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Schemes

Advantages and Disadvantages of NPS

Every trading plan has pros and cons. By knowing both, you can make the best investment choice. NPS, or the National Pension Scheme, is a private, fixed-contribution retirement savings plan. It allows you to make the best choices for your future by making systematic saves during your working lives. The National Pension Scheme (NPS) is a government-based pension plan. It is a tax-saving strategy under Section 80C. In India, NPS, like EPF (Employee Provident Fund) & PPF (Public Provident Fund), is an EEE (Exempt Exempt Exempt) tool. Its key goal is to build retirement funds. The investment also gives tax perks. But first, let’s study the definition and the advantages of NPS. [B-01] What Exactly is NPS? NPS ranks among the greatest investment plans overseen by the Regulatory & Development Authority for Pension Funds (PFRDA). The PFRDA set up the National Pension Scheme Trust (NPST), which serves as the rightful owner of all funds under this investment scheme. NPS stands for the National Pension Scheme. Initially, the advantages of NPS only applied to Central Government workers. However, NPS advantages are now open to all Indian nationals. It is very helpful for those employed in the private sector who need a monthly post-retirement salary. NPS is scalable across vocations and places, offering tax breaks for inputs under Sections 80C & 80CCD (1B). How Does the National Pension Scheme Work? National Pension Scheme is a market-linked pension plan in which you may invest monthly until you retire. Skilled fund managers are in charge of these investments. At the age of 60, you may take 60% of the sum, but the rest 40% must be invested in an annuity. This annuity may help you create a stable income once you retire. Advantages of The NPS Scheme Make Fund Managers’ Investments All funds placed by you are invested by expert, skilled, and experienced fund managers. Funds are controlled by the PFRDA or Pension Fund Regulatory & Development Authority. The assets are invested in a variety of portfolios that include corporate shares and bonds, bills, & government bonds, along with many other things. This is done in conformity with specific approved investment rules to get different advantages of NPS. Higher Profits Investing in Tier 2 accounts of an NPS scheme results in higher returns that grow to be large at the age of retirement. The assets that collect in the Tier 1 account also pile up funds for pension and help to get different advantages of NPS. Savings in ploys such as the EPF (Employees Provident Fund) grow at a very slow rate. This is because all assets are in debt tools as well as federal bonds, which rarely offer yields higher than the rate of inflation. So, a large part of NPS assets is directed towards the stock market, and the interest earned is higher. While NPS pay-outs in the type of pension plans & annuities are subject to tax, the yields are still much larger than the EPF. There Are No Barriers To The Intensity of Donations You can deposit funds in any of the NPS profiles on a yearly, semi-annual, quarterly, or monthly basis. You can also raise or reduce account donations so that the least donation (of Rs. 6000) is formed to avail different advantages of NPS. Low Investments Tier 1 accounts can be opened for Rs. 500, while Tier 2 accounts can be opened for Rs. 1000. The funds can be placed by check, credit, or demand draft. Simple Paperwork You can easily join the scheme via various channels. You only need to fill out the NPS form and provide proof of identity & address to enjoy the various advantages of NPS. Larger Canvas & Broader Coverage The scheme is open to all Indian citizens and NRIs. It has a broad age range, ranging from 18 to 60 years. At first, it was only open to government employees, but later (from 2009 onwards), anyone, including freelancers, self-employed people, and businessmen, can invest in the scheme. Simple to Use The plan is easily accessible, and you can easily sign up for it by visiting a nearby private or public sector bank. Disadvantages of NPS Aside from the advantages of NPS, this scheme also has its own set of drawbacks. These include: Withdrawal Limits Just before you reach the age of 60, all withdrawals are barred. You can make the very first withdrawal from the NPS after ten years of opening your account and a total of three withdrawals until the age of 60. The withdrawal sum cannot exceed the total amount of your contributions. Employer donations to the employees’ NPS fund are not deemed subscriber investments. Withdrawal Taxation When the scheme matures, the NPS case, which you can use to buy annuities or draw pensions, becomes taxable. The Indian government taxes 60% of NPS investments, while 40% is tax-free. Other products, such as the Public Provident Fund as well as EPF, are not taxed when they mature. You can also invest in mutual funds (equity), which offer much higher returns and aren’t taxed when they mature. Account Opening Limits You can only have one NPS account your whole life. While the PRAN (Permanent Retirement Account Number) could be easily shifted across geography & jobs, only one PRAN will receive the sum. Investment Limits You cannot invest more than 50% of your total investment within the NPS account in stocks. No Guaranteed Returns Since NPS is a national plan, the corpus is made based on the returns produced by corporate bonds, federal securities, & equity. As a result, market changes can hurt your returns/gains. NPS Funds in Several Locations NPS has three funds available for you. These are: A firm’s funds Stocks Government securities You may invest up to 100% of your money in the government securities fund & corporate assets. The investments are made by: Active choice: You have the choice of picking where to invest your money. Auto selection: When the fund manager makes investments based on the investor’s age. [B-02] Conclusion Now that you are aware of a few of the key pros and cons of the NPS scheme, you can pick whether or not it’s the best choice for you. NPS, like any other investment, has some drawbacks. However, the majority of NPS advantages were willfully set up to meet the scheme’s many goals. If you want to learn more about the benefits of the NPS scheme, visit Piramal Finance and explore the products and services they offer.

08-11-2023

Bonds

Advantages and Disadvantages of Sovereign Gold Bond (SGB) Investment

Gold is a great asset. It not just adds worth to a sovereign gold bond investment account but also helps expand it. Financial experts advise that at least 10%-20% of an investment portfolio’s assets be invested in gold. The key reason is that gold is a great buffer against currency and inflation risk. Buying gold bars, gold coins, or even Sovereign Gold Bonds & Gold ETFs are all ways to invest in gold. All of these have benefits & drawbacks. This blog goes into great depth on sovereign gold bond investments. [B-01] What exactly is a Sovereign Gold Bond? Sovereign gold bonds (SGBs) are federal assets issued by the RBI on the government’s behalf. They are priced in gold, with one gram of gold indicating one unit. These debt methods pay a set rate of return on investment. You may sell them in the resale market and profit from capital gains. You may invest as little as one gram and as much as 4 kilos in these bonds. Yet, the maximum limit for trusts and firms is 20 kgs, as determined by the government at any given time. Sovereign gold bond investments can be held singly or jointly. The limits also pertain to the first bidder in the event of a joint request. You may apply for a sovereign gold bond investment at nationalised banks, listed private and global banks, authorised stock markets, Stock Holding Corporation of India Ltd., and specified post offices. These bonds may also be applied online via the websites of known commercial institutions. SGBs are stored in the form of certificates and may also be disintegrated. As a result, there is no chance of theft or extra storage costs. The Benefits of Sovereign Gold Bond Investments The following are some of the benefits of Sovereign Gold Bonds: Safe Gold bonds are a secure method to invest in gold since the Indian government supports them. Also, since it is a computer or paper-based method of investing in gold. Hence, it doesn’t involve the risks linked with classic gold ornaments. Returns In most contexts, the government issues gold bonds at a discount to the average market value of gold. The cost of pure gold is the yield of sovereign gold. As a result, once the bonds mature, you will get cash equal to the present gold price. You will also get a set yearly rate of interest of 2.5% just on bonds, paid semi-annually. It is vital to recall that this rate will be set by the contract price rather than the actual gold price. Also, unlike gold ETFs and gold funds, SGBs do not have an annual fee. Allocation of Assets Sovereign gold bonds can assist with asset allotment in your investment portfolio. Low Initial Investment Investment in SGB is a low-cost way to get into gold. You must invest a minimum of one gram of gold in the sovereign gold bond scheme. Tax-efficient If you pay your bonds beyond maturity, that is, after 8 years, there is no capital gains tax. Yet, indexation gains are available if you exchange after the 5th year. Drawbacks of Sovereign Gold Bond Investments Gold bonds, like all other investment options, have some drawbacks. Long Maturation Time Many of you may be put off by gold bonds’ eight-year maturity duration. Although the maturity term is lengthy, it might assist you in avoiding uncertainty in the price of gold. Only Available in Tiers Unlike other investment choices, you cannot buy sovereign gold bonds at any time. You may readily deal in sovereign gold bonds from the main market during a set time on the RBI’s calendar. Capital Loss Since the bond’s worth is closely linked to the price of gold on global markets, investing in SGB can result in a monetary loss on your original investment if the gold price falls to the price of gold at which you got the bond. Yet, gold is a valuable asset, and the Indian government is focused on keeping its cost stable. Furthermore, the odds of having a capital loss are small if you hold until maturity. Nonetheless, the danger of capital loss can’t be ruled out. Who Should Consider Investing in SGBs? Sovereign gold bond investments are a good option if you wish to expand your portfolio with gold exposure. This is a low-risk investment. It also gives a semi-annual fixed income. You do not have to spend a lot of money on this asset. The cost of purchasing/selling SGBs is inexpensive as compared to actual gold. If you do not want to deal with storing actual gold, you may choose this kind of investment, which you can hold in Demat form. Is Now a Good Time to Invest in the Sovereign Gold Bond Scheme? As the government sells sovereign gold bonds, they are low-risk investments. Therefore, those with a long investment view might consider investing in such bonds since gold prices are projected to rise in the long run. When the price of gold falls, it is the greatest time to trade in sovereign gold bond investment. Why Should You Consider Investing in SGBs? The following are some of the primary reasons to invest in gold bonds: These bonds may be used as collateral for loans. Sovereign gold bond investments have an annual rate of interest of 2.5% based on the issuance price. Payment for these bonds may be done in cash. It is permitted up to a limit of Rs. 20,000. You may also make the payment via demand draft, check, or e-banking. As gold bonds are sold as Government of India stock, they provide security. After the specified time, generally 5 years from the date of investment, you may trade them on a stock market. [B-02] Conclusion Sovereign gold bond investments enable you to avoid buying actual gold and suffering storage costs. They also allow you to benefit from price variations in real gold without purchasing and holding the gold for the upcoming sale. If you want to learn more about sovereign gold bond schemes, visit the Piramal Finance website and explore their products and services.

08-11-2023

Health Insurance

Advantages of Employee Health Insurance Policies

Your most vital asset is your health. A lot of it is up to you and the way you conduct your life. It is totally up to you whether or not you wish to live a healthy lifestyle. Despite the measures you take, you may get ill and end in a hospital bed. And at that time, you begin to be troubled by skyrocketing medical costs in addition to your bad health. This is why getting health insurance is so critical these days. Health insurance policies are so worthwhile that most firms now include them in their employee benefits package. Some firms pay the charges, while others pay half and withhold the other half from the workers’ wages. [B-01] The Meaning and Scope of Employee Health Insurance Policies Firms buy employee health insurance policies to provide financial aid to their workers. Employees profit greatly from health insurance packages. These are known as the vaguest plans. The cost paid for group plans is lower when compared to other forms of health insurance policies. The risks involved are dispersed among a firm’s personnel. The advantages of this sort of health insurance plan may be extended to the workers’ immediate family in certain instances. Health Insurance Policies Benefits For Employees Employees of small firms may benefit from lower-cost group health insurance policies via their firm rather than having to obtain high-premium individual health care coverage. You can also get full coverage for your loved members at a much-reduced cost. Also, workers’ premiums might be paid pre-tax, reducing their total taxable income. Reduced Costs as A Result of a Bigger Risk Pool One of the benefits of health insurance policies for workers is the larger number of persons in the pool (group) that is covered. When more users are included, more people have more alternatives, usually at a lesser cost than would otherwise be accessible. In a nutshell, this means: Better insurance options are available. Insurance policies at a cheaper cost. More protection for those with pre-existing conditions. When you carefully evaluate the benefits of health care insurance, it is clear that there are several reasons to take it from the employee’s point of view. Employees who are eligible for this type of insurance via their company should take advantage of it. This is because the cost reductions are often substantial, and the additional benefits of health insurance policies surpass what a person might get from a personal insurance plan. There are situations when this is not the greatest option, but most of you do not find that private insurance is superior. Tax Breaks for Employers That Provide Health Insurance to Their Workers The benefits of corporate health insurance go beyond the employee. A small firm health care tax credit is also offered to employers. This is open to employers that give insurance to their workers and pay an element of their premiums. These firms may be eligible for a tax credit to reimburse them for the funds they spend on insurance plans. From the standpoint of the employer, this is one of the most vital benefits of group health insurance. Employees Who Are Satisfied at Work Employees that are satisfied work hard for the firm. This is one of the hidden benefits of group health coverage. You may get the following benefits if your firm provides this insurance: You who value your health insurance. You are invested in your employer and your work. You who envision a future with the firm. You who believe you are regarded and appreciated. You want to improve the firm for the benefit of everybody. All of these are vital benefits of group health insurance. They may go a long way toward improving the working relations of both workers and employers. Having insurance will not, of course, address all of your firm’s or employees’ concerns. It may help workers and bosses feel better about all they have at a certain firm. It is an insult to suggest that finding talented users that remain around in today’s job sector is hard. Aside from better pay, what can you give employees? Group health insurance is a great place to start, as the youth of today focuses more on preventive care and living a healthy life. One way to entice and keep strong recruits is to offer a cheap group plan choice. The firm should offer an insurance plan that covers these key health benefits. Insurance is a vital context of feeling secure and at ease. When firms offer insurance to their workers, it is not generally overlooked. Why Do Firms Provide Health Insurance to Their Employees? Almost all firms now provide health insurance to their workers. This helps them retain people, which improves employee efficiency. Employees believe that the firm for which they work cares about them. Some of you choose not to purchase health insurance. This is a huge benefit for you, particularly when you or any of your key family members are in the hospital. What Do You Say to Workers Who Don’t Believe Health Insurance Is Necessary? Telling folks how much they may spend privately is an easy way to convey how valuable having employee health coverage is for them. Most of you cannot afford to pay for medical expenses out of cash, at least not without losing whatever savings you may have. Health insurance for your workers will be less costly than if they bought it on their own and as a group. You will have greater control and ability to negotiate to guarantee that the cash you invest in insurance is wisely spent. [B-02] Conclusion Health insurance plans are famous for being complex. Employee health insurance policies, on the other hand, are quite basic. This is due to the fact that they are general and intended for a big set of people. As a reason, there is no space for alteration. This improves the buying of this insurance. An employee health insurance policy may help a huge number of people since it provides coverage with little problems. If you want to learn more about the best health insurance policy, visit the Piramal Finance website and explore the products and services.

08-11-2023

Business Loan

5 Ways to Tackle Losses in Time with a Business Loan

Every successful business puts a lot of money into thorough research and other internal aspects to ensure the business activities will succeed. But if even one part is missing, there could be money problems. When cash flow is negative, the best thing to do is get a business loan and use the money to make up for losses or debts. The most annoying things that can happen to any of us are those that hurt our finances. If a company loses all of its money, it could hurt its reputation and even be forced to shut down. But since this wasn’t planned, we’re here to talk about how you can handle it without risking your company. [B-01] What is a Business Loan? Business loans are contracts between a business and a bank or other lender for money. Businesses need money, either to start up and start making money or to pay for things. Banks and investors are happy to give them the money upfront if they pay it back on time and with interest. Causes of Financial Loss The first step to solving a financial crisis is to figure out what caused it. Most of the time, money problems are a sign of a bigger issue, which could be internal or external. Because of this, it is important to find long-term and permanent solutions to the problem. If your group is losing money, quickly list all the money that has been spent. Look at everything that leaves the building to find where the leak comes from. There are many reasons why money can be lost. If you look at your spending and see a clear area where money is wasted, you need to fix it immediately. A small hole in a business loan can turn into a boat that leaks. Comprehend the Business Loan Cash Flow Your first financial loss may have been caused partly by your inability to understand the cash flow of your business. After all, a business’s cash flow keeps it going and is key to running it well. It would help if you understood how money flows through your business. When you do this, you will get a clear picture of your company’s costs and income and tips on handling them well. Modern financial tools make it easier to keep track of clients’ bills. If we make it easier and faster for you to get paid, that cash flow should be easy to handle. Long and Short-Term Finance There may be a perfect short-term loan solution to the cash flow issues. The firms may use the line of credit to make the payments in case of an emergency or unforeseen cash constraints. Businesses would benefit if this could close the gap between receivables and payables. Long-term funding is another way to ease the financial burden, provided you have a sound plan for the company’s future. Businesses could seek long-term credit to fund large equipment, including real estate, rather than using their working capital. This way, they can split the asset and save money for their immediate needs for a while. Change Your Sales Plan Your sales techniques greatly impact how well you connect with your audience and persuade potential customers to buy from you. When your company loses money, you also need to carefully look at your sales strategies to see if they are working. So, you’ll be able to choose whether or not to change or improve your sales strategy and help your business make more money. A small business loan is a good way to boost sales for a struggling business. In this age of the internet, your customers will appreciate being able to buy your products from the comfort of their own homes. Keep Your Business’s Credit Rating Strong Business credit is the ability of a company to get any resource and then pay for it. As a small business owner, you will hear about company credit. Small businesses like these are to blame because they usually need loans to put money into operational costs. If your finances are in bad shape, but your business credit and company ratings are good, you can get a loan. Also, it could make your company’s brand more marketable and make getting assets easier. Even though it’s sad, it’s not unusual for businesses to lose money. A company could lose money if one division doesn’t do well or sales in a certain market go down. Every business goes through cycles of making money and losing money. The business must find ways to deal with financial loss and keep from getting too down. Significance of Controlling a Company’s Finances Education is the most important step for any business owner. By learning the basic skills needed to run a small business, like how to do basic accounting tasks, ask for a loan, or make financial statements, business owners can build a secure financial future or avoid failure. Keeping things organized is a key part of managing money and school well. [B-02] Conclusion Life is an adventure that never ends, and everyone always tries their best. Even in the financial world, there are times when the best-laid plans and most well-researched steps need to be revised to work out the way people want. When something goes wrong with your money, like an unplanned expense or a loss at work, it may seem like nothing will ever be the same again. But it’s easier to deal with any online business loan, especially financial ones, if you take things one step at a time and keep the big picture in mind. Piramal Finance, the leading source of financial services in India, has a long history. A range of financial services are provided.

08-11-2023

Home Loan

All The Features and Benefits You Should Know of Loan Against Property

Loans have become an essential part of modern life. It is considered a helpful tool for meeting long-term and short-term monetary needs during your journey. With changing lifestyles and increased demands, it is essential to plan your finances. Even though investments produce returns, some life milestones, like a child’s education, marriage, or a carefully planned international vacation, call for extra funding. So, getting a loan against property is useful. It is also named a mortgage loan. It allows people to use their assets as collateral. You can use this loan to cover major expenses or for personal use. This loan is available from banks and other financial institutions. It is secured by real estate on a home, a business, or a plot of land. [B-01] Purpose of Loan Against Property You can achieve your personal or professional goals easily with a loan against property. It is a secured loan. Getting one is easy as long as you are the legal owner of the property. This loan is available from the majority of top banks. It can be used for any personal needs, which include a wedding, education, medical expenses, or other financial needs. Mortgage loan interest rates range from 8.00% p.a. to 20% p.a. With mortgage loans, you can get loans with a maximum value of Rs. 25 crores and a maximum term of 20 years. Features of a Loan Against Property A loan against property is a basic loan product. It is secured by the mortgaged property. These are some of the primary features of this kind of loan: Banks have different loan amounts. The typical loan amount is up to 60% of the property’s market value. The sum is between Rs. 10 lakhs and Rs. 7.5 crores. The interest rate offered is competitive. It has longer pay-back terms. EMI allows for simple repayments. For this kind of loan, most banks only need a few documents. Processing only takes 3–4 days. The minimum age limit is 21, whereas the maximum age is 65. Self-employed people, salaried professionals, and IT analysts can all apply for this loan. Benefits of a Loan Against Property in India Several Uses You can put the money you get from a loan against property to many different uses. The lender doesn’t care if you use it for personal or business purposes. There are no restrictions. The ways you can use a loan against property may differ from lender to lender, but in general, you can use it for: Higher education or education abroad Marriage or Wedding Healthcare emergencies Combining debts with high-interest rates Growth of a business that already exists Remodelling/building a house Improvements to business infrastructure High Amount of Loan Approval One of the best things about a loan against property is that you can get a huge loan. In a loan against a property, the loan amount is based on the property’s fair market value. They do this with the help of a number called the loan-to-value ratio. Lenders grant you up to 70% to 80% of the property’s fair market value for the loan term. 70% to 80% is up to 15 crores, a large amount compared to other secured and unsecured loans. Fair Interest Rates A secured loan gives the lender something to fall back on if the person doesn’t pay or pays late. So, some security is needed to get a loan. For this reason, lenders offer loans against property with lower interest rates than other mortgages or secured loans. Different lenders charge different interest rates for loans secured by a property. It is around 8% to 10% per annum and can go up to 20%, depending on the lender. This low-interest rate maximises a loan against property and simplifies EMI payments. Property Categories Vary for Collateral You can use many forms of property as collateral for a loan against property. Lenders approve loans against residential and commercial property. Lenders with your best interests often approve industrial security. They will also verify the self-occupied, rented, and unoccupied properties. The property should not have any legal problems. Co-owned properties can also be used as collateral for a loan against property. Yet, standards differ by lender. Flexible Repayment Tenure Flexible and easy repayment terms allow you to pay EMIs promptly and without hassle. Secured loans, like a loan against property, can be repaid over 15 years, compared to 5 to 7 years for unsecured loans. The longer time frame doesn’t stress the person, lowering their EMI payments and interest rates. It helps you decide your financial needs and set aside your EMI. Fast Approval Loans against property have a faster application and verification process than unsecured loans. Unsecured loans lack collateral. So, lenders can’t rely on them. Lenders thoroughly assess the person’s repayment capacity during the screening and eligibility process. Online loan applications are convenient and time-saving. Same-day loan approval is typical. Minimal Documentation Another benefit of a loan against property is that the application for the loan doesn’t need much paperwork. Unlike the documents needed for a home loan, a loan against property only requires minimal paperwork. The person must give the following: Address proof Identity proof Bank statement proof (Salary credit statement, operative bank account statement) Proof of income or employment (such as a pay stub, letter of employment, tax return, profit-and-loss statement, or balance sheet) Property/ title documents Small Foreclosure Fees Loan against property has low-to-no foreclosure fees. Most banks or NBFC lenders charge between 2% and 4% of the outstanding principal plus taxes. Some lenders don’t charge this. You can close your property-secured loan for a minimal or no fee. Consider the lenders who mention every processing fee in loan documents. [B-02] Conclusion The loan against property is great for people who have assets that are not being used. Being a secured loan, a loan against property is simple to get with only a few needs. It includes the property and KYC documents. When considering a LAP, assess all the pros and cons carefully. If you can’t repay the loan, you risk losing your home. It is crucial to have enough income to repay the loan. For more details on loans against property, you can visit the website of Piramal Finance and explore their products and services.

08-11-2023

Personal Loan

What Will Happen If a Personal Loan EMI Bounces?

Most loans often come with a provision for equated monthly instalments (EMIs). You become a defaulter if you do not pay your EMI on time. Lenders offer a few solutions to mitigate such risks. The solutions offered depend upon various factors like your CIBIL score and your past payment history with the lender, but there are consequences to missing the payment/EMI due date. So, what happens when you default on personal loan payments? The article focuses on the consequences of missing a personal loan EMI payment. It discusses the different ways to avoid defaulting. We also provide you with an idea of the short- and long-term consequences of an EMI cheque bouncing. However, before delving into the consequences, you must understand the types of defaults. What are the default types on personal loans? Most banks and financial institutions categorise personal loan defaults into two types, as follows: Critical defaults Major payment defaults occur when you have gone more than 90 days without paying. Lenders will not work with you if you have a default history. A personal loan account is classified as a non-performing account (NPA) when payments are overdue by more than 90 days. Minor defaults Personal loan payments delayed by less than 90 days are considered minor payment defaults. In such cases, your CIBIL score will suffer. However, this problem is temporary, as the score can once again increase. You need to make payments on time. What are the consequences of missing an EMI payment on a personal loan? Missing a personal loan EMI can affect you in the following ways: Your CIBIL score may decrease. The most visible effect of missed personal loan payments is a drop in credit scores. To qualify for a loan from any financial institution, you need a CIBIL score of 750 or higher. If you miss an EMI payment, your credit score can go down. The decrease in your credit score depends on your payment history. Your creditworthiness decreases. The credit report includes your payment history and credit score. Personal loan applications with high CIBIL scores are rejected if they include negative remarks. Lenders will classify you as a high-risk borrower if you have negative remarks. These remarks show the lenders your probability of making the EMI loan payment on time. You have to pay penalties. Many banks and financial institutions charge late fees. The fee is between 1 and 2% of the total EMI amount. Some institutions may also include other penalties if you default several times. These penalties are mentioned in detail in the original loan contract. You get a visit from reviving agents. When the default period on an EMI exceeds 90 days, the financial institution will send an agent to collect the balance. Most lenders give a 60-day warning before the personal loan account becomes an NPA. You will have to pay extra charges if your account becomes an NPA. So, it is better to avoid such complications and pay your EMI on time. How do you avoid missing a personal loan EMI payment? You can use some strategies to ensure that you do not miss your EMI payments. These can help you plan your finances better. Keeping this in mind, here are some solutions that you can consider to prevent delaying payments: You will need a financial plan. Devise better financial preparations to reduce the likelihood of delaying the payment of your personal loan EMI. Most people know in advance if they can afford the EMI payment in a month. Therefore, you should create a plan and manage your expenses to pay the EMI. With the right plan, you will have fewer chances of defaulting. You can reduce the EMI. Talk to the lender about your financial situation if you are worried about missing an EMI payment. Many lenders give their customers a lower EMI by extending the tenure of the loan or by turning an unsecured personal loan into a secured loan. You can split the pending EMIs into multiple payments. You can also make pre-payments of your loan to manage your EMIs effectively. It is another preventative measure that you can use to manage EMIs for the loan you have taken. Making pre-payments a regular intervals for your loan is a good option if you have additional income. [B-02] Conclusion This article examines the consequences of missing a personal loan EMI. Go through the personal loan EMI plan before selecting a loan. You can also compare interest rates and EMIs when applying for a personal loan to get the best deal. However, remember that selecting the wrong EMI payment plan can have consequences. Choosing an EMI plan outside of your capacity will affect your CIBIL score and creditworthiness. Before you make a decision, consult an expert and read all the details. To learn more about personal loans, visit Piramal Finance for more in-depth finance-related articles.

08-11-2023

Mutual Funds

Advantages of Investing in Mutual Funds

Mutual fund investing can be very useful. This is especially if you’re looking for a simple and direct yet diversified method of investing. These funds are easy to use and managed by experts. A mutual fund is a type of asset that collects money from the most-known buyers and then invests it on your behalf. You take a certain number of shares in these funds when you invest in them. The Net Asset Value (NAV) is used to divide the income the mutual fund earns among buyers. Knowing the rules for selecting the best mutual funds to invest in can help you avoid losses or risks. They will also assist in building your wealth in the long run. [B-01] What is a Mutual Fund? A mutual fund is a managed investment programme that joins a group of people and invests the money in stocks, bonds, and other assets. Asset handlers often handle it. As an investor, you may purchase this fund in ‘units.’ It is essentially your portion of the scheme’s assets. These units may be taken or redeemed at the fund’s NAV. These NAVs vary based on the fund’s holdings. As a result, each person shares the fund’s profit or loss. SEBI registers all mutual funds. Hence, mutual funds function under strict rules designed to protect the investor’s interests. The most vital perk of investing in this fund is that it provides small buyers access to expert managed portfolio expanding of shares, bonds, and other assets that would not be possible to get with little cash. How to Select the Best Mutual Funds to Invest Here are top tips for selecting the best mutual funds to invest in: Financial Horizon How long you have to get to your goals determine this. Equity funds are better suited for reaching your goals with a long investment time, and debt funds are better suited for mid-term goals if you know about selecting the best mutual funds to invest in. Funds like ultra short duration and liquid funds are good for short investment tenures. Investment Goals You should know your funding goal before choosing the best mutual funds to invest in. Do you prefer income stability or growth? Long-term capital gain is best with equity funds, while consistent income is best with debt funds. Financial Records It is top advice to select the best mutual funds to invest in. The fund’s records offer a picture of its growth over time, including market upswings and corrections. This shows the fund’s survival in choppy market terms. Due to the lack of past data, it is hard to know the returns and work of newly launched equity funds and funds open for subscription. The best fund to buy shares in has a proven track record of giving steady returns through many market cycles. It also shows the validity of thorough research when growing asset plans. Spending Ratio The expense ratio is expressed as a portion of the fund’s assets. It is another fee the fund house levies with the other costs for managing a fund’s assets. The investor’s net return is assessed as the fund manager’s returns minus the expense ratio. A high expense ratio will result in lower returns for an investor. As a result, when selecting the best mutual fund to invest in, people should search for a scheme with a lower expense ratio than others in the sector. Risk Assessment Knowing your risk level eases choosing the best mutual fund to invest in. To ensure you take the proper risk, you should be familiar with the scheme’s risk profile. Bond or debt funds are right for buyers with low to mid-risk appetites, whereas equity funds are best suited for those with a high-risk appetite. Perks of Selecting The Best Mutual Funds To Invest Here are some of the best perks of selecting the best mutual funds to invest in: Cheap Investment This is an exciting benefit if you select the best mutual funds to invest in. These funds receive money from multiple buyers. Hence, the cost or fee for the asset services offered by the firm is relatively low because the money is split equally among all the buyers. Diversity If you buy shares in mutual funds, your asset manager will invest the money in various bonds, including equity, equities, debt funds, or other money market funds. As per logic, there is little chance that every tool will not reach its full potential. Furthermore, if one tool performs worse than the other, the two will balance out each other and decrease your risks, trying to make your funds safer. Liquidity Choosing the best mutual funds to invest in can improve an asset’s ability to be converted into liquid cash. Estate cannot be sold or loans obtained in an instant. However, you can easily withdraw your money from these funds. These funds are well-known for being strongly liquid assets when you need quick access to cash. As some of this money may have a lock-in period, you must ask your fund manager if the mutual fund can be easily cashed out. Smaller Funding You can begin investing in funds with just Rs. 500. A SIP can aid you with regular investments. And investing in the finest mutual funds through SIPs can boost your wealth. This implies you can ensure you are developing a routine for investing sparingly and are not constantly concerned about investing large amounts of money. Flexibility There is a fund-switching option available. You can swap between schemes or funds to obtain better terms and/or fund returns. The fund-swapping option is only available within a single fund’s schemes across some of the funds the firm offers. [B-02] Conclusion Over the past two to three decades, mutual funds have come a long way. These funds are becoming regular buyers’ investment options. They provide diverse funding choices to meet your goals and risk profiles. To learn more about the perks of mutual funds and the best mutual funds to invest in, check out similar blogs on the Piramal Finance website and explore their products and services.

08-11-2023

Personal Loan

All the Benefits of Personal Loan for your Higher Education you Need to Know

Want to study abroad to change your life but don’t have the money to do so? With a personal loan for school, you can reach your goals and have a great career. Studying abroad gives you more chances to grow academically, culturally, and professionally. [B-01] What is a Personal Education Loan? A personal loan for higher education is an unsecured loan that you can get to pay for your school costs. For this kind of loan, you don’t need a guarantee, collateral, or security. Lenders give them out based on your income, credit score, ability to pay them back, and financial history. The time to pay back the loan starts one month after you agree to take it. These loans have an easy application process and a quick approval time, which could help you pay for your study abroad costs. Why Get a Personal Loan for Education? Easy application process and competitive interest rates NBFCs have made it very easy to apply online for fast personal loans with low-interest rates. You only need to go to the lender’s website, fill out the loan application, and give the necessary information. You don’t even have to go to the lender’s office at all. The whole process of applying for a loan can be done in a few minutes from the comfort and privacy of your own home. Choose the loan’s period and the amount you will have to pay Choose a personal loan from a lender that offers flexible repayment terms because the duration will influence your monthly payments. Remember that your wages while a learner could be lower than your working earnings. Your primary need is for inexpensive EMIs. Rapid approval Technology simplifies the entire application process in the case of online applications. As a result, you can receive permission in a short amount of time. The procedure has been accelerated further due to a lack of collateral and documents. Why Should You Choose a Personal Loan for a Higher Education Loan Over a Student Loan? Traditional student loans usually only cover tuition and school costs. So you’ll have to find other ways to pay for other things. This is one of the worst things about them. Because of this, getting a personal loan to pay for housing, food, and other costs of living could be more financially beneficial than taking out a student loan to study abroad. Personal loans are unspecified loans. You can pay off almost anything with a personal loan, except for a mortgage, car loan, or student loan. You can use it to pay for college tuition, rent, food, transportation, books, and furniture, among other things. On the other hand, if you get a student loan, you have to use the money only for education-related things, like paying your tuition. Lenders may also make a short list of colleges and universities and give each one a grade based on how well-known and respected it is. Student loans to study abroad and education loans to work abroad are only available if your university or college is on the lender’s list of institutions. Before giving an educational loan for international studies, some lenders will also look at what the student has done in the past. So, personal loans are usually better than student loans when paying for a study abroad programme. The best thing about personal loans is that they are unsecured, which means you don’t have to keep anything as collateral. Features of Higher Education Loans and Personal Loan Inexpensive personal finance Affordable interest rates on an instant personal loan for higher education make it much easier to pay back. Immediate approval procedure The approval process has nothing to do with paper. You can get approval right away if you download the app from the App Store or Google Play. For saving money You can choose this loan in a pinch because there are no restrictions on how you can use the money and approval is almost instant. You can also use it to set up an emergency fund for your child to use if they have to pay for something they didn’t plan for while studying abroad. No need for security A student loan with no restrictions on how it can be used can be gotten without putting any property at risk, which is not the case with secured loans. Little documentation You don’t have to show a lot of paperwork to get this loan. You can get money quickly if you can prove who you are, where you live, and how much money you make. Documents Needed for a Personal Education Loan Most banks would need the following paperwork from you in order to give you a personal loan: A picture the size of a passport KYC records (Aadhaar card, PAN card, voter ID card, passport, driving licence, etc.) Verification of birth date Proof of income (bank account statements, salary slips) Proof that a business exists (for business owners) Along with a completed application form, people must submit self-attested copies of their supporting documentation. If necessary, the financial institution may request more paperwork. Factors that Affect Personal Loan Eligibility for Higher Education Loan If your monthly income is higher, you will be able to get a bigger loan. Your credit score shows how creditworthy you are and how much of a risk you are when you borrow money. If you already owe money, it will make it harder for you to get a new loan. Working for a well-known company also makes it easier for you to get a student loan. If you own your home instead of renting it, you’ll have a better chance of getting approved. [B-02] Conclusion Personal loans are a great alternative to student loans for higher education. For more information, you can visit the Piramal Finance website and explore their products and services.

08-11-2023

Home Loan

All the Pros and Cons You Need to Know of Loan Against Property

When money is tight, many people turn to expensive personal loans. With any of your real estate assets, you could get a bigger loan with a lower interest rate than a personal loan. When taking out a loan for a specific reason, most people have different options. Getting a loan against property can be helpful in many ways. However, you might have to deal with some issues as well. This article discusses the pros and cons of getting a loan against property. Before discussing the pros and cons of loans against property, let’s review the different kinds of loans. Then, we’ll talk about taking out a loan against property (LAP). [B-01] Loans can be Secured or Unsecured Most of the time, financial firms give people two types of loans: Secured loans When a loan is given as security for an asset, it is said to be “secured.” The most common types of secured loans are home loans and car loans. A Loan Against Security is another common type of secured loan (LAS). It is usually given as security for an asset, like a house, gold, stocks, a fixed deposit, etc. The security that is being offered is called collateral. If the borrower can’t repay the loan, the lender can sell the security and use the money to pay off the loan. Any money from the asset’s sale that exceeds the loan balance is returned to the borrower. Unsecured loans Unsecured loans are those that come with no guarantee of repayment. Personal loans, credit cards, and other unsecured loans are typical examples. Explain Loan Against Property. Loan Against Property (LAP) is a secured loan. A property owner gets it by putting their property up as collateral. You could use either a home or a business as collateral. The loan amount is based on the property’s market value and the loan-to-value (LTV) ratio. LTV is the amount of a property’s value that a bank can loan to its owners. There are many reasons why the borrower might take out a loan against the property. The person who wants to borrow money doesn’t have to tell the bank why they want to borrow money. Advantages of Loan Against Property Some of the main benefits of taking out a loan against property are mentioned below: Quick Approvals The approval time for a loan against property is shorter than for other loans because the property is used as collateral. The loan is quickly approved and paid out if the borrower has all the necessary documents. Long loan tenure Financial companies offer LAPs with terms of up to 15 years. With a longer term, the borrower doesn’t have to worry about their cash flow when making payments. The loan length would depend on the borrower’s age, income, and qualifications. Utilising property can be leveraged If you have a loan on a property, you can use it for a good reason. For example, you might already be making money from the house by renting it out. You can use it to your advantage by getting a loan against it and using the money for something useful, like starting a new business that could bring in extra money. Even though you will give the asset to the financial organisation as collateral, you will still own it. Additional loan amount Depending on their goals and the property’s value, a borrower may take out a larger loan against it. After finding out how much a property was worth, the bank would use the LTV ratio. The most that these institutions can give through LAP can be capped. The loan amount will depend on things like the property’s value, the LTV ratio, the borrower’s ability to pay back the loan, their credit score, and so on. Cons of Loan Against Property Let’s now examine some drawbacks of loan ownership of real property: Floating rate’s impact Financial institutions may agree to a variable rate LAP. When market interest rates go up, the interest rate may change to higher. This is called a “rising interest rate situation.” When interest rates go up, more EMI money will be paid out. After a certain point, rising interest rates could make it hard for the borrower to repay the loan, which could lead to default. Handling fees and additional costs When you sign the loan agreement, ask the bank to explain how much you will be charged as a processing fee and if there are any other fees. Look at the processing fees or interest rates different banks offer before making your choice. Risk of losing the property A loan against property requires a long-term commitment to making EMI payments on time and every month. If the borrower has money problems or misses an EMI payment, the bank could take the property, sell it, and use the money from the sale to pay off the loan. The borrower gets back any extra money from the sale of the property. A borrower may keep a few months’ worth of EMI in a separate bank account as a safety measure. They would help if you were having trouble paying your bills. [B-02] Conclusion Property loans have a lot of pros and some cons. You can put your property to good use, the process goes faster, the interest rates go down, the loan amount goes up, and the loan term goes on longer. Cons include having to deal with variable rates when interest rates are going up, losing the property if you go bankrupt, and loan amounts that are limited by the value of the property and the LTV. Think about what will work best for you by weighing the pros and cons. On the other hand, a mortgage loan is a secured loan that lets you get money by putting up an immovable asset like a home or business property as collateral. For more information, you can visit the Piramal Finance website and explore their products and services.

08-11-2023