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Investment

Basic Questions To Ask Before Investing In A Mutual Fund

Financial freedom is a status everyone desires, but only a few achieve it. To achieve this goal, you may stick to the traditional 9–5 job or start your own business. However, another way to achieve financial freedom is through investing. The latter usually involves a lot of risks and is very time-consuming. Fortunately for you, mutual fund investing is a thing. They pool money from investors to purchase bonds, stocks, and other securities, and the profits or losses are shared among the investors. This article will answer some basic questions you need to ask before investing in a mutual fund. [B-01] Before selecting a mutual fund, there are some questions you should ask: What is your goal? Before getting into the risky world of investing, it is crucial to specify and assess your goals. Your risk preference, time frame, and investment objectives should be laid out. Your investment objectives will then dictate which mutual funds to consider. Long-term This strategy is mostly geared towards more conservative investors who prefer low-risk investing and seek stability in their portfolios. It ensures that the capital you invest stays safe but delivers comparatively lower returns. If this strategy suits you, you should consider equity funds as your mutual fund investment. Income This strategy involves slightly more risk than the long-term strategy. The main idea of this strategy is to create an income stream through dividends received from mutual fund investments. If this rings true for you, you should consider investing in dividend stock funds. Growth The riskiest of all the strategies, this entails investing in high- or very high-risk mutual funds in pursuit of high returns in a short amount of time. This appeals mostly to younger, risk-tolerant investors. If you aim to yield high returns, investing in liquid or small-cap funds would be the optimum strategy. How well has the mutual fund performed in the past? The past isn’t necessarily indicative of what the future has to hold. However, when it comes to mutual fund investment, in-depth research of how it has performed in the past is a must before any consideration of investing. Going through the annual returns would give you a better insight into how the mutual fund is affected and managed during both bull and bear markets. By doing this, you can rule out the odd cases and get a general idea of what to expect from the mutual fund, which makes it easier to decide whether or not to invest. Who is running the fund? The individual spearheading a mutual fund is a portfolio manager. The success of that specific fund is heavily dependent on how it allocates the pooled capital of investors. The way they manage the funds in unfavourable market conditions is of utmost importance and is considered one of the most important skills a portfolio manager should possess. Hence, before proceeding with any kind of mutual fund investment, in-depth research of the portfolio manager needs to be done. His track record should be scrutinized, and inconsistencies should be considered a red flag. A vastly experienced portfolio manager is usually safer than one with high, inconsistent returns. What are the expenses involved with a mutual fund investment? Apart from your invested capital, several expenses should be taken into consideration before investing in a mutual fund. All of these fees are explicitly disclosed by a mutual fund to offer full transparency to investors. There are two types of fees that investors need to bear when investing in a mutual fund. Shareholder Fees This fee is paid directly by the investor and is mostly tied to actions taken by the investor regarding their mutual fund investment. It involves the following: Purchase fee Account fee Exchange fee Redemption fee Sales load (similar to a brokerage commission) Annual Fund Operating Expenses These charges are paid out of the fund assets and are indirectly paid by investors. They consist of the following: Management fees Distribution fees Total annual fund operating expenses Other expenses (legal and accounting expenses) What are the tax implications of mutual fund investment? Like any other source of income, taxes play an important role and will cut off a share of your profits. In the case of investing in a mutual fund, taxes depend on the type of investment as well as its duration: DividendsDividends received from mutual funds are tax-exempt. However, a DDT of 29.12% is still applicable to the mutual fund during the distribution. If you have opted for equity funds, DDT drops to 11.65%. Capital Gains Tax (Short-Term)In terms of capital gained over a short period while investing in a mutual fund, usually less than 12 months, a fixed tax of 15% is applied if you have opted for equity funds. In the case of investing in other types of mutual funds, tax on capital gains is determined by the investor’s tax slab. Capital Gains Tax (Long-Term)Mutual funds that allow investments made under Equity Linked Savings Schemes (ELLS) exempt investors of 1.5 lakhs in tax. However, ELLS needs you to lock in your investment for 3 years. On the other hand, investing without ELLS, according to Long Term Capital Gain (LTCG) you will be exempted from 1 lakh. But if it exceeds the aforementioned amount, there is a 10% tax without indentation. [B-02] Conclusion Choosing the best mutual fund investment that aligns with your needs and beliefs is a lengthy process that must be done to ensure maximum benefits from the capital invested. But, if done correctly, it can provide a good source of income for the investor. Just like any other investment, a mutual fund investment is subject to risks. That is why financial advisors like Piramal Finance are in high demand. They simplify the process of investing in mutual funds while equally providing myriad other financial help and advice.

08-11-2023

Tax Savings

Benefits Of The New Income Tax Regime

The revised personal taxation regime in Budget 2020 offers lower tax rates. But it also has greater tax brackets for individual filers. Also, it nullifies all exemptions and deductions. The Finance Minister gave taxpayers a choice between the old and new tax regimes. This added complexity to the situation. Taxpayers struggle to make sense of their income tax returns. That’s due to the complexity of the subject and the sheer number of variables at play. Also, several people calculate deductions by deducting them from their tax liabilities. Instead, they should deduct it from their gross income. This article provides a layman’s explanation of the new income tax regime. [B-01] Benefits of the New Income Tax Regime The tax rate changes under the new system are beneficial. Despite the new regime’s lower taxes, many accessible exemptions and deductions have gone. The new tax law requires less paperwork to be filed by individuals, and it’s also easier to file taxes. We now have more options for tailoring their investments thanks to the new tax structure. A taxpayer can only claim a deduction if they invest in one of the specified instruments. This characteristic will limit taxpayers’ ability to invest as they see fit. But it will give such people vast leeway to tailor their portfolios to their specific needs. Liquidity will improve due to the new tax system. Plus, lower rates will result in higher individual take-home pay. People, in this case, who couldn’t invest in particular things for some reason, will love this. With the new tax framework, investors can lock in their funds for a set time. We can no longer take advantage of deductions and allowances. The taxpayers who don’t have to invest in any way will gain from this. That’s because many investment contracts prohibit withdrawals during a certain time frame. They now have access to many investment vehicles. These are open-ended mutual funds that offer good returns. What’s good about the New Income Tax Regime? Those with minimal sway over policy programmes will enjoy the new income tax rate. There are seven progressive tax brackets under this plan. Paying a reduced upfront tax rate is an option for all taxpayers. It is a great addition to the current system for those who do not qualify for exemptions. Take the example of an individual with a total gross income of up to Rs 12 lakh. He also has investments worth less than Rs. 1.91 lakh. He was subject to a higher tax rate under the previous regime. That’s why the new system is better if you plan to save less money through loopholes. The new system is less complicated. Hence, fewer filing mistakes will occur if companies switch. Nirmala Sitharaman said the new income tax system would simplify filing. Thus, the new approach makes it easier to file taxes if you have no or few investments to report. Participation in the plan is voluntary. Hence, individuals can adopt a different system once the annual reviews finish. Yet, a taxpayer must have no business income to transition from the old to the new system. As a result, taxpayers will have more leeway to select the most helpful tax plan. To help prevent income tax fraud, the government has disallowed 70 exemptions. That’s because many people have exaggerated their tax returns to receive larger refunds. Yet, consider the elimination of so many exclusions under the current system. Due to this, the opportunity for abuse of the exemption regulations has lessened. What’s Bad About the New Income Tax Regime? In place of deductions, the new tax system offers lower tax rates. It helps those who don’t have much to invest. Still, it’s bad news for those who put away significant money in tax-free savings products. Products like the PPF or NPS. They will still owe more money to the government even if they switch to the new regime with a reduced tax rate. That’s because they won’t be able to take advantage of any exemptions. Under the current system, you can get a big tax break by deducting up to Rs 2 lakh in expenses. Seventy-used exclusions will no longer exist under the new income tax system. Hence, people may be less inclined to engage in tax-free programs. Thus, reducing household savings. The person’s future savings will be affected, despite the reduction in the tax rate. Here’s a line from Abhishek Soni, CEO of Tax2win, a tax advisory service. “Consider a taxpayer who contributes Rs 2,00,000 per year toward a tax-saving plan. At the age of 35, that person can expect to have more than Rs 50,00,000 in their possession by the time they reach the age of 60. The taxpayer benefits in two ways. First, they pay no taxes on the money they put into these assets. Second, they have a sizable nest egg when they retire. According to analysts, the new income tax system can deter real estate investments. Yet, it’s worth noting that buying and renting a home is a fantastic way to reduce your taxable income in India. Yet, the current tax plan does not provide such breaks. Hence, demand in the real estate market may decline. Suppose the insurance industry has to spend more money and time attracting investors. In that case, it will also suffer. As a result, insurers may see less business due to the new income tax structure. Which tax slab should you choose? There is no universal solution to this topic. That’s because it depends on individual circumstances and yearly income. The new income tax bracket and the previous bracket both have benefits and drawbacks. The new tax slab provides a range of income brackets with matching tax rates. Thus, whether you want to take advantage of these deductions and exemptions is up to you. In the previous tax bracket, there were allowances and reductions. So, before you file your taxes, reviewing and comparing both tax systems is wise. [B-02] Conclusion There can be a miscommunication with the implementation of the new tax regime. Still, you can address these with proper preparation. Before making an informed decision about which tax system to adopt, you must be careful. That’s because comparing the systems and highlighting their advantages is important. Thus, we recommend you continue with the old tax regime if you see no benefit in the new system. Individual taxpayers can use the benefits above and the cons to decide which tax regime is best for them. Individual taxpayers can make the best choice possible. They can do so if they take the time to read through all the details and compare the two taxes. Use the two different tax structures to your advantage. Did you love this post? Go to our blog for more valuable content!

08-11-2023

Know More

Get the Best Tips on Money and Finance

What are the best tips for money and finance? How can one manage money more efficiently? Is money management good in the long run? Unfortunately, money management is not a course many high schools offer. Consequently, many people need help throughout their early adulthood learning how to manage their finances, apply for credit, or avoid debt. Read up on the subject as soon as you reach adulthood to learn the foundations of wise money management. [B-01] Advice on Finances for the Young and Promising Cash is preferred over credit cards as a method of payment. Exercise self-control. It’s one of the easiest but most important things you can do to help your money. The simplest way to reduce interest expenses while shopping is to use a debit card rather than a credit card if you want to wait until you have cash management. When you use a debit card to make a purchase, the funds are immediately taken out of your bank account. Until the balance is paid off completely each month, using a credit card is equivalent to taking out a high-interest loan. When used properly, a credit card might assist you in building a strong credit history in money and finance. Due to their ease of use and sometimes fantastic perks, credit cards are also immensely useful. The lender will benefit from your bad habit of carrying weight from month to month. For better money management, you must use them to your advantage rather than the lenders. Keep credit cards on hand in case you need them, and be sure to immediately pay off the whole balance after receiving the statement. You should only apply for the credit card offers you get, and you should take only what you can handle. Avoid bad advice and focus on what you can learn for yourself. Others will only exploit you if you don’t know money management. Some of these people, like dishonest budget advisers, could be malicious. Despite having the best intentions, people may need to be fully informed. Even if you know that the only way you can afford to buy a house right now is to get a high-risk adjustable-rate mortgage, well-meaning family members may still tell you how important it is to own your own home. Don’t listen to unwanted advice from someone who isn’t skilled enough in money and finance. Instead, learn the principles of personal finance to take control of your financial future. Once the facts are clear, don’t let anybody get in the way, not even a partner who drains your bank account or friends who push you to go out and spend a lot of money every weekend. Discover how to set up a budget so you can monitor your spending. After reading a few publications on the subject, you’ll comprehend the significance of two pieces of advice that all personal money and finance managers stress. You should only spend what you bring in and always be aware of your cash flow. Making a budget and a personal spending plan that enable you to track your income and expenses is the simplest way to accomplish this goal. Long-term financial savings may be attainable if you keep your major monthly costs, such as rent, as low as possible. You can buy a condo or house much sooner than your peers who pay more rent if you choose to live in a less expensive neighbourhood and save money with proper knowledge of money and finance. This is still true even if you can afford a gorgeous apartment with all the bells and whistles. Make an emergency fund to be ready for anything. You should always set aside money for both short-term and long-term goals. With the use of this simple technique, you may avoid debt while also getting a better night’s sleep. Even if you don’t make much money, this is still true. This task will be easy if you know money management. Savings you make in a typical savings account are never in jeopardy and are always available to you. However, your money and finance will depreciate over time due to inflation since this kind of account offers almost no interest. Instead of placing the money in a bank, you may put it in a short-term certificate of deposit, a money market account, or a high-yield savings account (CD). Verify your savings account’s rules to make sure you can quickly withdraw money if needed. Verify the security of your money. If you need the money for something you did not plan for, you must take urgent action to guarantee it is well spent. Even if you don’t have the money and financial support for all these things right now, you should consider them in the future. Money management is secure in risk-free assets like certificates of deposit, money market funds, and high-interest savings accounts, but you get back less, and the value of your investment grows more slowly. On the other side, the risk is much higher with stocks, bonds, and mutual funds. The value of your portfolio may decrease, but it is far more likely to rise. [B-02] Summing up To become an expert in money management, remember that you don’t need a master’s degree in finance or specialised training. The road to money management, the cornerstone for your other goals and desires, may be paved with these eight pillars. Although we don’t provide financial advice, we offer unbiased research and analysis on investing, trading, and other financial topics. Users should do their research before signing up for a service. Additionally, you ought to read more complete and instructive Piramal Finance articles.

08-11-2023

Guide

A comparison of saving accounts and bank FD

The term “savings account” refers to a safe, reliable place where money can be stored that is not urgently needed and that pays modest interest rates. Today’s millennials feel safe storing their hard-earned money in a place like this. Banks use this money to provide loans to people. As people say, saving your money is as crucial as earning it, so a savings account does just the right job here for people. [B-01] The workings of a savings account It works in a very uncomplicated manner. A savings account facility is provided by banks and credit unions for customer convenience, both online and offline. Loans are obtained with this amount for people who need them. Every bank or credit union has a variable rate of interest. Some banks require a minimum balance in accounts to avoid charges. Money can be easily transferred from a savings account by means like UPI, net banking, cash withdrawals at ATMs, etc. Chequebook and debit card provisions are made for people holding a savings account. Advantages of a savings account It’s a safe and reliable way to stash away money. In the end, you earn benefits by earning interest on your amount. Liquidity is offered, so that if required, money can be withdrawn. Working is simple and straightforward. Disadvantages of a savings account There can be a temptation to spend money rather than store it when liquidity is offered. Interest rates are not very attractive and fluctuate a lot. Some banks have limited or restricted transaction allowances. If you are interested in opening a new savings account, read this article to find out more. About Fixed Deposits Introduction to Fixed Deposit Commonly known as a “bank FD,” it is an investment option offered by banking and non-banking companies with the main aim of saving money over time by investing an amount and earning interest on it. A lump sum amount can be withdrawn only when the tenure opted for the bank FD is over. Tenure can vary from 1-2 weeks to 10 years. It is one of the safest and simplest investment options right now with a higher rate of interest and holder benefits like loan allowance etc. These FD-offering companies have special schemes for senior citizens too. Types of Fixed Deposits Standard Bank FD- A very common fixed deposit that can be opened at a bank where the holder already has a savings account. The bank applies the interest rates accordingly. Cumulative bank FD– Best for investors with long-term profit goals, as money gets locked up for a specified period and can only be withdrawn after that particular period itself as a lump sum amount. It prevents temptations to withdraw money or use it before the lock-in period is over. Non-cumulative bank FD– Best for investors who want to pay EMIs; this enables them to set monthly, quarterly, half-yearly, etc. goals. This allows them to withdraw money on a regular basis while still reaping the benefits of the fixed deposit. Corporate bank FD- Offers good interest rates, it’s a fixed deposit at private firms, and investors should always check the credit rating of these companies before investing. Senior citizen bank FD– A special fixed deposit scheme for people over the age of 60. They get a slightly better interest rate than others. Tax saving Bank FD– Used for tax savings and exemption of taxes, it has a lock-up period of around 6 years during which money deposited cannot be touched. Bank FD for NRIs- A special fixed deposit scheme for NRIs (non-resident Indians), so that they can easily invest money in India and earn tax-free income from the interests earned on it. Advantages of a Fixed Deposit Bank FD offers assured returns no matter the rise or fall of the market. Interest compounding is highly beneficial. Offering slight liquidity. Easy and reliable process. Senior citizens benefit. One-time effort bearing great fruit later. Tax benefits. Can be used to obtain a loan. Disadvantages of a fixed deposit Fixed interest rates throughout the tenure. Locked up funds. Penalties or losses on withdrawal before the tenure’s completion. Interests earned are taxed. To read more about FD, check out these articles: link1 link2 link3 Comparing Saving Accounts and Fixed Deposit Saving AccountFixed DepositAim: To keep funds that are not in use at the moment safe.Aim: Earn interest from a one-time investment, focused on a long-run benefit.The liquidity offered, i.e., one can withdraw money in case of need without compromises( it can cause temptation though)Liquidity is somewhat compromised as on withdrawing money before the completion of tenure, loss on FD interest rates and penalties are to be paid in some cases.No Fixed tenure is to be followed.A definite tenure is to be followed, it can range somewhere between 1-2 weeks to 10 years.Saving account rate of interest ranges between 2-4%FD interest rates range between 5-8%One cannot avail loan based on this.One can obtain a loan based on a Fixed deposit.No Tax benefits earned.Tax benefits can be earned.Money can be transferred into a saving account regularly.It’s a one-time investment, money can only be put into the account once in a lump sum way.Withdrawal and transfers are available anytime using modes like ATM cash withdrawal, UPI, net banking, etc.Withdrawal and transfer are restricted before tenure completion and can cause FD interest rates losses and Penalties. [B-02] Hopefully, this comparison gave you a clear insight into savings accounts and fixed deposits. Investing money in the right place is crucial, and the right research can help you make that decision feel like a cakewalk. There are several market leaders and experts such as Piramal Finances, you would find more information and guidance for finance and Personal banking related topics at https://www.piramalfinance.com/personal-loan

08-11-2023

Home

7 Advantages of Buying a Home Over Renting

Most people have always wanted to own a home of their own. However, many factors determine whether it is better to buy a house or rent one. Some of them can be the burden of repaying a home loan, the preference to live in the same place forever, or managing other financial obligations. Although owning and renting have advantages and disadvantages, the decision rests largely on the individual. But there is one thing that both situations have in common: a consistent and regular income. In case you are still confused, here are some benefits of purchasing a property instead of renting. [B-01] Perks of Owning a House Over Rental Housing It gives a sense of security and stability There is no doubt that purchasing a home involves significant financial commitments. It is not always a simple choice. However, when you choose to buy a home, you are not only repaying a home loan but also providing your family with a place to call home. A place where they can feel at home. After a hard and exhausting day, returning home will bring you the necessary satisfaction. You will feel fulfillment, stability, and security each time you return home. After all, your home is the only place that can make you feel at ease. Tax benefits for home loans When you take out a home loan, you must return the principal plus interest to the lender. If you are unaware, you can save a significant amount of taxes when repaying a home loan. You may be wondering why you should buy if you also have to pay interest. However, the reality is that renting becomes more expensive over time. You receive no benefit from the rent you are paying. Instead, your rent would also increase every year. But in the case of purchasing your home, you will receive a tax break after paying off your home loan. Possession of the home Rent is a monthly payment that you spend without producing or developing any tangible assets. Your landlord receives a set amount each month in exchange for you looking after and maintaining their property. There are two advantages to being a homeowner. The first advantage is that you’ll have a place to live and the freedom to do whatever you want. You will have privacy. The second and most essential advantage is that you’ll own the house, which would be your permanent residence. There are no issues with the landlord Have you ever considered how frequently you’ve moved due to problematic landlords? The sad reality is that most people move because there is always something about their current residence that does not sit well with their landlords. Owning a home will ensure that landlords are no longer an issue. You will have the freedom to remodel your home whenever you want, do whatever makes you feel good, arrange things how you want them, and much more. You won’t need to wait for approval for how your home should feel and look. Even if getting a home loan requires a lot of paperwork, it will be less stressful than managing a landlord. Reduces your costs of living over time Most individuals imagine having no debt or rent to pay. You don’t need to think of it as a myth because it is actually doable. Even though it may seem like a very difficult effort to pay a home loan for “X” number of years, it is still preferable to paying rent for the rest of your life. You will be sure that a home loan will conclude when it is due, and you will be well aware of this date. However, that will be different if you are paying rent. You will consistently have to pay monthly rent if you want a home or a place to live. And, thanks to home ownership, you will eventually be able to reduce your living expenses. No fear of uncertainty If you are a renter, you will always live in fear of your lease expiring or of your landlord ordering you to leave the property at any time. After all, the likelihood of asking to leave someone else’s place increases if you are staying there. When you own your own home, you will no longer be concerned about the unknown. You won’t have to be concerned about your lease expiring or finding a new home quickly. If you were to live in your own home, you wouldn’t have to worry about negotiating your rent every year and would have the freedom to set your own rules. A house is a long-term investment Making an investment for the future when you purchase your dream house means more than just buying a place to live. Even though taking out a housing loan today can cost you more money, in the long run, your house might end up being worth more than you paid for it. You’ll feel secure and stable in your home, and owning a property will add to your net worth. Tomorrow, your home will become a family heirloom that your children will cherish forever. Additionally, property values always go up, so your home’s value is unlikely to decline anytime soon. Therefore, investing in a house will only result in you having more money overall. [B-02] Conclusion Always remember that purchasing a property requires much patience and careful consideration of your finances. But there are many benefits to buying your own house as opposed to continuing to rent. There are numerous factors to consider before taking this important step in your life and applying for a home loan. You don’t get to have a fantasy of getting a brand new house every day. So, you should thoroughly explore and ask questions before taking every small step. Check out Piramal Finance and study its offerings to learn more about how and why purchasing a home will be advantageous. You will no longer have any doubts, and you will learn a lot about housing loans and home financing.

08-11-2023

Business Loan

All You Need to Know about Different Types of Working Capital Loans in India and How to Apply for It

The cash that a company uses daily is known as working capital. It is the sum of money needed for a firm’s ongoing operations. A firm may not be able to work properly without working capital finance. So, firms may think about taking out loans to cover this need. Working capital loans are those that are taken out to fund a company’s daily operations. A working capital loan is only used to fund daily firm operations. It is not taken out to fund a firm’s growth. This shows that it pays for both the costs of existing capital and the costs of human resources. There are two kinds of loans: secured and unsecured. [B-01] Types of Working Capital Loans There are many types of working capital loans. These are given below: Short Term Loans The short-term loan has a fixed interest rate and payment plan. This loan is secured. You can also get this loan without any collateral. It will depend on the validity of your credit history and your relationship with the lender. Bank overdraft facility or credit line This is the working capital loan with the most flexibility. The lender gives the person access to use a specific amount. The person must take care not to spend more money than the amount of approved cash. Also, a person only pays interest on the amount taken not the approved amount. Trade Credit This working capital loan is funded by trade credit from current suppliers. When you make a big order from a supplier, they give you a trade credit. But, the supplier will only approve this loan after carefully checking your earnings and credit history. Accounts Receivables You can always apply for a working capital loan using your valid sales orders or account receivables. It is perfect if your firm is short on cash to meet a sales order. These loans are only secured if your firm has a good image and a history of making on-time debt payments. Equity funding through investors or personal funds This is the most productive working capital loan. You can get through home equity loans or expenses made by family members or friends. Start-up businesses or firms that lack a long credit history benefit the most. Invoice factoring In this arrangement, a company sells all or a portion of its late payments to a third party. The value used for this is less than the accounts’ initial value. Factoring service is the name of the third party. By buying the bills and getting money from the debtors, it offers funds. Letter of Credit A lender may sell a letter of credit to the buyer. The letter of credit will then be sent to the seller by the buyer. The lender will repay the seller for the order’s cost after the sender sends the order. The buyer then pays the bank the specified amount at the given time. Bank Guarantee It is a working capital loan without a fund basis. The seller or buyer gets a bank guarantee to cover the possible risk related to the failure to perform under a specific agreement. It could be anything, including cash or a promise to perform services. It can only be struck down by the holder if the other party fails to perform. The bank requests some security or levies a commission. Working Capital Ratio A working capital ratio is a number that is used to assess a company’s financial standing. To indicate that the company is doing well, the working capital ratio must ideally be between 1.2 and 2.0. When a company’s working capital ratio is 1.2, it means it has enough liquid assets to pay its debts and maintain day-to-day operations. Any ratio higher than 2.0 denotes poor capital investment on the part of the company. To calculate the working capital ratio, divide the current assets by the current liabilities, i.e. Working capital ratio = Current Assets / Current Liabilities Eligibility Criteria for Working Capital Loans The criteria differ from one lender to the other but some basic requirements for getting working capital finance are listed below: You must be at least 25 years old. You must have at least three years of business experience Information on the most recent income tax returns is needed The firm should not be blacklisted. Your company’s location should not be on a negative location list. Trusts, small businesses, and non-profit organisations are not eligible. You may also be asked to provide more data to prove your business. Documents Needed to Apply for a Working Capital Loan A working capital loan has minimal documentation requirements. For a list of the documents you should always have on hand, see the list below: Passport-size photo KYC records Relevant financial records Business proof The most recent bank statement Bank records for the previous 12 months Benefits of Working Capital Loans There are many benefits of working capital loans listed below: No need for any security You might be qualified for unsecured working capital loans if you have a high credit score. You don’t have to put your inventory, business or any other valuables to secure the loan. But, the loan must be paid back on time. Flexibility and Speed One of the great advantages of working capital loans is that qualified firms can easily get short-term loans. It includes inventory loans, bank lines of credit, accounts receivable and credit lines, in a shorter amount of time. The loans tend to be flexible with fair interest rates and paying-back plans. It helps firms to smooth out their cash flow during seasonal fluctuations. Using your wisdom when spending money Usually, there are few or no limits on the working capital loan. There is one thing that the lender demands. It is that you should use the money to boost sales or continue running your business as usual. [B-02] Conclusion A company’s lifeblood is its working capital. A strong working capital results in yearly market expansion. Any improper handling of working capital results in losses and the company’s decline. It might be caused by a staff member’s or a company’s lack of liquidity or attention. Its only solution is to get a working capital loan and pay ongoing costs. You can get a working capital loan to carry out regular business operations, not to expand your firm. In other words, it pays for the costs of both current capital and human resources. For more information, you can visit the Piramal Finance website and explore their products and services.

08-11-2023

Personal Loan

6 Reasons to Get an Instant Personal Loan From Piramal Finance This Diwali

As Diwali approaches, events and celebrations are just around the corner. Some of you might have had the chance to save for the special day in advance. But others might have some last-minute expenses to take care of. Personal loans can take care of such emergent costs and expenses. This way, you can manage all events smoothly. Getting a personal loan is a hassle-free process as it requires minimal paperwork. Also, there’s no trouble with assets or security. A loan from an authentic and reliable financial institution will go a long way in helping you manage your finances. There are thousands of lenders and banks on the market. This makes selecting the best option quite hard. This article will discuss the benefits of getting personal loans from Piramal Finance. So without further ado, let’s dive into the details. [B-01] Personal Loans: How to Identify The Best One For You? Personal loans are convenient and quicker to avail. But you must go through these tips before you select a lender. Compare interest rates When you go to a bank, they will try their best to make you believe they offer the lowest interest rates. No matter how much they try to convince you, it would be best if you did your research. For example, if a bank offers you a 14% interest rate, you might think this is a great deal for you. But, you must compare the interest charges with other available options in the market. Contact lending institutions for their offers. Also, check various rates on the official websites of banks or lenders. Otherwise, you can refer to credible financial sources for rate comparisons. Check loan charges or fees Getting the right rate for an instant loan is vital. But one must also check the other fees charged by the lender. Some of the standard fees or charges for personal loans are: Processing fees Penalties for a late payment Charges to cancel the loan Charges for a bounced cheque Delayed payment fees Service tax Generally, banks charge a processing fee of 1% to 3% on personal loans. Still, researching can help you find a lender that charges less than the standard market rate. Why Choose Piramal Finance to Get Personal Loans This Diwali Piramal Finance is one of the leading housing banking firms. Here are six great reasons why you should get personal loans from them. No Pre-Payment or Foreclosure Charges Pre-payment or foreclosure is a vital feature to look for. It is one of the best ways to get out of paying those extra charges with every installment. Sometimes you must pay an extra fee to prepay the entire loan sum. It might demotivate you to repay your loan before the term ends. So it is always better to opt for a financial institute that does not charge fees for repaying the loan early. This way, you can save all the money spent on interest charges and end your loan as soon as possible. Avail of Personal Loans Starting From Rs. 1 Lakh Most of you take out loans because of a crisis. Others might need them when someone wants to avoid giving an asset showcase to the bank or lender. Since these loans help relieve urgent expenses, it makes sense to borrow only what you need. Hence, you must get an instant personal loan of lower sums. You can ensure you are not getting into more debt than you should and can repay the loan on time, without any hassle. Minimal Paperwork Needed Piramal Finance requires minimal paperwork. It enables you to avail yourself of enough funds without spending time worrying about paperwork. This Diwali can be grand even without a salaried job or a profit-making business. And your Diwali celebrations do not have to wait. Provide identity and address proof for your personal loan. Once your papers are verified, you will have the entire loan sum. Instant Release of the Loan Sum Since Diwali is near, you might have plans to buy exclusive gifts for your loved ones. However, exclusivity in products comes at a high cost. The issue with purchasing one-of-a-kind gifts is that they can go out of stock at any time. Luckily, personal loans at Piramal Finance disburse quickly. Quick disbursals also help in vital times. For example, your loved one is battling accident injuries and needs quick treatment. Then, you need a banking firm that can give loans quickly. Flexible Repayment Tenure Understanding the repayment flexibility of your loan is vital. The time flexibility enables you to pay your loan in small sums. This is usually done in the form of EMIs. At Piramal Finance, personal loans have a tenure of 12 to 60 months. So, you can decide the repayment period of your loan as per your preferences. During the term of your loan, you can make the agreed-upon instalments with interest. Otherwise, repay the loan early according to your financial capacity. Combine Your Income to Avail of a Higher Loan sum You may need a hefty loan sum. But sometimes, more than one source of income is vital. You can then combine the many wage sources to avail yourself of a larger loan. Piramal gives you the perk of pooling wages from different sources. You can show the combined salary and opt for a higher loan sum. This perk can help you get enough funds for an investment opportunity. Also, you can even afford more vital costs, like buying a car this Diwali. [B-02] Conclusion Everyone has their way of celebrating Diwali. But one common thing is the joy of giving your loved ones something exclusive. Personal loans are the perfect choice for handling your costs this holiday season. Also, you will have ample funds without disturbing your finances. With Piramal Finance’s personal loans, you can get low rates. With the extra perk of time flexibility, you can decide how much time you need to clear your loan. There are several other perks that you can take advantage of. Piramal Finance has more personal loan blogs that you must look at. You may also take a look at the many financial products and services they offer.

08-11-2023

Home Loan

All You Need to Know About Top-Up Loans in India

The principal amount of a loan is fixed when you submit your application. However, sometimes unexpected expenses can occur. And the loan may no longer be enough. In such cases, you often consider your options. Many take out an additional loan to pay for the increased expenses. However, is this the only option? You can also take out a top-up loan. This additional amount can supplement your expenses. Your eligibility is checked before receiving a top-up loan. Not all plans are eligible for top-up loans. This article discusses home loan eligibility and advantages and how to get a top-up loan. [B-01] What is a top-up loan? If you already have a home loan, you can apply for a top-up loan from the same bank or lender over the existing loan amount. This top-up loan gives you additional funds in the same plan. A top-up loan can be used to cover additional expenses for your home. Banks and financial institutions provide this service to existing clients. For example, you can request a top-up loan if you already have a home loan with a lender. You will only be eligible if you fulfil the home loan eligibility criteria. The tenure or interest rate of the original home loan will change once you purchase a top-up. These loans offer an excellent chance to overcome any financial barriers. However, to avail of these loans, you should check your eligibility. Home loan eligibility criteria Home loan eligibility conditions must be met when applying for a top-up loan. Home loan eligibility criteria used by most lenders are as follows: A top-up loan is only available to those who have a personal loan with the provider. The loan can be taken only after a defined period has passed and you have returned a part of the loan. Both these criteria are specific to the lender. You are eligible only if you have a good repayment history with no late instalments or missing EMI payments. You should also be able to repay your loans. This means you need to show your income is enough to pay back the additional EMI. You need a high CIBIL score (a CIBIL score of 650-750). The score shows your reliability. What documentation do you need to prove your eligibility? Because you already have a personal loan (connection) with the institution, you need little or no paperwork to get a top-up loan. Some lenders now offer pre-approved rapid top-up personal loans to current loan clients. However, you may need to give some documents to prove your home loan eligibility. Some will ask for documents to prove the following; Address and identity proof Income proof Property documents Proof of employment How can I get a top-up loan? The application process for a top-up loan varies between lenders. You can apply for a top-up loan if you have completed six months of loan repayment. However, some require you to pay 12 instalments before requesting a top-up. A key point to remember is you need to make payments on time. You have to complete and submit an application form for a top-up loan. You should submit salary receipts and the most recent financial records with the application. Once approved, the amount is credited into the account within 2-3 days. Benefits of a top-up loan There are no financial limits. A top-up loan amount can be used for any purpose relating to your current property. It can be used to purchase a parking place, repair the property, build furniture, or other personal expenses. The procedure is simple and fast. You will receive the amount within 2-3 days after verification is complete. Verification is a simple process because you are an existing customer. The interest rates are low. Top-up loans are a profitable option to obtain funds since they offer lower interest rates than personal loans. The interest rates vary from one lender to another. However, this is often between 11 and 13%. In contrast, a personal loan can have an interest rate of up to 22%. There is no mortgage. A current home loan client may apply for a top-up loan without providing extra assets to the lending company. What do you need to know before applying for a top-up loan? Top-up loans can be used for many reasons. They can be taken out on personal loans, home loans, education loans, and others. The home loan eligibility criteria for a top-up home loan are easy to meet. The application process is simpler if you are consistent in paying previous EMI. If you adhere to the home loan eligibility criteria, some lenders may offer you as much as INR 1 crore with a ten-year tenure. You can apply for top-up loans online. The process is simple and fast. The verification is also done online so you need not go anywhere. Loan terms differ from one lender to another. Read all documents thoroughly. Some lenders offer no-documentation top-up loans. You will have to check individually with the lender. [B-02] Conclusion As discussed, a top-up loan is an extra loan added to the current personal loan or a house loan. If you are paying your loan and have carefully paid your instalments, you may get a top-up loan. Most Indian lenders provide top-up loans at the same interest rate as your current loan, with simple paperwork and a fast approval procedure. It may be simpler to consolidate your debt by taking a top-up loan if you have multiple home loans. If you don’t know where to start, reach out to an expert. Piramal Finance provides competitive interest rates, longer loan terms, and round-the-clock customer service. Reach out to the experts now to understand your top-up home loan eligibility.

08-11-2023

Personal Loan

Get Personal Loan For Self Employed Without ITR

Loans serve a wide range of purposes, from helping you fund your business to financing a marriage. For funding a business venture, there are multiple options, like business loans, MSME loans, various government schemes, etc. Likewise, for covering personal needs, a personal loan is the most widely chosen option among people. It is an unsecured form of loan that doesn’t require any collateral or security deposit and can be sanctioned to an individual best on the credentials. Personal loans can only be given to salaried individuals and self-employed individuals. However, getting a personal loan for a self-employed person without an ITR is not at all an easy job. Not all banks provide this privilege to all borrowers, and even if some do, there are special things you should consider. Is it possible for a self-employed individual to get a personal loan without ITR? The objective answer to this question is yes, but to get an elaborate answer, you have to glance through the article. This article is all about the process through which a self-employed individual can get a personal loan without ITR. [B-01] Can a self-employed individual apply for a personal loan without ITR? Well, the answer is yes, but there are certain additional requirements that one needs to look after. But before that, you have to understand the importance of ITR in a personal loan. An ITR acts as income proof, showing your income earned and the tax you paid on it in a financial year. For getting any type of loan, an ITR is a mandatory document that needs to be completed. Since the inception of the personal loan, it has always been easy for salaried individuals to apply for a loan. For self-employed people, getting a personal loan has been comparatively difficult as they have to go through lengthy paperwork and provide additional documents while applying. Since self-employed persons do not have a regular income, lenders see it as a risk to lend money to these individuals. You cannot obtain the minimum eligibility for a personal loan without an ITR. However, there are still some ways that will help you settle for a good credit line even if you lack ITR. How can self-employed individuals get a personal loan? Here are some points to consider before taking out a personal loan without ITR. Looking for a secured loan: As a personal loan is an unsecured loan, it means that you don’t have to pledge any of your assets to get a loan, provided that you have an ITR. But lenders find it risky to give loans to self-employed individuals who don’t have an ITR. However, to increase their trust, you can opt for a secured loan, which means you keep an asset as collateral and use it as a means to get the loan. By pledging your assets (property, stocks, etc.), you minimise the risk of defaulting and owing the lenders. Showing another proof of income: Instead of showing your ITR to the bank, you can replace it with your bank statement, which will show your credits, rental income, parental income, income from investments, etc. These are good substitutes for the ITR, and your lender might not find it difficult to disburse the loan amount. Improving your credit score: Your credit score plays a significant role in determining your eligibility and credibility for the loan. A good credit score is always a plus because it helps you get a larger loan at a lower rate of interest. A credit score of 750 or more is considered idle for most loans. You can improve your credit score by paying your bills when they are due, keeping your credit card balance low, paying your EMIs regularly, etc. Negotiations: Negotiation plays a decent role in deciding whether the lender trusts you regarding the loan repayment or not. Good negotiation skills will not only help you get a personal loan without ITR but will also help you establish a good relationship with the lender. For example, if you have a long-standing relationship with your bank, you have a better chance of obtaining a personal loan even if you lack an ITR. Clearing your dues on time: A good track record of your previous debts is a good way to make the lender believe that you are going to repay on time. If you have unpaid debts from the past, you should pay them right away. You can use that as a document when applying for a personal loan. For instance, if you have a credit card, you can use it to pay your bills, and you can show that as a record while availing of a loan. What are some things to keep in mind while getting a personal loan without ITR? Apart from covering the above-mentioned requirements, you should keep some things in mind. Not every lender allows this. You might balance it out with some other substitute documents and eligibility, but an ITR still plays an important role in showing your repayment eligibility. So, not every lender will be willing to take that risk. You might not get additional benefits. Even if you are sanctioned for the personal loan, you still pose some risk to the lender. As a result, you might be prevented from receiving certain perks that other borrowers with ITR will receive. [B-02] In conclusion For getting a personal loan without ITR, you need some additional documents and other substitute documents in place of income proof. Besides that, you have to focus on increasing your CIBIL score, clearing your debt, and aiming for a clean track record to minimize the risk you pose to the lenders regarding the repayment of the loan. If all that doesn’t work, you can choose a secured option, where you use collateral to get a personal loan. A secured loan is a better option to go with as it also prevents you from paying a higher interest rate. If you have more queries regarding personal loans for self-employed and salaried individuals and you want to know more about them, you should opt for services from Piramal Finance.

08-11-2023