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Derivatives Definition, Types, and Trading

Derivatives are financial instruments that investors use to transfer asset risks to other willing investors. The derivatives definition is such that it allows for a financial contract to exist between two parties. Each party has something to offer to the other one, and this is laid out clearly in the contract. For instance, if you have a stock that might devalue in the future, you use a derivative to transfer this risk to another party. [B-01] Derivatives Meaning By definition, a derivative is a financial contract. Its value depends on an underlying asset or a group of assets. This contract is entered into by two or more entities that can trade with each other. Derivative trading can be done on several assets, each with its individual risks. The fluctuations in the prices of the underlying assets determine the derivatives’ price. Derivative trading can give you access to certain markets. You may also trade them to hedge against risks. Depending on the types of derivatives, they can mitigate risk or assume risk. The former is called hedging, while the latter is called speculation. Experts consider derivatives as an advanced form of investing. In this regard, the most commonly used underlying assets are bonds, commodities, stocks, interest rates, currencies, and market indexes. Types of Derivatives The derivatives definition becomes even more clear if you understand its different types. Depending on the contract, there can be four types of derivatives – Options: The derivative definition for this type is that you can sell or buy an underlying asset at a fixed price in a given period of time. The buyer of the derivative, however, is not obliged to exercise the option. Option derivatives usually come with an expiry date. In the Indian market, options expire within weeks or months. Future: Also called future deliver, this type of derivative allows you to buy or sell assets at an agreed-upon price on a specified date. These are standardized contracts whose values are marked to market on a daily basis. This implies that the profit or loss incurred by you or the other party is calculated and adjusted in their margin amount daily. Future contracts also have an expiry date which is typically a month in the Indian market. Forwards: These are custom derivatives where the two parties decide a future date for the contract settlement. The buyer of the contract is under obligation to fulfil it. This renders it a similar derivative meaning as future contracts. Forwards are available over the counter (OTC), and are not marked to market. The risk involved for both parties is greater in forwards that in any other type of derivative. Swaps: With a swap contract, you can enter into a cash flow exchange with another party. It allows you to facilitate cash flow exchange at a future date using a pre-planned formula. Swaps, however, are not traded on exchanges and are only available over the counter. Derivative Trading Derivative trading simply means buying and selling derivatives. It allows you to buy a large number of underlying assets as an investor by paying only the margin. Margin is the initial amount of money you would pay to buy a derivative. Through derivative trading, you can buy or sell stocks, commodities, or currencies. Trading in the Derivatives Market Now that you are clear about the definition of derivatives, take a look at how derivative trading works. To start, you will need, A Demat and trading account. Add enough money to the Demat account to match the margin required to buy and sell derivatives. Derivative trading mainly involves four players – Hedgers take part in derivative trading to eliminate future price change risks. Speculators and traders predict future price changes. Arbitrageurs exploit price gaps between multiple markets. Margin traders use margins to increase their stock holdings. Advantages and Disadvantages of Derivating Trading If you engage in derivative trading by understanding the types of derivatives, you can benefit significantly. But there are also risks involved that you should be aware of. Pros The benefits of derivative trading are, Reduced market transaction costs: Unlike debentures and shares, the cost of derivative stock trading is much less. This is because derivatives act more as risk management tools. Risk management: Changing asset prices are associated with high risks. Derivatives can be used to mitigate this risk. Arbitrage: Derivative trading helps to achieve market efficiency by ensuring underlying assets reach their right prices. Asset price determination: Different types of derivatives are used to determine the prices of underlying assets. Transferable risk: Derivatives allow businesses and investors to transfer the risk associated with underlying assets. [B-02] Cons Derivatives by definition are good. But there are critical demerits attached to derivative trading – High-risk trading: The prices of underlying assets are subject to market fluctuations. This makes derivatives a high-risk contract. Counterparty default: Derivatives that are sold over the counter bear a high potential of counterparty default as they are not regulated by market controls. Speculative: Derivatives meaning is speculative. Derivative trading requires research and building in-depth knowledge about market assets. If you are interested in knowing more, then follow the Piramal Finance blog for information on related topics.
08-11-2023
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Banking

Can a Savings Account be Converted into a Current Account

An eligible person can open an account with the bank. They can choose between a savings or a current account to keep their money with the bank. There are some fundamental differences between the two types of accounts. A savings account encourages the owner to save funds by using the formal banking channel to preserve their income. A current account, on the other hand, is mostly meant for business purposes. The requirements for KYC and supplemental documentation are different for the two. While it is more straightforward in the case of a savings account, a current account usually involves an in-depth process. Due to this fundamental difference, the Reserve Bank of India has laid down certain regulations in this regard. It is not possible to convert a savings account into a current account due to these. For any reason, if a customer wishes to make the transition, they can close their existing savings account and open another current account. [B-01] What Is The Eligibility For A Current Account? A current account is a business account. Usually, only businesses are allowed to open a current account with the bank. The following points highlight the eligibility criteria for opening such an account. Individuals must be either of the following: Resident individual Hindu Undivided Family (HUF) Partnership Firm Sole proprietorship firm Private company Limited liability partnership Trust Association of persons Club or society If a customer is eligible to open a current account with a bank, there are many benefits that they can avail of. What Are The Benefits Of A Current Account? Since it is not possible to convert a savings account into a current account, a customer can opt to open a new current account. There are many benefits that they can enjoy by opening such an account. Here are a few of them. A customer is likely to receive a premium banking experience. Customers receive overdraft facilities. Due to this, they will never run out of funds. The bank considers your credit score to estimate the overdraft facility for a customer. For one year, customers can avail of free ATM transactions. Afterwards, ATM transactions are charged with an annual fee. Customers can avail of multi-city chequebooks along with a nomination facility. A current account can be transferred to branches of other banks. Customers can also obtain monthly statements. So even though it is not possible to convert savings to a current account, one can always open a new account and avail of the above-mentioned benefits. Moreover, the procedure to open a current account is quite simple. Let us take a look at the steps involved in opening a current account. How To Open A Current Account? You can follow a few simple steps to open a current account with a bank of your choosing. Here are the steps involved. Visit the nearest branch of the bank. Request them to provide an account opening form. Fill out the form with all the correct details. Also, make sure to attach the relevant documents along with the form. To make your account more accessible and flexible for use, make sure that you opt for all facilities, including internet banking, mobile banking, SMS and more. Submit the application form along with the initial amount required to open the bank account. The bank will verify the details filled in by the customer. Once the process is complete, the account opening process will begin. The customer will receive the relevant account details via post. Since it is not possible to convert a savings account into a current account, a customer can open a new current account and close their savings account. It is no hassle to close a savings account. The customer will need to visit the bank branch in person and fill out an account closing form. The bank will verify all the details, after which the savings account will close. But what if someone does not want to close their savings account? Well, a savings account has some great benefits as well. What Are The Benefits Of A Savings Account? Even with a savings account, you can avail several benefits. Savings accounts are instruments of financial planning. They encourage savings and investments along with the organisation of finances. Customers can earn interest on the balance in a savings account. Customers can use their savings account to build an emergency fund. This keeps their money secure, earning a fixed rate of interest. The money can be withdrawn easily from the comfort of the customer. A savings account can be used to conduct offline as well as online transactions. Customers can also make cash withdrawals using their savings accounts. [B-02] Conclusion Both accounts carry their own set of benefits. So, a customer can fall into doubt about what to do. We have already seen that a customer cannot convert their savings account into a current account. They have to look for another way out. Customers can opt to maintain both accounts with a bank. This will ensure that their incomes and expenses remain different for both. From an accounting perspective, this can be very beneficial. A current account can help a customer get an accurate picture of their business operations. Another benefit of maintaining a current account is that a customer can write off their business expenses against their income. This can help save taxes for them. But the same would not be possible if the same expenses were incurred through a savings account. Thus, a customer must identify their banking needs. This will help them determine which account they must operate. For more such vital insights into the world of finances, visit Piramal Finance. It is a premier financial institution where you can get every update related to banks.
08-11-2023
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Home Loan

Home Loan Document List For Self-Employed Individuals

Understanding the intricate details of the home loan process can be overwhelming, especially for self-employed. But it doesn’t have to be. This is a comprehensive guide to documents required for home loan for self-employed individuals. It will provide you with all the information you need to make a well-informed decision about obtaining a loan. [B-01] Documents Required for Home Loan For Self-Employed Home loan applications have a lot of documentation requirements. There are, however, a couple of documents that are usually required in every loan application. These documents include the following: Credit Report: A credit report is a document that has all the details regarding your credit history and credit score. A credit report will show your credit history and give a general idea about the amount of risk you pose to the lender. Credit reports are generally needed for most kinds of loans and are used to determine the interest rates of a loan. Statement of Financial Information: The Statement of Financial Information (SOFI) is a document in which you provide details about all your assets, liabilities, and income. This document is needed for many types of loans and can be used to decide on the terms of your loan. The lender will use this document to check if you have enough money to repay the loan without being a risk to them. These are the documents you can submit: Income Tax Returns with calculation for the last two years P&L and Balance Sheet with all annexures (must be audited and certified by CA) Account statement for the current account for the last six months Your savings account statement for the last six months Proof of Other Financial Obligations: Lenders will also want to see proof of your financial obligations, such as any existing debts you have. To prove your debt obligations, you’ll need to provide: Mortgage statement Car loan statement Any other loan statements Identity Proof: This is yet another important document required for home loan. This document includes one or a few of the following: Voter Card Aadhar Card Passport with validity Driving License Credit Card with photo Government-issued Photo ID card Identity verification letter with a photograph from a recognized public servant or figure (less than a month old) Address Proof of Residence: You will also need to submit proof of your address to the lender. You can submit one or more documents from the following list: Voter Card Aadhar Card Valid Passport Letter from a recognized public authority or public servant verifying your residential address Latest Utility bill Rent agreement on stamp Paper Bank Statements reflecting your address of any commercial nationalized bank Credit Card Statement (not older than 3 months) Life Insurance Policy Copy of Sale of the property (residence), if you own it Address Proof of Business: Apart from address proof of your home, the same for your business is also a document required for home loan. You can submit a copy of any of the following: Shops & Establishment Certificate Trade License Certificate SSI Registration Certificate PAN Card/ Sales Tax/ VAT Registration Certificate Partnership Deed (for firms) or MOA for companies Export-Import Code Certificate or Factory Registration Certificate Professional qualification Certificate and Degree Certificate for Professionals SEBI Registration Certificate The registration number issued by ROC Tips for Preparing Home Loan Documents It is important to submit complete, accurate, and genuine documents while applying for a home loan. Here are a few things you can do to prepare the complete and accurate documents required for home loan: Gather all the relevant documents: Collect all the documents that are relevant to your loan. If you don’t have the documents, then you will have to take them from the previous business or homeowners. Make sure to request genuine and legal documents from the previous owners. Submit original documents: Make sure to submit original and genuine documents. Don’t submit photocopies of the documents since the lender will reject these documents. Scan documents and store them in a secure place: Make a scanned copy of all the documents and store them in a secure place such as a cloud storage or a password-protected folder. You can also store them on an offline hard drive. How to Choose the Right Home Loan for You Pick the right type of home loan by keeping the following things in mind: – Budget: Before applying for a home loan, make sure that you have a budget that is realistic and tailored to your specific situation. Credit Score: Make sure to check your credit score before applying for a loan. If your credit score isn’t very high, you can consider applying for a loan with a lower interest rate. Rate: Choose a home loan that has a lower rate when compared to all other loan types. Make sure to check the different types of interest rates that each loan type has to find the best one for you. Term: A home loan term is the length of time for which you take the loan. Make sure to choose a long-term home loan since short-term loans have higher interest rates. Repayment: Choose a home loan that has a flexible repayment plan since most self-employed individuals may face difficulties in making monthly repayments due to their fluctuating incomes. Down Payment: Choose a home loan that has a low down payment since having a high down payment can make it difficult for you to apply for a loan. [B-02] Conclusion Instant Loans and Instant Funds are a quick, simple, and stress-free solution to supplement your current Home Loan. Given this, it’s an excellent solution for covering any unexpected or urgent monetary demands.
08-11-2023
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Home Loan

Complete guide on how to reduce house loan interest rate

Do you have a home loan or plan to get one? If yes, you would know that interest rates on housing loans are a crucial aspect that influences your decision. Any change in loan rates affects your monthly payment as well as your overall loan cost. Thus, any option to reduce the house loan interest rate would help ease your monthly burden. [B-01] Ways to reduce a housing loan interest rate Below, we discuss a few ideas that will help you reduce the house loan interest rate and the loan cost. Opt for a shorter loan term. Your Equated Monthly Instalment (EMI) depends on the principal, interest rate, and loan term. A longer tenure will reduce the EMI as you have more time to repay your loan, but it will increase the overall interest cost as you pay more interest during the loan term. Balancing the loan term and the EMI you can afford is crucial when you choose the tenure for housing loans. Lenders offer lower interest rates for loans with shorter terms when compared to loans with longer terms. Use an EMI calculator to pick the most suitable loan term for you. Consider making prepayments. For floating-rate housing loans, you can make small prepayments from time to time or in larger chunks if you have spare funds. Lenders do not levy any prepayment penalties for floating-interest home loans. In the initial years, your EMIs cover more interest than principal. The prepayments will help reduce the loan principal and the overall interest burden. For a fixed-rate loan, check with the lender about the prepayment charges before you prepay your loan. Research well before you choose a lender. Many banks and non-banking finance companies (NBFCs) offer housing loans, so you have a wide range of lenders from which to choose. You can go through lender websites or check various websites that let you compare home loan offers. Thorough research can help you find the lowest home loan rates. When comparing lenders, pay attention to other expenses like processing fees and legal and technical charges, as these also raise your overall loan cost. Keep a lookout for special deals. Often lenders come out with special rates for a small window or a select group of borrowers. If you are planning on taking a loan, keep an eye on these deals that can help you avail of a loan at a lower rate. In some cases, banks may offer special interest rates for women or employees of a particular sector or organisation. If you work for an organisation, they may have a special arrangement with a lender to offer a lower house loan interest rate. You can take advantage of these special arrangements to reduce your interest rate. A home loan balance transfer can help. If you have a running home loan and feel that your current lender is charging a higher rate, you can consider the balance transfer option. In this option, the new lender takes over the unpaid part of your housing loan, and your loan with the current lender is closed. Instead of paying EMIs to the existing lender, you pay them to the new lender. A balance transfer makes sense in the initial years of your loan. Though a balance can help you reduce your loan interest rate, it may involve some costs. Consider all the expenses you may incur and compare them with the savings you will make due to the lower interest rate. Focus on your credit score. Lenders look at your credit score before they sanction a loan. When you apply for a housing loan, the lenders seek your credit report from the credit rating agency. This is the first step in your loan application assessment; a low score could lead to an outright rejection, or you would have to borrow at high rates. A high score indicates a good credit history and a low-risk assessment; hence, lenders are willing to offer house loan interest rates. Pay more as a down payment. Another way to reduce your housing loan interest rate is to make a larger downpayment. When you apply for a loan, the lender offers a proportion of the house’s value as a loan. The remaining part you pay from your savings, which is known as the downpayment. A larger downpayment reduces the lender’s risk; hence, the lender is willing to sanction a loan at a lower rate. Paying more as a downpayment also reduces your EMIs; however, it could reduce your liquidity. Consider this aspect before you make a decision. Negotiate with the lender. Apart from all the above tips, pure negotiation with the lender can also get you lower rates. Even a minor reduction in the rates can help you reduce your EMIs, and the overall loan cost considerably, as housing loans usually run in the lakhs and last for almost 15 to 25 years. Meeting the eligibility requirements, having a good credit score, and having a lower debt-to-income ratio are all factors that can help you negotiate a lower interest rate. If you already have a relationship with the lender, you can get a better rate. You can use your negotiation skills to get a better deal. Increase your EMI annually. In floating-rate housing loans, banks offer you the option to increase your EMI. As your annual income grows, you can afford to pay a higher EMI without burdening yourself. You can increase the EMI by 5 to 7% yearly; this will allow you to repay your loan faster and lower your overall interest burden. Check with your lender to explore this option. [B-02] Conclusion Housing loans help you fulfil your dream of owning your own home. A few simple tips can help you reduce your house loan interest rate or the overall interest on the loan. Be a well-informed borrower, find the best home loan deal after careful research, and enjoy your new home.
08-11-2023
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Guide

Celebrate Immediate Possession Of Your Dream Home – Loans For Resale Homes

Owning a home is one of the most satisfying experiences for any person. It is among the most important and expensive purchases you will make. Home loans are a great way to finance the purchase of your dream home. But they can also be used to fund various other projects. For example, if you want to build a new house or buy land on which you plan to construct one in the future. Then, home loans for resale homes are ideal. They will help you meet these requirements. [B-01] What is a Resale Home? A resale home or property can be moved into right away. Resale means the current owner received the property from the developer or another seller. These properties are sold “as is.” If you commute to work long, buying a resale home may be a better option than a brand-new apartment or plot. As the majority of infrastructure in developed areas is already in place, finding a market, a bank, a school, a hospital, and other essential facilities will not be difficult. With a resale home, you will have immediate possession. This means you will not have to wait for construction to be completed before moving in. Resale properties are largely the buyer’s responsibility to evaluate banks and negotiate the best offer on a home loan. This segment is treated differently by banks than under-construction properties. Buyers should be familiar with the home loan process before buying a resale home. Home Loans for Resale Homes Loans for resale homes can be used to purchase brand-new houses and pre-owned ones. They are also available for residential properties like condos or apartments and commercial buildings like office spaces. Home Loans For First-Time Home Buyers As a first-time home buyer, you must have a steady job and a good credit history. If you’re looking for more accessible options, it would be better to opt for one specific home loan designed for first-time buyers. You can also justify paying higher rates of interest if you can afford it because there are certain benefits associated with these loans, such as reduced down payment requirements and lower monthly payments over time. Home Loan Eligibility Criteria For Resale Homes When it comes to buying resale homes, you need to keep the following points in mind: Age of the applicant You may apply for a loan for any property if you are over 18 years of age, including resale homes. Banks typically extend home loan terms until the end of the borrower’s working life. The loan’s term will end when you retire, regardless of when you take it. This is a typical scenario. Depending on the credit score and repayment capacity, financial institutions may extend the tenure. They might also provide mortgage insurance. Age of the property A property’s age is an important consideration. It should be considered when deciding the kind of home loan you will apply for. Resale homes are dated by when they were first occupied, not how long they have been owned. In some markets, purchasing a home may be impossible. This is because there is no space for new development. The resale home finance segment is just as important to lenders as the new supply segment. Banks will not approve a home loan request for a property in poor condition or disrepair. Even if the property is over 30-40 years old, well-maintained property has a better chance of loan approval. CIBIL Score Applicants with a perfect CIBIL score of 750 or higher are more likely to be approved for a home loan with easy and affordable repayment terms. Fixed Obligations to Income Ratio (FOIR) Low FOIR values indicate a higher disposable income. This increases the borrower’s chances of repaying their loan on time. Lenders will most likely offer low FOIR borrowers favourable terms on home loans. Home Loan Applications for Resale Homes The applicant can apply for a loan for a resale home separately or jointly. Co-applicants for a loan on a resale home are not required to be joint owners. However, they must be family members, such as parents, spouses, brothers, sisters, or children. Home loans are based on criteria such as customer profile, repayment plan, maturity age, property age, and other terms the bank deems applicable. Documents Required For a Home Loan To complete their documentation and approval process, banks often request the following documents: Completed application form A passport-size photo PAN Card Passport Driving license Voter ID card Bank statement for the last three months Income tax return for the previous financial year Address proof (recent bill of mobile phone, electricity bill etc.) Property-related documents (sale agreement, sale deed, letter of allocation, paid receipt of Land and Building Tax, non-encumbrance certificate, and so on) Impact of GST on Resale Homes In addition to affecting the real estate sector, the Goods and Services Tax (GST) also impacts resale homes. Since resale properties are immovable, GST is generally not applicable. However, sellers must pay stamp duty and registration fees (which may vary from state to state). Home Loan Tax Benefits for Resale Homes The tax break is the best part about buying a resale home with a home loan. You can take advantage of it once you have ownership of the property. Section 80C allows for a deduction of up to Rs.15,000 from the principal amount. Under section 24B, up to Rs. 1.5 lakh is exempt from interest tax. A resale home can be purchased more profitably by borrowing money. [B-02] Conclusion Loans for resale homes have become popular because they help you fulfil your dream of owning a house. These home loans enable you to purchase an already-built home at a lower price. It is perfect if you are looking for an investment property or want something that will be ready in no time. If you want to learn more about home loans, look at related blogs on Piramal Finance. You can also take a look at their various financial products and services.
08-11-2023
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Guide

Certificate Of Deposit (CD): Meaning, Features & Advantages

To meet the financial needs, our nation’s government needs to have money. For this, the government of India needs to approach the common public to raise funds. The money is raised by making tempting offers that are both long-term and short-term. But very few investment options for the money market for short-term investors. Such an option for the short term is a Certificate of Deposit. A certificate of Deposit is also called a CD. Here the role of retail is little. It is due to the need for more knowledge about this space. One can check out the post office FD rate. To know more, one can read the article further. [B-01] What is meant by a Certificate of Deposit? The CD is an agreement. It is between the bank and the depositor. The deal is done for a given period. It has a certain amount of money, and the bank needs to pay interest. It can be redeemed at the time of maturity of that investment. CDs get issued with the help of dematerialised forms. A money agency like a bank issues this promissory note. Federal Deposit Insurance Corporation, i.e., FDIC, is the one who insures it. The RBI, i.e., the Reserve Bank of India, regulates it. The rules are laid by RBI. Post office FD rates are tempting, and one can check them out. During the time of maturity, the depositor gets 7 days to decide the amount of maturity. The maturity amount is again invested if one fails to withdraw it in 7 days. But one can start the amount after 7 days by paying the penalty. One can check out post office fixed Deposit if they are willing. However, the actual investment cannot be redeemed in any way. In 1989 the certificate of Deposit first came into use. This was done to increase the size of the money market. What are a CD and an FD? CD and FD are not very distinct. They are almost the same. Fixed deposits are known as time deposits or CDs by many banks. The term period is the same. They also have basic needs for deposits and have high-interest rates. The only contrast is that the CDs can be freely negotiated, but FDs cannot be. One can check out the post office FD rate. The Certificate of Deposit: Features Eligibility: RBI chooses a few selective financial agents and banks for issuing CDs. They establish quite specific guidelines. Banks issue CDs to pension funds, insurance, trusts, mutual funds, and individuals. Maturity Period: Banks issue a CD for tenure ranging between 7 days to 1 year. But financial agencies give a CD for some other date of maturity. The CD can be from 1 year up to 3 years. Minimum Investment: The CDs get issued in multiples of Rs. 1 lakh. Also, Rs. 1 lakh is the smallest size for the investment. Transferability: Electronic credit of Deposit is transferable. It can be done with the help of delivery or endorsement. However, Demat account certificates can be transferred based on the rules of the Demat securities. A loan is taken against CD: The certificate of the Deposit does not have any lock-in period. It is the reason banks do not grant loans to them. The bank cannot repurchase CDs before maturity. Post office fixed deposit rates can be checked out by one. Discount available on CD: CDs are issued at a discount on the face value. Based on the flotation rate, banks and financial institutions gives the certificate of Deposit. The floating rate is set based on market research. Post office FD rate can be checked out by one who wants to invest. Advantages of Certificate of Deposit in India Security: The CDs or FDs, even during market volatility, do not eat up any capital. The money invested is safe. Just like traditional insurance, it has an assured amount during maturity. Without any risk of suffering a loss, the money being put given in the CD keeps growing at given rates. One can check out the Post Office FD rate. High-interest rate: A lot of investors get attracted towards CD due to the number of benefits it provides. The interest rate is relatively high. It can even go up to 7.8% on a massive deposit than the traditional savings account with almost 4%. Flexibility: One can choose monthly or annual payouts. They can also withdraw a large amount on the maturity of the CD. One can decide the price and time of the investment. But it has to be based on certain parameters. These are usually set by the bank. The CD is just apt for one, to meet their needs. Post office FD rates are quite great for someone interested. Very less maintenance cost: In the market, there are several fees charged by brokers. The costs usually include selling the shares, buying and delivery. Mostly no extra costs are merged with the certificate of Deposit. With some banks, one has to pay only what they invest. [B-02] Conclusion Is someone willing to invest for the short term? Then certificate of Deposit is the answer. Hopefully, the above guide was helpful for the ones in need. It has let people know the meaning, the different features and advantages of CDs. One can now get that they should invest in a CD to have a secure future. A Demat account needs to be opened before starting any process. Such an online account is needed to hold securities, just like a CD. One can check out the post office FD rate if they want. Does anyone need a financial option? Then “Piramal Finance” is a good personal loan/financing option for buyers.
08-11-2023
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Other

Celebrate This Diwali With A New Car

Diwali marks the beginning of the festive season in India. It is when you celebrate with your friends and family and enjoy good food and sweets. However, it is also an excellent time for new beginnings, like buying a new car. A lot of people look forward to Diwali and apply for a car loan or a personal loan that will help them bring their dream car home. Why? That’s because several automobile dealers offer attractive discounts on car purchases during Diwali. Nonetheless, that isn’t all. Here are all the benefits of buying a car during Diwali. [B-01] 5 Reasons Why You Should Get A Car Loan And Buy A Car This Diwali Automobile manufacturers put forward several offers to boost their sales during Diwali. But the question remains. Is Diwali a good time to apply for a car loan and bring home a new car? The answer can vary depending on every individual’s unique situation. But in general, the answer is yes. Diwali is an ideal time to make a car purchase. Here are all the reasons why. Discounts, offers, and free accessories Attractive deals are the primary reason Diwali is a great time to buy a new car. During the festive season, people are in the mood to celebrate. This means they are willing to spend money on the good things in life, including having a car of their own. However, the numerous options on the market can make it hard for them to choose a car. So, they often turn to discounts and deals to find the ideal car. The competition in the automobile industry is pretty tough. Every automobile manufacturer wants to grab its share of the market. To achieve this, manufacturers and dealers come up with competitive offers that attract potential car buyers. Additionally, they might be willing to offer free accessories as part of the purchase. This includes wheel covers, tool kits, seat covers, etc. If you want to take advantage of all these benefits, buying a car during Diwali is a great option. However, remember that these offers only last during the festive period. They might be invalid on any other day. Cashback and gifts You enjoy discounts, offers, and free accessories when buying a car this Diwali. But that isn’t all. Car manufacturers and dealers also offer cashback and gifts. If you go shopping during the festive season, you will find a lot of businesses organising lucky draw contests. This is another way to attract prospective car buyers. Nonetheless, it means a great deal for you on your car purchase. You get to bag attractive cashback offers. This means you save a significant amount on the car purchase. In addition, you get to participate in contests like a lucky draw or scratch cards. And if you are fortunate, you can take home an additional gift. Now, that is a great way to celebrate the festive season. You get a car, and you also get a memorable experience worth remembering for your lifetime. Replace your old vehicle with a new one Do you already own a car that has gotten too old with time? Perhaps you should exchange it for a new car this Diwali. Unlike the rest of the year, car manufacturers and dealers become open to the idea of car exchanges during Diwali. In addition, several financial institutions offer customised car loans to support such exchanges. If you are short on money, swapping your old car for a new one can be a brilliant option. And there is no better time to do it than during Diwali. You get a good price on your old car, plus added benefits, cashback, and discounts. This translates to big savings in a season when you are likely to spend a lot. Enjoy free car insurance Buying a car is a huge investment. However, a car purchase doesn’t end with you paying just the cost of the car. Alongside the price of the car, you also have to pay for car insurance. Car insurance in India typically begins at Rs 2,400 per year. Nevertheless, this amount can vary based on your car’s model and brand. The good news about buying a car during Diwali is that you stand a chance to get free car insurance. Now, this entirely depends on the dealership. So, you will have to ask the dealer if they have such offers during the festive season. If they do, you can save on insurance costs for the first year after purchasing a car. Car loans with zero processing fees and attractive interest rates If the opportunity to save big on a car purchase sounds appealing, this last point is for you. Using car loans is a great way to purchase a car during Diwali. Typically, car dealers partner with banks and other financial institutions to offer attractive interest rates and zero processing fees on car loans. So, if you have plans to take a car loan to buy a car, Diwali might be the best time to do so. Apart from processing fee waivers and reduced interest rates, you might also get other benefits, like a reduced down payment. [B-02] Bring your dream vehicle home this Diwali with a car loan. The festive season is indeed a great time to buy a new car. Diwali is a festival of new beginnings and holds sentimental value. So, a car purchase can bring positive energy and pave the way to more celebrations. If you are short on funds, consider getting a car loan to fund your car purchase. Numerous car loan and personal loan providers exist on the market these days. They often offer attractive deals on Diwali. For instance, check Piramal Finance’s personal loan webpage. They have unique features that can make your car purchase as smooth and enjoyable as possible.
08-11-2023
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Other

Common Mistakes People Make When Trading

Trying to make mon ey through share trading or stock trading can be exciting and rewarding. But it can also be an expensive lesson in risk management if you are not careful. Learning how to trade shares online can seem intimidating initially. However, with the right research and approach, you can profit from your trades without risking too much of your hard-earned savings. A successful investor knows it’s important to minimise risk to maximise gains, whether investing in the stock market or playing roulette. This means that you should be vigilant about avoiding common trading mistakes to maximize profits and cap the losses on your portfolio. [B-01] Trading and the Common Mistakes? While investing is a great way to make money work for you, carelessly trading shares can lead to financial loss. To keep up with the ever-changing market, traders must always be aware of what’s happening in the industry. Here are some common mistakes beginner traders tend to make and how you can avoid them- Not Doing Enough Research The first mistake is not researching a company before investing in it. Many people buy shares of companies without knowing anything about the company, its competitors, and the industry as a whole. This can be extremely risky since there is no way to know how the stock will do over time. It will also be hard to know if the stock is overpriced or if you will be able to sell when needed. In addition, many people follow what everyone else is buying instead of looking at individual companies. This could lead to making some really bad investments. Not Having A Plan One of the biggest mistakes people make when trading is not having a plan. Having goals and knowing what you’re trying to do with your investments is important. For example, if you want to save for retirement, then invest for the long term. And if you need more cash flow, then invest in growth stocks that are paying dividends. Or if you want to balance your portfolio between growth stocks and bonds, then invest in a mix of both. This way, you can make calculated decisions and trade more wisely. Risk Tolerance You should take into account your risk tolerance when investing. Knowing how much risk you can handle will make it easier to pick the right investments. Risk tolerance can vary, so there isn’t one specific rule on how to measure it. Generally speaking, you should ask yourself if they would feel comfortable losing everything they invested in one year, five years, ten years or twenty-five years. By answering these questions honestly, you can determine what level of risk you are comfortable with before choosing investments. Not Diversifying Diversification reduces risk. If you only invest in one or two stocks, you are more likely to go down, resulting in heavy losses. If you invest in ten companies, you will make up for the losses of one with the other nine. So your portfolio would still be profitable. Trying To Time The Market The most common mistake people make when trading shares are trying to time the market. It means you want your shares to go up in value as soon as possible. Hence, you’re likely to buy at too high of a price and sell at too low of a price. Buy lower-priced stocks and hold on to them until they increase in value over time. Making emotional decisions It’s also important not to trade on emotions. Emotions can often take over when making decisions about stocks. It will lead you to buy when you shouldn’t or sell when it’s not an appropriate time. You should have set plans about when to buy or sell, so you don’t get caught up in the moment. Not Reviewing Your Portfolio Some think that because they invested a certain amount of money, they are guaranteed to make money. However, this isn’t the case. By talking to a financial advisor, you should review your portfolio regularly to see what is going on with your investments. Also, make sure whether you need to make any changes. Reviewing your portfolio is important because it will show if you have an underperforming investment. It will also highlight if there’s anything in your portfolio that needs more research. In addition, it’s always a good idea to talk to an expert when considering big trades or changing the mix of stocks in your portfolio. Not Sticking To Your Strategy Formulating a share trading strategy and abiding by it is crucial for long-term success. For example, you can choose to buy when the market is in an upward trend or sell when the market is in a downward trend. However, if you find yourself doing the opposite of what you’ve planned, you should rethink your strategy before continuing. In addition, there are many strategies, such as ‘momentum trading‘, where your trades depend on whether stocks are trending up or down in price. Momentum traders will wait for a stock to break through a certain level of resistance or support (a level at which the stock has traded recently) before taking a position. The key is that you will only take positions when you see momentum in the direction you want to trade. Ultimately, a successful trader always sticks with their strategy. [B-02] Conclusion It’s important to be aware of your mistakes and learn from them to make better decisions. Take some time out of each day and examine what you could have done differently. You’ll find that your stock trading will become more effective and profitable. For more information, head over to Piramal Finance.
08-11-2023
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Health Insurance

Common Mistakes To Avoid While Buying Health Insurance

Due to rising living and health care costs, everyone needs health insurance policies today, even if they have a lot of money. It’s a great way to ensure that you and your family are financially safe and healthy in case of medical problems. Many families had to use their savings to pay for medical bills because of the pandemic. These things showed how important it is to have full health insurance to protect your health and finances. People who act too quickly may choose health insurance policies that don’t work well. That will only cover a small part of the space. Here are some common mistakes you should avoid if you want to buy the best health insurance policy. [B-01] Common mistakes people make when buying health insurance policies Not enough coverage In India, the cost of the premium you pay for health insurance is a big part of how you decide which policy to buy. So, people often end up with too little coverage when they try to save money on insurance. When looking for the best health insurance policy, you should consider more than just the cost of the premium. The main reason to get health insurance policies is so you don’t have to worry about money if you get sick or hurt. But if you don’t have enough insurance, your policy might not help you when you need it. If you don’t have enough health insurance and get sick, it’s just as bad as not having any. So make sure your health insurance policy covers enough. Not enough research People in a hurry to get health insurance policies should read the terms. Most people buy insurance without researching it or shopping around for the best deal. Before choosing a health insurance policy, experts suggest doing some research. Families with two or more kids should get a “family floater” plan instead of separate policies. If grandparents are part of the family, it might be best to buy them health insurance policies that don’t have to be paid out of pocket. The best thing to do is figure out how much your healthcare costs will be over the next few years and then get insurance to cover them. Not giving a proper medical history People make the mistake of keeping their health records secret. When they try to get health insurance policies, they worry that they will be turned down or have to pay a lot. If the insured tries to hide their medical history, they could get in trouble when it’s time to make a claim. The company can say that the medical history wasn’t shared. Health insurance policy contracts are based on the information given by the insured. If you tell them about your health history, they might charge you a slightly higher premium, but they won’t be able to pay your claim. Buying a simple policy There should be more than the basic coverage to cover many illnesses or situations where medical coverage is required. But the person with the policy can buy extras that fit their needs. Since add-ons raise the premium, many people choose a standard health insurance policy. Standard policies have lower premiums, but unless you buy add-ons, they don’t cover certain medical conditions or situations. Misreading of the co-pay clause When they buy something, most people don’t think about inflation. With a co-pay provision, the insured pays part of the claim and the insurance company pays the rest. The section is for older people, expensive medical procedures, and treatment in the city. In this case, the insured pays a co-payment of 10% to 20% of the claim. Other kinds of insurance cost more than co-pay insurance. You must understand this part of the law if you want affordable long-term health insurance policies. When you are young and healthy, the co-pay option can be helpful. Leaving out the exceptions Every health insurance policy has a list of things it doesn’t cover. Companies that sell insurance will tell you ahead of time. They won’t pay for any claims due to being left out. People often only bother to read the list of things that are allowed. They feel bad when they need to make a claim and find out that the insurance company won’t pay. Ignoring the additional benefits A comprehensive health insurance policy may cost a little more than a basic one, but the extra benefits of a comprehensive one make it worth the extra money. If you don’t take advantage of these extra benefits, your health insurance may not cover as much or protect you as well as it could. These extra benefits include ambulance charges, hospitalisation costs, cashless hospitalisation, etc. Overlooking small details Even though most people read and understand the policy carefully and know what it covers, they often miss the small details about how it works. The functional details help you make better plans or do things that have never happened before. These will also help you figure out if you should buy the policy in question in the first place. Even if you forgot to look over these details, you could still use the free look period. Almost every health insurance policy has a free-look period of 15 days. You have 15 days after buying the policy to review all the details of your health insurance policies. If you don’t like any of the terms during this time, you can cancel the plan and get your money back, according to the T&Cs. Buying health insurance in old age Many people think that health insurance is only for older people, so they don’t buy one until they’re older. No one can predict when they will need medical care, so not getting the right coverage early on could lead to asset losses or high premiums later. Investing early in health insurance will help you avoid both problems. Many low-cost insurance plans for people under 45 are easy to get. When you purchase health insurance early, you can pay for the waiting period while you are unlikely to need it. This gives you full coverage at a young age. [B-02] Conclusion You can protect yourself and your family in a medical emergency by getting health insurance. Because of how busy people are these days, full-coverage health insurance is no longer a luxury but a necessity. Consumers need to know about their different insurance options to make a smart choice. Don’t make the same mistakes others have made when looking for health insurance. Make sure that you and your family are financially protected. Piramal Finance is a great financing option for everyone. Visit their website to learn more about the products and services they offer.
08-11-2023
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