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Guide

Impact of the Budget on Share Markets

Every year, the government of India plans the budget. A budget is a report that has a lot of information about how much money the government has and how much money it will spend. This extensive report has a comprehensive analysis of the revenue and expenditure between April 1 and March 31 of a given year. This budget report is key to figuring out how the economy works. It helps us figure out things like how much to charge people for loans, how much the stock market is worth, and how much money the government should give to different groups. Why should you be concerned about the union budget and its impacts? As a taxpayer and a potential investor, every decision laid out in the budget report changes your financial situation. Read on to understand more about the union budget and its impact on the Indian stock market. [B-01] Why is the Union Budget Important? The central government prepares the union budget to help sustain and grow the country’s economy. The budget ensures Financial resources are all effectively allocated Reduction of poverty and unemployment in the country Equality in income and the wealth of the nation Clarity and allocation of tax structures and commodity prices What Does the Union Budget Report Contain? The union budget details every estimation and proposed expenditure for the Indian economy during a given fiscal year. It is divided into two parts: The capital budget is the budget for the government. It has a lot of information that tells you how much the government has to pay and how much they have to get. It also tells you how the government will pay for things like developing and maintaining buildings, offices, schools, hospitals, etc. It also tells you about loans and money the government has. The revenue budget tells you how much money the government has and how much it spends. The revenue budget helps with estimations for the new year. How Does the Union Budget Affect the Economy? If we take a look at different aspects determined by the budget, we can categorize them as follows: Planning of year-long government activities: This includes the progress of things like the building of roads, the maintenance of facilities, and the completion of ongoing projects. Structuring financial operations: These include creating estimations and making decisions involving the public’s finances like taxes, borrowing, expenditures, etc. Creating an economic policy: These measures focus on building rules and creating grants to help sustain the economy, decrease pay disparity, and provide equal opportunity for every citizen. How Does the Union Budget Impact the Share Market Today? If you look at the stock market today, every change is the result of the government’s financial decisions. When the government spends more money than it has, it’s like a family that spends more money than it makes. The gravity of the deficit changes how much money India has. When India has less money, it changes how much interest people have to pay for a loan or how much a company has to pay for a stock. What Key Factors of the Union Budget Impact the Indian Stock Market? Stock movement: When there are changes in the budget, it affects the stock market. For example, when interest rates increase, every industry’s cost of capital also rises. Now, profitability will decrease, lowering stock values. When there is negative stock market news, more people try to pull out of stocks to save their invested money. This further reduces share market prices. Income tax exemptions: People invest in the stock market based on their tax brackets and the amount of money they have left to invest. For example, if the union budget increases the tax exemption, it will increase profits in the stock market. Sector policies: When the government provides grants to help any sector—for example, by adding import or duty exemptions, stock prices of industries like textiles will increase. In the event that the taxes on cryptocurrency increase, it will negatively impact the share prices of that sector as fewer people will continue to invest in the stocks. Changes in corporate tax rates: When the tax rates change, they can affect the stock market. For example, if the tax rates change so that people have to pay more taxes, they will sell their stocks. This will cause the stock prices to go down. How Do you Choose the Right Stocks in the Share Market Today? The most important thing to do when you want to invest in the stock market is to find good companies to invest in. You can do this by reading the business news and finding out which companies are doing well. Also, you can find out about the government budget, which will tell you how the government feels about each sector. When the government changes policies in a sector, the stock price will change too. Financial analysts make predictions about how the stock market will perform. They make their predictions based on how they think the economy will do in the future. These predictions affect how people trade stocks on the stock market. So how can you succeed in investing in the share market? Outline your goal for investing – Before you invest your money, you should decide what you want to do with it. Are you investing for a short-term goal, like buying a car, or are you investing for a long-term goal, like saving for retirement? Decide how you want to build your portfolio – This will depend on how much risk you would like to take with your investments. Will it be in safe options like large-cap and value stocks? Or would you want to grow your stocks faster and invest in riskier shares like mid and small-cap stock options? Choose industries that you would like to explore – It is always better to choose to invest in industries you have some knowledge of, as it will drive you to learn trends and explore ways to move stocks. Shortlist your stocks based on share market news and ongoing trends – You can study the performance of different companies, growth rates, return percentages, etc. [B-02] Conclusion Budgeting is key to estimating various aspects of our economy. Every decision laid out in the budget report changes your finances. The union budget affects the Indian stock market in many ways. The gravity of the deficit impacts how much money India has and changes interest rates and stock prices. Analysts predict how the share market will perform based on the decisions made for the fiscal year. Decide how much risk you want to take with your investments before diving into the stock market. Shortlist your stocks based on share market news and ongoing trends. Need help with getting an instant CIBIL report and choosing the right financial options? Explore our service suite on the Piramal Finance website.

08-11-2023

Personal Loan

Top 10 Benefits Of Loan Against Property For Overseas Education

Education is a crucial part of life. It prepares people to take on the various challenges that life can throw at them. However, education costs have skyrocketed in recent years. When it comes to studying abroad, the cost goes up further. In most cases, you might not have enough money to pay for the entire cost. But you cannot let money stand in the way of you or your child pursuing higher education overseas. This is where the option of a loan against property for education abroad comes to your rescue. As real estate prices have also gone up in the last few years, you can put your property to use and get the money you need for overseas education. Many banks and NBFCs offer this loan based on the value of the property against loan. Read on to learn more about this loan against property and its benefits for education abroad. [B-01] What is a loan against property? A loan against property, also known as a LAP, is a secured loan offered by many banks and NBFCs. Herein, you must offer the property in the form of security. The amount that you can get as LAP will depend on the value of the property against loan. As these are secured loans, the loan against property interest rates are much lower when compared with other loans. The maximum amount you can get as LAP varies between lenders and ranges from 60% to 70%. The tenure in the case of a loan against property can go as high as 18 to 20 years. Hence, you will have to pay low EMIs as the loan against property interest rates are low and the loan tenure you can get is very high. Once the money is in your account, you can use it as per your choice and one of the well-known uses of LAP is to finance abroad education. Why loan against property for an education loan? Instead of using a LAP, why not get an education loan to pay for your overseas education? Well, the benefits that you can get from using a loan against property to pay for education at a foreign university are as follows: High Loan Amount: There is, in fact, no upper tab that can limit the amount you can get under LAP. Most lenders offer up to 70% of the property’s value as a loan against it. So, you can get crores of rupees with this option to pursue education at the best colleges abroad. This money is adequate to pay not only for college fees but also for living and other expenses. Low Interest Rates: – Loan against property interest rates are very low compared to an education loan, which is a form of a personal loan. As LAP is a secure loan, there is less risk for the lenders, so they offer low interest rates on it. Low interest rates will help keep your EMIs low, making it easy to repay the loan. Continue to Use Property: When you go for a loan against property to pay for foreign college fees and other expenses, you do not have to give up the property. If you live in that property, you can continue to do so as there is no effect on your ownership. This is a great option to meet all your urgent needs and still be the asset owner. Long Loan Tenure: The maximum tenure to repay a LAP is much longer than an education loan. You have between 18 and 20 years to pay off the loan. This feature helps keep the EMIs low and makes it easy for you to pay the EMIs on time. You can select a tenure that gives you an EMI, which will help you pay off the loan on time. Less Processing Fee: As it is a secured loan, there are some charges that the lenders will levy to verify the property and check the legal title. But other than that, the processing fee and other expenses are less than education loans. Hence, you can save a lot of money for other purposes. Quick Process: Most lenders complete the loan process for a LAP in a short time. This has been made possible with the help of the latest technology, where most of the steps are completed online. You need to submit some basic documents to start the process, and then offer the papers when asked for. Lenders typically take up to two weeks to complete this process. Top-Up Facility: Another benefit of a LAP is that you might not need another loan once you take it. This high-value loan can take care of most of your needs. You can get a top-up loan from the lender if you need more money. You must have paid all your EMIs on time to get this facility. The maximum amount of a top-up loan cannot exceed the original loan value. Property Use: If the property is lying idle, then taking out a loan against the property is a good option to put it to use. You can get a high-value loan to pay for abroad education costs and will still be the owner of the asset till you pay your EMIs on time. Lenders only mark a lien and create a charge on the property, but it is only symbolic; the physical possession will be with you. Waiver of Foreclosure: Many lenders allow foreclosure of a loan against property. Herein, you can repay the entire loan and need not pay any charges. This feature is available after a certain number of EMIs have been paid. So, when you have spare funds, you can pay off the amount. Balance Transfer: As the loan tenure is quite long, you can look for better offers from other lenders. You can opt for a LAP balance transfer if you get a better offer. In such cases, new lenders offer better terms and interest rates, making the loan more affordable. [B-02] A LAP is a good choice if you want to pursue higher studies at a foreign college. It will help you pay all your expenses, including living costs. For the best deals and offers on loan against property, get in touch with Piramal Finance. They provide high-value loans at low interest rates. You can also read their blogs and articles to get a better handle on your finances.

08-11-2023

Business Loan

What Are the Pros and Cons of a Small Business Loan?

Small business loans come in handy when a business is in urgent need of cash. These urgent needs include buying new tools, investing in new projects, etc. When you don’t have ready cash, a business loan can help. Every coin has two sides. Similarly, business loans have their own set of risks. These risks should be carefully studied before applying for a loan. You might lose an asset pledged as security. Your credit score might also be impacted if you default on your payments. Read on to determine whether a business loan will be a good step for your firm. [B-01] What is a Business Loan? A business loan refers to the sum of money borrowed for growing or expanding the firm. The business loan has a single rate of interest and fixed payment terms. EMIs are deducted from your firm’s bank account. Loans for small businesses are money borrowed from a lender, such as a bank or an NBFC. It is a famous method of getting a business loan. There are fewer fees and low-interest rates available for small business loans. It has more flexible terms than other types of loans. If you need a loan like that, you can apply at a bank/NBFC. You can also rely on local lenders, such as credit unions. Pros of Small Business Loans There are many benefits to taking out a small business loan. Here are a few to consider: Assist in Business Growth A business loan can help you grow your company by providing financial support. You don’t need to wait for your business to start reaping profits. With the help of business loans, you can put your dreams on paper and work on them. Keep Your Equity Intact A small business loan allows you to get cash without taking on any investors. It enables you to control your business entirely and retain all the profits as your company grows. Once you have the backing of an investor, he will be entitled to a portion of the profits as well. It will be continued until the business operates. A business loan is a liability until you pay it off. Ready Cash Assistance There can be a shortage of cash in any business. When a business grows, it employs more people and buys new machines. In such times, business loans are quite helpful. You can apply for a loan and use it for operations. Repayment can be made as per the term agreed upon. There is no limitation on usage. No Restrictions on Use If you apply for a loan from a local lender or bank, there is no limitation on usage. Whereas, if you ask for help from an investor, the investor will keep tabs on you. Investors may also restrict the use of the money. Unless the loan is for the firm’s machinery or real estate, you can use the business loan for whatever purpose you see fit. Preferred Over Other Options Always weigh your options before taking a loan. A business loan can be a good option when compared to others. If your business has a market standing of more than five years, then opt for a business loan. OD facility, a firm’s credit card, and a personal loan can incur extra pressure on the pocket. Cons of Small Business Loans Every aspect of business has positives and negatives. You must study both of them before applying for a loan. The downsides of small business loans are as follows: Long Process of Loan Application Lenders are giving a lump sum loan; they will require full-fledged paperwork. It results in a lengthy application process. While filling out the form, you will need to provide three to five years of tax details, books of accounts, and the mission and vision of the business. Default Payment Penalty Banks/NBFCs ask for security to ensure the loan amount is secure. If, in any case, you fail to repay, then the security is used. Any asset used as security you might lose if unable to pay. Start-ups or new firms may have to use personal assets. These can be their homes, land, etc., which applicants might lose if they default on the payment. Good Credit Score The central point noted by all lenders is a good credit score. For business loans, both business and individual, the score is seen. A good credit score determines the rate of interest. Usually, banks offer lower rates of interest than other lenders. It is also not easy to qualify for that minimum level. Your bad credit rating can put a burden on your pocket while you’re repaying. Strict Payment Terms Unlike personal loans, payment terms aren’t relaxed for business loans. Loan amount, regular EMIs, and tenure are all prefixed. You have to be very careful before applying for such loans. Moreover, if your firm’s earnings are not stable, then EMIs can become a burden on your firm’s account. Priority to Well-known Firms Lenders prefer to give business loans to companies that have longer repayment terms than start-ups. Give priority to well-established companies. If you are a new firm or startup, you will have a meager credit score. Banks and NBFCs hesitate to give loans to such firms. A good credit score is a major factor for any lender or bank. It makes your pathway to loan approval easy. New or infant firms find it challenging to get their loan approved. [B-02] Wrapping Up As can be seen, there are both advantages and drawbacks to taking out a business loan, as with anything in life. However, if you’re wise, the right loan can give your business an edge and open up opportunities that otherwise wouldn’t be available. It is critical to keep track of cash inflows and outflows. It helps you qualify for a small business loan if needed. When you have proper books of accounts, it shows the bank that you can manage your money well. It will further increase the chances of business loan approval. For more information about this small business loan, refer to Piramal Finance and explore their services.

08-11-2023

Cards

Tips to Follow When Using Your Credit Card During Festival Season

Having a credit card is very vital to making online and offline payments for purchases. You can use a credit card to buy something when you do not have enough money in your account or cash in your pocket. Most credit cards offer you up to 45–50 days to pay the due amount without any interest. You can easily pay your bills on time using any of these options. When the festive season arrives, it is time to give your loved ones all they desire. If you are short on money, you can make an online credit card payment for anything you want. But it is very easy to spend more than you can afford during festivals, and then you will end up in debt. Hence, you must use your credit card carefully. Read on to learn about some great tips that will help you use your credit card best during the festival season. [B-01] Tips for using a credit card during the festive season There are so many things to take care of during the festive times that you might need money urgently. Hence, you will prefer to use online credit card payment to pay for the goods or services you need. While there is no harm, it is better to follow the tips below to avoid a circular debt. Look for Deals: When the festive season is around, many vendors offer great deals and discounts on online credit card payment. This can include instant discounts or cashbacks. So, look around and find the vendor who offers you the best deals. This way, you will save a lot of money on your purchase and get up to 45 to 50 days to repay the money. Opt for EMIs: Many vendors offer to let you pay for your purchases through EMIs during the festive season. So, when you opt for online credit card payment for your purchase, make sure to opt for EMIs. Many platforms also offer zero-interest EMIs, which means you can buy your favorite products and have anywhere from 3 to 36 months to repay the money. Decide a Limit: It is easy for anyone to build up credit card debt during the holiday season. Hence, it would help if you were very careful when using a credit card during festivals. The best way is to define a fixed budget for the season and make sure you stick to it. Otherwise, you will be forced to repay a high-interest credit card debt. Pay the Entire Bill: – As stated above, many credit cards offer you between 45 and 50 days to repay the money. If you pay the entire bill within this period, you do not need to pay any interest. Else, you will have to bear a very high interest cost on your purchase. So, always try to pay your credit card bill on time. Maximize Reward Points: If you have multiple credit cards, you can make the most of the reward points. Different credit card issuers offer more reward points on some purchases. So, if you plan carefully and use the right credit card for the right purchase, you can accrue many reward points to redeem on your future purchases. Use Reward Points: Most credit card companies run their own reward programs. Herein, you get reward points for various purchases you make with the credit cards. These reward points continue to accumulate over time. So, you can redeem these points to buy great stuff from the catalog of the credit card company. However, most reward points have a two-year expiration date, so make sure you use them within that time frame. Make a Careful Decision: It is vital that, when you make an online credit card payment for a purchase, you do not buy things you do not need. Credit cards have high interest rates, and if you fail to pay your bills on time, you end up with credit card debt. So, make sure you only buy things you truly need, rather than just because your credit card limit allows it. Do Not Use the Entire Limit: Your credit card limit directly impacts your credit score. So, be careful not to overspend and use the entire credit card limit.At any given time, 30% of your credit limit must be free. This rule applies to all your credit cards, and you must keep your expenses under control during this period. Use Your Debit Card: – Many online platforms also offer EMIs on debit cards. But to get this facility, you must have a high credit score and a good credit history. If you are eligible for this benefit, make sure to use it. This will control your credit card debt and ensure you do not spend more than you can afford. Moreover, if you have a balance in your account, you will be better off using your debit card for festive shopping. Do not use a credit card just because you have one. [B-02] Online credit card payment can be a wise decision during the festive season. But you must follow the tips shared above to better manage your expenses during this time. You must know your finances better and make decisions based on your real financial position. To better understand your finances, you must visit Piramal Finance. They have many blogs and articles to help you learn about good credit card habits. Piramal Finance also offers great deals on personal loans, which you can use for your festival spending. High-value loans, low-interest rates, and long repayment periods make them a good choice for your festive needs.

08-11-2023

Home Loan

What Are The 4 Main Types Of Home Loans Available In India?

You cannot always stay in a rented house and raise your family; getting home at a particular point becomes necessary. Moreover, if you consider settling down somewhere, you will need to buy a house. However, with the price of everything rising, owning a home is a big concern. Thus, knowing about housing loans is imperative. There are indeed various types of home loans available in India. These loans are designed based on the requirements of an individual. Therefore, when you decide to borrow a chunk from a financial institution, it is wise to know the different types of housing loans. [B-01] A Brief Keynote on Housing Loans A home or housing loan is a secured loan obtained to purchase a house or property. These types of loans are usually paid through an EMI, and once you pay, the property you have purchased will transfer to your name. Loan lenders provide multiple types of flexible repayment tenures. Its purpose is to make the loan more affordable to loan applicants. You can opt for a payment tenure of 30 years to reduce the financial burden. Generally, all types of home loans are granted after thorough verification. Before seeking any home loan, it is best to analyse your budget and the monthly EMI you can afford. Hence, calculating EMIs in advance plays a crucial role. Get the loan from someone who has the shortest turnaround time. Types of Housing Loans With the need for a house skyrocketing, the demand for home loans has increased these days. Knowing about the four main types of housing loans offered by banks and other financial institutions will help you in the long run. 1. The land purchase loans Many institutions provide loans so you can get a piece of land and build your own house. In that regard, you must know that purchasing land is an individual and flexible choice. You can consider building a house on that land or holding it as a long-term investment. 2. Home purchase loans Housing loans for purchasing a home are the most common of the four kinds of loans. These loans are widely accessible and usually supplied by various financial institutions. The interest rate on home loans may vary between 9.85% and 11.25% daily. But, again, you can check with the financier before borrowing the amount. 3. Home construction loans As the name suggests, these loans are usually designed for individuals who borrow money to construct a house. These home loans cater to individuals who prefer to avoid buying a pre-built house. These loan patterns are specially designed to help you cope with the cost of the construction and building items. You also need to know that you can repay these loans within a tenure of thirty years, which makes them quite accessible. 4. Loans for home extensions You can also take a housing loan for home extensions. These loans are usually appropriate for those considering making minor home modifications. For example, a home extension loan will be the right choice if you are considering extending a balcony or redecorating the porch but are short on money. Why Consider Home Loans? If you are considering getting a home loan, it is best to know why it is a good choice. Here are a few benefits of housing loans. Easy and flexible repayments: The repayment period of home loans is longer. Hence, you will find it relatively easy to cope with the repayment of home loans. You can have tax benefits: Once you get a home loan, you will become eligible for tax benefits. That will allow you to save a lot of money. Freedom to choose the rate of interest: It is a fact that home loans, at times, come with a floating rate of interest that allows you to choose the rate of interest. This gives you the freedom to select the rate of interest that will be easy for you to repay. Enhanced capital appreciation: Home loans help you get a property that becomes a lucrative investment over time. Thus, it makes it easy for an individual to be drawn to fixed assets. Documents Required for Home Loans There are certain documents you need to have to get a housing loan. A few documents that you will need to provide are: The loan application form A few passport-size photos One or two identity proofs The residence proof Bank account statement Property details documents Original salary certificate of the borrower All these documents will be a significant deciding factor in the financial institution’s decision to grant you the loan. [B-02] Final Thoughts Now that you have a clear idea about housing loans and their benefits, you should understand your needs. Please check with Piramal Finance to clear out your doubts about home loans. You are sure to get the best home loan-related assistance from Piramal Finance. They have an outstanding team of professionals to stand by your side throughout the process. Home finance needs are best fulfilled with the help of Piramal Finance.

08-11-2023

Business Loan

What Are The Different Pros And Cons Of Startup Business Loan

There are many different types of loans that businesses can seek when they’re starting up. One of the most popular options is an MSME business loan or a startup business loan. However, this type of loan comes with some pros and cons. You’d want to be aware of these before deciding if it’s the right option for you. This blog will look at the advantages and disadvantages of taking a startup business loan or an MSME business loan. Let’s dig in! [B-01] What is a startup business loan? A startup business loan can also be called an MSME business loan. It is a type of small business loan that can be useful for businesses in their early stages. These loans help initial-stage entrepreneurs and their businesses grow and expand. Startup business loans are ideal for companies with little or no credit history. The reason is that they don’t require collateral upfront. Startup businesses typically have high start-up costs. This means they often struggle to meet debt obligations as they grow. An MSME business loan can help these companies cover those expenses while they continue to build their credibility and financial stability. If you’re interested in applying for a startup business loan, speak with an experienced lender. They could advise you on the best option based on your specific situation and goals. And remember: always consult a lawyer if any legal matters are involved in your loaning decisions! Advantages of a Startup or MSME Business Loan Startup business loans are indeed a great funding option for entrepreneurs. Let’s strengthen this point by looking at some of the obvious advantages of taking a startup business loan. Own Control Increasing your equity funding through investors can give them more oversight and control of the company. Raising money by selling shares finds you investors who are eager to know what’s happening with their investment. Hence, they may want board seats or signing authority over large purchases. On the other hand, when you get a loan, it’s not just the money that commits to certain covenants—your business does too. You can decide what kinds of operations will be allowed within the business. You will hold power over how these conditions will affect your business. You will decide when repayments must be made based on those decisions. All in all, you will have complete control. Build Business Credit Taking a startup business loan can be one of the best decisions you make when building your business credit. By taking out a small loan for your growing startup, you’ll show lenders that you can handle responsibility and manage funds appropriately. This will help you get better terms on future loans and loans from different lenders. Plus, other opportunities (such as with angel investors) will come more easily with good business credit. Strong financial stability allows businesses to operate in an uncertain environment with greater flexibility and agility. Saves personal wealth As anyone who has started a business knows, it takes a lot of money to get a new venture off the ground. From rent and office supplies to marketing and employee salaries, there are numerous expenses to account for. And if you’re self-funded, those expenses can quickly eat into your savings. A startup business loan can significantly help you in this case. By taking out a loan to finance your business, you can keep your personal wealth intact. You can also use it as collateral for the loan. This can be especially helpful if you’re planning on starting a business with high start-up costs, such as a restaurant or manufacturing company. So, if you’re looking to save your personal wealth while financing your new business, a startup business loan may be your best option. Keep Equity to Yourself Taking a startup business loan can be a valuable tool in helping to keep equity to yourself. By taking out a loan, you can access financing that will allow you to hold on to more company shares. As previously discussed, this can give you greater control over the direction of your startup and help protect it from potential threats or outside investors. Disadvantages of a Startup Business Loan While we have discussed the advantages of a startup business loan, there are also some cons. Let’s read what they are! MSME business loans have high interest rates. Many small businesses don’t realise startup business loans have high interest rates. This is a common misconception. Many people think that all startup business loans have low interest rates. However, this is not always the case. Some startup business loans have extremely high interest rates that can be damaging to a small business’ financial stability. If you’re considering a startup business loan, it’s important to research and compare different lenders’ offers side by side. MSME Business Loans are Not Easy to Get Startup business loans are not easy to get. Several factors determine whether or not a startup will be approved for a loan. This includes the company’s credit score, revenue, profitability, and track record in terms of paying back previous loans. Loans from traditional lenders such as banks can take up to six weeks to process. They may require collateral (usually 50% of the loan value). To qualify for an alternative lending platform loan, your business must have: A clear strategy High potential Strong market position Sound team Realistic projections Startup loans or MSME business loans can restrict cash flow. A startup loan can give you the capital you need to get your business off the ground. However, it’s important to be aware of the potential downsides. One potential problem is that a loan can restrict your cash flow. This is because you’ll have to make regular loan repayments. This can leave you with less money to invest in your business. Additionally, if your business isn’t successful, you’ll still be responsible for repaying the loan. As a result, it’s important to carefully weigh the pros and cons of taking out a loan before making a decision. But if you plan and do things right, a startup loan can be a useful tool for getting your business off the ground. [B-02] Parting Words So, if you are a startup business owner searching for some quick cash, a startup business loan may be the right option. Always weigh the pros and cons carefully before making your decision. Take help from the finance experts at Piramal Finance to get rid of all your doubts and concerns related to MSME business loans. Contact us today!

08-11-2023

Top 10

10 Bad Financial Habits to Break This Year

We all have habits in which we often engage. Yet, consider bad habits’ impact on your bottom line. Even little recurring purchases add up. And, despite all your efforts in other areas, they might be one of the reasons you’re still in debt. People in chronic debt often show similar attitudes and economic habits. However, if you detect them early, you may avoid problems. Recognizing and changing your bad money habits might help you get back on track. [B-01] 10 Bad Money Habits to Break 1. Spending More Than Your Income It would be best if you always tried to spend less than you earn each month to save 20% of your monthly income. While this seems easy enough, life may get in the way, whether you face a handful of sudden costs that blow up your budget, you lose a supply of money, or you just don’t earn enough to fulfill your basic demands. Even if you cannot spend less than you earn right now, making more cash than you spend must always be your final aim when it comes to getting your bad finances in line. 2. Failure to Keep Spending Records After you’ve set a budget, the next step is to monitor your monthly expenses to ensure that you’re sticking to it. Tracking your expenses might assist you in ensuring that you are not running over budget in any aspect. It also allows you to keep a record of your money, see where it is going, and help avoid bad money habits. 3. Going Above Your Limits If you’re not cautious, living over your means might have a major impact on your money and is a major cause of developing bad spending habits. While you don’t need to be very thrifty, avoid pricey and unneeded purchases such as new vehicles, luxury homes, and lavish trips if you’re still attempting to find your financial footing. This isn’t to say you shouldn’t indulge yourself, but you must make it fit your budget and help yourself to avoid bad financial habits. 4. Failure to Follow a Budget How much do you estimate you will spend each month while living within your limits? Make and stick to a budget. You must include basics like housing, electricity, food, and insurance. If your budget permits, you may add sections for saving and extra ‘fun’ spending every month. 5. Failing to Pay Off Your Credit Card Amount in Full Every Month When you don’t earn enough to make ends meet and have to pay bills monthly, it might be tempting to charge extra to your credit card. Although credit cards offer freedom and reward redemption chances, they may develop into a big monetary burden if you are not watchful. If it’s within your means, pay off your bill in full monthly to prevent interest and debt. 6. Making Delayed Payments Delayed payments are another typical bad spending habit for those new to personal finance. However, they might have long-term effects on your credit rating and purse. Delayed payments on bills can result in extra late interest and fees, and a record of late or missed payments may reduce your credit score. If this is your first missed payment, you may contact your lender to ask if they can pardon a one-time missed payment. 7. Overspending on Groceries Groceries are certainly one of your budget’s major flaws! It’s quite easy to overspend at the grocery store, particularly if you like cooking and eating good meals. If you value cooking at home and eating properly, it’s OK to spend a bit more on groceries. However, you should keep it in check and stick to a sensible monthly target whenever practical. You may have noticed that it also helps to prepare food in advance, buy at bulk shops, and buy shelf-stable essentials like lentils and rice to extend your budget even more. 8. Overspending on Phone Packages Phone packages are another frequent monthly expense that may quickly mount up if you’re not attentive. Before picking a costly phone plan, consider the data and services you need. It might be useful to review prior billing plans to see how much internet you used each month. You might also want to explore joining a group plan with relatives, friends, or classmates to save money every month. 9. Failure to Shop Around for Car Insurance If you haven’t updated your vehicle insurance coverage in a while, there’s a strong chance you’ll save money every month if you do. That may seem like a car insurance marketing pitch, but it’s real! If it has been a long time since you’ve been in an accident, or if you’ve grown older and are considered a less hazardous driver by insurance firms, your prices will likely be cheaper once you switch. Some auto insurance providers charge you depending on how many kilometers you drive every month, which might be beneficial if you work largely from home. If you’re pleased with your current supplier and don’t want to leave, ask them if they may review your monthly pricing or match bids from rivals. 10. Failure to Establish Personal Goals Personal and financial aspirations are often linked. Perhaps you aim to work part-time and devote more time to your family, or maybe you want to save money to explore the globe. You may want a low-stress career with a fair salary that enables you to dedicate time to artistic efforts while earning less money. It’s a good idea to obtain a solid understanding of your aims so that you may use them to guide your career and financial targets. [B-02] Conclusion Habits are formed over many years when you do the same task repeatedly. Bad money habits such as neglecting your debt, purchasing on impulse, and spending to show others may destroy any effort to become debt-free. If your financial status may benefit from a makeover, consider which of these terrible financial habits you are practicing. Break the loop rather than adopt a fixed attitude that says you’ll be in debt forever. Take responsibility and begin developing solid financial habits. Your debt, bad habits, and poor financial planning do not have to hold you back. If you want to know more about bad financial habits, visit Piramal Finance. You may also explore their products and services.

08-11-2023

Guide

Crude Oil and Natural Gas Trading in India

Crude oil is one of the most traded commodities, not just in India, but around the world. Oil prices feature in global headlines regularly due to various reasons. It is the most watched commodity across the world as well. Natural gas, on the other hand, is another important energy product traded widely in the United States and Northern Europe. Several things affect how the price of natural gas moves, and it’s also interesting to watch. Are you interested in learning about crude oil trading in India and natural gas trading in India? We will provide you with a complete understanding of these. Keep reading! [B-01] What is Crude Oil? Let us start with the basics and understand what crude oil is. Crude oil is a petroleum fossil fuel found beneath the earth. It is extracted and refined into usable products such as gasoline, liquefied petroleum gases, and diesel, which are then used to power machines such as automobiles, airplanes, and industrial machinery. Crude oil is also used as a raw material for the petrochemical industry. What is Natural Gas? A mixture of gases (nitrogen, methane, carbon dioxide, etc.) rich in hydrocarbons is natural gas. Natural gas is found deep inside the earth near other fossil fuels such as coal or crude oil. It is another popular commodity traded across the world. What is Crude Oil Trading? Being the primary source of energy, crude oil is the most traded commodity in the world as well as in India. The crude oil market is characterized by extensive price fluctuations. Investing in crude oil offers excellent opportunities to make a profit in nearly all market conditions. You can trade it in both the spot market and the derivative market. Spot crude oil trading: Spot trading of crude oil can be considered similar to buying an item from the grocery store. You go to the grocer, purchase the item, and pay him on the spot. To put it simply, spot trading in crude oil works in a similar manner. It is the price paid for taking delivery of physical barrels of crude oil. Of course, this is a very simplified explanation of the spot market. You will be able to understand the entire market dynamics when you trade oil on the spot market. Crude oil trading in the derivative market: The more popular of the two is the option of investing in crude oil via derivative contracts such as futures and options. Crude oil trading in India is done via futures and options contracts. Crude oil is traded in India in smaller contract sizes (100 barrels) than global benchmarks. These contracts are settled in cash, and no physical delivery of crude oil takes place. This eliminates several logistical challenges and headaches. Crude Oil Trading in India You can trade crude oil at the Multi-Commodity Exchange, or MCX, the commodity exchange of India. Crude oil is traded in India through futures and options contracts. Mainly, two crude oil trading contracts are available on the MCX: 1. Crude oil (the main contract) 2. Crude oil mini (the smaller version). You should check the MCX ‘Bhav Copy’ to get a clearer picture of the contracts being traded at a particular time. Crude oil contract The main contract for crude oil has a daily traded value of 2500 crores. The contact details are as follows: Price quote – per barrel Lot size – 100 barrels Tick size – ₹1/- Profit and loss per tick – ₹100/- Delivery units – ₹50,000 barrels Expiry – 19th & 20th of every month Due to their large size, these contracts are popular among institutional investors and corporations. Crude oil mini The crude oil mini is favored by the retail trading community. So if you are interested in investing in crude oil, this is the contract to look at. The margins are smaller, and the profit and loss per tick are also much smaller. Here are the details of the contracts: Price quote – per barrel Lot size – 10 barrels Tick size – ₹1/- Profit and loss per tick – ₹10/- Expiry – 19th & 20th of every month What is Natural Gas Trading? Like crude oil, natural gas is also traded as a commodity worldwide, including in India. You can speculate on natural gas prices by purchasing derivative contracts such as futures contracts. In India, natural gas is also traded on MCX, similar to crude oil. Natural Gas Trading in India For natural gas trading, you can open an account with a reputable broker and buy or sell natural gas contracts available on the exchange. The specifications of the contracts are as follows: Price quote: Rupee per Million British Thermal Unit (mmBtu) Lot size – 1250 mmBtu Tick size – ₹ 0.10 Profit and loss per tick – ₹125/- Expiry – 25th of every month Benefits of Crude Oil and Natural Gas Trading via Futures and Options Now let us come to a pertinent point – why should you trade crude oil via futures and options? Here are the three reasons to do so: 1. We all know oil prices fluctuate a lot. This can present difficulties in trading and an immense amount of risk. Futures and options provide you with better chances to make a profit while managing the level of risk. 2. You can take advantage of margin while trading crude oil and natural gas through derivatives. This means that with less cash, you can open larger positions by using the margin from your broker. Thus, your chances of making a profit increase manifold. 3. Although the world is talking about going green and moving away from fossil fuels, it has still not happened. Crude oil and natural gas are still the most traded commodities across the world, providing immense money-making opportunities. Derivative contracts help you take advantage of such opportunities. [B-02] Commodity trading, in general, provides fascinating opportunities. But it works differently from other financial instruments, such as shares. It will be good for you to conduct thorough research before you dive into the markets. This will help you balance your risk and reward. To read more such blogs, please go through the Piramal Finance website and their products and services.

08-11-2023

Know More

All You Need to Know About the New Pension System

The National Pension System (NPS) is a voluntary pension plan allowing investors to use a single investment tool to get exposure to debt and equity. In the new pension system, an investor can decide to keep up to 75% of their money in stocks and take out up to 60% of the maturity amount when they retire. The remaining 40% will buy annuities to pay NPS account holders a monthly pension. Recently, the Pension Fund Regulatory and Development Authority (PFRDA), which is in charge of pensions, allowed some changes to the NPS rules. This article contains a list of the most important changes that NPS account holders should know about. [B-01] Changes to the New Pension System This is a list of 10 important changes that have been made to the new pension system: Increased Age of Entry The new pension system has changed its rules, making the maximum age of entry to join the NPS 70 years. Previously, the maximum age limit was 65 years. The age range to join NPS has changed from 18 to 65 to 18 to 70. PFRDA issued a notice recently that displayed the revised guidelines, stating that any Indian or OCI up to the ages of 65 and 70 can join the NPS. Exit Rules According to the NPS scheme’s latest news, it is stated that users will be required to use at least 40% of the corpus to buy an annuity. They can then take the rest as a lump sum. If the corpus is less than Rs. 5 lakh, users can withdraw the entire pension in one lump sum. Dividing AssetsThe PFRDA has made the NPS more appealing to people who join after they turn 65. PFRDA allows them to place up to 50% of their funds in stocks. People who join the NPS after 65 can only risk 15% of their money on stocks. Premature ExitThe PFRDA has stated that quitting before 3 years is considered a premature exit. With this option, users must buy an annuity with at least 80% of the corpus. They can use the remainder, which they can withdraw in one lump sum. If a user leaves early and the balance is less than Rs. 2.5 lakh, the user can withdraw the entire amount. Contributing to an Account at the Age of 75NPS account holders can contribute to their accounts until they are 75 years old. Online ProcessThe PFRDA recently allowed government users to cancel their plans online. Only non-government users could use the online exit process before. The online exit is linked to ‘Instant Bank Account Verification’ as a user benefit. Employees of central and state governments and autonomous bodies can also use the service. Benefit of e-NominationOnce the nodal officer receives your application, he or she can either accept or reject it. Your request is forwarded to the Central Recordkeeping Agency (CRA) if the officer does not act within 30 days. No Maturity Annuity Proposal NeededThe Insurance Regulatory and Development Authority (IRDAI) has stated that buying an annuity no longer requires a separate proposal form. Digital Life Certificate Through Jeevan Praman, you can send digital life certificates online. Each year a pensioner receives money, they must send a life certificate, which they can do digitally. Credit Card ContributionAccording to the NPS scheme’s latest news, people with NPS accounts in Tier-2 cities will be unable to contribute using credit cards after August 3, 2022. Structure of the New Pension System The NPS has a two-tier structure. You can open a Tier I account, but you are not required to open a Tier II account. Compared to the Tier I account, the Tier II account gives users more freedom. Tier II accounts permit withdrawals at any time, whereas Tier I accounts are restricted and subject to more stringent rules. There is no extra fee to maintain a Tier II account, and you have the option to move your money to a Tier I account if you prefer. Investment Options The NPS gives you four ways to invest, from debt to equity. These options are: Equity: This is a high-risk instrument. Government Securities: This is an instrument with low risk. Corporate Debt: This is considered medium risk. Alternative Investment Funds: This involves infrastructure and real estate investment trusts. The Difference: The Old vs. New Pension System There are 3 key differences between the old and new pension system: The new pension system relies on investment returns. The government has taken several steps to protect the interests of NPS members, and the new pension system contains a variable investment pattern, a regulator, and a modern, low-cost NPS design. In the first case, the benefit is fixed. It indicates an employee’s pension is dependent on their last wage and service. This required contribution amount is calculated backward based on the money that will be owed in the future. In addition, the employer and the government are both contributors. But after a certain date, the government of India stopped providing this benefit to new employees. It started giving them benefits through the Employees Provident Fund, which includes another pension plan called the Employee Pension Scheme. In the NPS, an employee’s contribution stays the same. Users deposit a fixed sum or a portion of their salary each month. Since everyone is free to give, they can also change the amount at any time. Since this fund can invest in stocks, it is an opportunity to make money. [B-02] Conclusion The new pension system is beneficial for retired employees. This new pension system allows people to enjoy certain financial benefits after they retire. People’s monthly wages are deducted while they work, and these funds are returned to them as pensions when they retire. Several other benefits, such as health plans, are also part of the new pension system. People can benefit from the new pension system if they follow the rules and requirements. For more information on the new pension system and the NPS scheme’s latest news, visit Piramal Finance to receive more information and guidance.

08-11-2023