More articles for you

Your one stop place for everything related to finance and lending

Stocks Markets

What Are Bonus Shares?

Gaining a bonus or getting something for free is satisfying for consumers worldwide. Bonus shares enable that feeling in the finance sector. You can create a Demat account and generate bonus shares to increase your earnings. Demat accounts, after all, allow trading and investing from a person’s home. A Demat account is essential to hold securities directly in electronic format. It will help you invest in shares on the stock market. It is also known as a dematerialized account. Current shareholders get bonus shares at no extra cost. It depends on how many shares they currently own. These are the bank’s accumulated earnings that are transformed into free shares rather than distributed as dividends. The fundamental idea of bonus shares is to increase the cumulative number. It also maintains a fixed ratio of shares held. [B-01] Descriptive Examples For example, if Investor Y owns 200 shares of a company, and the company announces a bonus in the proportion of 4:1, then they would receive four shares for free. That is a sum of 800 free shares, and his total ownership will increase to 1000 shares. You can consider one more example. A shareholder would receive two extra shares for one ordinary share. This process happens if a company announces a one-for-two bonus share. Say a shareholder owns 2,000 company shares. When the business develops bonus shares, she will now own 1000 bonus shares, as 2000 x 1/2 = 1,000! The terms “ex-date” and “record date” are important to understand policy and benefits. Below are the instruments used when the company announces its shares to its shareholders. Record Date A record date is a time set by the company for bonus share eligibility. The company will grant shares to shareholders with shareholdings in their Demat accounts. The execution of shares will occur on the recorded date. Ex-Date The record date is one day earlier than the expiration date. In this case, an investor must purchase the shares at least one day before the expiration date. This practice helps in qualifying for bonus shares. Who Qualifies to Receive Bonus Shares? Companies issue bonus shares to promote retail participation and broaden their equity base. It is challenging for new investors to buy shares of one company when the per-share price is high—a higher share count results in a lower cost per share. But, despite the declaration of bonus shares, the total capital stays the same. The company may issue bonus shares to shareholders who held the company’s shares before the record date and the expiration date. The T+2 rolling system, where the record date is two days after the ex-date, is followed in many countries for delivering the shares. If you are an investor, you must buy shares before the expiration date to qualify for bonus shares. If you purchase shares after the expiration date, the business will not transfer ownership of the claims. Once the bonus shares are accounted for, you will receive a unique ISIN. Bonus shares will be credited to the shareholder’s account within 15 days. What Justifies a Company Issuing Bonus Shares? If a company incurs profits during this period but cannot pay dividends to present shareholders due to a lack of funds, it may issue bonus shares. Relevant companies distribute bonus shares from their earnings. This is also known as the “capitalization of profits.” Let us now think about the benefits and drawbacks of bonus shares. Benefits of Bonus Shares Investors who buy bonus shares receive several benefits. Some of these are listed below. Bonus shares give investors extra shares. This includes increasing their stake in the business and the stock’s liquidity. Bonus shareholders are not troubled by any tax effects because there are none. They are especially beneficial for those looking to make long-term investments. It is because they strengthened earnings across a wider spectrum. Individuals who own bonus shares can receive a larger dividend. This is possible when the firm declares dividends. It is because they now own a larger proportion of the company’s shares. Demerits of Bonus Shares Possessing bonus shares presents a few disadvantages too. They should be aware of bonus shares. It is because even though the financial gain will remain the same, there will be more of them since the earnings per share will decrease. From the Company’s Perspective: 1) The business does not get any cash when issuing bonus shares. As a result, it becomes harder to raise money after an offering. 2) The incentive price rises over time. It grows when a company issues bonus shares rather than paying dividends. Types of Bonus Shares There are two types of bonus shares, which are as follows: Paid-In-Full Bonus Shares Bonus shares are securities that are given out to investors based on how much ownership they have in the company. The entities that may issue these bonus shares include: A loss and profit account. Financial resources. Reserves for capital redemption. A premium security account. Bonus Shares with Partial Payments A portion of the total issue price is paid. The investor can buy partially paid shares without paying the full issue price. One can pay off the remaining partially paid share capital balance in installments. Guidelines That a Company Must Adhere to Before Authorising Bonus Shares Once bonus shares are issued, the articles of association must approve a ‘bonus issue. The company must adopt a special resolution at their meetings. This is a concern if an organization’s regulations cannot do what’s needed. In the event of a meeting, the shareholders must also approve the bonus issue. One should adhere to the SEBI guidelines. The business must ensure certainty after a bonus issue. It should ensure that the share capital stays within the authorized share capital. The Memorandum of Association’s capital clause needs amending by raising the authorized money. A business must notify the Federal Bank and get permission before issuing bonuses. Before the issue date, a company should pay the bonus shares. The shareholders will pay the uncalled amount if claims come in part. [B-02] Conclusion It is common practice to give existing shareholders bonus shares in order to meet their cash needs. Instead of issuing new shares, bonus shares do not increase the company’s profits. Access an open Demat account immediately to start trading and investing in stocks. You can also earn bonus shares! It is crucial to conduct adequate research before making buying decisions about securities. This early research can lower your risk of suffering losses. It will also save one from other negative outcomes. Along with it, this increases your opportunity for profit. For trustworthy financial guidance, Piramal Finance is here for your service. We are an Indian financial services company specializing in retail lending. With a skilled set of professionals, our services include several options. Services include personal loans, business loans, housing loans, and other consumer-focused finance products.

08-11-2023

Other

5 Unique Ideas to Set Up a Business in the Trading Sector

The trading sector is a dynamic and vital part of India's economy, significantly connecting producers with consumers. As part of the service sector, the country's largest industry, trading allows businesses to influence market trends and meet consumer demand innovatively. Whether you're looking to launch a new venture or diversify your existing business, exploring opportunities within the trading sector can be rewarding. In an industry where inventory management and responsiveness to changing demands are key to success, having the right resources and financing is crucial. You can easily establish or grow your business with access to business loans specifically designed for traders. Here are five lucrative ideas to help you succeed in the thriving trading industry: 1. Sustainable and Eco-Friendly Products: Trading for a Greener Future With increasing concerns over environmental degradation and climate change, there is a rising demand for sustainable and eco-friendly products. Consumers are now more inclined to purchase items that are environmentally friendly, such as reusable household products, biodegradable packaging, energy-efficient appliances, and sustainable fashion. This sector presents an exciting opportunity for businesses to enter the growing green market by trading in eco-conscious products. The options are diverse, from selling solar-powered gadgets to offering eco-friendly home decor or zero-waste products. Many people, especially younger generations, are willing to pay a premium for products that have a positive environmental impact. By sourcing and selling sustainable products, you can capitalize on a profitable market and contribute to a greener planet. The demand for these products is expected to keep rising, making this an ideal sector for entrepreneurs who want to make a difference while earning a profit. 2. Health and Wellness Products Trading: A Booming Industry The health and wellness industry has experienced significant growth in recent years, and this trend is expected to continue as more people become conscious of their physical and mental well-being. From nutritional supplements, fitness equipment, yoga accessories, and organic skincare products, there is a wide range of health-focused products that people are eager to buy. The Indian market for health and wellness products is booming, driven by factors such as increasing awareness about healthy lifestyles, a rising middle class, and a focus on preventive healthcare. Entrepreneurs can consider trading in fitness equipment, dietary supplements, essential oils, or even wellness gadgets like fitness trackers and smartwatches. With an increasing number of consumers focusing on staying fit and maintaining a balanced lifestyle, this sector has tremendous potential for growth. By sourcing high-quality products and offering them through online and offline channels, you can build a business that caters to the health-conscious community. 3. Auto Care: Capitalizing on the Rising Demand for Vehicles The automotive industry in India has witnessed substantial growth, with passenger vehicle sales crossing the 3 million mark in 2016-2017. The sector grew by 9.23% during this period, driven by a combination of factors such as higher disposable incomes, changing lifestyle choices, and the increasing demand for luxury vehicles. The potential for success is immense for those interested in starting a business in the auto care sector. The opportunities are endless, from selling spare parts to providing auto accessories and maintenance services. Currently, the auto care industry is valued at Rs. 20,000 crore and is expected to grow to Rs. 34,000 crore by 2020. This presents a fantastic chance for entrepreneurs to tap into the expanding market and offer products or services that cater to vehicle owners' needs. Trading in vehicle parts and accessories, such as tyres, battery chargers, or car cleaning products, can be lucrative. Additionally, offering services like car detailing, maintenance, and car modification can make your business a one-stop shop for automobile owners. 4. E-Commerce Trading: Expanding Online Retail Business In the digital age, e-commerce has become a major avenue for businesses to reach consumers. With increasing internet penetration, online shopping has gained immense popularity in India, especially in the wake of the COVID-19 pandemic. This presents an opportunity for businesses to establish an online presence and engage in e-commerce trading. Whether you're dealing in consumer electronics, clothing, beauty products, or groceries, e-commerce trading offers the chance to reach a wide customer base without the overheads associated with traditional brick-and-mortar stores. By setting up an online store, you can trade products directly to consumers, manage inventory effectively, and leverage digital marketing to drive traffic to your website. In the fast-evolving world of e-commerce, staying ahead of trends and continuously offering value to your customers is essential. Whether it's by providing seamless shopping experiences, offering personalized products, or focusing on customer service, a successful online trading business requires a solid strategy and access to the right resources. 5. Electronics and Gadgets Trading: A High-Demand Market The demand for consumer electronics and gadgets in India is rapidly growing, thanks to technological advancements and increasing disposable incomes. With the rise of smart homes, mobile devices, wearables, and entertainment gadgets, there are numerous opportunities for entrepreneurs to tap into the electronics and gadgets trading market. India’s tech-savvy population is eager to invest in the latest gadgets, ranging from smartphones and laptops to home automation systems and audio equipment. This market is driven by the urban population and younger consumers in smaller towns and cities who are adopting new technologies faster than ever. By sourcing high-quality, in-demand electronics and gadgets, you can meet the needs of a growing customer base. Additionally, offering after-sales services such as warranty extensions, installation support, or tech accessories can provide added value and boost customer loyalty. Conclusion: Unlock the Potential of the Trading Sector with the Right Support The trading sector presents a wealth of opportunities for aspiring entrepreneurs looking to capitalize on growing trends. Whether you're interested in organic foods, pet care, auto services, furniture, or e-commerce, there is no shortage of lucrative ideas to explore. Securing a business loan for traders allows you to access the necessary funds to start or grow your business. With flexible repayment options and affordable interest rates, these loans offer the financial support you need to succeed. Start planning your trading business today, and with the right strategy and financing, you can set yourself up for long-term success in this thriving industry.

08-11-2023

Other

Start Fresh with Investments this Diwali

Do you want to light up your finances by choosing the right investment option this Diwali? Are you planning to start your investment plans? Need help determining where to invest during Diwali? On Diwali, many people begin or plan to start their financial journey. However, the vast majority of them never begin investing because they are unsure of which mutual fund schemes to select. Here are a few attractive investment options that could help you generate significant returns. If so, this information is helpful. [B-01] Investment plan for this Diwali Plan your investment options for the upcoming Diwali holiday. Avoid being closely connected to anyone offering investment opportunities this Diwali. Please do not put all of your Diwali savings into a single investment plan, whether it be gold, a fixed-income instrument, or the stock market. Picking the best approach to investing is crucial. Your risk tolerance and the initial investment plan you created to reach your short- and long-term financial goals should inform your growth strategies. Start investing in Diwali by following the tips below. Stocks Investment options in stocks in 2022 are a constant way to profit on Diwali. That’s why many wealthy people buy stocks as gifts for their kids and other relatives. This instrument is ideal to invest in during the Diwali season and the days leading up to it. There are no perfect Diwali stock picks for 2022. You can put your money into large, mid, or small-cap funds based on how long you want to keep your money invested, how much return you’re hoping for, and how much risk you’re willing to take. If you’re looking for a safe and profitable portfolio, a diverse selection of investment options is your best bet. You can also invest wisely by purchasing “little cases,” which are selected portfolios of stocks or ETFs that experts manage to reflect a specific market theme or investing strategy. Diwali stocks in 2022 are plenty, regardless of your outlook. Mutual Funds for Gold Gold mutual funds, which are a favorite Diwali investment option, are a good buy for the holiday season. Some of these funds’ assets are placed in gold vaults or other gold reserves. These funds do more than generate wealth for investors; they also protect them from the harmful effects of market volatility. Gold mutual fund returns may occasionally exceed those of the metal itself, providing a fantastic chance for wealth growth. The best aspect is that you can start investing with a relatively small initial financial outlay. Gold mutual fund investment plans can be made with as little as Rs. 100. Equity The stock market has gone through corrections and stress in the previous several months due to monetary restrictions and global uncertainty. The International Monetary Fund, however, claims that despite these challenges, India is an economic bright spot, growing at a rate of 6.8% this year. Despite the drop, the Indian stock market has nevertheless outperformed many of its competitors in the emerging market arena. That’s why the stock market is a great place to invest in the long run. For instance, during the past decade, its annualized return has hovered around 12%, whereas gold has averaged approximately 5%. However, gold has returned roughly 8.7 percent over the last year. You can put your money into direct shares if you know what you’re doing, or you can put it into equity mutual funds if you don’t. Invest in the stock market according to your risk tolerance and long-term financial objectives. High equity exposure should be avoided by those who are nearing retirement age. Fixed-Deposits for Risk-Averse Investors Bank fixed deposits (FDs) can help investors wary of taking on too much risk get a reasonable rate of return. Banks offer higher interest rates on FDs during the holiday season. If you’re looking to earn a somewhat higher interest rate than the central banks, investigate FDs offered by small finance banks. Fixed-income investment options (FDs) can provide you with a high level of security in addition to sufficient liquidity, which can come in handy in times of financial difficulty. Tax-saving Options The time is coming soon when most workers will have to show their employers proof of tax savings. A tax cut on their earnings could cause monthly family spending to change if they cannot save during those months. By eschewing some conventional methods, Deepawali can serve as a springboard for the coming tax-savings season. A mutual fund that invests mainly in stocks and other equity-related investment options is known as an “ELSS” (Equity Linked Savings Scheme) fund. Other advantages of these funds include lower gains on tax, the capacity to compound, improved risk-adjusted returns, and the choice between SIP and lump-sum investment plans. Adding to or Investing in a SIP Lastly, investors can always add SIPs to their current investment options or start new SIPs from scratch. As time goes on, investors weather the market’s short-term volatility and gain from compounding’s long-term effects. With the help of an algorithm, investors may now set up a “Smart SIP,” which allows them to adjust their SIP payments based on certain variables like the current level of an index, the price-earnings ratio, etc. However, the Smart SIP service is only offered for open-ended, equity-oriented funds invested in the Growth option, and its features may differ from fund house to fund house. Consider the long term while deciding how to invest your Deepawali bonus. A person’s investment plan selections should be guided by their objectives and time horizons, and self-discipline is essential. While we won’t insist that the total bonus be put into an investment option (it is the season for celebration), strategic planning can open many doors for investors to make money. [B-02] Summing Up The purpose of this article is to provide a comprehensive examination of Diwali investment options. After reading this article, we hope you now have a much better understanding of online investment plans. Many of you have thought about starting an online investing option but lacked the information necessary to do so successfully. You may struggle at first to acclimate to your new surroundings, but you will gradually learn to deal with them. Investment Reliable does not offer financial advice, but we provide unbiased information and evaluations on trading, investing, and finance. Users ought to always carry out their research. Also, Piramal Finance has more in-depth, educational, financial-related articles.

08-11-2023

Home Loan

Step-by-Step Process for Home Loan Balance Transfer in the Current Year

Caught in the mess of repaying your loan at a high interest rate and looking for a way out? Interest rates might bother you, especially if you have wanted a change in your lender for a long time and you still don’t know if it’s a good deal or not. You should consider a home loan balance transfer. We will tell you why and how in this article. Here, you will find everything you need to know about the balance transfer of your home loan, how to do it, the benefits, the home loan balance transfer interest rate, and more. [B-01] What is meant by home loan balance transfer and why is it done? By definition, a home loan balance transfer is a process to transfer your current home loan’s outstanding balance from your existing lender to a new lender. You can do this for: Better terms Lower interest rates Lower EMIs More flexible loan repayment Better customer support Loan top-up Longer loan tenure Before switching to a new lender, make sure you thoroughly read your agreement. Confirm that you are getting a lower interest rate and better terms and conditions than your previous loan. Also, check for hidden charges and clauses. What are some of the benefits of a home loan balance transfer? Here are some advantages of home loan balance transfer: Lower rate of interest.This is the primary reason why borrowers transfer their home loans. New borrowers provide you with a low rate of interest and better terms and conditions. Even a small percentage decrease in your loan amount makes a huge difference in your EMI. Even if the decrease is 1%, it creates a good impact on your EMI amount.However, you will also have to keep in mind the charges for balance transfers and the home loan balance transfer interest rate, which starts at 9.60% p.a. The long tenure of repayment:Tenure of repayment, most of the time, is long which means you will get enough time to repay your home loan. Most of the time, the tenure is about 15 years, but it can be extended to 20 years or even 30 years depending on your credentials. Although you end up paying more interest over the longer tenure, it gives you enough liquidity each month. Suitable loan terms:The terms and conditions of the new lender after the balance transfer are going to be better than the previous lender. It is also your primary job to find the one that suits you the best. Suppose, the previous lender charged you a high processing fee and penalties. After a home loan balance transfer, you should look for a lender who charges you zero to minimal processing fees and no penalties. Quality service:Aside from lower interest rates, the new lender is likely to provide better service. This includes improving the quality of your terms and conditions, providing regular updates on your loan status, sending reminders to pay your EMI on time, etc. Top-upYou might need a top-up on your home loan for interiors, renovations, etc. if your current lender can’t provide you with this much-needed top-up. Some other lenders might be happy to help. Eligibility for Home Loan Balance Transfer Check these conditions to see if you are eligible for the home loan balance transfer: You should have paid at least 12 monthly installments. Check if you meet the criteria for the minimum principal amount and the tenure of the lender you are considering. Make sure you have a good credit score. These criteria might vary from lender to lender. Check with the one you are considering to see what criteria you need to meet to be eligible for the balance transfer. What is the process for a home loan balance transfer in the current year? Here is the process you should follow to change your existing lender and transfer your balance to a new lender. Write an application to your current lender:The first step is to write an application to your existing lender and let them know that you want a home loan balance transfer. Collect a No Objection Certificate:After processing your application, the lender will give you a NOC and a consent form stating that they are ready for the procedure. Searching for a new lender:This task takes a lot of time, and, in the whole process of a home loan balance transfer, this requires the maximum effort. You must make a list of the lenders who seem to fit your requirements. You can make consultations with different bank executives or your advisor for this. Submit your documents to the new lender:Submit all your documents to the new lender, like your KYC, NOC, etc., regarding transferring. Wait for the final confirmation from the previous lender:A final confirmation letter comes from your previous lender, which you have to hand over to your new lender. After this process, you can start paying your EMI to your new lender. [B-02] Wrapping it up The interest rate seems to play a huge role in the process of a home loan balance transfer. If interest rates do not suit you, look for new lenders with better interest rates, terms, and other conditions. Research well, and don’t make haste. If you came this far, that means you are interested in topics like loan systems, investment, financing, trading, etc. If that’s true, then you must visit Piramal Finance, where you will find highly informative content on these topics.

08-11-2023

Personal Loan

Personal Loans: Terms and Conditions of a Personal Loan

If there’s one form of loan that’s widely used, it’s the personal loan, which is people’s favorite. Personal loans are broad and simple to get; they may be used for several things and do not require assets. You may get personal loans from banks and lending firms. In contrast, personal loans are normally a fairly flexible fiscal tool that you may use to fund a variety of things, such as holidays, weddings, health costs, interest payments, and a variety of other things. However, lending companies may impose restrictions on how you spend your loans at times. [B-01] What Is a Personal Loan? A personal loan is a loan that is often unsecured. It differs from a home or auto loan, which are secured loans. The home or car you want to buy will be used as assets. The lending firm will be able to take the assets if you are unable to make payments. Personal loans, in contrast, are unsecured loans, which means the lender’s sole security is your promise to pay. Due to this, lending firms and banks analyze your income and credit score before granting your loan to confirm that you can repay it. After your loan has been granted, you may use the cash for any personal expenses. Personal loans are often used for medium or short-term funding. Although personal loan eligibility varies per bank, the typical selection factors include age, employment, income, and repayment ability. Terms and Conditions of a Personal Loan Security and Usage One of the most vital benefits of taking out a personal loan is that it may be used for a range of purposes. Unlike vehicle or school loans, personal loans do not have a specific purpose. Also, since personal loans do not need collateral or security, you must be aware of this and avoid falling for fake promises. Criteria for Eligibility Personal loan eligibility standards are created to ensure that you can repay the loan. Each bank has its own set of qualifying rules. The following are some of the frequent elements that influence this: Your Age Most lenders offer loans to people between the ages of 21 and 57. This is because most of you in this age bracket have a steady salary and can afford to repay the loan. Your Earnings One of the most important things that determines eligibility is whether or not your salary is above a certain level. Some banks only offer personal loans to salaried clients since the risk is greater with self-employed clients. Also, the minimum wage might vary from Rs. 13,500 to Rs. 15,000 or even more. Aside from that, another condition that most lenders now have is that the borrower’s salary is put directly into the borrower’s bank account. If you get your income in cash or by other means, you will find it harder to get loans. Credit Ratings Your credit score reflects your solvency. The better your credit score, the greater your chances of securing a low-interest personal loan. Most banks need clients to have a credit score of at least 700, notably for personal loans, which do not require collateral. If you have poor credit ratings or a shaky credit repayment history, you will have a harder time getting loans since banks are not able to trust your repayment ability. What Are Personal Loans Most Often Used For? While the use of a personal loan varies from person to person owing to its flexible structure, most users use them for similar goals. One of the most popular reasons you take out loans is to pay off credit card debt, since personal loans often have lower interest rates than credit card debt. You often use personal loans to meet sudden health costs and payments not insured by health insurance. Similarly, you usually use personal loans to boost or repair your homes. Other common uses for personal loans include having your car repaired or having larger parts changed. You often take out personal loans to meet moving-related expenses, such as hiring packers and movers, among other things. Finally, another popular use of private loans is to fund trips. What Can’t You Do with Personal Loans? As mentioned before, personal loans are pretty flexible and adaptable. Thus, you use them for a variety of reasons. Yet, financing agencies and banks have certain limits on what you may use your loan for. Therefore, you must explain what you intend to use the money for on your request form. Many banking firms will not let you use your loans for betting or other unlawful acts. Banking firms and lenders will restrict you from using the cash from your loan to start an unlawful business, such as selling illicit items. Using personal loan cash to gamble or wager at a casino is not legal. Other than that, there are no limits on the use of personal loans. Yet, to be financially sensible, you should avoid taking out a personal loan for a luxury. Although personal loans have lower rates of interest than credit cards and are thus more enticing, you must not spend beyond your means. Whatever you want to use your loan for, be sure you have the means to repay it on time. Make sure you never take more than you can afford to repay. [B-02] Conclusion Make a strategy for how you’ll spend the money and how you’ll repay it before taking out a personal loan. Think about the benefits and drawbacks of getting a private loan rather than another kind of financing. Explore your choices, including a home loan or a credit card debt transfer. Use an EMI calculator to determine the best loan choice for you. If you’re planning to take out a personal loan, seek quotes from various banks so you can contrast interest rates and loan conditions. Note: read the fine print, which includes fines and taxes. Before pledging, consider if the benefits of a private loan exceed the downsides. Follow Piramal Finance for recent personal loan updates, daily blogs, and articles.

08-11-2023

Business Loan

What Are the Types of Large Business Loans?

Every business needs cash flow at some point. The size of the business doesn’t matter. The purpose of getting a large business loan depends on many factors. A business expansion, new purchases, urgent payments to agents, etc., are the reasons for sudden cash needs. What type of business are you operating? What is the stage of business operations? Every business works in its own manner. Banks and NBFCs offer many types of business loans. These loans can be either small or large business loans. [B-01] Types of Large Business Loans Business Term Loan Term loans are a popular form of business loan in India. A business’s credit score is a factor that determines the loan amount. The business loan is given for a fixed term. The tenure is usually between one and five years. You should specify your intended use of the funds when applying for such a loan. You can use the business loan in many ways. One such way is to fulfill financial needs. Business Loans for Start-ups Today, young minds are starting their ventures. They’ve dubbed it “startups.” Most of the time, these young brains search for investors or apply for loans. Since they are new, they don’t have a credit history. Lenders are hesitant to make loans because credit is such an important factor in loan approval. Lenders approve the loan based on the owner’s credit score and personal profile. The firm should be legal on paper. The applicant must produce all the papers correctly. Current account data is studied for the business loan amount, term, and interest rate. Before applying for a loan, the company should have all of its legal documents in order. Business Loan for Routine Capital Firms use large business loans to get help with any sudden money matters. They can use this amount for the firm’s daily needs. Business loans for routine purposes can be used for many purposes. These are to pay daily wages, a new purchase, the inflow and outflow of cash, etc. Retailers, sellers, etc., can use the routine capital loan for export and import. These loans are short-term. Their term period is 12 months maximum. Also, there is no need for any security. It benefits the borrower by using any asset as security. Property Loan Property loans are large business loans amounting to more than ₹50 lakhs. It is a property loan because you must have security to avail of such a huge loan. It is a loan against the property. The asset you will be pledging must be free from legal issues. The payback period ranges from 10 to 20 years. Property can be of any type – personal or business property. The lender will provide a loan amount equal to 70% of the property’s value. Invoice Factoring There are small businesses that suffer from a cash crunch. When a business raises an invoice but doesn’t receive the payments, it faces a cash shortage. The lenders or banks remit funds equal to 80% of the invoice amount. The applicant can repay the loan when the actual payments are received. The loan amount, term period, and interest rate are decided before the loan is approved. Business Loan for Machines One of the types of large business loans in India is for heavy machinery. It is suitable for firms that deal in building and construction. Buying important machines with the help of loans lessens the burden. Most building units require costly machines for their work. A large business loan for machinery is a specific loan. Users must provide security and use the loan amount for the stated purpose. It is advised to take this loan to purchase heavy machinery. The interest rate is lower than that of other term loans. Overdraft Facility If your firm has an FD with a bank or NBFC, then you can avail of an overdraft facility. Overdraft is one primary type of large business loan. Before allowing for overdrafts, there are several factors to consider. Lenders consider the firm’s credit payment history, inflow and outflow of cash, terms of its FD, etc. The benefit of OD is that the applicant can take out the cash needed and pay interest on the used amount. Women Business loan Some banks and NBFCs offer women Business loans. These loans are to help women operate their firms. These are mainly for women who have small to medium-sized firms. Such special perks include easy business loans, rebates on interest charges, and quick loan approval. Credit Card Facilities You can apply for a firm’s credit card. It is used to fulfill short-term needs. You can always use a firm’s credit card when in need. Your firm’s credit card can give you many plus points. These can be credit points, cash back, insurance coverage, etc. However, credit cards have high interest rates. Hence, these cards should be used as the last option. Advance to Agents You can get an advance in the form of a loan from a bank or NBFC. This amount is equal to some part of the capital from the daily sales. You can return the money taken as part of the daily credit sales. You need to opt for this type of business loan. You can maintain enough cash for the payments. The benefit is that the payment can be made daily. [B-02] Conclusion It is always advised to choose a business loan that fits your business profile. You can always study different types of loans before applying for one. You should always choose the best business loan for your venture. Large Business loans are available at a very affordable interest rate. Banks and NBFCs also provide easy EMIs. The process for a business loan application is very simple. Visit the official website of Piramal Finance for more assistance and finance blogs.

08-11-2023

Home Loan

Step By Step Process to Avail Home Loan Subsidy Under Pradhan Mantri Awas Yojana

Everyone must have a roof over their heads. Therefore, PM Narendra Modi launched the Pradhan Mantri Awas Yojana (PMAY) in 2015, intending to establish “housing for all” across India. This scheme aims at urban and rural populations alike. This yojana provides affordable housing for economically disadvantaged and low-income groups. Pradhan Mantri Awas Yojana Gramin is a scheme designed mainly to make housing loans affordable for those in need. With lower home loan rates, everyone can now afford a permanent home. This scheme has two main sections: PMAY-U and PMAY-G. PMAY-U benefits urban areas where economically weaker, low-income, and middle-income groups are eligible. PMAY-G is for the rural population. The rates for each of these are different, depending on the financial condition. These all come under the CLSS, a Credit-Linked Subsidy Scheme for only home loans. In this article, we will throw some light on the steps to follow to avail home loan subsidies. [B-01] Eligibility Criteria for the PMAY Scheme Before starting the procedure to fill out the PMAY form, check if you are eligible for it. You can check the points of eligibility below. This scheme is only for home loans. You can benefit from this scheme only if your loan amount does not exceed Rs. 6 Lakhs. If your maximum loan amount is Rs. 2.67 Lakhs, you can gain the benefit. The family looking for the subsidy must not have any pucca houses. This is most commonly the case for those under Pradhan Mantri Awas Yojana Gramin. PMAY-U can also opt for it if the family encounters space issues in migration. Pradhan Mantri Awas Yojana Gramin’s online application is open for those with no prior housing scheme benefits. A married couple applying jointly would be eligible for a single pucca home loan subsidy under PMAY. MIG category families require Adhaar Card to confirm the application for PMAY subsidy. Steps to Avail Home Loan Subsidy under PMAY Calculate Your Current Earnings It is a good idea to check your financial situation before going for the Pradhan Mantri Awas Yojana Gramin online application. This will tell you if you fall into any categories under the PMAY scheme. Hence, calculating your income is a good way to check how much land you can afford. Online PMAY income calculators are available for you to check now. Fill PMAY Application Now You can easily fill out the offline application forms at common service centers everywhere. A certain fee of Rs. 25 is required to fill out the form. If you are filling out the online application, follow the steps below: Open the browser and type in the PMAY official website address: https://pmaymis.gov.in. In the list of tabs, find “Citizen Assessment” and click on it. Then, you can choose the category under which you can apply. You will be required to submit the Adhaar Card details at this step. This is necessary for the home loan subsidy application form’s completion. After submission, you will be taken to the form where more personal details need to be filled in. Finally, you can click on the SAVE option for later use in the PMAY application form. Fill Loan Application Form Firstly, you are required to submit the online or offline PMAY application form. Then, you can visit a nearby bank or non-banking financial company such as Piramal Finance. You would be able to easily obtain the home loan subsidy here. Along with the PMAY application form, you would need the following: income proof, details of any investment, any properties, the details and information of the co-applicant or joint partner. Checking Online PMAY Application Status You can check the status online using one of the two methods. With Assessment ID Go to the official PMAY website. Click on the “Assessment Tab” and find the “Tracking Application Status” option. Next, choose “By Assessment ID” out of the two options. Enter the ID provided at the time of PMAY application form submission. Click “Submit.” On the screen, you will see information about the application form’s status. With Personal Details Go to the official PMAY website. Click on the “Assessment Tab” and find the “Tracking Application Status” option. Next, out of the two options, choose “By Name, Father’s Name, Mobile Number.” Provide the state, district, and city details of your application. Further, you can fill in the details of your name, father’s name, and mobile number. Once you are done, you can click on the “Submit” option. Your application status will be visible on the screen. [B-02] Conclusion You can avail the complete benefits of the Pradhan Mantri Awas Yojana Gramin as per your eligibility. You can rely on Piramal Finance to get you the best possible solution. The home loan schemes presented here are all designed to benefit the beneficiaries as much as possible. Therefore, you can gain greater benefits if you opt for a premier financial institution like Piramal Finance. Those can be related to the PMAY scheme and any other value-added services we can provide. Every benefit is calculated with your financial situation and income in mind to assist with your home loan EMI. You can get all the details about the Pradhan Mantri Awas Yojana Gramin Online Application. You can check with the Piramal Finance website and the team’s professionals. They will guide you step by step through filling out the form and checking your eligibility. You can submit a loan form and check your status with expert help. In the end, you can discuss and plan the details of the EMI repayment.

08-11-2023

Mutual Funds

What Types of Mutual Funds are Available?

Mutual funds have recently become very well-known as a successful investing channel. Your investment goal will determine which type of mutual fund fits your needs. Mutual funds may also see their returns go down because of commissions, annual fees, or expense ratios. A portfolio of stocks, bonds, or other securities makes up a mutual fund. According to the types of securities you invest in, your investment goals, and the kinds of returns you seek, mutual funds are grouped into several categories. [B-01] Types of Mutual Funds Equity Funds Equity funds are a type of mutual fund that, as their name suggests, invests in the stock of various firms. These funds carry a significant investment risk due to their equity market investments. Besides, this type of mutual fund is likely to see capital growth. While equity funds share a typical pattern, not all are equal or similar to one another. Some equity funds may invest only in one or a few specific sectors. Others may attempt to replicate an index like the Nifty 50. Balanced Funds These investments are also known as “asset allocation funds.” It combines equities and fixed-income funds with a specified percentage of stocks and bonds. For example, 60% for stocks and 40% for bonds. The most popular type of these funds is target-date money. It changes the proportion of investments from equities to bonds as you approach retirement. Solution-Oriented Funds These mutual fund plans are intended to help you achieve specific objectives. This includes saving money for your retirement or your children’s college or wedding. They have the shortest lock-in period, lasting only five years. Debt Mutual Funds Based on the debt securities the fund firm invests in, debt funds are differentiated. The distinction is made depending on the issuer and the holding time of the securities. Further, the risk in debt funds is identified based on the tenure and issuer. Hybrid Funds These plans invest in both debt instruments and equities. Whether they are equity or debt-oriented hybrid funds, it influences the proportional allocation to equity and debt. Debt-oriented hybrid funds have at least 75% of their exposure to debt instruments. whereas equity-oriented funds invest at least 65% of their assets in equities. Types of Mutual Funds Based on Risk Low Risk These types of mutual funds are where people put their money when they don’t want to take a chance with it. These investments are long-term. They are made in places like the debt market. As a result of their minimal risk, these investments also have modest returns. Gilt funds, which invest in government securities, are, for instance, low-risk funds. Medium Risk These investments present a medium level of risk to the investor. They give more significant returns, making them perfect for people who are willing to take some risk with their investment. Further, these funds can be invested to accumulate wealth over time. High Risk These mutual funds are perfect for people willing to take more significant risks with their money and who want to accumulate wealth. Inverse mutual funds are a kind of high-risk investment. Despite the increased risks associated with these funds, they also provide higher returns. Types of Mutual Funds in India Mutual funds can also be classified depending on their structure. There are three different types of mutual funds in India: Open-Ended Funds These can be bought and sold all year. Here, fund managers attempt to invest in securities with more significant prospective returns. Open-ended fund purchases and sales are based on the fund’s current Net Asset Value (NAV). Close-Ended Funds After a set maturity, closed-ended schemes allow for the redemption of investments. Even though these funds are also listed on the stock exchange, liquidity is low. Interval Funds Open-ended and closed-ended fund features are combined in these funds. These funds offer to purchase back shares regularly at a proportion of their net asset value (NAV). Typically, the fund will offer shares of interval funds for sale each day at the current net asset value. Types of Mutual Funds Based on Investment Objectives Growth Funds To provide financial appreciation, growth funds invest money in equity stocks. They are considered riskier funds, appropriate for investors with a long-term horizon. Since they are hazardous funds, they are also perfect for investors seeking greater returns on their capital. Pension Funds After a significant investment period, pension funds provide regular returns. They are hybrid funds with modest yields. But they have the potential to offer consistent returns in the future. Tax-Saving Funds These are referred to as Equity Linked Savings Schemes (ELSS). Each financial year, they are entitled to a tax deduction of up to Rs. 1.5 lakh. With 65% or more of the portfolio invested in equities, tax-saving funds are diversified equity-oriented funds. Capital Protection Funds These funds split their investments between equities and fixed-income instruments. This could guarantee capital protection, i.e., little loss, if any. [B-02] Conclusion If you know more about the different types of mutual funds, you may be better able to reach your financial goals. To maximize your investment returns, you can check the objective of the funds. Further, see whether it matches your needs or not, and then you may make investments. You can also visit Piramal Finance to get a better understanding of mutual funds and the products and services they offer.

08-11-2023

Business Loan

Step-by-step Process to Get MSME Loan for New Business?

The Government of India has launched many schemes in the form of loans and subsidies to help and promote entrepreneurs in their business ventures. One of them is the MSME business loan which targets to finance and foster medium, small, and micro businesses (MSME). Do you also want funds from the MSME loan for your startup? Well, this article will help you navigate through it in detail. In this article, we will discuss the MSME business loan why it was introduced, its benefits, and how to get a startup business loan for your new business. [B-01] What is the MSME loan scheme, and what is its primary objective? The MSME Ministry of India is an individual body that has executed and implemented the MSME business loan schemes for the betterment of emerging small businesses. This loan system’s prime objective is to provide unsecured loans to individual, small business units to help them meet their business-related expenses. Not only the government, but private financiers and private banks have also started giving MSME loans to individual, rising businesses. The main differences between government and private MSME loan schemes are the interest rate and the loan amount. This loan has self-tailoring features, which means you can get an MSME startup business loan as a short-term, medium-term, or long-term loan scheme. You can take it as a cash credit, letter of credit, working capital loan, etc. You can use this lump sum amount to buy raw materials, use them for transportation, or pay for any services. What are some of the exclusive benefits of the MSME loan scheme? Here are some of the exclusive benefits of getting an MSME loan: Low rate of interest: Banks charge a low rate of interest to small and micro businesses to ensure that the minimum amount is spent on repaying the loan and the maximum amount goes into funding the business venture. The rate of interest for MSME business loans in India is somewhere in the range of 10 to 25 percent per annum, with an exception of 1 to 1.5 percent by some lenders. Accessibility: MSME startup business loans in India are highly accessible and easy to apply for. The whole process is hassle-free with serious exemptions, which makes it an ideal loan system with the fewest cons. Collateral-free: Since it is an unsecured loan, there is no requirement for collateral, a security deposit, or a guarantor. If you don’t have any of those, you don’t need to worry about your loan getting sanctioned. This decreases the burden on small and microbusinesses and helps them pay better attention to their businesses. High flexibility: MSME business loans are a short-term affair, and you require them only to cover your short-term requirements. Since an MSME loan isn’t a long-term commitment, you can easily focus on developing your business. The long tenure of repayment: The tenure of repayment is not fixed for every bank, but it can often be started at 3 years and stretched up to 15 years, which seems like a reasonable amount of time. You can repay your loan within this loan period in the form of installments. High loan amount: If you get your MSME startup business loan sanctioned, your loan amount can go up to Rs. 50 lakhs, which you can use in your business venture. You can use it to buy new types of machinery, and raw materials, expand your manufacturing, hire more workers, and pay for other services. What is the eligibility for an MSME Business Loan? Here are some of the eligibility requirements to help you get an MSME business loan: Type of business: The type of business determines whether or not you are eligible for MSME loan schemes. The two types of businesses that are eligible for MSME loans are those in the manufacturing sector and those in the service sector. Business experience: In your current business, for which you are applying for a startup business loan, you must have a minimum of one to three years of business experience. This is due to the fact that you must demonstrate to the banks that you have extensive experience in the business venture in question. Business turnover: A business turnover of about 12 lakh rupees per year is the benchmark for an MSME business loan. However, it is again very subjective because different banks have different criteria. Credit score: It is a common analogy that a good credit score will increase your chances of settling on a better deal on any type of loan, which stands to be true. If your credit score is 750 or more, it is always a plus point for you and increases your chance of getting a bigger loan at a lower rate of interest. Clean loan history: If you have been paying your previous debts diligently and on time, then you are always a step ahead. Banks prefer candidates who have a good track record and pay their instalments on time. [B-02] Conclusion The interest rates from the top banks for MSME business loan range from 8.5% to 15% per annum. Some of the popular banks might go lower than that with an increased tenure of repayment. You should use calculators in this case, where you can spin different loan amounts and interest rates to see what suits you best. You should focus on improving your credit score, improving your business venture, and increasing your business experience to make a better pitch and get a decent loan. If you prefer well-researched and easy-to-understand articles and blogs on these topics, you can have a look at the official website of Piramal Finance. We have some amazing content on loans, investment, financial consulting, SIPs, etc.

08-11-2023