More articles for you

Your one stop place for everything related to finance and lending

Home Loan

Common Myths about Loans against Property

A loan against property provides the borrower with a big sum of money. The most common causes for this sort of loan are the start-up of a new company, marriage, or education for children studying abroad. Before you decide to take out a loan against your home, you should be aware of all the myths and reality. Before taking out any sort of loan from a lender, one should be aware of the wrong information. Ensure that the conclusion you make is founded on facts and genuine data rather than market fallacies. [B-01] What Exactly Is a Loan against Property? A loan against property, or LAP, is a credit obtained by holding your property as a mortgage with the lender. Banks in India often consider the property as a security cover if the loan borrower fails to repay the amount borrowed. If you do not repay the loan on time, the lender has the power to sell the property to reclaim the money. One of the most crucial things to understand about LAP is that lenders only grant a specific proportion of the property’s market value. Banks often lend 50 per cent to 60 per cent of the property’s value. Other private lenders provide around 80 per cent of the property’s worth. LAP is a secured loan since you maintain the security with the lender. Purpose of LAP To pay for a medical issue To help pay for your child’s marriage To pay for the long-awaited trip To grow your company To pay for your kid’s education Advantages of a Loan against Property Lengthy Payback Term LAP (Loan Against Property) has a long repayment term of up to fifteen years. Reduced Interest Rates In comparison to other unsecured products, such as personal loans, which often have high-interest rates, loans against property are low. Reduced EMIs The lower the EMI, the longer the tenure. Because the loan against property has a longer term, the EMIs are lower. As a result, the loan burden is reduced. Simple to Obtain You may easily get LAP since it is a secured loan and banks are eager to grant credit. If you own a home, you may mortgage it with a reputable bank to get a loan for your company or personal purposes. Common Loan against Property Myths Some of the most popular misconceptions about loans against property are listed here. A loan with a higher interest rate is preferable to a loan against property There is no question that with a solid credit history, the credit market provides loans that are better than loans against property. A loan against property, on the other hand, is a loan that will provide you with access to high-value cash at a cheap interest rate. It is a form of loan in which your property is held as collateral. If you are certain that the payments will be made on time, you should never have to worry about maintaining your home as collateral. It takes forethought to maintain your property as collateral. So, if correctly planned, a loan against property is a very useful financial instrument that may help you retain financial stability. The Pledged Property Cannot Be Exploited People have the misperception that once a property is pledged, it cannot be utilised until the debt is paid off. This information is untrue, and the property may be used even if the loan’s term is not completed. If the borrower fails to make loan payments, the lender will take possession of the property. In the event of a default, the lender has the authority to sell the property to obtain money. The Whole Worth of the Property May Be Borrowed This is another common misunderstanding. You will never be awarded a loan for the entire value of the property. In general, the loan amount runs from 75% to 90% of the property’s worth. Though each lender’s policy and terms and circumstances vary, this is a basic amount. As a result, you should carefully evaluate the worth of your home before applying for a loan that meets your needs. A Loan May Only Be Obtained against a Residential Property In the market, this is simply not the case. The loan may be used to purchase both residential and commercial property. The loan amount may also be utilised to purchase commercial or residential property or to reduce lease payments. You Must Have a Greater Salary to Qualify for This Loan Borrower income may sometimes have an impact on loan applications. It represents the borrower’s capacity to repay the loan amount within the time frame stipulated. This is not the case with loans secured by real estate. You may simply get the loan by pledging your property as collateral, and if your lender is pleased that you will be able to repay the debt within a certain time frame, the loan will be approved. The Interest Rate Is Very High Personal loans have a higher interest rate than loans against property. The rate of interest for the latter option is determined by many variables, including the lender you pick, the state of the property, and your credit score. Because loans against property are secured, they are less expensive than personal loans. These loans also have a lengthier payback period when compared to personal loans on the market. [B-02] Conclusion Loans against property are a wonderful choice to pick if you are searching for a loan in the market with no limits and may pledge a property. The loan may be customised to your specific financial needs and payback capabilities. People choose a loan against property rather than a personal loan because a loan against property is cheaper. Taking all properties of LAP, It offers a flexible technique for paying a substantial expense. The only drawback of the loan is that failure to repay it may result in the bank taking power over your property. To know more about such types of topics, visit Piramal Finance.
08-11-2023
Read More
Home Loan

Complete Guide On Getting Housing Loan Easily In India

Buying a house is always a dream, whether it’s your first or fifth. Most people who buy homes today get loans to pay for their purchases. Consider getting a housing loan to buy your dream home. Since housing loan interest rates are getting cheaper, almost every big bank offers a wide range of housing loans with attractive perks. The most obvious first step is to apply for a mortgage. You may have a lot of worries and questions about getting housing loans. You can be sure that this detailed guide will answer all your questions about applying for a housing loan. [B-01] How does an Indian housing loan work? The bank or NBFC pays the owner or builder the housing loan amount. The borrower is expected to pay back the loan amount plus interest over the chosen period. For example, if you borrow Rs. 25 lakh for 10 years at an interest rate of 9.5% per year, your EMI will be Rs. 32,418. The calculation also proves that the loan will cost Rs. 14 lakh in interest on top of the Rs. 25 lakh principal, which brings the total cost over 10 years to Rs. 39 lakh. Here are a few important things to remember about housing loans: The lending company takes the property used as collateral for the loan. The property can be used for either business or living. If the borrower can’t repay the loan, the lender has the legal right to sell the property to get the rest of the money. A step-by-step guide to getting housing loans Housing Loan Application This is the first step of the housing loan process. In this step, you fill out the loan application with your basic information. At this point, you’ll need the following information: Information about a person, like their name, phone number, and where they live. Information about earnings, including annual earnings. Details about schooling, careers, and jobs. Details about the property, like where it is and what it is used for. This is a rough estimate of how much the property will likely cost. At this point, lenders might need different kinds of information. The application must include proof that the facts given are true. At this point, you’ll need the following documents for your housing loan: Identity proof Age proof Income proof Address proof Education proof Employment proof Property details Pay the processing fee Your bank will charge you a non-refundable fee for processing the loan. The processing fee at a typical bank can be anywhere from 0.5% to 2% of the loan amount. GST is an extra 18% added to the price (Goods and Services Tax). Financial institutions use this amount to start and keep the housing loan process going. To attract more customers, some banks have stopped charging loan processing fees. You can get an advantage by negotiating and pursuing. Some banks might be willing to do without processing fees, but others would not. Discuss with the lender At this point, the bank has checked the submitted documents, and the lender and the customer have a formal conversation. If the documentation is in order, it usually takes one to two working days or less. Some lenders want you to come into the branch to discuss the loan, the terms, and other details. Some lenders feel more at ease talking to the claimant in person about these details and getting more information about them. On the other hand, modern financial institutions don’t require you to go to the branch for anything. The online process and door-to-door service from start to finish make things easy and pleasant for everyone. Wait for the verification It’s important to know that many people apply for housing loans daily. To speed up the time it takes to process your application, make sure your documentation is in order. At this point, the lender checks the information that the applicant provided. Most of the time, the lender checks the following documents: Residential address Employment details Credentials of the employer Residence phone number Workplace phone number These details are checked to ensure that the applicant gives the right phone numbers and other information. Housing Loan Offer Letter The offer letter written by the bank includes the following: Approved amount The interest rate that applies to the principal amount Fixed or changed interest rate Loan tenure Method of payment Special plan (if applicable) Terms and conditions of the loan If you agree with the offer letter, you must send the bank a signed copy of your acceptance. An acceptance copy is a copy of the offer letter that the bank puts on record. The administrative fees charged by the bank should be paid off. Property Verification The bank will inspect the property before making the loan. You must give the title deed, the no objection certificate, and other original papers. The property’s title will be checked to ensure there are no problems. Banks also do technical valuations of properties. A property that is still being built will be judged by the bank based on its location, stage, quality, and progress. Before selling or reselling a property, the bank looks at its age, who owns it, quality of construction, upkeep, location, and legal status. Property evaluators who work for the bank decide how much of a loan to give based on established rules. The property backs up your housing loan. When the loan is paid off, your papers will be returned to you. Disbursal of Housing Loans After all the above requirements have been met, the registration process for the housing loan can begin. The bank’s attorney must approve the final document before printing it on stamp paper. After this, you must sign the housing loan agreement and give post-dated checks for the agreed-upon term. After you sign the loan agreement, the process of getting your housing loan money will start, and they will inform you about the housing loan balance transfer interest rate. Your bank will give you the loan amount based on how you agreed to get it (all at once or in stages). [B-02] Conclusion All banks and credit unions have the same process for getting a housing loan. But the process might be different based on the lender’s rules and the borrower’s past. Before applying for a housing loan, you should do research and find a trustworthy lender. Once the loan is approved, you’ll start paying interest from that day on, so don’t wait to send in any missing paperwork or finish any other formalities on your end. If you want to know more about how housing loans are sanctioned, visit Piramal Finance.
08-11-2023
Read More
Other

Complete Guide on How to Calculate Working Capital Ratio

What is Working Capital? Working capital finance is the money your business needs for everyday tasks. This is the difference between current liabilities and current assets. You must track this because you should know how much money you need. But, this cost can change at any time. The working capital allows for responding to new opportunities. You can calculate the working capital cycle by using this formula: Inventory days + receivable days – payable days = working capital cycle in days. [B-01] Working Capital Loan: Everything You Need to Know Not every business has the funds to perform its daily operations. This is why they take a working capital loan. A working capital loan is a loan that any business takes to fulfil its daily tasks. Remember these loans are not investments. Also, they are not for buying any asset. But this money is only to cover any business’s urgent needs. These everyday tasks can include debt payments, payroll, and rent. The loans are linked to a business owner’s credit. If they miss payments, this can affect their credit score. Advantages of Working Capital Finance There are many advantages of taking a working capital loan. It allows a business to carry out its daily tasks with ease. Let us have a closer look at them. A working capital loan is easy to get. It allows companies to meet their urgent financial needs. The process is simple. You receive the amount together. This ensures businesses can carry out their everyday tasks. Also, it boosts the impact of the funding. The best part about a working capital loan is that business owners need not give up control of the business. Why is working Capital Important? This is one accounting term you hear often. But the working capital is important for the success of your business. Working capital affects many factors of your business. For example, it affects how you pay your employees. In addition, it determines how you plan for long-term growth. Working capital loans are essential when businesses run out of money to carry out their daily tasks. To ensure the working capital you have is correct, you need to calculate many factors. Some include your future and current needs of the business. How To Calculate Working Capital? It is simple to calculate the working capital if you understand the formula. In the formula, you will notice that we subtract current liabilities from current assets. If you get a positive number, this means you have enough funds to cover daily expenses. But if the number is a negative one, it means your business is not doing great. Formula: Working Capital = Current Assets – Current Liabilities Let us understand the formula better. What are Current Assets? Current assets are everything your business owns that you can convert into cash in a year. Examples of these include: Prepaid expenses. Cash at the bank. Short-term investments. Outstanding invoices. Government bonds. Stock. What are Current Liabilities? Current liabilities include any debt or bills your business has not paid yet. Examples of these include: Short-term loans. Rent. Wages. Bank overdrafts. Accounts payable. Payroll, sales, and income taxes. Outstanding expenses. Working Capital Ratio Formula Calculating the working capital ratio helps to understand the ratio of assets to liabilities. In simple terms, it is finding how many times a business can pay its liabilities with current assets. Here is how you can calculate the working capital ratio. Working capital ratio = Current assets / Current liabilities Understanding the Working Capital You must know the ratio on paper. This is because two businesses can look similar if you compare their working capital. A high ratio means your business has more cash. And this is good news. If the ratio is low, it means the business is not going great. Generally, a ratio of less than 1 can mean problems. But a ratio between 1.2 – 2 is safe. Also, if the ratio is high above 2, it means that the business is storing too much cash. A company that has good working capital may not make most of its assets. Having positive working capital is great but too much cash doing nothing does not help. The business can use idle funds for many purposes. It includes investing in a long-term goal or clearing debt. In addition, the business may also consider buying long-term assets. [B-02] The Bottom Line Working capital gives you an idea to understand your cash flow. This is essential to make sure your business has money for operations. Taking a capital loan may be helpful in some cases. Your business should always have the funds for its smooth operation. It makes your business reliable and helps with growth. If you would like to read more, visit the Piramal Finance website. It is your ideal destination for finance-related topics. The blogs on the website will help you understand finances better. Head over to their website to boost your knowledge on everything related to finance.
08-11-2023
Read More
Home Loan

Complete Guide on How to Make the Down Payment on Your Home Loan

After a long day, only one person goes home to relax. It’s where people can do or say whatever they want without caring what others think or say. A place you rent is very different from your own home. You are in charge of designing the inside of your home (without having to seek permission from the landlord, as in the case of a rented place). Who you are is what you do in your own space. It’s also a sign of success and social status. It’s often the biggest choice and deals someone makes in their life. But it’s not an easy job. The amount at stake is big enough to make careful planning important. [B-01] How to Finance Your Home Purchase? You would be better off if you didn’t sell your long-term investments to pay for your property quickly and cheaply. You should only sell long-term investments as a last resort because it will change how you plan your finances. A housing loan is the best choice because it helps you get money when you don’t have any and lets you buy a home early in life by putting up your future income as collateral. The best way to pay for a house is to borrow as much as possible and pay it back according to the lender’s terms. Problems with the down payment A home loan requires you to put down at least 10% of the cost of the house, which is based on your qualifications. Also, the lender, a bank or a housing finance company, would pay for the rest (the home loan amount). The down payment is the amount you have to pay out of your own money toward the cost of the home. After picking a house, you might be in a tough spot regarding the down payment. If you have to pay for something immediately, you should save money. This problem is made worse by the high cost of housing. Also, buying a home means waiting to pay for it, which means taking a chance that real estate prices will increase even more. Even though it may seem hard, there are ways to make getting the money for your down payment easier. Some tips on how to save on your own for the down payment Make a Corpse The easiest way to save up for a down payment is to put your savings into one big pot. You can use compounding to grow your savings into a large sum of money if you start saving early in life, preferably as soon as you start working. In the beginning, you might want to think about putting your money into high-return assets like stocks. Then, you must write down how much money you made and put it into safer investments, like a bank fixed deposit. Make a budget, track how much you spend each month, and work hard to cut back on purchases you don’t need. Pay off your high-interest loans to get rid of more debt and increase your monthly savings. Release in the right amount This is a service that a small number of lenders and developers offer to clients in secret for new building projects. If you choose this option, you can pay your down payment in small amounts instead of all at once. Because building takes years, you can pay your down payment in parts, and the lender will release loan payments based on when you do. The pressure to come up with a big down payment all at once is lessened. Don’t take out a loan from a savings account or life insurance. If you have no choice and a home is a long-term asset that increases in value over time, you might want to use your long-term savings. You might want to borrow money from your savings account or life insurance plan. Over time, you can pay off the loan with your own money. How big of a down payment should you make? Even if the lender requires a minimum down payment, you can pay the minimum or more if you can. Both have good points and bad points. Pros of Putting down a bigger down payment on a house There are benefits to making a bigger down payment, such as: Since you have more money invested in the property, you borrow less money. Since interest rates change based on the loan size, a smaller loan can mean a lower interest rate. For example, the interest rate for Rs. 20 lakh may be lower than the rate on a loan for Rs. 40 lakh. This will depend on the rules of the lender. Because it gives the lending institution more security, a smaller loan amount makes it more likely that the loan will be approved quickly. Since registration fees and home loan insurance are based on how much the loan is for, this saves money. Cons of Putting Down More Money on a Home There are some problems with making a big down payment, such as: Your own money is tied down for a long time, which makes you less able to move it around. In a crisis, this could cause a financial crisis. You get tax breaks when you pay off your mortgage, both the principal and the interest. Fewer tax breaks come from smaller loans. To make your house a home, you might need more money first for things like buying furniture and durable goods, making repairs or renovating, etc. [B-02] Conclusion In the past, people in their late 40s and early 50s often bought their first homes. People used to save money until the end of their careers, and then, after paying for important things like their children’s education and their wedding, they would buy or build a home within their budget. But things have changed. People want to buy their own homes even in their late 20s and early 30s. They don’t want to buy their first home until they are in their fifties. If you want more information, you should go directly to Piramal finance.
08-11-2023
Read More
Personal Loan

Complete Guide On How To Apply For Gold Loan In Emergency

Usually, when you need a loan, you either look to your friends and family to borrow money or take a personal loan. To get a loan, you need to have an existing connection with the bank or a high credit score. Otherwise, you will have to deal with high interest rates, extensive paperwork, and delayed loan disbursements. Gold loans, on the other hand, are a more accessible and straightforward option. This will not strain your bank account. Only a few people know that you can use the gold ornaments or coins in your house to avail yourself of some of the best gold loans available. Now what are gold loans, and how is it practical to take a gold loan during a time of financial emergency? Keep reading the article to get a detailed understanding of gold loans in emergencies. [B-01] What are gold loans? These loans are secured because gold is used as collateral between the borrower and the lender. The lender keeps the gold during the loan period. In this way, you are ready to secure the loan by giving up possession of your gold. This type of loan can be a convenient solution to ensuring liquidity for several financial expenses. It can be an immediate personal emergency or a professional expense. A gold loan is also a great option for credit-impaired individuals, i.e., people who have low credit scores. Additionally, it is among the quickest loans to be disbursed. It has relatively lower interest rates because of the collateral. It can be obtained in a few easy steps. Why should you avail yourself of gold loans? Here are some of the benefits of getting gold loans when you need money fast: High-value Loan amount: The Reserve Bank of India has increased the LTV (loan-to-value) for gold loans from 75% to 90%. This means that for the same amount of gold, you can apply for more money. Low-Interest Loans: If you are worried about incurring huge interest, you will find relief in knowing that the best gold loans provide minimal interest rates. These rates are affordable and will not trouble you in the future. Flexible Repayment Tenures: Gold loans offer the most flexible repayment choices out of all the secured loans. The borrower is generally allowed to choose from any one of the following loan repayment options. No EMI is required, you can directly pay the loan at the end of the term. The best gold loans offer flexible repayment terms of up to 48 months. You can pay a portion of the principal and interest each month. There is also an overdraft feature that lets you take money out whenever you need it in case of an emergency. Interest will be charged only on the withdrawn amount. You can pay the principal amount at the end of the term and pay the interest monthly. Flexible repayment options without foreclosure charges, for example:a. Regular loan payment: Here the EMI accounts for a certain portion of the principal and interest.b. Paying interest regularly and clearing the principal at the end of the tenurec. Bullet payment option: With this, you can pay off both principal and interest at the end of the term.d. Every repayment option has its own financial implications. You are free to choose after assessing all the options. Faster and safer processing of loans Gold loans have a very simple and easy-to-follow procedure. They do not have a complicated documentation process. Instant disbursal of funds: A huge advantage of having gold loans is that you can get access to your funds instantly whenever there is an emergency. How can you get a gold loan? Gold loans are risk-free for lenders. They have very simple procedures. The process avoids cumbersome paperwork and tedious documentation. The eligibility criteria are also very lenient. Anyone with gold ornaments can apply for gold loans. The credit score of the borrower is not significant in lending a gold loan. The borrower’s income and employment status do not need to be accounted for. To apply for a gold loan, you can follow the below steps: Firstly, you need to visit your bank branch along with your gold, KYC documents, and residential proof. The bank evaluates the value of the gold and offers a certain amount of loan against it, depending on the LTV. LTV (loan-to-value) refers to the amount of loan you can get in comparison to the value of your assets. A higher LTV is helpful in cases of financial emergencies or if you’re facing financial pressure and need money. Are you eligible? The best gold loans have lenient eligibility conditions that are simple and easy to fulfil. Anyone within the age bracket of 21 to 65 years of age can apply. The gold should be owned either by the individual or their family members. The bank will also think about other important things, like your credit card report and whether or not you qualify based on its standards. However, keep in mind that gold loans cannot be used for risky endeavours like investing in the stock market or buying real estate. [B-02] Final Thoughts Hopefully, you’ve gotten to know more about gold loans and their benefits in this article. Financial emergencies are almost always unpredictable. It is important to have a pillar that can support you during your time of need. Gold loans are the most dependable way to manage and withdraw your funds as needed. They are also easy to apply for. If you want to know more about gold loans and gold loan transfers, you can consult financial experts like Piramal Finances. They provide efficient guidance and solutions for the needy regarding financial matters.
08-11-2023
Read More
Home Loan

Difference Between a Land Loan and Home Loan

Are you looking to buy your dream home or acquire a piece of land in a prime location in the city for investment purposes? One of the quickest ways to put your ideas in motion is by getting a loan. This article discusses land and home loans to help you make an informed choice. If you want to buy a property, you will likely cross paths with these two types of loans. But how to differentiate one from the other? Let us explore and understand. [B-01] Home Loan Vs Land Loan Home and land loans typically have the same terms and conditions and the application process. However, a few fundamental differences exist between the two. Definition You can avail of a home loan for ready-to-move properties, properties under construction, to be self-constructed. Land loans, also known as plot loans, are offered for purchasing a plot of land. However, the plot must specifically be for residential use. Eligibility Criteria Both resident and Non-Resident Indians can avail of home loans. In contrast, a land loan is strictly offered to Indian citizens only. Plot and home loans are offered to salaried and self-employed individuals based on the following criteria: Age Source of income Credit Score Repayment capacity Property Location You can take a home loan for property outside the municipal area. However, any land inside a village or industrial area does not qualify for a land loan. In this case, the plot of land must reside within the municipal limits. In addition, the land in question must be demarcated. Tenure The tenure for home loans is exceptionally high, extending up to 30 years. In contrast, the tenure for land loans is 15 years. However, this is the maximum tenure. Lenders like the State Bank of India provide a tenure of 10 years for land loans. Interest Rate Interest rates on home loans tend to be the lowest in the market. On the other hand, the interest rate on land loans is typically 0.5% to 1% higher than on home loans. Tax Benefits Principal repayment and interest payment for home loans qualify for tax deduction under Section 80C and Section 24B of the Income Tax Act. Contrarily, land loans do not come with tax benefits. Loan to Value The loan to value (LTV) is the percentage of property value a lender can lend to the borrower. The LTV of land loans differs from that of home loans. The LTV can be as high as 90% for home loans. However, in the case of a land loan, a borrower can get only up to 75% of the property value. This limit applies only to loans meant specifically for land purchase. The lenders may fund higher if the borrower avails of a land purchase and construction loan. Remember that 75% is merely the upper limit. Most lenders are conservative in terms of the loan amount and valuation of the property. So, expecting approval on a lesser amount would be wiser. Summary Category Home Loan Land Loan Eligibility Criteria Both resident Indians and NRIs can apply for the loan. Only Indian citizens can apply. Objective The loan is meant for the purchase or construction of residential properties The loan is given for buying a plot of land. Tenure of the Loan Maximum tenure is 30 years. Maximum tenure15 years. However, the upper limit may vary from one lender to another. Benefits of the Taxes The principal amount and interest are both tax-deductible under the Income Tax Act. No tax benefits. Location of the Property No restrictions. Plots in industrial or rural areas do not qualify for the loan. The land should strictly be located inside municipal limits. Maximum Loan-to-Loan Value Up to 90%. Up to 75%. Rate of Interest 7.25 – 7.50% per year. 8.0-10.0% per year. Composite Loans Do you belong to the unique category of borrowers who want to purchase a plot and build a house on it? In that case, go for a composite loan. These loans are given by lenders to buy a plot and construct a house within a specified timeline. Before applying for such loans, note that the time limit is crucial here. Typically, borrowers must begin construction within 3-5 years. However, the period varies from one lender to another. Moreover, the construction-specific part of the loan is disbursed only when you complete the foundation work. A composite loan attracts the same interest rate as home loans. However, you may have to pay slightly higher interest till you do not begin construction. [B-02] Conclusion The application and repayment procedures are the same for home loans and land loans despite their differences. Both have their specific benefits and purposes. The article above has listed down crucial information to help you determine which one suits your needs. However, remember that your credit score is vital for both loans.
08-11-2023
Read More
Business Loan

Complete Guide on How to use Loan Against Property to Start Your New Business

Banks and other lending firms give out loans to new business owners. Borrowers must meet the eligibility criteria and provide proper paperwork. The company loan against property is very easy to obtain. You can use the property as security to secure a loan from a bank/NBFC for a startup firm. [B-01] Key Points of a Property Loan Many benefits make loans against property a better option. Read on to find out how it works and its benefits. A loan against property is more low-cost than a personal loan. Since there are so many cash outflows in a new firm, this decision is important. It will determine the success or failure of the enterprise. A property loan does not entail giving up the building or closing on the business. If you need to use your home as collateral for a business loan, you and your family can still live there. Getting a loan against property to start a business is very simple. The financial institution giving the loan will be assured with the mortgage asset. Lenders can take your property if you default on payback. Because of this, getting a loan against property to start a business is much less of a hassle. A mortgage loan against your home can provide you with a larger sum. It is way better than getting through a personal loan or any other type. Loans against property are available up to Rs. 3.5 crore by many lenders. They prefer to give a loan-to-value (LTV) ratio of 75%-90% of the property’s current market value. Business Eligibility for a Loan Against Property There are a few things to get a loan against property to start a business. Property loans can be obtained by both paid and self-employed people. Keep reading to find out if you meet the requirements to apply for a loan against property for new business. If the applicant is salaried A multinational corporation or a reputable private company must hire salaried workers. The only salaried borrowers eligible for a loan against property for business are those living in Tier-I cities like all the Metro cities. If the Applicant is Self-Employed Those who work for themselves must be able to prove their employment. They should have proof of reliable income. It will help them qualify for a loan against property to start a business. Only residents of Tier – l and ll are eligible for the loan against property for company owners. Documents Required The paperwork needed for a loan against property will also vary from one person to another. Salaried Employees Any official identification issued by the Indian government, such as an Aadhaar card, voter ID, PAN card, etc. An official form of identification with a current Indian residence address, such as an Aadhaar card, voter ID, passport, ration card, utility bill, etc. The most recent salary slip given by the company to which you belong Statements from your checking and savings accounts covering the past three months Current and prior year tax returns To secure a mortgage loan, you’ll need to provide legal papers of the property you intend to use as security. Self-Employed Individuals One of several forms of official identification issued by the Indian government, including an Aadhaar card, passport, voter ID card, etc. A government-issued form of identification or proof of residencies in India, such as an Aadhaar card, voter ID card, or utility bill. Six-monthly bank statements To secure a mortgage loan, you’ll need to provide documentation of the property you intend to use as security. How to Apply for a Business Loan to Get Started? Business owners can quickly and easily get a loan against property. All they have to do is visit the websites of banking institutions or go offline. Once your loan is authorized, the funds will be transferred to your account quickly. Learn more about how simple it is to get a loan against property for a new business. Provide your personal information (such as your name, address, date of birth, and contact details) in an online form. After you’ve filled out the basic form, you’ll need to provide information about your income so that you can be matched with the most suitable loan offers, given your credit history. Once the loan application form has been submitted, a representative from the financial institution will call you to verify your identification and property. Why Prefer Loan against Property for New Business Meeting the requirements and submitting the application for a loan secured by real estate are both very quick processes. When you’re first starting, every second counts and these procedures move quickly. Several costs must be incurred in a new business. Creating an office and employing manpower plus other assets are just a few costs associated with new business. If you take out a loan against commercial property, you’ll have the flexibility to use the money. It can be for whichever purpose is most pressing. Lenders typically don’t get involved in such details. Repayment terms that can be modified to match your needs. Having a repayment term that can be adjusted to fit your needs will reduce the pressure you feel to increase profits to pay down your debt quickly. With a loan repayment term of up to 20 years, you can focus on growing your business without worrying about how to make loan payments. The interest on a loan secured by collateral is typically lower than that on unsecured debt. Compared to other loan options, such as personal and company loans, the interest rates offered with a loan against property for business owners are fairly cheap. [B-02] Conclusion Although the property is one of the best financial assets, its value can be increased. The property’s value can be used as collateral to secure a cheaper interest rate and a larger loan. There are a lot of costs for new business owners to consider while getting their venture off the ground. Taking a secured loan can make sure you can do all of this without going into serious debt. Visit The Piramal Finance website for more details.
08-11-2023
Read More
Home Loan

Here’s a complete guide on home loans: Know how it works

What is a home loan? Want to know how it works? Purchasing a home is the dream of every person. Applying for a home loan is an exciting first step toward getting the house of your dreams. With our step-by-step guide to the home loan process, this doesn’t have to be hard to handle. Buying a house is one of the most important choices a person can make. With the arrival of affordable home loans, many people are now able to buy a home. Buying a home costs a lot of money, so many people in India and all over the world get a home loan to help pay for some of the costs. Before there were home loans, people would save for years. Then borrow money from unknown lenders when they need it. But as consumers’ needs change and as rules and regulations get stricter, a lot of things have gotten better in the industry. [B-01] What are home loans? A home loan is money that an individual borrows from different banks or non-banking financial companies (NBFCs) to buy a home. How to apply for a home loan, step by step Here is a step-by-step guide to the process of applying for a home loan, which will help you get started: 1. Fill out the form. This is the first step in the process of getting a home loan. In this step, you send in the loan application with your basic information. At this step, the following information is needed: ● Personal details. ● Details about income, such as annual income ● Education details ● Business/Employment details ● Property details like residential or commercial addresses, etc How much the property in question is expected to cost? How is the property being paid for now? Different lenders may ask for different kinds of information at this step. In addition to the information you send in with your application, you need to send in documents to back up the information you send in with your application. At this point, you need the following documents for your housing loan: ● Proof of identity ● Proof of income ● Age proof ● Proof of address ● Proof of employment ● Proof of education 2. Details about a house: Pay the fee for the process. After the housing loan application has been sent in, it is important to pay the loan processing fee. Again, processing fees can be different from one lender to the next. Processing fees for home loans are usually between 0.25 and 1 percent of the loan amount. The processing fee is the amount that the lender charges the customer to keep track of the loan account. This amount may also include the agent’s commission. You can always talk to the lender about the processing fee to get a better deal. Even though banks and NBFCs have a set way to figure out the processing fee, there is no harm in asking for the fee to be lower. If the lender doesn’t charge a processing fee, compare the interest rate, duties, and other fees that will make the loan more expensive. 3. Talk to the bank about it. At this point, the bank has checked the documents that were sent in, and the lender and the customer have a formal conversation. If the paperwork is in order, it usually takes one to two working days or less. Some lenders want you to come into the branch to talk about the housing loan, the terms, and other details. Some lenders feel more at ease talking to the applicant in person about these details and getting more information about them. But some modern lenders don’t require you to go to the branch for anything. The online process and door-to-door service from start to finish make it easy and comfortable for our customers. Wait for the documents to be checked. It’s important to know that many people apply for home loans every day. To speed up the time it takes to process your application, make sure your paperwork is in order. At this point, the lender checks the information that the applicant provided. Most of the time, the lender checks the following documents: ● Residential address ● Employment details ● Credentials of the employer ● Number to call at home ● Number to call at work These details are checked to make sure that the applicant gave the right phone numbers and other information. 5. Get approval This is the most important step in getting a mortgage. It is when the lender decides whether or not to give you the loan. This is called the loan application being approved or sanctioned. Before giving the loan, the lender checks the application carefully for the following things: ● Who is applying and how old they are ● Information about the applicant’s business or place of work ● How much money the applicant makes ● ability to pay back the loan with the interest that was set 6. Get the letter from the court: The lender should send a “sanction letter” after looking over all of the documents that the applicant has sent. 7. Submit your property documents. After the lender accepts the offer letter, it’s time for the lender to pay attention to the property in question. Even if the applicant hasn’t decided on a property yet, the lender may give them some time to do so. 8. Make sure there are technical checks and a site estimate: Since a home loan is a secured loan in which the house itself is used as collateral, every lender is very careful to check all the technical details of the property to give it a fair value. The lender can check the property by sending an employee, a civil engineer, or an architect. 9. Close the deal on the loan: After all of the technical checks are done and the lender is happy with the property for which the housing loan is being given, the final registration of the deal is the next step. The lender’s lawyer should finish up the paperwork and get it stamped in the right places. 10. Sign agreements: After all the paperwork is in order, both parties need to sign the papers. The lender signs the papers first at this stage. When the applicant has to sign and send in the paperwork. He or she is expected to send in post-dated checks for the amount of time that was agreed upon by both parties. Wait for the loan to be paid out. This stage is the last step. After all of the paperwork is done, the housing loan is given out. The lender may ask you to show proof that you have saved up for the down payment. Most of the time, the seller or builder of the property being bought is the one who gets the money from the loan. [B-02] Summing up This article’s goal is to provide clarity about the home loan, how it works and its step-by-step process . Before going for a home loan. You should have the proper and relevant knowledge about home loans and its process. Home loans are a great way to purchase a home for those who don’t want to take any risks to make money. As time goes on, the returns increase because of a process called “compounding.” FDs are flexible because investors can take some or all of their money out early. Pay attention to the information mentioned before while making any decisions. Take your decisions wisely. Also visit, Piramal Finance for more in-depth, educational articles.
08-11-2023
Read More
Personal Loan

Here’s the complete guide on how to get a loan against a fixed deposit

During a financial hiccup, different funding options come to the rescue. Out of various funding options, loans are one of the most preferable options. It helps you during a crisis without putting much financial burden. People tend to go for both secured and unsecured loans, based on their needs and credentials. However, many cannot go for an unsecured loan because of a lack of credit score. In that case, secured loans come to the rescue where you have to use collateral to get a principal amount. Some people use their property as collateral to get a loan, while some use their shares and savings to do so. Fixed Deposits or FDs are a great way to have a loan that can help you during a financial crunch. A loan against a fixed deposit is an effective and time-efficient way to bridge your short-term crisis. Since this is a secured loan, there are some additional benefits that the borrower gets from the bank. Do you also want to apply for a loan against FD but are confused about how to? Well, the answer to your dilemma is here. Read on to learn everything about loans against fixed deposits and how to apply for them. [B-01] What is a loan against a fixed deposit and what is its significance? A loan against a fixed deposit is financial aid that you take from a lender to cover your needs during a crisis. Here, you have to use your fixed deposit amount as collateral or security to get the loan amount. In return, the lender charges you a specific rate of interest for a fixed period which you are expected to repay within a stipulated time. This is a better way to opt for instead of breaking your fixed deposit prematurely. It will help you cover your requirements during a crisis for a short duration. In India, for a loan against FD, you can get a loan amount of about 90% to 95% of the total deposit amount. The loan amount solely depends on your fixed deposit amount and the offer that your bank provides. Besides looking for a loan against fixed deposits, you also have the option to choose a credit card against fixed deposits. Using a credit card against a fixed deposit will also help you to build a credit score over time. What are the minimum eligibility criteria to apply for a loan against fixed deposits? Now that you have known the significance of a loan against a fixed deposit, let’s find out the minimum eligibility criteria that are required. You must possess a fixed deposit account to be eligible to apply for a loan against fixed deposits. The loan amount you borrow from your lender must be less than the fixed deposit amount. If the fixed deposit which you are pledging is in the name of a minor, you are ineligible to go for a loan against FD. The repaying tenure of the loan cannot be more than the tenure of the fixed deposit. How should one apply for a loan against a fixed deposit in India in 2022? The process to apply for a loan against a fixed deposit is quite easy and to the point. You can apply for it in both online and offline modes, depending on your convenience. You don’t have to break your fixed deposit to apply for a loan, you can use it rather. Like every other loan, for a loan against a fixed deposit, you have to submit an application form with all your details filled in. You have to submit all the legal documents that your lender asks for while applying for the loan. For the proof, you have to show your Fixed Deposit receipt to your lender if your lender asks for it. What are some of the benefits of applying for a loan against fixed deposits? There are several benefits of applying for a loan against FD in India and they are: Low rate of interest: Since, a loan against fixed deposit is a secured form of loan in which you pledge your FD to get a loan amount, the rate of interest is comparatively low as compared to unsecured loans. No requirement of credit score: For most of the loans you apply for, you are expected to have a good credit score to prove your creditworthiness to your lender. However, that is not applicable in the case of a loan against a fixed deposit as its eligibility is independent of the credit score. This also helps a lot of borrowers to avail of a loan who have poor credit scores. No prepayment charges: Many banks charge a prepayment penalty on the borrowers, but in the case of a loan against fixed deposits, you don’t have to pay any penalty. You are eligible to pay the entire loan amount before the tenure of the loan without bearing any extra costs. [B-02] Wrapping it up As fixed deposits are a very good investment option that yields significant benefits, they can also act as security for availing of a loan. To bridge your short-term financial crunch, loans against fixed deposits are the best way to look for. Their interest rates are nominal, there is minimal documentation and no requirement for a good credit score. You can get up to 95% of the loan amount in most cases, which is another added advantage. But, since you are opting for a loan, you should make sure that the loan is utilised to cover emergency expenses rather than meeting personal requirements like trips and shopping. In case you want to gather more information regarding loans against fixed deposits, you should visit Piramal Finance.
08-11-2023
Read More