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Mutual Funds

Advantages of Investing in Mutual Funds

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

08-11-2023

Personal Loan

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

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

08-11-2023

Business Loan

5 Ways to Tackle Losses in Time with a Business Loan

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

08-11-2023

Credit Score

All You Need to Know About the Importance of Credit Score In 2022

A high credit score makes life better. Your ability to achieve important milestones is strongly affected by this. These could be renting an apartment, purchasing a car, or getting a loan for your first home. It touches almost every aspect of your financial life. Even if you have zero credit history, this guide will cover all you need to learn about credit scores. Find out how to start building credit, whether you just graduated from high school or are starting later in life. [B-01] What is a Credit Score? A credit score consists of three digits. It shows your credit ratings. When you take out a loan or a credit card, it is the first thing that lenders look at. They can tell if you’ll be able to repay the loan on time or not by looking at this. So, keeping a high credit score is crucial. Pay all of your bills on time, regularly check your credit reports, and clear up any outstanding balances on your credit cards. With these, you can keep your credit score in good standing. What Information Does Your Credit Score Provide You with? Your credit score gives an outline of your credit standing. Take a look at the information your credit score can provide you with: Gives you details about your current credit situation When you review your credit report and score, it informs you of what needs to be your main focus. Your credit report contains an overview of all of your recent and previous credit transactions. You can find any errors that might have caused your score to drop by regularly reviewing your report. Helps you find the best rates on credit cards and loans People who have good credit are also qualified for the best loan and credit card offers. You should keep a credit score of at least 750 to get the best deals on credit products. Benefits of Having a Good Credit Score Fast Approval Everyone has financial needs. Today, loans can cover such demands. Every lender prefers a responsible borrower. If you have a good credit score, you may be able to get money quickly to pay for things you need. The money is deposited as soon as the lender agrees to the loan. Low-interest Rates If your credit score is high, you can expect to pay less interest on big purchases and loans like a car loan. A good credit score helps you to get loans with lower interest rates. Increased Credit Limit Lenders set loan amounts and credit card limits on monthly income. Credit scores can also affect a person’s borrowing capacity. Lenders know they’ll get their money back when you have a good credit score. People with good payment histories and high credit scores can get a bigger loan. Lenders may not want to give them more money if someone’s credit score is low. Approved for Premium Features on Your Credit Card Your income and credit score play a role in determining your credit card limit. Lenders will also review your credit score and report to figure out your eligibility. After that, they make decisions like on your credit card limit or letting you a rewards programme. Access to Balance Transfer Facility The Balance Transfer Facility allows users to save the most on their loans. Using this tool, people can move their main debt to a lender with a lower interest rate. Before transferring loan balances, lenders check the CIBIL score calculation of People. Those with good credit can easily use the Balance Transfer option. Those with bad credit may have trouble. Simplified Rental Approval Process Many landlords are using credit scores as part of the screening process. Your chances of getting a home are much lower if you have a low credit score. If you have good credit, finding a landlord willing to give you a chance to stay is much easier. Better Insurance Rates Insurance firms look at your credit history to determine your insurance risk. Insurance premiums tend to be more expensive for those with lower credit scores. If you have a good credit score, you will pay less for insurance than others for the same coverage. Some Ways to Boost Your Credit Score An ideal credit score is 750 or higher. It grants you access to the majority of loans. this is also subject to other factors like your income. If your credit score is nearer 900, the chances of your being accepted are higher. It is advisable to keep a high credit score. One never knows when one might need a loan. You don’t want to be in a position where you unexpectedly need a loan but are rejected because your score is low. These are some ways to consider if you want to keep a good credit score. Keep a good track record of repayment Pay off any loans or credit card balances you have on time and in full. Your credit score can reduce if you miss payments or pay them late. Paying off debts on time over a long period shows that you are responsible with credit. Don’t use too much of your credit The credit usage ratio shows how much credit has been used. Keeping your credit usage ratio at 30% or less shows that you don’t depend too much on credit. If you keep this, your credit score will go up. You’ll have a better chance of getting loans and credit in the future. Do not apply for loans from many places at once Don’t apply for and ask about loans from many different places at once. It shows that you depend only on credit. This increases the number of hard inquiries on your credit report. Both of these things hurt your credit score calculation. Avoid making partial credit card payments People can use credit cards to make minimum payments. These are typically 5% of the balance. This usually leads to people believing that the minimum payment is enough. But, the balance continues to earn interest at a rate of 3-4% per month. This is quite high. Also, as your credit card balance grows, so does your credit utilization. So does your credit score. Minimum payments result in high interest and a lower credit score. [B-02] Conclusion Your credit score is a major factor in most lending decisions. So, it is crucial to build and maintain a strong credit profile. Take the time to raise your credit score if you currently have a low one. It will help you later when you need a loan. For more information, you can visit the Piramal Finance website and explore their products and services.

08-11-2023

Home Loan

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

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

08-11-2023

Mutual Funds

When is the Good Time to Invest in Gold Mutual Fund

Are you interested in purchasing shares of a gold mutual fund? But you’re not sure what kinds of gold investments are best to make or if there is ever a good time to invest in them. Let’s take a closer look at some of the best gold mutual funds that are available for investment in India. In this section, we go into detail about the purpose of investing in a gold mutual fund, as well as its taxable status, the elements to consider, and the best time to do so. [B-01] What are gold mutual funds? There is a specific kind of mutual fund known as a “gold mutual fund.” It puts its money into gold bullion or other gold reserves. Gold mining firms, gold bullion, and mining company stocks are the most common places to put your money without actually needing to get the thing itself. Mutual funds that invest in gold are a type of open-ended investment vehicle that uses the units issued by an exchange-traded fund (ETF) that invests in gold mutual funds. The value of the underlying asset is tied directly to the price of gold because it is stored as actual gold. One further application for these funds is as a hedge against the risk of an economic downturn. Some 10% to 20% of a diversified portfolio is often put into gold mutual funds to protect against the market’s ups and downs. What is the purpose of gold funds? The two main goals of these investments are wealth creation throughout the investing tenor and protection during market downturns. Gold’s price fluctuations have a significant impact on the performance of the stocks that are tied to it. For instance, a relatively little shift in the price of gold on the international market can have a disproportionately large impact on the performance of the company that is tied to it. Putting your money into the best gold mutual funds can be a good idea because their returns are often higher than those of the precious metal itself. The returns on long-term (8 years or more) gold mutual funds are determined by the current market price of gold. If gold prices rise by the time they are redeemed, the investor could see a sizable profit. Taxability of gold mutual funds Investors in gold mutual funds in India may be subject to taxes. The investors may be subject to additional taxes if the time between their initial investment and their eventual redemption is less than three years. The money earned is added to the investor’s other sources of income to determine their taxable total. ROI with a tenor of more than three years is subject to a lower rate of taxation (20%) and indexation requirements (indexation norms reduce this rate to 10%). In addition to any regular taxes owed, CESS may also be required. Long-term investments in gold ETFs do not incur capital gains tax. Neither the maturity nor the trading of gold mutual funds is subject to tax deduction at source by the Indian Income Tax Department. Who should invest in gold funds? Mutual funds that invest in gold are a good choice for those who want to reduce their overall portfolio risk. Due to SEBI oversight, investing in mutual funds is less dangerous. Gold bullion is a tangible asset that is relatively immune to the ebb and flow of financial markets. The money is being put to work here. Therefore, it is appropriate for moderate and conservative investors alike. Gold mutual funds are another option for those wishing to invest tax-efficiently. These investments are exempt from TDS and are subject exclusively to the taxes associated with the purchase and sale of jewellery. Factors determining the fluctuation in gold prices Gold is believed to have a negative association with stocks. Investors seek the safety of gold when the stock market drops because of a faltering economy or in catastrophic conditions like a global epidemic. Given the state of the market, this makes sense. To safeguard their wealth from the global pandemic and lockout circumstances, most investors sold their equity holdings and bought gold ETFs. The value of the dollar relative to gold mutual funds tends to go down. Gold mutual fund prices go up as the dollar’s worth goes down and vice versa. Gold prices around the world are quoted in dollars, so a drop in the value of the USD would have a positive effect on the value of most other currencies. So, now that you know what drives the ups and downs of gold mutual fund prices, you can assess which gold mutual fund is best for you. When is the right time to invest in a gold mutual fund? Gold can protect your wealth during periods of market uncertainty. But it can’t be your primary holding. For both long-term and short-term goals, you should have a core portfolio. Depending on your level of comfort with risk, you may want to look into equity and debt funds as potential vehicles for achieving these goals. Gold mutual funds are a good way to spread out your portfolio’s exposure to risk, but you shouldn’t count on earning as much as you did last year. Gold mutual fund holdings should make up no more than 10% of a diversified portfolio. Gold ETFs may offer low returns during times of economic growth. Those who invest in gold mutual funds do so in the hopes of hedging against a decline in the stock market. Don’t invest unless you’re sure you can reach this goal, or you might be let down. [B-02] Summing-up: The purpose of this article is to give a comprehensive examination of the best time to invest in gold mutual funds. Gold can be a good inflation hedge and portfolio diversifier, but it may not be the ideal choice if you’re looking to the future. It’s important to first determine how the gold fund will interact with your other investments. Apply for the best gold mutual funds, compare interest rates and features across banks, and get the best deal. Investment Reliable does not offer financial advice, but we do provide unbiased information and evaluations on trading, investing, and finance. Users ought to always carry out their research. Also visit Piramal Finance, which has more in-depth, educational, financial-related articles.

08-11-2023

Home Loan

All the Deductions You Need to Know on Home Loans under Section 24

There are many advantages to being a homeowner. In addition to providing a lifetime of security, owning a home can be a wise investment because property values rise yearly. The best way to buy a house is with a home loan. The government provides several tax breaks and deductions on home loans, thus increasing the profitability and advantages of such loans. Section 24 of the Income Tax Act, Article 80C, Article 80EE, and Section 80EEA deal with tax rebate claims or deductions on home loans. This article gives you insight into home loan interest deductions under Section 24. [B-01] What are Tax Deductions? A tax deduction reduces the amount of taxes you must pay, in turn, reducing your tax burden. The amount of tax deduction is subtracted from your income, lowering your taxable income. This means that if your taxable income is minimal, your tax liability will also be lower. Property ownership also comes with tax obligations. A person’s real estate revenue is taxed considering their capacity to collect rent if the unit remains unsold. Under Section 24 of the Income Tax Act, the government offers several home loan reductions to help people buy property at reasonable rates. Tax breaks also motivate people to buy more assets and help them fulfil their dream of becoming homeowners. Home loan interest rates may be as low as 6.65%, and Section 24 offers several reductions even on that. Deductions on Home Loans under Section 24? Standard Deduction Standard deduction accounts for 30% of the determined net yearly value. This is permitted regardless of whether one has spent more or less money on the property. It also does not account for utility and maintenance expenses like power and water supply or insurance. The net yearly value of a self-occupied property is nil, so there is no standard deduction on such properties. Municipal Tax Deduction Municipal tax is the yearly sum paid to the local municipal body. Other taxes are calculated on the gross yearly value of the property, which, in turn, is calculated by subtracting the municipal tax from the net value of the property. A deduction on the municipal tax is allowed if the homeowner has paid the municipal tax within that fiscal year. Interest on a Home loan for real estate is deductible. If their own family lives in the house, homeowners are eligible for a deduction of up to Rs 2 lacs on the home loan interest. If the house is not occupied, the same rules apply. If the property is rented out, the complete amount of home loan interest is deducted. Section 24: Special Circumstances The following special circumstances are also covered under Section 24: The owner may claim exemptions for the interest if they do not inhabit the house. The extent of this exemption is not limited. If the house is unoccupied because the owner lives in another property (within or outside the city) where their workplace is located, they may only claim a tax credit on the interest up to Rs. 2 lacs. The brokerage or commission that must be paid to intermediary agents is not tax deductible. To receive the full tax deduction on the home loan interest amount, a person must acquire or complete the construction of the property within three years of taking out the loan. But one can claim a deduction of up to Rs 30,000 instead of Rs 2 lacs if the acquisition or construction is completed after three years. Section 24: Requirements for Deducting Interest from Income To be eligible for income tax deductions, a person must fulfil three requirements: To utilise the loan for building or buying a home, it must be applied for on or after April 1, 1999. One must have an interest certificate for the interest due on the loan obtained. The home must be built or bought within five years (three years until the Financial Year 2015–16) after the end of the financial year in which the loan was accepted. If the borrower applied for a loan to build, buy, rebuild, or repair a house before April 1, 1999, the interest deduction may be capped at Rs 30,000. Even though the deduction permitted by Section 24 can enable one to reduce their tax liabilities, there are several requirements they should be aware of: The only residential properties that qualify for the tax break under Section 24 are those that are fully constructed or those that are bought after the construction is finished. The pre-construction interest deduction is only permitted after the work is complete. Any tax benefits one earns under Section 24 are lost if they sell the house within five years of ownership. [B-02] Conclusion Land ownership is one of the most common long-term goals for most Indians. But home loan EMIs heavily deplete one’s income. So, a wise financial strategy is to make the most of the tax benefits that come with home loans. Borrowers of home loans may deduct interest under Sections 80C, 80EE, and 80EEA, in addition to Section 24. Piramal Finance, the leading source of financial services in India, has a range of blogs that help one plan their personal and home loan finances well.

08-11-2023

Business Loan

All the Pros and Cons of Online Business Loans You Need to Know

You can apply for an online business loan almost anywhere with internet access. If your business is accepted, you can get money to run, improve, or grow it. Traditional business loans were harder to get, took longer, and were less realistic than online business loans. If you want one, you’ll only have to put in a little work to get a loan. It’s a great choice if you’re a busy manager or business owner who can only get away from work for a short time. [B-01] Different Online Business Loan Types Not all online business loans are granted the same way. You can choose from different kinds, such as the ones below:- Term loan Term loans are similar to regular bank loans in many ways. A lender would give you a large amount of money all at once, and you would pay it back with interest by making monthly payments. Business credit lines Similarly to credit cards, business lines of credit allow you to make any withdrawals up to a certain credit limit. Finance for equipment It’s available for computers, cranes, dump trucks, ovens, and ovens to pay for all or part of their costs. The equipment would be used as security, making it possible for the borrower to get it if there were a chance they would not pay back the loan. Finance for Invoices When you receive invoice finance, a lender gives you a partial advance on your invoices. You will pay the advance and associated costs over a defined period. Advances to merchants A merchant cash advance is an advance of funds depending on the credit card purchases. Within 48 to 72 hours, you can receive the money you require. Pros of Online Business Loan The following are some of the best things about online business loans: Quick online applications Usually, it takes little time to apply for business loans online. After entering your personal or financial information on the computer, laptop, tablet, or cell phone, you can send your request and wait for a response in just a few minutes. Quick funding After you’ve been approved, some online business lenders will immediately put your money in your account. Depending on the bank you choose, you might get your money within 24 hours, a few business days, or even the same day you sign up. Simple criteria Even if your business is new or if you have bad credit, you might still be able to get an online business loan. Several lenders are willing to look at more than just your background or credit score and have loose rules. Lots of possibilities In today’s digital world, there are many ways to make extra money. Banks, credit unions, and online lenders offer them different rates, terms, and benefits. Prequalification Some lenders will let you know if you qualify for an online business loan before you apply. After you answer a few questions about yourself, a lender can tell if they will give you a loan. The best part is that getting prequalified won’t hurt your credit score, so it’s easy to think about your options and compare prices. Nothing Attached Most of the time, you can put up your business property or car as collateral. Since most loans for online businesses are unsecured, you won’t have to worry about losing a valuable asset if your business fails. Cons of Online Business Loan The following are some drawbacks of Online business loan: Little Loyalty discounts Lenders offered other services, like checking accounts, savings accounts, and loyalty rewards. Lenders who only offer online business loans rarely reward customers for sticking with them. Everything happens online Most of the time, online business loan providers want you to fill out the application process online. After putting in your application online, you’ll also get the results. You will also fill out your forms online if you accept an offer. Users who feel uncomfortable doing everything online could get a mortgage loan from a traditional lender instead. No individualised service When you apply for an online business loan, you can go to a different place. Building a relationship with the lender and getting personalised service might take a lot of work. The good news is that you can typically contact lenders who provide online business loans by phone, email, and chat. Security worries If you want to use an online business financing option, you must give your personal and financial information online. Even though most lenders take careful steps to ensure their websites are safe, security may still be an issue. Benefits of Online Business As the world moves online, everything has to be bigger, better, faster, and more. Therefore, why would obtaining a business loan be any different? Cheaper The cost of things like site visits, office/branch infrastructure, overhead, and so on into account when setting the interest rate on a loan. Applications also save money because your bureau score doesn’t have to be pulled for each lender mapping. If you apply offline, each lender you talk to will pull your credit report, making it more expensive to borrow money. Faster Online is the fastest way to get money for a business. Since eligibility checks are based on algorithms, they can be done in minutes or seconds. Also, you only send in a lot of paperwork after your application has been submitted and approved. Also, you can rest easy knowing that copies of your valuable records aren’t being passed around for no reason. As much document validation as possible is also done online to save time. Processing speed is very helpful if you need a loan quickly because of an emergency because offline sources would take longer and cost more. Objectivity Every request to borrow or get a loan must meet objective standards based on algorithms. When applicants go to lenders in person, they are often exposed to subjectivity. This gets rid of that. Personal information, location, the biases of the evaluator, and other irrelevant factors are not taken into account. [B-02] Conclusion Online business loan interest rates can be useful if you’re a small business owner looking for capital. They are a quick and simple way to finance almost any business expense. But before you do, weigh your choices to determine which is best for your specific circumstance. For more information, you can visit the Piramal Finance website and explore their products and services.

08-11-2023

Which Is A Better Investment Option, Gold Or Fixed Deposit?

An investment is made for a better and safer future. In recent times, the investment market has been very volatile. Because of this volatility, some people have temporarily stopped their investments or are looking for a safer investment option. If you also don’t want to take unnecessary risks, investing in low-risk assets might be a better option. Generally, fixed deposits (FDs) and gold investments are low-risk investments. Because these two investments ensure proper and timely returns, they are the most popular ones. Though the gold investment market is a little volatile, it has cultural significance in India. In a fixed deposit, you can deposit an exact sum of money in the bank, and upon maturity, you will get a lump sum with high interest. The money in an FD is invested at a fixed interest rate for the tenure of your choice. Now that we’ve defined gold investment and fixed deposits, let’s see which is a better investment option: gold or a fixed deposit. [B-01] Gold Investments vs. Fixed Deposits (FD) Risks: Both gold and FDs are considered low-risk or no-risk investments. While gold prices can fluctuate in the short run, traditionally, they have been the safest option. In terms of economics, gold has always acted as a hedge against inflation and helped prevent major currencies from losing their value. So, the investment in gold has its own unique value. If we talk about FDs, they have guaranteed returns and aren’t affected by market volatility. But the interest rate and returns largely depend on your chosen tenure. The longer your tenure, the more and higher the return on your FD. Rate of Return: Gold investments, being traditionally and culturally significant, offer a higher rate of return than FDs. Gold has always been considered one of the safest investment options. On the other hand, fixed deposits are invested for a fixed period at a fixed interest rate. The bank sets the interest rate at the time of opening the account. So, in FDs, the return is guaranteed, but the interest rate is lower than gold interest. The plus point of FDs is that banks provide slightly higher interest rates to senior citizens (0.50%–0.75%). Liquidity: Liquidity means the ability to convert your assets into cash or acquire cash (via a loan). When it comes to liquidity, nothing compares to gold. Investors and buyers always prefer gold. Over time, the investment in gold has become more diversified. Other than holding physical gold, now you can invest in digital gold, gold ETFs, gold mutual funds, and sovereign gold bonds, to name a few. These investment options give you excellent returns and liquidity without the headache of storing gold in your home. While the returns on gold are great, they largely depend on the market situation. So, you need to be informed before buying and selling gold. On the other hand, in FDs, the liquidity completely depends upon the bank in which your FD lies. The other downside of FD liquidity is that if you want to liquidate your FD before maturity, you may need to pay a penalty. So, try to find a bank with a penalty-free exit on your FD. Loan Against Investment: Both gold and FD investments offer a loan of up to 80% of the value. You can easily get a loan against your FD or gold investment from your bank or NBFC partner. The interest rate for this type of loan is usually lower than the interest rate for personal loans. Income Generation: Gold investments are designed as an income source. Gold is an asset that accumulates wealth over time and acts as a hedge against inflation. Whereas, with fixed deposits, you can choose the frequency at which you receive the interest. This interest can serve as an alternative income source for you. If you don’t wish to take the interest generated from the FD, you can reinvest it to get better returns upon maturity. Taxation: The returns gained from gold investments come under capital gains; thus, you can get indexation benefits. On the other hand, interest earned from FDs attracts taxation. Though banks offer tax-saving FDs, they come with a lock-in period of five years. You can’t break that deposit or withdraw from it during those five years. However, if your investments are under Rs. 1.5 lakh, you can claim tax exemption as per Section 80C of the 1961 IT Act. ParametersGold InvestmentFixed DepositRisksProne to some market riskNo Market RiskRate of ReturnHighLowLiquidityHighLowLoan Against Investment~80%~80%Income GenerationNoYesTaxationNoYes [B-02] Conclusion In our analysis, we found that gold investments have better returns but are prone to some market risks. On the other hand, we see that fixed deposits have lower returns but are more secure against fluctuations. Both of these investments provide guaranteed returns. So, if you want better tax benefits, more flexibility, and higher capital gains, you should go for gold investments. On the other hand, if you like to play it safe and receive interest on your investments, the fixed deposit would be a better option for you. You can fix your finances in a period of 7 days to 10 years. Therefore, depending on your liquidity requirements, financial goals, and risk-taking ability, choose the right investment mode for yourself. Visit Piramal Finance’s official website to gain better investment insights. You can also read various blogs posted on their website. Do not forget to explore the various products and services they offer.

08-11-2023