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What is Commodity Trading? Types of Commodity Trading

Commodity trading is the act of buying and selling goods. It also means trading things that are made from those commodities. Wheat, gold, and crude oil are some examples. When you trade, buying commodities may be a great way to make your portfolio more diverse. If you are interested in the commodities market, you should know how it works. [B-01] Types of Commodities There are now fifty major commodity exchanges all over the world. They sell more than a hundred different things. Traders and investors can put their money in one of four main types of commodities: Metals Metals are used in the industry. They are used to make consumer goods and many other things. Metals like nickel, copper, and aluminum are used in factories and buildings. Gold, silver, and platinum are never used in this way. Energy Commodities These are the most important raw materials used by businesses and homes. The energy group also has ethanol, coal, electricity, and uranium. Agricultural Commodities Since agricultural goods are always in demand, you should focus on them when you buy or sell things online. These include cereals, sugar, oilseeds, cocoa, pulses, cattle, and more. Environmental Commodities In this category, you’ll find product certifications and clean energy sources. It also includes things that are good for the environment. Pros of Participating in the Commodities Market Future Gains There aren’t many things that change the prices of goods, but supply and demand, inflation, and the state of the economy are a few. Prices in the commodities market are affected by how much people want to buy goods. It can come from building big things all over the world. The prices of commodities go up when the stock prices of companies that trade in commodities go up. A Competition Against Inflation The price of goods is one thing that might go up because of inflation. Most investments are safer than commodities, but when inflation is high, commodities do well. Multiple Investment Options A well-balanced investment strategy is what people mean when they say “diversified investment portfolio.” Putting money into the commodities market is a good way to keep it safe. Raw materials are a good choice if you want to put your money somewhere other than the stock market or bond market. Profitable Results for Investors When liquidity goes up, investments in commodities become riskier. It means that companies can have times when they do very well and times when they do badly. Ability to Withstand Market Disruptions If the rupee’s value goes down, you need the money to buy things on the commodities market. Investors get rid of their stocks and bonds when prices go up and put their money into commodities. These things will make money. Reduced Margin Trading Most of the time, margin requirements are between 5 and 10% of the contract’s total value. Compared to other ways to invest money, this is small. When margins are low, investors may be willing to take on more risk with the same amount of cash. Characteristics of the Commodities Market Demand & Supply Commodity prices fluctuate in response to changes in the commodities market. These prices may rise and fall depending on supply in the market. Inverse Relation There is a negative correlation between commodities and the stock and bond markets. Stock and bond values tend to decline when commodity costs increase. Inflation Hedge Top commodities like silver, gold, crude oil, etc., tend to increase in value over time. This makes investing in the commodities market an excellent strategy for growing inflation. Ensuring the compound growth of capital over time helps investors improve their wealth. Diversification Commodities make a portfolio very diverse. This is because their value goes down when other asset classes go up. Investors can protect their portfolios from the bad effects of market consolidation and volatility by buying and selling commodities. Margin Trading Hedge funds and people who bet on the market may benefit from its volatility. To do this, they can work with commodity brokers like IIFL. The margins for these brokers are lower than those for stocks and bonds. Trading and Investing in the Commodities Market Depending on the type of commodity being traded, there are many ways for investors to invest in the market. Since things can be seen and touched, there are four main ways to invest in this sector. Direct Investment: Putting money straight into the commodities market. Futures Contracts: Futures contracts are a way to guess what the price of an item will be. Commodity ETFs: Exchange-traded funds are a way to invest in commodities. Commodity Shares: Commodity shares are investments in the stock of companies that make or sell goods. Commodity Market Participants Investors in the commodities market may be roughly divided into two broad categories. They are as follows: Hedgers Manufacturers, producers, and anyone else in the commodity’s supply chain can protect themselves against price changes. One way to do this is to buy futures contracts. Hedging is done to protect the seller from losing money. Speculators Traders are in the real world. They keep track of commodity prices to predict how they will move. Speculators think the commodity will go up. They purchase contracts with the intention of reselling them for a profit later. [B-02] Conclusion A reputable broker has a good name and a lot of experience. Think about how quickly the customer service team answers questions and how good the investment advice is. Try to find ways to handle clear margins. A good broker will help a person get a good start in the commodities market. Before you sign up, ask the broker what live platforms they use. The best thing for investors who have never done this before is to see how it works. For more details and similar blogs, you can visit Piramal Finance.

08-11-2023

Personal Loan

What is a Collateral Loan and How to Apply for One in India?

Getting a loan is often much easier if you’re willing to give up some form of collateral, such as your house, vehicle, or your dad’s Rolex. Loans with collateral help secure the cash you’re lending and may result in cheaper interest rates. If you fail to pay your debt, a collateral loan may result in the loss of a valued asset. When you need money for a big buy, it may be easy to max out your credit card. So, if your score isn’t perfect, you have choices that are less likely to hurt your credit or trap you in a debt cycle. Collateral loans may be a valid choice for lending funds. This is how they work. [B-01] What Exactly Are Collateral Loans? A debt from a bank or a fiscal firm is classified as either a secured or unsecured loan. You may secure the debt by offering anything of huge value if you fail; this is known as collateral. An unsecured loan is one in which you take funds with no collateral to secure it. A collateral loan may have a lower rate of interest or a higher loan sum than an unsecured loan, such as a credit card. In a few cases, it could be the only debt option open to a person with a short or uneven credit history. What is the Process for Getting Collateral Loans? You should expect more relevant lending terms with a secured loan rather than an unsecured loan. It may entail a cheaper interest rate, a greater loan sum, or a loan period that is longer. When approving you for the collateral loan, the bank will assess the value of your collateral. To do so, they will take into account the fair market value of your assets or, in the event of a debt, the estimated value of your assets. They will then decide the sum of your debt by giving you a percentage of the cost of your collateral. A bank, for example, would weigh aspects such as the prospective resale worth of the property you’re buying, as well as the nearby community, when making a loan choice. The loan-to-value ratio that a bank will assign to your loan when you obtain a debt reflects the value of your collateral. In general, the greater your LTV, the higher your interest and closing fees will be. You will also need a larger down payment. When your LTV equals 80%, you know your bank is ready to give you a large sum of funds, but you’ll have to pay the rest, 20%, out of your own pocket. How to Get a Collateral Loan If you feel a collateral loan is the right choice for you, make sure you get it by doing the following steps: Examine your credit Even if your credit isn’t perfect, getting a loan with assets may help you get accepted. Yet, it is still vital to ensure that your credit is as strong as it can be to get the best collateral debt rate and payback terms. Your credit reports are given for free. When you apply for a loan, review them for faults or bad marks that you’ll need to correct. Select your assets If you apply for a house or vehicle loan, the asset you’re funding will serve as collateral. However, you have choices if you take out a secured personal loan. Assess what assets you have to secure your loan. Choose liquid and readily available assets, such as money in a bank account. Collect your papers When you’re about to apply, it’s a good idea to collect all necessary paperwork and data ahead of time. Personal information is one kind of data you may be asked for. Look for the best asset lending interest rates Before starting the whole application procedure, it is essential to get quotations from various lenders and check collateral loan rates & terms. You can get rates quickly online, which usually only require a light credit check and have no effect on your score. Select a lender and apply Once you’ve found an offer that meets your budget and requirements, you can begin the application process. It is important to understand that formally asking for a loan will lead to a hard credit check, which will be recorded on your credit scores. It should, however, have a transient and minor influence on your credit score. Where Can You Obtain Collateralized Loans? Banks If you already have a bank account, you may be ready to get cash the same day you enroll or the following working day. When it comes to vehicle loans, though, keep an eye out for any limits on the brand, model, mileage, or year of the car you want to purchase. Credit cooperatives To qualify, you’ll most likely have to be a client of the credit union, although rates are often cheaper than bank rates. Lenders on the internet Many internet lenders only offer unsecured loans, and you might have to apply for one before seeing a secured loan choice. Automobile dealerships Typically, automakers provide loans on new vehicle purchases through their dealerships. Rates are often comparable to those given by banks and credit unions, but you must have excellent credit to qualify for the best rate. [B-02] Conclusion Collateral loans are risky since you may lose the asset used to secure the loan if you fail to make payments. On the other hand, a collateral loan might be well worth it if you’re in good financial standing. A loan secured by collateral mitigates some risk by allowing for cheaper interest rates and fees. In the long term, this may save you a lot of money. And if you are still confused about secured and unsecured loans, visit Piramal Finance and explore the products and services.

08-11-2023

Gold Loan

What Is Digital Gold Loan?

India’s houses have pieces of gold just sitting in their lockers. But the good news is that you can use them when you need them. When you need money quickly, you can use your gold items to pay for your immediate needs. Not by selling your gold but by giving it as collateral to a place that lends money. Many banks and non-bank financial companies (NBFCs) in India offer gold loans with attractive interest rates. Moreover, digital gold is the cherry on top and gives people attractive gold loans. But before applying for a digital gold loan, you should know the features and benefits of these types of loans. This post goes into more detail about these things. [B-01] What is a Digital Gold Loan? Digital gold is a new way to buy gold that doesn’t require holding. You can easily and quickly buy it online from the comfort of your own home. The least amount you can buy or sell is Rs. 10. You can buy and sell gold around the clock, even on weekends and holidays. People can avail themselves of a loan against their digital gold. Borrowers can get their digital gold loan money at their front door. If they have gold to use as collateral for a loan, a lending executive may come to their home, figure out how much it’s worth, and give them the loan in as little as 30 minutes. Features of a Digital Gold Loan Some of the most important features of digital gold loans are: Attractive Interest Rates Digital gold loans are secured loans. The interest rates are lower than those for loans without collateral. No Need for a Good Credit Score For gold loans, lenders don’t need to know your credit score or how much money you make each month. The loan’s value is based on how much gold was used as collateral. Safety Lenders keep your gold pledges safe by putting them in solid vaults. Once you pay back the loan, they give it back to you. Loan-to-Value (LTV) The Reserve Bank of India (RBI) has set the maximum LTV ratio at 75%. So, if you put up Rs 1 lakh’s worth of gold as collateral, you can get up to Rs 75,000 as a gold loan. Little Paperwork You only need your ID and proof of address to apply for a gold loan. This is part of the “Know Your Client” (KYC) process. Lenders don’t need proof of your income or bank statements to figure out if you qualify. Versatile End-Use You can use the money from the loan to pay for anything you want without having to worry about end-use restrictions. Fast Processing Processing is faster, so you can get the money you need in minutes. The lender calculates the value and immediately gives out the loan amount. No Foreclosure There are no fees for foreclosure or paying off the loan early. You can pay back the principal and interest on your gold loan at any time without worrying about foreclosure or early payment fees. Benefits of a Gold Loan There are many good things about gold loans that make them an attractive way to get money. Among the most popular are the ones below. Benefits of a Secured Loan Most loans either have collateral or don’t. Unsecured loans don’t require collateral, but there are strict rules about who can get them. Since a gold loan is secured, the lender will want something in return. But they usually make it easy to get a loan. You don’t have to show proof of income to get a high-value loan. Plus, because of the gold, lenders charge less interest. Adaptability When you apply for a digital gold loan, you only have to show that you have gold in the form of coins, jewelry, etc. You can still get the loan even if your credit score is low. Many gold loan lenders do not care about your credit score, which is why these loans are so popular. Using the Same Gold Repeatedly Once you’ve paid back your gold and gotten it back, you can use the same gold to get another loan. Since the gold loan amount is based on how much gold is worth on the market, you can get a bigger loan if gold prices go up. Flexible Repayment Terms Gold loans are not amortized, meaning you don’t have to pay the interest and the principal in each EMI. Instead, you could only make EMI payments on the interest during the loan’s term and pay off the loan’s principal in one lump sum when the loan is paid off. Because of this, a digital gold loan is a great option that is easy on the wallet. You can also pay back some of the principal amounts before the loan is due, which will lower your interest. Steps to get a Digital Gold Loan 1. Application The application is the first step in getting a loan. This is done online in the case of a digital gold loan. Borrowers fill in the basic information, like their name, age, gender, home address, and cell phone number. After that, a lender’s representative will contact them and show them what to do next. 2. Evaluation The lender will send an executive to the home of the person who wants to borrow money so that the gold can be valued. Once this is done, the official will provide the loan, usually between 60 and 75% of the gold’s value. 3. Disbursement Once the lender approves the loan amount, the money will be sent to the bank account in as little as 30 minutes. The process is quick and easy. [B-02] Conclusion Since the COVID-19 epidemic, most things in life, including gold loans, have moved to the digital world. It’s only a matter of time before they become popular and replace traditional payment methods as the norm. Borrowing a digital gold loan from a trustworthy lender like Piramal Finance is a quick and easy online process that only takes a few minutes to finish. Want to know more about digital gold loans? Visit Piramal Finance and explore the different options they offer!

08-11-2023

Business Loan

What is a Commercial Loan and How Do Commercial Loans Work

All firms need money to run. But, many may not have the funds to pay these costs. Commercial loans are a useful source of capital for firms. A commercial loan is a debt-based finance. A firm borrows money from a bank or creditor. Let us look more closely at what a commercial loan is and how it is employed in a corporation. [B-01] What Exactly is a Commercial Loan? A commercial loan is a short-term loan that is used to boost a firm’s cash flow as well as pay for major spending and running costs. It is funding used by small firms when they want capital but cannot afford to seek it via the bond and stock markets. Banks and other financial firms approve commercial loans based on the debtor’s cash flows and credit score. Why Do You Require Commercial Loans? You may need finances for any of the reasons listed below: A business loan might assist you in buying the proper tools, such as heavy machinery or desk PCs. In contrast, the lender may use the bought goods as assets without needing extra security. Firms with a strong market position may go to the next step: company growth. You will need cash for the firm’s growth, and commercial loans may assist. Owners might also think about extending into the new target industry or geographic area. Working capital is the basis of every successful firm, whether it is micro, tiny, medium, or large. Firms that are having problems handling working capital might use a commercial loan to avoid the financial effects. What is the Process of Getting a Commercial Loan? Lending firms offer commercial loans to firms to assist them in meeting short-term capital needs like working capital, operations, and equipment. In most contexts, commercial debt works closely with typical business loans. It means that the lender must repay the loan sum plus interest in a selected time frame. For these sorts of loans, banks often have a set of rules as well as conditions and terms in place. Commercial Loan Features and Advantages Commercial loans have the following features: Short-term loans (less than 12 months), medium-term debts (12 months to 36 months), and long-term loans (more than 36 months) are the three types of commercial loans. They are classified as secured (collateral is required) or unsecured loans. Due to the collateral, secured loans have lower interest rates than unsecured loans. Commercial loans are not issued to single clients. They are given to firms. Fixed or adjustable interest rates are offered for commercial loans. If a firm picks a fixed interest rate, it will remain constant during the term. If the rate of interest is floating, it will vary in response to market developments. Getting a business loan is simple, with cheap interest rates, quick payments, and an enhanced credit rating. Commercial Loan Eligibility Different commercial lending systems have different rules for offering commercial loans. The following are a few of the key parameters: In India, sole owners, self-employed experts, partnership businesses, private limited firms, and public limited firms can all get commercial loans. Lenders must be Indian nationals between the ages of 21 and 65. Firms must have steady income, a high annual turnover, and make at least the minimum amount of money they need to make each year. The firm must have been in operation for at least a year. Papers Required for a Commercial Loan When asking for a commercial loan, your firm must present the lender with particular papers. The documents may differ based on the lender. However, the vital papers are: GST/VAT reports from a certain period or the firm’s PAN card Proof of continued operation A completed application form Income reports from a certain period How Do You Apply for a Commercial Loan? In recent years, getting a loan has become fairly simple and rapid. If you complete the paperwork and match the qualifying standards, the funds will be paid to your account in a few days. Both offline and online loan requests are accepted. Visit the lender’s site. Tap on “Apply Now”. Fill out the relevant information. The lender will get in touch with you. For an offline loan request, bring the needed papers to the lender. They will check them and ask you to fill out a form. After verification, the loan sum will be paid within a few days. What is a Commercial Loan EMI Calculator? A commercial loan EMI calculator is a unique calculator that you must use to figure out how much you must pay to your bank each month. Suppose you get a loan of Rs. 1,00,000/- for two years at a rate of 14%. Based on this information, you must pay a total of Rs. 1,15,230/-, along with the 2% processing charge. The EMI will now be calculated as follows: EMI = L.i. (1+i) n / {(1+i) n – 1} P denotes the total loan sum. I = Interest rate n = The loan’s term The method mentioned above is employed in the commercial loans EMI calculator. The interest sum is computed each month as the main sum decreases. [B-02] Conclusion Most local credit unions or banks that provide automobile loans also provide money for small businesses. And some of the best rates will come from local businesses that want you to succeed. After all, if your company thrives, it will benefit the entire community. However, because many credit unions and banks are unwilling to issue commercial loans, internet lenders are an excellent alternative if you are unable to obtain a loan through a bank. Online lenders have substantially greater success rates for small-business loans than banks. However, it is still a good idea to check with a local bank first to see if lower rates are available. Whatever lender you choose, be sure you do your homework. You should have a good idea of what loan you want, how much money you need, and what monthly payment your firm can afford. If you’re still perplexed about commercial loan EMI calculators, go to Piramal Finance and look through their products and services.

08-11-2023

Tax Savings

What Are ELSS Funds and How Are They Helpful for Tax Savings?

Equity-linked savings schemes (ELSS) funds are a type of mutual fund. The amount invested in these funds is locked in for a minimum of three years. However, the lock-in period for some schemes may be five years. ELSS funds offer tax deductions under Section 80C of the Income Tax Act, 1961. The maximum deduction available from ELSS investments is Rs 1.5 lakh per fiscal year. ELSS funds have the shortest lock-in period as compared to other tax-saving investments such as PPF, NSC, etc. The returns from ELSS are also exempted from tax. ELSS is thus a better investment option as it offers both tax savings and capital appreciation. If you are looking for a good investment option to save taxes, then you should consider investing in ELSS funds. [B-01] What is an ELSS Fund? An ELSS fund is an equity-linked savings scheme that is offered by many mutual fund companies in India. ELSS funds are similar to other mutual fund schemes, but they have a lock-in period of 3 years. This means that you cannot withdraw your money before the 3-year period is up.ELSS funds are invested in stocks and equity-related instruments. This makes them riskier than other types of mutual fund schemes but also potentially more profitable. The returns from ELSS funds are taxed at 10%, which is lower than the rate for most other investments.ELSS funds are a good option for investors who are looking for a long-term investment with the potential for high returns. They can also be helpful for taxpayers who want to reduce their tax liability. How Do ELSS Funds Work? ELSS is a great option for new investors who are looking to make investing a habit. This is because the lock-in period discourages the investors from slacking off or prematurely withdrawing the money. One of the best things about ELSS funds is that they come with a low-income threshold of Rs 500. The Benefits of Investing in ELSS Funds ELSS funds are a great way to save on taxes. With the help of these funds, you can save up to 30% on your income tax. Moreover, they also offer a higher return than most other investment options.There are many benefits to investing in ELSS funds. Some of the most noteworthy benefits are listed below:Higher returns: ELSS funds offer higher returns as compared to most other investment options. This is because they are equity-based, and, hence, their value appreciation potential is high.Tax saving: As ELSS funds offer income tax benefits of up to 30%, they help you save a significant amount of money on taxes.Flexibility: ELSS funds offer great flexibility in terms of investment tenure and withdrawal. You can choose to invest for a minimum period of 3 years or for a longer duration at your convenience. Similarly, you can also withdraw your investments before the maturity period if needed.Diversification: ELSS funds provide an opportunity to diversify your investment portfolio as they invest in a variety of asset classes like stocks, bonds, etc. This helps reduce your overall risk and maximize returns. No need for a lump-sum investment: One of the best benefits of ELSS funds is that you do not need to have a lump-sum amount ready. You can choose the systematic investment plan (SIP) method and systematically compound your investment over months or years. You can select a date on which you will invest a predetermined amount in ELSS funds every month. An option to invest twice a year (every 6 months) is also available to investors. It is important to note that each SIP payment is considered a new investment, and the lock-in period will apply to it. Two payout options: ELSS funds offer two payout options, namely, growth option and a dividend option. In the growth option, the investor gets the option to either withdraw the investment along with the accumulated profit at the end of the lock-in period or reinvest. As far as the dividend option is concerned, there are two alternatives. The first one is the dividend payout option, where the investor receives payment in the form of dividends at fixed intervals. The second option is the dividend reinvestment option. As the name suggests, in this option, the payout is reinvested and treated as a fresh investment. This fresh investment will be eligible for tax deductions. How to Invest in ELSS Funds There are a few things to keep in mind before investing in ELSS funds:– Consider your investment goals and risk tolerance. As with any investment, it’s important to align your investment with your financial goals and risk tolerance. With ELSS funds, you can expect higher returns than fixed deposit investments but also greater volatility.– Research different ELSS fund options. Not all ELSS funds are created equal; there will be variations in terms of performance, fees, and features. It’s important to compare different options and select the one that best suits your needs.– Read the fund’s offer document carefully. This document contains important information about the fund, such as its investment strategy, objectives, risks, and charges. Make sure you understand all of this before investing. [B-02] Conclusion If you’re looking for a way to save on taxes and grow your money at the same time, ELSS funds are definitely worth considering. Talk to your financial advisor to see if they’re right for you. The moderate risk and the option to systematically invest every month make ELSS funds a favorite among both new and seasoned investors. The multiple payout options, like the dividend and growth options, give investors more control over their portfolios. Depending on your personal financial goals, you can choose the suitable payout option. Investing can be a daunting task for those with no prior experience. We list in this blog everything you need to know about ELSS funds to make investing easier for you. If you liked this blog and found it helpful, you can read more such blogs on our website. Piramal Housing Finance is a one-stop solution for all your personal and business finance needs.

08-11-2023

Personal Loan

What is a Flexi Personal Loan? How Does it Work?

Facing a financial emergency can be very daunting. In such times, accessing funds at the last minute can become very difficult. For ease during such a situation, various types of loans are available. However, the process can be tiring if you do not know the amount you need. Loans like a flexi loan can be relied upon to meet your financial needs. As you can predict from its name, a flexi loan has excellent flexibility. The flexibility makes this type of loan an ideal choice for many. However, what exactly is a flexi personal loan? [B-01] What is a flexi personal loan? A flexible personal loan, or a flexi personal loan is a loan that allows you flexibility on how much you can borrow. A flexi loan usually comes with a pre-approved credit limit. This credit limit is decided by the financial institution that grants the loan, and the loan limit is determined individually for each application. You can borrow any amount until you reach this credit limit. Since these are types of personal loans, you can use the money to pay your debts, fund a vacation, or meet other expenses. Like other loans, you will have to pay interest on the loan. This fixed interest amount is decided based on the principal amount and other factors. Some factors that affect your eligibility for a loan include your income, credibility, CIBIL score, etc. You get benefits like the freedom to withdraw any amount, low interest applicable on the consumed amount, prepayment without any extra charges, etc. Features of a flexi loan If you are considering applying for a flexi personal loan, you must know the features: A flexi personal loan usually has no restrictions regarding end-use. You can use the money for any expense. The loaned amount can be paid at your convenience; however, the interest amount must be paid every month. Flexi personal loans differ from lender to lender. You based on factors like CIBIL score and loan tenure. How does a flexi personal loan work? If you need money, you can undoubtedly apply for a flexi loan. Before applying for a flexi personal loan, check your CIBIL score. Most lenders have a minimum CIBIL score requirement. Once you have checked your CIBIL score, you can contact a lender. You will have to provide proof of income, address, identity, and other similar documents. Provided you meet the eligibility criteria, you will receive the principal amount. Once you get the loan, your interest charges will be calculated only on the used amount. Why should you get a flexi personal loan? A personal flexi loan is the best financial support you can get if the situation has flexible monetary demands. However, it is advisable to understand your needs beforehand. Because, in most cases, people take a personal loan for instant and non-necessary expenses. There are a few advantages to flexi personal loans that make them attractive options. You can receive instant loans if you meet the eligibility criteria. You can get the loan amount you need. A flexi loan allows you to repay at your convenience. The interest rates are applied only to the amount you spend. This makes flexi personal loans affordable. Flexi personal loans could be withdrawn based on your needs. So, you need not use all the principal amount. What is the interest rate? The interest rate on loans is one of the major deciding factors. Flexi loan interest rates range from 12% p.a. to 28% p.a. Another thing to remember is that you might have to pay more if your tenure period is longer. Interest rates are decided based on your creditworthiness and income. Eligibility criteria There is no doubt that each loaning institute has a different criterion. Thus, you have to understand the eligibility criteria before applying: You must be an Indian citizen to be eligible for flexible loans. For salaried applicants, your age must be between 21 and 70 years old, and for self-employed applicants, your age must be between 23 and 70 years old. Salaried applicants can work in the private sector, public sector, government institutions, or related companies, such as proprietorships, partnership firms, NGOs, or other organizations. If you are self-employed, you can be a business owner, partner, proprietor, member of a partnership firm, or self-employed professional like a doctor, architect, etc. Documents required for flexi personal loans The documents required may vary from lender to lender. You have to provide the following documents with your application form. Identity proof (PAN card, Aadhar card, or passport) must be provided. You will have to provide your Aadhar card, voter ID, and utility bills as your address proof. You will also have to provide 3 to 6 months’ salary slips as income proof. Self-employed professionals will have to submit bank statements to prove their income. You can be asked for additional documents based on your application. It is recommended to provide them with a swift approval experience. [B-02] Conclusion If you are considering applying for a flexi loan, know that the procedure is straightforward. A flexi personal loan is a viable option if you need a loan with a flexible borrowing amount and repayment period. Piramal Finance can be of great help if you’re unsure where to start. They have an experienced team to help you with flexi personal loan-related needs. If you wish to read more such blogs about personal loans and financiers, visit the official website of Piramal Finance to learn more.

08-11-2023

Mutual Funds

What is an ETF? Advantages of Exchange Traded Funds

Exchange traded funds (ETFs) are a type of investment fund that trades on a stock exchange, just like shares. ETFs are usually designed to track an index, such as the ASX 200, or a commodity, such as gold. An ETF can be bought and sold throughout the day on the stock exchange, and its price will fluctuate with the underlying asset. This makes ETFs very liquid investments. Investors often choose to invest in ETFs because they offer many of the same benefits as shares but with added diversification. ETFs also tend to charge lower fees than other types of managed funds. In this blog post, we will explore what ETFs are, their advantages, and how to start investing in them. [B-01] What is an ETF? An ETF is a type of investment fund that trades on a stock exchange. They are quite similar to mutual funds in that they hold a basket of assets; however, they are traded like stocks. ETFs can be used to invest in various asset classes, including stocks, bonds, commodities, and real estate.ETFs offer several advantages over other types of investments. First, they are very liquid, meaning that they can be bought and sold quickly and easily. Second, ETFs tend to be very low-cost. Mutual funds often charge high fees, but ETFs typically charge much lower fees. Finally, ETFs expose investors to a wide range of asset classes in one investment. What are the benefits of ETFs? Investing in ETFs has a number of benefits.1. ETFs offer diversification: When you invest in an ETF, you are buying a basket of securities, which helps spread your risk and diversify your portfolio. This is especially useful if you don’t have the time or expertise to pick individual stocks.2. ETFs are cost-effective: ETFs typically charge lower management fees than actively managed mutual funds. They also incur fewer trading costs because they are traded on an exchange like a stock.3. ETFs provide access to difficult-to-reach markets: There are ETFs that track just about every market imaginable, including hard-to-reach markets like foreign markets or emerging markets.4. ETFs are flexible: You can buy and sell ETFs at any time during the trading day, unlike mutual funds, which can only be bought or sold at the end of the day. This flexibility can be helpful if you need to quickly adjust your portfolio in response to changes in the market. What are some of the best ETFs to invest in? There are a number of different factors to consider when choosing the best ETF in India to invest in. Some of the most important factors include the following:The type of ETF: There are different types of ETFs available, each with its own set of benefits and risks. Some of the best ETFs in India include index funds, sector funds, and commodity funds.The expense ratio: This is the annual fee that you will pay to invest in an ETF. The lower the expense ratio, the more efficient your investment will be.The track record: It is important to look at the historical performance of an ETF before investing. This will give you an idea of how well the fund has performed in different market conditions.Your investment goals: It is important to align your investment goals with the type of ETF you choose. For example, if you are looking for long-term growth potential, you may want to consider investing in an index fund. If you are looking for short-term income generation, you may want to consider investing in a sector fund or a commodity fund. Difference between active and passive ETFs Active ETFs are funds that are actively managed by a fund manager. Passive ETFs are index funds that track a benchmark index.The main difference between active and passive ETFs is the way they are managed. Active ETFs are managed by a fund manager who actively buys and sells stocks in an attempt to beat the market. Passive ETFs tracking a benchmark index simply aim to match the performance of the index.Active ETFs tend to have higher expense ratios than passive ETFs because of the active management fees. Passive ETFs have lower expense ratios because they do not have any active management fees.Active investing generally requires more time and research than passive investing. For example, a fund manager of an active ETF may need to spend time analyzing different stocks before making any trades. Passive investors simply need to choose an index fund that tracks their desired benchmark and then let the fund manager do all the work.Which type of ETF is right for you depends on your investment goals and how much time you are willing to spend on your investments. If you want to beat the market, you may be better off with an active ETF. However, if you are content with matching the market’s performance, a passive ETF may be a better choice for you. Different types of ETFs There are three main types of ETFs: equity, commodity, and fixed income. Each type of ETF has its own advantages and disadvantages.Equity ETFs track a basket of stocks, allowing investors to diversify their portfolios and reduce risk. However, they are subject to the same volatility as the stock market.Commodity ETFs offer exposure to commodities such as gold and oil. They can be used as a hedge against inflation or economic uncertainty. However, commodity prices are notoriously volatile, so investors need to be aware of the risks involved.Fixed-income ETFs track a basket of bonds, providing exposure to the bond market without the need to purchase individual bonds. They offer stability and income, but they might not be as good for growth as equity or commodity ETFs. [B-02] Conclusion If you’re looking for a way to invest in the stock market without having to pick individual stocks, then investing in ETFs might be a good option for you. ETFs offer many of the same benefits as traditional index funds, but they trade on an exchange like stocks, which makes them more accessible and flexible for investors. With all of these advantages, it’s no wonder that ETFs have become one of the most popular investment options in recent years. For more informative articles, log on to Piramal Finance.

08-11-2023

Personal Loan

What is Flexi Loan and What Are its Benefits?

What is a Flexi Loan? A Flexi loan is a type of personal loan. It credits money to your account instantly. You can use the loan amount as per your requirements. Unlike other loans, Flexi personal loans don’t charge interest on the amount sanctioned to you. Instead, interest is charged only on the money you spend. In other words, you will pay interest only for the amount used by you and not for the total amount credited. Flexi Loans allow you to use the funds and repay the interest whenever you wish. They are often referred to as Flexi personal loans. Flexi personal loans are similar to the overdraft facilities provided by banks and other financial institutions. [B-01] What is the Difference Between Personal Loans and Flexi Personal Loans? Here is how personal loans and Flexi loans differ: Personal Loans Let’s assume you have borrowed Rs. 1,00,000 as a personal loan from a bank or any other financial institution. You are charged an interest rate of 10% p.a. for this principal amount, and the total period of the loan is 1 year. The bank, in general, will charge you an interest rate of Rs 12,000 for the one-year tenure. Thus, you will be required to pay Rs. 1000 as interest per month. Flexi Personal Loans For example, if you borrowed Rs 1,00,000 as a flexible personal loan from a bank or an institution at an interest rate of 10% p.a., you are not required to pay an interest rate of Rs 12,000 as you did in a personal loan. Instead, you will be paying interest only on the amount that you withdrew or utilized. Assume that you have used only Rs. 50,000 out of the total Rs. 1,00,000 credited to your account as a Flexi loan. As a result, you will pay only Rs. 6,000 in interest over the course of a year, i.e., Rs. 500 per month. What are the Eligibility Criteria for Flexi Personal Loans? The eligibility criteria for Flexi personal loans depend upon various factors. These include the type of employment you have, your age, income, financial obligations, credit score, citizenship, any criminal records you may have, etc. You can opt for a Flexi loan if you are a salaried employee or a self-employed individual. But the above criterion is subject to change from bank to bank or from institution to institution. Another major factor that determines your eligibility for getting a Flexi loan is your total credit (CIBIL) score. In general, to avail of any type of loan from banks and other financial institutions, it is recommended to maintain a minimum credit score of 700. What are the Benefits of Flexi Personal Loans? Below is a list of the advantages of a Flexi loan: Unlimited Withdrawals: Once the loan amount is credited to you, no one can question you on the number of withdrawals. It is because there is no limit on the number of times a Flexi loan can be withdrawn. No Need For Multiple Applications: In Flexi personal loans, whenever you withdraw money, you will not be required to fill out any application. Hence, no lengthy paperwork or approval is required for using the loan amount credited by the lender. Lower EMI: With Flexi personal loans, you are not required to use the entire loan amount. As a result, the interest rate and EMIs will be lower, compared to other types of loans. Pre-payment Option: Whenever you have a cash inflow or a lump-sum amount, you can pre-pay towards the total value of the Flexi loan. Furthermore, you will not be charged or penalized for making partial prepayments on the borrowed loan. Bullet Repayment Option: Flexi personal loans not only allow you to make partial prepayments but also provide a bullet repayment option. Bullet repayment is when you can pay back the loan principal and interest rate all at once at the end of the loan’s maturity period, also called its “tenure.” Helps You in Unexpected Situations: Flexi personal loans are a great aid in your unforeseen or unexpected circumstances. The loan amount is credited to your account instantly. Thus, a Flexi loan helps meet both your planned and unplanned needs. Minimum Documentation: As compared to ordinary personal loans, a Flexi loan needs a few documents at the time of application. Usually, an application for a Flexi loan asks for your Aadhaar card, address proof, income tax returns, salary slips, etc. No Need for Collateral: To avail of Flexi personal loans, you do not need to pledge any collateral, assets, or other financial securities. Closing of Loan Before Tenure: If you repay the Flexi loan amount before the maturity date, your loan will be closed. The main advantage of closing the loan before the term is that the interest payments are reduced. However, some banks or institutions may impose charges for early loan repayment. Easy Cash Flow Management: As your monthly EMI is reduced, you will be better able to manage your cash flows. This helps reduce your cash outflows and expenditures. [B-02] Final Takeaway Flexi personal loans are flexible not only in their name but also in their usage. We hope this article has helped you understand Flexi loans and the importance of maintaining a high CIBIL score. You can easily apply for and get a flexible personal loan with Piramal Finance. We, at Piramal Finance, will guide you through each and every step. Our executives are available to answer any queries related to Flexi loans. You can visit Piramal Finance‘s website to learn more about loans and related topics.

08-11-2023

Other

What Are Floating Interest Rates and What Are Their Advantages and Disadvantages?

Getting a loan calls for crucial decision-making skills. Among other things, one must consider interest rates. Generally speaking, interest rates are pretty high nowadays. Getting a loan at a low-interest rate requires thorough research. Once decided, the borrower needs to choose from two options: fixed interest or floating interest rates. Unlike fixed interest rates, floating interest rates vary throughout the term of a loan. Want to know how? Here’s everything you need to know. [B-01] What is a Floating Interest Rate? An interest rate that varies with the market or is based on an index is referred to as a “floating rate.” Several times during the repayment period, this interest rate may fluctuate. The base rate, which is the minimum interest rate, is decided by the Reserve Bank of India. The market’s current condition affects the base rate. Now, the interest rates are also linked to the base rate. The lender determines the interest rate by multiplying the repo rate by the “spread” (extra interest). The repo rate is the rate at which the RBI lends money to commercial banks. Any increase or decrease in interest is first passed on to the borrower. Then, they are adjusted to match the loan’s current interest rate. Floating rates may change often, depending on the terms and parameters of a loan. They could change every quarter, half-year, or annually. The amount of the EMI will not alter if the interest rate changes at any point throughout the loan’s term. Instead, the floating rate loan’s term is adjustable. On the other hand, when the floating rate declines, so do the loan terms. According to RBI regulations, lenders cannot impose a prepayment penalty on a loan with a floating rate. Who Should Opt for a Floating Interest Rate? When a borrower believes that the base rate will either stay the same or go down over time, a floating interest rate loan is for them. In such cases, he will either benefit from the same rate for the duration of the loan or pay less interest. For example, one can benefit from lower rates, until the next RBI revision, if the interest rate is reduced. As a result, low rates make floating-interest loans more alluring than fixed-interest loans. Additionally, choosing a Flexi loan will enable them to make prepayments. Pay growth, cash bonuses, year-end bonuses, sales incentives, etc. are a few examples. One will be able to pay off the loan more quickly and pay less interest overall as a consequence. A variable interest rate will be advantageous if one can anticipate having the potential for increased income in the future. In other words, one may pay off his debt more quickly as his earnings rise. If one is ready to accept interest rate volatility and wants to take advantage of speedier loan payments, floating interest rates could be a major benefit. Pros of Floating Interest Rates For the record, floating interest rates come with many benefits, including: Cheaper Floating rates are volatile in the short term since they depend so heavily on the market. However, floating rates are less expensive than loans with fixed interest rates in the long run. With a floating interest rate, there is no maximum hike allowed. Even if interest rates increase by 1% to 2% or more, one will still save more money. The floating interest rate often changes as rates spike. Simply put, the loan’s duration increases rather than the monthly payment. Pegged to the Repo Rate For starters, floating loan rates are closely related to the repo rate. As a result, fixed-interest rate loans are more expensive than long-term loans with floating interest rates. Moreover, lending institutions also increase the repo rate using “spread.” It is an additional interest charge over and above the repo rate. No Prepayment Penalty RBI rules say that the lender can’t charge fees for loans that are paid off early. Cons of Floating Interest Rates Like everything else on the market, this too has its disadvantages: Inconvenient Additionally, it is challenging to keep up with the EMI payments due to fluctuating interest rates. As a result, EMIs with fluctuating rates lack consistency and predictability. Financial planning Due to the erratic nature of interest rates, financial planning is challenging. Unfavorable market circumstances might result in higher premiums, which would be more expensive. May can be required to pay more than one can manage With fluctuating interest rates, it is difficult to establish a set monthly payback schedule. Sometimes the EMI amount may be higher than one anticipated or felt comfortable paying. This may also have a high impact on one’s monthly savings. Market conditions affect the interest rate The interest rate on loans with floating interest rates is heavily influenced by market circumstances, which are frequently erratic and dynamic. It may do a lot of harm if the interest rate rises to the point that making EMI payments. It might affect one’s overall credit history. The lender may identify them as a defaulter. If this happens, the chances of getting a loan in the future cease. [B-02] Wrapping up In a nutshell, interest rates are the most crucial factor that needs to be considered. The decision between a fixed interest rate and a floating interest rate is entirely subjective. Moreover, before choosing Flexi personal loans or any other loans, remember that they are highly volatile. It will be very difficult to pay off interest if the rate goes up. However, one can benefit from it too. The rates could go down as well. So, there is always a probability of risk that remains. Lastly, don’t forget to check Piramal Finance for loans at the best interest rate online.

08-11-2023