maintaining healthy credit scores. 


### Frequently Asked Questions

**Q.1: Can I get a loan without a credit score?**

Ans: You can opt for a secured loan without a credit score. Paying off the loan on time will help you build your credit score, and make you eligible for an unsecured loan.

**Q.2: What is a credit limit?**

Ans: A credit limit is the maximum amount of credit a financial institution allows a customer on a credit card or line of credit.

How Credit Card Usage Makes or Breaks Your Credit Score?

![Credit History.jpg](https://zet-blog-images.s3.ap-south-1.amazonaws.com/Credit_History_4acdab9346.jpg)

Every time there is a sale by one of the e-commerce giants, there begins a scramble for credit cards. Be it the ‘big billion day’, ‘end of reason sale’, or ‘the great republic day sale’, what makes these discount carnivals even more exciting is the mind-blowing deals by various financial planners and partners.

In fact, in the last few years, the demand for credit cards created by such pull factors have led to a lot of ‘new to credit’, or NTC users coming under the credit net. 

However, with this shift in consumer behaviour, it is of utmost importance that as individuals we understand how credit works and how to adopt healthy financial habits that will increase our credit worthiness.

### Understanding Credit

So, what is credit? Put simply, credit is a loan. The kind of credit one is eligible to get depends on his/her credit score. The higher your credit score, the more creditworthy you are from your lender’s perspective.

One of the quickest means of availing credit is to get a credit card. However, most credit cards fall in the "unsecured" category of cards. This means that a credit seeker cannot get a loan without a collateral. Therefore, every card owner must have a good credit score or to get a credit card.

However, if you don't have a credit score, or have a low credit score- say, are a housewife, retired person, or have just started earning- then what can you do in such a situation? For such users getting a secured credit card, which is typically an FD backed credit card is a good option. 

### How to Build Your Credit Score?

Building a credit score from scratch can be very tricky. This is because you need to have a credit history to build a CIBIL score. However, this turns out to be a paradox as no bank is likely to approve your Loan or Credit Card without an adequate score. 

Here are a few ways to have a good start on your credit profile:

**1. Apply for a consumer durable loan:** If you have never made use of credit before, there will be no history that lenders can refer to, for granting you a loan. However, you can create one easily by getting a consumer durable loan of a smaller amount, e.g. purchase of a smartphone on EMI that can be easily repaid.

**2. Use the pay later option:** This is a popular trend amongst consumers today. If you opt for a pay later option on any quick commerce site, it will be considered as a credit facility and reported to the credit bureau. This will also help you build onto your credit score. 

**3. Apply for a credit card from your salary account:** A bank that already has your salary account is in a much better position to offer you a credit card, primarily because you already have a relationship with them, and have assured earnings. 

**4. Apply for a secured credit card:** A good way to start building your CIBIL score is to get a credit card against a fixed deposit (FD), popularly called secured credit card. Each bank specifies a minimum fixed deposit amount to apply for a secured credit card. The amount in your Fixed Deposit account is directly linked to the total credit limit that will be offered to you on your credit card.

**5. Use credit responsibly:** If you are a salaried individual, you may be receiving offers for credit cards with cash-back benefits and higher credit limits. The key is in knowing which offers will be relevant for you and whether you really need so many credit cards. For a beginner it is advisable to start using one credit card responsibly and create a favourable credit history.

### Inculcating Financial Discipline: Maintaining Healthy Credit Habits

Once you have established a credit footprint, it is essential to follow healthy credit habits in order to maintain a positive credit profile for continued access to credit. 

Here are a few ways on how to inculcate financial discipline:

**1. Checking your credit score regularly:** Many apps like the ZET App help you _[check your credit score for free](https://play.google.com/store/apps/details?id=in.onecode.app)_. Very few users of credit take full advantage of the information contained in their credit profile, also called CIBIL profile. Having a good understanding of your credit information and checking your CIBIL score and report regularly can help you save you time and money, and get ahead in life. This is called Credit Monitoring. Regularly monitoring your CIBIL Profile frequently helps you stay informed of any changes to your profile. 

**2. Applying for credit only when necessary:** Typically, a lender performs a hard enquiry to assess the borrower’s creditworthiness every time he/she applies for credit. There is a high chance that frequent hard enquiries by lenders shall negatively impact your CIBIL Score. By applying for credit only and only when you need it, your score remains much stable and presents an overall view of a responsible credit user.

**3. Paying in full & on time:** One must never avail the option of part payments and accumulate interest on the long unpaid bill. This is harmful to not only your score, but the interest burden can become wildly expensive for the loanee, in the long run.

Always remember that to build a healthy credit profile is like running a marathon. Irrespective of the methods you may choose, consistency is the key. By creating and following a carefully chalked out and well planned roadmap, you can easily move towards creating your own credit footprint and becoming credit-worthy.

Go _[check your free credit score on the ZET App](https://play.google.com/store/apps/details?id=in.onecode.app)_, and start building your credit future today.

Building Credit: How to Create Your Credit History From Scratch?

![Afraid of Credit Card.png](https://zet-blog-images.s3.ap-south-1.amazonaws.com/Afraid_of_Credit_Card_36fa6a237d.png)

There are many people who are afraid of using credit cards. If you’re one of them, you might find this article helpful. So read on!

This fear of using credit cards is seldom random. More often than not, these are such people who have been defrauded online in the past, or have heard stories of such fraudulent activities like phishing, skimming, cyber attacks and so on from near and dear ones. 

Then, there is also a second category of people called NTC, or New to Credit. These are typically such people who are afraid that having a credit card will lead them into financial trouble, and therefore have never applied for credit cards. They stick to their debit cards and feel safe, away from the credit bubble. 

Then there is a smaller third category of people, who have a poor credit history and stay away from any form of credit line, to prevent their credit score from further going down. 

If you fall in the latter two categories, that is, are new to credit, or have a poor credit history, secured credit cards are perfect for you. 

Secured credit cards are issued by banks and financial institutions, against a fixed deposit and require no prior credit score. These are super helpful to build your relationship with credit and inculcate financial prudence and discipline. The best part- since these are mostly designed for NTC customers, you get instant approval and require no documentation. 

Applying for a secured credit card is as easy as **[applying for an unsecured credit card](https://play.google.com/store/apps/details?id=in.onecode.app)**. It is a quick and simple process and comes with a lot of benefits. For instance, it is designed for people with low or no credit history. It is a great tool if you’re looking to build your credit score. The application process is simple. And in many cases, you get an instant virtual card on activation. 

So next time you hear someone tell you about some crazy discounts they got on their credit card, don’t shun them out completely. Hear all the details and make an informed decision. You might get a good deal out of it. 

### Frequently Asked Questions

**1. What is a secured credit card?**

Secured credit cards are designed for people with poor or no prior credit history and are issued against a bank fixed deposit to lower the risk for the credit card issuers. Getting a secured card is thus one of the easiest ways to improve your credit score while availing the benefits of a credit card like cashback and other rewards. However, if you don't pay your bill on time, the issuer can secure the money from your fixed deposit.

**2. What are the benefits of a secured credit card?**

A secured credit card not only helps you build a better credit score with your timely payments each time your credit card bill is generated but also offers the following benefits:

- Competitive interest on FD to help you earn & enjoy the benefits of a card at the same time.
- Rewards program, which allows you to get discounts on dining, travel, shopping & more.
- Interest-free credit period. This varies from card to card but typically ranges 30-50 days

**3. What is the difference between a secured and prepaid credit card?**

Prepaid credit cards are very similar to bank debit cards. You have to top-up a certain amount of money into your bank account and thereafter, you can spend up to a limited amount with your prepaid card. Prepaid credit cards are considered a good source of instant credit as they don’t require credit checks of any type. Secured cards, on the other hand, are issued against an FD. The FD provides the permissible credit limit to the user. One key difference among both is that prepaid cards cannot be used as a credit-building tool since they do not have any long-term benefits associated with them, while secured cards can. 

**4. Can I be rejected for a secured credit card?**

You are not likely to get rejected for a secured credit card as you are already paying a security deposit in the form of an FD to indemnify the card issuer in case of any irregularities in payment. However, in some cases, the account still may be checked by the card provider. If the user has on record- bankruptcy, a tendency of making late payments, or other suspicious financial activities, his/her application for a secured card may get rejected.

Are You Afraid of Using Credit Cards?

![Do's and Dont's.jpg](https://zet-blog-images.s3.ap-south-1.amazonaws.com/Do_s_and_Dont_s_c409c9a6b7.jpg)

Applying for a loan can be a daunting task, especially if you are not sure about the eligibility criteria, interest rates, documentation, and other aspects of the loan process. However, with some research and planning, you can avoid common mistakes and pitfalls that can lead to loan rejection or higher costs. 

Here are some dos and don’ts that you should follow when applying for a loan in India.

#### Do: Evaluate your need before taking a loan

Before you decide to take a loan, assess the requirement that you need it for. Every loan is a commitment to pay monthly EMIs for the specified term of the loan, which means that it will be an added expense in your future budget, along with interest. Evaluate if the loan you are taking is for a productive purpose or not. For instance, you have unpaid credit card bills to pay off but you are taking a personal loan to fund your vacation. That will just land you in more debt. So, ensure that you use your loan money productively.

#### Don’t: Apply for multiple loans at the same time

Applying for multiple loans at the same time can hurt your credit score and reduce your chances of getting approved. This is because every time you apply for a loan, the lender will make a hard inquiry on your credit report, which will lower your score temporarily. Moreover, having multiple loan applications can indicate that you are credit hungry and desperate for funds, which can make lenders wary of lending to you.

#### Do: Research thoroughly before applying

Before you take a loan from a lender, do some thorough research on all the options available to you. Don’t just blindly go for the first lender who approaches you with a personal loan offer. If you keep a lookout, you have a good chance of finding a lender who may offer you a lower rate on a personal loan with better terms. Also, ensure that the loan you choose suits your requirements.

#### Don’t: Ignore the fine print

Before you sign the loan agreement, make sure you read and understand all the terms and conditions of the loan, such as interest rate, tenure, processing fees, prepayment charges, late payment penalties, etc. Some lenders may have hidden clauses or charges that can increase your overall cost of borrowing or restrict your flexibility to repay the loan. If you have any doubts or queries, ask the lender to clarify them before finalizing the deal.

#### Do: Maintain a high credit score

Your credit score can make or break your chances of getting a loan. Given that these are unsecured loans, the risk involved is much higher for the lender. As a result, the lender will favor applicants who have a higher credit score as this will indicate better repayment capacity of the borrower. A credit score of 750 and above will land you a good chance of getting a personal loan with a lower interest rate and good terms.

#### Don’t: Borrow more than you can afford

One of the biggest mistakes that borrowers make is to borrow more than they can afford to repay. This can lead to financial stress and default in the future. To avoid this, you should calculate your monthly income and expenses and determine how much EMI you can comfortably pay without compromising on your essential needs and savings. Use the free EMI calculator on ZET to find out how much loan amount and tenure will suit your budget.

#### Do: Check your eligibility criteria

Before you apply for a loan, make sure you meet the eligibility criteria of the lender. Different lenders may have different criteria based on factors such as age, income, occupation, credit history, etc. If you do not meet these criteria, your loan application may get rejected or delayed. You can check your eligibility online on the lender’s website or use an online eligibility calculator to find out how much loan amount you can get based on your profile.

#### Don’t: Be careless with documentation

Availing of a loan involves some documentation and it is important to submit documents that are approved by the lender under each category to avoid loan rejection. Some of the common documents required for a personal loan are identity proof, address proof, income proof, bank statements, etc. Make sure you have all these documents ready and updated before applying for a loan. Also, ensure that all the information is provided in the application form.


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