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Health Insurance

Things to Consider Before Buying a Health Insurance Policy in India

Having a health insurance policy can ensure that you receive timely medical treatment and secure your money and assets. For a health policy, you need to pay a small amount of money for every policy period. With a health insurance plan in place, you are equipped to take care of your and your family’s medical requirements, and a health policy can help you afford better quality care in hospitals. In this way, you do not have to be worried about medical inflation. But before buying a health insurance policy in India, it is crucial to consider a few points. [B-01] What Is a Health Insurance Policy? A health policy is a contract of insurance between an insurance provider and the person who buys the policy. It acts as a financial safety net for unplanned medical costs. The policyholder must pay a premium for a certain amount of time to get this health insurance. A health insurance plan is considered essential to avoid draining your savings. It should also cover the high costs of surgical procedures and consultations. In addition, there are other benefits to getting health insurance plans, which are discussed below. Reasons for Buying a Health Insurance Policy These are 6 key reasons why a health insurance policy is beneficial: Extended DurationYou do not have to worry about the duration of health insurance plans since you can continue to extend your health policy until the upper age limit. If you buy a health insurance policy, you can continue to use it for your medical expenses for as long as required. This allows you to benefit from having a health policy for a long time. Tax BenefitsThe premium for a health insurance policy gives you a tax credit. It may be deducted from your gross income under Section 80D. Hence, the premium lowers your tax bill. If you buy health insurance for your elderly parents, the maximum deduction is Rs. 1,00,000. You may also opt for the health policy for yourself to get tax benefits. However, you must avoid paying your premiums in cash, as this will exempt you from tax benefits on your health insurance plan. Free Look Period Find out if your health insurance policy provides you with a “free look” period. During this time, you can carefully read the policy document to better understand the features and advantages of your health insurance plan. If you decide that the health policy is not what you need, you can cancel it and get a refund for the plan you have already paid for. Serious Illness If you or a family member is suffering from a serious illness that requires excessive or prolonged treatment, a health insurance plan can be beneficial. Getting a health insurance plan can save you from massive expenses for the treatment of serious health conditions. Coverage for More ServicesNew health insurance plan include daycare, OPD fees, and full hospital expenses. These can help you pay for services like operations and ambulances. However, it depends on your level of coverage. Most plans also include maternity benefits, which could be important for working women. Furthermore, the child also gets protection, and you will not require an additional premium for this. Start Young When you get a health insurance plan early, it comes with many advantages because it is more affordable. Since you are younger and healthier, you have the option of purchasing extensive coverage. Hence, you can get complete coverage even later in life when you are suffering from a serious illness. What to Consider Before Buying a Health Policy Before choosing a health insurance policy for you and your family members, you must consider these 6 factors: Cashless ServicesThe cashless claim settlement of a health insurance plan can handle any medical emergency and also covers an extensive network of hospitals. Premium CoverageThe health insurance provider’s premium is usually based on your age. Therefore, you must find the right balance between premium and sum insured coverage. Waiting PeriodBefore getting a health policy, ensure you understand the waiting time clause. Health insurance plans usually have a waiting period of 30 to 90 days and certain health conditions have specific waiting periods. During this waiting period and in emergencies, you cannot submit any claims. So, find a health insurance policy with the shortest waiting period. Lifelong RenewalBefore purchasing a new insurance plan, a medical exam may be required. Obtaining insurance becomes more challenging as you age. As the perceived risk rises, there is a chance that the premium amount will also rise. Therefore, make sure that your health policy allows for long-term renewal. Claim Settlement ProcessWhen paying health claims, reviewing the health policy wording is essential. Check the company’s claim settlement and settlement percentage before buying a health insurance plan. You can also go through client reviews and pick an insurance company that can quickly resolve your claim. Inclusions and ExclusionsAlways look over a health policy’s inclusions and exclusions. The rules for this may vary among insurance companies. Make sure the charges for your hospitalization are included in your policy. Pre-existing diseases, diagnostic charges, and check-ups must be present in your plan. Health insurance plans come with add-ons to increase coverage. This can happen if you know all the exclusions and inclusions in advance. [B-02] Conclusion The cost of healthcare is rising faster than ever. Thus, you should include a health insurance policy in your financial strategy. Many insurance providers now offer a wide range of benefits, including low premiums and high coverage. Before getting a health insurance plan, make sure you are familiar with all these features and choose a plan that fits both your health condition and financial situation. For more articles like this one on health insurance plans, visit Piramal Finance and get access to more information and guidance on selecting a good health policy.

08-11-2023

Personal Loan

Top 5 Advantages of Applying Online for a Personal Loan

Life is unpredictable. Sometimes life gives you problems when you least expect them. So, it’s a good idea to plan for these things. You might also have other important needs, and your finances might not allow you to pay for unplanned costs. Also, extra costs don’t only come up when something goes wrong. You might want to buy something or travel the world but not have enough money. You can pay for all of these things with a personal loan. A personal loan is a great way to get credit. It can help you pay for many different things. Let’s learn more about personal loans and the benefits of applying for a personal loan online if you decide to get one. [B-01] What is a Personal Loan? A personal loan is an unsecured loan. It doesn’t have any additional expenses. These can help with going on a trip, buying a new electronic device, paying for your small business costs, making improvements to your home, or combining your debts. You can spend your money wherever and however you want, and the lender has no say. As personal loans are unsecured, so you can apply for them without putting anything up as collateral. Top 5 Advantages of Applying for Personal Loan Online Quick & easy You can apply for a personal loan online from your home. As you can get the money in a few hours or days, personal loans can be used right away. You must fill out a loan application form and show proof of identity. The lender looks at your credit score and credit history. If the loan is approved, the lender puts the money into your bank account. The process is very simple and quick. There’s no need to go to the bank. This is helpful when you need cash quickly. No security required You could apply for a personal loan of up to Rs 30 lakh, and you wouldn’t require any collateral. Most individuals can get personal loans. It might be hard to give security to a lender. Personal loans let you borrow money without putting up much in return. No limitations A personal loan can be used for various financial needs. This is because they are flexible and easy to get. For example, you could use them to buy the newest phone or fix your house. A personal loan gives you money immediately to use for a host of emergencies. When you apply for a personal loan, the lender doesn’t ask you why you want the money. So, you can use the money for more than one thing. For instance, you could use some of it to buy a new bike and use the rest to pay for your next trip. The choice is up to you. The loan provider won’t get in the way. Minimal paperwork Personal loans require minimal documentation. Your credit score and credit history mainly determine if you can get one. If your credit score is good, you can easily get a loan for a large amount. Getting a personal loan is much easier than getting a business or home loan. Hence, you can apply for a personal loan online and not worry about being turned down. Flexible repayment time Depending on your credit history and the loan amount, you may get a good interest rate on a personal loan. You have nothing to worry about if you have a steady income, a good financial situation, and a high credit score. You can get a low-interest loan, making it easy to fit into your budget. Some personal loans don’t charge any fees for paying early or for not paying them back on time. So, the costs of the loan are cut even more. The settlement terms are flexible, and the tenure can go up to 60 months. This gives you plenty of time to pay off your debt. How Can You Apply for a Personal Loan? Lenders always ensure it’s easy and quick to get a personal loan. You can stay at home and still get all the money you need with the help of online personal loans. You can follow the steps below to get a personal loan: Step 1 Visit a lender’s website for an online personal loan. Step 2 Click on “Apply Now.” Step 3 Choose whether you are a salaried or self-employed person. Step 4 Fill in your personal information on the online form. Step 5 You can decide how much money you want and how long you want to take to pay it back (up to 60 months). Step 6 After that, you should upload the required documents. This includes your PAN card, Aadhaar card, proof of address, proof of income, most recent pay stub, last 3 months’ bank statements, and degree certificate. Step 7 The loan company will have a team of experts look over the loan application. Step 8 Once the personal loan is approved, the money will be sent to your bank account. [B-02] Wrapping Up Given the many benefits of personal loans, it is natural to say that they are one of the best ways to get money quickly. Personal loans can be used at any time and for any reason. The online process also makes the application easier, allowing you to compare different offers and choose the one that gives you the most value. You can use an EMI calculator to make smart loan decisions. Piramal Finance is a great financing option for everyone. Visit their website to learn more about the products and services they offer. You may also take a look at similar blogs.

08-11-2023

Guide

ELSS vs. ULIP: A Detailed Guide on Which Investment Choice is Better

While a consistent monthly salary is a great way to handle your expenses, additional income is necessary to take care of your bigger goals, such as annual vacations, buying an automobile, investing in your children’s future, etc. This is where investing instruments such as mutual funds, bonds, securities, etc. come into play. Since a plethora of investment options are available these days, it can be hard to choose the most beneficial ones from them. Today, we would like to introduce you to two of these instruments, which are known as ELSS and ULIP. Let us take a closer look at their characteristics and compare them to learn about their benefits. [B-01] What is ELSS? ELSS is short for “Equity Linked Savings Scheme,” which is a diversified equity scheme that comes with a minimum 3-year lock-in period. This type of mutual fund invests a high percentage of its corpus in equity-based securities. This scheme is eligible for tax deductions thanks to Section 80C of the Tax Act. They are known as “tax-saving funds” due to their useful tax deductions. Once the lock-in period has been completed, they can either be reinvested or you can exit the scheme after selling your shares. Most ELSS funds allow you to invest in a diverse range of companies ranging from small-cap to large-cap, amongst other sectors. You can make investments for as little as Rs. 500. Most ELSS schemes offer two types of investment options – SIP and lumpsum. Lumpsum is great for receiving higher returns in a shorter period of time, say 3 years. However, the SIP (Systematic Investment Plan) allows you to invest smaller amounts and reap better tax benefits. What is ULIP? ULIP is short for Unit Linked Insurance Plan that offers the duality of working both as an insurance policy and as a life cover. You can fulfill your lifelong goals, as well as protect your family in case of an emergency. One part of the premium paid towards an ULIP goes towards your life insurance contribution, whereas the remaining premium is invested in funds of your choosing, whether they are equity, debt, or a combination of both types of funds. To choose a convenient ULIP plan, you must choose the right insurance coverage amount. Additionally, you can adjust the amount between different funds in a scheme to ensure maximum benefits. ELSS vs. ULIP: Which is better? ELSS strives to build your corpus, like most equity fund-based investments. On the other hand, ULIP provide life coverage and some capital appreciation to investors. While one is purely an investment instrument, the other combines policies from investment and insurance schemes. ULIPs are less risky than ELSS since a policy coverage guarantee is assured even if funds are not returned. However, ELSS is a more high-risk instrument as it allocates a majority of the fund to equity funds. ULIPs take the upper hand in this round. Although ELSS is high-risk, the returns are also greater than those of ULIPs, since the entire premium is used to buy fund units. ULIPs provide lesser returns on average, but they tend to be more stable. Since ELSS has a lock-in period of only 3 years, it offers more liquidity than a ULIP, which has a minimum tenure of 5 years. Both tax-saving instruments do not have any options for premature withdrawal, so ELSS comes out on top. Although both are tax-exempt up to a certain amount, they are taxable once they are redeemed after their lock-in periods are over. However, ELSS is taxed like regular equity-based funds, whereas ULIP is tax-free for up to Rs. 2.5 lakh. They are thereafter taxed at 15% for short-term profits and 10% for long-term gains. ULIPs take the win in this section. One underrated aspect of these funds is the expense ratio, which is basically the percentage of returns that need to be paid as a fee for managing your funds. ELSS has a lower expense ratio. For example, the typical large-cap fund has an expense ratio of 0.5–1.5%. But for the typical ULIP scheme, the expense ratio hovers between 1.05 and 2.25%. ELSS wins here by a clear margin. Advantages of ELSS Higher revenue is received once the funds are withdrawn. It can also be reinvested for further returns. Despite their higher profit margins, they are useful for receiving tax deductions. ELSS has a lower expense ratio compared to ULIP. The expense ratio is the percentage of returns paid as a fee for fund management. Thus, investing in ELSS offers you a higher percentage of profits. Advantages of ULIP Returns are tax-free up to Rs 2.5 lakh, with some taxation on any further gains. A low-risk instrument, especially if the investment portfolio includes plenty of debt instruments. Therefore, the returns do not fluctuate too much based on market volatility. Since it is an insurance instrument, investors have the freedom to choose which funds they want to invest in. They can also switch to a different set of funds later. [B-02] Conclusion Both ELSS and ULIP are useful investments for helping you achieve your financial goals. However, they have a different set of properties and uses that can be useful to you depending on both your short and long-term plans. As always, check out the schemes carefully before making any investments to receive the best possible returns. To know more about the different kinds of investment schemes and their benefits, we suggest taking a look at the Piramal Finance blog.

08-11-2023

Personal Loan

Most Important Personal Loan Benefits You Should Know in 2022

Are you looking for a loan to meet your financial goals and needs? You should consider a personal loan because it has many benefits. Since personal loans are unsecured, you do not need collateral. You can use the personal loan amount for a variety of things, such as planning a lavish wedding, taking an expensive trip, dealing with urgent medical bills, redesigning your home, or taking out a personal loan for professional purposes. [B-01] Personal Loans and How They Work After being approved for a personal loan, the funds will be deposited in your savings account in a lump sum. Depending on the lender, the transfer may take 24 hours or a few days. Once the loan is disbursed, monthly repayments must begin. Most personal loans have set interest rates, so your EMIs remain constant. Unsecured loans require no collateral. But if you cannot get an unsecured personal loan, use your savings or a certificate of deposit as security. Top Benefits of Getting a Personal Loan Quick Disbursal The funding of a house loan roughly takes three to four weeks to be completed. On the other hand, the time for processing a personal loan is only 24 to 72 hours. As a result, they are the most effective form of financial instrument to meet pressing demands for cash. To get your loan promptly disbursed, all you need is a strong credit score and to meet the eligibility requirements. No Collateral Loans for personal use are typically unsecured. As a result, you do not need to offer any collateral as security. If you default or fail to make payments, you do not lose an asset. So, being approved for a personal loan is possible for virtually anyone who has a stable source of income and a positive credit history. Help with debt You can use the funds from a personal loan to pay off any outstanding obligations, such as secured loans or credit cards with high interest rates. This removes such liabilities from your investment portfolio. Personal loans typically come with more reasonable interest rates than credit cards do. So, you can use a personal loan with a low interest rate to pay off the debt that has a higher rate. Versatility Personal loans are your best option whenever you need to take out a loan for any reason. Lenders place no limits on the end-use of the personal loan amount. That is without a doubt one of the most beneficial aspects of a personal loan. The money that you borrow can be put toward arranging your ideal trip, paying off other types of debt, buying high-end electronics and accessories, or planning an extravagant wedding. Personal loans can also help you pay the bills for a medical emergency. Improved credit score If you are new to credit or have a low credit score, taking out an affordable personal loan is a great way to build up your credit score. Your credit score will continue to increase as long as you are prompt with the payments of your EMIs and interest. But keep in mind that you should only get a loan if you have the means to pay it back. Your credit score could take a hit if the monthly payment on the loan is too high and you miss it. Flexible Tenure Its flexible repayment schedule is one of the benefits of personal loans that attract borrowers. The minimum commitment is for 1 year, and it can last for as long as 7 years. So, you can select a tenure that suits your finances and needs. A longer tenure also results in a lower EMI amount. You should select a term that gives you the ability to optimise your monthly expenses according to this amount. Attractive and Competitive Interest Rates Personal loans are accessible at low interest rates, so you can enjoy low EMIs. In most cases, the interest rate remains the same over time. So, your monthly instalments do not change throughout the loan, and you do not have to worry about the interest rate either. Tax Benefits You may be eligible to receive tax exemptions on your personal loan, but this is contingent on how the money is used. For instance, if you use the loan to renovate, build, or buy a house, you may be eligible for tax deductions of up to Rs 2 lacs on the interest paid during a financial year. These deductions are based on the amount that you paid on the loan during that year. Extra terms and restrictions may apply depending on the use of the loan amount. Hassle-Free Documentation As part of the application process, your lender will ask you to provide ID proofs, address proofs, bank account details, pay stubs, tax returns, and credit history. One of the major benefits of personal loans is the lack of paperwork. If you submit your application online, all the required documentation is in digital format. You can attach the document files to your application form and submit them simultaneously. The procedure does not include any paper at any point. Also, some lenders offer the service of collecting your documents right from your doorstep. [B-02] Conclusion Personal loans can help you consolidate debt and make big purchases, but you must use the loan amount cautiously. This article should have given you a better understanding of personal loans. Check out the many resources that Piramal Finance has to offer if you want to learn more about loans, mortgages, MSME financing, personal loans, business loans, or a loan calculator.

08-11-2023

Guide

What is the importance of money management in 2022?

What is the purpose of financial management? Why does financial management matter? What are the elements of money management? This article will teach you more. After this, you will be a finance guru. You will know a lot about finance and how the world works. Financial management plans can organise, direct, and control your financial transactions. Here are some examples of financial management’s goals: keeping the cash flow statement positive ensuring that you have enough money for emergency purposes making sure that your bank balance is good proper resource management establishing a variety of investment alternatives Business process size is an essential part of any introduction to financial management. Next, we’ll talk about how modern businesses deal with their money. [B-01] Acknowledging the Purpose of Financial Management Money management is critical. Suppose you have a medical emergency. Money plays an essential role. A wedding in the family? Saving money is necessary. Money management is vital in all aspects. As a family member, you must take all things into account. 1. Investment decisions You will have to make smarter and more profitable investments in the future. This will add to your financial management duties. When times are hard, these choices can help with money. There are both long-term and short-term investments. You must make long-term investments when you buy fixed assets that others can’t sell. Your money will be used to buy current assets. It’s used to figure out what to do with the money in the bank, plan inventory, and make other short-term investments. 2. Financing decisions The efficient use of a person’s resources is known as financial management. The future extent of money management for a person is determined in part by this crucial choice. Similar to how they make business decisions, financial managers are crucial in this one. A manager can choose between two different financing options. Here are some of them: ● Planning finances: In this financial choice, managers move to address capital demands. ● Choosing capital: The manager’s principal goal is to determine where the money comes from. You need to have the right capital mix for growth. 3. Understanding the future Do you have kids growing up? Ageing parents? You need to allocate money for education, weddings, and medical issues. Intelligent money management and planning can also help you figure out how to save money best. 4. Determining liquidity Liquidity means having assets that can be quickly turned into cash. Due to the growing need for liquidity decisions, financial management now includes more tasks. Why does financial management matter? Here are some reasons why financial management is a critical corporate function: Getting money Money and finance managers are in charge of financial management. Their job is to get cash for business activities. Most of their job is to find different ways to get money for as little as possible. Use money wisely For a business to be more productive, its finance managers must use it wisely. Deciding on money Financial decision-making is aided by solid financial management. The organisation’s sales and profit go up tangentially as a result. Profitability goes up With a standardised system, the process of financing is easy. You can plan, track, access, and record financial transactions. Making wise financial decisions Financial management allocates the person’s resources. The article recommends profitable financial investment alternatives for the business. Making the best financial investments depends on finance managers and their knowledge. Money Management’s Goals Like how we all used to save money as students, businesses need to manage their money. They need to grow and succeed. The following are important money management goals that organisations must remember: Maximising profits Make as much money as possible in the short and long term. This should be the main focus of a financial manager. Ensure that the results of the company’s performance are profitable. Effective mobilisation Any business must know how to handle its money, just like you shouldn’t spend all your savings. Financial managers must carefully allocate and use funds. Investing in stocks, goods, or a small business requires careful consideration. Good performance Financial management encourages efficiency in one’s life. A person can do better with more money and budgeting. Reduce risks Business is risky, especially when unclear. Managers in the finance department must plan. And they must prepare in the best way possible. Keeping a business in operation In today’s challenging business world, survival is the most important thing. Darwin used the phrase “survival of the fittest” in biology, but it also works in business. Businesses must make decisions that make sense. If they need to, they can always hire qualified consultants to help. Structural Balance Balance is the key to everything, as the saying goes. This is true in business and in our daily lives. Money managers must build a strong capital structure. This should take into account all sources of capital. This balance is essential for stability, the economy, flexibility, and liquidity. [B-02] Conclusion Our goal is to tell you about the need for money management in 2022. Usually, financial or money management begins with an understanding of financial conditions. You will have a severe financial crisis. This will happen if financial and money management are ineffective. Make your money management so efficient that it will ensure your future security. Also, Piramal Finance has more in-depth educational articles.

08-11-2023

Other

What Are the Pros and Cons of Opening Multiple Demat Accounts?

A savings account is a convenient way for you to save money. It gives you easy access to your funds and protects them from mishandling and theft. A Demat account is your electronic savings account for your shares and securities. Demat accounts have become popular, but very few know how they work. This article highlights everything you need to know about Demat accounts. We also answer the question: can I have multiple Demat accounts? But before we answer this question, let’s get into the basics. [B-01] What is a Demat Account? A demat account is an online savings account for investors and stock market traders. It holds the shares and securities that you buy from trading and investing. They are managed in an electronic format. “Demat” refers to “dematerialized,” meaning not existing in a physical form. A demat account makes trading easier for you. A Demat account holds all the investments. It includes ETFs, mutual funds, bonds, government schemes, etc. The largest benefit of a Demat account is that it gives you an overview of all your investments in one place. Demat accounts are accessible from all over the world. What are the eligibility criteria for opening a Demat account? You must be at least 18 years old. Only an Indian citizen or NRI can apply for a Demat account. You have to provide proof for both. The documentation for opening a Demat account is as follows. Identity proof Address proof Income proof Signature on a blank paper Evidence that you have a bank account Passport photograph What are the different types of demat accounts? There are three different kinds of demat accounts used in India. You cannot use all three, and each type is for a different category. Based on your location and eligibility, you can open an account. Regular Demat Accounts The most commonly used accounts are regular demat accounts. NSDL and CDSL provide these accounts to Indian citizens. These bodies deliver these services through intermediary bodies. These intermediary bodies can be stockbrokers, depository participants, etc. Repatriable Demat Accounts Repatriable accounts are ideal for NRIs who invest in the Indian stock exchange. These Demat accounts can be used for trading using foreign currencies. They function under the supervision of FEMA. NRIs need an associated non-resident external bank account to open an account. Non-Repatriable Demat Accounts These Demat accounts are for NRIs who want to transfer funds between different countries. A non-repatriable Demat Account requires an extra NRO bank account to transfer money, while a repatriable Demat account does not. A non-repatriable Demat account helps NRIs who have income sources in India and abroad and face difficulties managing their finances. It also helps them manage Indian and international bank accounts in one place. Can I open two demat accounts? Yes, you can open multiple Demat accounts to trade stocks and bonds. There is only one condition: you cannot open many accounts with the same intermediary. For example, if you have an account with ICICI Securities, you cannot open a second account with ICICI. It has to be through a different intermediary. What are the pros of having many demat accounts? You can organise your investments You might be trading on different platforms with different brokers every day. Opening many accounts allows you to organize your investments. You can use these accounts according to your goals. Opening many accounts also ensures your investment will not overlap. You receive insights from various brokers You can keep a record and gain information from several brokers with multiple Demat accounts. It will help you analyze your trading pattern. You can then decide how to approach the brokers to increase your investments. It will help you improve your trading skills. In addition, there is a high chance that the information is free of bias. You can separate your investments Suppose you invest money in both long-term investments and short-term investments. So you can open multiple accounts and keep your money separate. You can keep the amount you invest for short-term and long-term goals in different accounts. The separation will help you keep track of your investments and goals. What are the cons of having multiple demat accounts? Now that we have discussed the advantages, let us go through some of the cons of opening multiple Demat accounts. It is tricky and confusing Managing many demat accounts is not a piece of cake. It is difficult if you lack experience in trading and investing. It will further burden you with issues, such as missed investments, difficulty tracking your investment, etc. Managing many accounts is expensive By opening more than one Demat account, you have to bear the extra charges of each account. The charges include maintenance costs, transaction charges, etc. These charges are less if you have only one account for all transactions. The annual maintenance cost on a Demat account is about INR 700 to INR 1000 per account. Your account cannot be inactive If you have opened multiple Demat accounts, you also have to make sure that there are periodic transactions in each. If your account does not have a set number of transactions per quarter/year, it will be marked inactive. The process is time-consuming, and keeping track can be difficult. [B-02] Conclusion A Demat account is a very accessible and convenient way to manage your money. Trading and investing are becoming popular. Keeping everything in an electronic format is ideal because you can process the information. In India, bodies like the NSDL and the CSDL provide Demat Accounts to citizens who trade and invest. Piramal Finance can provide you with more information on stock markets, trading, investments, finance management, etc. Go to Piramal Finance to read more similar blogs.

08-11-2023

Home Loan

Loan Against Property: Top 5 Mistakes You Should Avoid

A loan against property is a secured loan you can take to meet your business or personal needs. Compared to unsecured loans, it gives you a higher borrowing capacity at lower interest rates. A loan against property can be obtained against a residential or commercial property without losing its ownership. The lenders usually go easy on the borrower’s credit score while evaluating their creditworthiness. Due to this relaxed approach, borrowers often miss out on some important factors. Here is a list of five mistakes you should avoid while taking a loan against property. [B-01] Mistakes to Avoid While Taking a Loan Against Property Before you take a loan against property, you should avoid these common mistakes. Not Comparing Interest Rates Interest rates have a direct effect on your monthly finances. The higher the interest rate, the more your monthly EMIs will be. As a result, regardless of the type of loan you choose, it is best practice to compare interest rates. Look at the rates different lenders are offering. They might differ from lender to lender. One can easily find them online. Once you compare the interest rates, choose the ones that meet your requirements. Not Comparing Processing Fee Most lenders charge a processing fee between 1% and 2% of the loan amount. Since loans against property are big loans, the processing fee can be significant. So you must consider this factor before taking a loan against property. If the loan is offered at fixed interest rates, the lenders may also charge prepayment charges. However, as per the RBI guidelines, floating interest rates have no prepayment charges. Prepayment charges may cost you a hefty sum, so try to secure a loan against property with a floating interest rate. Not Opting for the Right Tenure Loan tenure plays a key role in loan repayment against property. It also affects your monthly finances, given that you will be repaying it in EMIs. Choose the right tenure so that monthly EMIs don’t become a burden and you can pay them without defaulting. Failing to make the repayments on time can have negative effects on your credit score and loan eligibility in the future. It may even attract some penalty charges. Choosing a longer tenure will reduce your EMIs, but it will increase the interest rates. And a shorter tenure will decrease the interest rate, but the EMIs will be much bigger. Shorter tenure works best when your current liabilities or fixed obligations are on the lower side. Hence, choose the tenure according to your suitability. Not Considering the Disbursal Time Disbursal time for a loan against property can take up to 2–3 weeks. It takes time for a lender to verify all the documents and evaluate the market price of the property. For people looking for instant funds, a personal loan might be a better option as it has a shorter processing time. Nonetheless, if you want a loan against property, inquire about the disbursal time with the lender before applying. Not Factoring Existing Liabilities When you apply for a loan, a lender will check if you have other existing liabilities. They will look at your debt-to-income ratio, which shouldn’t be too high. This is used to ascertain your repayment capabilities. If you have other loans when you apply for a loan against property, only borrow the amount you can repay without trouble. Your credit and repayment history will also be considered. A history of defaulting might result in getting the loan at higher interest rates or even rejection. Benefits of a Loan Against Property A loan against property can be used for many purposes. Apart from its uses, it comes with multiple benefits as well. Easy online application. Longer and more flexible tenure of up to 15 years. It lessens the burden on the borrower. Processing is transparent, as there are no hidden charges. Lower interest rates as compared to unsecured loans. Higher loan amount. No restriction on the end use of the loan. You can use it to expand your business or for other personal reasons. You do not lose ownership of the property used to secure the loan. You can stay at the property hassle-free once the repayment conditions are fulfilled. [B-02] Conclusion A loan against property is a mortgage loan that can be taken against a commercial or residential property. It comes in handy during times of financial crunch. You can even use it for business expansion and even personal needs like a marriage in the family. Some factors that a lender will check before approving the loan are a healthy credit history, your income, the value of the property in the current market, and more. Loans against property are secured loans. Hence, they offer larger borrowable amounts and lower interest rates than unsecured loans. Compare the interest rates with what other lenders are offering and opt for the tenure that suits you the best. Check the other factors we mentioned before taking a loan against property. For more finance-related blogs and other tips, visit us at Piramal Finance. Our experts over there will help you make better financial decisions.

08-11-2023

Personal Loan

Signs to understand Personal Loan Scams

Financial fraud costs consumers a lot of money. Con artists try to get their scams into the hands of those most likely to fall for them. Beware of personal loan scams that might leave you out of pocket if you aren’t vigilant. Learn the signs of a legitimate lending firm to prevent becoming a scam victim. Some typical indicators of personal loan fraud are listed below. [B-01] Lender guarantees approval Credible personal loan companies always state clearly that they will check your credit and often pull reports from all three main credit bureaus (Equifax, TransUnion, and Experian). Criminal organizations don’t care if you have good credit or not. They look for high-risk borrowers who are most likely to miss payments and incur high costs. It would help if you stayed well away from any lender that makes the following promises or who assures clearance. No one here cares about your history. Your loan application has been approved. Which is better, having bad credit or no credit at all? Your state does not permit this lender’s kind of business. The registration of a business must be verified before any decisions can be made about its legality or the ability to detect fraudulent practices. Several trustworthy personal loan companies will consider borrowers with less-than-perfect credit. These loan providers look at more than just your credit score to decide if they will work with you. Nonetheless, these loan providers will often want documentation of your income, job history, and education level before they approve your loan application. Prepayment methods Several scams have targeted prepaid debit cards, gift cards, and other financial information. Cons usually make some excuse, like needing the data for insurance, collateral, or fees. It’s a trick to trick you. Communication methods from the lender Be wary of anyone who offers you a personal loan by unsolicited means such as phone, mail, or even door-to-door services. The debtor cannot be located Any potential lender worth considering will have a physical presence. Check the location’s viability with Google Maps, just in case. Personal loan scammers may use empty lots as “offices,” so it’s important to double-check the address they provide you. Avoid the lender if there is no trace of a physical location. Many fraudulent enterprises use anonymity to avoid detection and prosecution. The lender imposes time limits Do not give in to coercion. The imminence of a deadline to sign up for a personal loan because the offer would expire soon, such as within a day, is one of the elements of personal loan scams. The lender may threaten to withdraw your driver’s license or bring a lawsuit if you hang up without providing a fast response. There’s a chance that banks or other financial institutions that use excessive pressure to close deals are up to no good. Perhaps someone is trying to trick you. Lender’s fees are kept a secret If you ask a scammer what they charge, they won’t tell you. They may also tell you that you’ve been pre-approved for a personal loan and then demand payment before it is even processed. Although some legitimate lenders do not publicize their fees on their websites, they must be revealed during the application process and before signing. The introduction of additional costs after loan approval is a major red flag. Researchers warn consumers to stay away from businesses that use this practice, especially if they are told the payment is for “processing,” “insurance,” or “paperwork.” It seems too good to be true It is most likely a scam if a personal loan offer is too good to be true. Honest lending companies won’t contact you with an offer that seems unbelievable. A loan with an absurdly low interest rate is probably out of reach unless you apply and agree to a thorough credit check. Conventional loan programs Most loan scams try to either get money up front or place extreme conditions on the personal loan that make the customer susceptible to late payments and other penalties. There are several well-known examples, such as: Forgery of loan fees: If you pay hundreds or thousands of rupees upfront, scammers may offer you a personal loan with a low-interest rate. Once they get these funds, they will cut off contact and stop sending payments. Tricks with no credit check loans: Some legitimate lenders go beyond your credit score when deciding, while others provide loans with no collateral and no credit check. Since your credit history is a big part of figuring out how risky of a borrower you are, this is a red flag. Debt consolidation scams: Debt consolidation can reduce your monthly payment amount and interest costs. Aggressive debt consolidation companies that tell you to stop communicating with your creditors are almost certainly trying to scam you. [B-02] Conclusion Con artists will do whatever it takes to get their hands on your money, including passing themselves off as a reliable lending institution. Financial scammers frequently use tactics like changing caller ID names and numbers to appear more legitimate. Piramal Housing Finance may help you get more accurate information. Go visit right now.

08-11-2023

Business Loan

What Are the Important Aspects You Should Know about Working Capital Loans

Most firms have periods of poor income at least once a year. These firms must prepare to cover the day-to-day expenditures, pay the staff, and, most importantly, remain ahead of competitors, whether it’s due to seasonal demand variations or the weather. A working capital loan or commercial loan, a financing solution meant for short-term concerns, is one approach for firm owners to address this issue. However, it might be challenging to grasp what you’re getting yourself into if you’re new to this form of finance, mainly if this is your first time seeking a loan for your firm. If you’ve been wondering, “What is a working capital loan?” you won’t have to for long. Continue reading to learn all you need to obtain a working capital loan. [B-01] What is a working capital loan? As the name suggests, these loans fund a firm’s daily operations. Working capital loans often have shorter terms than long-term firm loans, often from six to twenty-four months. Firms do not invest in the long-term assets of the firm. Instead, satisfying urgent demands is the primary goal of working capital loans. Here’s a quick recap of how cash flow loans function. Consider a sessional firm like a fireworks seller. The seller makes the bulk of the sales over the holiday season. But one of the slower times of the year occurs just before the holiday season starts. As a result, it’s conceivable that surplus cash stocks would run dry before the busy season begins. The current difficulty is collecting money so the seller can buy a lot of stock to meet rising demand during the busiest season. Working capital loans can be helpful in this situation. The fireworks retailer can buy goods in time for the holiday season by taking out a working capital loan. After the holiday season, the firm can rapidly repay the loan because it has more cash on hand. Types of Working Capital Loans Tool Loan As the name implies, this loan is designed to support firms in purchasing new tools or machines. Such a loan normally contains an end-use restriction, which means you can’t use the money for anything other than buying tools. Bill Reduction Many firms utilise bill discounting to fund diverse working capital needs. You may use this option to discharge the funds in outstanding invoices ahead of the maturity dates. You must submit your outstanding invoices to a lender to get this working capital loan. Depending on the worth of your overdue bills, you may then borrow a substantial sum as a cash advance. Leading lenders often provide a 10% discount and the remainder as a loan. Overdraft It is a credit line provided by banks to many firms. You may use this service if you have a solid relationship with your bank. An overdraft facility enables you to withdraw money from your account even if the balance is zero, but it is limited to a certain amount. You can simply solve your working capital difficulties with such a line of credit. However, the interest rate on this loan facility is substantially higher than others. Loan against a fixed deposit It’s a secured loan that asks you to put collateral in your FD account. The amount you may borrow as a commercial loan is often a proportion of the outstanding balance on your FD. Furthermore, interest rates on such loans are somewhat higher than FD rates. Reasons to Get a Working Capital Loan A commercial loan has nearly limitless applications. It may improve cash flow and pay off utility bills, wages, rent, or stock. The following are some more reasons to get a commercial loan: 1. Immediate repairs Things fail at the worst possible moments, mainly if you operate a small firm. A commercial loan may relieve money stress by enabling you to repair or replace faulty tools to avoid downtime. 2. Take a perk out of a situation A commercial loan might assist you in financing a firm opportunity that you should not have to pass up. Opportunities like these might include purchasing products at a reduced cost or purchasing a tool that reduces labour expenditures. Although the perks are long-term, a working capital loan might aid in the immediate term. 3. Seasonal variations Every firm has peaks and troughs throughout the year. Whether you need a loan for stock, payroll, or other needs at particular periods of the year, knowing the option is accessible is reassuring for firm owners. 4. Promoting the firm’s growth A commercial loan may aid with a marketing campaign, growth, repair, or anything else that will take your firm to the next level. Unlike loans from banks, this sort of loan has no constraints on how the money may be used. Firm owners must ensure that adequate funds are available to keep operations running. There may be unforeseen bills sometimes, but a commercial loan can help make things easier. It is critical to have adequate funds to weather idle periods or slow-paying consumers. What Papers Are Needed to Apply for a Working Capital Loan? Here are the basic papers needed for a working capital loan: Papers for proving one’s identity, age, and address are included in the KYC process. PAN cards, Aadhaar cards, driver’s licences, passports, and others are generally accepted IDs. Firms’ registration papers include proof of firm registration, GST registration, partnership agreements, leasing agreements, firm PAN cards, etc. For the past six months, the firm’s current account statement IT gains for the firm Details about any debts Who Can Get a Working Capital Loan? The working capital loan is open to any firm providing vital supporting papers. Some lenders may impose different eligibility conditions, such as the need for the firm to have existed for at least six months and a certain amount of turnover. [B-02] Conclusion Working cash is the lifeblood of a firm. Every year, healthy working capital adds to expansion plans. Any misuse of working capital, on the other hand, leads to losses and a decline in the firm. It may be due to a lack of focus from people or a shortage of funds. As a result, the only way to deal with it is to obtain a working capital loan and cover daily expenses. This loan is used to fund daily operations rather than develop the firm. This means that it pays for both human and current capital. Follow Piramal Finance for recent commercial loan updates, daily blogs, and articles.

08-11-2023