More articles for you

Your one stop place for everything related to finance and lending

Personal Loan

Top 5 Types of Personal Loans in India

Banks and other NBFCs provide many types of personal loans to satisfy a variety of needs. Because of tech advancements, the loan application process has become seamless. You may now find it very easy to get access to loans. The most known lending product in India’s debt market is personal loans. This group features more than 78% of loan requests in India. Many people like these loans since they are unsecured and come with a longer tenure. Read on to learn more about the five types of personal loans available. [B-01] What Are Personal Loans? Personal loans are loans that banks and NBFCs offer to help people pay for things like a wedding, education, vacation, home improvement, etc. They are like other kinds of loans where the borrower has to pay back the principal amount plus interest to the lender by the end of the loan term. Personal loan limits are often based on the borrower’s credit history and monthly income. Most banks and credit unions offer individual loan sums that start at Rs. 50,000 and go up to Rs. 15 lakhs. Different lenders have varied rules about who can get a personal loan. But, there are some general rules that all lenders follow. Additionally, the various types of personal loans may have different eligibility criteria and requirements. Five Main Types of Personal Loans 1. Travel Loan Trips, especially foreign vacations, may be costly. If you plan a trip to an exotic place with your family or friends, consider taking a travel loan to reduce the money load. A travel loan is a type of personal loan which is used to pay trip costs. Travel loans often come with travel insurance that is free with the loan. Main Features of Travel Loan Easy application and approval process. Most firms will provide you with a loan of up to 40 lakhs. The loan payback time might last up to 6 years. 2. Home Improvement Loan People can get a home loan to buy a house, but what should be done if the old home needs major repairs? This is where a home improvement loan comes into play. A home renovation loan is a type of personal loan from a bank or non-bank financial firm for renovating an old sweet house. When you remodel your old property, you not only have a good place to stay or live, but your old house’s economic value also increases. Main Features of Home Improvement Loan The loan sum might range between Rs. 2 lakh and Rs. 40 lakh. A home improvement loan has a payback term of up to 30 years. 3. Wedding Loan India is famed for its lavish wedding rituals. The wedding day is surely one of the most vital days in the life of the groom and bride and the parents & family members. Everyone hopes to make this day unique and memorable, which may need lavish spending, and one may not have as many liquid assets at their disposal. As a result, many families seek a wedding loan. Main Features of Wedding Loan The bride, groom, or family members can apply for a wedding loan. The loan sum might range from Rs. 1,000 and Rs. 25 lakhs. The payback time for a wedding loan might range from 3 months to 6 years. 4. Education Loan Personal loans are available from many lenders to help you pay for your education. Secured education loans are given against collateral such as your master’s degree or a real estate property. This education loan may be used to pay your tuition, housing fee, and other academic needs. Main Features of Education Loan Most banks would give you a personal loan for up to 20 lakhs to cover education-related costs. A personal loan term used to fund schooling may range between 5 and 6 years. 5. Pension Loan If you’re a retired person, you may find it hard to make ends meet, mainly if the person has medical costs. Many banks give pension loans to these types of people. A pension loan is a type of personal loan built specifically for retirees. Since it is solely for retired people, pension loans are exempt from the qualifying terms that apply to other personal loans. Main Features of Pension Loan Pension loans are only given to retirees with constant pensions. Payback time for pension loans might range between five to six years. What Are the Eligibility Needs for a Personal Loan? Personal Loan eligibility needs differ from lender to lender, though there are some common rules that all lenders follow. So let’s discuss them in this section. When the loan period starts, you must be at least 22 years old and no more than 58 years old. You must be working and have a steady source of income. A high credit record is needed. You must have identity proof and proof of income. You must own a bank account in your name. Papers Needed for Personal Loans Personal Loan papers differ from lender to lender. However, there are a few crucial papers that all lenders will need. A signed application form has been filled out. Identity proof (PAN card, passport, Driving License, Voter ID, etc.) Address proof (ration card, utility bill, rent agreement, etc.). Income verification (salary slips, Form 16, bank records, etc.). Last six months’ bank statements. KYC papers (Pan card, Aadhar card, etc.). How to Apply for Different Types of Personal Loans Personal loan applications are easy to fill out. You can apply online or go to a bank or credit union closest to you. Online applications must include personal and financial information. You can apply for a personal loan online through the lender’s website. The lender will review your loan request in a few days and give you the money if you’re eligible. If you want a personal loan from a bank, you will need to fill out an offline application form and bring it in with the necessary paperwork. The bank will process your loan request in a few days and give you the money if you meet the eligibility criteria. Many banks also offer online applications. You must check with your bank to see if their loan request process is online or offline. [B-02] Conclusion Now that you know the many types of personal loans in India, you can pick the one that best meets your needs. You may explore and compare the top loan providers online, choose one, meet their conditions, and get fast approval on the personal loan. When enrolling in any loan plan, review the terms and conditions thoroughly to ensure you completely understand the borrowing & repayment arrangements. Check out similar blogs on Piramal Finance and also learn about their products and services.

08-11-2023

Lifestyle

How to Run a Successful Clothing Boutique Business?

A great clothing store needs the same effort as any other business to succeed, plus a little more work. If you want to run a successful clothing business, it’s crucial to keep in mind that you need a strong marketing plan. Use effective marketing methods, like marketing on media platforms and online ads, to reach more people. Look at each online shop’s offer to decide which is best for your business. It would be best if you also had a strong online presence and loyal customers who liked what you do. Once you have the basics down, it’s vital to stay unique and keep adding to your stock to keep your clients happy. [B-01] How Do You Get Started in the Clothing Business? When you’ve settled on your path, it’s time to find out how to begin a clothing boutique business. Find your niche. To begin, select your target market and the people wearing your garments. Pick a group whose needs aren’t being met or a group you’d be excited about helping. The more particular you are, the more likely you will reach your target buyers with ease and for less money. For example, you might design t-shirts with amusing messages meant for coders or new mothers. Make a business strategy. A business plan is a road map that will lead you and assist you in reaching your targets. It is, in fact, the core of every strong firm since it considers all factors and gives a clear picture of what has to be done. The market study, research, and financial and managerial methods are all part of a company’s strategy. However, bear in mind that such facts are not set in stone. You will most likely need to modify your company’s plan structure. Since the fashion and clothing business is markedly different from other sorts of firms. Analyse your industry. Another vital factor to examine is how the market operates. Analysing your rivals might help you get a better insight into your target audience’s behaviour and desires. As a result, use the internet to study how your rival interacts with its clients. Learn their offerings, bestsellers, and success formulas. Calculate the figures. It is vital to know your early costs when opening a clothes business. You will most likely require the following: A brand’s visual trademark (logo and website). Internet and phone bills are examples of building costs. Permits are needed to trade in a marketplace or on the street. Sewing or designing tools (sewing machines, fabrics, scissors). Rent for your office or website. Costs of marketing. Wages of your coworkers. You’ll be able to calculate your expenditures this way, which will help you establish the proper rates and make your firm successful. Establish Prices. Defining your costs and the cost of production allows you to calculate how much it will cost you to make or buy an item of apparel. To generate a profit and make your clothes business viable, aim for pricing 30%–50% more than your costs. Charge too little, and you will lose earnings; charge too much, and you will lose customers. You must also take into account the pricing of your competition. Finally, consider your brand’s image and how its worth is regarded. If you sell expensive garments, your clothing business will be seen as being more valuable. Organise your clothes business. To ensure the smooth running of your business, you must address the following critical issues: Your current location: Will you work from home, or will you need a workshop? Your company plans: Do you intend to be an internet store or a boutique clothing seller? Joining forces: Are you a one-man (or woman) show, or do you need the assistance of coworkers to get things started? Sales and marketing: Do you have an advertising plan? How would you carry out your marketing tasks? Funding: Are your finances enough to support your activities, or do you need extra resources? Create your clothesline. Designing, sourcing, and manufacturing are the most difficult aspects of beginning a clothing business. But it may also be the most rewarding. First and foremost, you must locate the resources. Don’t be afraid to seek guidance since it will save you time and money. Friends or coworkers who work in the business can assist you or link you with someone who can do manufacturing for your business. It’s time to put your idea into action when you’ve found the textiles. You must contact a clothing manufacturer if you do not intend to complete it all yourself. Assess the pricing, minimum order number, and quality while selecting a supplier. Also, obtain a sample before you begin production so you may make tweaks and assure high-quality items. Try out your collection. Once you have your test samples, you should take them to the market. Facebook Marketplace, market trading areas, or events your customers attend are good places to verify your concept. You may alter your apparel items based on consumer input, ensuring there is no room for error. Begin selling and advertising your work. The last stage is launching your clothing brand and spreading the word about it. Make use of social media to reach out to your consumers. There are also several free creative advertising ideas available to you. Remember to try out several strategies and stick with the ones that succeed. It will likely take time to grow your clothing company, but don’t lose hope. Be diligent, and you’ll start seeing results. [B-02] Conclusion Creating a clothing business might be hard, but it can also be lucrative. Successful businessmen understand that success in any field requires more than simply the product or service they provide. They understand their consumers and rivals, create a concrete strategy to reach their goals with their firm, work hard to advertise themselves and their goods successfully, and continue to learn from errors along the way. If you want to know more about the clothing business, visit Piramal Finance for related blogs and explore their products and services.

08-11-2023

Tax Savings

10 Financial Planning and Tax Strategies to Prepare for 2022

A new year brings fresh starts, ideas, chances, and experiences. With the start of FY 2022–2023, it could be a good time to begin your financial planning tasks, organise your money, and prepare for the year ahead. It’s never been a better time to work toward your financial goals and instil some financial control. It may have been hard in the last month of the fiscal year to meet the March 31st deadline for your tax and financial planning needs. As a result, assessing your finances in the middle of 2022 is one task you can do to ensure the rest of the year is free of worry. [B-01] 10 Financial Planning Strategies to Prepare for 2022 Here are the top 10 financial planning and tax strategies to prepare for 2022: Examine your portfolio. This financial planning tip can help buyers still worried about inflation, rates, and crisis risk. The recent market activity allows you to verify your risk level and ensure that your cash balances are still sufficient. You could also think carefully about whether or not this is a good time to change your portfolio. Your evaluation might include the following: Consider tactics for managing a rapidly changing environment. Consider the new chances given by this year’s rather large market pullbacks. Studying the cost-benefit analysis of potential projects. Purchase medical coverage for your family. You may even save money on taxes by buying health insurance for yourself and your family. Section 80D of the Income Tax Act permits you to deduct up to Rs. 25,000 for paying premiums for yourself, your spouse, and your dependent child. Also, if a taxpayer is over the age of 65, the person may get a tax deduction of up to Rs. 50,000 here under the clause. You may save as much as Rs. 50,000 if you pay for the parents’ health insurance. Review your cash management. Matching the features of various investment options with the desired demands is vital. Even inside a brokerage account, money market fund options have varying rates and certain liquidity hazards. Confirm that you are satisfied with the return on your money and the items providing that rate. Calculate your progress toward financial freedom. Even though the last few years have already been hard on many fronts, owners’ total net worth has grown steadily, even with this year’s market slump. After a period of great performance, compare your existing assets to the levels required to sustain financial freedom. With this research, decisions on savings rates, investment policies, and wealth transfer schemes may be made. In many cases, it is also a wonderful time to reflect on the positive changes and enjoy the outcomes of a focused financial planning tip. Invest in tax-advantaged assets. This financial planning tip might help you. As said before, Section 80C of the Income Tax Act permits certain tax breaks on sums invested in tools. It states that purchases of these assets are tax deductible up to a limit of Rs. 1.5 lakh. Select the relevant tax regime. Indian people currently have access to two tax systems. You may choose one of these when submitting your ITR. Yet, selecting a suitable tax system is critical to maximising tax savings. While a new tax system provides reduced tax rates, tax deductions are not permitted. So, if you wish to use the tax deductions under Section 80C of the Income Tax Act, you must follow the previous rules. Otherwise, you might choose the new tax system to reduce your income tax bill. You can use an online income tax tool to see whether the old or new tax system is more favourable to you. Create a reserve. You also need to keep an eye out for any urgent expenses that might come your way. If you still do not have a reserve to meet your urgent needs, create one as soon as possible. Begin by saving 10% of your monthly income and gradually increase. After a couple of years, you will have a considerable amount in the corpus. Examine buy-sell deals. Because the value of businesses has increased in recent years, the owners of privately held companies must evaluate any buy-sell agreements. They must also check that all parties agree on the listed price and the process to determine the price in the future. If you depend on insurance to help you meet your commitments, you should review your coverage in light of any changes. Plan ahead of time for the expiration of estate tax exemptions. If the family thinks about wealth transfer methods, you should start designing and adopting them now. If you’re thinking about shifting capital to reduce future tax payments, do it as soon as possible. Remember to make use of home loan tax breaks. Assume you get a house loan from a bank or NBFC. You may deduct your loan’s rate and principal parts from your taxable income in such instances. The maximum deduction allowed under this provision is Rs. 2 lakhs under Section 24 for house loan interest and Rs. 1.5 lakhs under Section 80C of the Income Tax Act for home loan principal. [B-02] Conclusion New Year’s goals are simple when you decide what is most vital. Wealth, health, and happiness should always be top priorities when it comes to living well. So, if you follow these top ten financial planning tips, you’ll be well on your way to a prosperous 2022. Many taxpayers rush to invest in tax-saving devices toward the end of the fiscal year to save money. Yet, this defeats the basic goal of allowing such deductions, which is to inspire people to save for the future. As a result, the optimal time to make tax-saving investments is at the start of each calendar or fiscal year. You may also save taxes and build wealth by investing regularly in numerous tax-saving routes. However, you must comprehend all tax-saving investing options and only invest in the relevant ones. You can visit Piramal Finance for more exciting blogs on financial planning and explore their products and services.

08-11-2023

Tax Savings

Best Tax Saving Investment Options in 2022

As another fiscal year comes to a close, taxpayers and investors are busy arranging their taxes and investments for the next fiscal year. Tax-saving investment options range from ELSS to PPF, where gains are only derived from interest. But what will be valuable and relevant in 2022? Let’s take a close look at tax-saving investment options for 2022, as well as see how they vary to make your decision simpler. [B-01] Best Tax Saving Investment Options ELSS (Equity-Linked Savings Scheme) ELSS is simply a mutual fund investment with a tax-saving investment option. The fund primarily invests in stocks, which are believed to provide better returns but also have a higher level of risk. As previously stated, the only benefit of ELSS over normal mutual funds is the tax-saving investment option. It is covered by Section 80C of the Income Tax Act of 1961, and you may claim a tax credit of up to Rs. 1.5 lakh for your investment in them. Furthermore, it has a three-year lock-in period, and your earnings after this time are deemed long-term capital gains (LTCG) and are tax-deductible up to Rs. 1 lakh. Profits beyond Rs. 1 lakh will be taxed at a fixed 10% rate. You may invest in ELSS as a single amount or via a systematic investment plan (SIP). PPF (Public Provident Fund) The public provident fund is a long-term investment offered by the government of India that would provide you with a retirement fund. The lock-in term here is 15 years, and you may open an account with as little as Rs. 500. Unlike equity-linked plans, the profit is exclusively from interest, which is now 7.1%. PPF is under the same section 80c of the Income Tax Act of 1961, and your investment is tax-deductible up to Rs. 1.5 lakh. NPS (National Pension Scheme) NPS, like PPF, is a retirement tax saving investment option that is market-linked. Investors may choose from a variety of funds depending on fund allocation, risk, and return potential. The option also depends on your age, as NPS fund options differ for people of different ages. The success of your fund solely determines the reward from your NPS investment. Equity-focused NPS funds are known to provide better returns, but they also carry a higher level of risk. On the other hand, debt-based NPS funds offer reduced risk but a smaller potential return. NPS also falls under the same 80C section. However, there is an additional Rs. 50,000 tax savings possibility under Section 80CCD (1B), bringing the total tax saving potential to Rs. 2 lakhs. ULIP (Unit-Linked Insurance Plan) A ULIP is a life insurance policy that also includes an investing component. Life insurance is a must-have for your and your family’s safety, and adding an investing component to it makes it much more valuable. A portion of the premiums you pay in a ULIP policy goes toward your life insurance, while the remainder is invested in the fund. You may choose the fund here; however, availability varies by the insurance company. NSC (National Savings Certificate) NSC is a tax-advantaged investment that may be made at post offices. These are low-risk investments in debt assets. They have a five-year maturity duration and are not eligible for recurring investments. When you invest in NSC, you will get an NSC investment certificate. You must make fresh investments every time you invest in an NSC. Your NSC investments are tax-free, up to Rs 1.5 lakh per year. This interest is compounded annually and is taxed as “income from other sources.” Once it has matured, you will get your principal amount as well as the compounded interest for the five years. NSC’s current interest rate is 6.8% (in July 2022). Fixed Deposit (Five-Year Tenure) A five-year fixed deposit is an 80C tax-saving investment option, allowing you to save up to Rs 1.5 lakh in taxes each fiscal year. Interest generated on a tax-saving fixed deposit is added to the investor’s income and taxed according to their income tax slabs. Fixed deposit interest rates vary by bank. Premature withdrawal is not permitted in a tax-saving fixed deposit, as it is in a tax-saving PPF. You may invest in these fixed deposits at a bank or post office. Furthermore, the risk profile of fixed deposits is modest. However, you cannot make recurring investments in a fixed deposit. You must establish a new fixed deposit each time you want to invest. Mortgage Loans A house loan displays how to save taxes in India five times over. There are three methods to save money on taxes by using house loans. You will save a lot of money as a result of this. Section 80C deductions permit you to reduce the debt repaid within the current fiscal year. The maximum deduction is Rs. 1,50,000. Section 24 permits you to deduct any interest paid on your house loan up to Rs. 2,00,000. First-time buyers may receive a grant of up to Rs. 50,000 under Section 80EE. You may even get another home loan if you live in the house where you got your first one. The tax deduction for a second home loan is infinite. What Should You Do to Save Taxes in 2022? These investment alternatives will be relevant in 2022, and your pick should depend on your investment horizon and risk tolerance. For example, if you want to invest in a significantly shorter-term alternative for tax advantages, you may choose ELSS. ELSS, on the other hand, has a larger risk. If you are risk-averse, go with a PPF, which is not market-linked but has a longer tenure. The decision here should be a precise mix of your requirements and what these funds offer. Many choices, such as NPS, let you move to a new fund if your current fund is not working. [B-02] Conclusion Many people rush to invest in tax-saving instruments at the end of the fiscal year to save money. But this negates the main goal of allowing such deductions, which is to urge you to manage your personal finances. As a result, the ideal time to make tax-saving investment options is at the start of each calendar or fiscal year. You can also save taxes and build wealth by investing regularly in many tax-saving avenues. But you must ensure that you know all tax-saving investment options and only invest in the suitable ones. If you want to know more about tax-saving investment options, visit Piramal Finance for related blogs and explore their products and services.

08-11-2023

Personal Loan

How Pre-Closure of Personal Loan Can Impact Your Credit Score

Now and then life throws a curveball at us and catches us off guard. In such dire situations, a Personal loan can come to our rescue and steer us clear of financial troubles. The borrowers of personal loans don’t need to back it up with collateral and that’s why they are the go-to choice for most people. More often than not, borrowers prefer to pre-close the personal loan and shed the weight off their shoulders. Many people pursue this course if they intend to borrow another loan and don’t want to get caught up in the hassle of paying two loans at once. However, the pre-closure of a personal loan isn’t always a good idea. [B-01] Does a personal loan affect your CIBIL score? Well, the answer to this question is both straight and complicated at the same time. Let us delve deeper into the technicalities to better understand them. Things to consider before prepaying a personal loan Debt to income ratio The repayment of a personal loan reduces your debt-to-income ratio because your existing debt obligations will be fulfilled. This could come in handy if you intend on taking a new loan. Your loan servicers will assess your debt-to-income ratio and the lower your debt-to-income ratio is, the higher your chances of getting approved for a new loan. The math is up to you, if you are in dire need of getting a new advance from your bank, this option will float your boat. Savings While repaying your personal early would remove the ghosts of debt that loom over your head, washing out your savings and hastening to go debt free could prove very risky. Exhausting your savings will make you more susceptible in the face of emergencies. Moreover, you could incur pre-closure charges for the personal loan. There are always two sides to every coin. Contrary to the popular belief, pre-closure of a personal loan doesn’t get you into the good bank of the bank and much to your surprise, it can negatively affect the CIBIL score too. However, there is no one size fits all kind of solution and everyone’s financial posture is different. Let’s understand the Pros and Cons of pre-closure of the personal and you will be in a better position to assess what fits the bill for you. Pros Most banks or for that matter financial institutions have a minimum lock-in period which is usually one year, however, it could vary depending on your loan provider. Once the lock-in period is over, choosing to prepay the loan is a viable option for you. If you are opting for a pre-closure of your personal loan, this is how you could benefit:- Less Interest – If you foreclose a loan early, provided that the lock-in period is over, you could save a substantial interest on EMIs which otherwise would have extended till the loan term. Even if you make a part prepayment, the number of EMIs would get reduced and this would prove more economical for you as you could save a decent amount on interest. Debt-free – Another virtue of paying a personal loan early is that you could be having multiple financial obligations at once; car loan, home loan, credit card debt etc. Paying off a loan early will not only shed weight off your shoulders but allow you to channel in more cash flow towards your other loan obligation. Thus, placing you in a position to go debt-free early. Cons As we said, no talisman works for everyone when it comes to personal finances. Different things bode well with different people and pre-closure of a personal loan may not always prove to be in your favour after all. Impact of prepayment on CIBIL score – You would think that making timely payments towards your loan translates to a good CIBIL score, then paying off your loan early should spell well on your CIBIL score too. Sorry, you are not even close. When you pay off a loan, your credit report shows a closed account. However, credit bureaus take into consideration your open accounts for assessing your CIBIL score. Timely fulfilment of the active financial liabilities has a more significant impact on your score than the ones closed early. The open accounts are reflective of your past and present debt. Even though the timely payments on your closed loans are a crucial part of your credit history, the impact on your credit score isn’t too significant as they aren’t your current obligations anymore. Mind you, this logic doesn’t apply to credit card debt. Even if you pay all your credit card debt in one go, the credit card is considered an open account and hence things swing differently in this case. Pre-closure charges for a personal loan – You cannot escape prepayment charges even if your lock-in period is over. You have to bear prepayment charges when pre-closing your loan. The prepayment charges could vary from 3% to 6% depending on your provider. However, when pre-closing charges are contrasted against accrued interest during the tenure of a personal loan, they usually come out smaller. [B-02] To sum up A prepayment is an option if you find yourself in a financial position to do so. Personal loan prepayment is beneficial since it allows you to eliminate debt sooner. Prepayment of any amount on a personal loan has a good effect on credit scores, so even a small amount can help if you can’t pay it off in full. To lessen the financial pinch of paying interest during the initial lock-in period of a personal loan, you may want to extend the loan’s repayment term. The aforementioned advantages are only yours to reap, however, if you prepay the debt. Think about getting a personal loan from Piramal Finance, where you may get low rates and flexible payback terms.

08-11-2023

Tax Savings

How Does Taking Home Loan Help You To Save Taxes?

Do you know a home loan serves more than just fulfilling your dream of having your own house? Have you ever figured out how taking a home loan helps you to save taxes? If NO! In this article, we will clear all your doubts related to home loan and how it helps you in many ways. Let’s get started without further ado! When you own a house, you no longer have to worry about rent and other expenses. The home loan makes it easier for you to become a homeowner. In addition, it also offers tax benefits. The Income Tax Act of 1961 provides tax benefits for home loans in the following sections: Section 24 Section 80C Section 80EE [B-01] Housing Loan and Its Benefits A housing loan helps you to buy a house where you will get funding for 80% of the cost of the property. When you purchase a new home or take out a loan, you can add a co-owner or co-borrower. The bank will mortgage your property until the loan is repaid. Here’s a list of benefits of availing of a housing loan: Tax benefits Low-interest rates Capital appreciation No prepayment charges Balance transfer facility Ease in buying a house High repayment tenure Tax benefits on the second house Tax Benefits of Home Loans To encourage people to invest in property, the government of India provides various tax benefits on home loans. But you can save your money only if you are aware of all the tax benefits. There are two components to a home loan, and both are tax deductible: Principal and Interest- SectionsNature of deductionMaximum deductible limitSection 80CPrincipal repaymentRs. 1.5 lakhSection 24Interest periodRs. 2 lakh Note: You can also claim a tax deduction on stamp duty charges Under 80C – up to Rs. 1.5 lakhs Under section 80EE – up to Rs. 50,000 Here are a few points related to home loan tax benefits: If you have already made the investments under Section 80C, then there will be no benefit to the principal. However, if you want to claim a deduction on interest payment, you can claim it after 5 years of construction. In the event that you sell the property within five years of purchase, interest taxes are deducted from your taxable income. In case you take a loan for home improvement, then interest payments will qualify for tax deduction under Section 24. These won’t lower your tax dues. In the case of the joint holder, both holders can claim a deduction in their tax returns. Principal repaymentInterestFirst Holder1.5 lakh2 lakhSecond Holder1.5 lakh2 lakh How do tax slabs affect tax benefits? It is highly advisable to invest in buying a home if you are under the 30% tax slab. For those who fall under the 10% or 20% tax slab, it is better to look at other options. Options that you can explore instead of taking a housing loan for tax benefits are: National Pension Scheme (NPS) Family Mediclaim Public Provident Fund Equity Linked Savings Scheme Sukanya Samariddhi account Life Insurance Policy A home loan has one major advantage that no other loan can match. The tax savings on home loan interest are governed by a separate section 24B up to Rs. 2 lakh. So you can claim the tax benefit on interest in this particular section. There are a few additional deductions available, which you can claim. They are: Deductions under Section 80EE A maximum of Rs. 50,000 is allowed under Section 80EE. If you want to claim this deduction, the following conditions need to be fulfilled: The loan amount should be Rs. 35 lakh or less The property value should not be more than Rs. 50 lakh During the period from 1st April 2016 to 31st March 2017, the loan must be sanctioned Individuals must be first-time house owners Deductions under Section 80EEA The government always emphasizes the importance of purchasing a house. In the 2019 Budget, this additional deduction was introduced, a maximum of up to Rs. 1,50,000. Please find below the conditions that need to be followed: The property’s stamp value should not exceed Rs. 45 lakh The loan sanctioned date should be between 1 April 2019 to 31 March 2022 The owner should be a first-time house owner Can claim only one deduction out of Section 80EE and Section 80EEA Is there an annual property tax in India for homeowners? Yes, the house owner has to pay property taxes in India. They can, however, claim it as an expense when calculating income under house property. How to Claim Tax Benefits on Home Loans? By following a few simple steps you can easily claim your tax deduction: First of all, calculate the amount of tax deduction. You should be the owner of the house or co-borrower of the loan. Submit your home loan interest certificate so that the tax deduction at source can be adjusted. Calculation of Tax Benefits on Home Loan? The best way to calculate tax benefits is with the help of an online calculator. Only the following fields need to be filled out: Loan amount Tenure Interest Rate Loan Start Date Gross Annual Income Existing Deduction Under 80C/D A tax calculator offers several advantages: Accurate results Fast calculations Easy to use How is Tax Deduction Calculated on Second Property? When one of the homes is self-occupied, and the other is vacant, individuals can claim the same tax benefits as on their first loan. However, in let-out properties, a standard deduction of 30% on the total interest payments will be there. [B-02] Wrapping Up We hope you got all your answers about How Taking Home Loan Helps You To Save Taxes. Home loans offer several benefits, but they will be most beneficial if you fall into a higher tax bracket. If you still have any doubts, you can consult a financial expert like Piramal Finance.

08-11-2023

Home Loan

How To Raise Funds To Make The Down Payment On Your Home Loan

It can be challenging to save for the down payment of a new home. And, it’s not always easy to track your expenditures and figure out the best way to set aside money for a specific purpose. Fortunately, there are plenty of ways to raise funds for your home purchase that don’t involve selling valuable assets or taking out a mortgage on your primary residence. Here are six ways to raise funds to make the down payment on your home before you apply for a housing loan. [B-01] How Do Home Loans Work? When you apply for a home loan, the lender will ask you to put down 20% of the amount you plan to borrow. In other words, the rules mandate that buyers make a payment of up to 20% of the home’s value as a down payment. Only then can the bank or lender process the home loan for the remaining 80% of the amount. The rule applies to all cases where a loan of more than Rs. 30 lakhs is needed. When looking for a home loan, you must consider two critical things – interest rate and the repayment period. A home loan involves large sums of money. As a result, you must have a long enough repayment period to repay the money without financial trouble or ruin. At the same time, you must look for the best deal for the house loan interest rate. In some cases, you will be paying off the loan for a long time – decades. A high-interest rate would result in you paying a large interest over that period. Here are some ways to arrange the down payment for the clearance of the loan: Take a Personal Loan For Down Payment In this scenario, you apply for a personal loan and put a portion of the amount you borrow as a down payment. A personal loan isn’t purpose-specific and you can put it to use the way you want without interference from your lender. Therefore, it is legally possible to use your personal loan for the down payment on your new dream home. If you are taking a personal loan for the down payment, you must remember two things. One, a personal loan is given for a relatively shorter term when compared to other types of loan, including a home loan. Two, a personal loan has a higher interest rate than a housing loan. These two points must be factored in when you are considering taking a personal loan for a down payment on your new home. Take a Gold Loan For Down Payment If you have an existing relationship with a gold lender, you can create a gold loan for your down payment. A gold loan is an unsecured loan secured by your existing assets. In this scenario, you borrow a portion of your gold as collateral for the loan. Once you apply for the loan, the gold lender will determine your eligibility, down payment, and the amount you can borrow. Once approved, you will sign an agreement with the lender. The agreement will detail the loan terms and conditions. Borrow From Friends & Family For Down Payment Another way to fund a down payment is to borrow funds from friends and family. It can be a great option if you already have a network of friends and family to seek a loan. One of the advantages of borrowing money from friends and family is that you will not be charged interest in most cases. Therefore, you can target your income and savings towards paying interest on the home loan that you plan to take. It is also better than a personal loan as the repayment will be flexible given the informality of the transaction. Withdraw From PPF Account For Down Payment You can withdraw funds from your Public Provident Fund (PPF) account for use as a down payment. It can be a great option if you have been contributing to your PPF account for some time and are now ready to withdraw the funds. If you want to use your existing contribution to fund a down payment, you need to withdraw the amount from your PPF account. The other way is to borrow against your PF money. PF account holders have the option of getting a loan against it. Moreover, the government allows partial withdrawal if the money is used to purchase a house. If you want to go with the loan option, it will be available only if you have completed five years of service. Sell An Asset For Down Payment Another way to raise funds for a down payment is to sell an asset. Even if you don’t make much money from selling an asset, you can use the proceeds to make a down payment on your home. You can even borrow against the value of the home you sell to make the down payment. You can also consider selling a piece of land you inherited from your family or shares gifted by your parents. These assets are created for difficult times and can be used when buying your dream home. You can reinvest in these when you have a home and save the rent. Take a Loan Against Your Life Insurance Policy It is one of the most surprising ways to raise funds to make the down payment on your home purchase. You can use the loan against your life insurance policy to make a down payment on your home purchase. If you do not have a large insurance policy, you can take a loan against small ones to make up a part of the down payment. It could reduce the burden significantly. [B-02] Conclusion Home is one of the most important things in a person’s life. It represents security, stability and comfort. Although it is an expensive investment, it is important to plan for your future and ensure you can afford it. There are many ways to fund a down payment on your home purchase. A home loan is cleared only when the applicant has made the down payment for the property. Read more blogs like this on the Piramal Finance website to learn more about housing loans. You can also take a look at the products and services they offer.

08-11-2023

Business Loan

How To Apply For Online Business Loan: Complete Guide And Benefits Of It

To run a business, you need funds and resources. You need funds for both the running and expansion of the business. You can apply for an online business loan depending on your business needs. There are multiple options with varied business loan interest rates. With quick disbursal and processing, business loans are a great option. But there are various aspects that you should know about an online business loan. In this guide, we have shared the complete information on an online business loan. The business loan interest rate is also low, making it a great option. [B-01] Understanding Online Business Loan A business loan is an amount available to meet the business expenses. It is both a short-term and long-term loan. The main aim of the online business loan is to help infusion funds for business quickly. You can use the business loan to: Expand Meet daily expenses Buy new machinery Expand staff Conduct research Start a new line The business loan interest rate depends on the following: Amount Nature of the business Tenure Credit score The online business loan offers you transparency. It requires minimal documentation. The business loan can be both secured and unsecured. Secured loans are those backed by collateral or guarantee. You can pledge property, government securities, savings accounts, fixed deposit certificates, gold, or other assets. It should be under your or your co-applicant name. Unsecured loans are offered solely based on creditworthiness. The income, documents, business tenure, and other factors are considered while sanctioning this loan. Factors affecting Online Business Loan An online business loan is affected by multiple factors. This includes: Your credit score is a primary factor considered. The nature of the business determines the loan amount too. The annual turnover of the business plays a crucial role. The business debt-to-income ratio should be 50% minimum for approval. Top types of Online Business Loans There are three main types of online business loans: Term Loan A term loan is a short-term loan. You can use this loan to meet daily expenses. The business loan interest rate of the term loan is comparatively low. Credit Line A credit line is similar to a credit card. You will be issued a credit limit for your business. You can withdraw money if necessary and use it for business. Invoice Funding It is also called bill discounting or invoice factoring. It is used by small firms when there is a delay between issuing invoices and receiving payments from clients. You can get an advance based on invoice value. Documents required for an Online Business Loan The documents required for an online business loan are very basic. The documents include the following: Fill out the application form online. Proof of identity Aadhar card Passport Voter ID Driving license Proof of address Aadhar card Passport Voter ID Driving license Proof of income Latest ITR Bank statement for the last 6 months. The PAN card is a mandatory document. Proof of business continuity GST Registration Trade License Copy of partnership deed Registration Certificate issued by RBI or SEBI Certificate of Practice It will need you to submit the latest audited financials if asked. Benefits of Online Business Loan There are multiple benefits of online business loans. The primary benefits to enjoy are: Paperless application An online business loan is a paperless application. You are not required to fill out any long application forms. You can go to the website or mobile application and give the required information. You can complete the application as per comfort. Repayment tenure The tenure of the online business loan is around 36 months. You can repay the amount in instalments or prepay the loan if you wish. Simple eligibility The eligibility criteria for a business loan are very simple. You should be 23-65 years of age. The business should have been running for the last four years. In the case of a new business, you should own a previously successful business. You can be self-employed non-professional, or professional. Quick processing Online business loans are processed fast. Once you submit all the details, the request is taken into processing. Once the request is approved, the amount is disbursed within 24-48 hours. No collateral needed Most online business loans do not require collateral. It is for an amount of up to INR 10 lakhs. You are not required to put in any guarantor to secure the loan you have applied for. Multiple choices available There are multiple options available for the borrower. You can apply to any of these depending on your need. You can get a term loan, working capital loan, credit line, or invoice funding. Fees and interest rate The business loan interest rate is very cost-effective. Also, the processing fees are quite nominal. The rate charged by other moneylenders is very high. You can meet your business needs without having a high cost. The interest rate is around 17% PA. Builds credit history Applying for an online business loan helps to build a credit history. Timely repayment of the EMIs can improve prospects of acquiring high-value loans. Process to apply for an Online Business Loan The process to apply for an online business loan is very simple. You just need to have your documents and a stable internet connection. The following are the steps: Visit the lender’s website. Fill in the information in the online application. Make sure it is accurate. Upload all the necessary documents. Ensure to keep the images are legible. Wait for some time till the lenders go through the documents. Once the papers are verified, you will get approval. Get the loan agreement signed. Submit the document back on the portal. The money will be disbursed to your account within 24-48 hours. [B-02] Conclusion Online business loans are a boon for business owners. It offers hassle-free and quick funding to meet immediate business needs. The documentation process for the business loan is quite simple. Also, the business loan interest rate is quite friendly. This a great option to meet your immediate financial needs. It is offered without any security and with minimal documentation. It supports business expansion. You can apply for an online business loan from your mobile or laptop. To get more information on the same, you can visit Piramal Finance. The loan process is transparent, saves time, and is convenient.

08-11-2023

How To?

How to Apply for a Gold Loan | Steps to Apply for Gold Loan

A lot of individuals struggle to meet their everyday needs. That’s because the pandemic-related decline in the global economy is apparent. The only way to help you fulfil your financial obligations is with a gold loan. Gold loans are secured loans where you pledge your gold assets as security to get cash for unforeseen expenses and other needs. If you require short-term finance, gold loans are more affordable than credit cards and personal loans. But before approving a financial arrangement, full awareness is required. [B-01] What Are Gold Loans? In return for gold-related goods, lenders provide their customers with loans that are secured by gold. Typically, a percentage of the gold’s value is provided as the loan sum. The maximum credit amount that may be obtained depends on the gold loan amount per gram of gold, the amount of the gold being pledged, and other eligibility restrictions. It’s crucial to understand these factors in addition to having a fundamental understanding of what gold loans are. Borrowers must return the loan in instalments during the loan to get their gold items back (which might be made monthly or according to other predetermined repayment schedules, depending on the loan terms). When you understand what gold loans are and how to get them, you’ll see that they’re the best to use for important occasions and costs like weddings or unexpected obligations if you are convinced you can repay the loan quickly. Benefits of Gold Loan When obtained from respectable businesses, the best gold loans provide the borrower with a broad variety of benefits. Following are a few benefits of a gold loan: Little paperwork is needed since your gold will serve as collateral for the loan. Identity and address documents must be provided. No proof of income is needed. You have the option of paying the principal balance in full or only the interest after the loan period. You might save a lot of money since gold loans offer lower interest rates than personal loans. A gold loan has benefits such as fast processing and rapid distribution of borrowed funds. Loans secured by gold may easily be converted to cash. This loan has security. Therefore, having a poor credit history won’t prevent you from acquiring a loan. Gold loans have either zero or extremely low processing fees. How Do Gold Loans Operate? The fundamentals of gold loans are straightforward. A gold loan requires the customer to provide the gold to a lender in the form of coins or jewellery. It is possible to borrow up to 75% of the value of the pledged gold products. An Indian citizen who possesses items containing gold is eligible to apply for a gold loan. When you present the gold item to the lender, an assessor will look it over to make sure it is of good quality and is worth what it is currently selling for. As soon as you agree to the loan balance and any associated fees, you may start the paperwork. After accepting your loan, the lender will retain the gold and deposit the funds into your bank account (in possession, not ownership). The loan balance plus a lender’s interest should be repaid during the repayment procedure. A substantial loss or price decline for gold is often not very likely. Lenders are motivated to lend money because gold’s value is guaranteed to rise over time, unlike the other assets that can be used as security. Steps to Apply for Gold Loan and Eligibility Criteria Online or offline applications are accepted for gold loans. You must go to your nearby branch to submit an offline loan against a gold application. You may follow the procedures listed below to apply for a gold loan online: First, go to the Piramal Finance website. Select “Gold Loan” from the list of options under “Apply Now.” Complete the online gold loan application by providing your name, contact information (including email address), and residence address. Choose your state, city, and closest branch in the fourth step. To submit your gold loan application, click “Submit.” Write down the number on your reference id. A representative from the company will contact you soon. Eligibility Criteria You must be at least 18 years old to qualify for the eligibility criteria for a gold loan. Your source of income must be stable. What Paperwork Is Needed in India to Get a Gold Loan? The following records are necessary for an Indian gold loan: A PAN card, an Aadhar card, a driver’s license, a voter’s ID card, or a duplicate of a passport may be used as identification. Aadhar cards, driver’s licenses, voter ID cards, passport copies, landline/postpaid bills, water bills, electricity bills, or rent agreements (together with the most recent owner’s electrical bill) are all acceptable forms of identification as proof of residency. A pair of current passport-sized pictures Interest Rates on Gold Loans Gold loan interest rates range from 7% to 18%. The main things that affect the interest rate are the size of the loan and the borrower’s monthly income. The gold loan interest rate will be higher if you borrow more money. The interest rate will be lower if you have a stable, high income. The loan’s value is directly linked to how much gold you have. The purity of the gold doesn’t make a big difference in the interest rate. If you pay off the loan well before the pre-scheduled payback term of 3-6 months, certain NBFCs and banks may assess a foreclosure cost of up to 2%, excluding GST. A minimum service charge of Rs. 500, or 0.5% to 2% of the loan amount, is further charged. [B-02] Conclusion One of the first things you should consider before applying for a gold loan is the interest rate. Even though they have high-interest rates, gold loans are often obtained since they are a quick method to get funds. Take your time taking out a loan with a high-interest rate. The more you must pay each month, the greater the interest rate. To know more about how to apply for a gold loan, follow Piramal Finance.

08-11-2023