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How prepayment charges are calculated?

People tend to get loan products or services from the bank. COVID-19 has caused a situation of abnormality in society, for which the banks have been trying to convince their customers to close their accounts. The clients would also want to get rid of the responsibility of the loan. When everything seems so uncertain, both the bank and the customers would wish for financial security. Many banks try to check the purpose for which the loan was needed by the customer. Usually, for early payment, a prepayment charge is levied. But during COVID-19, there were some relaxations on this rule. The option of early payment only exists during emergencies. In general, the bank has this option where the borrower can close the loan before the deadline. If a considerable amount is paid as prepayment, then it leads to a reduction in the total loan amount and also the EMI. [B-01] How can one calculate prepayment charges for a home loan? Home loan is opted for by many people. Both employed and unemployed take this loan. Banks and NBFC, i.e., Non-Banking Financial Companies, both offer the facility of prepayment for a home loan. In this, one can repay a portion of the total amount. It helps to reduce the total due amount. When one decides to make the prepayment, then either the EMI can be diminished, and tenure can be kept the same, or the Emi can stay the same, and the term would get reduced. One can use an online calculator to check the details and also the prepayment charges. Some details are to be mentioned in the calculator to get the desired result. Those are discussed below: The principal amount: The original amount that has been taken. It is the total amount that the lender gives to the client. The outstanding loan amount: The money one owes to the bank or the financial institution is known as the due loan amount. Remaining tenure: It refers to the total no. of EMIs that remains pending in the balance tenure. Part-payment amount: The portion of the amount due that one’s desires to pay off. There is a minimum amount required for this. The amount needs to be three times the amount of EMI. What is a home loan prepayment calculator? One can get many calculators online. They are offered by many 3rd party sources. The above-mentioned details would be needed by the website to calculate the result. Once the details are entered, the values or the result will be received in no time. Under what circumstances can the housing finance companies, i.e., HFCs, levy prepayment charges? If an individual avails dual rate home loan: in this type of loan, the interest rate is a fixed one for starting years. Later a floating charge can be applied. Under this loan, a bank or financial agency can levy charges. The interest rate of a fixed home loan from a housing finance company, i.e., HFC: In case one borrows some amount from another bank or HFC for repaying the loan, then the HFCs can levy a prepayment charge. The interest rate of a fixed home loan from a bank: If someone opts for a home loan at a fixed rate of interest. The bank can levy prepayment charges depending on the agreement of the loan. Non-individual borrower: HFCs or the banks has the right to levy prepayment charges for non-individual borrowers. Under what circumstances can the housing loan finance companies, i.e., HFCs, not levy prepayment charges? Dual-rate home loan that has a floating rate of interest: The dual-rate home loan gets shifted to a floating rate of interest. In that case, prepayment charges will not be levied. The prepayment gets made with one’s own money: If no money is borrowed from HFCs or banks and one uses their own money, then no charges are levied. If an individual avails home loan with a floating rate of interest: Home loan with floating rate of interest the lender cannot levy prepayment charges. This has been stated by RBI. What are the other kinds of loans in which prepayment is allowed? One can avail of the facility of prepayment for a business loan. An education loan is another loan that has the facility of prepayment. A person can also opt for the option of prepayment if they have taken a personal loan. Many other loans have this option of prepayment. What are some of the tips for calculating prepayment charges? It is always advised to go through the fine print thoroughly. It should be made clear what methodology is used by the lender to determine the prepayment charges. Depending on the interest rate, a fixed amount is usually levied. The appropriate principle needs to be determined. One must ask for the amortization table from the lender. It would help them to have an exact break-up of the payments. The lender can charge prepayment charges depending on the differential rate of interest method. One can calculate this by finding out the difference between the initial rate of interest and the new one. Calculating the charges manually can be difficult, and hence one can use an online calculator. [B-02] Conclusion Prepayment helps the borrower. This helps to either reduce the EMI or the tenure of the loan. This reduces the financial pressure on the person lending the money. But some banks or HFCs can levy prepayment charges. It is advised to check all the details of how the lender will charge this penalty before they opt for this option. If a person needs a financial chance, then “Piramal Finance” is a good personal loan/financing option for buyers.

08-11-2023

Personal Loan

Four Ways To Manage Your Personal Loan, EMI

Personal loans are instalment loans. Borrowers receive a one-time cash payment from a Personal Loan EMI. Customers repay that amount plus interest in regular, monthly instalments over the loan’s term. Loans are available from online lenders, local banks, and credit unions, and the funds are given in one lump sum. You must make payments until the debt is fully repaid once you receive the cash. Personal loans can be secured (needing collateral) or unsecured (needing no collateral). Personal loans are made in the form of a lump sum payment. The payment is deposited into your savings account. In most cases, you will be required to repay the loan over time and at a fixed interest rate. Depending on the lender, the repayment period can range from a year to ten years. [B-01] What is the definition of a Personal Loan? For example, a personal loan could be used to manage debt, pay for home improvements, or plan your dream wedding. Banks, credit unions, and online lenders can all provide personal loans. Personal loans may also incur fees from some lenders. Personal loans are short-term loans that can be used to cover various expenses. Personal loans EMI is available through banks, credit unions, and online lenders. Personal loans can vary greatly regarding interest rates, fees, loan amounts, and repayment terms. Ways to Manage Your Personal Loan EMI Borrow as per your repayment capacity. Getting carried away when deciding how much money to take out in a personal loan is easy. You may be tempted to take out a large loan to meet your financial goals at once. But doing so may land you in hot water. You may end up in financial trouble if you take on more debt than you can handle. Before taking out a personal loan, know about the EMI and interest rate. Then, using a Personal Loan EMI calculator, you can calculate your EMIs based on the loan amount, interest rate, and tenure. Make an informed decision about the length of your loan. Another critical step in organising your loan EMI instalments is to make a good decision about your loan tenure. The EMI you must pay is affected by the loan amount, term, and interest rate. As a result, you can select your loan amount and term to ensure that your EMIs are manageable while the lender fixes the interest rate based on your credit history. Personal Loan Emi are available from a variety of lenders with varying terms. If you choose a shorter period, your EMI will rise, and vice versa. The disadvantage of a longer term is that you will have to pay more interest while making lower monthly payments. If you need more monthly liquidity, you can choose a longer term. If you want debt-free as soon as possible, go for a shorter term with higher EMI payments. Decide on a loan term that is neither too long nor too short. Create a monthly budget that includes your EMI. Creating a monthly budget is critical. It will help you better organise your finances and make personal loan EMI repayments. Don’t forget to include your loan EMIs in your monthly budget, along with your other monthly expenses like grocery bills, electricity bills, school tuition fees, and house maintenance costs. Your monthly expenses should not exceed 70% of your monthly income, including personal loan EMIs. Choose the Best Loan Provider. Your lender’s interest rate will heavily influence your personal loan EMIs. Although you do not influence the interest rate offered by a particular lender, you can choose the lender with the lowest rate. As a result, your loan payments will be low. The lowest interest rate should not be your only consideration when choosing a loan. Other factors include processing fees, repayment options, personal loan eligibility needs, and late payment penalties. Conclusion Because market competition has increased, you can get attractive interest rate offers from many lenders even if your credit score is average. However, it is necessary to compare various lenders online about interest rates, processing fees, prepayment and part-payment charges, late payment fees, and other loan terms and select the one that provides the best value. It is critical to conduct research regularly, even after you have obtained the loan, to ensure that you are well informed and can take advantage of any better deal that arises. Read on to learn more about finances at: https://www.piramalfinance.com/ [B-02] FAQs Is it best to borrow money through a personal loan?There is no single best way to borrow money; instead, the best type of loan is determined by your objectives. Personal loan EMIs are ideal for short- to medium-term borrowing at lower rates than credit card rates, such as debt consolidation, emergencies, or home improvement. You would not use one to buy a car or a home. Is obtaining a personal loan difficult?Compared to home, auto, and other types of loans, personal loan EMI are simple to apply for and qualify for. As a result, they are useful for everything from minor home improvements to large purchases. You can use the money for almost anything, but it’s best to borrow only what you need and only for things that will improve your finances or make a big difference in your life. Personal loans are repaid in a variety of ways.Personal loan EMIs are in the form of a lump sum deposit into your bank account. Most loans need you to repay them over a set period at a set interest rate. Depending on the lender, the repayment period can range from a year to ten years.

08-11-2023

How To?

How to Link Your Bank Account on PhonePe

PhonePe is a digital payment and finance tech company started in India. It is a safe and secure online money transaction application, and its demand is increasing daily among the public. This is because of the ease with which it can be used. The application helps transfer money to a vendor or a second person without much hassle, unlike bank transfers or credit and debit cards. All one has to do is type the amount to be paid, followed by the PIN of their account. This app helps with everyday transactions, paying bills, data cards, recharging money, DTH, etc.; this can be enabled by linking the Bank Account on PhonePe, which creates a Unified Payment Interface (UPI). More than one bank account can be linked for the sake of convenience. An additional recharge on your wallet is unnecessary, as all the money from the bank account will be directly transferred. [B-01] Is PhonePe secure? PhonePe is an end-to-end application needing no third party. This Vouch for the security and safety of the app. Also, the UPI generated is unique for every single bank account. Thus, it cannot be forged or duplicated without the user’s permission. Here is an easy guide on how to link the bank account to the PhonePe app: Download the app Play Store for android or Apple store, in case of an iPhone user. Open the app and verify the phone number Enter the required details such as name, email, and address. Set a password or activate a fingerprint for safety purposes. Go to My Money Page Select the bank with which the account is active. The app will fetch all the necessary details and initiates creating a PhonePe account. Feed all the necessary details as asked, such as the last sex digits of the ATM card and the expiry date. Now, an OTP will be sent to the registered mobile. Using this, a new UPI pin can be created Now, a successful Bank Account on PhonePe has been created. Can the account be revived upon forgetting the PIN? Yes, an account can be revived or restored by resetting a new PIN. The app will prompt the user to reset the password by tapping on the forgot password feature. An OTP will be sent via SMS or another enabled permission upon entering the registered mobile number. This OTP will be auto-fetched, and now one can set a new PIN. Does PhonePe allow investment options? Many investment applications have tie-ups with mobile wallets to unlock easy investment modes for users’ comfort. As a money transaction app, PhonePe allows funding and investing in mutual funds enabling the user to create a robust investment portfolio. Link the Bank account on PhonePe and proceed with the investment journey. Here is a list of funds one can invest using PhonePe Tax saving funds – It is the kind of fund where the money is collected from many investors and invested in an equity market Liquid funds – These funds are debt funds invested in assets such as certificates of deposit, government securities, treasury bills, etc., Equity funds – Also known as stock funds. Investing assets in different companies after going through the various objectives and finding the best option. Debt funds – These are also called bond funds. It is a mutual scheme where the investments are based on government and corporate bonds Super funds- These are long-term investments. Typically starts when an employee joins the work where a small part of their money will be allotted for super funds. Hybrid funds – These are the kind of funds where a mix of different funds is used to invest, hoping it reduces the risk involved. Gold and silver investment – By connecting the Bank Account on PhonePe, it is safe to invest in gold and silver. Does PhonePe allow multiple Bank account access? This user-friendly app allows users to link more than one account to smoothly send and receive money between two people or organisations. Open the app. Tap on the My Money page Click on the bank accounts under payment methods. Now, tap on ‘Add new bank account’ and proceed to fill in the requirements for another bank What is the Transaction limit for PhonePe? The app allows a maximum of Rs. 1 lakh per day. A user can make about 20 transactions per day. These transaction limits are enabled so that the user does not put themselves in fraud situations. What makes PhonePe stand out among other online transaction apps? This is one of the famous Indian digital wallets. The features are similar to other wallets but better than their rivals. It has fewer technical glitches, safe from cybercriminals, and the details provided by the customers are kept secure. By linking one’s Bank Account on PhonePe they are up for credible and trustworthy services. PhonePe has one standout feature in particular: transferring money between two bank accounts. And the app does not demand the card’s IFSC code, card details, etc.; this ease of use is to reach out the app to every Indian possible ranging from educated to uneducated. Key features of PhonePe: Safe and secure Easy to use by anyone Made paying bills and recharging your account considerably convenient Do not demand recharging the wallet Generous transaction limit Available in multiple Indian languages You can open numerous Bank Accounts on PhonePe. Popular among Indians of all classes indicating easy transactions. [B-02] Conclusion: The use of mobile wallets has become inevitable with every passing day. In such a case, linking one’s Bank Accounts on PhonePe and adopting this application is wise. The article covered everything there is to know about PhonePe but to get more views on the same, reference the links given below. Piramal finances offer more insights into how one can perform smooth day-to-day transactions using PhonePe.

08-11-2023

Personal Loan

What is the formula for personal loan EMI? And how to do It.

EMI is short for equated monthly instalments. One needs to pay this monthly amount to the bank until their loan gets fully repaid. The money gets directed towards both the actual amount and the interest. Personal loan EMI or any other EMIs needs to be paid monthly. In the initial months, a more significant part of the amount is directed towards interest. Gradually towards the end, a higher portion of the EMI amount is used to repay the principal. The monthly EMI does not change, but the percentage of interest and principal will be adjusted accordingly. The article discusses how you can calculate loan EMI. [B-01] What formula is used to determine personal loan EMI? There is a need for a standardised formula that would be accepted everywhere. There is one such formula for calculating personal loan EMI. All online calculators use this formula to compute the result. You can use the same formula to calculate manually. The formula is: EMI = [P x R x (1+R) ^N]/ [(1+R) ^ (N-1)]. Where, 1. EMI = Equated monthly instalment 2. P = The principal amount 3. R = Rate of interest. 4. N = Tenure or period. This formula of personal loan EMI calculation is used to find the EMI for any loan amount. The formula is quite complicated. It can be challenging for people to do it manually. It is time-consuming and can be prone to errors. So, it is better to use an online calculator for the job. What results are overviewed in an EMI calculator? EMI: The EMI needs to be paid monthly to the creditor to pay off the loan. Break-up for the total amount needed to be paid: One gets to see the loan amount payable to the creditor. The total amount includes processing fees, interest rate, and principal. An amortization table is made available for users to have a holistic view of their repayment obligations. What are the features of an EMI calculator? Graphical representation: One gets to know how much their principal amount is and the rate of interest applicable on their loan. This information gets displayed in the form of a pie chart. Repayment table: This table has detailed illustrations of your loan repayment to help you understand how much you need to shell out each month, helping you plan your finance. What are the elements of the repayment table? Principal paid: A portion of the monthly payment is directed towards repayment of the principal amount. As the loan gradually matures, this portion keeps increasing every month. Interest paid: A portion of the monthly payment is directed towards the interest rate. This portion of the personal loan EMI keeps reducing as the loan matures. Total payable amount: It is the total amount that needs to be paid. It is the total sum of the interest and principal. The outstanding balance of a loan: The ending balance of a particular period is the total amount the one owes to the bank after every payment. This table has monthly and yearly data. So, one can look at the data needed accordingly. What are the factors affecting personal loan EMI? The loan amount: A higher principal translates to a higher EMI. The lender gets to decide the maximum amount you can borrow. They make the decision based on your relationship with the bank, repayment capacity and many other factors. Rate of interest: The higher the rate of interest for a loan, the higher the EMI will be. Here again, the bank or the lender gets to decide the rate. This, too, depends on a few factors, such as credit history, income, and repayment capacity. Tenure of the loan: A longer tenure means lower EMI. But if someone chooses a longer tenure, then they might have to pay extra interest. The tenure usually ranges from 12 to 84 months. How can a personal loan EMI calculator be used? Online EMI calculators are way more convenient than the manual method. The manual method is long and tedious and can give the wrong result due to miscalculation. On the other hand, the digital process is simple and generates results in a few seconds. It also gives the proper breakup of the amount and explains details with the help of tables and charts. You can very conveniently use a personal loan EMI calculator. The following details need to be entered on the online EMI calculator: The principal amount The loan tenure The rate of interest And in no time, you will be able to see the result. What are the benefits of a personal loan EMI calculator? You can compare loans with the digital calculator Much quicker than manual calculation You can choose different loan tenures and check the EMI for each. With a personal loan EMI calculator, you can check your repayment schedule. The repayment schedule that the bank offers can be verified using this calculator. [B-02] Conclusion It is always advised to take financial decisions after doing a lot of research. Taking a loan is a big financial step. A personal loan EMI calculator will help you compute and plan your monthly expenditure. Visit “Piramal Finance” to explore their financial offerings and to learn about a range of finance-related topics.

08-11-2023

Calculator

How Does a Bank Calculate Interest on Your Fixed Deposit?

A fixed deposit is a simple and safe investment. It only requires a one-time deposit. You can deposit a sum known as the “principal” with a bank for a set period. You will receive your deposit plus interest at the end. No matter how interest rates move, or how the economy performs, you will get fixed returns when investing. This helps you collect a large amount with ease. What is a fixed deposit? Banks offer fixed deposits (FDs), a type of investment product. In this type of investment, investors put in a fixed amount of capital at a fixed interest rate for a fixed period. When the fixed deposit matures, the bank returns the principal amount and the interest earned. Fixed deposits pay a higher interest rate than other products, such as savings accounts. You can put money into a fixed deposit for a period ranging from 7 days to 10 years. Anyone with a bank account can open an FD with a minimum deposit of Rs. 1,000. The minimum time frame is seven days. How does a Bank Calculate Fixed Deposit Interest? Bank Calculates Interest on Fixed Deposit: Simple and compound interest are the two methods for calculating interest on a fixed deposit. Banks may use either, depending on the deposit’s tenure and size. Simple Interest - This method is simple. It is computed by multiplying the principal, interest rate, and period. “principal x rate of interest x time period divided by 100” or “P x Rx T/100.” Where, P = principal amount; R = annual interest rate T is the number of periods. For example, if you invest Rs. 10,000 at 8% p.a. for 5 years, the interest can be calculated as follows: Step 1: 10,000 times 8 times 5 equals Rs. 4,000,000. Step 2: Divide that number by 100. You will be paid Rs. 4,000. So, after 5 years, you will have earned Rs. 4,000 in interest. As a result, if you invest Rs. 10,000 in a fixed deposit paying 8% p.a. simple interest over 5 years, you will receive Rs. 14,000 back. Compound Interest - In this method, you earn interest on both the principal and the interest. Many banks offer compound to calculate interest on fixed deposits, but you should shop around to ensure you get a good rate. For example, suppose a bank offers 8% p.a. on a 5-year deposit with annual compounding. So, if you invest Rs. 10,000, the interest can be calculated as follows: In the first year, we employ the simple interest method. 10,000x8x1/100 = Rs.800 So, the first year’s interest is Rs. 800. This sum is returned to the principal. As a result, the second-year principal’s salary is Rs. 10,800. We can now compute the compound interest for the next three years in this manner. Calculate Interest Fixed Deposits Using the fixed deposit calculator While the formulas are direct and can be used by banks to calculate the fixed deposit yield interest rate, they are technical calculations. As a result, fixed deposit calculators are available to assist you in correctly and easily calculating the possible interest. The fixed deposit calculator is an online tool. You must enter the deposit amount, the deposit tenure, and the interest rate. The calculator then calculates the interest rate on the deposit and the amount due at maturity. You can also adjust the deposit amount to see how the interest earnings change. The formula for calculating the final amount using a compound interest rate is as follows: A=P [1+(r/12)/100)] N Where: The amount at the end of the investing period is denoted by A. P is the initial investment amount. R: annualised interest rate, for example, 6, 6.5, or 7. N: Is the investment tenure Conclusion A fixed deposit is an investment scheme. You deposit a lump-sum amount with a bank or financial institution for a specific period. As a reward for this lump sum, you will receive a certain percentage of interest. At the end of the fixed period, the financial institution returns your principal investment amount and the interest earned up to that point. Fixed deposits are generally considered far safer than other types of investments. Fixed deposits have low default risk. However, the default risk is not non-existent. You risk losing your investment capital if you invest in low-rated fixed deposits. [B-02] FAQs What is the definition of compound interest? What is the compound interest formula for a fixed deposit? Fixed-Deposit Compound Interest Compound interest is interest earned on both the principal and interest earned. The interest rate is increased in proportion to the number of periods (years) for which the interest will be compounded and multiplied by the principal amount invested. Calculate interest on FD using compound interest P (1 + r/n) (n * t) A “A stands for maturity amount. P denotes the principal invested. R = The interest rate (in decimals) N is the number of compounds that occur in a year. T denotes the number of years. What is the minimum term for which a fixed deposit can be held? Customers can invest their money for as little as 7 days and as much as 10 years. What are the drawbacks of a fixed deposit? Fixed deposits have drawbacks.Lower interest rates No interest increasesInflation can cause interest rates to fall.

08-11-2023

Personal Loan

How to Get a Personal Loan with Lowest Interest Rate?

A Personal Loan with Lowest Interest Rate can help a person in many emergencies and needful situations such as medical emergencies, financial emergencies, buying a house or car, planning a wedding, taking a vacation, paying debts, etc. – a personal loan does not have defined rules before taking the loan, it can be taken to fulfil any requirement of the person in need. The bank providing this loan pays more attention to whether that person can repay the loan. A loan’s interest rate depends on the person’s credit score or previous loan repayment history. Though the central bank often determines the personal loan interest rate, reasons like a bad credit score can boost the interest rate. That is why a person must follow certain habits before taking a personal loan, so they don’t have to pay high interest. By practising the below-mentioned tips, one can get a https://www.piramalfinance.com/personal-loan. [B-01] What is an interest rate? Interest rate is a rate that is determined according to the money borrowed or invested. The interest has to be paid over a certain period. The overall interest rate depends on the initial amount borrowed, the duration chosen to repay the debt, EMI, and the fixed interest rate. There are many types of interest rates. So, a person who talks with the manager before taking a Personal Loan with Lowest Interest Rate must calculate the amount to be paid as interest and make plans accordingly. A high-interest rate can be avoided by calculating the interest beforehand. What are all the factors affecting the interest rate? The central bank usually fixes an interest rate. It varies for different types of loans and durations. But other factors can influence the interest rate set by the government. A person’s credit score is one of the critical factors that will be noted before approving the loan. A lower credit score can increase the interest rate of the borrower. Other factors that need to be considered include employment status, the amount borrowed, previous loan history, duration of the loan, etc.; sticking with these factors, one can achieve the Personal Loan with Lowest Interest Rate. Key Points to follow to get a lower interest rate Credit score to score lower interest rate. A credit score is calculated by analysing how likely a person will repay the money using previous credit records. It determines how worthy the borrower is of a loan. There are different models to calculate credit scores. Typical credit score ranges between 300 and 850. But generally, a credit score above 750 is considered a good credit score to approve a loan. This indicates that the person has a good record of paying loans, fewer debts to pay off, and has an active account. All these factors are taken in differently while calculating the credit score. The higher a credit score is lower the interest that needs to be paid. Employment status. Another critical factor noted by the bank before offering loans is employment status. This plays an even more important role when applying for personal loans. Since there is no responsibility for a personal loan, the bank takes it essential that the person applying for a loan has a job or a source of income to repay the loan later. Therefore, an employed person is likely to get a Personal Loan with Lowest Interest Rate. The type of employment is whether the person is self-employed or working in a private or public sector. All these are factored in while assigning the rate of interest. Previous loan history. Every bank will go through the loan history of a person before providing a new Personal Loan with Lowest Interest Rate. This is true even if the person is applying to a different bank for a loan while having a bad loan repayment record in another bank. If one has a list of loans or debts to be paid, that is not considered a good situation to lower the interest rate. This behaviour suggests the person might not pay the loan back in time. Thus, one expecting a low personal loan interest rate should avoid debt. And maintaining a good loan repayment history is a bonus to be considered for low-interest rates. Compare different lenders. There are many requirements a person should qualify for before getting approved for a loan. Similarly, the person should compare different banks, loan records, and offers before choosing the ideal one. Foreign banks can consider other factors while approving a Personal Loan with Lowest Interest Rate. The services, level of fees, and interest rate will also vary at large. Suppose one has met the eligibility to get approved for a loan. In that case, they can refer to a financial institution or a website to compare them and understand how to pick the best bank to offer them a lower interest rate. Watch out for offers. One should apply for a loan with offers to get a lower interest rate. Banks provide offers to attract new customers and encourage old customers to apply for new loans. A person who wants lower-interest-rate should always wait for offer periods before applying for a personal loan. The offer period is when the bank is flexible with factors that must be met before approving a loan. So, to attain a Personal Loan with Lowest Interest Rate, look for offers from different banks. [B-02] Conclusion: Getting a Personal Loan with Lowest Interest Rate is not that difficult when the borrower follows the tips mentioned above. An important point to remember while applying for a loan is to contact sound financial institutions like Piramal Finance. You can avail of various loans at great interest rates.

08-11-2023

Personal Loan

How to Finance Home Renovation Using a Personal Loan?

Often, one would like to make some changes in their home. It can be anything like changing colour, getting expensive furniture or many more. From time to time, one would want to change the look of their house. If in an Indian family, then during celebrations or festivals, it is a general notion to change the look of one’s house. After this is noted, the festivals in themselves have a cost implication. So, renovating on a tight budget is not a great plan. This would affect the quality of the renovation. This is the reason personal loans for home renovation are taking over the market. [B-01] What Does One Mean by a Home Renovation Loan? A home improvement or renovation loan is a type of unsecured loan. This means that no security or collateral is needed for these types of loans. This is different from a mortgage loan or housing loan. That is why no deed of one’s home is required. Mostly, a personal loan for a home renovation can be repaid without much problem. One gets to repay it in monthly instalments, i.e., EMI. The period can vary between 12 months to 60 months. The EMI is decided based on many factors. The principal amount is one factor, processing fee and rate of interest are the others. If the person fails to repay the money within the given time, then a penalty is levied. A person can also choose to close the loan before the completion of tenure. But some banks and agencies charge a penalty for that. It is essential to read the fine print before opting for any personal loan for home renovation. What are the Eligibility Criteria for a Loan Application? Should be a citizen and resident of India. The age bracket should be between 21 years to 60 years. Needs to be either salaried or self-employed to apply for a personal loan for home renovation. The credit score should be good. Preferably above 750. Why Should a Person go for a Personal Loan for Home Renovation? There are several options with the help of which one can finance their renovation goals. A credit card is an excellent option for a person who aims to achieve short-term renovation goals. But then, credit cards do not offer the stability that a person provides. The home improvement loan offers a much lower APR than credit cards. It also ensures that there are no fluctuations in EMI during repayment. But most renovation plans are high budget. So, a personal loan for home renovation serves the purpose most accurately. The amount gets disbursed to one’s bank account. For petty expenses, one uses a personal loan to give cash payments. This loan also adds to the property value. Here is how: Property value helps to increase with home renovation: No matter if a person plans to sell their place or continue using it. This renovation helps one to increase the value of the property. Real estate prices are rising, so renovating it would get one great deal. For maintenance, the renovation of a home is a must: All types of houses need maintenance. If taken care of at regular intervals, one can avoid the massive problem in the future. What are the Benefits of This Loan? One can opt for a collateral-free loan: This being unsecured, does not need any type of security or collateral. The application process is simple: Today, almost all personal loan for home renovation provides an online form fill-up facility. This hardly takes 15 minutes. Even uploading documents and verification have been digitalised. With this, the application gets approved quite fast. The approval and disbursement can take as less as 24 hours. Unexpected expenses can be taken care of as it gets tough to provide an extra amount when needed during renovation. And it is impossible to know exactly how much would be spent on the entire process. Mainly one can have a rough estimation of the expense. So, when the renovation starts, one needs to be prepared for unforeseen costs. If a person has taken a loan, they need not worry as the loan amount will cover all those expenses. Loan details can be tracked online: Almost all the loan information can be accessed online. One is provided with a set of login details that stay unique. With the help of that, the person can track their loan. How Can One Apply for a Loan? The application form needs to be filled out. The loan amount needs to be selected. Necessary documents are to be submitted: KYC documents, i.e., address and ID proofs. Salary slips for salaried persons. Financial statement and audited income for a self-employed person. Statement of bank accounts for the past 3 months. Employee ID for salaried person. Business proof is needed for a self-employed person. Now the loan gets approved, and the amount is disbursed. [B-02] Conclusion Home renovation is a dream project for many. Unsurprisingly, One would want to take great care in renovating their house. In such a case, no one would want to face any financial problems and compromise the outcome. A Personal loan for the home renovation is the best option in such a situation. Banks and many financial agencies provide this facility. If a person is looking for a financial option then “Piramal Finance” is a good personal loan/financing option for buyers.

08-11-2023

Mutual Funds

Use SIP Calculator to Calculate Returns on a SIP Investment in 2022

SIP stands for Systematic Investment Planning. It is an investment approach that is disciplined. With the help of the SIP route, one can invest a fixed amount in mutual funds at a specified interval. The intervals can be semi-annual, quarterly and monthly basis. There is a facility for auto-debit techniques. This would automatically transfer the amount to the fund from one’s bank account. One need not take any stress – the decent amount gets shared on the designated date. This helps one with not missing any dates. One can create long-term wealth with the help of SIP. This investment is reoccurring in nature. It would help one to develop the habit of savings. It is not unknown that the financial market is volatile. So, it saves one from that uncertainty. One can calculate the return with a SIP calculator. [B-01] What are the different kinds of SIP? Top-up SIP: This Systematic Investment Planning helps one to change the amount of their instalment. One can change the fixed amount at a pre-defined interval. Flexible SIP: Until now, SIP means to invest a certain amount in a mutual fund in an organised manner. But there can be situations in which one might not be able to pay the same amount every month. In such a case, one can choose a flexible SIP. One has the liberty of altering monthly investments depending on cash flow. If facing any financial crunch, one can reduce the SIP amount. If there is high cash flow at any month, one can invest depending on that. Perpetual SIP: Investors would generally be inclined to invest in a mutual fund with a fixed period. There are different spans of tenure. It can be ten years, five years, three years or 6 months. But it can be so that one does not want to have any fixed end date. This can be achieved if one chooses perpetual SIP. With this, one can invest in their fund for as long as they want. One needs to provide clear instructions to AMC so that they cease it. The amount can be redeemed by one when the desired corpus is reached. What is a SIP calculator? The SIP calculator is a straightforward tool. This helps a person to have a clear idea about the returns of their mutual fund’s investment made by SIP. This method of investment is quite common among millennials these days. The mutual fund’s SIP calculator is specifically designed to help investors know about the investment estimate. Many factors depend on which the actual value of the investment can vary. But one will not be able to have a clear idea of the expense ratio and exit loan. One will learn about the wealth gain and the expected return for SIP investment. One can get a rough idea of the monthly SIP. It would be based on the projected annual rate return. How does a SIP calculator help one? Many experts say that SIP is one of the most lucrative ways of investment. This creates a financial discipline in one. It also helps create a good habit of savings that would benefit one in the long run. The SIP calculator is a very beneficial tool. One could get an estimate of the return one would get after investment tenure. Few benefits of the SIP calculator: Helps one to determine the required amount that they want to invest. It would help one to know the total amount that one had to invest. This provides an estimated value of the return. How does a SIP calculator work? There is a formula depending on which SIP calculator works. The formula is: M = P × ({[1 + I] n – 1} / I) × (1 + I). Where: M means the amount one receives on maturity. P refers to the amount one invests at every regular interval. n refers to the total no. of payments that have been made. I refer to the periodic rate of interest. Market conditions play a vital role in fixing the interest rate of SIP. It may either decrease or increase, which would affect the estimated return. What are the benefits of SIP? Averaging of rupee cost: SIP makes sure that when the market is low, one buys more funds, and when it’s high, then fewer funds are accepted. The power of compounding: Compounding means earning income on the principal investment and earned income. It is simple to invest: The process of investing with the help of SIP is quite simple. It is the ideal tool for financial planning: When someone invests steadily every month, they can fulfil their financial goals. It can be both short term like travelling or long-term, like building the dream house for oneself. [B-02] Conclusion As per the research, SIP investment is quite popular these days. It is one of the best investment options. One gets to invest in mutual funds with the help of SIP. The investments are made of a fixed amount and at a specified interval. The SIP calculator is a great financial tool. It helps one to know the returns they will get from their investment. One can get these calculators all over the internet. They give excellent results; one could calculate such things in a fraction of a second. If a person needs any financial option, then “Piramal Finance” is an excellent personal loan/financing option for buyers. They also have great blogs that one can read if one needs them.

08-11-2023

Personal Loan

Important Things to Consider Before Borrowing A Personal Loan

What is the definition of a Personal Loan? A personal loan is an unsecured loan that does not need any collateral. It needs little documentation. That means a borrower is not required to put up any of their assets as collateral. If you’ve decided that a personal loan is the best option, crunch the numbers to see if you can afford to go into debt. The higher your score, the better your chances are of getting approval and securing a lower rate. Personal loans are convenient ways to meet your short-term financial needs. Personal loans are much easier to obtain than car or home loans. Here, lenders do not require collateral. Because personal loans are unsecured, lenders take a higher risk when providing them to customers, which is why the interest rates on personal loans are higher than those on home loans or car loans. [B-01] Here are some things to think about if you want to get an instant personal loan: Know the Exact Borrowing Amount: The applicant must know how much money he or she requires. When you tell the exact amount, the bank is much more likely to sanction the loan than if the borrower is unsure of how much money he or she needs. Identify other Loan Options: Personal Loans are not always the only way to get out of a jam. You might consider asking family and friends for a loan if the amount is small. This clears the hassle of paying interest rates. Even if you pay them more, you will not incur any prepayment penalties. The Reason for taking the Loan: Tell about the reason for taking the loan along with the amount. The fact that the bank must decide whether to lend or not, for whatever reason, gives them an idea of the level of risk they are taking by offering you funds. You appear more authentic. Choose an affordable EMI: Before you take out a loan, make sure you will be able to make regular payments. It is without incurring any penalties. Make an estimate to fix how much loan EMI you can pay. Show the Spending Pattern if taken for Business Purposes: Personal loans are used by firms to start new firms or to buy new assets for an existing firm. Also, salaried individuals to meet financial needs. When you inform the bank of your intention to buy an asset that will generate higher returns in the future, the bank is delighted. So, if you appear to be a good candidate with a good CIBIL score, the lender may approve your loan with flexible EMI repayments. Repayment Flexibility: Banks offer various repayment plans for personal loans. A long tenure would need the payment of higher interest rates. Banks charge a fee to close the loan if you want to pay early or fail to pay on time. You must consider repayment flexibility to avoid incurring enormous costs. Possibility of Repaying EMI every month: The actual EMI will be fixed by the loan’s term. A long tenure will result in lower EMIs, and vice versa. A long tenure results in higher interest. It will increase your total loan-availing cost. This is because interest is calculated on the total amount to be repaid. Thus, plan to fix which EMI scheme is best for you. Other Fees or Charges: Banks charge a small fee when granting loans. A bank may levy various fees, such as prepayment penalties, late fees, cancellation penalties, processing fees, cheque bounce penalties, etc. Compare the fees charged by some of the best banks that offer low-interest loans. Shop around for a Good Loan Offer: This is one of the most overlooked steps for people looking for a loan. Personal loans are available from various banks, not only the ones where you have an account. Consider the bank that offers the best terms and the lowest interest rates. Most banks have similar terms. But there may be variations. Some banks charge fewer penalties and have friendlier terms. As a result, before deciding on a lender, do your homework. Interest Rates: Compare the interest rates of various banks that you find reliable enough to receive credit from. Though we would prefer a bank with lower interest rates, it is vital to first read the terms and conditions to avoid incurring costs in the future. The best way to do this is to check the bank’s official website for personal loan offers and interest rates. Conclusion Personal Loans have always been popular because of how they can be obtained with no collateral required. The availability of online services has accelerated this. Personal loans are very easy to get. Because they are unsecured, they have significantly higher interest rates than other loans. It is important to consider certain factors before taking out a personal loan to do what is best for you. I hope this article helped you make future financial decisions. Read on to learn more about finances at: https://www.piramalfinance.com/ [B-02] FAQs How can I apply for a personal loan? A good credit history increases your chances of getting a personal loan and a lower interest rate. Some lenders offer both good and bad credit loans. When evaluating applicants, some lenders also prioritise alternative data, not on your credit report, such as education, occupation, and where you live. Do I have to provide any security? This is an unsecured loan, not a secured loan. There is no need for any kind of security or guarantee. How long does it take to get a consolidation loan approved? The majority of debt consolidation loans are approved within a day or two. Getting a debt consolidation loan becomes even simpler if you meet all the eligibility needs and your record is flawless.

08-11-2023