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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
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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
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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
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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
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Personal Loan

Get a Personal Loan for Accidental Hospitalisation Treatment Expenses

Are instant personal loans easily available? Is this loan good? Is it safe? As the name suggests, an instant personal loan is designed to safeguard users. This is when they sustain injuries or lose their lives in an accident. All of the major insurance companies offer personal accident insurance. These affordable plans, nevertheless, should be considered in favour of more well-liked choices. When someone gets hurt in an accident that makes it impossible for them to go back to their old job, they have a permanent, irreversible disability. Most injuries that don’t get better after a year are permanent. Apply for a personal loan in such a scenario. [B-01] When is a person permanently unable to work due to an injury? Having issues with both eyes. Losing both legs. A limb is amputated, and one eye is blind. It isn’t easy to communicate. No hearing in either ear. Both ears are deaf, and they lost one leg. There is just one working eye and ear. Having no way to interact with anybody and being stripped of all physical components. Having trouble speaking and losing sight in one eye. Apply for a personal loan with zero problems. These diseases make it difficult for the covered person to carry out regular chores. Persistent partial disabilities include losing one’s ability to speak, see, or use one’s limbs. The instant personal loan would pay the policyholder a share of the sum covered by the policy terms. Payment for a complete temporary disability These chronic wounds will make it difficult for the covered person to work. They find it difficult to lead a regular life. Instant personal loans often give users a daily or weekly award in certain situations. A case-by-case analysis is used to determine the amount of compensation. It depends on the severity of the illness or damage. Instant personal loans provide extra incentives. They persuade clients to choose their plans over those other businesses offer. In certain cases, paying extra is required to get these advantages. Hospital bill-paying The instant personal loan may need to spend a lot of time in the hospital after being hurt in an accident. The insurance company gives a daily benefit to the insured person while they are in the hospital. Some insurance companies may give a set benefit amount, while others may change the amount. This depends on how bad the illness is. If an accident causes the person to be hospitalized, the instant personal loan will pay for all hospital and other medical costs. The insurance company will pay for medical care on a regular and predictable basis. Changes made to a vehicle or a space If a claim is made, the accident victim may have suffered injuries. These might make it impossible for them to do their daily tasks without help. Due to their handicap, the insured person may need to change their home or vehicle. For instance, a person without legs could need rails within their home and balancing wheels for their two-wheeler. The instant personal loan covers all of the modifications above under this benefit. Transportation for funerals The instant personal loan will pay for moving the insured’s body to the crematory if they are killed in an accident. Your insurance’s terms will outline how much you will get. The advantages of school for kids If the person makes a claim, the instant personal loan provider will provide each of their dependent children with a one-time payment. This is to help with college costs. The aspects that it covers are: Bone fractures If the insured has a bone fracture or other kind of bone damage due to an accident, the instant personal loan will pay a certain sum of money. Burns If the insured person is burned in an accident, the instant personal loan will pay a certain sum of money. Loans backed by a third party If the insured person dies too soon or gets permanently disabled, the personal loan will give them a lump sum to pay off their debts. Financial support for hospitalisation The covered person could need hospitalisation because of the severity of their wounds. The instant personal loan in this case pays the insured person’s hospital bills up to the amount promised. Protection during the relocation of the remains If the insured person dies, the plan will pay for the cost of getting their body back from the accident scene or hospital stay. Apply for a personal loan and use the money to pay for an ambulance to take the policyholder to the nearest hospital in case of an accident. This is true whether the ambulance has to be driven or flown. Emergency children’s education grant If the insured passes away or is rendered totally and permanently disabled, the insurance company will cover the cost of the dependent child’s college education. The personal loan decides how much is offered and how many kids are covered. ● Emergency family finances Some instant personal loans can lower your rates if you get personal accident insurance for many family members. Various insurance companies offer different discounts. Full coverage insurance If you renew your policy every year and don’t make any claims, the company that gives you instant personal loans will raise your total disability coverage by 5%, up to 25%. [B-02] Summing up Many fake websites don’t provide you with personalised advice. We give you unbiased information on trading, investing, and other financial issues. You should always do your research. This article does not offer financial advice. We only provide unbiased information and evaluations on trading, investing, and finance. Users ought to always carry out their research. Visit Piramal Finance for more in-depth, educational-related articles.
08-11-2023
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Other

All You Need to Know: What Is Debt Consolidation and How Does It Work?

Debt settlement is the process of taking out a new loan with a lower rate and using it to pay off other debts. If your credit score has improved since you took out your current loans or if you have trouble remembering payment dates, debt consolidating may be a great way to streamline loans while decreasing your monthly payments. One loan or credit card may be used to pay off many other loans, consolidating your debt payments. If you have one loan EMI rather than many, it may be easier to pay off your debt. Furthermore, you may even be able to negotiate a reduced interest rate with your lender. [B-01] What is debt consolidation? Simply put, debt consolidation is taking out a new loan to repay existing debt. When many debts are combined into one larger commitment, like a single loan, the payback terms are often more beneficial for the borrower. Some benefits include a lower interest rate, a smaller monthly payment, or possibly both. Debt consolidation can help you handle credit card debt, student loans, and other debt. How does debt consolidation work? The first stage in debt consolidation is to apply for a private loan, a credit card with a balance transfer, or another debt-consolidation product through banks or another lender. You can pay your other debts when you are consolidating a loan. Alternatively, you can request the loan amount in cash and pay off all outstanding debts. Many balance transfer credit cards provide a standard process for merging your present credit cards. After paying off your existing debts with the money from the new loan, you will have to pay one EMI on the new loan. Debt consolidating lowers your monthly payment amount by extending the loan terms. Consolidating loans helps those who struggle with managing money. Consolidation works by streamlining payments and improving budgeting. Many lenders collaborate with you if you are consolidating your debt. This is because it makes it easier for you to make on-time payments. This is favourable for all lenders. You will need a good credit score to be granted a loan with an interest rate lower than your present loans. If your current lender needs help finding a loan option or if you are not eligible for the options they offer, you can talk with another lender. Types of Debt Consolidation There are two primary types of debt consolidation loans: secured and unpaid. Your asset, such as a house or car, serves as security for a secured loan. The asset itself acts as collateral for the loan. The asset is seized if you cannot repay the loan. On the other hand, unsecured loans are not backed by any assets. They have higher interest rates and lower principal amounts. Loan interest rates are often lower than credit card debt interest rates. Moreover, the rates are fixed, which means they stay the same throughout the repayment period. How do you consolidate debts? There are many ways to collect your debts, including paying them all at once. A few are mentioned below. Loan for debt consolidation Lenders often offer specific loans for debt consolidation. These are types of personal loans created just for debt consolidation. Debt consolidation loans include a fixed interest rate and term to provide more reliable repayment terms. Debt management plans You can enrol in a debt management plan (DMP) to combine your outstanding debt. DMPs are often used to help repay credit card debt. As soon as you join the plan, you stop paying payments to your creditors. Instead, you make a lump sum monthly payment to a credit counselling service. Then, the amount is dispersed to your lenders by your credit counsellor. Loan consolidation for students The only purpose of these loans is to convert multiple student loans into one private loan with a single payment. This approach may be useful if you have multiple student loans with various services. House equity loan To combine debt with a home loan, you need to get a loan secured by the value of your home. The lender disburses the funds all at once. You are free to divide or pay off your debts with the amount. Therefore, since your property serves as security for the loan, you can be certified for a lower interest rate provided for debt-consolidating loans. Charge cards Another tactic is to transfer all credit card payments to a new card. The process is only used if the new card provides low or no interest rates. You can also use the debt transfer option on your existing credit card if it offers benefits. Pros and cons of debt consolidation Pros of debt consolidation Debt management is simplified by combining loans into a single, clear payment. The overall interest rate of your loans may be lowered by consolidating debt into a secured loan, a credit card balance with no interest, or a reduced personal loan. Fixed loan payments can help you pay off large credit card debt quickly. Cons of debt consolidation Lenders may charge fees for lending money, a balance transfer, or loan closing. Some lenders may ask for collateral. You may receive higher interest rates if you have poor credit scores. The tenure of the loan is longer. [B-02] Conclusion Debt consolidating is a simple and effective way of combining all your debt. This technique is helpful for those who do not have good financial management. However, you need a high credit score to combine your loans. You should consider consolidating your debt only if you have a steady income and can afford your monthly payments. You can also look at personal loans before consolidating your debt. If you don’t know where to start, Piramal Finance can help.
08-11-2023
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Other

Essential Financial Planning Steps in your 40s

Are you in your 40s? If yes, you’re probably considering investing in a SIP or a pension scheme. With the right financial planning, you will be on track to have enough money to support yourself once you stop working. Below, we’ll go over some essential financial planning steps for your 40s. However, do keep in mind this is just a starting point. But by following these guidelines, you’ll be well on your way to a more secure future. [B-01] Start Investing in NPS Scheme You should start investing in the national pension scheme as soon as possible. It will provide you with a steady income when you retire, which will help you live comfortably in your old age. There are two investment choices in the NPS scheme. These are: Active Pension Scheme Choice: Subscribers choose their investment portfolio from various options. Auto Pension Scheme Choice: Government chooses the investment portfolio on behalf of subscribers. If you want to go for the Active National Pension Scheme option, here are some tips to help you get started: Decide how you want to invest your money – in stocks, bonds, or a mix of both. Decide how often you want to contribute to your National Pension Scheme account. Monitor your account regularly to ensure your investments are performing as expected. The revised National pension scheme entry age is now 18-70 years. However, don’t wait too long to invest in a pension scheme! The longer you wait, the more difficult it will be to save enough money for retirement. Review Your Life Insurance Most people in their 40s should have a life insurance policy. This is the time to review your coverage and ensure it’s still appropriate for your needs. Consider increasing your coverage if you have a spouse and/or children who depend on you. Also, remember that your health will not be the same as you get older. So, it’s important to reevaluate your policy to ensure it meets your needs. Review Your Investments Your investment portfolio should be reviewed regularly to ensure it meets your needs. There are a few key things to review when assessing your investments: 1. Your asset allocation Your portfolio will include asset classes, such as stocks, bonds, and cash. Review asset allocations and ensure it aligns with your risk tolerance and investment goals. 2. Your portfolio performance You should also review your portfolio’s performance. See how it has fared compared to the market or your benchmark. This will help you determine whether you need to make any changes to your portfolio. 3. Your fees Fees can significantly impact your portfolio’s performance. Are you paying too much? Review your investment fees and ensure you get the most value for money. 4. Your portfolio’s diversification Your portfolio should be well-diversified to help reduce your risk. Ensure you’re not too heavily weighted in any asset class or sector. 5. Your investment goals Finally, review your investment goals. Do they align with your current and long-term plans? If your goals have changed, adjust your asset allocation and investment strategy accordingly. Make a Will No one likes to think about their death, but it’s important to have a will in place if something happens to you. A will lets you decide what happens to your belongings and dependents if you die. It can save your loved ones a lot of heartache (and money). Making a will is pretty simple. You can do it yourself with an online service or hire a lawyer. Either way, you’ll need to list your assets and decide who gets what. You’ll also need to choose a guardian for any minor children. Review Your Debts and Loans Your forties are a great time to take stock of your debts and loans. Having the plan to pay off any outstanding debts is important. It may involve consolidating your debts into one loan, refinancing your loans, or negotiating with your creditors. If you have any loans, such as a mortgage or car loan, now is also a good time to review the terms of these loans and see if you can get a better interest rate. You should plan to pay off any high-interest debt as quickly as possible. Invest in Health Insurance During your 40s, you should start to think about your health and life insurance needs. The best way to do this is to invest in a good health insurance plan that will cover you and your family in the event of an illness or injury. Doing so gives you peace of mind knowing that your family will be taken care of financially if something happens to you. Build an Emergency Fund If you’re in your 40s, you may feel the squeeze of living expenses and trying to save for retirement and an emergency fund. It can be tough, but it’s not impossible. Follow your expenditures for a month to identify areas where you might make savings. Remember, it takes time to create an emergency fund. So, stay patient because it’s worthwhile in the long run. [B-02] Key Takeaways When it comes to financial planning, your 40s are a critical decade. You need to start thinking about your long-term goals and how to achieve them. This includes saving for retirement, investing in a pension scheme, and taking out a life insurance policy. You must also start paying off your debts, such as your mortgage or credit card debts. This will help you to be in a better financial position when you retire. Are you looking for help managing your money? Do you need someone to help you plan for your future? Look no further than Piramal Finance services! We can help you create a budget, save for retirement, get a personal loan at zero prepayments, and invest your money wisely. Contact us today to get started!
08-11-2023
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Home Loan

Who Is Eligible For A Rural Housing Loan In India?

Building your own house is still like living a dream for many people. You often would have thought of having your own house but might not have achieved it yet. Want to know more about the rural housing loan and how to apply for it? Want to know what is the eligibility criteria and the interest rate for applying for a rural home loan? Well, then this article will make your work easier by providing you with all the information you need to know about rural housing loans. In this article, you will get to know about rural housing loans, their interest rates, and their eligibility criteria. [B-01] What is a rural housing loan and what is its aim? A rural housing loan is an initiative to provide you with financial assistance for helping you build your own house. You simply apply for it in a bank and the bank gives you the loan and you have to repay it in form of instalments over a set period. It focuses on the government’s motive of “affordable housing for all”. It is a financial instrument that applies to everyone, whether you are self-employed or a salaried individual. It can not only be taken to construct a new home but also you can use it to renovate your existing house. Interest rates for all types of rural housing loans range from 8.05 percent to 13.75 percent per annum. You will also be given a decent period to pay your interest, which often can be extended for a maximum period of 30 years. What are some of the benefits of a rural housing loan? Below mentioned are some of the exclusive features of a rural housing loan: Low-interest rate: The interest rate on rural housing home loans is often less and banks don’t charge you extra costs such as processing fees, penalties, etc. The interest rates vary from 8 percent to 13 percent in almost all banks. Quick approval: Just like personal loans, rural housing home loans are also quickly disbursed, often within 48 hours. In some cases, if your debt history and track record have been good and banks find that you can easily repay, then you might even get that sanctioned in less than 2 days. Flexible tenure: Often rural home loans provided by banks have a flexible tenure, which sometimes can even be stretched for 30 years. You can easily pay off a big amount in small instalments over 30 years. Easy eligibility: The eligibility criteria are easy and fast, and most people seem to qualify for them. Also, you only need to show some legal documents to navigate through this. Government subsidies: Government subsidies like the Pradhan Mantri Awas Yojana (PMAY) can help you get up to 2.67 lakh rupees if you are going to be a first-time homeowner. Low loan margin requirements: One advantage is that rural housing loans often have low loan margin requirements ranging from about 10 percent to 20 percent. What is the eligibility you must have to qualify for the rural housing loan? Here are the eligibilities you must have to apply for a rural housing loan: Nationality: The benchmark requirement is that you must be an Indian by origin to qualify for applying for a rural housing loan. Age limit: You must be at least 21 years old or above to be able to apply for a rural home loan. The upper limit of the age must be less than 70 years. Employment: You can be a salaried individual or a self-employed person to apply for a rural housing loan. You can also apply for it if you are an agriculturist, or you have any agricultural affair based in a rural area. Work experience: In whatever field you are working, you should at least have a minimum of three years of work experience to get a rural home loan. This varies from bank to bank, but three years can be taken as an average. Single or joint applicant: You can either be a single applicant, where you apply for the home loan for yourself or you can also be a joint application where you apply with other members of the family like your parents, siblings, wife, children, etc. Documentation requirements for a rural housing loan: Here is the list of documents that are required to apply for a rural housing loan in India: Your proof of identity: You have to show your identity proof through an Aadhar card, Voter-ID card, PAN card, or other KYC documents. Your proof of income: To show your income proof for eligibility for rural housing loans, you have to show your bank statements, IT returns, salary slips, credit history, etc., if you are not an agriculturist. In case you are an agriculturist, you have to show your last 6 months’ bank statements, legal documents of agricultural lands, etc. Documentation requirements vary from bank to bank, but your ID proof and your Income proof are mandatory. [B-02] Conclusion A rural housing loan can fulfil your dream of owning a house in your name, the very purpose for which it came into being. Before taking a loan, contact your bank executives regarding the dos and don’ts. You can also use a rural housing loan calculator to check how much loan you should be borrowing. If you want to know more about home loans, personal loans or corporate loans, visit Piramal Finance. They have many services and content regarding home loans, personal loans, loan calculators, investments, etc.
08-11-2023
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Other

Who Is Eligible For Provident Fund? PF, EPF & PPF Eligibility & Rules

The Provident Fund is a retirement savings scheme managed by India’s Employees’ Provident Fund Organisation (EPFO). Both employees and employers contribute to the fund, which can be used as a source of income during retirement. So, who is eligible for these different provident fund schemes? Read on to find out. [B-01] What is the Provident Fund? The Provident Fund (PF) is a retirement savings scheme managed by the Employees’ Provident Fund Organisation (EPFO). It is a mandatory contribution from both the employer and the employee and is typically a percentage of the employee’s salary. The PF corpus can buy annuity products or be withdrawn as a lump sum at retirement. India started the EPF plan in 1952 and is now the world’s largest social security organisation. It has over 50 million members and assets valued at more than Rs 10 trillion. The Employees’ Provident Funds and Miscellaneous Provisions Act of 1952 says that anyone who gets a salary can join the EPF scheme. This act covers people who work in both the public and private sectors. Most of the time, an employee’s EPF balance contribution is 12% of their salary, with 8.33% going to their PF account and 3.67% going to their pension scheme account. Employers also put the same amount into the PF accounts of their workers. Types of Provident Funds in India The Provident Fund (PF) scheme in India is divided into several types: Employee’s Provident Fund (EPF) and Public Provident Fund (PPF).Employee’s Provident Fund (EPF): The EPF is a retirement savings scheme that is mandatory for all salaried employees in India. It is managed by the Employees’ Provident Fund Organisation (EPFO).The employee contributes 12% of their monthly salary towards the EPF, while the employer contributes an additional 3%. The employee’s contribution is tax-free, while the employer’s contribution is taxable.Public Provident Fund (PPF): A Public Provident Fund (PPF) account is a long-term investment option offered by the Indian government. It offers several benefits, including tax-free returns and the safety of your investment.The PPF account can be opened at any designated bank or post office in India. The minimum amount you can deposit into your PPF account is Rs. 500 per year, and the maximum amount is Rs. 1,50,000 per year. Your deposits earn interest at a fixed rate of 7.9% per year. PF, EPF, and PPF Eligibility and Rules in India In India, the Employees’ Provident Fund Organisation (EPFO) regulates the employees’ Provident Fund (PF). Both public and private sector employees must contribute 12% of their basic salary towards PF. The contribution is divided equally between the employee and employer.The EPF can be used for various purposes, including retirement planning, medical expenses, and home loans. Employees can withdraw from their PF account after completing five years of service. However, certain rules and regulations must be followed when withdrawing from the PF account. If a worker has less than five years of service, they can only take out up to 50% of their PF balance. Employees can only withdraw up to 75% of their accumulated PF balance if they have more than five but less than 10 years of service. If a worker has worked for the company for more than 10 years, they can take out up to 100% of their PF balance. Withdrawals from the PF account are subject to income tax. Withdrawals from the PF account are also subject to a 10% withdrawal charge if the employee is younger than 60 years old. PF, EPF, and PPF Eligibility The Employees Provident Fund (EPF) and Public Provident Fund (PPF) are some of India’s most popular savings schemes. These schemes offer several benefits to employees and self-employed individuals, depending on their eligibility. Eligibility for Provident Fund (PF) To be eligible to join a provident fund, an employee must: Be a resident of India. Employed by a company that offers PF as a benefits scheme. Earn a basic salary of Rs 15,000 or more per month. Have completed at least one year of continuous service with the company. Eligibility for the Employee’s Provident Fund (EPF) To be eligible for the EPF, an employee must: Be aged between 18 and 54 years old. Be employed in an organisation with more than 20 employees. Have a basic monthly salary of Rs 15,000 or more. If an employee meets these criteria, they will be automatically enrolled in the EPF scheme and will have to contribute 12% of their monthly salary towards the fund. Their employer will also contribute 12% of the employee’s salary to the fund. How to apply for a provident fund? Applying for a Provident Fund (PF) account is simple and can be completed online. This step-by-step guide will help you apply for a PF account: Visit the EPFO website and click on the “Our Services” tab. Under the “Our Services” tab, select “For Employees” and “Online services for employees.” On the next page, select “Provident Fund” from the list of options. You will be redirected to the UAN Member Portal login page. Enter your UAN and password to log in. Once logged in, click the “Apply Online” link under the “Services” tab. Select the type of PF account you wish to apply for: general provident fund (GPF) or employee provident fund (EPF). Fill out the online application form with all the information that is asked for, such as your name, where you work, etc. Attach all the required documents and submit the form online. Once EPFO gets your application, it will be processed, and you’ll be given a PF account number. Withdrawal rules for a provident fund When it comes to withdrawing your provident fund, there are a few rules that you need to be aware of. Here are the withdrawal rules for the provident fund: You can only withdraw your provident fund when you reach the age of 55. You can only withdraw 50% of your provident fund balance. If you take money out of your provident fund before you turn 55, you will have to pay a 10% penalty. If you take money out of your provident fund after you turn 55, you won’t have to pay any fees for doing so early. You can only withdraw your provident fund once every three years. If you have more than one job, you can only withdraw your provident fund from one job at a time. [B-02] Conclusion The provident fund is an excellent retirement savings choice for Indian workers. It has a lot of economic advantages, including tax-free growth, and is supported by the government. Employees may contribute to the provident fund as soon as they begin working and continue to do so until they retire. If you have doubts about your eligibility for a provident fund, it is best to consult a financial expert like Piramal Finance. They can help you understand the rules and laws about PFs in India and give you advice on the best way to handle your situation.
08-11-2023
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