More articles for you

Your one stop place for everything related to finance and lending

Tax Savings

Old Vs New Tax Regime – Which One Should You Choose?

The tax brackets for both the pre-2020 system and the post-2020 system were left unchanged by the Union Budget of 2022. Now, how can a citizen choose between the old and new tax systems? A thorough evaluation of the taxpayer’s tax burden and other considerations is necessary for settling on the most advantageous regime. Before settling on any tax regime, taxpayers should think about a few key factors. There is uncertainty about which tax system is best for you because of the introduction of a new one. You are a taxpayer. So you may have trouble deciding which regime is a better option for your income situation. An inquiry comes in this context: how do you make a living? Do you have a regular 9 to 5 job, do you manage your own business, or do you work in some other kind of profession? Many of you are probably attempting to figure out how much of a difference there is between the old tax and the new tax because of the changes in current sections. There is no one-size-fits-all strategy for taxpayers. But this article will help you know which of the new and old tax regimes is more advantageous for your particular financial situation. [B-01] Advantages of the New Tax Regime Expense reductions Income beyond INR 15,000,000 is subject to the highest tax rate under the new regime’s seven tax brackets. This ranges from 0% to 30%. Incomes over INR 10 lakh were subject to the highest tax rate of 30 per cent under the old system. However, under the new system, there is just one tax bracket of 0 per cent. The rates under the new tax regime are more lenient than those under the previous, old regime. As most exemptions are unavailable, there is less paperwork involved and filing taxes is easier. An investor might not like being forced to invest in the required schemes for the full term Every taxpayer will be given the same treatment under the new system. Most investments do have a lock-in time, before which they can’t be withdrawn. This can be useful for those taxpayer groups that do not have the defined modes of investment. Mutual funds, open-ended schemes, and deposits offer them attractive yields and withdrawal flexibility. Liquidity Increase The lower tax rate will result in greater money for the person, who is currently unable to invest in the schemes for various reasons. Flexible investment options Under the current tax system, investments can be made specifically for the investor as tax deductions. This can be done only if the taxpayer invests in the plans and the manner prescribed by the Act. So the taxpayer is restricted to making investments in just the approved programmes. The new method gives taxpayers more freedom to customise their investments to meet their individual needs. The disadvantage of the New Tax Regime: The new tax structure does not permit the taxpayer to make use of certainly available deductions. Perks Of The Old Tax Regime Over time, the old tax regime instilled a culture of savings in individuals. This was done by requiring them to make deposits in tax-saving schemes for making money for major life events like marriage, schooling, buying a home, medical expenses, and so on. Disadvantages of the Old Tax Regime: Investments qualify for tax breaks under the former regime, and a lock-in period of three to five years is fixed for most of these schemes. People who would rather have access to cash and invest in securities with a more fluid and open-ended tenure may find this tax strategy less than ideal. The investor is limited to the defined schemes. These are generally low-risk and may not give big returns during the investing period, even though they may be doing well. How to decide between the old and new tax structures? There are two key distinctions between the old and current tax systems. First, it offers more progressive tax brackets at reduced rates. Secondly, if the new tax system is selected, taxpayers will not be able to make use of any of the main exemptions or deductions that are now available under the old tax regime. Therefore, if the savings from the lower rates exceed the value of the deductions under the former tax regime, a taxpayer may choose the new tax system. The modification of the slab rates is the main difference between the previous and current tax systems. In India, taxpayers have to pay income tax according to the tax slab system into which they are classified. The tax slab is designed as per the average income of a person. Taxpayers with a higher income will be paying more taxes. There is a vital change in the previous and new tax regimes and the potential to reduce the tax. The old tax system allowed for many deductions. But the current system doesn’t. The former tax system allowed taxpayers to use exemptions and deductions to lower their taxable income. The new system offers them none. By saving or spending on particular goods, taxpayers might qualify for a deduction that lowers their taxable income. Which tax system is better? After taking into account any available exemptions, a taxpayer can know which tax regime is preferable by calculating their income tax liability using the standard tax rates, i.e., the old tax slab rates. If a taxpayer does not wish to invest exclusively in qualified schemes but would like more options, they may want to investigate the new tax system. Before deciding whether to stick with the current system or switch to the new one, it’s wise to evaluate and analyze your situation under both options to discover which one better suits your needs. [B-02] The bottom line If you get a salary, you have the option of making this selection every year, including when you file your tax returns. Things get more complicated for those who have business revenue; if you choose the new tax regime, you can only revert to the old system once. We hope you have got a brief idea about the old vs new tax regime. Visit Piramal for more such articles. Our experts have got answers to your every question.
08-11-2023
Read More
Tax Savings

Difference between Old Tax Regime and New Tax Regime

All the salaried people ever since their joining, tend to look for ways to save their hard-earned money. During the filing of their annual Income Tax, all you need to do are to declare some of their eligible investments under the category of 80C or similar. You then will be able to avail yourself of some exemptions and deductions. How you do the declarations, depends on the tax regime. Till 2020, all the taxpayers were filing under the old tax regime. Afterthe new tax regime was effective from Financial Year 2020-2021, you are given the choice to file your Income Tax according to your choice. [B-01] What is the Old Tax Regime? The old tax regime was in effect since the Income Tax Act of 1961. It allowed an individual to claim for saving money on exemptions, deductions, and allowances on 70 different schemes. You can declare for exemptions by spending on House Rent Allowance, Leave Travel Allowance, Food Coupons or Vouchers, Mobile and Internet service, Standard Deductions of Rs 50,000, Uniform Allowance, Company Lease Car, and Leave encashment, to name a few. You can also opt to save for your future by declaring for deductions on PPF (Public Provident Fund), ELSS (Equity Linked Saving Scheme), EPF (Employee Provident Fund), Life and Health Insurance Premium, Interest and Premiums on Home Loans, Children Tuition Fees, Investment in NPS (National Pension Scheme), Saving Account Interest and many more. If you can strategize and declare accordingly, you can save your taxable income by quite some amount. Just by declaring under section 80C, you are entitled to save your income by Rs 1,50,000. However, the tax slabs were on the higher side. In the Union Budget 2020, a new regime tax slab was introduced in which tax benefit is not applicable. All we need to know about New Tax Regime The New Tax Regime was introduced by Finance Minister Nirmala Sitharaman on 1st February 2020. In this tax regime, you can declare your expenditures based on the new regime tax slab. The bottom line is, if you earn more, you have to pay more. Some important exemptions which are retained are Income from Life Insurance, Agricultural Income, Deduction on Rent, Retrenchment compensation, leave encashment on retirement, VRS amount up to Rs 5 lakhs, Death cum retirement benefits and Monetary benefits as Scholarships. Senior Citizens above 75 years of age are exempted from Income Tax filing. Comparison between the Old and New Tax Regime Let us see the difference between the old and new regime tax slab: Annual IncomeOld Tax RegimeNew Tax RegimeUnder Rs 2.5 lakhsNilNilRs 2.5 – 5 lakhs5%5%Rs 5 – 7.5 lakhs20%10%Rs 7.5 – 10 lakhs15%Rs 10 – Rs 12.5 lakhs30%20%Rs 12.5 – 15 lakhs25%Rs 15 lakhs and above30% From the table, it can be easily deduced that for every income group, according to the new regime tax slab, there is a certain interest rate that is payable by the individuals. Whereas in the previous tax regime, the interest slab catered to a wider range. Above Rs 15 lakhs, both the new and tax regime yield the same amount liable for tax. INCOMEOLD REGIMENEW REGIMETax Interest RateTaxTax Interest RateTax Under Rs 2.5 lakhs0000Rs 2.5 – 5 lakhs5%Rs 12,5005%RS 12,500Rs 5 – 7.5 lakhs20%Rs 50,00010%Rs 25,000Rs 7.5 – 10 lakhs20%Rs 50,00015%Rs 37,500Rs 10 – Rs 12.5 lakhs30%Rs 75,00020%Rs 50,000Rs 12.5 – 15 lakhs0025%Rs 62,500 Sum Rs 1,87,500 Rs 1,87,500 Health & Education Cess4%Rs 7,5004%Rs 7,500 Tax payable Rs 1,95,000 Rs 1,95,000 Let us check the Annual Income of Rs 15 lakhs and above with maximum exemption to check the taxable amount according to the old Tax Regime. Annual IncomeRs 15,00,000 Exemptions under section80 CRs 1,50,00080 CCD (1B)Rs 50,00080 DRs 75,000 Taxable IncomeRs 12,25,000 Which tax regime is beneficial? No one can truly say which tax regime is beneficial. In the older tax regime, you are required to invest so that you can claim tax benefits. In the newer tax regime, your take-home salary is more as there are limited tax benefits on long-term investment. Hence, there is also no need to provide documentation as proof of the investment. For the newer generation, who just started their career, the newer tax slab is beneficial for them as they do not have much savings either. The high-income earners find the older tax slab beneficial. Taxpayers belonging to the middle class have benefitted the most from the newer slab. A comparative study of both models is suggested as you cannot toggle between the old tax regime and the newer tax regime. Your decision will be frozen for the whole financial year. In the newer future, a simpler tax income system will be implemented. [B-02] Conclusion In case you are facing a cash crunch, you can avail personal loan too for your investment. Do check out the personal loan webpage (https://www.piramalfinance.com/personal-loan) of Piramal Finance. They provide quick loans starting at Rs 1 lakh at minimal documentation. Choose flexible EMI at an interest rate of 12.99% and above at a repayment tenure ranging from 12 months to 60 months. Do you know the best part; you are eligible for a personal loan above Rs 10 lakhs in case you make your working spouse or blood relative a co-applicant. Do check the Piramal Finance website for more such products and services.
08-11-2023
Read More
Personal Loan

8 Reasons for getting a Personal Loan in India 

You may often need money when you are least ready for it. In times of financial trouble, personal loans can be a lifesaver. They are available immediately and fall under unsecured loans, meaning they do not require collateral and can be repaid quickly. In the past, borrowing money required a visit to the borrower, but now everything can be done online. Personal loans cover all the financial needs of a person. You may decide to look for a loan due to several factors. Taking a personal loan in India is simple and can be done for any need. [B-01] Even though there are many uses for personal loans, some reasons are popular and almost universal. Let’s talk about some of the most common reasons to get a personal loan in India. 1. Easy application and approval In the past, Indian lenders and banks took too long to approve personal loans. One had to fill out a lot of paperwork and wait for days, and even then, there was no guarantee that the instant loan application would be accepted or that the funds would be distributed in India on time. However, today’s online lenders make it possible to apply for a personal loan in India and get it in just a few hours. You can quickly apply for a loan online by immediately visiting the website and uploading your documents in minutes. In addition, the loan amount is deposited into your account once your application is approved. The entire process is done online, from applying for a loan to getting the money. This way, you can apply for a loan and get your money without having to talk to your lender. You will also be able to meet your urgent requirements quickly with fast loan disbursal. 2. Medical Emergencies Medical emergencies are unpredictable and can put immense financial strain on individuals and families. From sudden hospitalizations and surgeries to critical treatments and post-operative care, the costs can escalate quickly. In such situations, a personal loan serves as a quick and hassle-free solution, ensuring you get the necessary funds without depleting your savings. With the rising cost of healthcare in India, having immediate access to funds can be a lifesaver. Many financial institutions and NBFCs offer personal loans specifically for medical emergencies, covering everything from doctor consultations and diagnostic tests to ICU charges and expensive medications. If you require instant financial assistance, you can opt for an online instant loan, which offers quick disbursal—generally within a few hours. 3. No usage restrictions The primary advantage of personal loans is that you can use them for any purpose. On the other hand, home and car loans can only be used for a specific purpose. In this way, they are not similar to a home loan, which you must use to purchase real estate, and a vehicle loan, which you must use to buy a vehicle. You can use individual credit to meet any financial need. You can use personal loan in India to pay for things like vacation expenses, house renovations, new furniture and appliances, wedding expenses, unexpected health care expenses, education expenses, buying a used car, etc. 4. No Collateral One of the main reasons why personal loan in India is becoming more popular in this country is that you can obtain them without any collateral. Since individual loans are unstable advances, you do not have to give any security, guarantee, or insurers to get a loan confirmation. When approving a personal loan in India, the only factor considered is your ability to repay the loan within the stipulated time. 5. Flexible terms The typical repayment period for an instant loan is between 12 and 60 months. You can choose the maturity period that suits you best. However, remember that a personal loan in India comes with extended repayment periods and has significantly higher interest rates than loans with shorter repayment periods. Features like low EMIs and flexible repayment terms make loan repayments simple. Your credit score will also increase if you take an instant loan and make your EMI payments on time. Remember that while the loan has a longer tenure, the EMIs are lower, but the total interest paid is higher. As a result, you can be flexible and choose repayment strategies that suit your preferences and financial situation. 6. Personal loan for weddings In every Indian household, a wedding is one of the most significant occasions. You want to complete every step, whether it’s your or your children’s wedding. Taking out a personal loan in India will get you everything you want, but suddenly your savings will run out. Several financial institutions offer attractive terms and interest rates for wedding-related personal loans. 7. Higher education expenses Whereas you can cover school fees with an education loan, You still need a lot of money for related expenses. Some basic costs associated with higher education include travel, insurance premiums, book costs, and housing deposits. One can pay these costs and realize your dream of studying at a good school by getting a personal loan. Traditional education loans come with some conditions and restrictions. For example, some loans can only be used if you get into a particular type of college. In addition, they have strict repayment requirements, and it takes years for students to become debt free. In such cases, a personal loan in India is generally a better option as there are no essential elements for drawing such an advance. [B-02] Conclusion It does not matter for what reason you are taking a personal loan in India; what matters is that you pay your debts on time and have a good credit history. A personal loan in India can help prepare for any financial needs and to deal with life’s uncertainties. If you are looking for an Indian financial services company offering personal loans, you should go for Piramal Finance, as it offers customizable personal loans with longer tenure and reasonable interest rates. Moreover, the costs and fees are not too high, and there is no collateral or security requirement. With Piramal Finance, you can choose the EMI amount that suits you best and free yourself from the burden of high repayment costs.
08-11-2023
Read More
Personal Loan

How To Extend Personal Loan Repayment Tenure; What Are The Effects Of It?

A loan is basically for a person who is looking for some kind of financial help and tenure or longevity plays a vital role in every loan. It also includes personal loans, which can be taken for a maximum of 5 years. Initially, an individual should choose an appropriate personal loan tenure, that is it should not be too long or too short. In this way, the overall interest experiences a substantial reduction. And life is certainly unpredictable and therefore some uncertainties will surely come in the path. Sometimes it can become quite difficult to pay off the personal loan EMI and in that case, a person would surely prefer the EMI to be lower. And this can only happen if the personal loan repayment tenure can be extended. [B-01] Here are Some of the Key Components of Personal Loan Repayment Tenure 1. Tracking Loan Repayment The repayment schedule will determine if indeed the running private loan arrangement has to be modified. When you ask the creditor to extend the personal loan’s term, they would initially review the repayment history to consider how consistently you have made EMI payments. The lender will look at the payment history going back at least 9 to 12 months. If the company notices areas where payments are falling behind schedule, it may think about extending the term to lower the EMI cost and help you make the on-time payment. 2. The Debt to Income Ratio The EMI on a private loan might have been less than 50% of the monthly gross earnings at the time of credit application and the implication of this is that it must have prompted the creditor to authorize the mortgage without hesitation. However, as time passes, a person might need some new loans which in turn would increase the debt in proportion to income. Also if the person has repaid the loans and the overall debt obligations exceed 60% of your wages, the creditor may increase the personal loan repayment tenure to avoid a hypothetical fallback issue in the future. 3. Revenue Evaluation If a person hasn’t signed out any additional debt but is still having difficulty making personal loan repayments on time, then it possibly can be the case that your earnings are not increasing with the growing inflation. In such cases, it should be discussed with the lender, when pursuing an extension on personal loan repayment. The lender will keep track of this and request payroll stubs and bank account numbers. When a person applies for a new personal loan, the lender will need the past three months’ salary slips as well as the last six months’ bank details. However, the lender may want you to present income details dating back a year or longer. 4. Your Life Stage Someone set to retire soon may have difficulty extending the term of their personal loan repayment. The argument is that extending the term further than the age of retirement may raise the likelihood of failing to pay. The creditor will preserve the term inside their pensionable age to avoid such occurrences. However, if superannuation is a long way off, the lending institution may consider extending the term if you are experiencing legitimate loan payment difficulties. Effects of personal loan repayment tenure Mentioned below are some of the effects of extending a personal loan repayment tenure: 1. The possibility of applying for a larger loan balance The mortgage balance users’ desire to borrow is the foremost important thing to think about when applying for private loan repayment. It is established by your financial requirements and accessibility. A longer amortization period permits you to borrow more bonuses based on their liabilities ratio. When it regards personal loans, all microfinance companies recommend an equity ratio of 35-40%. This indicates that the monthly liabilities, including prior EMIs and current EMIs, should account for 35-40% of your monthly income. Choosing a longer loan term might lower your DTI ratio by increasing your repayment capacity. As a result, you will be able to borrow more money. 2. It aids in the growth of a better credit history. The credit score is an important consideration in the mortgage application procedure. However, establishing a good credit score requires time and consistency. You have an exceptional possibility to accomplish this with a long-term conventional mortgage if you complete your EMIs on time. 3. Make room in your budget for extra things. One could save money for those other scheduled and unanticipated costs because your EMI repayments are reduced due to the longer repayment term. Users can then apply the excess funds to any additional requirements. If a person has a credit card, for example, a long-term loan with reduced EMIs can allow him to put this extra money toward its settlement. Furthermore, a person might employ this income in investments to obtain bigger returns for their long-term personal planning. [B-02] Conclusion Now that you’ve learned about the factors that can assist you to extend your personal loan repayment term and lower your EMI, put them into action with caution. Many people prefer to prolong the tenancy to the point where they ultimately pay significantly more to lower weekly payments. Because personal borrowing costs are still normally high, extending the loans for a prolonged period might dramatically increase your payments. When you’re facing a loan obligation, keep in mind you designate your earnings accordingly so you don’t find yourself having to ask the banker to extend the personal loan repayment tenure.
08-11-2023
Read More
Personal Loan

Important Unique Factors You Need To Know About Unsecured Personal Loans

Finance management should be a top priority when you want to achieve a particular life goal. Many people advise regular savings to accumulate funds for any emergency. But sometimes, hard-earned money may also fall short of any urgent requirement. In such a situation, anyone can get money only through loans. An unsecured or secured personal loan is one such option. Here, in this article, we are going to explain unsecured personal loans, their advantages, and the complete application process for personal loans. [B-01] What is an Unsecured personal loan? Unsecured personal loan applications do not need any valuable security. Lenders usually approve the loan based on your credit score and income. In contrast to other types of loans against valuables or property, an unsecured personal loan is easier. It requires minimal documentation and verification time. These days people prefer to apply for unsecured personal loans due to their benefits. There can be multiple reasons, such as marriage expenses, a child’s higher education, or a medical emergency, where you may need quick funds. Here is when unsecured loans come into use. Advantages of an Unsecured Personal Loan Before applying for an unsecured personal loan, you should first know the eligibility criteria to apply for the loan. Applicants need to fulfil the application criteria to qualify for the application. However, after qualifying for a loan, you can avail of it easily. Some benefits of unsecured personal loans include: Flexibility Application flexibility is the major factor of unsecured personal loans. Loan applicants do not need to disclose the purpose for which the loan is applied. You can use the loan amount as per your choice. However, you are advised to borrow only when you need the money. Collateral Free Loan Many people do not know whether a personal loan is secured or unsecured. However, one should know that personal loans are unsecured forms of loans. Moreover, if personal loan applicants have a poor credit history or insufficient income, then to be eligible for the loan, they may have to use their personal assets as security for loan approval. Flexible Repayment Tenure Most personal loans come with short-term repayment terms. The loan repayment term may vary from 12 to 60 months, depending on the financing institution. However, some financial institutes are flexible for repayment tenure. You can choose the appropriate repayment schedule and tenure depending on your income and budget. However, whenever you sign the loan agreement, always read the loan foreclosure terms and conditions carefully. Less Documentation You might be asked to submit basic documents such as income proof, KYC documents like ID proof, passport size photograph, and others. Once the lender executes the verification process, the loan gets approved instantly. These benefits make personal unsecured loans easy to avail. However, if you want to know what exact documents are required to apply for the loan and the common eligibility criteria to apply for the loan, keep reading. Eligibility Criteria for Unsecured personal loan You may apply for an unsecured personal loan from anywhere. Almost all financial institutions have the same standard eligibility criteria. Mostly the application is decided based on age criteria. Age Criteria: Only Indian nationals can apply for unsecured personal loans. The applicant’s age should be between 21 and 58 years. Minimum and maximum age limits may differ from one lending financial institution to another. Income: Any self-employed or salaried individual with a minimum salary of Rs. 15,000 may apply for an unsecured personal loan. Anyone with the same high-income range can apply for the loan. Occupation: If you are self-employed or have a business, then it should be at least 2 years old. The salaried person should be with their organisation for at least 6 months. Hence, anyone with all of these satisfying criteria can apply for an unsecured personal loan. How to Apply for an Unsecured Personal Loan Online and Offline? You may reach out to your nearest financial institution or bank to apply for an unsecured personal loan. You can apply in person and online through both modes. The websites have the option to apply for loans that may be accessed online. The steps for offline or in-person and online loan applications are: In-Person/Offline Loan Application Steps Visit your nearest and preferred bank branch or financial institution outlet. Ask for the application form and fill required details. Submit the form with the necessary documents to validate your information. A bank representative will verify your documents and eligibility criteria and prepare your loan offer as per your eligibility. Once the financial institution verifies and approves your details filled in the application form, they will disburse the loan amount to your bank account Online Loan Application Steps You can apply for a loan on a financial institution’s website. On the website, go to the relevant loan application web page and open and fill in the application form. Upload the required documents and wait for approval. You can apply for the loan via any mode. The requirement remains the same. [B-02] Conclusion A personal loan is a one-stop shop for any loan requirement. There are many more loan types and categories. You should make sure of important factors like quick loan sanction and disbursal. While applying for an unsecured personal loan, you should also check for closure and prepayment terms. It is always recommended to check the lender’s credibility. You should also check the RBI registration status and the lender’s disclosure standard. Customers or borrowers with high credit scores always get the loan easily. However, they should also fulfil the minimum KYC requirement as well. With the help of proper guidance and information, anyone can get a loan. For more blogs related to personal loans and other financial aspects, visit Piramal Finance here.
08-11-2023
Read More
Personal Loan

What Are The Minimum Charges And Processing Fee For Personal Loan You Need To Know?

For most people, getting a personal loan helps meet urgent needs. You can’t do anything, and you wouldn’t have money to cover your necessities if you’re delayed. That’s why many of us have found ourselves in a situation where a personal loan was required. Personal loans are a great option for funding your business and personal expenses. When you are trying to get a personal loan of any kind, you usually have a lot of questions. You need to know about the fee details and the personal loan charges involved in getting a personal loan. It may surprise you to find out that there are no exact rules for fees when getting a loan. In this blog, let’s discuss the minimum charges and processing fees for a personal loan. [B-01] Types of Personal Loans You can borrow money to pay for a personal expense and repay it over time by taking out a personal loan. You can receive a certain amount of money by taking out a personal loan, which is a repayment debt. There are two types of personal loans. 1) secured (needs collateral), 2) unsecured (requires no collateral). It varies in terms of interest rates, personal loan charges, amounts, and payback terms. What are the Personal Loan Charges Involved? Below is a list of some common personal loan charges: Processing Fees A bank may need to cover some administrative personal loan charges while they review and approve your loan. These fees are often minimal and range from 0.5% to 4% of the total loan amount, depending on the lender. When requesting a personal loan, you have two options. (I) pay the processing fees in advance. (II) have it deducted from the loan’s total amount while disbursement occurs. Each lender determines the minimum and maximum percentage of processing fees. Verification Charges You must convince your lender of your ability to repay a loan before applying for one. To verify your credentials, the lender hires a third party or agency. These agents look at your credit score and repayment history. This verification charge is an extra personal loan charge to the lender. As a result of the verification process, you must pay this fee because it adds an extra cost to them. Goods and services tax (GST) After the implementation of GST, you may have to pay a minimal fee as GST on loan processing fees. It is a part of the personal loan charges for any additional services that you request during the loan approval process or throughout the loan period. Origination Fees Some lenders charge a loan origination fee when you apply for a loan for the first time. The cost of processing and underwriting your loan is covered by origination fees. The percentage of your loan is calculated in this personal loan charge. These expenses could be deducted from the loan’s funding amount or added to it and paid over time. Origination fees typically range from 1% to 8% of your personal loan amount. Documentation Fees Your lender must invest time and money to give you a loan estimate. Typically, this fee goes toward documentation and other administrative personal loan charges. Penalties for EMI Defaults You can repay the loan through EMIs in manageable amounts to avoid personal loan charges. If you don’t pay your EMI, then you have to pay a fee for default in payment. Make sure you pick an EMI amount that you can afford rather than striving to pay off the debt as quickly as possible. Pre-payment Fees Pre-payment fees are imposed on a portion of your loan balance as personal loan charges. The RBI has, however, prohibited lenders from charging pre-payment fees on your loans with fluctuating interest rates. Penalty on Foreclosure of a Payment If you foreclose your loan earlier than the agreed-upon term, then the lender suffers a loss. To compensate for the loss, banks impose personal loan charges as a fee for prepayment. This fee typically ranges from 2% to 5% and varies from one lender to another. Duplicate Statement Fees You can generate a duplicate statement of the loan’s payment schedule and outstanding balance if you miss it. For this, you will have to pay a fee as a personal loan charge. The lender charges a fee between Rs. 200 and Rs. 500. Charges on Loan Cancellation If you cancel the loan amount after it has been approved or disbursed, then you have to pay personal loan charges for cancellation. There are frequent cancellation fees of up to Rs. 1,000 per loan. Cheque Dishonour Fees If your cheque for a personal loan bounces, there will be personal loan charges of a set amount. This sum may differ for various lenders. Lenders charge a maximum of Rs. 500 for each occurrence. If your cheque bounces regularly, then they will charge a higher amount. Other Fees Some of the other fees that come under personal loan charges are collection pickup charges, statutory charges, stamp duty charges, legal charges, recovery-related charges, cash collection charges, and so on. All these charges differ from lender to lender. [B-02] The Bottom Line The processing fees vary from 0.5% to 4% of the total loan amount, depending on the lender. Some charges are imposed to take care of the verification fees, default on EMI payments, documentation charges, and prepayment of loan fees. These are the minimum personal loan charges and the processing fees for personal loans. To read more articles on personal loans and related topics, check out the Piramal Finance website right away.
08-11-2023
Read More
Tax

Income Tax Calculator – Calculate Your Taxes for FY 2021-22

Why is an income tax calculator a good option to calculate taxes? How to use an income tax calculator? Users may use a website to determine how much tax they will have to pay. This is based on their income after the release of the Union Budget for the year. People in the “taxable income band” must pay taxes on a certain amount of their annual net income. Payroll deductions and the Central Board of Direct Taxation’s online method of filling out income tax forms are the two ways you can pay your income tax (CBDT). If the required payments can be made through an online payment system that receives money from many sources, people are more inclined to do so. So, if you’re having some trouble calculating your income tax, an income tax calculator can be the solution to that problem. [B-01] The basic information about the income tax A person’s base pay plus any supplementary payments, such as housing, transportation, special, and other benefits, are called their “salary.” Paying phone bills and travel costs incurred while on leave are only two examples of non-taxable compensation and benefits package components. If you have rented a property and paid HRA, you could be qualified to submit an exemption application for HRA. These exemptions are in addition to the standard deduction. This deduction was set at 40,000 rupees in the 2018 budget but was raised to 50,000 rupees in the 2019 budget. Our income tax calculator has been updated to reflect the most recent changes by the Union Budget 2021–22. How can I use the income tax calculator online? Please adhere to the guidelines below to gain the greatest benefit possible from the income tax calculator: Select the year equal to the assessment year for which you intend to do your tax calculation first. Enter your current age in the appropriate fields. In India, different age groups are subject to different income tax laws. Then choose “Income field” from the menu. Make a list of your year’s gross pay. Consider all taxes (monthly or yearly salary paid without deductions). You must also declare the amount of income you get from renting out your home. You should also consider the annual interest payments you make on your mortgages for your main house and any investment properties. The following deductions should be entered: Section 87A, Section 80C, Section 80CCD (1B), Section 80D, Section 80G, Section 80E, Section 80TTA, Section 80TTB, and Section 80GG deductions. Please provide further information on the interest rates for the savings account and the student loan. Add your annual rent that HRA and your wage, DA, and HRA do not cover. Select “metropolitan region” or “non-metropolitan area” and click “calculate” to see how much tax you would owe. These steps clearly explain the procedure of using an income tax calculator. What do the terms in my tax brackets imply in the income tax calculator? Under India’s income tax slab structure, every taxpayer pays the appropriate taxes. “Slabs” refers to the varied tax rates for different income levels. You have to pay the government more taxes when your income increases. An income tax calculator can easily calculate your tax amount and save you from any type of foul. Different categories of taxpayers are taxed at different rates. Taxpayers fall into one of three categories of “individuals” according to the Income Tax Act of India. Anyone under 60, whether they are a permanent or temporary resident, Residents in the neighbourhood between the ages of 60 and 80 Adults above 80 who live in one place are called “super seniors.” So use the income tax calculator and stay updated about the income tax payable amount. How is the required income tax amount determined? People may use an online income tax calculator to determine how much they owe. Transactions in Indian Rupees on December 31 of a particular year The total sum of money someone makes yearly is their annual pay. Generating income from unusual channels, such as investments, rental income, etc. A recurring payment to help with housing and transportation costs. You may determine a person’s total tax burden. This can be done by providing precise values for the variables mentioned in the preceding sentence. Any money left over after TDS has been taken out may be deposited immediately via Challan 280. This is the government’s internet gateway. The government has 30 days to issue a taxpayer a check for the difference if their refund request results in more payout than their tax bill. The income tax calculator will help you to get all the information about income tax. The Internal Revenue Code’s Sections 234A and 234F explain how interest and penalties are applied to late-filing taxpayers. Therefore, it’s crucial to note the cutoff date for filing your income tax returns. Additionally, remember that the date for submitting your taxes may change. This depends on your tax situation. Salary earners typically have time till July 31 of the assessment year to file their tax returns. You can stay updated with the income tax calculator. Effects of exemptions on the total level of income tax A tax credit of up to Rs.12,500 may be claimed by individuals earning less than 5 lakh rupees by Section 87A. Equity-linked savings schemes. The Indian Income Tax Act contains the relevant rules on this. Taxpayers may deduct up to Rs. 2 lakh in contributions made to the national pension system from their taxable income under Section 80CCD (1B). Under Section 80D, you are eligible for a tax deduction of up to Rs 25,000 if you pay health insurance premiums. For those over 65, the maximum amount rises to Rs. 50,000. According to Internal Revenue Code Section 80G, certain donations to NGOs are not taxed as gross income. You can deduct all the interest paid on student loans for up to eight years, according to Section 80E. Taxpayers may deduct up to Rs. 10,000 of interest income from their taxable income by Sections 80TTA and 80TTB of the Income Tax Act. Older people are free from paying taxes on interest income up to Rs. 50,000 under Section 80TTB. All these rules and regulations are encrypted in the income tax calculator, so you can expect the exact result from it. [B-02] Summing up Piramal Finance is one of India’s top non-bank finance organizations. A team of knowledgeable advisers of Piramal Finance is available to assist you at every stage of the application process. It is accessible 24 hours a day, 7 days a week, to assist existing and new clients. This boosts your chances of being accepted and receiving your funds soon.
08-11-2023
Read More
Personal Loan

Pros and Cons of Early Closure of Personal Loans

Personal loans are a popular choice in India for meeting urgent expenses of all types. However, the large interest rates and monthly installment burdens can become stressful. As a result, people often pay off their personal loans as soon as they have the funds to do so. But is the early closure of personal loans financially beneficial? This blog will answer this question by considering the pros and cons of pre-closing your personal loan based on your status so you can make an informed decision. If you choose to go ahead, we will also tell you how to close personal loan early in this quick guide. So, let’s start! [B-01] What is Early Closure or Pre-Closure of Personal Loans? Pre-closure is when you partly or fully repay a loan before the due date. Pre-paying a loan lowers your liabilities and offers peace of mind, but it is not always financially advisable. Yes, you don’t have to pay interest and can get rid of debt. But you may have to pay a penalty amount to the lender as the lender loses the expected income from interest. So, we will discuss the pros and cons of personal loan pre-closure before going into the process of pre-closing personal loans. Benefits of Early Closure of Personal Loans Here are the benefits you can enjoy by early closure of personal loans, which you must consider if you have the financial means to pre-close personal loans. Quick Relief from Debt Pre-payment relieves you of your entire debt in one go! After pre-closure, you no longer have to pay EMIs with an added interest. Net Savings Possible Pre-paying your personal loan will reduce your overall interest payout on that loan. Bearing relatively low pre-payment charges in this process is often more economical than paying the complete interest. However, there are exceptions if the pre-payment penalty is higher than the remaining interest. This is unlikely if you pay the loan off early just after the lock-in period, but you must check your math first! Better credit score Your credit score is at risk if there are delayed payments or if you already have a lot of debt. And this makes it tough to get new loans. But pre-closing personal loans allow you to settle your loans quickly to lower your liabilities, eliminate delays, and increase your credit score. This increases your chances of getting approved for another loan in the future. Disadvantages of Early Closure of Personal Loans Early closure of personal loans also has a flip side. Here are the disadvantages you may face by paying off your personal loan before it is due. Lock-in period Most loan providers apply a one-year lock-in period from the day the loan is disbursed. So, you will have to wait for this period to get over before you can pre-pay the loan, even if you have the required funds in advance. This lowers or removes the savings you can make on pre-payment, as you have already paid large amounts in interest by the time the lock-in period ends. Pre-payment charges You may have to pay extra charges to the lending institution for the early closure of your personal loan. It can be a flat fee, or it may be calculated based on the interest still due. This can lower your expected pre-payment savings if the amount is similar to the net interest on upcoming EMIs. You may even lose money instead of saving it, especially if you are paying late or after a long lock-in period. So, you must consider the interest rate and penalty amount to calculate how much you save or lose before making a decision. Notably, there are no pre-payment charges in the case of floating interest rates. But personal loans with floating interest rates are rarely available. Loss of lump sums You may have to cut back on other expenses to save money for the early closure of personal loans. Moreover, you will pay a large amount in one go instead of investing it to earn more or cover future needs. How to Close Personal Loan Early? The procedure for early closure of personal loans is quick and easy. If you have made up your mind to pre-close the loan, follow these four steps: Visit the bank or institution where your personal loan is active. Carry and present the necessary documents, such as ID Proof and bank statements, to the respective officials at the bank and make the request for pre-payment. Also, carry the cheque or demand draft with which you will then pay the remaining loan amount (fully or partially), processing fees, and pre-payment penalty as instructed. Once the entire amount is paid, the bank will give an acknowledgement letter and then a loan agreement that you must keep safely for future reference. The entire process is quite simple and should not take more than a few days. [B-02] The Final Verdict When it comes to personal loan pre-payment, the right choice depends mainly on your financial standing, lock-in period, loan amount, remaining interest, and interest rate. In general, you should go for early closure of personal loans just after the lock-in period after ensuring that the amount you save by not paying the remaining interest is greater than the pre-payment fees. This will reduce your liabilities and improve your credit score while saving you a significant amount! On the other hand, if the penalty is greater than or equal to the interest you will be paying, you may continue to pay the loan EMIs to avoid paying a large sum at once unnecessarily. Early closure of personal loans is also not viable if you do not have sufficient funds to bear the large loan amount and penalty. Partial pre-payment with a smaller penalty and lower future interest (due to principal reduction) is also a good option in such a case. Besides, you should understand the terms and conditions of your loan provider before taking the loan to determine if early closure or partial pre-payment will be beneficial. If all this leaves you confused, contact a reputed financial agency like Piramal Finance that provides reliable advice and favourable loans to solve all your personal loan repayment issues.
08-11-2023
Read More
Personal Loan

What is The Minimum Period Required To Get Approved For a Personal Loan

It’s no secret that personal loans help when you need extra money for specific needs. Whether you’re looking to make a large purchase or cover an unexpected expense, a personal loan can give you the funds you need without going through a lengthy approval process. But what minimum time is required to get an approved personal loan? And how does your credit score impact the approval process? Keep reading to find out more! [B-01] The minimum period required to get approved on a personal loan When applying for a personal loan, the amount of time it takes to get an approved personal loan depends on several factors, including your credit score and income. Generally, the minimum period for approval is around two weeks or less. Your credit score is important in determining how long it will take to approve a personal loan. A higher credit score gives lenders more confidence that you can repay the loan and makes them more likely to offer you a favourable rate. If your credit score is low, however, it could take two weeks to get an approved personal loan, as lenders may need additional documentation before deciding on your application. Income also influences how quickly you can get an approved personal loan. Lenders want to make sure you can afford the loan repayments, and typically, they will want to see proof of income. Having a steady income with a high salary makes it easier for lenders to approve your application quickly. If you don’t have a consistent income stream or are on a lower salary, getting an approved personal loan might take longer than two weeks as lenders may need more time to assess your ability to repay the loan. Finally, the type of personal loan you apply for can also affect how long it takes to get your approved personal loan. Some types of approved personal loans require more documentation or involve more complex processes, which could lead to delays in approval times. How long will it take to process my application for an approved personal loan? The time it takes for your loan application to be processed will depend on several factors, including the lender, the type of loan product applied for, and your eligibility. Usually, a fully completed application can take 24-48 hours to process. In some cases, you may receive an answer within minutes if you are eligible. Once your application for an approved personal loan is processed it can take between 5-7 business days for funds to become available, depending on the lending institution and repayment terms agreed upon. This timeline also depends on whether or not any additional documents are required before the disbursement of funds is made. It is important to note that the personal approved loan process can be longer in some cases if additional information is needed or there are complications in verifying your identity or creditworthiness. It is also important to ensure that you have all the documents required by lenders to expedite processing and avoid any delays. Generally, it is best to be prepared with all the necessary information and documents to apply for a personal loan quickly and easily without any delays or complications. Be patient during the application process as it can mean more savings on interest payments and more time to get approved. If you have questions, please don’t hesitate to contact your lender directly for assistance. What are the documents I need to provide Proof of Identity: A valid government-issued photo ID is required, such as a driver’s license, passport or national identity card. Proof of Residence: You will need to provide documents that prove where you live, such as a utility bill or rental agreement for the past three months. Employment Documents: This usually includes your pay stubs, income tax returns from the last two years, and/or any other proof of income you may have. Bank Statements: Banks ask for statements from your current and/or previous accounts going back at least three months to assess your financial situation and creditworthiness. Collateral Documentation: If you are applying for a secured loan, you must provide documentation proving your ownership of the collateral. This may include title deeds, land certificates or bills of sale. Other Documents: Depending on your specific situation and requirements, some lenders may ask for additional documents such as credit reports or other financial records. It is best to check with the lender beforehand what they require to avoid surprises. Once all the required documents have been submitted and verified by the lender, you can expect to receive an approved personal loan in a few days. After approval, the loan will be disbursed into your bank account within a few hours or days, depending on the lender’s processing times. It is important to remember that each lender has different requirements and documentation needs, so it is best to verify the list of documents they will ask for in advance. This can save you time and stress when applying for a personal loan. Can I use the loan for any purpose? The loan can be used for any purpose as explained in detail. For example, you could use it to finance a vacation, consolidate debt, pay for college tuition or medical bills, make home improvements or repairs, purchase furniture or appliances, or cover emergency expenses. However, some exceptions exist: lenders may not allow you to use personal loans such as gambling-related activities and investments. It is important to consider your current financial situation and goals when deciding how best to utilize a personal loan. You should also compare different lenders’ terms and conditions before deciding to take out a personal loan. Is there a prepayment penalty if I want to pay off the loan before the end of the term Most personal loan lenders do not impose any prepayment penalty if you choose to pay off the loan before the end of the term. However, some financial institutions may charge a fee for early repayment. It is important to check with your lender before deciding to pay off your loan early and ensure you understand all associated costs or fees. You can typically start making prepayments at any time; however, how much you can pay may depend on other details stipulated in the loan agreement. Some lenders might require that each payment be at least a certain amount (such as Rs.10,000). You will also want to ensure there are no hidden fees or penalties associated with doing so. [B-02] Conclusion A personal loan can come in handy when you need cash quickly. We hope that we were able to give you a clear idea about the time you can expect to get an approved personal loan. However, if you still have any queries you can connect with us here
08-11-2023
Read More