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Personal Loan

What Happens After A Loan Is Disbursed?

Loan disbursement is the transfer of funds to a bank account. The loan disburses when the agreed-upon sum is sent into the borrower’s account and is ready for use. The funds move from the lender’s to the borrower’s account. Personal loan disbursement is much faster and easier. You can apply for a loan online and deposit it into your bank account within 48 hours or less. After the property has been checked out and all legal documentation has been completed, funds will be disbursed. Before loan disbursement, a customer must invest their relative share of the cost. The loan can be disbursed in a lump sum or instalments. It depends on the needs of the development authority, society, or private builder. A disbursement is a completed payment that has been recorded as such. It has been deducted from and credited to the payer’s account. [B-01] Main steps in the disbursement of a personal loan There are several steps involved in the entire disbursement process. The following are the main steps in the disbursement of a personal loan: Personal Loan Processing Your personal loan application is usually approved within 24 hours to a week. When it passes, banks usually issue a check you can pick up at the branch or mail it to you. Personal Loan Payment The bank is contemptuous of the data you provided. It will approve your personal loan, and loan disbursement will begin. The amount disbursed is fixed by the loan agreement as well as other factors such as: Loan Type Processing fee Payment in advance Service tax Mode of Payment A personal loan is disbursed within 24 hours of the application being approved. The bank issues a check or a demand draft. You can either courier or physically collect from the branch. In rare cases, the loan amount may be credited to your bank account via NEFT transfer by the branch. The bank’s confirmation After the disbursement of the personal loan, the bank will send a confirmation letter. In addition, the bank will provide you with an EMI calendar as well as an amortisation table. This is done to assist you in calculating the principal-to-interest ratio for your loan payments. The repayment procedure Once you’ve received the funds, you can begin repaying the loan. You can do this as per the terms of your loan agreement with your bank. You can repay the loan with postdated checks or electronic clearing services. If you got the loan from a bank where you already have an account, you could set up a periodic auto-debit with standing instructions to make the repayment process easier. If you took out a loan from another bank, they would only accept repayment through your salary account. The most important things to remember about the personal loan disbursement process Your monthly income, credit score, and loan repayment period determine your loan’s interest rate. You can change lenders at any time. But you may be charged a penalty if you switch lenders. Technology is critical in the disbursement of personal loans. Conclusion Loan disbursement is simple, but each step is critical. The steps don’t take long. You can apply in minutes and receive your loan soon. A disbursement is the transfer of funds from one bank account to another. Knowing the basics, such as personal loan disbursement, will make the loan process easier and simpler. Dig into Piramal Finance for more finance-related terms and discover your needs. [B-02] FAQs Can I cancel my loan once the funds have been deposited into my bank account? Once you’ve got the funds, you can’t cancel your personal loan. You can cancel your application before the funds have been disbursed or even before the lender has approved it. No, you cannot cancel your personal loan application once the funds have been deposited into your bank account. You can cancel your personal loan application before the funds are disbursed. What exactly is a loan disbursement? The transfer of funds from a bank to the borrower is called a disbursement. The loan is disbursed when the agreed-upon sum is deposited into the borrower’s account and is ready for use. The funds have been moved from the lender’s to the borrower’s account. How long does it take for a loan to be disbursed after its approval? Your loan application will be processed within 24 hours to a week, depending on the credibility of the facts you provide. Once the loan is approved, banks usually issue a check that borrowers can pick up at the branch or have mailed to them. Why is disbursement being held up? Delayed disbursements are possible. Commercial banks take longer to process checks drawn from remote banks, sometimes up to five business days instead of the usual three. What, exactly, is “partial disbursement”? The bank makes partial or partial disbursement loan payments for under-construction property. The lender will wait to start the EMI. The EMI is calculated on the total loan amount. Repayment dues on a partial disbursement may be unfit at the start of the loan term. As a result, many lenders charge interest on the part of the loan that is disbursed. What Is the Distinction Between a Payment and a Disbursement? Payment is a disbursement. The term “disbursement” implies a completed payment. That is, it has been recorded properly as a debit on the payer’s side and a credit on the payee’s side.

08-11-2023

Guide

Should I Choose a Long-Term or a Short-Term Tenure

A loan is used for various reasons, like building a new house, spending on a wedding, medical purposes, education, or purchasing a flat or apartment. Eligibility is generally fixed by repayment capacity and property price. While most loans are granted for a maximum of 30 years, it has been seen that the average time it takes people to pay off their mortgage fully is around 8 years. You agree to pay an EMI (equivalent monthly instalment) when you obtain a home loan. An EMI of 60–65% of monthly income for a specified period can last up to 30 years. The lower the interest rate, the longer the term. [B-01] What are short-term and long-term loans? Short-term loans are repayable in less than a year, whereas long-term loans have a longer repayment period, depending on the type of loan. We will further discuss it in detail below. Short-term loans Short-term loans are repayable in less than a year. They are right for small, short-term capital needs. These are unsecured loans with no asset requirements. There is very little paperwork required. You can get a short-term, instant personal loan online. Short-term investments are those that are traded for a short period of time, usually up to three years. These are high-liquidity instruments with lower market risks. Short-term financing gives borrowers a single amount of money that they can use to solve a short-term problem. Short-term financing provides borrowers with cash quickly, making it an excellent choice for those who require funds right away. It also takes less time to repay than traditional loans. It’s also useful for people who don’t qualify for a bank’s line of credit or whose bad credit makes getting a credit card difficult. Key features of a short-term loan Interest Rate The main impact of loan tenure is the amount of interest that must be paid. The interest rate rises as the repayment period lengthens. Also, the interest cost remains low if the repayment period is short. After all, the cost is fixed by the applicable interest rate. Property Mortgage A loan is a secured loan. The property will be mortgaged until the entire loan amount is repaid. The shorter the tenure, the shorter the property’s mortgage with the bank. Amount of EMI Loans must be repaid in instalments. Borrowers should select an EMI option that is comfortable for them. Prepare to pay a very high EMI for a short-term loan. On the contrary, be prepared to pay a low EMI for long-term loans. If the EMI amount is manageable, a short-term loan should be considered. Long-term loans Long-term tenure has a longer repayment period, depending on the type of loan. These loans are typically used to borrow large sums of money. While interest rates on long-term tenure loans are generally lower than on short-term loans, the total interest paid on the borrowed amount is much higher. Home loans, car loans, large personal loans, loans for long-term hospitalisation expenses, and so on fall into this category. Key features of long-term loans Greater loan amounts Long-term tenure loans have higher loan amounts. As a result, home loans, auto loans, and other long-term tenure loans provide larger loan amounts than short-term loans such as personal loans. Because these loans are mostly secured through the submission of collateral, banks are not afraid to lend large sums to long-term loan applicants. Interest rates are lower. Long-term loans have lower interest rates because the loan repayment period is longer. As a result, car and home loans have lower interest rates than personal loans. Submitting Collateral Long-term tenure loans almost always require collateral because the loan amount is much larger than other loans. This assists banks in recouping lost funds if a borrower fails to repay the loan. Instalment repayment Long-term loans are repaid in equal monthly instalments over a long period. These monthly payments consist of two components: principal and interest. Conclusion Like any other choice, both have advantages and disadvantages. Short-term investing allows you to achieve your financial goals in a short period of time while taking on less risk. Long-term investments, on the other hand, are appropriate if you have a higher risk tolerance and desire higher returns. For more such finance-related inquiries, contact Piramal Finance. https://www.piramalfinance.com/ [B-02] FAQs Which of the following is a benefit of using short-term financing? The main advantage of a short-term loan is that you will usually receive funds within a week of approval. If you need to make a quick payment on a bill or buy new stock, a short-term loan will help you meet your cash needs right away. What are the drawbacks of a long-term loan? A significant disadvantage of a long-term loan is that it impacts your monthly cash flow. The larger your loan, the more you’ll have to pay monthly. What are the reasons for the difficulty in obtaining long-term loans? Long-term tenure loan approval is also generally more difficult. The lender will want to ensure that the money is being lent to someone who can repay it. Many long-term loans have higher interest rates than short-term loans. This makes the lender’s decision to lend you money riskier. What is a loan term? A loan term is the length of the loan or the time it takes to pay off a loan completely when the borrower makes regularly scheduled payments. These loans can be short-term or long-term, and the time it takes to pay off the loan’s debt is referred to as the loan’s term.

08-11-2023

Personal Loan

How many types of personal loans can be offered by a bank?

Personal loans have become very popular amongst customers. There are a lot of options for personal loans that banks offer. Banks and other NBFCs offer different types of personal loans based on various needs. It is one of the easiest ways to raise urgent funds. These funds can be used for diverse needs like buying or renovating houses, medical needs, funds for marriage, etc. Personal loans are quick, easy, and available with minimum papers. Each of these aspects makes different types of personal loans preferable for customers. Read on to get a better idea of personal loans offered by banks. [B-01] Types of Personal Loans Offered by Banks Home renovation loan As the name suggests, the bank will offer personal loans for renovating houses. A home renovation loan will help finance repair, maintenance, and restoration. If someone plans to fix a leaky ceiling or fill up cracks in a wall, then a home renovation loan is the perfect personal loan. Agricultural loan An agricultural loan is one of the best personal loans provided to farmers. This kind of loan provides funds to the farmer at a very low-interest cost. It helps the farmers to buy farming equipment, tools, and raw material. It allows them to farm quickly and conveniently. Thereby, increasing their earnings and improving their overall output and productivity. Wedding loan A wedding loan is a type of personal loan offered by banks. This loan helps customers by raising funds for the couple or parents. These loans deal with giving financial support for the expenses of a wedding. Marriages in India are very expensive. Expenses for jewellery, management, food, etc., can be fulfilled by taking wedding loans. Thus, many lenders have started offering wedding loans which can help make the special day more memorable. Anyone can handle these types of personal loans. It can be the family of the bride, groom, or any other family member. You can take no fixed amount in this type of personal loan. The amount can be customized as per the needs of the individual. Travel loan This is one of the types of personal loans specially designed for holidays and travelling. These loans will help one raise funds for a vacation or a tour. With the help of travel loans, one can enjoy going around the world while paying for it later with a travel or holiday loan. Another advantage of a travel loan is that it comes with the added benefit of travel insurance. This will give foolproof protection throughout the tour. Education loan Education loan is one of the most popular types of personal loans offered by banks. Students use it to fulfil their academic requirements. These loans have existed for decades. Parents can sign up for these education loans, and as time goes by, kids can take over and pay it later. These loans are also known as school fee funding. These loans can be used to pay fees in school or tuition. In more significant cases, these education loans can be used in situations like if the child wants to study abroad. Festival loans Festival loans are a very different kind of loan. These loans are new in the market. Lenders are giving out this kind of festival loan for celebrating festivals. These types of personal loans can help one prepare for different festivities, host parties, etc. Festival loans are an excellent way to raise funds for festivals and parties. Pension loans Pension loans are loans that are meant for retired personnel. Only retired people are eligible for these personal loans. Hence the standard eligibility criteria don’t apply to the loans. In this type of loan, the bank offers a few times more of the amount of a regular pension that the pensioner will draw out at the end of the month. The main eligibility criteria for a pension loan is pension proof. It is a must to be able to apply for this type of loan as per the loan eligibility calculator. After submitting the loan application, the pensioner can take the loan for the next month. Pension loans help pensioners to borrow money for any expenses like medical bills or daily expenses. It has no boundaries. Consumer durable loan The consumer durable loan is a type of personal loan that will help one buy white goods. Various kinds of white goods can be purchased with the help of consumer durable loans. These types of loans are customer friendly and convenient to use. White interests include refrigerators, ac, microwaves, televisions, etc. So, if someone hopes to buy a fridge or an ac, they can apply for a consumer durable loan. Medical emergency loan A medical emergency loan is a crucial type of personal loan offered by a bank. Medical emergencies can happen to anyone at any time. A medical emergency loan will help raise funds for the crisis. Apply for a medical emergency loan to cover all medical expenses required during an emergency. These loans are a lifesaver. A medical emergency loan is quick, instant, and readily available with minimum documentation. The only eligibility criterion is a medical certificate as proof of credibility. Top up loan Top-up loans are different types of personal loans. Banks offer it to help with the payment of an existing loan. A top-up loan can only be taken from the bank where the initial loan was taken. One can take more funds from a top-up and repay the bank within the existing tenure. A top-up loan’s main eligibility criteria are for the customer to be regular with the payments. [B-02] Conclusion There are different types of personal loans offered by banks. These are easy to avail, customer friendly, and available with minimum rules. Personal loans can also be customized as per the customer’s needs. If one needs help with personal loans, Piramal Finance is a good personal loan provider.

08-11-2023

How To?

Detailed Information On How To Manage Debt To Income Ratio

Debt-to-income ratio (DTI) compares the monthly loan payments to that the monthly salary. It indicates the part of the net monthly income (pre-tax). It helps to pay off the rent, mortgage, credit card, and other things. A person’s debt-to-income ratio (DTI) impacts their overall financial health. They can decide whether or not they should apply for credit by using the DTI calculator to assess their comfort level with their current debt. The ratio is expressed as a percentage. Lenders use it to assess your ability to handle your monthly payments. Whether one is fully capable of repaying a debt. Higher DTI ratios are typically associated with riskier borrowers. [B-01] What elements comprise a DTI ratio? Mortgage lenders calculate a Debt-to-income ratio using two factors: A front-end ratio and a back-end ratio. Let’s see how it’s done: The ratio of front-end. It is also known as the housing ratio. It shows what proportion of your gross monthly income would go into housing costs. Such as your payment of debt and property taxes. Also, home-owners insurance and HOA dues. The ratio of back-end: Indicates the percentage of your income required to fulfil all of your monthly debt commitments, in addition to your mortgage and housing costs. This includes any revolving debt that appears on your credit reports. Such as credit card debt and vehicle loans. Child support, student loans, and child custody obligations as well. Calculation Of Debt-To-Income Ratio Some simple steps to follow to calculate the Debt-to-income ratio are: Count up all of your monthly expenses. These payments could be minimum credit card payments. Auto, student, or personal loan payments. Alimony payments or child support payments. Any other debt repayments that appear on your credit report every month. You can calculate it by dividing your monthly debt payments by your gross monthly income. Your DTI ratio can be calculated by converting the number into a percentage. Remember, this figure does not include other regular monthly expenses like daily utilities, insurance payments, medical costs, daycare, etc. These budget systems won’t be taken into account by your lender while assessing how much money to lend you. Why Is This Ratio Important? A high Debt-to-income ratio can indicate that a person has too much debt. It can be relative to their monthly income. Creditors that have low debt-to-income ratios are much better. They can manage their monthly loan payments. As per result, before giving any loan or credit to a potential borrower, banks want to see low DTI percentages. The proper front-end ratio, according to lenders, should be no higher than 28%. The back-end ratio, which takes into account all costs, should be no higher than 36%. Because you’ll be paying off more debt, lowering your credit use ratio will also assist raise your credit score. The maximum DTI ratio a creditor can have yet approved for credit is 43%, as per general rules. Consequences Of High Debt-To-Income Ratio Your financial life may be impacted in several negative ways. If your debt-to-income ratio exceeds the acknowledged benchmark of 43%. Some of them are: Less financial mobility – You have less money to save, invest, or spend. If a sizable amount of your salary is going toward paying off debt-restricted Confined eligibility for mortgages- If your debt-to-income ratio is over 43%. You might not be eligible for an Eligible Credit. It might only be approved for more stringent or costlier mortgages. Worse conditions when you borrow money or apply for credit. When your debt-to-income ratio is high, you will be viewed as a riskier debtor. Lenders may impose stricter restrictions. Higher interest rates and harsher punishments. It is for missed or late payments. Also, when approving loans or financing for risky borrowers. Managing The Ratio And Keeping It Low How should one attend this? Here are a series of steps which can help. Create a budget to keep accurate accounting records. Cut back on pointless purchases. Put more money toward paying off debt. Make a strategy to pay off your debts. Reduce the cost of your debt. Look into strategies to lower your rates if you have high-interest credit cards. Call your credit card provider first. See whether the interest rate can be lowered. Check If your account is sufficient with no credits. Are you consistently make your bill payments on time? You might have more success trying this approach. Don’t accumulate more debt. Don’t use your credit cards for important expenditures. Take out new loans for them. This is crucial before and during a property purchase. Maybe your debt-to-income ratio doesn’t directly affect your credit score. But lenders or credit issuers will probably ask for your income. This is when you apply. Your debt-to-income ratio will be considered just as your credit score will be one consideration in their examination of your application. Due to this, keeping a healthy debt-to-income ratio might be just as crucial. It is for obtaining a loan or credit as having a high credit score. [B-02] Conclusion Keeping high credit is as important as keeping low debt. For instance, make sure the debt-to-income ratio is low. It is to maintain stability. Maintain a manageable DTI ratio. It indicates where you can handle the debt. This may increase your ability to obtain financial goods. Be very smart, especially when it comes to taking any financial decision. Check your progress each month. Do this by tallying up your debt-to-income ratio. You may maintain your reasons to continue your debt modestly. Do this by observing your DTI decline. Don’t lose hope. Make the best out of the scenario. For more information on relatable topics, visit Primal Finance.

08-11-2023

Personal Finance

Four Pillars Of Personal Finance And Why They Matter

Personal finance is a management system that deals with investing and saving. It can be done individually or for a family. It is a record of income, budget, and the amount of money spent. Some financial risks and their effects are a part of personal finance. Retirement plans are also included in personal finance. Personal finance is an essential part of handling your current financial demands as well as your upcoming finances. Getting a stronghold in personal finance is very important. It helps you make better decisions and take control of your hard-earned money. [B-01] The Four Pillars of Personal Finances The “4 pillars of personal finance” are the following: Asset: An asset is something useful that one owns. The ability of an investment to be quickly transformed into liquidity is what makes it valuable. Money in your checking account is a form of asset. Liquidity means readily available cash. An asset can be for a short or long period of time. One of the most reliable parts of finance is assets. The reason for this is that it is the sole element that provides you with solid financial assistance. Until you have more liabilities, your net worth increases as your assets do. Most assets increase in value over time on their own. Liabilities: Liability is a burden. It can be money you owe to someone or land that can’t be used anymore. Debt is the major form of liability. Many of us get stuck in debt because we don’t grasp the fundamentals of financial planning. All accounts payable are included in liabilities, which are the reverse of assets like student debts, bank cards, due bills, loans, and other debts. Additionally, the interest that has accumulated on all of these obligations will only be deemed a liability. Interest rates are seen as measures of the value of debt. The interest rate decreases as credit rating increases. All payables are included in debts, which are the accounting reverse of assets. Income: Income often corresponds to the sum of cash, assets, and other asset exchanges gained over a predetermined period in return for goods or services. There isn’t a single, accepted definition of “income.” Instead, the term is defined in light of the context in which it is used. All of a person’s financial output during a specific amount of time is referred to as “income.” Either monthly or annual calculations are possible. Even if a monthly computation is advised to manage the costs, tracking your earnings and expenses will enable you to meet short-term objectives. Income can be divided into two categories: first, spending power; and second, spare cash. Use this income sensibly and avoid making unnecessary purchases. Expenses: It refers to the cash flowing out. Expenses are any sums of money spent in a certain time frame that don’t result in any revenue. For our daily operations to run smoothly, expenses are required. It is vital to continuously keep a record of your monthly spending to prevent going over budget. You must keep track of spending so that you may compare the planned and real amounts. Keeping track of your monthly spending can be difficult. To minimise unforeseen costs, use your bank card responsibly. Utilize specials, deals, coupons, and other incentives when purchasing goods. To prevent your savings from running out, consider creating a fund for emergencies or unforeseen needs. Personal finance schemes Planning your finances is the first step toward security. Follow some of these methods to maintain your personal finance: Understand your money: One must know how the cash flow system works. Calculate your expenses and keep track of your salary. Make a good budget: See what works for you, and plan accordingly. It is important to set one’s own budget. It keeps you aware of where and how your money gets spent. Assign money to yourself: Save some money from your salary to pay for personal expenditures. This can be a medical bill, money for daily use, or even a vacation. Limit your debt: The more debt you have, the lower your credit score becomes. Keep a hold of it and try not to fall into a debt pit. Plan a wise strategy to avoid taking on debt. Debt is not an option you would ever want to opt for. Borrow wisely: Do not borrow a large sum of money from someone. Take only when you are certain you can pay. Taking on large loans will financially drain you. The higher your credit score, the higher your chances of getting loans from a reliable source. Credit history and a good score always keep your finances strong. Future planning: Retirement can be hectic if not planned early. One doesn’t want to end up with poor financial status. To avoid that, save money. Put in a fixed deposit, invest in some reliable source or get yourself a good insurance plan. [B-02] Conclusion Maintaining good personal finance can take you a long way. As we saw, it has four pillars. These are assets, liabilities, income, and expenses. As important as it is to collect assets, it is also important to get rid of liabilities. Debt is the last thing anyone wants in their life. Keep a good balance between your income and expenses. See how much you can save and exactly how much can be spent. A balance sheet won’t hurt anyone. In turn, it helps you move a straight path in finances. Plan your budget. Find new alternatives and see what works best for you. Try fixing your lifestyle to achieve that plan of yours. Get a grip and start achieving those targets. Personal finances should be regulated regularly to give your dream a chance. To learn more about personal finance, visit the website of Piramal Finance. Check out the products and services they offer and read the informational blog posted by them.

08-11-2023

Home Loan

How Can A Housewife Get A Loan?

A housewife can get a loan if she does not have a steady income. You can look for a loan for a housewife against your assets by submitting securities such as gold, real estate, or fixed deposits in their name. These are secured loans, and they can be obtained without needing any proof of income. Some housewives may be able to earn a living while working from home. If they have the required income and a good credit history, they do not need to provide any security to obtain the loan. A housewife who worked in the past but quit for whatever reason may still have a credit score. On the other hand, a housewife with no prior work experience may not have much of a credit history to show. That does not preclude her from obtaining a personal loan. [B-01] Women’s Personal Loan Benefits The benefits of Loan For Housewives are: It is simple to obtain by adding a working co-borrower. There are no restrictions on how the borrowed funds may be used. Quick loan approval. There is no need to visit a bank – one can apply for it online. There is little documentation. There is no need for paperwork as documents can be submitted online. Repayment terms are flexible. No security is required. It can easily be obtained to start a business. Personal Loan Programs for Women Here are a few of the most popular personal loans for housewife programs that may be of assistance to you: Women’s Mudra Yojana This program was created specifically for women to help them start their businesses. Depending on your needs, you can obtain a loan of as little as 50,000 rupees and as much as 50,00,000 rupees through this scheme. You can apply for an unsecured loan of up to ten lakh rupees. If you want a larger loan for a housewife, you must pledge your asset as security to the lender. Because it is legal, you can get this loan from any bank, private or public. It is a government of India initiative. Udyogini Scheme Another government-initiated scheme that empowers women from rural and underdeveloped areas is the Udyogini scheme. This scheme allows for a loan of up to Rs. 3 lakhs. You do not, however, have to live in a rural or underdeveloped area to qualify for this loan for a housewife. Women from all over the country can easily obtain this loan. The biggest advantage of this loan is that the interest rate is extremely low, and the borrower’s annual income should be less than 45,000 rupees. Star Mahila Gold Loan Program One of the best schemes of loan for housewives is the Star Mahila Gold Loan Scheme. It is a tax-break program for female business owners and entrepreneurs. Before applying for this scheme, you should keep in mind that a woman must own at least 50% of the company’s share capital. This scheme requires no collateral or security, and you can obtain an unsecured loan of up to 5,00,000 (five lakh) rupees. The woman applying for the Star Mahila Gold Loan Scheme must be at least 18 years old and not older than 60 years old. How do Housewives get Personal Loans? Consider a secured loan. Secured loans are credits obtained against a lender’s assets. The lender will take possession of your asset until the loan is completely paid off. If the borrower fails to repay the loan, the lender will be authorised to sell the borrower’s assets to recoup the loan money. A housewife can easily obtain a personal loan if she owns any assets that can be used as collateral. Loan for Gold Gold is a metal that is present in almost every Indian woman. A loan for a housewife against a gold ornament can help a person make the best use of their gold ornament. Gold jewellery has the potential to get you a gold loan, which is much cheaper than unsecured personal loans. A gold loan is one of the most effective ways for women to obtain a personal loan. Conclusion Most housewives who want to start their businesses or brand face the challenge of raising capital. Now that housewives can apply for loans, this problem has a solution. Housewives can also apply for secured or unsecured loans and receive funds to start their businesses today. By approaching banks or utilising the government’s housewives’ empowerment schemes, it has become simple to apply for a loan for a housewife and assist them in achieving their dream of starting a business. Read on to learn more about finances at https://www.piramalfinance.com/ [B-02] FAQs Is it possible for a housewife to get a loan if she does not have a steady source of income? She absolutely can! Housewives can obtain housewife loans by depositing securities such as gold, real estate, or fixed deposits in their names. These are known as secured loans and are available without the need for income verification. What kind of guarantee should I provide?The security will be the house against which the loan for the housewife will be obtained, as well as any collateral provided by the customer. This is under their jurisdiction if banks want to accept any other security. Is the bank willing to convert a fixed interest rate to a variable rate?Yes, the bank provides the conversion. You can change the fixed lending rate to a variable at any time. You can also change a variable lending rate to a fixed rate. What is the maximum loan term?For salaried individuals, the loan tenure is 30 years or 65 years, whichever comes first. For other borrowers, the loan term is 20 years or 65 years, whichever comes first.

08-11-2023

Banking

Difference Between Retail Banking and Corporate Banking

Both commercial and retail banking is a part of one business. The customer base for the two is different. They both offer banking services to people. Commercial banks cater to the needs of corporate customers. Retail banks provide service to retail customers. It can be found almost all banks have a separate division for retail and corporate. It can be challenging to decide which division to go for. One needs to know what are the differences between the two. This article has discussed in detail what is the difference between the two. Both the differences and similarities have been discussed here. [B-01] What Is Meant By Retail Banking? Retail banking is also called personal banking or consumer banking. They mainly provide their service to individuals. They do not cater to large businesses and industries. Mass-market banking, designed for the general public, is known as retail banking. Many services are provided for clients to manage their money. They have services like a savings account, loan and checking account. They also have services like financial advice and source for credit. Retail banks have a type called local community banking. They also include large-scale global corporate banks. As the world is modernizing, all the features banks offer are available digitally for their customers. What Are The Services Offered By Retail Banking? Retail banking offers many services and facilities to help customers manage their finances. But the level of service depends on some factors. The client’s income level is a factor. The client’s level of involvement with their bank is also a factor. There are many channels for distribution provided by these banks. They have many branches, online applications and websites. A few services that the banks offer are: Deposit account: This account means savings, checking, and many other accounts that help to store, deposit and manage the client’s money. Depending upon the account agreement, one can withdraw the deposited money. The fund can be withdrawn using checks, cards, and over-the-top withdrawal slip. Individual lending (secured): Secured individual lending is offered if an individual wants to buy a huge asset. A mortgage or loan against property on investment or residential property is an example of this loan. This, in turn, profits the retail banking service. It also helps to build a client base. Another good example of it is automobile financing. Individual lending (unsecured): This loan means student loan, credit card and personal loan. It is issued to individuals to facilitate their spending. No collateral or permission is needed as it is an unsecured loan. The terms can mostly be based on the credit score of the customer. If a person is willing to apply for this loan, they must ensure their credit score is high. The interest rate would depend on the terms of credit and can be high. Certificates of deposit: A CD or certificate of deposit is a savings account. There is a fixed tenure, rate of interest and date of withdrawal for this. Compared to other savings accounts, this one has a high-interest rate. The period usually ranges from 3 months up to 5 years. For a CD, there is mostly no need to make monthly payments. But for early withdrawal, some banks charge a penalty. Cash access: It simply refers to how the customer can access their cash. E.g., ATM. What Is Meant By A Commercial Bank? The other name for this is corporate banking. They provide services to institutions, corporates, businesses and, at times government. They offer deposit products and also in addition to them they offer some commercial services and products. The model of this banking service is to maximize revenue. As compared to retail banking, commercial banking has a low client base. But they are way more profitable as their clientele is way more affluent. What Are The Services Offered By Commercial Banks? All the services offered by them specifically cater to the needs of the corporates. Merchant services: It refers to loans and many other credit lines. It includes credit card processing, electronic check service and mobile payment solutions. This allows companies to accept and make payments. It is vital for online business. Global trade services: This service refers to trade finance, including global payment, letters of credit, financing and foreign exchange. It is used to streamline international commerce and trade. A third party is introduced, which eliminates supply and payment risk. Treasury management service: This service helps businesses to manage their assets like investments and cash. Fraud prevention, disbursement and fund collection are a part of this service. Lending services: Commercial banks offer many programs to lend money. It includes the working capital for real estate lending, equipment financing and business. Their short-term cash flow is secured and meets their capital needs long-term. Employee services: Corporations need to build a benefits plan for their employees. This service is for that purpose. What Are The Differences Between Retail Banking And Commercial Banking? Retail banking caters to individuals. Commercial baking, on the other hand, caters to corporates. Retail banking has customer-oriented programs. Commercial banks have services that are designed for cooperates. The services and products offered by the retail banks are standardised. On the other hand, commercial banks customize their services and products for their clients. [B-02] Conclusion Although there are many differences, we can still find some similarities between retail and commercial banking. Both banks offer debit and credit cards. They both have the facility of loans. Online services are provided by the two. So, in this article, it has been discussed in detail what are the difference we find between the two. One such thing is to do good research before opting for any service; if looking for financing options, then “Piramal Finance” is a good personal loan/financing option for buyers.

08-11-2023

Personal Loan

Personal Loan for Pensioners: Eligibility, Document, Features

A young person with a solid salary might get a personal loan with ease and good terms in India. Yet, if you are above 65, you may find it harder. Retired people often struggle to keep up with debt paybacks due to a lack of constant income. As a result, most banks see them as a credit risk. They often issue loans with higher rates or even reject their request altogether. Yet, certain banks and financial firms provide loans to pensioners. To get credit, they must meet the criteria standards imposed by banks. This blog will go through the eligibility criteria, perks, features, papers needed, and application process for personal loans for pensioners. What is a Personal Loan for Pensioners? A personal loan for retirees is made especially for those over 60 who get a constant pension. The loan is versatile and may be used to meet various money demands. It is a collateral-free loan. No asset is secured here. Yet, a third-party guarantee may be needed for the loan to be approved. Although there is no major difference between personal loans to young people and personal loans for pensioners, the criteria and rates offered by lenders vary. Features & Perks of Personal Loans for Pensioners Here are some aspects and perks of a loan for retirees: Competitive Rates: This loan is available from many banking firms at a low rate, enabling you to plan and manage your finances in an organised manner. Minimal Paperwork: You can avoid the extensive and time taking paperwork by submitting your ID proof, home proof, and income evidence (details of your pension). No Security Needed: Personal loans for pensioners are unsecured. As a result, you do not need to present any collateral or security to receive it. You may borrow against your pension. Instant Approval & Rapid Payment: Your loan will be approved within a few hours, and the cash will instantly be put into your bank account. Multi-Purpose: There are no criteria for getting this loan from financial firms. As a result, it is one of the fast and cheap loans for retirees that can be used for many goals, such as trips and debt paybacks. Paperwork Needed to Apply for a Personal Loan For Pensioners For the lender to approve the loan request, you must complete a form and submit it together with the needed papers. Among these papers are the following: Identity verification You need a copy of your Aadhaar card, passport and driving licence. Include your PAN card and other ID proofs. Proof of residency Gather a copy of your rental agreement, property paperwork, and utility bills. Even Aadhar Card, Voter ID Card, and driving licence would work for proof of residency. Proof of Pension Bank records from the previous six months show that the pension has been credited to your account. Additional Papers This gives a clear idea of the financial state of the borrower. Lenders may ask for additional papers based on different factors. Eligibility Criteria for a Personal Loan for Pensioners Pensioners may get online and offline loans from lenders. But, before applying, you must be informed of the qualifying conditions to prevent rejection. You need to be a citizen of India. The maximum age for applying for this loan is 76. You should have worked for the govt. Or the military. In the case of your death, the relative pensioner (person authorised to receive the pension after you) may also apply for a personal loan. Yet, he or she should not be older than 76 years. Vital Factors to Consider To Get a Personal Loan for Pensioners Source of income People who get a pension from Central, State, or any other government-recognised agency may apply for the loan. Income from a previously employed private firm or a withdrawal from a late spouse or family member is also included. Note that personal loan rates are lower than those of other types of financing, such as credit cards. So, this loan is preferable to collecting credit card debt if you have a steady pension. Unsecured loans Personal loans for pensioners do not need collateral, which means you do not have to guarantee your home or a plot of land at the time of application. This is a significant perk since no assets would be kept as collateral. Duration of payback The time to repay the principal and interest on such a loan is similar to that of a standard loan. It may range from 12 to 60 months. But, the real payback term varies depending on the criteria and plans of the lender. The applicant’s equity and credit history are other vital factors in establishing the payback duration. Using an online personal loan EMI calculator, you can know your EMI and the loan length. Interest rates Personal loans for pensioners have variable rates. These are decided by the applicant’s age, credit score, and the lending firm’s rules. How Can You Seek a Personal Loan for Pensioners in India? You may always receive this credit facility by going to any bank offering retirees personal loans. All you have to do is complete the application form and submit it with all the needed papers. After verifying your papers, the officials will approve your loan request within two working days. You may also go to the bank’s website, sign in, and fill out the form. Provide and upload all needed papers. The bank will authorise and approve the loan within a few hours or days. They initiate the process after verifying your paperwork and information. [B-02] Conclusion One of the government’s key aims is to provide financial stability for the aged. For this reason, many pension plans have been developed. Each month, the pension is deposited into the person’s bank account. But, this pension is insufficient to meet sudden costs or additional expenses. Hence, the pensioner may need to hunt for money elsewhere to deal with unplanned events. All bank has created a lending plan in response to the demands of the elderly. Personal loans for pensioners have reduced rates and no paybacks or processing costs. A personal loan for retirees enables you to access cash when needed. Also, because the loan is flexible, you may use the cash for personal purposes and return the loan in constant EMIs. To learn more about personal loans for pensioners, visit Piramal Finance for related blogs and explore their products and services.

08-11-2023

Guide

What Are the Best Types of Debt Consolidation?

It is challenging to get out of debt. It is tough if there are many creditors. If a person is trying to juggle all such things, then debt consolidation is the right option. The meaning of debt consolidation is to combine many debts into one payment. There are many methods for this. This makes the finances of a person simple. One has peace of mind as they do not need to juggle many payments. This also helps to save up money in terms of interest. It helps to pay off debts faster. [B-01] How does debt consolidation work? Many forms of financing are used to pay off many liabilities and debts, and it is known as debt consolidation. It can be so that person is swaddled with many obligations. To ease the situation, a loan can be applied to consolidate the debts. It would result in a single liability, and the rest gets paid off. Then the payments are to be made on the latest debt till it gets paid. Many people like to choose their banks, credit card companies and credit unions for this purpose. It is an excellent way to start. It would be great if the person had a good relationship with the financing institution. If such an option turns down the application of a person, they can check out private financing companies for debt consolidation. Creditors have several interests in giving this benefit. Due to debt consolidation, the likelihood of collecting for debtors increases. The general public gets this service from banks or credit unions. But many private agencies and lenders are willing to offer this option. What is the difference between debt settlement and debt consolidation? It is essential to know that debt consolidation does not mean the original debt gets erased. It simply means that many loans get transferred to a different lender or kind of loan. There are many whose loan needs to be qualified. They can try for debt settlement. The purpose of debt settlement is to lessen the obligations rather than no. of creditors. A person can decide to work with a credit counselling service or debt-relief organization. The purpose of these organizations is not to create new loans. Instead, they try to negotiate the existing loan with the creditors. What are the different types of debt consolidation? Balance transfer credit card: This method of debt consolidation has a low or even zero interest rate for the initial 18 months. In this, the balances from a high-interest credit card are moved to a new one. The goal is to pay the balance before the end of the promotional APR period. Otherwise, one gets racked up in more interest than they started with. One needs a balance transfer card that has high accommodation for the balance being rolled over. It also needs to have a low APR (Annual Percentage Rate) to make it worthwhile. One can use an online calculator to see how much time one would need to repay the balance. HELOC: Home Equity Line of Credit: The difference between the appraised value of the home and how much a person owns on their mortgage is called home equity. For debt consolidation, a homeowner with a good credit score and equity can borrow some of the equity affordably. Many people use this credit to pay high-interest debt like credit cards. HELOC acts as a second mortgage. It means that an additional monthly payment gets added. It gives a credit line that lets one draw from a variable rate. This can be a good option if one has enough equity to be qualified. Loan for debt consolidation: If one gets qualified for a low-interest rate, then a loan for debt consolidation is a great option. One gets enough funds to cover their debts and a comfortable repayment term. This loan is an unsecured one. So, the rate and limit of borrowing depend on the person’s credit profile. One can use either the entire or a portion of the loan to repay the balance. So, a person needs to make only a few payments monthly. Instead, they need to make only one payment on that personal loan. Peer-to-peer (P2P) loan: This option of debt consolidation connects investors with borrowers. They offer them an unsecured loan. As this is an unsecured loan, the person’s credit history is quite important. It is needed for fees, borrowing limits and rates. The higher the credit score of a person, the more benefits they get. Plans for debt management: This debt consolidation option is for the ones who do not wish to apply for a loan or balance credit card transfer. This plan is an excellent alternative to bankruptcy. In this method, one needs to work with debt relief companies so that they can negotiate with the creditor. These companies draft a payoff plan. All accounts for a credit card are to be closed. The person makes a single payment every month to the agency, which in turn pays the creditor. The billing statements with be received for the creditor. So it is easy for one to track the refund process. [B-02] Conclusion So, there are many debt consolidation options available in the market. One should research which method would be the best for them. One must avoid subprime lenders who offer bad credit. Even if the credit score of a person is low, they should stick to traditional or trusted options for such matters. A person should always confirm that their lender is authorized. If looking for a trusted financial option, then “Piramal Finance” is a good personal loan/financing option for buyers.

08-11-2023