Monday, January 15, 2018

What to Do when Your Mutual Fund Merges with Another?

In the last few years, consolidation has occurred within the mutual fund (MF) industry. A question in your mind in the wake of this consolidation may be whether the Indian scenario is becoming difficult for foreign players. Paradoxically, the government is taking several steps to increase the investments in this industry while it is under consolidation.

The last few years have also witnessed an increase in the number of investors in the MFs. However, more than 2,000 active schemes available from the various fund houses make it difficult to shortlist appropriate products to invest in.

Mutual Fund

The Securities and Exchange Board of India (SEBI) is trying to clear the various roadblocks that confuse or discourage potential investors. As per a recent circular, SEBI had instructed asset management companies (AMCs) to consolidate and reclassify various schemes. According to the new guidelines, mutual fund schemes must be classified in the following five categories:
  • Equity
  • Debt
  • Hybrid
  • Solution-oriented
  • Others

These are further divided into various categories as follows:
  • Equity schemes (10 sub-categories)
  • Debt schemes (16 sub-categories) 
  • Hybrid schemes (6 sub-categories) 
  • Solution-oriented schemes (2 sub-categories) 
  • Other schemes (2 sub-categories) 

In the wake of this, several mutual fund investments will have to be merged. SEBI aims to reduce the number of active schemes by as much as 40%. AMCs will be allowed to offer only one scheme under each category. Nonetheless, there would still be over 1,250 schemes after the merger.

The new SEBI rules on the reclassification of MF schemes are applicable only to open-ended schemes. It is anticipated that the new guidelines may not severely affect the existing product portfolio of the various fund houses. Nonetheless, the possibility of scheme mergers is not completely eliminated and some restructuring is expected in the fund houses.

Impact of mergers on your investments

With mergers being inevitable, you most likely would want to know what to do with your mutual fund investments. In the consolidation that has occurred over the last couple of years, it has been observed that foreign players have been acquired by larger domestic fund houses. These are not only some of the largest fund houses but also offer some of the best performing mutual fund schemes. Therefore, it is recommended you invest in schemes offered by these large domestic fund houses.

However, you need to be smart about how to exit your investments if required to avoid large tax liabilities. You must exit from the scheme only during the exit period offered by the fund houses. This ensures you do not have to pay any exit load that reduces your actual returns on investments. However, if you decide to hold on to your investments, it is recommended you seek advice from an experienced tax professional to understand the potential tax implications.

Opting for Systematic Investment Plans (SIPs)

Today, the Sensex is at its all-time high with several companies reaching maximum valuations. If you want to invest in MFs in such a scenario, opting for an SIP is advisable. Your investments will be staggered over a period and will allow you to take advantage of rupee cost averaging. Therefore, the risks due to market volatility and adverse price movements are mitigated when you choose SIPs. When the market conditions become adverse, you are able to accumulate more units and vice versa.

Choosing the right mutual funds

As mentioned earlier, even after the consolidation arising from the reclassification as per the SEBI guidelines, there will be over 1,250 active schemes. Therefore, choosing the best performing mutual funds amongst these may be difficult. Fortunately, you do not need to worry because there are several professional service providers that offer good advice.

One of these service providers is Angel Wealth. The Angel Wealth app has a technology-driven ARQ investment engine. The ARQ investment engine uses highly advanced algorithms and quants to offer the best recommendations. This investment engine considers your personal requirements and risk appetite before offering recommendations. One feature that distinguishes ARQ is that it offers all recommendations without the interference of any human bias. The algorithms use your data to generate recommendations that are appropriate to your investment philosophy.

In the wake of mergers and consolidation in the MF industry, you must adopt a cautious investment approach. You need to clearly understand the investment philosophy and risk profile of the merged schemes. This will enable you to make appropriate investment decisions on whether to exit or stay invested in the different MF schemes. You must not base your decision on size and lineage to ensure the security of your hard-earned monies.

Download the Angel Wealth app and eliminate the risks with ARQ’s advanced machine-originated investment recommendations.

Tuesday, November 21, 2017

Some Of The Best Apps For Black Friday Sales

Are you excited for Black Friday and all the great deals you might be able to snag along the way? That might be even more true if you have some of the best free apps available to help you stand an even better chance of getting the deals that you are looking. The apps are just a technological boost to push you in the right direction towards better luck with the deals. After all, we use our smartphones to find everything from title loans online to the latest novels to hit the bookshelves, so why not use them to shop smarter?


This app is constantly on the lookout for great sales going on at just about any store that you can imagine. It tracks down those deals for you and sends you alerts letting you know where you can find the bargains. The app itself is free of course, so you would only be putting yourself at a disadvantage if you did not go ahead and download it. 

Black Friday Sales


This app is great for the online shopper. It removes the burden of looking for paper coupons and instead stores electronic coupons to all of your favorite online stores. By doing this, Flipp helps people save money when they make their purchases online and the stores that it has identified as having deals. 

Price Cruncher

Sometimes something that appears to be a great bargain really isn't. This is because stores use their pricing to always make it look like they are offering the best price imaginable. However, if you break things down to a per unit pricing model, you may see that this may or may not truly be the case. Given that, Price Cruncher is a great app to have in your tool chest. It helps compare prices for different items based on the per unit value that you are really getting. 

Santa's Bag

Setting and sticking to a personal budget for Christmas gifts is difficult for a lot of us. This app helps us all to keep track of how much we have spent on gifts on different people on our list. It makes it easier to ensure that we do not go over the amount that we are supposed to spend. Little alerts and warnings let us know when we are getting close to budget on any particular person, or on Christmas in general. 

Store Specific Apps

You can always trust to have some of the best ideas for how to save money on Black Friday. One of the things they highly recommend is for app users to download store-specific apps while they are at it. All of the others mentioned above are a great start as well, but the store specific ones are really wonderful at targeting those great bargains that are specific to a particular store. Besides, the stores sometimes offer extra discounts to users who do them the favor of downloading the app. In order to gain those extra discounts, it is necessary to have the app. 

The store-specific apps are free just like all of the other apps mentioned here. The only price you pay is the time it takes to download these apps. Despite that, they could save you a lot of money this holiday shopping season.

Wednesday, October 25, 2017


A SHOCKING 25 percent of 20 – 34 year olds in the UK are still living at home with their parents, according to the Office of National Statistics, with 60 percent of those being men. And the UK is not alone. The US Census Bureau shows that 22.9 million 18 – 34 year olds are living with their parents. 

For many young people, moving out and entering the world of credit can be a scary thought, but there are lots of ways you can build up your knowledge so that you’re ready to take the next step. 

Things you need to know about before moving out for good:  

What is credit? 

To put it simply, credit is borrowing money. Companies will offer you an amount of money and you have to agree to their terms and conditions, such as how much you will pay back and by when. Most banks offer credit cards, personal loans, mortgages and overdrafts. Whether you are looking to rent or buy, it’s important to do your research to find out which is the best option for you.

To buy or not to buy?

Buying your first home is probably one of the biggest decisions you will ever make so it’s important to weigh up the pros and cons before taking the plunge. 

Once you have paid off your mortgage then your home will be yours, rather than giving rent to a landlord, you will be paying toward real bricks and mortar and you have the freedom to sell or move at your discretion. If you invest time and money on improving your home while you live there you can increase its value – it’s a great way to invest while still enjoying your new and improved living space. You might even find that sometimes your monthly payments are cheaper when you buy rather than rent. 

However, you have to consider that getting a mortgage is a big obligation – you need to be sure you can afford it for the next 30 – 35 years. Renting could be a better option if you want to move out quickly or you are unsure about how to afford the additional fees. Also consider it is usually easier to leave a rented house quickly if your monthly repayments become unmanageable or, not to jinx it, if you split up with a partner. If you decide renting is the way to go, a short term loan could help you to cover estate agent fees, deposits and even a loo brush until you get on your feet. 

How do I start applying for credit? 

Once you have decided on the best option for you, make sure you have the following information to hand:
  • Proof of address for yourself and your employer – you’ll probably be asked to provide a recent bill or statement.
  • Bank account details 
  • Your employer’s name and address 
  • Information on your income and outgoings, including any payments you already make e.g. your phone bill. 
If, whilst you are saving up to move out, you have to live at home with your parents again to recoup some costs, here is a guide on how to survive.

Moving Back Home: A Survival Guide

Moving Back Home: A Survival Guide, courtesy of

Thursday, October 12, 2017

Top 5 Benefits of Mini BMX for Kids

When it comes to finding activities for your youngsters to do on the weekend or in their spare time, there are so many different options that are available. However, finding the right one for your child and one that they are interested in can be a challenge. If you are not keen on one of the many contact sports that can be dangerous, you can look at BMX racing. 

Mini BMX for Kids

Your child can participate at a very young age and your child can get a whole lot of enjoyment out of it. There are a number of benefits that are related to mini BMX for kids and you will need to sit down with your child to see if it something that they would be interested in doing. 

Top 5 Benefits of Mini BMX for Kids:

Takes a lot of skill to be good at it

If your child has asked for a bike and you are looking to teach them, there are a number of BMX clubs that were established to help promote the sport. These clubs will help make it easier for you and child to get the most out of their experience. The mini BMX programs are designed specifically to help introduce young kids to the sport and get them started on the right foot. 

Mini BMX Bikes are not ridiculously expensive

Sports these days can get very expensive for kids to participate in, but BMX is not like that. Most of the local BMX clubs don't charge outrageous membership fees to get involved. The equipment will mostly depend on the quality of bike and safety gear you are looking at to provide your child. So, the cost will really depend mainly on the requirements of the clubs in your area.  

Local BMX tracks are usually easy to find

Depending on what area you live in you might have to do some amount of searching in order to find a BMX club and then figure out where the tracks are that they race at. The best way to find them would be to go online and search for BMX racing clubs in your area. Once you find the clubs you want to look at than you get in touch with them. 

Practice, practice practice

If your child is really interested in participating in BMX bike racing chances are they will want to get a good as they can. This means they will probably fill up as much as their spare time with practice. Since getting better will depend on how much time they are willing to put into getting better. After all, the age old saying  "practice makes perfect" is extremely true in BMX racing. 

It can help give families extra time together

Extracurricular activities are a big part of childhood and it is a way that parents and kids are able to spend more time together. While team sports are not exactly for everyone, BMX bike racing is a way for families with kids who may not be athletic enough to play them. The whole family can easily get into watching the racing just like any game of a field or court. 

Thursday, August 24, 2017

How to Save Money and Enjoy Yourself at the Same Time

As companies around the world continue to tighten their financial belts, working class people are not only finding it harder to earn a dollar, but also that the dollar they do earn no longer lasts or stretches as far as it once used to.

Now while there isn’t much that we can do to convince your boss to pay you more, we can provide some useful tips which can help you save money on your monthly budget.

The Bigger the Better

The quickest and undoubtedly the easiest way to save money each month is with your grocery shopping list. And the quickest and easiest way to cut this total down is by buying in bulk. While many shoppers are turned off because it can often mean a larger upfront cost paid at the register, the long-term benefits of bulk purchased quickly become visible and are very real. 

Save Money

Yes, it means that your pantry shelves may be fully stocked with baby formula for a few months, but the money saved will be well worth it. Once you have got the hang of buying your grocery items in bulk and managing your quantities, look at other places in your budget where you can apply this tip, such as your cleaning supplies and any student supplies.

Modern Coupons

When you think about coupons, do you imagine cutting out vouchers from local flyers and brochures which you redeem at the supermarket? If you do, then you are in for a surprise! Sites like the Groupon Coupons page for StubHub let you buy tickets to popular concerts and events at discount prices. Sites like these can be used to find many of the items in your regular monthly budget along with also being used to keep your entertainment costs down.

Renegotiate Your Contracts

Just because you got the best deal with your insurance or the best electricity rate when you're signed up three years ago doesn’t mean that you still have the best rate, today. If any of your service or utility contracts have lapsed,  [speak with your provider and ask them for a better deal. If they aren’t able to provide you with a new offer, speak with their competitors to find an offer which better suits your needs.

When you are negotiating your new rates and contract, do your best to commit to a short contract, so that you have the option to repeat his exercise in another 12 months or so to keep your budget continually low.

Keep Your Energy Bills Down

While it may just seem like an idea which people speak about, taking steps to reduce your energy is possible and can have very beneficial impacts on your monthly budget and bank account. Speak with your energy provider for information about how you can reduce your energy usage, along with any relevant electricity regulators in your state which can help you with advice and further contacts and information.

Managing an effective budget and sticking to it no easy task, however, with the right tips such as the ones above, the task can be made significantly easier.

Tuesday, August 8, 2017

How to Protect Your Credit Card from Cloned?

Following the recent case of an employee at a cafe in Delhi stealing money using cloned credit and debit cards, the fear of cards being cloned for financial theft has resurfaced & the focus is back on how secure your credit cards are and what you can do to ensure they don’t get misused. 

A similar incident took place last year with an employee at The Quint as well, where her ATM card was cloned and money was withdrawn. It is imperative that you never let your card out of your sight, especially at restaurants while paying the bill. If the waiter swipes it away to the billing desk, there’s a chance that it could be run through a card-cloning scanner on the way. 

Protect Your Credit Card from Cloned

One must insist on the restaurant bringing a mobile point-of-sale device to your table for the payment or walk over to the billing desk and swipe the card yourself. Most banks now issue credit cards and debit cards with chips in them that are more secure than the simple cards with a magnetic strip on the back. The chip-based cards require a personal index number or PIN to be entered on the point-of-sale (POS) terminal that makes them less likely to be cloned.

It is also important to sign on the back of the card, something most of us do not give any importance to. When you get a new credit or debit card, always remember to sign on the back of the card as this will help a seller verify that the card being used belongs to you. 

Last but certainly not least, never share your PIN number with anyone. Keep changing the number every few months to prevent any misuse. It is perfectly safe & convenient to use debit & credit cards to make payments at various point of sale terminals, if some of the aforementioned basic safety features are kept in mind.

Saturday, August 5, 2017

Have you ever wondered how to go about planning a frugal road trip?

Road trips can be a fun way to travel, especially when you're in great company. 

Sharing driving costs with friends or family is definitely a huge financial advantage. Without doubt, it's cheaper than buying separate train or airline tickets to travel. 

Personally, I'm a big fan of road trips. 

First, you get to save money on travel costs. And second, you get to see so many different and interesting places before you even arrive to your destination!

road trip

However, even if road trips are considered frugal by definition, this particular way of travelling can get expensive if you're not careful.

Here's how I manage to keep costs down and plan a frugal road trip every single time. 

1. Saving money on gas

With a bit of planning, you can definitely manage to save money on gas! 

Here are 4 useful tips to lower the cost on fuel

- Fill up your tank when and where it's most convenient, before leaving. If you have certain gas stations in your area that drop prices on certain days, take advantage! 

- Check your tire pressure. Not only is this a recommended safety precaution (who wants to deal with flat tires), but it helps save on gas as well.

- Drive efficiently, and you'll lower your overall gas consumption. Keeping a constant speed while driving helps a great deal. Knowing when to change gears influences fuel consumption as well. All in all.. learn how to drive efficiently and you'll spend less money on gas!

- Pack light, so your car won't have to struggle to carry all the weight! It's true, it's better to be safe than sorry, especially since lots of stuff can fit in a car! But truth be told, the lighter you pack, the less fuel you'll consume.

- Avoid getting lost. Although driving around cluelessly can turn out to be an exciting experience, it can take a toll on your total gas consumption.

2. Packing food and drinks for the road

It's impossible not to find a fast food joint along the way. Or a restaurant. Or even a gas station that sells food!

Problem is, this is where road trips can drill a hole in your budget.

To save money, make sure to pack enough food to avoid buying any along the way.

frugal road trip

Personally, I plan ahead by doing some light shopping before the actual road trip. 

My shopping list includes ingredients for sandwiches to brown-bag, fruit that lasts in a cooler bag and salty or sweet snacks (what's more thrifty than brown bagging your snacks on a road trip?)

Don't forget to pack drinks as well. Buying them along the way is the opposite of frugal.

3. Budgeting for pit stops

As a bonus, packing your own food on a road trip saves time. Nevertheless, you might want to make a pit stop and stretch your legs or sit down while enjoying your lunch!

The great thing with frugal road trips is, you can plan ahead and include some pit stops beforehand!

To save money, search for affordable gas stations along the way. Pin them on your map to avoid paying ridiculous prices for gas elsewhere.

Stopping to visit a landmark can also turn out to be an interesting experience. Just make sure to budget properly if you're expected to pay entrance fees.

4. Planning ahead for sleeping arrangements

Have you thought about where will you spend the night?

If your trip takes more than 1 day before arriving to your destination, book a room in advance! 

In certain circumstances, some might consider sleeping in the car. It's a full proof way to save money, but doesn't work every single time.

By planning ahead, you'll know for sure you'll have a place to sleep waiting and you'll lower the costs by having plenty of choices to compare ahead of time. 

I'm always excited when planning a frugal road trip and can't help but look forward to what to see and do, even on a short stay! Finding ways to save money and keep travel costs to a minimum is a perky added bonus.

About the author: Adriana is an experienced web content writer, passionate about everything personal finance. She blogs about the topic over at, where she covers everything from saving money and frugal living tips, to real estate and investing.

Wednesday, July 19, 2017

Personal Finance Tips During a Career Transition

If you’re considering a career transition, you have plenty of company. The majority of people consider changing careers at least once in their working lives.

Not knowing how to prepare for a career transition financially holds many people back. It requires research, planning, and lifestyle changes to do successfully.

Personal Finance Tips

If you’re serious about a career transition, following these personal finance tips will make the path to a new career go more smoothly.

Set aside savings

You might not know yet how much you need to save, but start saving now. You’ll need to set aside savings for months or possibly years before you make that big career transition.

The usual advice is to set aside at least six months of take-home pay. Up to a year of pay is better. The bigger your financial cushion is, the less stressful the transition will be.

Create a separate savings account for your career transition fund. Some online banks offer higher interest rates for savings accounts than brick-and-mortar banks do. Also, if you keep these savings at a bank other than where you usually do your banking, you’ll be less tempted to dip into the account.

You may have to make some lifestyle changes to be able to set aside a significant amount of money every month. Start tracking where your money goes.  From little things you buy to bigger expenses such as transportation and housing, you can find ways to spend less and save more.

Research the career you want

How well do you know the career that you want to change to? What are the job prospects in the field? Are typical salary levels similar to, lower, or higher than those of your current job? Will you have to start at a lower pay rate and work your way up?

If you’re going to be self-employed, what operating expenses will you have? How long will it take until you have enough clients to be profitable?

Career goals

The answers to these questions will help you plan how much to save before making the career transition.

Self-employment expenses might include a new computer and other home office equipment, self-employment tax, and health insurance.

Consider also changes in tax deductions and tax credits.

Research and plan for career transition expenses

How much will it cost to get to the starting point of your new career?

Education can be a major expense. Take into account the cost and time for any courses you need to take to become qualified for the job. If you can study part-time, start taking courses now. 

Save on costs for education wherever possible. Look for scholarships and financial aid. Claim tax breaks for your tuition.  Rent textbooks or buy used ones. Claim your education deduction on your income tax return.

Allow for moving costs if you’ll be relocating. Since they’re job-related, your moving expenses might qualify for an income tax deduction.

If you’ll be starting your own business, create a business plan and estimate your startup costs. If you’re working for a company, there’s some expenses you need to consider. Factor in other expenses your new career may entail, for example, a new wardrobe, a vehicle, or professional memberships. 

You also need to consider your time needs. You’ll need to tweak your resume, get your references in order, work on professional development, network, and manage your online reputation.

Continue working

From a financial point of view, it makes sense to stay at your current job as long as you can while preparing for your career transition. If that isn’t an option, consider a part-time job or temporary jobs while you work on making that big move. Having some income will make your savings last longer and ease the financial stress during the transitional period.

continue working

Often the bigger job sites are overcrowded and it’s hard to stand out. Search local job boards where you live instead. Often, there are more localized opportunities with smaller companies, great places to look if you’re planning on transitioning careers. 

Finding a job in your new field is ideal, but don’t worry if it isn’t. At this point, you want a part-time or short-term job to help with your finances. Side gigs can also help with the transition.

Maximize your money

You might be making more money once you’re settled in your new career. But while you’re saving for it, and during the transitional period, you’ll need to live on less money. You’ve already cut some expenses to set money aside. Good. Now you need to cut more expenses.

Create a budget for how you’ll live between careers. Include essentials: housing, food, and transportation. Look at what you can eliminate or reduce from the non-essentials, and start eliminating and reducing now. You’ll be glad you did when your savings start to dwindle. Also, by starting this part of the process now, you’ll know that you’re capable of doing it.

Keep in mind that this lifestyle change is temporary. It’s part of the process to reach your goal. Many people never make that career change they dream of. Fear of the unknown and not knowing what steps to take may hold them back. However, you’re more likely to regret not making the transition than you are to regret going through it.

You can make the transition into a career that fulfills you, one step at a time. Starting your financial preparation is the first step. 

Susan Ranford
About the writer: Susan Ranford is an expert on job market trends, hiring, and business management. She is the Community Outreach Coordinator for New York Jobs. In her blogging and writing, she seeks to shed light on issues related to employment, business, and finance to help others understand different industries and find the right job fit for them.

Tuesday, April 18, 2017

How a 401(k) Differs from an IRA

Financial advisers like James Dondero urge people to save for their retirements at their earliest opportunity. When you are ready to start saving for your own retirement, you may wonder what kind of account to open and fund. 

Is there an advantage to a 401 (k) that you cannot find with an IRA? You can answer this question for yourself and save for your retirement accordingly by learning how a 401(k) differs from an IRA.

An Overview of a 401(k) Retirement Account

A 401(k) is an employer-sponsored retirement account. People who work for companies that offer 401(k) accounts are generally eligible to participate in the retirement savings program once they meet the necessary qualifications, which may include completing a training period of 60 to 90 days or working at least 34 hours per week.


Moreover, your employer may automatically enroll you in the company-sponsored 401(k) once you meet the qualifications without you having to ask to participate in it first. Your contributions to your account may also be deducted for you from your paycheck, saving you the effort of having to fund your account yourself.

The amount you can contribute each year can be subject to change. However, for the 2016-2017 tax year, you can contribute up to $24,000 to a 401(k) as long as you are age 50 or younger. If you are over age 50, you can contribute up to $18,000.

A 401(k) does not allow you the freedom to choose from a wide variety of stocks, bonds, and other assets to invest. You must choose from a pre-selected list chosen by your employer. 

An Overview of an IRA

An IRA, or individual retirement account, comes in two primary forms: a traditional IRA and a Roth IRA. No age limit exists for opening an IRA; anyone can open and fund this type of retirement account. To open and fund a traditional IRA, you must be under 70 ½ years of age and have an earned source of income. 

As with 401(k) accounts, the amount you can contribute each year may vary. You can check with a financial adviser like James Dondero to verify the amount that you can pay into your IRA. 

The 2016-2017 tax year allowed people 50 and under to pay in up to $5500 to an IRA. People over the age of 50 could pay up to $6500. When you open an IRA, you can choose from a variety of stocks, bonds, mutual funds, ETFs, and other investments. You can open an IRA by consulting with a financial analyst like James Dondero or at financial institutions like:
  • a bank 
  • brokerage firm
  • insurance company
  • investment firm
It is important that you allow a certified management accountant like James Dondero to guide you in funding your IRA if you are unsure of what to invest in or how much to contribute to the account. 

James Dondero Bio: Certified as both a certified management accountant and a chartered financial analyst, James Dondero serves as the president of Highland Capital Management, L.P., a Dallas financial company that he also co-founded. 

He graduated from the McIntire School of Commerce at the University of Virginia. He volunteers for charities like Education is Freedom and Snowball Express in the Dallas area.School of Commerce.

Friday, April 14, 2017

Personal Loan Myths You Never Knew

Sadly, there are several half-baked theories and myths about personal loans and many people believe that a personal loan is basically a debt-trap. However, there is no reason to dread personal loans any longer as many of these common myths are busted in this article!

1.Personal loans are the most expensive loan available

This is the most common reason why people avoid applying for a personal loans. Typically, personal loan interest rates are around 12-14%, which is more expensive than a secured loan but the interest on personal loans is way lower than credit card interest rates of 22-36%. 

Personal Loan

2.No Tax Benefits

Another big myth associated with personal loans is that they do not provide any tax benefits. There are tax benefits for personal loans. You can claim income tax benefit under Section 24 on personal loan which offers an overall interest benefit of 1.5 lacs for tax exemption that can be deducted from your taxable income. 

3.Only Salaried Employees are Eligible

Self-employed individuals, businessmen and NRIs also can get personal loans. While salaried employees find it easier to get approvals but self-employed individuals can also avail of personal loans if they can provide proof of income from their business. Businessmen may need to provide the income tax returns for 3 years. 

4.Always Apply for an Amount More Than Your Actual Requirement

This is a misconception among Indians - that applying for more than what you need currently would help ensure that you get approved for the amount that you actually need. Ultimately, your loan eligibility is determined by your credit rating and ability to repay the loan. Applying for a bigger loan will unnecessarily create a financial burden and a poor credit score if you are unable to repay it on time.