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Home Loan

Top Myths About Loans Against Property Busted

There’s no denying that loans can be incredibly useful tools, especially when you need money fast and don’t have time to save up for it. However, if you’re considering applying for a loan against your property, you’ll likely encounter some common myths about the process before you even start looking into it. In this blog, we will explore some of the most common loan against property myths to help you identify whether they’re accurate in your specific situation. Let’s get started! [B-01] What is a Loan Against Property? It is essentially a secured loan with the property as security. Low rates and flexible repayment terms characterize mortgage loans. To qualify, you must pledge your property with a bank or NBFC, receive a large amount of funds, and pay the monthly EMIs. Unlike a home or an education loan, a person may use a loan against property for various purposes, including medical bills, weddings, higher education, and business expansion. Myth #1: Property Cannot Be Used Once it is Pledged A common myth about pledging property is that it can’t be used or sold once it’s been pledged. It isn’t the case, as you may continue using the property without worrying about defaulting on the loan. The only caveat is that you’ll need to keep up with the payments outlined in your loan agreement. Myth #2 Loan Will Be Equal to the Total Property Value The loan to value (LTV) is never 100%. Depending on the estimated cost of the property you pledge as collateral, the lender will determine what percentage of the loan should be given. Many banks and lending institutions offer a home mortgage loan up to 70% to 80% of the property’s market value. Along with this, the age of the property, the property’s location, the building’s infrastructure, etc., are all considered. They also influence the LTV. Myth #3 Loan Against Property Cannot Be Used for Personal Expenses One of the most common misconceptions about loans against property is that they cannot be used for personal expenses. It is untrue, as you may use it for anything you would use a loan for. As long as you pay it back, you will have no problem receiving it from your lender. Myth #4 Prepayment of Loan Against Property is Expensive One of the most apparent misconceptions about a loan against property is that prepaying will be costly. The fact is, prepaying does not have to cost you anything. Some lenders charge a penalty for early payment, but some do not. Some, for example, waive penalties on specific terms (for example, no penalty if within two years). All in all, prepaying has far more benefits than negatives. So it would seem wise to talk with your lender before making assumptions about what might happen if you pay your mortgage early! Myth #5 It Is Necessary to Be in the High-Income Category to Avail Of LAP If you would like to go in for a loan against property and belong to the middle class, then there is good news: the rules differ for salaried people and those who are self-employed. Various lenders have different thresholds for what constitutes an acceptable salary for either. Maintaining low liabilities and not defaulting on all your current EMIs will help you gain the lender’s confidence, even if your net income isn’t high. The income group you belong to should not be a hassle until you can convince the lender about your ability to pay the loan back. Myth#6 LAP Has High-Interest Rates Another major misconception is that interest rates are higher for a loan against property. When you qualify for a loan by pledging your property, your credit score, income, and ability to repay it all play a role. Your EMI payment history and credit card payment history will be the only proof that can be considered. If your credit score is 750 or higher, the lender can trust you and offer you a LAP at a lower interest rate. In contrast, if your credit score is low, you can’t qualify for LAP at a lower rate of interest. You are not even in a position to negotiate. Myth#7 LAP is Not a Safe Option One common misconception is that a loan secured by real estate is not a secure option. Many people think that LAP can worsen your financial situation. The reality, however, is that LAP is one of the safest ways to borrow money because you get to keep your collateral. To avoid complications, you should only focus on paying the instalments on time. [B-02] Summing up It’s no surprise that LAP is quite popular. However, knowing the myths and realities about this type of financing is essential. The most common myth about a loan against property is that you can’t get a mortgage if there is a home equity line of credit. It simply isn’t true. For a more detailed analysis of the topic, refer to Common Myths About Loan Against Property – Piramal Finance.

08-11-2023

Know More

Things to Know About FPO: Who is Eligible for FPO?

Many investors all around the globe always wait for a big corporation to go public and issue an IPO. This way, they can hold the shares of a prospective business giant as early as possible. For example, when Tesla Inc. went public and issued an IPO in June 2010, its shares were priced at $17. Today, the price of each Tesla share is $178. But don’t be so hooked on the IPOs because they only come once for each company. Instead, you should focus on another offering— FPO. It can help you own the shares of any public company at a lower price with minimal risk. So, what exactly is an FPO, and why should you invest in it? Let’s find out! [B-01] What is a Follow-on Public Offer (FPO)? Follow-on Public Offer is made when a company that has already gone public decides to sell more of its stock to the general public. An FPO is typically offered by a company to raise additional capital to deal with debt, expand business operations, or for other reasons. To issue a follow-on public offering, the business must already be a public company that has gone through an IPO. Also, the shares offered during an FPO have to be available to the general public. It should not be limited to the current shareholders. Why Do Companies Make a Follow-on Public Offering? A public company offers a follow-on public offering for the following reasons: If a company has a large amount of debt, it might use a follow-on public offering to sell some of its shares to settle some or all of the debts. Too much debt can severely limit a company’s business operations. Sometimes, a company can fail to raise enough capital via an IPO to expand its business. To raise more capital, the company executives might decide to offer additional shares via an FPO. Maintaining a proper debt-to-value ratio is important for a corporation’s capital structure. A business may choose to achieve this by raising equity by issuing new shares to the public. A follow-on public offering allows a corporation to raise capital without incurring further debt. It can help the company have enough funds to start: 1) new projects, 2) go through a series of acquisitions, or 3) simply grow its business operation. Types of FPOs FPOs can be divided into two types depending on how the new shareholders gain ownership of their shares. 1. Diluted FPO The diluted FPO is a kind of follow-on public offering where a company issues new shares to the general public to raise funds. The total number of outstanding shares increases during this kind of public offering, slowly reducing the earnings per share. Capital raised through diluted FPO normally changes a business’s capital structure or decreases its corporate debt. 2. Non-diluted FPO A follow-on public offering will be called a non-diluted FPO if one or more existing shareholders of a company sell their shares to the general public. All the capital gained from the sale goes to the shareholders, and the company doesn’t get any share of it. So, the shareholders suffer almost no monetary loss. In most cases, these shareholders are the founders, board of directors, pre-IPO investors, or promoters of the company. Since the corporation doesn’t issue any new shares for this kind of follow-on public offer, the actual earnings per share value does not change. Non-diluted FPOs are also known as “second-market offerings.” What’s more, this type of FPO doesn’t benefit the company in any way; it just changes the ownership pattern of the shares. How to Apply for an FPO? The process to apply for the FPOs is quite similar to the IPO application process. You need to apply through the Retail Individual Investors allocation. To buy the shares offered in an FPO, you must be over 18 years old, have a PAN card, and possess a Demat account that helps investors trade stocks. You can now buy the shares of the companies that have follow-on public offerings on the stock exchange through a broker, or a bank’s ASBA (Application Supported by Blocked Account) services. Reasons to Invest in FPOs Here are a few reasons why you should invest in FPO shares: A company issuing follow-on public offering shares has already gone through an IPO. So, you will already have a better idea of the company’s business practices, management, etc. As an investor, you can benefit from also having data on the company’s 1) stock performance, 2) earning reports, and 3) a few more analytical data. If you engage in arbitrage trading, you can buy the FPO shares at a low price and sell them at a higher price later to earn profits. The price of FPO shares is usually on the lower side than the same company share that is being traded in the stock market. So, you can buy them now and sell them in the secondary market to earn an instant profit without taking any risk. The risk level of the FPO shares is significantly lower than the shares issued during an IPO. You can simply assess the risk factors of the issued share to determine if it is worthwhile to invest in the company. [B-02] Final Words As you can see, investing in an FPO is a lot less risky than investing in an IPO since you are already familiar with the company. Because the company has already gone through its IPO, you can easily check the company’s general financial report to see how it’s performing financially. You can also see how a corporation’s shares are performing in the stock market. This allows you to thoroughly investigate the company to get the most out of your FPO investments while reducing the risk factor. Do you want to learn more about corporate finances? Visit Piramal Finance to learn more about corporate financing and different business finance options.

08-11-2023

Home Loan

Everything You Need to Know About Fees and Charges Involved With a Mortgage Loan

Financial emergencies can arise at any moment. You can always apply for a mortgage loan on your house or property. A mortgage loan will give you a quick influx of cash to deal with any problems. However, these loans have hidden charges that most people do not know. This article will highlight the most popular fees charged with mortgage loans. [B-01] What are the most common charges on a mortgage loan? 1. Processing fees Lenders have many processes to complete between receiving your loan application and giving their final approval. The lender’s staff will carefully examine your application and supporting documents. They will do so to ensure its authenticity. The lender will charge you a processing fee in exchange for this service. Some lenders impose a flat rate, while others may charge you a percentage of the principal amount. For example, some lenders charge processing fees ranging from 1% to 10% of the loan’s principal. Other lenders can charge a processing fee of up to Rs. 3,000. To entice borrowers, some lenders will even forego processing fees. Even if you pay the processing fee, it does not mean your loan application will be approved. The processing fee is non-refundable. Hence, you will have to pay the charge regardless of whether the loan gets approved. 2. Stamp duty and registration fees You need to submit the original property documents, such as the registration document, to the lender. This document must be registered under state legislation. It is subject to stamp duty and registration fees. Stamp duty and registration fees range from 0.10 to 0.20% of the loan amount, depending on the buyer’s location. 3. Goods and service tax (GST) The bank provides you with various services in exchange for your mortgage loan. Hence, the transaction is subject to goods and service tax (GST). These can be processing fees, administrative fees, legal and technical assessment fees, etc. These are subject to GST, but the loan amount is exempt. The GST is 18%. 4. Technical/legal assessment fee for the property The bank hires a third-party agency for legal and technical inspections. They do this as part of their mortgage loan application process. The lender uses the legal review to see if there are any legal issues with the property or the title of the land. Lenders determine whether to lend money to a borrower by doing a technical analysis of the house. They do this to see if it is worth the asking price. The banks must pay for the services of external consultants for this process. Hence, the expense falls on the borrower. For this service, most banks will charge a set fee. The fee may range anywhere from Rs. 5,000 to Rs. 10,000. High-value properties often incur more charges since they demand extensive technical and legal reviews. As the situation may be, fees for external opinions from attorneys or technical valuers are paid on an actual cost basis. If you need legal or valuation advice, the bank advises you to pay the lawyer or expert directly. 5. Documentation charges Lenders may charge a documentation fee of between Rs. 500 and Rs. 2,000 to cover the costs of getting the necessary paperwork signed and the electronic clearing service (ECS) set up. An additional fee is required for the preparation of paperwork. After the deed is recorded at the sub-office, the registrar, you submit the original document to the bank. The branch then sends this document to a secure location, where it will remain for the loan tenure. This is a costly process that banks typically outsource to other organizations. Thus, the borrower will be responsible for this cost. 6. Fees for credit reports Your credit score will determine whether or not the lender grants you a mortgage loan. Lenders will request a statement of your credit from an external agency. This is subject to fees. Therefore, you will also be charged a flat rate for the credit reports. Credit report fees vary between Rs. 500 and Rs. 1000. 7. The conversion cost of a loan The Reserve Bank of India (RBI) routinely adjusts policy rates to ensure end-users may rest easy. But, banks have been slow to pass on the advantages of these reductions. While banks have been using the repo rate benchmark established by the RBI to price loans as of October 2019, a borrower whose loan is associated with the prior MCLR regime will continue to service his debt based on this benchmark alone. Worse, many senior citizens still make mortgage loan payments under the old base rate system. If you go to your bank to have your current loan matched to the new lending standard, the bank will do it, but it will charge a fee. The fee is called the conversion fee. The conversion fee can be between 0.25 and 1.5% of the principal outstanding plus tax. 8. Penalties for late monthly instalments You must pay your EMI on time. You will be charged a late fee if you miss the due date. Some financial institutions impose a flat fee for late payments. In contrast, others charge a percentage of the EMI. A late payment fee is usually around 1–2% of the EMI amount. 9. Loan prepayment penalties RBI has decided that people who take out a mortgage loan with a variable interest rate won’t have to pay a penalty if they pay it off early. However, this is not the case for homeowners who have locked in a fixed interest rate on their loans. The lender will impose a prepayment penalty on you if you decide to pay off your loan early. In some cases, this may be a fixed percentage of the total loan balance. The prepayment penalty is around 0.5–3% of the total outstanding amount. [B-02] Conclusion A mortgage loan can give you access to funds. This article has highlighted all the fees associated with a mortgage loan. There are numerous advantages to applying for a mortgage loan, such as shorter processing and documentation times, many repayment terms, the option to transfer the loan’s balance to another party, and the ability to make additional principal payments or partial prepayments. Looking for instant funds? Apply for a quick personal loan with Piramal Finance now.

08-11-2023

Personal Loan

Top Factors that Affect Your Personal Loan Amount

Introduction: A personal loan is an amount of money borrowed from a bank or financial institution to meet emergencies or unexpected needs. An instant personal loan is a great option to arrange funds for weddings, holidays, medical emergencies, higher education, etc. It is to be noted that a personal loan is an unsecured loan, which means no collateral is needed to acquire funds. The amount of personal loan you need is influenced by a lot of external factors, like your income and employment status, credit rating, history of defaults, any existing debts, and your relationship with the lender. [B-01] Top Factors That Affect Your Personal Loan Amount: Income: Your income is the primary component that determines your loan amount. It is a widely acknowledged fact that those with a large disposable income have a higher ability to pay back loans than those with less income. It is common practice in the lending market that people who have regular disposable incomes tend to get lower rates of interest for their loans. This may have a different effect on people with lower incomes. Employment Status: The lender may take into consideration the borrower’s employment status, as this may influence the probability of repayment. If the borrower has a secure job with a stable income, he may be able to get a higher loan amount sanctioned. Credit Score: Your credit score is a big factor in whether or not a lender will give you a personal loan. It also affects how much you can borrow and how much you’ll pay in interest on an instant personal loan. You could be deemed a risky borrower, and your loan amount may be cut if your credit score is lower than 650. Keep your credit rating in good standing and make your payments promptly for any debts that you have. Limit the number of credit applications you submit, since this could cause a drastic decrease in your credit rating. Instead, focus on improving your credit line on existing accounts, as that will prove you’re able to pay back a loan. History of Defaults: If the borrower has a previous history of defaults, the lender may be skeptical about offering a higher loan amount. So if you are hoping to borrow a bigger loan amount, you must maintain a sound credit history. Relationship with the Lender: Lenders tend to be more accommodating regarding the amount of loan and interest they charge a reputable customer. Because of their long-standing and reliable relationship with each of their customers, they have a high degree of interdependence. The trust that they build doesn’t happen in a single day and requires an extended period of time and responsible behavior by the customers of the bank to maintain their loyalty. When lenders from institutions or individuals recognize your loyalty to them, they’re much more likely to give you an offer that is more feasible than the one new customers receive. Loan Interest Rate: The term “interest” refers to the amount that is incurred when borrowing money, which is shown in percentages of the amount of the loan. If, for instance, you take out a loan at 10 percent of the loan’s worth, the loan will be due to the lender or the bank every year, in addition to the principal amount. Naturally, a high interest rate means that the loan you are taking out will have a much higher APR than if you were eligible for a low-interest loan. The interest rates can vary greatly depending on your circumstances as well as other aspects, which is why you must consider your options carefully. Loan Amount: The interest rate is calculated as a percentage of the loan’s amount. The more you borrow, the more you pay in interest. Because you must pay back both interest and principal, a higher amount can result in greater monthly installments. Therefore, it is recommended that you only borrow the amount you require and try to avoid borrowing more than what is needed. Repayment Period: This is the time it will take to repay your loan and can be affected by your monthly payment and the total costs. You might be able to spread your repayment plan over a longer period of time to reduce your monthly payments. The loan might appear to be more affordable; however, if you decide to go with this approach, you’ll be paying more. How to Improve Your Allowable Personal Loan Amount To increase the credit limit for personal loans, we have a few suggestions: Get Your Credit Score Up: If your credit score is not high, you can work on improving it by decreasing the amount of debt you have, paying your bills promptly, and disputing any errors that appear on your credit file. Improve your income: If you can, take a job that pays more or work extra hours. The more you earn, the greater your chance to receive an appropriate loan to meet your requirements. Reduce Your Debt: The lower the amount of debt you have to pay off, the more you’ll be able to take out. Think about loan consolidation using personal loans to ease the burden of debt repayment with less interest. This all helps increase your instant personal loan limit to allow you to get the funds you need to accomplish whatever you want, such as the consolidation of your debt, making a major purchase, or for any other reason. [B-02] The Bottom Line Now that you know all the things that can change the amount of your personal loan, you know how to change the amount of your instant personal loan. Working on your credit score, making more money, and paying down your debt may be important steps to take if you want to get a bigger personal loan.

08-11-2023

Personal Loan

Top 5 Mistakes to Avoid When Considering a Debt Consolidation Loan

A high amount of debt can be overwhelming, and you often wish to pay it off quickly. One way to do that is by consolidating all the debt and taking a personal loan to pay off all the obligations. You can combine all your high-interest loans and take a personal loan on low interest to repay them. Instead of dealing with numerous monthly bills, a debt consolidation loan can be your single repayment plan. While this sounds like a smart plan, it can often go wrong. If you are not careful, a lot of mistakes can turn out to be costly. This is why we have compiled a list of mistakes you can avoid when considering a debt consolidation loan. [B-01] Unable to Find the Cause of Debt Taking a debt consolidation loan may look like the right option. But if you cannot identify its root cause, the problem will persist. The problems could be a bad budget habit, overspending, overcharging credit cards, etc. These are the common ways to approach the problem: Go through your monthly credit card bills and statements and figure out your spending patterns. You can identify areas where you are spending excessively and accumulating debt. Once you have tracked your spending, create a budget to reduce your debt. Follow the budget strictly to avoid further debts. Choosing Longer Tenures Longer tenures do reduce monthly EMIs, but the repayment takes a lot of time. If you choose a longer tenure for debt consolidation, you will not be debt-free any time soon. This also means you would be paying personal loan interest for a long period of time. For example, if you were about to pay off your debts in two years. But the debt consolidation loan you have taken has a tenure of five years. Then, you will end up paying more in total interest costs. Thus, take a debt consolidation loan with a shorter term for your debts and focus on monthly payments alone. This will help reduce personal loan interest expenses and the overall debt burden. Spending Impulsively and Getting Into More Debt Consolidating your debts saves you money, and if you are not careful this time around, you might end up in debt again. This is the time when you need to stop taking out more credit and resist all your spending impulses. Avoid or limit using your credit card until the debt is cleared. You can also lower the credit limit. It is not recommended to close the credit card as it affects the credit score. Not Having a Repayment Plan Make a proper repayment plan before taking a personal loan to pay off your debts. If you don’t have a plan, you might end up in debt again. You can consider these points while coming up with a plan of your own. Determine what percentage of your income you can allocate towards debt repayment. Make a budget and follow it religiously. Whenever you get a bonus or extra money, you can use it to repay your debts. Cut down on needless spending. If you have the time and resources, find ways to increase your income. Not Setting Up an Emergency Fund What most people do while paying off their debts is focus on a single goal. They forget the importance of savings. Getting rid of debt is a good thing, but you can’t just ignore the savings. An emergency can occur at any time. And if at that time you don’t have any money saved, you might end up taking on more debt. Hence, you always need to be prepared, and the best way to do it is with an emergency fund. Put a chunk of your money at regular intervals towards an emergency fund. You can start small but consistently. Save at least 4 to 6 months’ worth of living expenses. Not Seeking Professional Help There are multiple resources available online that can help you make a solid plan to pay off all your debts. But at times, you might remain unaware of the minor defects it contains. So, it is best to seek professional help. They can tell you about new products or practices that can suit your circumstances better. There are many institutions and agencies set up to help you with debt consolidation. [B-02] Conclusion Consolidating all your debts into one and finishing it off with a debt repayment loan is a concrete plan. However, you need to be responsible before you implement it. Look around for options and choose the option with a low personal loan interest rate. Make sure the tenures are not too long, as this increases the interest costs. Control your spending so that you keep your debts at bay. And whenever in need, always seek professional help. They can provide you with the best solutions based on your situation. You can reach out to us at Piramal Finance, where our experts will solve your financial queries.

08-11-2023

Tips & Advice

Top 5 Commodities to Invest in for Long-Term Goals

Investing in commodities has been done for hundreds of years because it helps diversify your portfolio and protects your wealth from inflation and price changes. This blog will discuss the top five commodities to invest in for the future. We will also discuss whether trading commodities is a good way to get rich over time. [B-01] What do you mean by investing in commodities? Trading in commodities existed before stocks, bonds, and other investment options. But today, commodity investments trade in specialized stock marketplaces called commodity exchanges. Millions of people put money into commodity investments daily. You can invest in real goods in the local market or buy shares or exchange-traded funds (ETFs) of companies listed on the stock market. What is the benefit of investing in commodities? Investing in commodity trading may protect your money from inflation. It’s one of its many benefits. When inflation is high, the prices of most goods tend to go up. Investing in commodities can be a good way to make money. Because of this, there is a strong global demand for investing in commodity futures, even though prices are sensitive to currency exchange rates, interest rates, and changes in the market. Stocks in companies that deal with commodities are worth more than before. So investors are more likely to want to buy it. Why choose commodities for investment? There are a variety of reasons why you could decide to include commodities in your portfolio: The value of a good is often set by supply and demand, which is a variable you can keep an eye on to predict its rise and fall and decide whether to buy or sell. Buying and selling, futures contracts, and CFDs are the most common ways to invest in commodities. Certain commodities are more likely to hold their value independent of external causes in uncertain and chaotic times. As a result, they are often a safer investment. Prices for commodities often go up and down by a lot, giving you the chance to make a lot of money. Investing in commodities may be a brilliant strategy to diversify your portfolio. Five commodities to invest in for long-term goals Gold No matter what is going on in the market, investing in gold as a commodity always pays off. Gold is one of the world’s oldest and best-known ways to make money. Even when the market fluctuates, gold still gives high returns. Its cost is determined by how many people want it. So, if more people want it, its price will go up, too. You can buy gold by buying gold bars, coins, or jewelry. It’s also great for investors who want to add more currencies to their market portfolio. Silver Silver is one of the most popular goods, right after gold. Silver is a great investment because it has been used as money and a way to store wealth for a long time. Silver is also used to make tools and jewelry that are very valuable. There are several ways to invest in silver, such as with silver options, silver futures, and silver exchange-traded funds (ETFs). Platinum Platinum is one of the most valuable metals. It is often used in high-end jewelry, cars, and other products. It is also a valuable commodity that you can trade on the open market. Platinum’s price changes a lot, but many financial experts think it’s a good long-term investment. Investors think the price of platinum will keep going up because it is hard to find. So, investing in platinum can help you reach your long-term financial goals. Crude Oil Crude oil is the most liquid commodity on the market, making it easy to trade and invest. But it is also one of the riskiest and most unstable commodities. Since the COVID-19 pandemic, crude oil prices have been increasing. The supply of crude oil is much higher than the demand, so if the demand for crude oil goes up, the prices will go up too. The price of crude oil can also change based on how much is produced and used worldwide. To make a good investment in crude oil, you need to know about commodity and capital markets. Stocks that make commodities One of the best things a person can do with their money is put it into a business that produces things. These businesses have low overhead costs and can sell many of their products to make a lot of money. Because of this, they are good places to put your money. The world economy and the forces of supply and demand also affect the prices of goods. Due to this, the prices of stocks that provide goods and services change more than those of other stocks. So, people who want to invest in goods for the future should be careful. Things to keep in mind before investing in a specific commodity Prices of goods tend to change because they go through cycles and because supply and demand affect each other. Unexpected things like wars, pandemics, and natural disasters can change the prices of goods. Trading commodities is not the same as trading stocks. Investors may benefit from the fact that the commodities market is open longer than the stock market. To stay out of trouble, monitoring cash flow is important. Investing requires a lot of careful thought and research. [B-02] Conclusion For long-term investors, investing in commodities can be a great way to reduce the risk of inflation and price changes. But it’s vital to do research and talk to a financial advisor. It will help you decide if trading commodities is good for you. Visit Piramal Finance for more blogs like this one. You may also take a look at the products and services they offer.

08-11-2023

Personal Loan

Top 5 Ways You Can Save Money Through a Personal Loan

What is a Personal Loan? A personal loan is a fund you take out to fulfill big expenses. These loans do not require you to provide any security. It usually has low-interest rates. Also, it has fewer monthly payments. You can use the personal loan for various purposes. For example, you can use it for weddings, medical expenses, or education. Otherwise, you can use them to buy any major household appliance or pay off previous loans. With a personal loan, you have a fixed monthly amount you need to pay. It also comes with a fixed tenure. [B-01] How Does a Personal Loan Work? Once you qualify for a personal loan, you get the amount directly in your bank account. When you get the money, your repayment starts after 30 days. If the loan has a fixed rate, then the monthly instalments will be the same. But if your loan is a variable one, the installments will change. How to Choose the Best Personal Loan in India? It is easy to get a personal loan today, Currently, many banks and organizations offer such loans. So, it is tough to choose one of them. Here are a few tips to help you choose the best personal loan in India. Look at the interest rates: When getting a personal loan, keep an eye on the interest rate. Choose an affordable interest rate. The rates usually differ among banks. So, it is best to do your research first. Know about the extra charges: Do not blindly go for personal loans with a low-interest rate. Check the loan details for any hidden processing or other charges. For instance, there can be penal charges and bounce charges. While some may offer low-interest rates, you may end up paying more than you should. Read the loan documentation: We recommend choosing a personal loan with the least amount of documentation. If you need money urgently, you will not have time to fill out many forms. Also, read the documentation carefully before proceeding. Personal Loan: The Secrets to Saving Money Almost all of us have been in situations where we needed money urgently. A personal loan is the best way to get funds instantly. A huge number of people use personal loans to fulfill their expenses. A personal loan does not have huge interest rates. Also. It also helps to improve your credit score. Below is a list of how personal loans can help you save money. Allows you to fulfill huge expenses We all come across situations where we need money. A personal loan is not only quick but easy to apply too. You also have the option of paying back smaller amounts. This is a cheaper option than using credit cards. Usually, credit cards have a huge rate of interest. So, choosing a personal loan lets you save money in the long run. Prevent hidden charges Credit card owners often claim that they are charged additional fees. People usually do not know about these charges. So, they end up paying more than required. Here is where a personal loan fits well. If you have a large expense, a personal loan will be more beneficial. Read the documentation carefully to learn about all the added charges. Boosts your credit score For example, you have a huge credit card bill. Your lender will see you as a high-risk borrower. Here is where a personal loan is helpful. When you take a personal loan, you get tenure to repay it. Once you repay the full amount, you can boost your credit score. Also, you need to ensure that you make monthly payments. This will help you in the long run. Flexible repayment Another way to save money is through flexible repayment options. When getting a personal loan, you can choose the repayment option based on your income. Also, you can compare various loan options. This will allow you to save tons of money. Tax benefits Personal loans do not come with any tax benefits. But if you use it for the renovation of your home, you can claim tax benefits. In such a case, you can claim a 2 lakh tax deduction under Section 24B. But to claim this, you will need proper documents and receipts. So here are the top 5 ways you can save money using a personal loan. [B-02] The Bottom Line A personal loan is quick money with the least documentation. You have several options when it comes to choosing the term and monthly EMIs. They are helpful to cover a wide range of expenses. Unfortunately, people end up choosing the wrong loans. This makes them pay more than expected, thus losing money. But now you know how to play it safe with personal loans. Now you, too, can save money using these loans. If you would like to know more, visit the Piramal Finance website. They are home to some amazing finance-related content.

08-11-2023

Personal Loan

Top 5 Benefits of Using a Personal Loan EMI Calculator

Personal loans have increased in popularity as an easy and reliable way to get access to much-needed funds. This is the reason that lenders have seen rapid growth in personal loans being issued. The eligibility requirements are not too difficult to meet, and the funds are disbursed in a short amount of time. A loan is a debt that can impact your lifestyle and future savings. As a result, before applying for a loan, you should calculate personal loan EMIs by using an online personal loan EMI calculator. Personal loan EMI calculators are intended to help you calculate personal loan EMIs so that you will know how much to repay every month and how these repayments will affect your monthly budget. [B-01] 5 Benefits of Using an Online Personal Loan EMI Calculator These are the top 5 reasons to use an online personal loan EMI calculator to calculate personal loan EMIs: Helps You Make the Best Choice There will be many personal loan choices available to you. An online personal loan EMI calculator will help you make the best choice in terms of repayments and other factors. Given how simple it is to use an online personal loan EMI calculator, people can compare multiple loan offers or loan terms. You can also review the repayment details for many loan term options until you find one that fits your needs. If you know the lending rate provided, you can calculate personal loan EMIs and the interest cost and then narrow down the choices based on pricing. Easy to Use One of the best reasons to use an online personal loan EMI calculator is its simplicity. It is easy to use and guides you through each step. If a lender wants to help the borrower thoroughly understand how to calculate personal loan EMIs and properly plan their repayments, then the online personal loan EMI calculator is the tool that will help the borrower. To use the EMI calculator, go to the lender’s website. Enter the amount you want, the chosen rate, and the repayment time (which can vary from one to five years). The online personal loan EMI calculator will provide the results instantly. Some lenders also provide on-call or in-person support to help borrowers calculate personal loan EMIs. Saves Your Time Another good reason to use an online personal loan EMI calculator is that it provides quick and precise answers. The tool to calculate personal loan EMIs is available online, saving you the time and effort of going to the bank, standing in line, and waiting for your loan EMI to be calculated. You can also use the online personal loan EMI calculator from a convenient location such as your home, office, or another place where you are researching details on personal loan repayments. With a device and internet access, you can calculate personal loan EMIs and prepare your loan application. Accurate Results The accuracy of the online personal loan EMI calculator‘s results is one of the major benefits of using the tool. When calculating EMIs manually, there is always the chance of incorrect data when determining how much is due. With the online personal loan EMI calculator, you do not need to use the pen-and-paper method and risk miscalculating the due amount. It is also not necessary to manually test multiple rate pairings, desired loan rates, and loan tenures. The algorithm also allows you to adjust the data and try out different loan options without negatively impacting your credit score. Avoids Complex and Confusing Calculations The online personal loan EMI calculator has a user-friendly interface that assists the borrower by avoiding complex calculations and sums. To calculate personal loan EMIs, all that is needed is to enter the desired loan balance, personal loan rate, and loan time. The tool removes the excess calculations and gives you the data you need to determine what your monthly repayments will be. Using the manual method or a tool on a spreadsheet requires additional work, such as converting data to fit the criteria of the equations in use. The online personal loan EMI calculator avoids calculations that are difficult to understand. How to Calculate Personal Loan EMIs Using the Calculator To use the online personal loan EMI calculator, enter the following data: The amount you want to borrow as a loan. This is the amount of money that the lender will lend you. The rate that the lender is charging. This is the portion of the main amount that you will pay the bank. The loan term for which the credit account will be active. This is the time that you will take to repay the loans. Before applying for a loan, using a tool to calculate personal loan EMIs is a good place to start. It simplifies the process and helps you understand the loan’s multiple features. All you have to do is enter the variables and select the loan that best meets your needs. [B-02] Conclusion Despite having higher rates than other loans, such as a loan against property, many people choose personal loans since these do not require collateral and the funds are issued in a short amount of time. People find online personal loan EMI calculators useful compared to other, more complicated, ways of calculating what will be owed to the lender. It is understood that while loans are helpful, extra care should be taken to plan repayments well. Easy-to-use tools to calculate personal loan EMIs allow the lender to understand different aspects of the loan, including the loan amount, repayment ability, rates, loan term, and more. Visit Piramal Finance to learn more about how to calculate personal loan EMIs and read other articles related to this topic and more!

08-11-2023

Tips & Advice

Top Reasons why ELSS Should Be Your First Mutual Fund to Invest In

An equity-linked savings scheme, or ELSS fund, is one kind of mutual fund. People who invest in these funds can apply for tax deductions under Section 80C of the Income Tax Act of 1961. The best part of investing in an ELSS mutual fund is that you can claim a tax reduction of up to Rs. 1,50,000. Hence you can save up to Rs. 46,800 in a year in taxes alone. An ELSS investment also comes with a lock-in period of just three years. This is the shortest for all mutual funds among section 80C investments. The ELSS mutual funds mostly consist of equities, but they also look at fixed-income securities. [B-01] Features of an ELSS Investment An ELSS fund is an equity-based scheme. It comes with a mandatory lock-in period of three years. Taxpayers have shifted in recent years to lean toward ELSS funds due to their tax benefits. This is mostly due to the tax exemption of Rs. 1,50,000 that is offered by ELSS investments. Also, the income earned under this scheme will be considered as Long Term Capital Gain (LTCG) and will be taxed at 10% if the income is above Rs. 1 lakh. Some of the features of an ELSS investment are as follows: There is no maximum duration for an investment. But there is a mandatory lock-in period of three years. The exemption of tax on the invested amount under Section 80C of the Income Tax Act. The funds are invested in equity in a very diverse manner. They are invested in themes, sectors, and market capitalizations. A minimum of 80% of the total investment collection is invested in equity and equity-related instruments. Why You Should Start Investing in ELSS Mutual Funds The wide range of benefits offered by ELSS funds include: – Diverse investments – ELSS funds invest in a diverse group of companies. This includes small capital, large capital, and various other sectors. This element of diverse investment adds a lot to your portfolio. The benefit of SIPs – SIP is a favorite method as it allows investors to invest small amounts. This is better than investing a large amount in one go, as you can avail tax benefits and create wealth. Minimum amount – You can invest in ELSS funds with as little as Rs. 500. You don’t have to collect large amounts of money before you start investing. Who Should Invest in ELSS Funds An ELSS investment is great for anyone saving up to Rs. 46,800 a year on tax exemption. It is recommended for people willing to take a certain amount of risk. They also have to be able to continue to stay invested up to a mandatory lock-in period of three years. To get the best benefits from an ELSS fund, it is better to stay invested for at least 5 years. Five years allows your investment to go through the complete market cycle and give you the best returns. It is also suitable for young investors because of the very low initial capital required. An ELSS fund is also great for beginner investors if they come in with a long-term plan. Young investors can also benefit from the time they have at hand. This allows them to take advantage of compounding and enjoy high returns. How to Find the Best ELSS Mutual Funds Fund history– Consistency over the past 5 years is important in choosing an ELSS fund. The quality of stocks in a fund’s portfolio reflects its standard. Fund returns– Make sure that the fund has been consistent over the past years by comparing its performance with that of its peers. This information helps you pick from the recommended funds. But, it is not necessary that the past performance alone can speak for the fund’s future performance. The future mostly depends on market movements. Financial ratios – Criteria such as standard deviation, Sharpe ratio, alpha, and beta must be looked at to analyze a fund. Funds with a lower standard deviation and beta are preferred. Also, funds with a higher Sharpe ratio offer higher returns for the risk taken. Expense ratio – This tells you how much of your investment goes towards managing your fund. A higher take-home return comes from a lower expense ratio. So, if you have to compare two similar funds, choose the one that has a lower expense ratio. What Makes ELSS Funds the Best Funds? Tax repayment and wealth growth – The ELSS fund is the only investment option that provides tax deductions under Section 80C of the Income Tax Act of 1961. An ELSS investment also aids in wealth growth. Excellent returns can be earned by staying invested for at least five years. Shortest lock-in period – Compared to other 80C options. ELSS has the shortest lock-in period of three years. Inflation-beating returns – ELSS mutual funds have the potential to offer inflation-beating returns. This makes ELSS stand out from other tax-saving options. Money management – ‘Fund managers’ are financial experts that handle mutual funds. This means that your money is managed by individuals who have great portfolio management skills. Their team of market researchers and analysts, picks the best-performing securities that benefit investors. Monthly investment strategy – You can invest in an ELSS mutual fund on a monthly basis with as little as Rs. 500. There is no upper limit to how much you can invest. [B-02] Conclusion An ELSS mutual fund is the best choice for anyone looking to invest in mutual funds. Some of the best ELSS funds can help you not only save tax but also enjoy equity exposure in a controlled manner. For more financial help, reach out to the finance experts at Piramal Finance. They offer a wide range of blogs and articles on various finance topics to help improve your skills.

08-11-2023