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Business Loan

All You Need to Know about Business Loan Fees and Charges

If you want a business loan, you should be aware of the high fees that financial companies charge. Many fees come with business loans. Administrative fees, interest rates, document transaction fees, EMI bounces fees, prepayment fees, no opposition certificate fees, foreclosure fees, loan change fees, post-dated check charges, and many other fees are just some of the costs. So, when you ask a financial organisation for a property against loan, you should be told about all the fees. Now, let’s quickly go over the fees and costs that come with business financing. [B-01] A List of a Few Essential Fees Charges for Post Dated Cheques Fees for Late Payments Fee for Cancelling a Loan Payment in Advance Processor Charges Rate of Inflation Bounce Fees for Equated Monthly Instalments (EMIs) Charges for Post Dated Cheques Process Charge The amount that is charged for the Property Against Loan process is the processing fee. The administrative fees cover the cost of checking your personal or business credit score and the costs of running the business and making sure the loan is approved. So, the lender would take these costs out of the value of your loan before putting the money in your account. Because of this, administrative fees vary from one bank to the next. Inflation Rate in simple terms, the interest rate is the cost to the borrower during the loan. Interest rates are shown in terms of a percentage of the principal. It is called the Annual Percentage Rate and has been worked out monthly and yearly. Bounce Fees for Equated Monthly Instalments (EMIs) Don’t forget to pay your EMI on time. Both financial and non-financial organisations have rules that say you have to pay property against loan. Even EMI payments that aren’t paid on time hurt your CIBIL score, and you have to pay fines. This EMI bounces because either your signature needs to be corrected or you need more money in your account. Charges for Equated Monthly Instalments (EMI) Returned Checks If you don’t make your EMI payments on time, you will have to pay extra fees according to the rules of financial and non-financial institutions. Even when EMI payments are late, CIBIL scores go down, and harsh payments are made. This EMI bounces because either the signature needs to be corrected or there needs to be more money in the account. Online Convenience Cost You must pay a fee to use this service to get your business loan online. You can use the user ID or password the lender gives you when you agree to the loan terms. But now that many financial companies have apps that let you check the status of a property against loan, you don’t have to pay a fee. Charges for Foreclosure or Prepayment If your business loan is foreclosed, you must make one big payment instead of the monthly EMI. They will ask you for a property as collateral for a loan. The foreclosure fee is based on how much the loan was for. But right now, some financial organisations pay NO advance fees. Let’s break down the following sentence: Let’s say you take out a business loan because you need money to grow your company. With the help of business loans, your business will grow and start making money. In that case, you get the full amount of money for the property against loan before the term is up. Charges for Reviewing Documents This is the cost to the lender of processing the property against loan application papers. The document fee takes care of the employee’s fees. So, this cost will depend on how much you borrow. When processing a loan, a bank might charge basic charges. Prepayment Advice for Business Loans It’s smart to agree to pay off a business loan before it’s due. If handled right, prepayments can save the company a lot of money. But prepaying without enough planning could cause cash flow problems that could hurt the business. Take a look at these tips for paying off business loans early to learn how to avoid these problems. The optimal time to prepay the loan must be based on the project’s cash flow. Avoid prepayments even during leaner months of the business cycle. Before making a prepayment, consult the amortisation plan. Verify any appropriate prepayment penalties. Benefits and Drawbacks of Business Loan Foreclosure Foreclosure is the legal process by which a lender tries to get the money owed on a missed payment by buying or selling the property used as collateral for the loan. A borrower usually defaults when they miss a certain number of payments each month. Still, it could happen if the borrower follows the other rules of the mortgage contract. When a business, usually a bank, forecloses, it takes back property bought with money borrowed but not paid back as promised. It is important to eliminate corporate obligations to keep a healthy working capital reserve. This is only sometimes a good choice. So, business owners should know the pros and cons of such ventures. See this table for a quick look at everything. It offers low-interest business loans that are cheaper than what other lenders offer. This makes it easier for our clients to make good decisions. Pros Reduces interest Makes current liabilities smaller Cons Puts pressure on cash flow Attracts a charge of foreclosure [B-02] Conclusion A company can get a business loan to pay for costs it can’t cover on its own. Some business owners use business loans to pay for salaries and wages when they start a new business. On the other hand, some people lend money for office supplies, inventory, and new business ideas. Lenders want to know how the money will be used, so business owners must ensure they have a thorough plan. To avoid having your property against loan application turned down, it’s important to make a good first impression on lenders. Businesses can borrow money in many different ways. To learn more about these, you can visit Piramal Finance and make an informed decision.

08-11-2023

Business Loan

All You Need to Know About Benefits of MSME Business Loan

Every small business will need help with money at some point. Most Micro, Small, and Medium-Sized Enterprises (MSMEs) usually need financial help to move up the growth curve. The money might be needed to cover operating costs, improve infrastructure, or buy the right tools. The money that comes depends on the owner’s judgement and priorities. Many organisations have access to different ways to borrow money to get the funds they need. However, when it comes to MSMEs, an MSME business loan in India is the primary way used to meet financial issues. [B-01] What is an MSME Business Loan? Micro, small, and medium enterprises (MSMEs) can get an MSME loan to start a business, grow an existing one, or pay for other business costs. Loans for MSMEs were often easy to get. But you must meet some requirements to qualify for this kind of loan. According to the Government of India and the RBI, MSME loans are “loans for commercial firms to help with financial, infrastructure, and other sectors.” Banks give out these loans through government programs and the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). The Indian government set up the Ministry of MSME and SIDBI to make it easier for loans to go to the MSME sector without using security. This plan says that the lender must: Offer to look at the project’s viability and use the financed resources as the main security for the loan. If an MSME unit doesn’t pay back a loan, the Credit Guarantee Scheme (CGS) will pay up to 85% of the amount owed to cover the lender’s loss. For a business to get an MSME loan, it must meet certain requirements spelt out in the program. Benefits of MSME business loan Until recently, obtaining an MSME loan required a trip to the lender’s office. Meanwhile, several lenders have automated this borrowing procedure for their clients because of the banking industry’s growing use of technology. Consequently, applying for an MSME business loan is now simple and convenient from home. Applying online for a digital company loan has numerous advantages. Among them are: No conditions associated To get an MSME business loan, business owners don’t need to put up any collateral. Small businesses don’t have a lot of assets, so they can’t use their stock as collateral. This is why this happens. Putting their valuable resources up as collateral with banks in exchange for cash could hurt their output if something goes wrong. Accessibility Timing is crucial, especially if a company has an unplanned disaster and needs money immediately. In reality, sometimes needing more resources makes it hard to run a business. This is why SME business loans are a good idea. Getting an MSME business loan is easy and doesn’t cause any trouble. There is also less paperwork to fill out, and the loan amount is quickly distributed. Loan application process without paper To get a loan, you must show the lender many different things. During the online loan registration process, you can use the lender’s website to send the lender all the necessary paperwork. You must keep a paper trail and make the loan application process easier. If you don’t have digital copies of the required documents, you could scan them and upload them as pdf or jpeg files to the lender’s website. Also, to keep the application process from getting stuck, ensure the documents you send are clear and easy for the borrower to understand. Unsecured type of borrowing MSME loans are not like most business loans because they are not secured. It means you don’t have to give the lender anything in return for credit. Because of this, MSME business loans are some of the easiest business loans in India to get. Protected MSME loans are also available from several lenders. You could put something up as collateral to lower the cost of the loan. The best MSME business loan for you will depend on the lender’s terms and your ability to pay back the debt. A flexible payback period to make it easier: Before applying for a loan, one of the most important things to think about is how easy it will be to pay it back. When the debtors have a reasonable amount of time to pay back their debt, they can better keep up with their payments and avoid defaulting. In this way, the repayment terms of an MSME business loan are flexible, which lets a business owner better plan his budget. Short-term commitment: Small businesses often use MSME business loans to pay for their immediate needs. This method gives the borrower some freedom because there is no long-term commitment. A short-term commitment also lets the administration manage working capital and use resources in the best way possible. When should one apply for an MSME business loan? You’re buying land so you can start a business. You’re putting money into a factory. You are buying things for a factory, like a machinery and other things. You buy raw materials to meet the capital needs of your business. It would help if you paid your workers’ wages, bills, and debts. You want your business to grow. You need money to pay for marketing and advertising. For the organization to be fixed up, money is needed. It is easy and quick to get an MSME business loan. Most lenders will give you the loan money quickly as long as you have all the paperwork in order and have shown that you can be trusted. There is also little information. Some lenders say that the approval process takes no more than a few hours. [B-02] Conclusion The interest rates on MSME business loans are low, so it only takes a small amount to repay them. Compared to other conservative financial products, it helps you save money. Most MSME loans also don’t need any security. Small businesses often use these loans to meet immediate needs. This gives the borrower some freedom because there is no long-term commitment. With a short-term agreement, you can keep track of your cash flow or use your assets well. To learn more about these, you can visit Piramal Finance and make an informed decision.

08-11-2023

Electronics

7 Key Factors to Check Before Buying a Stock

To earn money by buying stocks in the share market, you must prepare ahead of time and maintain discipline in the face of temptation. If you choose to invest in stocks, making sensible judgments might pay off in the long term. If you want to buy from the share market, you need to study and assess them before you buy any. As sensible as investing in the stock market seems, not all people can select the right stocks and profit from them. Here are seven things to keep in mind to make a wise choice. [B-01] What Exactly are Stocks? A stock, also known as equity, is a form of stock that represents ownership of a fraction of the issuing firm. Shares, also referred to as stock units, entitle their holders to a portion of the firm’s profits based on the number of shares they own. Most investors’ portfolios are comprised of stocks, primarily purchased and sold on stock markets. New rules must be followed throughout stock trades to protect investors from unfair practices. How to Pick Stocks in the Share Market: 7 Aspects to Keep in Mind Time Frame Before purchasing a stock, you must first know your timetable because it is a major factor in deciding whether or not to do so. You can choose a short-, middle-, or long-term investing period based on your money goals. Short-Term Any investment you intend to hold for less than a year is considered short-term. The best investments to make if you intend to hold a stock for less than a year are blue chip stocks that pay dividends. Mid-Term You intend to hold a mid-term asset for between one and ten years. You should invest in high quality stocks from emerging share markets with a modest level of risk for midterm investing. Long-Term All assets you intend to hold for more than ten years are taken as long-term assets. These assets can get you a sizable return and have time to recover if something goes wrong. Investment Approach Some vital tactics that good investors employ are listed below: Value Investing Warren Buffett’s approach to making a lot more money in the stock market is to buy undervalued shares of rival companies. Growth Investing It involves buying stocks whose earnings increase consistently along with the share market. This kind of investor thinks the upward trend in the share market will last and present a chance for profit. Income Investing Last but not least, people ought to hunt for high-quality shares that offer sizable dividends. Stock dividends can result in income that can be spent or reinvested. Before buying stock in the share market, a plan is vital. Liquidity An asset’s liquidity is defined as how easily it can be sold or turned into cash. Both stock exchange sales of an instrument at maturity and borrowing can provide liquidity. A fund’s liquidity can be judged using the following criteria: Lock-in Periods for Assets A lock-in period is a time frame in the investment cycle during which the investor is prohibited from liquidating the funds. Expenses Related to Selling an Investment These expenses include the following: Brokerage Brokerage fees are what the broker charges the investor for helping to complete the transaction. The rates, or brokerage fees, vary from one broker to the next. Because of fierce competition and low-cost online trading platforms, stock brokers are now responsible for as little as 0.1% to 0.25% of transaction costs. Tax on Securities Trading The purchase and sale of securities listed on stock exchanges are subject to the Securities Transaction Tax, or STT. STT is usually calculated as 0.001% of the sale price of a mutual fund and 0.1% of the cost of a share market transaction. Redeemed Item Fees At the time of the sale of the mutual fund’s units, mutual funds may charge the investor a redemption fee. The points of sales that go toward this fee are charged. Typically, redemption fees range from 0.25 to 1% of the redemption cost. Business Size The risk you take when buying depends greatly on the size of the firm you would like to invest in. It is critical to consider this before purchasing stocks, both in terms of time and risk tolerance. Volatility It describes how much a share’s price or the value of another financial asset can fluctuate. Share market stocks with high volatility experience rapid ups and downs, while stocks with low volatility experience slower ups and downs. Equities-Focused Funds This is mostly made up of stocks with a small amount of debt. Though not as high as true equity, such funds experience high volatility. Devoted to Debt This mainly consists of debt instruments, with a smaller portion going to equity. These funds are more volatile than debt tools but with lower volatility. Growth in Revenue and Earnings You must invest in expanding firms on the share market if you want to profit from stocks. Examining a firm’s revenue and earnings is the best way to tell if it is expanding. It’s important to consider both earnings and revenue because firms can find it difficult to inflate both. For instance, a business that wants to increase sales may spend more on advertising. As a result, although its revenue will increase, its profitability will suffer, resulting in declining earnings. Ownership Pattern You should learn about a firm’s shareholder model before investing in its stock. Firms with investors who own vital firm stock may prosper in the long run. Investors ought to fund multi-stakeholder firms as well as domestic and foreign investors. [B-02] Conclusion It is possible to be persuaded to buy stock in a company just because you know its name or were told by a credible source. This tactic, though, may reduce your chances of creating a healthy return and raise your risk of suffering a loss. Thorough research is always vital in the share market. Investing for the long term, taking advantage of dividends, and finding stocks with a track record of success are some ways to protect your assets. Risky and aggressive trading tactics should be avoided if you need more time. You can visit the Piramal Finance website to learn more about the share market and explore their products and services.

08-11-2023

Home Loan

All You Need to Know about How Interest Rates for Home Loans Decided in India

The interest rate on a home loan is the annual percentage rate (APR). A lender or firm charges it for borrowing money. How much you can borrow for a house loan depends on many factors. Such as the interest rate offered by financial and non-financial firms. The EMIs you must pay to the lender are based on the interest rate charged. Lenders set their rates in tune with the repo rate. Let’s read the article to learn more about loans against property interest rates. [B-01] What is a Home Loan? Loans against property interest rates are different. It also differs depending on the individual. Even a slight increase in the interest rate on a house loan can change the interest rate. The lending institution will charge interest when you apply for a home loan. It is levied for using the money to purchase a property. A home loan’s interest rate can be viewed as the expense of getting a loan. With EMIs, you can spread out the cost of your loan’s interest. You should know how a home’s interest is determined before applying for one. Factors that determine loan on property interest rates Repo Rate The rate at which the Reserve Bank of India lends money to other banks is the Repo Rate. The lease rate at which a bank obtains a loan against property interest rates is passed on to the end user. Therefore, consumers’ interest rate is inversely related to the repo rate. Reverse Repo Rate The Reserve Bank of India can borrow funds from commercial banks at RRR. Lending money to the RBI becomes more appealing if the Reverse Repo Rate is high. It will result in cheaper interest rates for its clientele. Credit Rating The bank will always look at your credit history when you apply for a mortgage. This gives the bank information about your creditworthiness and helps them evaluate if you pose a high risk as a borrower. There is a direct correlation between a borrower’s credit rating and the terms of their mortgage. A credit score is a three-digit number that indicates your financial health based on various characteristics like your payment history, credit history duration, total debt, and more. Prime Lending Rate (PLR) Banks use the Prime Lending Rate (PLR) as a reference rate for establishing interest rates for their various products. The following format is used by several banks when displaying interest rates:- PLR + 0.5%. An 8% PLR means a bank’s home loan against property interest rates will give 8.50% Cash Reserve Ratio (CRR) The required reserve ratio (RRR) refers to the minimum proportion of deposits a bank must set aside as cash. This may be in the form of cash or RBI deposits. When the CRR is high, the interest rate charged to the customer is also high. This is because raising the CRR limits the available cash flow in the economy. Statutory Liquidity Ratio (SLR) A commercial bank’s mandatory reserve is known as the SLR. Gold, government bonds, or any other safe investment can be used to store SLR. Once the SLR is achieved, a bank may only extend credit to its customers. Rate of Interest Used as a Measure of Default on Prime Loans (BPLR) A bank’s lending rate to its customers is known as its Base Prime Lending Rate (BPLR). Given that banks were constantly breaching BPLR in the form of exceptionally low-interest loans, the RBI decided to replace it. In other words, no bank will be permitted to offer loans at interest rates lower than the BPLR. This affects the interest rate a bank is willing to give a customer. A higher BPLR means a higher interest rate for the customer. Quick Points on Reducing Loan Against Property Interest Rates Pick the minimum loan period The home loan length is a major factor in the total interest you will pay. A lower EMI can be obtained by increasing the loan’s tenure; however, this will result in higher interest payments. Increase initial payment Buying a house should be done methodically for the best results. If you save enough for a higher down payment, you’ll be able to borrow a smaller amount at a much more favourable interest rate. Maintain a good credit score. Credit scores in the 750+ range are generally regarded as excellent. How responsible you are with money is reflected in your credit score. When you have a good credit score, lenders will see you as a reliable borrower and give you a better interest rate on a loan. Opt for a home loan transfer If you feel that the lender is giving a raw deal, ask them to lower the interest rate. Lenders always prefer to settle with loyal customers. You can ask your bank to match a lower interest rate offered by a competitor. You can also ask for a review of your credit score. The next step is to decide whether to switch lenders for the loan. Find a different lender with a more suitable loan against property interest rates. Always watch out for any other fees they may charge. Annually evaluate EMIs Few firms will allow you to negotiate yearly EMI. You may decide to raise your EMI. It is based on a raise in salary. At first, this increase may be a burden. Sooner, the tenure will become short. Finally, all these will affect lower interest rates. [B-02] Conclusion The above article has intended to solve most of the queries. The questions related to loans against property interest rates have been answered in detail. There are factors like steady and lengthy more importantly, though, is a steady and lengthy track record of employment. The likelihood of getting a loan increases if you have a stable job and a growing salary. The desire to be a homeowner has made home loans an integral part of our society. Today is a great time to buy a house because home interest rates are at historic lows. For more details, visit the Piramal Finance website and get assured assistance.

08-11-2023

Home Loan

Who is Eligible for Loan Against Property and What are the Documents Required

A loan against property (LAP) is a type of secured loan. It allows you to use your property as collateral to borrow a lump sum of money. The loan amount is usually a percentage of the property’s value. It is typically used for debt consolidation, business expansion, or other large investments. However, there are a few loans against property eligibility criteria that you must meet to apply for this credit. To be eligible for a loan against property, you must also have certain documents. The eligibility criteria and documents required vary from lender to lender. Generally, you will need to be at least 21 years old, have a regular income, and own a property in India to use as collateral. Keep reading to learn more about the loan against property eligibility and what documents are required. [B-01] What are the eligibility criteria for a loan against property? The amount you can derive from a loan against property is determined by the value of your property. You can also use the loan for any personal or business purpose. You can choose to repay the loan in EMIs over some time, depending on the loan tenure. To be eligible for a loan against property, you must meet the following criteria: You must be a resident of India. You must be between 21 and 65 years of age. You should be the rightful owner of the property that you offer as collateral. You should have a regular source of income and should either be a salaried employee or self-employed. You must have earned a minimum gross annual income (GAI) of INR 3 lakhs in the previous three years. Your CIBIL score must be 700 or above. What are the documents needed to apply for a loan against property? When you apply for a loan against property, you must keep the following documents on hand. This will help you take advantage of lower mortgage loan interest rates, along with other benefits. The documents you will need to furnish to the lender will depend on your status. This is why we have sections for different use cases. The documents that you will need are as follows: 1. If you are a salaried employee Proof of identity (any one) PAN Card Passport Driving Licence Voter’s ID Card Aadhaar Card Ration Card Proof of Address (any one) Aadhaar Card Voter’s ID Card Passport A utility bill (such as telephone, electricity, water, or gas bills), which is less than 2 months old Bank account statement LIC Policy Proof of Residence Ownership (any one) Documents related to the property Maintenance Bill Electricity Bill Proof of Income (any one) Payslip for the last two months IT Returns for the last 3 years Form 16 Promotion or increment letter, if any Proof of Job Continuity (any one) Current job appointment letter, in case you have spent more than 2 years in the same organisation Current employment certificate Certificate of experience Others Bank statements of your salary account for the last 6 months Documents of any existing loans, such as sanction letters and payment records Any proof of investment, such as fixed deposits, fixed assets, shares, etc. Copies of property documents, such as the sales deed, copy of the agreement, share certificate, latest maintenance bill, etc. Advance processing cheque, for processing of the loan documents 2. If you are self-employed or a businessman Proof of identity (any one) PAN Card Passport Driving Licence Voter’s ID Card Aadhaar Card Ration Card Proof of Address (any one) Aadhaar Card Voter’s ID Card Passport A utility bill (such as telephone, electricity, water, or gas bills), which is less than two months old Bank account statement LIC Policy Proof of Residence Ownership (any one) Property documentation Electricity Bill Maintenance Bill Proof of Business Ownership and Address (any one) Property documentation Maintenance Bill Electricity Bill Proof of business existence (any one) Sales Deed or Agreement Saral IT Copy (three years old) Copy of Tax Registration Company registration licence Proof of Income (any one) IT returns of the last three years Computation of income duty. It should have had due attestation by a chartered accountant Audited balance sheet Profit and Loss Accounts that include tax audit reports Form 16 Others Bank statements of your savings and current accounts. They should be for the last year. Documents for any existing loans. These include sanction letters and payment track records. Any proof of investment. They could be fixed deposits, fixed assets, shares, etc. Copies of property documents. They could be documents such as a sales deed, or a copy of the agreement. Also, share the certificate, the latest maintenance bill, etc. Advance processing cheque. It is needed for processing the loan documents for sanction. Passport-sized photograph. A professional degree certificate. It is needed if you are a professional. What are some of the benefits of a loan against property? Applying for a loan against property can be very beneficial for you. Some of the benefits that you can enjoy include: Lower rate of interest The loan against property interest rates is lower than personal loans. This is because this loan uses your property as collateral. Lower prepayment charges A loan against property also has low to zero prepayment charges. So, you can close your loan easily. Easily accessible You can easily get a loan from a bank if you meet the loan against property eligibility criteria. Lower EMI This loan also has a lower EMI. It is in addition to a low mortgage loan interest rate. A loan against property is available for a longer tenure. So its EMIs are lower than those of personal loans. Longer tenure A loan against property is available for a longer tenure. It can go up to 15 years in some cases. [B-02] The final word Applying for a loan against property can be stressful if the process is unknown or the applicant does not have an idea of the documents required. It is always best to check your loan against property eligibility first, followed by gathering the documents that you would require. For more information and guidance on loans against property, you can visit Piramal Finance.

08-11-2023

Home Loan

All You Need to Know about Stamp Duty and Registration Charges on Home Loan

When buying property, you must take care of many things. These might range from clearing debt to filing legal documentation. Stamp duty, registration fees, and other relevant requirements should be handled first. If these prerequisites are not cleared, you might face obstructions with your transaction. This article gives a summary of stamp duty and registration fees related to real estate transactions. [B-01] What is Stamp Duty? You are charged a property stamp when transferring ownership of your property to another person. According to Section 3 of the Indian Stamp Act,1899, you are charged this stamp fee to register your documentation. Every state has a varying stamp duty. Stamp duty is charged by the state authority to confirm your registration deal. A registration certificate with a stamp duty payment tag works as legal proof in court. It is to verify your ownership of the property. One can only claim ownership of a property once stamp duty is paid. So, stamp duty is critical when buying or selling property. It is often paid by the buyer regardless of the agreement, and in the event of a property exchange, both the seller and the buyer are required to bear the stamp duty equally. What Does Home Loan Stamp Duty Entail? Simply put, stamp duty is a valid tax levied on each sale or purchase of real estate to establish the property’s ownership. It is the tax levied on processing documents, including sale deeds, transfer deeds, and power of attorney. Once the stamp duty is paid, the buyer can claim these papers. The amount due varies from state to state. The actual amount and the type of property you buy define the specific charges due on each document. The sum is calculated using the property’s value. Several factors besides state laws affect the stamp duty of an asset. Factors that Influence the Cost of Stamp Duty The amount of your stamp duty depends on a variety of factors: Age of the PropertyThe amount of stamp duty you pay is affected by the age of the property in question. Age of OwnerSenior persons get a discount on stamp duty from almost all state governments. Thus, the amount of stamp duty fees you pay depends on your age. Gender of OwnerFemale homeowners also get a reduction in their stamp duty. This discount is only applied if their name was used when the property was registered. Type of PropertyCommercial buildings are more expensive than residential ones since they need more facilities, such as floor space and closed-circuit cameras. So, your stamp duty fees will be higher if your home is a commercial building. Location of the PropertyProperties located in suburban or municipal areas have a higher stamp duty. On the other hand, you will pay lower fees for properties outside towns and cities. AmenitiesThe state government is allowed to tax you for any extra amenities. These are checked when you register your property. Elevators, swimming pools, libraries, clubs, town halls, and gyms are a few of these facilities. How Much Does It Cost to Register a Property in India? The registration fee is the cost you pay to the government to get the property registered in your name. You need to pay this sum besides the stamp duty fees. The Indian Registration Act of 1908 includes legislation for property registration. The federal government of India sets the registration cost, making it a national standard. The charge usually equals 1% of the entire property value. But remember that the fee amount may vary based on the property. How Are Stamp Duty Fees on Home Loans Determined in India? A property’s value is used to find how much stamp duty should be paid. This fee is calculated on the property’s market value and some other elements. It also includes the property’s type, location, age, number of floors, etc. Property valuations are made public by the relevant state government. You can access this data through the registered stamp duty ready reckoned of your state. Then, the authorities compare the circle rate and the home loan stamp duty. After that, they choose to charge stamp duty on home loans based on the greater value. Stamp Duty Calculator The stamp duty calculator makes it simple to check your property’s stamp duty fees. By entering a few parameters, the online calculator provides you with an approximate cost. To find out the amount, enter the status of the property and its total value. Tax Advantages of Stamp Duty and Registration Fees According to Section 80C of the Indian Income Tax Act, your registered stamp duty and registration fee are tax-exempt. According to the tax code, you can claim a tax exemption of Rs 1.5 lacs when filing your income tax return. If you share the property with another owner, you can file tax returns and receive a tax credit. Joint ownership of a property can grant a tax exemption of up to Rs 1.5 lacs. [B-02] Conclusion To buy a house in an educated and clear manner, you must do proper research and plan your finances well. Now that you know about stamp duty and registration fees, you can also make an informed decision about all the home loan charges. Take into account these costs and fees when applying for a home loan on Piramal Finance. With Piramal Finance, you can find the best financial services and products and learn more about such topics.

08-11-2023

Personal Loan

Which One Is The Best, A Personal Loan Or A Bike Loan?

Bikes have become an important requirement for any Indian household. A bike is the best option, whether it is grocery shopping, visiting malls, or wandering around town. Besides being fuel-efficient, bikes also help beat the city traffic. However, it is never a good idea to spend all of your money at once. Instead, getting a loan would be much better if you are planning to purchase a bike. You can buy a bike on loan and repay the loan amount in equated monthly instalments (EMIs). Generally, there are two types of loans for purchasing a bike: a bike loan and a personal loan. Let’s see what these two loans are: The bike loan is specifically designed for purchasing a bike. A personal loan can be used for any purpose, including purchasing a bike. Now, you will also be wondering which one is best: a personal loan or a bike loan. So, let’s clear up your confusion. [B-01] Personal loan As mentioned earlier, a personal loan can be used for any purpose without mentioning it to the bank. Moreover, getting this type of loan is easier than getting a bike loan. Pros Lower interest rate: One of the major benefits of choosing a personal loan over a two-wheeler loan is its lower interest rate. The average interest rate for this loan is around 9% per year. This rate also varies depending on your credit score and the lender you have chosen. No down payment: A personal loan has no down payment or collateral requirement. Buying a bike with a personal loan gets you full financing for the bike’s on-road price. So, if you are running low on cash, getting a personal loan for a bike can help you. Minimum eligibility criteria: To qualify for a personal loan, you only need a certain amount of income and a decent credit score. If you want to get a personal loan quickly, having a good credit score will be the icing on the cake. Cons High processing fee: Banks and NBFC institutions charge some processing fees. This processing fee is usually a certain percentage of the total loan amount. The processing fee might be high for a personal loan. No repayment flexibility: While you can choose the repayment duration, you can’t change it once it is fixed. After choosing a duration, you need to pay the EMI without failing. Failing to do so attracts heavy penalties and, in some cases, legal action too. Bike Loan A bike loan is specially sanctioned for purchasing a bike and is a secured type of loan. It means the bike you purchase with the loan will be the collateral for the loan. Unless the loan is repaid in full, the bike will remain hypothecated. Pros Secured Loan: While it may seem a drawback to many, the secure nature of bike loans ensures you don’t face legal action for defaulting on the loan. If you miss too many EMIs, the lending partner will take the bike into their possession. You can get it back by paying the EMI plus the penalties imposed. Tax Benefits: You can claim tax benefits if you purchase a two-wheeler on a bike loan. For example, if you are using the bike for professional purposes, you can claim the interest on the loan as a business expense. Moreover, you can also claim deductions on fuel and maintenance of the bike as a business expense. Similarly, you can also claim benefits on the depreciation cost of the bike. Longer repayment Tenure: Earlier, the loan terms for bike loans were the same as personal loans. Nowadays, you can get an extended loan term on your bike loan. So, you can easily pay off the loan without making a dent in your monthly budget. Cons Higher interest rate: Usually, a bike or two-wheeler loan’s interest rate is higher than a personal loan. The interest rate on a two-wheeler loan depends on various factors, including your income, price, specifications, and vehicle age. If these factors don’t meet the bank’s lending policy, the bank may charge a high interest rate. Down payment: You will need to pay a down payment of around 10–20% of the bike’s on-road price. Strict eligibility criteria: Compared to personal loans, banks and NBFCs have strict eligibility criteria for two-wheeler loans. As the loans are secured in nature, you will need to produce quite a few documents. This could be a time-consuming process for you. Longer processing time: Bike loans require an average of 4-5 days of processing time. On the other hand, a personal loan is sanctioned on the same day without much hassle. Comparison Table ParameterPersonal LoanBike LoanPurpose Can be used for any legal purposeSanctioned especially for purchasing a bike or two-wheelerMaximum Sanctioned amountBased on credit score and activity, up to 40 lakhsLimited to the price of the bikeDown PaymentNoAnywhere between 10-20% of the on-road cost of the bikeCollateralNo Yes, the bike Interest rate (depending upon lender)10.5%-24% 10.5% onwardsLoan Tenure6 months to 5 yearsUp to 7 yearsLoan Sanction timeSame day processTake 4-5 daysDocumentationMinimalVarious [B-02] Conclusion When it comes to purchasing a bike, both financing models are quite popular. It depends on your preferences and requirements. If you don’t have any other loans, a personal loan will be much easier for you to get. On the other hand, if you are a salaried employee and need a bike for business purposes, going for a bike loan is a much better option for you. If you are looking for a financing option for your bike, reach out to Piramal Finance. They have various options, from personal loans to bike loans, and their experts will help you choose the right financing option for your dream bike. You can also read their blog and explore the various products and services they deal in.

08-11-2023

GST

Effects of GST on the Working Capital of Businesses

The Goods and Services Tax regime was introduced in the year 2017 across India. By far, it has been the most elaborate tax system introduced by the Indian Government. GST is a unified system of indirect taxation. Previous tax systems of VAT, Service Tax and Excise duty were abolished after GST was introduced. GST has now been in the country for more than five years and you can see the impact (both positive and negative) it has had on the economy so far. Business entities are the most impacted entities by GST in the economy. Let’s find out how GST impacts the working capital of businesses. [B-01] What is Working Capital? The difference between the current assets and liabilities of an entity is referred to as its working capital. It relates to the liquidity and short-term financial health of any business. Positive working capital is a situation when the current assets are more than the current liabilities. It shows that the company can fund its ongoing operations and also invest in future growth prospects. On the contrary, negative working capital is not a very favourable circumstance for any entity. This is the reason why working capital is called “oxygen” for any business. How GST affects the Working Capital of a Business? Raw Material: GST is levied on the raw material obtained by any manufacturer. When an importer imports raw material from a foreign country, it has to levy a tax of 18%. Before GST, this tax slab use to be 14%. This affects the liquidity of the business since more amount of money has to be paid as tax. Similarly, the service sector also has to pay a tax of 18%. Earlier this used to be 15%. It was earlier believed that GST will help businesses make tax savings but unfortunately that hasn’t been the case. Management of Inventory: Before the GST, businesses had to maintain multiple warehouses in separate states. The reason for the same was to avoid inter-state taxes. This whole process was very burdensome. It was also very expensive as maintenance required a lot of funds. For the entity to move goods to another state, it had to pay different taxes like octroi, CST, and other state-specific taxes. Besides, compliance with different state laws at the same time was another tedious job. However, with the implementation of GST, things have changed for good. Now, the entities only have to maintain four to five warehouses as per the need of their business and states. Also, upon the movement of goods from one state to another, the tax doesn’t have to be paid every time. This has led to huge tax savings as no tax has to be paid on the movement of goods from one state to another. It has helped in making savings in the working capital of businesses. The transit time of moving goods has also been reduced. There is no system of tax collection at state borders anymore. The inter-state movement of goods has become much easier now. Tax Credit: In the system of GST, the tax credit can be claimed by a business only at the time of the sale. However, the tax is levied at the time of the transfer of goods itself. There are a lot of ties when the time difference between the transfer of goods and their sale is quite lengthy. Till the time of sale, the business entities have to wait for the input tax credit. The waiting time for businesses adversely affects the working capital of the businesses as they have to pay the tax which leads to a fall in the working capital. The businesses are sometimes also forced to take a working capital loan. Inverted Duty: This is a scenario wherein the tax on inputs is higher than the tax on outputs. As a result, unutilized credit is accumulated. This used to exist under the previous provisions of taxes, especially in the pharmacy industry. However, things have changed under the GST regime as it allows for the Inverted Duty Structure. Businesses can claim unutilized input tax credits which have resulted due to Inverted duty. This has come as a big relief for businesses. Also, the process of refund has been simplified as 90% of the claim is given on a provisional basis and 10% after verification. This way the working capital of the businesses doesn’t get impacted negatively. They can utilize the working capital to meet the daily needs or other financial needs of the business. Service Sector: Earlier for the service sector, there was one unified act- Service Tax. It applied to the entire service sector of the country. In this, an entity could avail of the service tax credit on its services and use it in any state to set off its service tax liability. This is not the case under GST. Under the GST regime, the service provider has to register himself in the state in which he wishes to supply his services. The Act limits the setting off of the state GST and central GST of one state with another state. Sometimes, this could lead to a situation where the tax credit is held at a branch of one state. But then the service provider is unable to use it against the branch or tax liabilities of another state. Such a situation would impact the working capital of the service provider. The business will have to pay cash out of pocket. Such a situation cannot even be handled with the concept of an Input Service Distributor. [B-02] Conclusion GST is still new to the country and businesses are learning to get used to it and make the best use of its clauses. The tax regime has been implemented for the economic growth of the country and will certainly give a positive outcome in the future. Till then, the businesses have to learn to balance their working capital requirements in consonance with the clauses of the GST Act that affect the working capital. Visit Piramal Finance to learn more about GST and its impact on businesses. There are many blogs and articles on the topic that would enlighten you.

08-11-2023

Home Loan

All You Need to Know About Useful Benefits of Home Loan Balance Transfers

Everyone dreams of buying a home. It is considered an achievement when you own your own home. Yet, purchasing a home in India is a process that requires a certain amount of planning. Many people turn to housing loans to help them achieve their dream of purchasing a home. With housing loans, you can get the financing you need to buy a house or apartment. The most prominent benefit of housing loans is that you can purchase property you wish to own and set convenient EMIs spread out over a lengthy period. Many banks and NBFCs in India provide housing loans and it is vital to choose the best lender for you. An important part of the required research you must conduct is checking if home loan balance transfer options are provided. This is when you want to change your housing loan lender to a new lender because of better deals offered. [B-01] What Is A Home Loan Balance Transfer? Using a home loan balance transfer, you can switch or transfer your existing home loan lender to a different lender. To do this, you will have to create a new account with the new lender and close your housing loan with your previous lender. Housing loan refinancing is another name for home loan balance transfers. The home loan balance transfer option is helpful when receiving extra benefits from a new lender, such as: Better interest rates Lower pre-payment penalties Better customer service An extended tenure With home loan balance transfers, you can transfer your loan to a different lender for an amount equal to the remaining balance on your previous mortgage. Why Are Home Loan Balance Transfers Done? Making use of home loan balance transfers can help you lower the interest rate on your mortgage. Besides this, there are also other advantages such as pre-approved offers, a better repayment period, more flexible tenure and improved customer service. Here are the benefits of home loan balance transfers in detail: Less Interest The main advantage of home loan balance transfers is that you can reduce the interest rate on your housing loan. Therefore, you have the option to pay less interest on your housing loan, which will bring down your monthly payments. You can also use home loan balance transfers to transition from a fixed to a variable interest rate. Easier Conditions for Repayment People make home loan balance transfers if they have been able to negotiate better repayment conditions. Home loan repayment terms and conditions differ from lender to lender. For example, a new lender may be able to offer you housing loans with a better tenure than your current lender. This will make the EMIs easier to manage. Pre-Approved DealsLenders sometimes create pre-approved offers to attract new customers. They provide good interest rate savings on housing loans and other beneficial features. If you have found a lender with better pre-approved offers, you can consider home loan balance transfers to take advantage of such offers to pay off your housing loan easier or improve your borrowing experience. Increase Your Loan Amount You can opt for a home loan balance transfer to increase your loan amount if required. This may help you meet certain financial requirements that come up while purchasing your home. While some lenders provide top-up options for housing loans, others do not. If your current lender does not allow you to do this, you can consider a home loan balance transfer to a lender who will increase your loan amount. Better Customer ServiceIf the customer service provided by another lender is better than your current lender and you want to take advantage of these benefits, you can look into a home loan balance transfer. For example, you may find a lender that offers 24-hour customer support, online EMI payments or full account monitoring via a web portal or smartphone app. In this case, you can decide on a home loan balance transfer to get better customer service. How To Do A Home Loan Balance Transfer Home loan balance transfers are a simple process that requires little paperwork. Once you have done your research and decided on a lender, these are the steps to follow: Obtain a ‘no objection letter’ from your current lender on the home loan balance transfer. Ensure your important documents come back into your possession from your existing lender. Finalise the loan repayment from your new lender to your old one. Officially begin your new loan agreement with your new lender. Home Loan Balance Transfer Checklist Here is a checklist of things to consider before proceeding with a home loan balance transfer to a new lender: New Lender’s ReputationWhen another lender provides a lower interest rate, it is easy to get interested in this offer. But, before doing a home loan balance transfer, do your research on the reputation of the new lender and make sure they are well-established and reliable. Refinancing Fees vs AdvantagesYou must carefully weigh the pros and cons of a home loan balance transfer which includes finding out if there are any possible charges. It is important to only proceed with a home loan balance transfer if the benefits outweigh any disadvantages. Eligibility And DocumentsCheck your eligibility for a home loan balance transfer with the new lender before applying for the transfer or closing your existing loan. Check that you have all the required documents that the new lender requires as well. Terms and Conditions of New LenderBefore finalising your home loan bank transfer to a new lender, you must be informed of the new lender’s terms and conditions. Read the fine print, and only proceed if you are satisfied and the new lender meets all your conditions. [B-02] Conclusion Home loan bank transfers have many advantages. But, take your time to consider whether you should refinance your mortgage with a new lender. Before making this important financial decision, conduct thorough research and weigh the pros and cons. Be sure to reach out to your existing and your new lender for any questions that you may have since it is important to make a decision having all the information you need. Visit Piramal Finance for more information on home loan balance transfers and guidance on housing loans!

08-11-2023