More articles for you

Your one stop place for everything related to finance and lending

Tax

What is Value Added Tax?

Taxes are levied on products at every production stage, from manufacture to sale. They are based on the product’s price, not the manufacturing material price. The prime goal of this blog is to provide you with the necessary information to fully understand what the VAT tax. Without further ado, let’s get started with the follow-up article to learn more about this. [B-01] What is Value Added Tax (VAT)? At every stage of production or distribution, value-added taxes (VAT) are levied on goods and services that add value, starting from raw materials until retail. VAT was introduced in April 2005. It tells you how much value you add at each step, and you pay taxes based on that amount. Consumers finally pay the full VAT when they buy goods, whereas buyers at earlier stages get reimbursed. Because the total tax is passed on to the consumer, the VAT tax is considered a consumption tax. The VAT laws are levied by each state to ensure proper implementation and assessment. Different states apply different VAT rates based on their implied laws. Why Was VAT Introduced? Introducing the VAT tax was the first step towards eliminating double taxation and cascading effects caused by the then-existing sales tax structure. Consequently, the cascading effect occurs when a tax is imposed on a product at every stage of its sales process. As a result, the consumer pays taxes on taxes already paid, so the tax is calculated on the property’s value, including the taxes paid by the previous buyer. In the VAT system, no exemptions are possible. Taxes are charged at each level of the production process, ensuring better compliance and fewer loopholes for exploitation. Pros and Cons of Value Added Tax (VAT) Pros The tax loopholes in the income tax could be closed by substituting a VAT for other types of taxes, such as the income tax. A VAT has a stronger incentive to encourage people to earn more than a progressive income tax. Cons Businesses are burdened with higher costs as a result of VAT. As a consequence, tax evasion may be encouraged. Added costs increase prices, which is particularly difficult for lower-income consumers. VAT Registration If a company generates revenue exceeding Rs. 5 lakh by selling goods and services, it is mandatory to register for VAT. All such entities must register with the relevant state where they operate. The registration process for VAT is essential for an enterprise to pay VAT. All traders are given an individual 11-digit registration number upon registration, which is used to communicate all details regarding the VAT tax. You need to submit some essential documents during VAT registration, including the following list of documents: A copy of the PAN Business address proof Promoters’ identification proof An additional security deposit or surety Rates of VAT in India State governments collect a value-added tax, and the guidelines and rules applied to its implementation vary widely from state to state. Value-added tax in India is divided into four major categories, which are as follows: Nil: It is generally considered that items that fall under this category are exempt from VAT. These represent products and services deemed essential and sold in the unorganized sector. Some of these are items such as khadi or salt. 1%: This class of goods usually has a higher price than other products that belong to this class. There is a reason that VAT is charged at a rate of 1% on expensive goods. If the VAT rate is increased, this will mean that the prices of these items will increase considerably. This category comprises gold, silver, precious stones, and other things. 4-5%: Some daily items are subject to VAT at 4%–5%. These items include cooking oil, tea, medicines, etc. General: It has been established that the items that fall under the general category are subject to VAT rates ranging from 12% to 15%. Most things under the general category are considered luxury items, such as cigarettes, alcoholic beverages, etc. Value Added Tax Collection in India Account-based collection of VAT In the account-based method of collecting your taxes, there is no need for sale receipts. Instead, you calculate your taxes based on the value added. Value added equals the difference between the revenue and the allowable purchase amount. Invoice-based collection of VAT Traders who sell goods and services provide invoices that include separate details about the VAT collected. The invoice-based VAT collection method uses sale receipts or invoices to determine the corresponding VAT. A lot of countries today collect VAT based on invoices. Another way to categorize VAT collection is to assess when it was collected. Accrual-based collection A company collects revenues according to the period during which the income is generated. The accrual-based collection matches the remittance with the period during which the revenue is generated. Unlike the cash-based method of collecting VAT, this method is very complicated. However, it provides essential information regarding any business. Cash-based collection of VAT A cash-based accounting system is more straightforward than an accrual-based system. The focus is on the cash being handled rather than whether all the charges have been paid. Once reimbursement has been received, that date is recorded as the date on which funds have been received. Example of value added tax Ram owns a restaurant and purchases raw materials for it at a cost of Rs. 50,000. The input tax on the raw materials is 10%, so the input tax on the raw materials will be Rs. 5,000. As a result, Ram was able to make Rs. 100,000. Considering an output tax of 10%, Ram could make Rs. 10,000 after selling the food made from the purchased raw materials. Therefore, Ram must pay Rs. 5,000 in VAT tax instead of Rs. 10,000. How to Register for VAT Online? You must follow the following steps to register for VAT online in India. Firstly, you need to go to the official website of the VAT and click on the tab titled “Registration.” Upload all of the relevant documents and enter all of the relevant information. You will receive a temporary VAT number if you register on behalf of a corporation. After you send in your application and all the required paperwork, you will get a VAT number that will stay with you for the rest of your life. [B-02] Conclusion Products are subject to a variety of taxes that are levied on them. An excellent example of one of these tax types is the value-added tax. We hope that this article helped you clarify any doubts that you had about this topic. Your comments encourage us to write better.
08-11-2023
Read More
Business Loan

What To Do If Your Business Loan Is Rejected

Every business needs money to operate successfully. Applying for a business loan is something that most startups do to kickstart their business operations. While there are many business loans available, there is no guarantee that every business loan will be accepted. There are multiple reasons for a business loan rejection, including a bad credit score or businesses that are in debt. But after a business loan gets rejected, there are still steps that can be taken to ensure that your business receives the funding it requires. Here are a few things you should do if you ever face a business loan rejection. [B-01] Determine the Cause of a Business Loan Rejection It is very important to understand the reason for your business loan rejection. This can help you take the necessary steps to make improvements before applying for another business loan. Generally, your lender should send you a business loan rejection letter within 30 days with detailed information about why your business loan was rejected. If not, you can raise a request for this. A few common reasons for business loan rejections include: Poor credit score Cash flow issues Excessive debts New business Absence of collateral High-risk business If your business loan was rejected, there should be a reason for it. Find out what that reason is and work towards improving your standing in that area. Evaluate and Improve Your Credit Score A credit score is an important factor that helps banks approve or reject business loans. This will help them evaluate your income as well as your repayment capacity. In India, four credit bureaus calculate and manage credit scores: TransUnion CIBIL Experian Equifax High Mark Out of these, the CIBIL score is the one that most banks, NBFCs, and private lenders consider while approving business loans. Ideally, a CIBIL score of 750 or above should be good enough to get your business loan approved. You can improve your credit score by following the steps mentioned below: Make sure you repay your debts and clear your credit card dues within the required time. Restrict your credit utilisation to less than 30% of your total credit limit. Request an increase in your credit card limit if possible. Check your credit report for errors and have them corrected as soon as possible. If you cannot improve your credit score even after following these steps, you can try applying for a secured loan. Your bank might approve your loan if you have collateral, as the risk involved will be less. Correct your debt-to-income ratio How much of your business’s earnings go towards repaying your debt is a factor that most banks will consider when approving your business loan. This is called the debt-to-income (DTI) ratio. The debt-to-income ratio is calculated by dividing your total monthly debt repayments by your monthly gross profits and then multiplying the result by 100. The lower your DTI, the better your chances of getting a business loan. Keep your DTI under 36% if you wish to get your business loan approved. Check your documentation. You have to make sure your documentation is in order if you want to apply for a business loan. In addition to the documents that show who you are and where you live, you will also need to send: Bank statement for the past six months Your latest income tax returns, along with the computation of your income, duly certified by an authorised chartered accountant Certified copies of your profit and loss account and balance sheet for the past two years Proof of continuation, such as your trade license, sales tax certificate, or establishment certificate Other important documents, such as your sole proprietorship declaration, partnership deed copy, or a certified true copy of your memorandum of association (MOA), should be included, along with an original copy of the board resolution. Make a list of all the documents you need to make sure you have everything you need. Identify alternate sources of funding. Banks follow strict rules to approve business loans. As a result, most owners of small businesses and startups find it very difficult to get their business loans approved. This makes it very important for businesses to look for alternative financing for their business operations. Alternative financing is available from external lenders who offer loans to businesses with poor credit scores. They are easier and faster to get since the lending criteria are not as strict. These are some alternative financing options if you are facing a business loan rejection: Line of Credit: This is a source of funds that you can access whenever you require finances. Most small businesses use this for equipment financing. It is more or less like using a credit card in that you will be approved for a certain credit limit for a specific period. You can borrow as per your need, as long as you do not cross that limit. This might come in handy while meeting payroll expenses, especially during lean periods. Instalment Loans or Term Loans: These are loans that you repay over time by making regular payments in instalments. They are similar to the loans that you obtain from banks or credit unions. However, they are offered by many external lenders online. You can apply for these on the official websites of lenders or crowdfunding platforms. They are customizable and user-friendly. You can qualify for a term loan even if you have bad credit. Invoice factoring: If your business has outstanding invoices, you can use this option to get money immediately. With this option, the factoring company purchases your invoice and credits your account with 90% of the invoice value. It then collects the payment from your client on your behalf by charging a 1–2% factoring fee. The remaining amount will be credited to your account. Other options include invoice financing, equipment financing, merchant cash advances, microloans, and crowdfunding. [B-02] Conclusion Getting a business loan is not as easy as some may believe. Even if you have a good credit score, there are other factors such as income and experience that can reduce your chances of getting your business loan approved. Even in the event of a business loan rejection, there are still multiple alternative financing options available. For more options after a business loan rejection, visit Piramal Finance to read related articles, like this one, for information and guidance on getting your business loan approved.
08-11-2023
Read More
Gold Loan

What role do gold loans play in India’s economy?

The gold loan has been popularised in India for decades now. Yet most of them were managed and controlled by the unorganised sector, which included the local moneylenders and pawnbrokers. There were no policies or regulations to control their activities. It is only recently that the banking and finance sectors have been informed about the impact that gold loans have on the Indian economy. Compared to the other retail loan products, gold loans are gaining faster traction, with the rising gold prices acting as a boon for the market. Borrowers can get loans faster as they can provide their gold ornaments as collateral. Lenders find it safer to lend money since the collateral is adequate to cover their risk. Many banks as well as NBFCs (non-banking financial companies) have started offering gold loans at low-interest rates. The interest rate is as low as 7% per annum for gold loans in India because of the collateral provided. The tenure for these gold loans ranges from three months to four years, and you can avail of up to Rs. 1.5 crore as a loan, depending upon the value of the gold you keep as collateral. [B-01] Benefits of Taking a Gold Loan Here are a few things you need to understand about gold loans: Gold loans can be used for any purpose. You can pledge your gold ornaments and get a gold loan whenever you face any kind of financial emergency. You can use the money for medical emergencies, educational purposes, or even to go on a holiday. These loans are highly secure. If you pledge your gold with a reputed bank or financial institution, you can rest assured that your gold is safe with them. Whenever you repay your loan, you will get your gold ornaments back in the same condition they were in when you deposited them. There are numerous tenure options. From 3 months to 48 months, you can choose any tenure option to repay your gold loan. Low Fees. Like other loans, gold loans are also associated with certain fees, such as processing fees, valuation fees, and late payment charges. However, these amount to only about 2% of your loan amount. Multiple Repayment Options Most gold loan lenders offer various options for borrowers to repay their gold loans. These include: Regular EMI repayment Paying the interest amount upfront and repaying the principal loan amount at the end of the tenure Paying interest amount in monthly instalments and repaying the principal loan amount at the end of the tenure If you repay your interest amount regularly, you might even get a 1 to 2% rebate on the original rate of interest. Gold loans are often preferred by borrowers because of their quick disbursements, minimal paperwork, and flexible schemes. It is a hassle-free and easily accessible option for borrowers who wish to borrow small loans. However, there is something called loan-to-value (LTV) that you need to be aware of while opting for a gold loan. What is loan-to-value (LTV)? Loan-to-value, or LTV, is the ratio of the gold loan amount to the value of the gold that is being pledged. The RBI (Reserve Bank of India) has capped this at 75%. Nevertheless, this might change depending on the market rate of gold. If there is an increase in the gold rate, you can get more gold for the gold that you pledge. On the other hand, if the gold rate falls, you may have to pledge additional gold for the same amount of money. Banks and financial institutions generally derive the value of gold by analysing the fluctuations in the gold rate over the past 30 days. They then evaluate the LTV by checking the purity of the gold that is being pledged. A professional loan evaluator is usually hired for this purpose. The lender might ask the borrower to pay up the marginal difference or pledge more gold when there is a fall in the gold price. Not paying this up might make you a defaulter, thereby impacting your credit score. In case you fail to repay the loan even after 90 days after the end of your term, the lender might liquidate the pledged gold by auctioning it. However, it is highly unlikely for lenders to follow this route if the tenure of the loan is short. Impact of gold prices on the Indian economy Indians love gold. They buy gold all the time, be it for investing, for weddings or other festive occasions, or to offer as a gift to their loved ones. They consider gold a symbol of prosperity and good fortune. Buying gold is a cultural norm for Indians. The amount of gold that Indians hold is more than what you can find in any other country in the world. 2.5 trillion Indian rupees’ worth of gold was imported by India in the fiscal year 2021. This is estimated to reach 3.4 trillion Indian rupees in the Fiscal year 2022. As a non-productive asset, gold has a huge impact on the Indian economy. Most of the gold that is purchased in India either gets transformed into jewellery or is stashed away in safe boxes and lockers. Most people hold on to their gold to get higher returns on their investments or just to add to their wealth. [B-02] In conclusion With the gold rate expected to rise in the forthcoming future, there are going to be more takers for gold loans. Make sure you make the most of your investment but do evaluate your financial situation and your repayment ability before borrowing your gold loan. Check out the Piramal Finance website for other options if you don’t want to pledge your gold.
08-11-2023
Read More
General Insurance

What is the Right Age To Buy a Term Life Insurance Cover?

Term life insurance is essential for protecting your family’s financial future, especially if you are the sole breadwinner. In the unfortunate event of an untimely demise, having a term insurance plan will help your family if you are the one who provides for them financially. Preparing well for the future in case of an unfortunate demise will ensure that your family is well taken care of and will not be in a situation of financial desperation or need. This article will explore different aspects of term insurance, including the age at which you should be investing in a term insurance plan. [B-01] What is a Term Insurance Plan? In simple terms, a term insurance plan is a death benefit insurance plan that will provide the insurer’s nominee with a lump-sum amount upon their untimely death. It is one of the very few types of insurance that can provide a large amount, up to Rs. 1 crore or even more. But the amount depends on the amount of the premium, the number of premiums submitted, and also the age and income of the insurer. It is important to be cautious since there are some insurance plans with a maturity limit, and if the insured outlives the maturity limit, there will be no payout. So, make sure you pay careful attention to those details while investing in a term insurance plan. What Sort of Premium Will You Have To Pay? The premium you will pay depends on factors such as age, sum assured, term, gender, and others. Here are details on five of these important factors: Age: Age plays a significant role in insurance policies. At a younger age, the premium you pay will be lower compared to what you will pay 10 years later. So, if you get term insurance at an early age, you will be paying less than what you will have to pay later. Sum Assured: If the sum assured or the payout is higher, then the premiums you pay will be higher too. Term: Like premiums, the term can impact the final payout that the nominee receives. If you choose to have longer terms, you will also have to pay higher premiums, but you will receive a higher final payout. Most term insurance policymakers have term benefits, such as a duration of 5 to 40 years. Some even have a term that allows insurance until the age of 99. Gender: Some policymakers offer lower premium amounts for women. This is based on studies that indicate that women have a lower death rate compared to men. Lifestyle: Your lifestyle choices can affect the premium you pay. For example, a smoker will have to pay higher premiums. This is based on widely accepted research that indicates smokers have a higher death rate compared to non-smokers. The simple calculation is: the higher the death rate, the higher the premium amount. The Right Age To Buy Term Life Insurance The question many people ask is: When is the right age to buy term life insurance? The answer depends on several factors. Anyone between the ages of 18 and 65 can buy term life insurance. But since most people start getting their first jobs in their early 20s, that is considered a good enough age to start investing in term life insurance. If you are earning well, your expenses are not too high, and you have family members who financially depend on you, then it is important to start thinking about a term insurance plan as soon as you get your first job. Some people may have low earnings and high expenses early in their careers. Once you start earning higher salaries and are capable of managing your expenses, that would be the ideal time to start investing in term life insurance. Mostly, by the end of your 20s or early 30s, you should have a stable enough financial life to buy a term insurance plan. Most insurance policymakers prefer people who are young and in good health. Therefore, it is wise to take advantage of this by investing in term insurance early. Benefits of Term Insurance Term life insurance comes with various tax benefits. So, you will pay a lower premium since there will be no tax amount included in the said premium. Term insurances are exempt under Section 80(C) of the Income Tax Act, as long as the premiums are under Rs. 1.5 lakh. The final payout that the nominee receives will also be exempt from tax under Section 10(10)D as long as the annual premium is less than 10% of the total sum assured. Term insurance can also benefit you if you have any loans in your name that are yet to be repaid. In the event of your untimely demise, the outstanding loan amount can be simply deducted from the final payout of the term insurance. This saves your family from having to worry about how to repay your loans. Most people who want to secure their family’s financial future invest in term insurance. Term life insurance allows your family to have stable financial support after your unfortunate demise and also gives you confidence that they will be well looked after due to your smart financial planning. [B-02] Conclusion Planning your finances well secures your future and the future of your family members. One of the many ways you can do this is by buying term life insurance. This will allow you to easily secure the financial future of your family members, especially if you are their sole provider. If you are searching for term insurance plans, be sure to conduct thorough research to find a term insurance plan that is appropriate for your needs. To read more articles like this one with information on term life insurance, visit Piramal Finance. You will find other articles with details and guidance on term insurance plans and how you can get started on securing your family’s financial future!
08-11-2023
Read More
Home Loan

What is the Purpose of a Loan Against Property? Here’s Everything you Need to Know

Your home is one of the most valuable assets you’ll ever own because it will protect you from the elements and keep you dry for the duration of the building’s useful life. For instance, a property owner who needs cash badly doesn’t have to take out expensive personal loans. Instead, he or she can get a loan against property (LAP) to cover the short-term financial need. A loan against property is a unique way to use all of the money that can be made from an immovable asset while still keeping the title. You can get money right away by using your property as collateral for a loan against it. It is a popular choice because it has a long time to pay it back and a low interest rate. [B-01] What is a loan against property (LAP)? In India, an “LAP” is a home loan you get against a property you own. It has become a popular kind of long-term loan in India, especially among self-employed people, because the loan terms are longer and the interest rates are lower. Can I borrow money for my house? All properties, including homes, factories, and offices, are fair game for an LAP. In the case of residential property, it could be a rented property or a property that the owner lives in. This includes apartments, flats, single-family homes, and so on. Commercial property is made up of things like office spaces, stores, shopping areas, complexes, and so on. If you own a piece of land or a plot, you could also get an LAP. Criteria for getting the LAP Even though this may be different from bank to bank, there are some things that all banks look at: the borrower’s income, debts, savings, history of paying back loans and credit cards, and the market value of the property being mortgaged. Aside from this, the borrower’s job status, maturity level, financial situation, and credit score are also important factors in deciding how much of a loan they can get. Lenders prefer that borrowers pay off debt while still employed. Hence, the upper LAP maturity age for salaried workers is 60 (retirement age in India), while for self-employed individuals, it’s 70. Benefits of a loan against property High loan amount with a long repayment term Depending on the lender’s rules, you can get a loan for up to 60% of what the property is worth on the market. You can also take advantage of the long time you have to pay back the loan (up to 15 years) by making sure you can afford the monthly payment. Loans can be used for many different things. The money can be used however the borrower wants. It can be used for various things, from paying for a wedding to financing business and expansion plans. It can also be used to pay for healthcare costs or buy a property or other asset that might not qualify for a loan. Available to everyone The loan is not only for people with regular jobs but also for professionals and businesspeople who work for themselves. Simple process Compared to other loans, a loan against property requires less paperwork and can be paid out quickly. Low-interest rates Since the property is used as collateral, the interest rate is usually lower than a personal loan. The interest rate varies by lender but is usually between 12 and 15%. This is much lower than the interest rate on a personal loan, which is between 15% and 25%. Tax benefit You can not only get cash to pay your bills with a loan against property, but you can also get tax breaks. Under section 24(B) of the Income Tax Act, you can get a deduction if you get a salary. The tax deduction can be used for the principal amount and the interest paid. Documents needed for an LAP For salaried people: As proof of residence, a copy of any of the following is acceptable: Ration Card Electricity bill Phone Bill Voter ID Card Employer’s Card The most recent bank statement or passbook that shows a salary or income has been credited to the account in the last six months Payslip for the last six months that shows all deductions Form 16 in the last two years Copies of all the property papers for the property that will be used as collateral for the loan Self-employed: Statement of financial condition for the past three years As proof of residence, a copy of any of the following is acceptable: Ration Card Electricity Phone Bill ID Card Employer’s Card The most recent bank statement or passbook that shows a salary or income has been credited to the account in the last six months Copies of all the property papers for the property that will be used as collateral for the loan [B-02] Conclusion One of the best ways to get money is to take out a loan against your property, especially when the property market is doing well. But if the borrower can’t pay back the loan on time or in full, the bank can take the mortgaged property and sell it at auction to get the money back for the loan. Like with any other loan, not paying back on time will hurt the borrower’s credit/CIBIL score and add a penalty to the loan repayment. Before taking out a loan against property, it is wise to think carefully about whether or not you will be able to pay it back and to understand all of the terms.
08-11-2023
Read More
Personal Loan

What is the Procedure for an Education Loan?

Education has become a necessity for every citizen in the modern era. However, the affordability of quality education is not the same for everyone. The rising cost of quality education is a growing concern. Many students want to refrain from burdening their parents with the high cost of their education. At such a time, the student may opt for an education loan. To begin applying for an education loan in India, one must first ensure that one satisfies the requirements. Every parent has the same goal regarding their child’s education: to put them in the most prestigious school possible. However, many individuals discover that earning it, particularly from a reputable institution, is financially exhausting. This is especially the case when it comes to the cost of tuition. One way to cover the costs of attending school, particularly for those who want to further their education, is to apply for a student loan. We offer many different kinds of loans, such as mortgages and car and other vehicle loans. [B-01] Eligibility criteria for student loans Nationality To get a student loan, a person must be a citizen or a permanent resident of India. Prerequisite Age Education loans may be applied for by the prospective student or the student’s parents if the prospective student is 18 or older. No one beyond the age of 35 may qualify for a federal student loan. Educational Course Admission The applicant must have proof from the University Grants Commission (UGC), the Indian Ministry of Higher Education (MHRD), the All India Council for Technical Education (AICTE), or a similar organisation that they have been accepted to a university in India. Percentage To continue, a candidate must have scored at least 60% on all prerequisite assessments. A Step-by-Step Guide for Education Loan Getting one is fairly straightforward, and although the application process varies from bank to bank, they all follow the same general steps: Step One: You’ll need to fill out a loan application. The applicant must fill out an application form, which may include questions like: Pictures of you and me, both passport-sized Documentation of completion of secondary school, high school, or its equivalents, such as a diploma or transcript Examples of KYC documents are voter ID cards and PAN cards that provide proof of identity, address, and age Proof of signatures Eligibility for extra money is based on proof of parental income, records for properties, and FDs A person who wants to get an international student loan must provide the following proof that they want to go to school abroad: Two pictures of you, both passport-sized Proof of identity and papers showing the right to work (voter ID cards, PAN cards, and proof of identity, residency, and age) certificates attesting to a recent exam’s success or grade reports Verification of course and university enrolment Set aside money for tuition More copies of the prize letter (if you have one) Bank statements for the last six months from the borrower, parents, or guardian All guarantors, parents, and borrowers must provide transcripts of their current and past years’ federal tax returns. What exactly is being offered as collateral, if anything? To prove its marketability, mortgage-approval prospects, etc., the applicant may be asked to present a search and report from an advocate Proof of relocation provided by candidates Step Two: A Personal Conversation After applying, the candidate is interviewed by a bank staff member, who may ask questions about the candidate’s past academic performance, the specific major or field of study, the school attended, and other factors. Step Three: The applicant needs to provide relevant paperwork. Before a bank considers a loan application, the applicant must provide all admissions paperwork. The bank needs proof of enrollment at the school before approving the loan. If the education loan amount exceeds Rs. 4, the applicant may be required to furnish collateral security, such as documentation related to mortgaging the property. Step Four: Acceptance or Rejection of the Loan A cosigner is needed for a student loan. The applicant’s parent(s) or guardian(s) might serve as the guarantor. Before approving the loan, the bank will look into the guarantor’s credit history. When the process is complete, the bank may decide whether to provide the loan to the applicant. Step Five: the actual distribution of the loan. After all the documentation is submitted, the bank will disburse the loan. The financial institution will cover the cost of college or university by making a direct payment to the school. Submission of an Online Student Loan Application Incorporating an online application has made applying for a student loan much less hassle. Applying for an education loan may now be done entirely online. The bank will only approve the education loan if the applicant and the main contact are physically present at the time of approval and distribution. What does an education loan cover? Starter fees for the class Affordable housing Other college-related necessities In which cases may one apply for a student loan? When a student applies for a loan, the student is the principal borrower, and a parent or sibling may be a co-applicant. The student is expected to repay the loan once he earns an income. If the co-applicant does not find gainful employment, he will be liable for repaying the education loan. What if the person cannot afford to pay back the loan? The bank may sue them if they cannot repay their student loan. However, the lender also faces scrutiny in these cases since it becomes clear that they did not accurately assess the borrower. [B-02] Conclusion The right to education has emerged as one of the most essential of modern times. However, not everyone has the opportunity to afford a quality education; such people can opt for an education loan. You can take help from Piramal Financing House to decide which loan will be best for you.
08-11-2023
Read More
Other

What is the Timing of the Commodity Market in India?

The following article discusses the history of the Indian commodity market. It also informs you about a range of trustworthy brokers and commodities exchanges operating in India. In this post, we’ll break down some of the most technical words used in the Indian commodity market so that even a beginner may understand them. Body: [B-01] Origin of Commodity Trader Organized commodity commerce in India began in 1875 with the establishment of the Bombay Cotton Trade Association. However, the foundation of the commodities market was laid down much earlier than in any other country. Futures markets in jute and other jute products emerged shortly after the Bombay Cotton Exchange was established in 1893. Let’s investigate the nature of commodity trading and why it’s garnering so much attention now. What is commodity trading? Stocks aren’t the only things that investors and traders buy and sell to earn a profit. Profits from the commodity market might be quite attractive if one knows what they’re doing. Commodities are widely traded all over the globe. They are the backbone of any economy. The word “commodity trading” refers to the buying and selling of various raw materials and finished products made from them. Let’s break down each portion of this explanation so you can fully understand it. It all starts with a massive commodity trade. There is a limit on how many units may be acquired at once when buying units. The interaction of supply and demand establishes the market price of an item. What Time Does the Commodity Market Open? The commodity market opens for trading at 9.00 a.m. every day. You can start trading all commodities at 9 a.m. Commodity Market Closing The closing commodity market times for diverse commodities are not uniform in the Indian commodity market. At 11:30 pm EST, the closing bell rings for all commodity trades other than those involving food and agricultural products. The last trading hour for cotton, among other agricultural products, is 9:00 pm. Likewise, the market for all other commodities closes at 5:00 pm. All today commodity market positions must be squared off 25 minutes before the market’s closure, and trade adjustments are accepted till 11:45 pm. Traditional banks such as ICIC Direct and HDFC Securities provide commodity trading services. What Kind of Deals Can You Make in the Commodity Market? The commodities traded on the Indian commodity market fall into two broad categories: agricultural and non-agricultural. Non-agricultural commodities may be further broken down into three groups: precious metals (gold and silver), energy (fuels and ores), and industrial metals (base metals). Among the most frequently bought and sold commodities on the markets are: Black pepper, cardamom, castor seed, cotton, palm oil, kapas, wheat, rice, chana, bajra, barley, and sugar are a few of the many items that come from agriculture. Meant for storage or Exchange, bullion typically consists of silver and gold. Fuels consist of crude oil and natural gas. Base metals are nickel, zinc, lead, copper, lead, and aluminium. Cotton, copper, silver, and gold are India’s most widely traded commodities. Commodity Exchanges: Several Unique Markets Commodity markets may be divided into two categories: Spot markets are also called physical markets or cash markets. Here immediate delivery of items is traded. The derivatives market includes both futures and forwards. Users may schedule an exchange on a certain day and price. Deliveries of the exchanged product take place at the expiration of the contract. MCX, NCDEX, and other exchanges in India are used for trading commodities. Two of India’s most popular exchanges for trading commodities are the Multi Commodity Exchange (MCX) and the National Commodity and Derivatives Exchange (NCDEX). In 2003, the Multi Commodity Exchange (MCX) was established as a marketplace for exchanging non-food commodities. Agricultural products are the primary items traded on the National Commodity and Derivatives Exchange. It has been operational since 2003. Commodities Market Participants are essential to ensuring the fairness of these markets. The vast majority of participants in commodity markets are either hedgers or speculators. Speculators are those who aren’t involved in the production or consumption of products. They enter the market for short periods to profit from price fluctuations. Those who have a stake in the commodity they trade are called “hedgers.” As a result of their dealings, commodity price fluctuations are eliminated. These players contribute to the market’s stability and collaborate to set its direction. How to Make Money Trading Commodities Traders in commodities need a Demat account in the same way that stock traders do. Choosing a broker to open a Demat account with isn’t difficult. Many viable options exist. However, before opening an account, ensure your prospective broker has a solid track record, competitive rates, and low costs. Finding a broker that can provide you with higher margins requires careful consideration. Commodity exchanges conducted through the internet Buying and selling commodities online are similar to trading stocks or other assets. Indian commodity markets may be quite lucrative. Shares can be traded just as easily on the BSE as on the NSE, and vice versa. MCX (Multi Commodity Exchange of India Limited) and NCDEX are the two most well-known exchanges (National Commodity and Derivatives Exchange Limited) for those interested in trading commodities in India. The commodity trading market functions differently from the stock exchange. Commodity trading margin requirements are not fixed like stock trading margin requirements are. Why Do People Engage in Commodity Trade? First, purchasing commodities like gold and silver is the best way to diversify your financial portfolio. Second, the returns from commodities are diversified and risk-adjusted. In contrast to equity commodities, stock market declines lead to price rises. Commodity prices are relatively immune to inflation since they tend to rise when money loses purchasing power. Investment in Basic Materials is Now Appropriate The Indian commodity market is active throughout the year and features trading in various goods. The Commodity Exchange is open during regular business hours, Monday through Friday. Any holidays declared by the Exchange are communicated in advance to the traders. [B-02] Conclusion Primal Financing House provides its consumers with cutting-edge stock trading solutions to make stock trading a breeze. If you are a beginner with a high level of intuition, employing Pirimial Financing House will simplify your investment and trading on the commodities market. You can get their help for the best experience.
08-11-2023
Read More
General Insurance

How to Determine the Right Amount for Your Life Insurance Cover in 2022?

We all know that death is certain, and most people may not want to think about it too much. However, if you have family members who rely on you, it is critical that you have enough investments, such as life insurance. Life insurance can make it easier for those left behind to manage day-to-day living expenses, pay off mortgages or other debts, and cover other expenses. When it comes to life insurance, many people are uncertain as to how much coverage they need. This article will talk about everything, such as what factors affect your coverage amount and how to calculate it. [B-01] What is life insurance? In the event of your death, life insurance pays out money to one or more beneficiaries of your choice. Depending on the type of coverage, life insurance can pay for final expenses such as a funeral or unpaid debts, or it can provide funds to support dependents’ standard of living or future financial needs. In the end, life insurance gives you some peace of mind that your beneficiaries’ financial needs will be met (up to the policy limit, or death benefit) if you die. Factors to Consider Before Selecting Life Insurance Cover Your Age Your date of birth when you bought the coverage is very important. Adults between the ages of 25 and 35 need coverage equal to at least 18 times their yearly salary plus. However, those between the ages of 25 and 45 and 44 and 55 require coverage that is 15 times and 10 times their respective yearly incomes, in addition to having all outstanding loans paid in full. It is recommended to purchase the coverage when you are young and to select the tenure that is the longest. Your annual income Evaluating your present financial situation is one of the crucial elements to consider while choosing life insurance coverage. The basic rule of thumb, which states that your life insurance coverage must be at least 15 to 20 times your current yearly income, is often recommended by consultants. Your financial liabilities or debt Liabilities are an important factor when determining the insurance coverage for your life insurance policy. The life insurance coverage should be enough to cover all of your current and anticipated debts and financial liabilities. Since life insurance ensures that the policyholder’s family will get money in the event of their death, the coverage should be set up so that it enables the family members to settle their debts and live a life free from interference. The benefit from your policy should be enough to pay off all of your current debts, such as credit card bills, mortgage payments, and car loans. Figure out how many other capital assets you have and set the amount of coverage you want to buy based on that. Your Financial Goals The entire purpose of the life insurance plan is to provide for the family’s financial necessities following the death of the insured. Children’s schooling and marriage should at least be included in the coverage because they end up being significant household expenses in modern Indian society. Thus, life insurance cover must pay these costs in the event of the decedent’s death while taking inflation into account. Policy Tenure Life insurance generally has annual premiums. Therefore, it is recommended to purchase a life insurance policy at a young age so you can get coverage for a longer time. Moreover, life insurance premiums are rather cheap when you purchase them at a young age. Methods to Calculate How Much Life Cover You Need Human Life Value (HLV) A figure that indicates the current value of anticipated future income, expenses, debts, and assets is known as the “Human Life Value” (HLV) or “Ideal Life Cover.” The HLV figure is typically obtained to determine how much capital would be needed to purchase term insurance to protect the lives of your dependents if you pass away. Find out how much it would cost in today’s currency if your goal is to maintain your family’s current lifestyle in the future. Also, most insurance providers recommend the HLV method to calculate the coverage amount. Income Replacement This calculation method assumes that life insurance will make up for the lost source of income. “Your insurance coverage = your current yearly salary x the number of years till retirement” is one of the simplest ways to determine your income replacement value. For instance, if you are 40 years old, make 20 lakh rupees a year, and expect to retire at 60, the amount of insurance you’ll need is 4 crore, i.e., 15 lakh times 20. Expenses Replacement In this method, people estimate their living costs, debt payments, and responsibilities like funding their children’s school and caring for financially dependent parents. The amount of coverage calculated from this will be the amount your family requires. Your investments and life insurance must then be subtracted from the calculated amount. You can estimate how much coverage you need by subtracting investments and insurance from spending and goals. [B-02] Conclusion You must consider all these factors before finalising a coverage amount for your life insurance. These factors should have given you a better understanding of your current goals and positions regarding supporting your family financially. It’s a good idea to periodically examine your term insurance needs because you can’t predict everything. Moreover, research and apply only for the life insurance that suits you best. You can also visit our website to read more such blogs and learn about life insurance and finances. You can also check out the housing and personal loan sections if you plan to get one.
08-11-2023
Read More
Other

What is a Trading Account, Its Charges and Eligibility Criteria

Recently, many people have moved toward investing. People are opening Demat and trading accounts every day. You might have noticed that your neighbour has begun to talk about stocks with you regularly. Also, you may have decided to start dealing in stocks to make more money. However, before you take a plunge into the world of trading, you need to know about the ABCs of trading. A trading account is a fundamental aspect of share markets. Understanding them is crucial. So, read this article to learn all the vital information about trading accounts. [B-01] What is a trading account? Are you considering investing in the stock market? As an initial step in becoming a trader, you will need a Demat account. The next step is opening a trading account. A trading account allows you to buy and sell equity shares and bonds. Using a trading account, you can trade shares and securities in the stock market electronically. In what way does a trading account work? Your trading account links your Demat account and your bank account. It debits your shares from your Demat account and credits the money to your bank account. This mechanism for online trading accounts facilitates the sale of your shares. Alternatively, in the case of share purchases, shares are credited to your depository account and the money gets debited from your bank account. Features of a trading account Shares can be purchased and sold online or via smartphone. Expert recommendations facilitate access to the best-performing shares in different categories. If you open an online trading account, you will get free alerts about the market and news. Margin investing allows investors to gain exposure to a variety of stocks. You can trade stocks without any delays with real-time transactions. Unique features help you place orders after the market hour. Expert research advice is available from our team of analysts. Trading account benefits As an investor, you can set your trading limits on your trading account. A trading account lets you buy and sell stocks, gold ETFs, forex, and derivatives. It is easy to perform all sorts of transactions virtually. You do not need physical transactions to buy or sell securities. It builds a profitable relationship between profits and sales to an investor. It provides the perfect ratio between profits and purchased goods. Demat account vs. trading account Functional difference: You can use a Demat account to hold securities in an electronic format. A trading account’s purpose is to allow the trading of stocks on the stock market. It means buying and selling shares on the exchange. Nature: A Demat account works similarly to a savings account. In the same way that a savings account holds money, a Demat account allows investors to have financial instruments in a dematerialized or electronic format. They are debited or credited as necessary. Trading accounts, on the other hand, function more like bank accounts. It is essential to have both a depository account and a trading account. The main purpose of a Demat account is to keep your trading account safe so you can buy and sell shares at any time without risk. Time measurement Trading accounts differ from depository accounts. Depository accounts hold shares and are measured as stocks at the end of each financial year. On the other hand, an account for trading transactions is a flow statement. Choosing the best trading account in India Several service providers are available on the market. So choosing the right one can be confusing. Before selecting your broker, you should consider the following: Searching for a platform with reasonable service charges based on transaction frequency is essential. If you are an equity trader, you can select a provider that suits your needs. The best trading accounts have high-tech platforms that let you trade whenever and wherever you want. To ensure smooth trading, select a reliable and efficient service provider. Charges for Opening an Online Trading Account In India, several stockbrokers provide trading accounts to their clients. In most cases, the expenses associated with a trading account are nominal. You can break the typical fee structure into several categories, such as: A one-time account-opening fee is required. Fees for account processing Annual maintenance fee. A trading account can be opened in various ways, depending on your chosen plan and associated account opening charges. The average account opening fee ranges from INR 0 to INR 975.00, depending on your plan type. Eligibility Criteria to Open an Online Trading Account To open an online trading account, you need to meet specific eligibility criteria, which makes the process straightforward. Age You must be 18 years of age. There is still the possibility of having a trading account if you are under 18, but you can’t buy or sell directly with a stockbroker. Besides, you can only sell securities that the minor can possess, such as IPOs, inheritances, gifts, corporate actions, etc. PAN card You must have a valid PAN card to apply. Demat and bank account You must have a functional depository and bank account. The unavailability of a Demat account can be sorted out by submitting either one of these documents: a cancelled check, a bank passbook, or the most recent 6-month bank statement. KYC documents You need to complete KYC for a trading account. Submitting the below documents will help you complete your KYC process: Income proof: If you wish to trade futures and options, you will need income proof. Providing either of these documents can prove your income: the latest six-month bank statement, the most recent three-month salary slip, and the most recent ITR statement. Identity and address proof: You can present several types of documentary proof: a PAN card, an Aadhaar card, a driving license, a passport, and a voter ID card. Alternatively, you can submit your most recent utility bill or bank statement for proof of address. Also, you’ll need your passport photo and signature on white paper. [B-02] Conclusion If you still need to start trading, there is always time for you to start. Piramal Finance can be a one-stop solution for all your financial needs. It is always necessary to look for wealth-creation opportunities to create wealth. Thanks for reading the information we provided regarding trading accounts. We hope that it has helped you and cleared your doubts. Comment if you agree.
08-11-2023
Read More