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Personal Loan

Some Useful Tips for Personal Loan EMI Management

A personal loan might be a lifesaver if you find yourself in a monetary bind and need quick access to funds. Unlike other types of loans, personal loans do not require you to put up collateral. Therefore, a borrower doesn’t have to purchase any collateral to get a loan. The money from the loan may be used toward whatever you’d like, whether it’s paying off your credit card debt or making some much-needed house repairs. Processing a personal loan requires less paperwork. As a result, the demand for these loans is far higher than any other kind of borrowing available on the financial market. Most people are fine with getting a personal loan, but maintaining the monthly equated monthly installment (EMI) payments might be challenging, for which a personal loan EMI calculator can be beneficial. Since most people are so consumed with their day-to-day responsibilities, they often need to arrange the repayment of their loans, which is not a financially sound decision. Your ability to prepare and manage your future finances may be severely impacted by your inability to keep up with the monthly EMIs on your loan. To avoid this, consider the following tips for dealing with EMI payments on a personal loan by using a personal loan EMI calculator: [B-01] Evaluate your repayment capacity Determining whether you can pay off the loan is the first step in streamlining your EMI payments. Make sure you have a good understanding of the personal loan interest rate and the different repayment options that the lender provides. You may estimate your monthly EMI payments using these numbers, which will help you organize your finances more efficiently throughout the loan tenure. Additionally, many banks and other financial institutions provide personal loan EMI calculators online, with the assistance of which borrowers may compute their monthly EMIs. This may assist you in making better choices about your finances and the repayment of your debts. By using these personal loan EMI calculators, borrowers can determine whether they will be able to afford the amount of the EMI during the loan tenure. Remember to put away a sufficient amount With sufficient money in the bank, it is possible to achieve financial security. These savings come in handy if you ever find yourself in a situation where you do not have enough money to cover the EMI payments on your loan. Your gold, stocks, fixed deposits, and other valuables may be liquidated quickly to cover your EMI obligations. Having a financial safety net also comes with a host of additional advantages. If a significant portion of your paycheck goes toward paying EMIs, having an emergency fund can help you make ends meet when there are other, more pressing bills. Because of this, there is no reason for you to attempt to negotiate for a more reasonable EMI. Get your spending under control by making a plan Your EMI payment should be between 50% and 60% of your gross monthly income. The margin above error ensures you will not have to skimp on any of your other regular expenditures. However, if your EMI payment exceeds the maximum, it might affect your monthly expenses. You can find out by using the personal loan EMI calculator. In addition, the majority of your requests will have the effect of decreasing your revenue. Still, it doesn’t mean you have to give up your current way of life. When it comes time to repay a loan, cutting down on frivolous spending is essential. Reminders once the EMI payments have been made Setting up recurring monthly reminders that alert you to the due date of your EMI payments is an absolute necessity if you want to guarantee that you will never be late with these payments. These notifications are meant as a gentle prod to ensure that you check your bank account to validate that the EMI payment can be deducted. If you are concerned that you won’t be able to keep up with the scheduled payments for your EMI management, check on the personal loan EMI calculator. Consider negotiating with the lender to increase the payments. Maintain a strong CIBIL score The Credit Information Bureau of India (CIBIL) score is one factor that is taken into consideration when determining the creditworthiness of a prospective borrower. Your credit score is a three-digit number indicating how creditworthy you have been in the past. Outstanding performance on the CIBIL scale is typically defined as a score of 700 or higher. When customers have high CIBIL scores, the approval process for personal loans is easier. Borrowers with excellent CIBIL scores can access various loan options, including low-interest personal loans. In addition, having a high CIBIL score demonstrates to your lender that they can trust you with their money. Therefore, the lender may agree to the borrower’s request to extend the loan term or the due date if the borrower has an excellent CIBIL score and a track record of making payments on time during the loan tenure. Increase your loan’s duration The loan tenure and the EMI you pay are inversely related. When the loan period is longer, the monthly payment (EMI) is lower, and vice versa. To avoid EMIs being a strain on your budget, you can extend the length of your loan while applying for a personal loan. To keep track, use a personal loan EMI calculator. You could reduce your EMI by a significant amount, allowing more flexibility in your monthly budget. [B-02] Conclusion You must make your loan EMI payments on time. If the borrower consistently falls behind on their EMI payments, it is possible that their credit rating may be significantly affected. Consequently, borrowers may have difficulty obtaining credit when they need it. Additionally, it is conceivable that the borrower will be liable for paying any late fees or penalties that the personal loan lender may assess. Check the personal loan EMI calculator for details. You can also consult financial experts at Piramal Housing, and if you want to manage your loan EMIs better, you are highly advised to take these tips and implement them effectively.
08-11-2023
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Bonds

Sovereign Gold Bond Scheme: Invest in SGB Online

Sovereign gold bonds are gold bonds issued by the Reserve Bank of India (RBI) on behalf of the Government of India. This sovereign gold bond scheme is offered in increments of one gram of 999.9 fine gold, with the value of each unit determined by the gold’s weight in grams. An average gold price at the end of business on the last three trading days before the subscription period is used to set the pricing. The India Bullion and Jewellers Association Limited (IBJAL) publishes the last prices of the day. The discounted price is calculated using the same most recent base data. A sovereign gold bond is convenient to invest in and keep track of thanks to its low interest rate of 2.5% per year, paid semi-annually. In a given fiscal year, an individual may only buy up to 4 kilograms, whereas a trust can buy up to 20 kilograms. No investment in SGBs may be made without a valid PAN card. [B-01] How does SGB work? The RBI issues multiple tranches of SGBs throughout the fiscal year. Banks, brokers, the mail, and the internet are where one may purchase these assets. To entice traders to purchase SGBs over the internet, a discount of INR 50 per gram is offered. Remember that every year the RBI issues a brand new series of SGBs for purchase by the public. If you have yet to receive the most recent issue, you can always hear when the next one will be released. The bonds can be purchased in paper form, electronically, or both electronically and physically. Purchasers of these bonds can have their Demat accounts credited with ownership upon request. RBI will then keep the bonds in their records while dematerializing them. Following allocation, dematerialization can also take place. Those who don’t want to buy units from the RBI directly can do so on the secondary market, which consists of stock exchanges. What are the benefits of investing in SGB? People looking to buy gold only on financial grounds may wish to explore SGB. SGBs protect both the gold’s purity and the safety of their investors. Because these bonds are digital and stored in the investor’s Demat account, they may reduce the need for physical storage of gold, which may be costly. The 2.5% interest rate makes this alternative attractive since bondholders get a passive income stream based on their gold holdings, unlike physical gold. In the current economic climate, these bonds would make wonderful gifts. Since there are no taxes on the capital gain at maturity, these bonds are good for long-term investors. Risks associated with SGB Loss potential exists if the gold market price exceeds gold’s cost. Investing in sovereign gold bonds is not immune to this risk or any other type of investment. The RBI assured investors that they would never shed more gold than they were given. What should you know before investing in SGB Exit Options & the Risks Involved The tenor of the series is fixed at eight years from the date of issuance, raising questions about the RBI’s early redemption option after five years. It is possible to cash in a coupon on the day it is paid. A month before the coupon payment date, investors only need to contact the appropriate bank, post office, or agent. And they may always redeem some of their stock (the minimum quantity being one gram). Bondholders’ accounts are promptly credited with the redemption amount. These bonds can be bought and sold on stock exchanges through demat accounts if kept in demat form. However, the price at which bondholders can sell their notes will depend heavily on the liquidity of the particular series. Taxes An individual’s understanding of taxes is crucial before making a sovereign gold bond investment. The government of India created SGBs so its citizens could more easily invest in gold. It provides a unique tax benefit. Under the sovereign gold bond program, the bond matures in eight years. Although there is no taxable gain on the maturity amount, there may be a taxable gain on any sale before maturity, depending on the time the investment was held. It should be noted that the tax exemption applies to bonds acquired through the stock market, which is considered a secondary market. If you buy a sovereign gold bond on a stock exchange, the deal is considered a transfer instead of a redemption, and you become the new bondholder. When the bond matures, you will receive a tax-free payment. But if you sell a bond before it matures on a stock exchange, you’ll have to pay capital gains tax on the profit. These short-term payouts will be added to your yearly income and taxed at your regular rate. Long-term capital gains (LTCG) are realized when an investment is held for four years or more. This benefit is subject to a 20% tax rate with indexation benefits and a 10% tax rate without them. There is a 2.5% annual interest rate attached to these bonds. Each installment is due every six months. The interest accrued on this sum is exempt from withholding. When your taxable income is subject to taxation, it is taxed at the rate specified by your tax bracket. Collateral Usage The third benefit of purchasing SGBs is that they can be used as collateral for loans. The fact that banks are willing to take SGBs as collateral lowers the cost of loans and helps people who would otherwise buy physical gold to protect themselves from economic uncertainty. The loan-to-value (LTV) ratio is similar to that used in conventional gold loans, so investors can be reassured that the product will be liquidated before its time. Like loans secured by deposits, the financial institution that receives the sovereign gold bond loans it without keeping any interest revenue for itself. Instead, it sends it on to the true beneficiary. [B-02] Conclusion SGBs are developed to facilitate gold investment. Although it is not designed for trading, there are tax benefits at maturity. That’s why most people who invest in these bonds do so for the long haul. SBG’s low trading volume on the stock market is further proof of this. It’s important to weigh the pros and cons of investing in SGBs before buying any, whether through the stock market or during the issuance period. Those interested in purchasing a sovereign gold bond can do so through the stock market at a discount. Remember that SGBs are a great way to diversify your holdings and add gold to your portfolio. But before you put money into them, make sure you know everything there is to know about them by consulting Piramal Housing. They are one of the best financial institutions.
08-11-2023
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Gold Loan

What are the New Norms for a Gold Loan?

Gold is no longer just a luxury item owned by a select few socioeconomic classes. It is currently one of the most highly prized commodities, and due to its rising costs, it is one of the most highly traded commodities. Gold has aesthetic, economic, and cultural importance. Indians consume it in many ways, such as through gold bars, jewelry, and coins. Usually, there has been an increase in research about gold loans. Also, the number of people looking to sell their gold jewelry for cash in times of need is increasing. Apart from all other basic information about gold loans, you must be aware of the new rules and regulations about gold loans that exist in the economy. [B-01] How Easy is it to Access Gold Loans? To access various gold loan facilities, you must first find a gold investment company that is locally based. You can find out if one in your area is licensed to provide this service. The only thing that you’ll need to do after this is read their website. Most of these companies will have a website, and the websites are not just for show. These websites contain plenty of helpful information about how gold loans work and what needs to be done by the borrower if they want to use them. On the website of a gold loan company in your state, you may notice that a significant emphasis is put on how the money is received in exchange for your gold. Some companies allow their borrowers to invest with this money, while others do not. But remember, if they allow it, they may charge an additional fee of 10% of the amount borrowed to be deposited into another account. If you locate a local gold loan company that allows you to make investments, you can use your funds to invest wisely in them. What is a Gold Loan? The gold loan works like a pawn shop with some key differences. Your gold is stored in their vault, and you are given a receipt for it and told how much you could borrow against your gold’s value. The money received in exchange for gold can be used for any purpose; however, it costs an extra fee if you want to use it for an investment opportunity. This fee is not to exceed 10% of your original amount. The borrower will receive the principal amount but no additional funds. Borrowers seeking to meet their immediate or long-term monetary demands may apply for a gold loan or a loan against gold, a secured loan. The borrower is offering up their gold jewelry as security in this instance. Typically, a proportion of the value of the gold pledged is used to determine the loan amount, up to 75%. You must repay the loan in installments. You will receive your gold back once you have paid the loan and interest. Affordable gold loans are available from nationalized banks, commercial banks, and NBFCs. Your gold loan may have an annual interest rate between 7% and 29%. It, however, differs from lender to lender. A gold loan is also helpful to cover a short-term credit need. It could be paying for your child’s schooling, a medical emergency, a family wedding, etc. It is usually better to take a gold loan than to sell your jewelry. Further, EMIs are a payment option for gold loans. Even better, you can pay the interest in full upfront and repay the loan’s principal at the end of the term. New Gold Loan Norms Introduced by the RBI The Reserve Bank of India (RBI) recently changed the gold loan regulations. It has made it easier for lenders to offer more money as a loan against jewelry with easy returns in the form of gold. The RBI raised the loan-to-value ratio through its regulatory statement in August 2020. It ranges from 75% to a maximum of 90%. According to the RBI’s rules for gold loans, lenders, including banks and non-banking financial institutions, are permitted to give up to 90% of the gold jewelry’s value. It strictly demands that the loan against gold jewelry be used for non-agricultural purposes. For borrowers who find it challenging to repay personal or company loans, the modification in the loan-to-value ratio for gold loans is a blessing. The LTV value was changed, allowing borrowers to borrow more money against the same amount of gold. Banks were permitted to import gold or participate in the gold monetization scheme. They could offer gold loans to jewelry exporters and manufacturers, with the repayment of these loans being made in Indian rupees. However, the RBI has since announced the new norms after the current notification. According to a recent RBI statement, physical gold can now be used to pay back gold (metal) loans. It is being hailed as a significant breakthrough, particularly in business and bullion. The move is anticipated to aid in promoting Indian refined gold. Plus, assist jewelers in covering their debts with gold holdings. Only prospective borrowers will have access to this option. As per RBI regulations, the loan agreement must expressly state that the borrower can use it. Also, it must specify the standard of gold that is needed. The refiner has to pay back the bank with Indian gold delivery standard metal that was made locally. What Are the Gold Loan NPA Norms in India? NPA norms for gold loans in India are a document that lays down norms and practices followed by the National Personal Asset Authority. It guides the industry in deciding how to value gold and other financial assets. Hence, they do not just operate as an authority but also work with their peers across the globe. Gold is an asset to many individuals because of religious beliefs, cultural and social reasons, and many more. Some people consider gold a good investment instrument due to its fluctuating prices. Usually, buyers wish to have gold as an investment or hedge against adverse market events. Gold is sometimes considered an instrument of value preservation or a currency. It does not have a fixed nominal value and is traded at its market price. Hence, the idea of gold loan NPA norms is to fix the value of gold. [B-02] Conclusion With so many benefits, a gold loan is among the finest ways to handle any unforeseen financial circumstances. The fact that you must mortgage your gold to the lender is the sole drawback of a gold loan. Therefore, close the loan properly and make the repayments on schedule. Additionally, there are several new norms for gold loans that we have stated above. You must know this before applying for a gold loan. So, go through that. Further, you may check out Piramal Finance to learn more about gold loans and explore their products and services.
08-11-2023
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Know More

Sovereign Gold Bonds (SGBs) Know Benefits & Why to Invest

Want to learn more about the sovereign gold standard? Are you looking for the ideal investment opportunity? Do you want to discover why purchasing a sovereign gold bond scheme is better than buying physical gold? An investment plan called the Sovereign Gold Bond (SGB) offers a fantastic chance. The all-purpose Sovereign Gold Bond program offers superior returns and tax advantages. Answers to your inquiry will be found here, so long as you keep these important things in mind before investing in sovereign gold bonds. Here are some crucial factors that will increase the impact of your decisions. Let’s take a look. [B-01] Sovereign gold bonds are gold-backed government securities. They replace gold. Investors must pay in cash for the bonds’ issuance price and maturity. The investor’s gold is protected by the current market price at redemption or early redemption. Physical gold is inferior to SGB because of the reduced storage risks and costs. The market price of gold at maturity and interest are guaranteed. Sovereign gold bonds are free of fees and purity concerns for gold jewelry. The RBI’s financial records contain the bonds. About sovereign gold bonds, some key points are mentioned below : Sovereign gold bond scheme The purpose of the sovereign gold bond scheme, which was implemented in November 2015, was to lessen the demand for physical gold and convert some domestic savings traditionally used to buy gold into financial savings. As part of the Gold Monetization Scheme, the government created the Sovereign Gold Bond Scheme. In this plan, the RBI, in cooperation with the GOI, opens the issues for subscription in phases. The RBI periodically announces the terms and conditions for the initiative. The RBI will issue a press release stating the SGB rate before the distribution of each tranche. Indian Sovereign Gold Bonds are issued by the Indian government. Gold may be purchased and stored safely without the need for physical vaults. Investors are guaranteed a yearly interest rate of 2.5%. Benefits of sovereign gold bond Without storage costs or risks: Buying gold jewelry will inevitably make one worry about keeping it secure. Even storing it in a bank locker could cost money. The dangers and expenses associated with storage are removed with this kind of bond. Low danger: These bonds are issued by the RBI on behalf of the government, which, therefore, indicates that the central government supports the plan. This makes these sovereign gold bonds more secure than buying gold itself. Market-based payment: You receive the current market price if you redeem your bond early or at maturity. According to the RBI, investors are guaranteed the market value of gold at the time of maturity plus monthly interest. Bringing no claims: When purchasing gold jewellery, you must pay making fees. No capital gains tax: If you invest in a sovereign gold bond, the Indian government has waived the tax on capital gains for the purchase of gold. However, interest income will be taxed. Benefits of Indexation: If you try to transfer (leave) the bond before maturity, indexation can help you pay less in capital gains taxes. Paper gold bonds may also be used as collateral. Similar to taking out a gold loan, you can use national sovereign gold bonds as collateral to get loans from banks. Features of a sovereign gold bond According to the RBI, the sovereign gold bond plan has a few special characteristics. SGB bonds can only be acquired in grams or kilograms of gold. For this program to work, you must purchase at least one gram of gold. The highest maximum is also subject to constraints. Only sovereign gold bonds up to a maximum weight of 4 kg are allowed. It can hold 20 kg of weight if it’s a trust. Interest rate: You will get interest payments from the RBI twice a year on the amount of your initial investment. Advantages of a sovereign gold bond Online discount Long-term investment More earning Safe and secure Saves money Here are some instructions for purchasing sovereign gold bonds online: Step 1: Access your net banking account. Use the credentials to access the net banking services. It is crucial to remember that anyone making an online investment needs a valid login ID to use their bank’s net banking service. If someone does not already have a login ID, they must activate it right away to continue. Step 2: After logging in, choose “e-Service” from the top menu, and then choose “Sovereign Gold Bond.” Step 3: New users must first click “Register,” review the Reserve Bank of India’s “Terms and Conditions,” and then click “Proceed.” Step 4: Enter the necessary information for the sovereign gold bond scheme as well as the depository’s information. Step 5: Click “Submit” after completing the registration form. Step 6: The investor must select the purchasing option from the header tab after completing the registration process. Those who are already registered can bypass the registration process and go straight to the header tab’s “Purchase” option. Step 7: Enter the nominee’s information and the number of subscriptions on the new page. Step 8:To finish the procedure, the investor must enter the one-time password (OTP) supplied. Required paperwork when issuing sovereign gold bonds A voter ID card, An Aadhaar card A PAN card A TAN card, or a passport According to the provisions of the Income Tax Act of 1961, the interest on gold bonds will be taxed (section 43 of 1961). The capital gains tax that would have been due upon the repurchasing of sovereign gold bonds by an individual has been waived. [B-02] Summing-up The purpose of this essay is to present a comprehensive study of significant data regarding the sovereign gold bond scheme. We are aware of how important making the appropriate investment choice is. When investing in sovereign gold bonds, you need to use caution, regardless of whether a plan is the best option for you. Examine the features and interest rates provided by several online platforms to discover the best deal before applying for a sovereign gold bond, but most importantly, pay attention to the points mentioned above. Investment Reliable does not offer financial advice, but we do provide unbiased information and evaluations on trading, investing, and finance. Users ought to always carry out their research. Also visit Piramal Finance, which has more in-depth, educational articles.
08-11-2023
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Business Loan

What Are the Most Important Things Required to Apply for a Business Loan

A business loan is one of the most essential things every business needs to run well. Many people have ideas that, if implemented, could lead to the start of new, successful businesses. But because of a lack of finances, it couldn’t happen. With the help of a business loan, you can grow your business, pay for ongoing costs, and buy stock and technology. If you have never tried to get a business loan before, you might not know how to start or what documents you will need. Read on to find out how you can get started. [B-01] Things You Must Keep in Mind While Applying for a Business Loan The process for applying for a business loan is different from the one for a personal loan. Getting a business loan can be a complex process. There is more paperwork to do, and the requirements are stricter. It is important to know what needs to be done. Knowing every aspect of a business loan doesn’t necessarily qualify you to apply. So what does it do? Let’s dive into the details. Improve Your Credit Rating There may be ups and downs or errors in your credit history from time to time. If you don’t pay attention, they could hurt your credit score. So, it’s usually a good idea to check your business and personal credit files regularly. If you find any problems, you should immediately contact the credit bureau. By getting rid of the mistakes, they will fix your credit score. If your credit score is low, no bank will lend you money. Search for Every Possible Lending Option It is vital to do your research. You should make a list of banks that are willing to give you business financing. It should meet all of your needs. Check your credit history to make sure it’s in good shape. Choose the lender whose rates are the lowest. Keep Up-to-Date Accounting Records A bank is more likely to give a business loan to a company with good financial records. Lenders want to look at your capital structure, records of cash flow, and income statements to see if you can repay the loan. You should start immediately if you aren’t keeping track of these things. They are helpful when applying for business financing. Create a Brief Plan To give a business loan many banks need to see a detailed financial plan for your business. It tells people about you and what your business wants to do. The business must be clear about its goals, mission, and how it works. A strong business plan shows a lender that the business will do well. What Happens if You Don’t Have the Proper Paperwork When Applying for a Business Loan? The terms for paying back business loans are easy, and the interest rates are reasonable. So, to get a business loan, you need to have the proper paperwork. Documentation is needed to ensure that the information given during the loan process is correct. They also make sure that your business is legal. Lenders may decide the loan amount, term, and interest rate for a business loan based on how valid these documents are. If the documents are not submitted, the application may be turned down. Application Checklist for Business Loans Cover Letter You might have to send a cover letter to the manager of a banking institution to talk about your business loan application. The letter should also talk about your company, including what it does and what industry it is in. With the letter, you can ask your lender to consider your loan request and give you advice. Business Plan Lenders will want to know that your business is trustworthy and that you have the knowledge and skills to run a successful business. Include your business’s goals, competitors, past and expected income and expenses, research on the market, and plans for growth. Personal Credit Report As part of the application procedure, lenders obtain each applicant’s credit report individually. Before filing a loan application, any lender must get credit reports from each of the three credit rating organizations. You may not be approved for a loan if your credit report contains errors. Additionally, clearing this is required before beginning the registration process. Income Tax Return Applications for business loans must include the last three years’ worth of personal and corporate tax returns. Analyse Lending Options Analyzing your lending options will help you find a lender who will give you a good deal. Don’t accept proposals just because they look good without proper research. Before deciding on a lender, consider the processing fees, fees, and level of customer service. Documents Required for a Business Loan Application You must provide the following paperwork with your business loan application. For Identity Proof PAN Card. Driving Licence. Aadhaar Card. Passport. Voter ID Card. For Address Proof Voter ID Card. Driving Licence. Aadhaar Card. Passport. Business PAN Card Other Business Documents Last six months’ worth of bank statements. The most recent CA Certified ITR. Income computation, balance sheets, and profit and loss accounts for the last two years. Proof of continued existence in the form of an ITR, trade license, establishment, and sales tax certificate. Sole Proprietorship Declaration or a certified copy of the partnership deed. [B-02] Conclusion A business unit can grow with the help of a loan. The money can be used for general business costs like buying plant equipment, paying off debt, and more. A business loan is easy to get. If you meet the requirements, you can get the loan amount in a few days. All you need is the necessary paperwork for business financing. You can visit Piramal Finance for more blogs related to business loans. Take a look at the products and services we offer.
08-11-2023
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Home Loan

Pros and Cons of Getting a Home Loan for Married Couples

Borrowers can take out individual or joint loans to buy their dream home when they need a housing loan. In the case of a single application, the borrower must submit the documents on their own, but in the case of a joint application, you must submit the documents of both applicants. Borrowers can split the home loan amount and make payments with a shared loan. When a property is owned separately, it is only registered in the name of one person, and that person is responsible for all the payments on the property. The joint assets become the joint loan for those who want to borrow money. In this case, if the borrower doesn’t pay back the loans, the owner and co-owner, whose names are on the title, could be added to the list of debtors. If both people in a married couple have always worked and brought money into the home, it’s often a good idea to get a loan in both of their names. This way, if one person in the couple can’t qualify for the loan, the other person could take on more responsibility for paying back the home loan. This is good for both the borrower and the lender. [B-01] What is a Joint Home Loan? Home loans differ from other loans because you can apply for them together. By saying “joint mode,” you mean that more than one person could apply for a loan at the same time. There can be no more than six co-applicants on a home loan. But they must all own the property in question together. On the other hand, a married couple can apply for a mortgage even if they are not co-owners. Most mortgages allow siblings, parents, or spouses to be co-applicants. Co-applicants who are not married and female family members, friends, or business partners unrelated to the applicant are not allowed. The Pros of Getting a Home Loan Reduces the burden of liability When two or more people own a property together, they are responsible for paying the installment. When married couples have children, it’s often best to own the property together. The couple can benefit from the property and own it as if they were one person. The couple is free to choose the house, the budget that fits the house, and the interior design. Also, if one of the couples loses their job, the other co-owner can keep making payments to keep full ownership of the land and keep the lenders from fining them. Increases the number of women ownership to own property India is a male-dominated country, so all decisions are made by men. Unlike women, men usually get a larger share of the property than women do. Also, there are many more men in the working class than women. Because of this, there is a big difference in wealth between men and women. The number of candidates who buy homes in their names is going up at the same rate as the number of women working. India and the state government’s efforts to give women more ownership rights have led to good results, like women taking part in daily tasks and buying their dream homes independently. Helps in the mutual benefit of taxes The property that is jointly owned and has one female co-owner is eligible for registration benefits and will have lower returns applied to it. PMAY [Pradhan Mantri Awas Yojana] borrowers are eligible for higher subsidy advantages for purchasing a property, including one female co-owner. The Indian government encourages women to get loans in their own names and buy real estate on their own or with other people. The Cons of Taking a Joint Home Loan Both applicants would lose ownership in the event of a dispute No matter how much money they put into the apartment, if the joint owners stop talking to each other and stop paying the mortgage, the borrowers risk losing their home, and it becoming a secured asset of the bank, which would mean they both lose their homes. Conflicts with the property If a couple breaks up or gets divorced, they might not agree on what to do with their property, which could cause problems with ownership and getting back on their feet. Let’s say the payments haven’t been sent to the bank yet. In that case, both partners may refuse to do so in the event of a divorce, leading to default and arguments over who owns the property. You could also include the co-owners in the default case. It may impact both applicants’ CIBIL scores If both the borrower and the candidate default, the applicant’s CIBIL score could be hurt. This could mean that people won’t be able to get any more loans in the future. In the event of a loan default, both couples may have to pay large fines, making both couples responsible. [B-02] Conclusion At last, you might tell the borrower that she should buy the house with her wife as a co-owner to lessen her financial responsibility, take advantage of programs that help women, and save money. For the joint property to work, there needs to be a good, long-term relationship based on trust so that the right can be used, and the default isn’t always an issue. You can visit Piramal Finance for more blogs related to home loans. Look at the products and services they offer as well.
08-11-2023
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Home Loan

What is a Home Loan Sanction Letter?

Everybody dreams of owning a house someday. With a home loan, you can come closer to achieving your dreams. In this article, you will learn more about home loan eligibility. But first, you must know what is meant by a home loan sanction letter. [B-01] What exactly is a home loan sanction letter? A home loan sanction letter is an initial letter of approval for your home loan. After your home loan is approved, a home loan sanction letter is given to acknowledge your home loan application. The letter is issued by banks or other institutions stating that the home loan has been approved. The home loan sanction letter is issued only after verifying your home loan eligibility. A home loan sanction letter is also called an “in principle home loan sanction letter.” You can learn more about the home loan application process with Piramal Finance and understand the options that suit you best. Eligibility for Getting a Home Loan Eligibility for a home loan is based on several factors: Employment: All banks or institutions provide home loans only to salaried or self-employed individuals. Age: Age is the other factor that determines your home loan eligibility. If you are younger, the terms and other conditions are more favorable. If you are older or nearing retirement age, there will be fewer chances for approval. It is based on the calculation of your remaining work years. Credit (CIBIL) Score: A credit score can make or break a home loan. If you have a healthy credit score, you will be in a safer position. A credit score of 700 or above is generally preferable. Other Financial Obligations: The lenders will also consider other financial obligations, such as any other ongoing loans or liabilities. Criminal History: Though most financial institutions do not consider your criminal history, some will take it into account before issuing a home loan. Once the bank or financial institution has verified your details, it will then determine the principal, interest rate, and repayment period of your home loan. What are the Features of a Home Loan Sanction Letter? Here are some of the key features of a home loan sanction letter: Home Loan Sanction Letter and Loan Agreement: You should not confuse a home loan sanction letter and a final home loan agreement. They are two different documents. The home loan sanction letter indicates your eligibility for a home loan. The home loan agreement, on the other hand, states the terms and conditions that your bank or financial institution has laid down. Validity: The home loan sanction letter is generally valid for up to 6 months. However, this may vary from bank to bank. Reapplication: If the validity of a home loan sanction letter expires, you do not need to worry. You can reapply for the sanction letter. However, before renewing the letter, you need to apply for the home loan again. What Does a Home Loan Sanction Letter Contain? The home loan sanction letter from banks and other institutions contains some important information. This includes: The total amount of the loan that you are sanctioned. The tenure of your home loan. The type of interest rate for your sanctioned home loan. The interest rate may either be fixed, floating, or a hybrid one. The tax benefits of your home loan. EMI details and related information. Mode of the home loan repayment. The validity of the home loan sanction letter. Other terms and conditions. The contents of a home loan sanction letter mentioned above may be subject to certain changes. Thus, they are different for different financial institutions. What are the Benefits of a Home Loan Sanction Letter? Some advantages of a home loan sanction letter are as follows: Acts as a guarantee: The home loan sanction letter guarantees your home loan eligibility, before receiving the loan amount. Important Document: The home loan sanction letter is an important document that you must submit to your builder or a developer. The builder or developer is the company or individual from whom you have purchased property. Gives prior information: The home loan sanction letter gives you prior information on your credit score. It also acts as a reminder of the EMI amount, helping you plan your expenses in advance. What is a Digital Home Loan Sanction Letter? The world has become more digital, and so has banking. As a result, banks and other institutions have made the home loan application process simpler. If a person is eligible to apply for home loan they can submit their application online. Once verified, the bank or institution will send them the sanction letter digitally. Thus, a digital home loan sanction letter can be defined as a home loan sanction letter that is received online or as a digital copy. [B-02] The Bottom Line We hope you have understood what a home loan sanction letter is, its benefits, and home loan eligibility. The good news is that you can avail of a home loan at low-interest rates with minimal documentation from Piramal Finance. You can also check your home loan eligibility with us before applying for the same. We, at Piramal Finance, will work with you to get a step closer to your dream house. You can also learn more about finance and related topics on our website.
08-11-2023
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Home Loan

Stamp Duty and Registration Charges on a Home Loan

If you intend to purchase a house, keep in mind that the price the seller has offered you does not represent the total cost of the transaction. According to Indian tax laws, stamp duty is an extra cost that all homebuyers in our country must cover to become legally responsible for their properties. When purchasing a property, it is essential to have clear, crisp paper since you will need these legal papers for a variety of purposes for a very long time. In other words, stamp duty must be paid as soon as everyone signs the sale agreement. When you register it in your name, the price you were quoted is likely to rise by a few lakhs. [B-01] What is Stamp Duty? The state government charges this cost for the paperwork required to register your property. This tax is imposed on transfers of both freehold and leasehold real estate, including residential and commercial buildings. When you pay stamp tax, the government registers your name. The stamp mark on the paperwork confirms that the paper has obtained official approval and is now genuine, which is why the fee is so named. States have different stamp taxes and registration fees. When registering a property, you are required to pay stamp duty according to Section 3 of the Indian Stamp Act, 1899. Registration Fees The ownership paperwork must be registered once stamp duty has been paid. Registration must be completed within four months after the execution date. Registration costs are payable at 1% of the market value or the agreement value, whichever is greater, up to a maximum of Rs. 30,000. How is Stamp Duty Calculated? Stamp duty is estimated depending on the property’s worth. In India, however, stamp duty fees are between 3 and 10 percent of the property’s worth. You will end up paying a large fee if the market value of your property is high, and vice versa. The rate of stamp duty depends on a number of factors, including the property’s location, gender, the owner’s age, the property’s use, the kind of property it is, and the amenities of the project. The value of the property is established by authorities using the Stamp Duty Ready Reckoner. Every January 1st, the government releases the market values. One cannot lawfully claim the property without paying the required stamp duty. Factors Affecting Stamp Duty State-to-state differences in stamp duty exist. The following variables affect how much duty is charged. Location: The stamp duty fees will be more expensive if the property is situated in an urban region compared to a suburban or rural one. You will end up paying less to have your property stamped if it is situated inside the Panchayat borders or on the outskirts of the town. Age of the owner: Almost all state governments have reduced the cost of senior citizens’ stamp duties. The age of the property owner has a sizable impact on stamp duty rates in the majority of states. Age of the property: Since stamp duty fees are computed as a proportion of the property’s total market value, older structures often have lower fees while newer structures have higher fees. Gender of the Owner: When compared to women, men spend around 2% more getting their property registration paperwork stamped. In Delhi, you are still qualified for a stamp duty discount if you agree to register the property jointly with the woman as the principal owner. The availability of this amenity, however, varies across the nation. Purpose: Comparatively speaking to residential structures, commercial buildings are subject to higher stamp duty fees. Your stamp duty expenses will differ depending on whether you are purchasing land, an apartment, a standalone home, or a villa. Does a Home Loan Cover Stamp Duty and Registration Charges? As we talk about the importance of stamp duty and how to calculate it, you should also budget for the additional costs that will be imposed on your budget as a house buyer, including stamp duty and registration fees. Banks are advised not to include stamp duty, registration, and other documentation fees in the home loan charges of housing properties to prevent the Loan to Value (LTV) Ratio’s effectiveness from being diminished, according to the Reserve Bank of India’s circular on “Housing Loans by Commercial Banks – Loan to Value (LTV) Ratio” dated February 3, 2012. These fees will be paid by the government. Your loan does not cover stamp duty or registration; each must be paid separately by the buyer of the property. Tax Benefits Stamp duty and registration fees are exempt from taxation under Income Tax Act Section 80C. Section 80C’s maximum benefit for stamp duty and registration expenses is Rs. 1,50,000. When there are joint owners, each co-owner is allowed to submit their income tax returns based on how much of the property they own. Payment of Stamp Duty and Registration Charges Purchasers may use any of the following methods to pay their stamp duty, both online and offline: Physical Stamp Paper: In this case, you buy non-judicial stamp paper from a licensed seller. E-Stamping: One of the most practical ways to pay for stamp duty is through the SHCIL website. Fanking: The majority of banks offer homebuyers franking agent services. [B-02] Conclusion Stamp duty and registration fees are typically not included in the home loan amount that the bank has approved. To take possession of your new home, you must pay these fees in addition. When registering your property, you must pay the correct stamp duty as required by law. Many people give their property a low market value to avoid paying expensive registration and stamp duty fees. Therefore, once your sale agreement is signed, registered, and the registration and stamp duty fees are paid, you are deemed the owner of the home. Explore more informative articles on Piramal Finance.
08-11-2023
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Home Loan

What is The Rate of Interest of a Loan Against Property in 2022?

Do you need a mortgage loan? With just a few clicks, you can get the money you need at low-interest rates. As a secured loan, a loan against property (LAP) has a much lower interest rate than a loan that isn’t backed by anything. Another way, a LAP loan shouldn’t only provide you with a low interest rate but also a fair appraisal of your home’s worth. LAP also has a repayment plan that suits your needs and low or no closing costs. Let’s continue the topic of the interest rate on loans against property and how to get a lower rate. [B-01] What is Loan Against Property? A loan against property (LAP) is approved as long as the lender keeps an asset as a mortgage. This asset can be a piece of land, a house, or any other place where business is done. The asset stays with the lender as collateral until the total loan against the property is paid back. Most of the time, you have up to 20 years to repay the loan. Lenders usually let you borrow between 50% and 70% of the property’s market price as a mortgage loan, which you can pay back over time through EMIs. You can use the LAP to meet your or your business’s needs. Interest Rate of LAP Depending on your profession, the interest rate on a loan against property will differ. For example, lenders charge higher interest rates on loans to salaried people than to self-employed people or businessmen. Generally, most lenders apply 11.5% p.a. interest to a mortgage loan. Interest Rates on Different Properties (LAP) Conditions Industrial Property Commercial Property Residential Property Interest Rates 9.35%-13.7% 7%-20.6% 7%-20.6% Loan to Value 50%-80% 40%-80% 1%-80% Processing Fee 0.2%-1% 0.2%-3% 0.1%-3.0% FOIR 0.65 0.65 0.55-0.65 Factors Affecting Loans Against Property Credit Score A high credit score shows that you use credit wisely and are good with money. As a result, many lenders provide mortgage loans with lower interest rates for people with high credit scores. Loan Amount Many banks set interest rates on mortgage loans based on the loan amount. Most of the time, the interest rate on loans against property up to Rs 30 lakh is lower than that for loans for more than Rs 30 lakh. Property Type Some lenders charge less interest on loans for homes owned and lived in by the borrower than on loans for commercial properties or properties that are not owned and lived in by the borrower. Women Applicant Many lenders give women borrowers a break on their interest rates, usually 0.05%. If your female family member applies, it can help you get a lower interest rate. LTV Ratio The loan-to-value ratio (LTV) measures how much of the property’s value you can borrow. Most lenders will give up to 70% of the property’s value as collateral for a loan. When you borrow less, the loan-to-value ratio decreases, making you eligible for more loans and lowering your interest rates. How to Lower the Interest Rate of LAP? Here are some essential things to think about if you want to lower the interest rate on a loan against property: Find out what the interest rate is for each type of loan. For example, it’s possible that the interest rate between Rs. 30 lakh and Rs. 20 lakh will be lower than the interest rate on a loan between Rs. 20 lakh and Rs. 30 lakh. Choose the term carefully because it directly affects the interest rate that the lender will offer. Watch out for loan providers who offer low-interest rates. Don’t fill out multiple applications with different lenders. Each application rejection will lower your CIBIL score, and a low CIBIL score will cause the lender to charge you a higher interest rate. Choose a loan amount that you can easily pay back. Documents Needed for a Loan Against Property You will have to send in the following general documents: Address proof: Aadhaar card, driving license, voter ID card, etc. Identity proof: passport, Aadhaar card, PAN card, etc. Form 16 Bank statements IT returns certificate Income proof documents Salary slips Property documents: sales deed, property tax receipt, registration certificate, building plan, etc. Steps for Getting a Loan Against Property Here is a general outline of how to get a loan against property: Choose a lender with a good reputation that has the best loan against property deals on the market and fits your budget. Fill out the lender’s website’s online application form. Type in your name, address, income, and other necessary information. Enter the details about the loan you want, like how much you want to borrow, how long you want it to last, etc. Based on your information, the lender will decide if you can get a loan. The lender will get the paperwork they need and check the value of your property. A loan approval letter will be sent to you after the lender has checked your information. You must show the original property papers before the loan is paid out. [B-02] Wrapping Up Real estate is an asset that can be used as security for a mortgage loan, whether for a home, a business, or something else. When unexpected financial needs arise, like growing a business, sending a child to college, paying for a wedding, or dealing with a health emergency, having property may help. You can get a loan quickly and easily by pledging your home as collateral. The loan against property rate has a direct impact on your finances. Its interest rate fluctuates from bank to bank, state to state, and even city to city. So check the interest rate before applying! Follow Piramal Finance for the latest news on mortgage loans, daily blogs, and articles.
08-11-2023
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