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EPFO UAN Activation: How to Activate Your UAN Number Online

If you run a business with 20 or more employees, it is mandatory to register with the Employee Provident Fund Organization (EPFO). Under the Employee Provident Fund (EPF) scheme, an equal amount of contribution is made by both the employer and the employee. Every individual registered under the EPF scheme is assigned a Universal Account Number (UAN). It is a twelve-digit value that helps them manage information regarding their EPF account. If you are an employee who wants to switch jobs, the UAN will remain the same. Only member identification changes when you change jobs. You can ask your company what your UAN is. In certain cases, your salary slips also mention it. Without UAN activation, you cannot withdraw or transfer money from your Provident Fund (PF) account. [B-01] There are certain documents you should have before UAN activation. These include: UAN provided by your company Member ID provided by the employer. The member ID is the same as your PF digit. In case you don’t have a member value, request one from your employer. The member ID is an alphanumeric value that consists of a code. This code represents the state as well as regional offices. Aadhaar Card Digits PAN Card Digits Let’s learn more about the steps involved in the EPFO UAN activation process. Steps for the UAN Activation Process Online To activate UAN number online, follow the steps below: Go to the Member Interface of the Unified Portal of Employees’ Provident Fund Organisation. On the right, under the ‘Important Links’ section, you can find ‘Activate UAN’. Clicking on the link will take you to the next page. Here, you need to enter details such as your UAN/Member ID number, Aadhaar digits, your name, birth date, mobile number, and the captcha. After entering the details, go to ‘Get Authorization Pin’. The pin will be sent to your registered phone number. Click on the ‘I Agree’ checkbox to accept the terms. Then go to ‘Validate OTP and Activate UAN’ The password will be sent to the registered mobile number. You can log in now using your UAN and password. After logging in, you can choose to change your password. Documents Required to Activate UAN Number The EPFO UAN activation requires the following documents: PAN card Aadhaar card Bank account details Bank IFSC code Address Proof of identification Benefits of UAN UAN has many benefits for employees as well as employers. Some of them are: Due to UAN, sending PF funds has become hassle-free. It has made the procedure quick and increased the chances of fewer errors. You can even switch your EPF account online. Before UAN, withdrawing your PF was dependent on your employer. But, UAN has reduced this dependency. Once the KYC verification is complete, the PF amount from the old account to the new one can be sent automatically. You receive a notification on your phone for every activity in your EPF account. This has made things more secure. You can also check your account balances through UAN. UAN helps in ensuring the PF accounts of the employee are valid. How to Link Aadhaar with UAN There are three ways to link your Aadhaar card with your UAN: Using the Official EPFO Portal Log in to the Unified Portal for Employee Provident Funds Go to ‘For Employees’ followed by ‘UAN Member e-Sewa’ Enter your UAN along with the password and log in Go to ‘manage’ and then on ‘KYC’ Next, you will need to enter the details of your bank branch, Aadhaar card, and PAN. Go to ‘Save’. Your request will be displayed in KYC pending approval. Once approved by UIDAI, it will mention the employer’s name as “approved by the establishment” as well as “verified by UIDAI.” Using the UMANG App Log in to UMANG app using MPIN or OTP. Once logged in, go to the ‘All Services Tab’. Here, choose ‘EPFO’. Under the EPFO section, choose the ‘e-KYC service’ option. Then choose the ‘Aadhaar Seeding’ option. Enter your UAN, followed by the ‘Get OTP’ tab. An OTP will be sent to your mobile number. Enter your Aadhaar details. Lastly, you will receive an OTP on your registered number again, as well as an email for verification. Offline Mode To link Aadhar in offline mode, you will need to fill out the ‘Aadhaar Seeding Application’. This will require your UAN and Aadhaar digits. You will have to submit self-attested copies of UAN, PAN, and Aadhaar along with the application. This can be submitted at the EPFO office or Common Services Centers. Once the verification is done, you will get a message on your phone saying that the Aadhaar has been linked to the EPF account. [B-02] Conclusion UAN has made things easy for businesses as well as employees. All the PF accounts can be accessed on a single platform. It also helps the EPFO track all the changes being made. These facilities can be accessed online, which makes things hassle-free. Further, you can switch your PF account from one employee to another, from the comfort of your home. The steps for activating the UAN are simple. It requires minimal documentation. For more such articles, head to the Piramal Finance website. Our experts will guide you through your finance-related concerns.

08-11-2023

Stocks Markets

How Much Can a Share Price Rise or Fall in a Day?

The law of supply and demand drives short-term stock price fluctuations. Each day, billions of shares of stock are traded, and it is this trading that determines where values will settle. But what exactly is it that makes people want to buy stock in such large quantities that it drives up its price? It all comes down to how investors feel. Let’s learn about the determining factors of stock market price rise and fall. [B-01] Factors affecting stock market prices Several factors decide the rise or fall of stock market prices. Some of them are: Analysts’ predictions for the stock. How investors feel about the sector. Stock market optimism among investors. The more expectations investors have for a company’s future success, the higher the demand for the stock will be. Conversely, if investors lose faith, they may sell their shares, causing the stock price to fall. Market sentiment about an industry is another factor that can move the price of a stock up or down. For instance, the stock price of an electric vehicle manufacturer may skyrocket if investors believe strongly in the industry’s promising future. All boats can rise with a rising tide. In this case, both parties are at fault. It doesn’t matter how well individual companies perform if investors turn against an entire industry. What is a “price band”? Stock market volatility is kept under control by employing price bands. It’s the maximum allowable increase or decrease in a company’s stock price. The price range for equities might range from 2% to 20%. The stock exchange determines this range after reviewing the share’s past price behaviour. The daily price range also considers the previous day’s closing price. Supposing the previous day’s closing price for ABC company’s stock was Rs 100 and the price band was 10%, we would have the following scenario. The minimum price could be 90, and the maximum price would be 110. The maximum limit of this range will be 10% over the prior day’s close (Rs 100). Thus, Rs 110 is the highest possible range. The lower limit of the price range will also be 10% below the prior day’s closing price (Rs 100). As a result, Rs 90 is the lowest possible pricing range. For the day as a whole, Company ABC’s share price has a range of 90 to 110. The stock price is capped at this level. What causes stock prices to rise and fall? Reasons for the growth and fall of stock market prices typically include the following: Providers and Consumers There is a demand for anything when there are more potential purchasers than there are sellers, and there is an excess of sellers when there are more potential purchasers. In the stock market, certain companies’ fortunes naturally follow business cycles. For instance, the summer is the peak season for the sale of air conditioners. Therefore, investors anticipate that a market-leading AC manufacturer will report stronger earnings in the second or third quarter compared to the first. As a result, they tend to purchase these stocks before the end of the first quarter and sell them before the end of the third. However, cyclical businesses are just one subset of the stock market’s vast array of publicly traded organizations. Below are further explanations for why stock prices go up or down. News from the Company Your stock will experience the effects of company news, both positive and negative. The revelation of an earnings estimate can positively or negatively affect a company’s stock price. Another event that could cause a stock price increase is the corporation’s dividend or bonus announcement. Additionally, a product launch or merger may be well received by investors and traders, leading to increased buying activity. However, the stock price may fall if the company discloses a major management change, swindle, or product recall. Analysts Every day, major brokerage companies and so-called market pundits provide stock recommendations for free or a fee. In the stock market, novices and traders who aren’t willing to do their studies often rely on the advice of industry professionals. Institutional investors and traders will sometimes follow these suggestions to measure the general public’s opinion. Stock market prices could go up or down depending on how the recommendations are received. However, intelligent investors take these tips with a grain of salt before deciding whether to purchase or sell a company. The General Tendency The market might be in a bullish, bearish, or neutral phase at any given time. When the stock market is rising, investors are all over the place with excitement. This will occur if investors are very bullish on the economy and individual firms. You can make incredible profits in only a few days if you enter the market right before a bull run begins. The bear phase follows the bull phase’s antithesis. During this phase, investors sell their stocks whenever they can, and even businesses with strong fundamentals get beat up. It’s important to remember that this period is also a favourable time to make purchases. When markets are sideways, volatility is very low. Stocks with sideways trends do not go up or down significantly, and even seasoned investors find challenges in detecting a sideways market. [B-02] What Counts is the Big Picture Long-term investors aren’t too concerned with the daily fluctuations in stock prices caused by news events. When you have time, even short-term events like earnings surprises and analyst reports are unimportant. It’s not where a business is today that matters, but rather where it will be in five, ten, or twenty years. Long-term, a stock’s worth is proportional to the cash flow the company is expected to create. No matter what happens in the near term, investors who think a company can grow its profits may be willing to pay a greater price for its stock today. A stock price may also be affected by factors such as the market, interest rates, rising prices, the price of crude oil and gold, and the gross domestic product. The conditions of the global market also affect the prices. You can find more finance-related blogs at Piramal Finance.

08-11-2023

Know More

What is the interest rate of FD in 2022?

A fixed deposit, or FD, is an investment account. Banks and other financial institutions provide it. The investor can deposit a good amount of money in history, and they will get back a fixed interest rate depending on the tenure. The tenure can be selected from 7 days to 10 years. Generally, the interest rate of an FD account is much higher than that of a savings account. [B-01] How do interest rates work? Typically, interest rates are added monthly to the investor’s fixed deposit account. The customer can get the benefit of interest every month or on a quarterly basis. The investors can withdraw their investment once the tenure of the investment ends. The customer will also have the option to reinvest the money for another term. As per the investor, the assignment will be maintained. The interest rate of an FD can vary from bank to bank. Generally, all banks and other financial institutions offer fixed deposits. Another thing to know is that the interest rates offered by private sector banks and other private financial institutions will be higher. The public-sector banks and financial institutions will provide a slightly lower interest rate on the fixed deposit accounts. Different types of FDs There are different types of FD accounts offered by banks. The interest rates on the various types of FD accounts are slightly different. Some different types of FD accounts are- Regular FD account These are for customers aged below 60 years old. The interest rate of FD offered on these accounts is lesser than the one offered for a senior citizen FD account. Senior citizen FD accounts These are for customers above the age of 60 years old. The interest rate of FD offered in these accounts is slightly higher. The amount of interest in these FD accounts can be used by the senior citizen to handle their expenses like medical bills, etc. FD account with a monthly payout These fixed deposit accounts will pay out the built-up interest to the customer every month without any inconvenience. This FD account has the advantage of getting the interest component directly into a saving account. The investor can use this money every month and use the sum for regular expenses. FD account with a maturity payout In this kind of FD account, the interest gets collected in the customer’s account based on the deposit tenure. The interest gets compounded. Later, the customer will get the principal amount plus the interest components. By the time of the maturity of the FD account, the investor will get the principal and the interest components. Rates of interest offered by banks The interest rate of an FD keeps changing from time to time. Another thing to remember is that the interest rate mainly depends on the tenor. The government bank offers different rates of interest than the private banks. There is a margin of difference between the two of them. Most public banks will offer interest in India in 2022 ranging from 3% to a minimum of 6% or a maximum of 7%. The general tenure for public bank fixed deposit accounts can range from 7 days to 10 years. Now let’s learn about the interest rates of FDs offered by the private sector banks and financial institutions. In general, private banks offer interest rates that range from a low of 2.50% to a high of 7.20%. Private banks offer fixed deposit accounts at an average interest rate of between 3% and 7%. Sometimes, it can cross 7% just by a slight increase. The average tenure of private banks’ fixed deposit accounts is also 7 days to 10 years. But exceptions can happen in this case. In some cases, the tenure goes from 15 days to 10 years, but in other cases, it can be between 33 and 99 months. The investor needs to check out all the possibilities. The customer can compare the tenor with the interest rate of an FD offered by public and private sector banks and then decide which one they should go for. Things to consider before investing in fixed deposits Deposit limit Investors should always consider the deposit limit of the bank from where they are making their fixed deposit accounts. It refers to the maximum amount of money that a bank offers for a fixed deposit account. Banks use these amounts of money to confirm whether they will offer you a fixed deposit. Interest rates It is the most important thing to consider before investing in a fixed deposit account. The interest rates on fixed deposit accounts are different at different banks. Some might offer higher interest rates based on the rating and financial capacity. The customer should thoroughly go by the interest rates of an FD offered by the bank and tenure and then analyse them before making any decision. Tenure It is important to know about the duration of the whole process. The investor must know how long the money will remain in the bank. Most banks in India decide the interest rates of the fixed accounts based on this duration, known as the tenure. So, before investing in a fixed deposit account, the customer must keep tenure in mind. [B-02] Conclusion Now that it’s the end of the article, if the customer has a large amount of money that they want to save, opening up a fixed deposit account is the best solution to invest that amount of money. It’s safe and will provide you with a good interest rate of an FD for that amount of money. Even though it’s safe, you should still look into things like payouts, risk calculations, real interest rates, etc. One can take help from Piramal finances as they deal with personal loans and finances.

08-11-2023

Home Loan

How Much Home Loan Can I Get On 75K Salary?

Numerous factors determine the home loan amount that you can get on your salary in India. These factors include age, income, current debts, credit score, and employment history. Lenders will also consider the type of property you are looking to purchase as well as the location of the property.To know how much housing loans you can get on your salary in India, it is best to speak to a mortgage specialist. They will be able to assess your situation and provide you with an accurate estimate. Generally, the higher your income and the lower your debts, the more home loan you can get. Read on to learn more about how much a home loan you can get on a 75k salary. [B-01] How Much Home Loan Can I Get On 75k Salary? Assuming you take a home loan for the first time in India, your maximum loan eligibility will be calculated based on your income and repayment capacity. The general rule is that your monthly EMIs (Equated Monthly Installments) should not exceed 35%-40% of your monthly income.On a salary of INR 75,000 per month, you can get a home loan of up to INR 55.93 Lakh. This amount considers that banks typically finance up to 80% of the property value. So, if you are looking at a property worth INR 50 lakhs, you would need to bring in 20% as a down payment, which would come to INR 10 lakhs.Your EMI will depend on the bank’s interest rate and the housing loan’s tenure. For example, at an interest rate of 9%, your EMI for a 30-year tenure loan would be approximately INR 28,500 per month. reduce your EMI burden by choosing a longer tenure loan or opt for a variable house loan interest rate instead of a fixed rate if market rates fall during your loan repayment period. Loan Types in India Housing Loan: A housing loan is a loan to purchase a property or land. The interest rate on a housing loan is usually lower than that of a personal loan or credit card. Mortgage Loan: A mortgage loan is a secured loan against a property. The interest rate on a mortgage loan is usually lower than that of a personal loan or credit card. Home Equity Loan: A home equity loan is a secured loan against the equity in your home. The interest rate on a home equity loan is usually lower than that of a personal loan or credit card. Personal Loan: A personal loan can be used for any purpose, including purchasing a property or land. The interest rate on a personal loan is usually higher than that of a housing or mortgage loan but lower than that of a credit card. Top-up Loan: Borrowers who have previously obtained a mortgage loan from the same lender are eligible to apply for a top-up loan, an extra loan of the same kind. It is common for the house loan interest rate on top-up loans to be lower than the rate on personal or unsecured loans. How to Qualify for a Home Loan in India Assuming you’re salaried, to qualify for housing loans in India, most banks would require the following: A minimum income of Rs.25,000-30,000 per month A good credit score A stable employment history of at least 2-3 years Age between 21 and 65 years Indian residency Repayment capacity as determined by the bank’s internal criteria (Note that these are general guidelines, and each bank has specific eligibility criteria, which may differ from others.) Interest Rate on a Home Loan In India The interest rate on housing loans in India depends on numerous factors, such as the type of loan, the tenure of the loan, the LTV ratio, etc. India’s house loan interest rate starts at around 6.65% per annum. However, this can differ based on the type of home loan, the lender and other factors. Generally, the interest rate is higher for loans with shorter repayment tenure and vice versa. For instance, SBI’s house loan interest rates start at 8.55% per annum for loans up to Rs 30 lakhs with a tenure of up to 30 years. India Home Loan Down Payment Assuming you are taking a home loan for the first time in India, the following down payments would be applicable – For loans up to Rs.30 lakhs for 10 years- 7.6% of the loan amount For loans between Rs.30 lakhs to Rs.75 lakhs – 20% of the loan amount For loans above Rs.75 lakhs – 25% of the loan amount Hence, if you take housing loans of Rs.50 lakhs, your down payment would be Rs.5 lakhs (10% of the loan amount). Similarly, for a loan amount of Rs.1 crore, your down payment would be Rs.25 lakhs (25% of the loan amount). Home Loan Lenders in India: How to Choose! There are many factors to consider when choosing a lender, but some of the most important include the following:1. Interest rates: One of the most important factors when choosing a lender. Make sure to compare interest rates from multiple lenders before making your decision.2. Loan terms: Another important factor to consider is the loan term. Make sure to choose a loan term that you are comfortable with and that fits your financial needs.3. Charges: Some lenders may charge fees you are unaware of. Read the fine print and understand the fees before signing on with a lender.4. Customer service: When you are taking out a loan, you want to ensure you can get help. Choose a lender with good customer service so that you can get help when needed. [B-02] Bottom-line If you’re looking to take out a home loan in India, it’s important to know how much you can borrow. This will depend on your income and other factors. Typically, banks will lend you up to four times your annual salary. However, this is just a general guide. The actual amount you can borrow will depend on your circumstances. The lender will consider factors such as your credit history and employment status. Visit Piramal Finance, where you can find similar articles and start exploring housing loans in India with a salary of 75K. It’s always best to speak to our financial advisor before taking out a home loan with a house loan interest rate. They’ll be able to help you understand your options and find a loan that’s right for you.

08-11-2023

Home Loan

How much home loan can I get on my salary?

How to get a home loan based on salary? Want to Know more about home loans? Your net salary is one of the things that determines if you can get a loan and how much you can borrow. Your salary is important because it helps lenders figure out how much you can pay back. Some important points are mentioned below. How much you can borrow will depend on how much money you make. Lenders will look at your net pay, which is your salary after common deductions like tips, PF, ESI, etc. Your take-home pay will determine how much you can pay in EMIs and how much you can borrow as a whole. For example, if your take-home pay is Rs. 25,000, you can borrow up to Rs. 18.64 lakh to buy a Rs. 40 lakh home (provided you have no existing financial obligations.) But if your take-home pay is Rs. 50,000, you can borrow Rs. 37.28 Lakh for the same property. Then, if your take-home pay is Rs. 75,000, you can increase your loan eligibility up to Rs. 55,93 Lakh. [B-01] Home loan: A home loan applicant’s monthly salary is one of the most important factors in figuring out how much of a home loan they can get. Some lenders look at a housing loan applicant’s gross salary, while others may look at his net salary to figure out how much of a loan he can get. After deductions like Professional Tax, Tax Deduction at Source (TDS), Employee Provident Fund (EPF), etc. are taken out of an employee’s gross salary, what’s left is his net or in-hand salary. Lenders use the EMI/NMI Ratio and the Multiplier Method, either on their own or together, to figure out how much of a home loan an applicant is eligible for. Ratio EMI/NMI -The EMI/NMI ratio is the total amount of a loan applicant’s net monthly income (NMI) that goes toward paying their current EMIs and the proposed home loan’s EMIs. Most of the time, banks and NBFCs/HFCs give home loans to people whose total EMIs are between 50-60% of their monthly income. Since longer loan terms mean lower EMIs, people who want a home loan but are over this limit can extend their loan terms to lower their EMI/NMI ratio and make themselves more eligible for a housing loan. Multiplier Method – Many banks, NBFCs, and HFCs use the multiplier method to decide how much a home loan applicant can borrow. Under this method, lenders figure out how much of a home loan to give someone based on a set number of times their monthly income. Home loans are usually available to salaried people for up to 72 times their gross monthly income or 6 times their gross annual income (based on IT returns). For instance, if an employee’s net monthly salary is Rs. 30,000, they can get a home loan for up to Rs. 21.6 lakhs. If more than one person in a household makes money, the lender can add up all of their net monthly incomes to figure out how much of a home loan they can get. Other things that affect who can get a home loan A salaried person’s ability to get a home loan may depend on a number of things besides how much money they make each month. Your Age: Home loans are available to people who are between the ages of 21 and 55. This is because you have a long work life ahead of you and a lot of chances to pay off your home loan. Your loan term may also be longer than that of someone who is older and applying for a loan. Your Employer and Your Work Experience – If you work for a well-known company, it may be easier for you to get a housing loan because the company gives you some security. Lenders can be sure that the house loan interest rate will be paid on time and in full. In these situations, you may also be able to borrow more money. In the same way, the length of time you’ve been working says a lot about how steady your career is, which is good for your loan application. Your credit score – A good credit score is one of the most important requirements for getting a home loan. Even if you make a good salary, it might not be enough if you have a bad credit score, which shows how your credit has been in the past. For a home loan to be approved, your credit score should be at least 750. Also, if your credit score is high and you make at least the minimum salary for a home loan, you may get a house loan interest rate on your loan. New Property Approval: When you apply for a home loan to buy a property, you have to show your lender that the property is legally yours and that you have the title to it. Also, lenders must know what the property is worth on the market. How much can ONE borrow based on thier salary? In general, a salaried person can borrow up to 60 times their net income. For example, if you make a salary of Rs. 40,000 per month, your home loan amount could be Rs. 24 Lakhs, based on your home loan salary eligibility criteria. You can use a calculator to figure out how much of a loan you can get. In the meantime, you can use the table below as a quick reference for the income levels at which you can get loans and how much you can borrow for each: Monthly Net Income amount borrowed Rs. 20,000 – Rs. 10,36,246 Rs. 25,000 – Rs. 13,73,026 Rs. 30,000 – Rs. 17,09,806 Rs. 35,000. – Rs. 20,46,586 Rs. 40,000. – Rs. 23,83,366 Rs. 50,000 – Rs. 30,56,926 [B-02] Summing up: Most of the time, you can get a home loan for 60 times your salary. But most lenders don’t look at how much money you have in your bank account when deciding how much money to lend you. Home loan eligibility is a set of rules that a financial institution uses to decide if a customer is creditworthy enough to get and pay back a certain loan amount. Eligibility for a home loan depends on things like age, income, credit history, credit score, and other financial obligations, among other things. Also visit, Piramal Finance has more in-depth educational articles.

08-11-2023

Personal Loan

Types of Unsecured Loans Available in India

Unsecured business loans are those that are granted only on the basis of the borrower’s creditworthiness, without the pledge of any collateral as security in case of failure or non-payment of dues. Unsecured loans, also known as personal loans, are given to those who have excellent credit. Variable or fixed interest rates are available for personal loans. [B-01] How Do Unsecured Loans Work? When you apply for an unsecured loan, the lender will often look at your credit report. They do this to see if you have a history of making timely loan payments. The lender will be able to get a better sense of whether or not you will be a responsible customer if you fill this out. A good credit score of 750 or higher is required for an unsecured loan. Unsecured business loans may be available from some financial institutions, even for those with a poor or nonexistent CIBIL score. Without a good credit history, you may be charged a higher interest rate on a loan. Before deciding whether or not to grant you a loan, a lender may also look into your ability to make repayments. Types of Unsecured Loans Available in India Signature loans: This is the most fundamental form of unsecured credit available today. For this type of loan, “just your signature” means that that is all that is required to get the money. By signing this loan agreement, you promise the lender that you will pay back the full amount of the loan on the due date every time. Signature loans are available from both traditional banks and alternative lenders (NBFCs). This is a loan that may be repaid over time through regular monthly payments until the loan is repaid in full. Personal loans: The most typical form of credit extended on credit terms without collateral is a personal loan. The motivation for applying for a personal loan is irrelevant. Similar to other types of instalment loans, this one is paid back in equal monthly instalments (EMIs) over a certain period of time. Personal loans can be obtained from both traditional banks and non-banking financial companies (NBFCs), both online and in-person. Education loans: A student loan, sometimes known as an education loan, is a loan that can be used to cover the costs of attending an accredited educational institution. The nicest part of student loans is the grace period called a moratorium, during which the borrower is exempt from making any payments. This time frame is also called a grace period, a grace period of time, or a waiting period. Subsidies on interest rates and adaptable repayment schedules are additional benefits for a student application. Borrowers can use the money for any legal school-related cost, such as rent, books, a meal plan, or tuition. Peer-to-peer loans: An alternative lender is the source of this loan rather than a bank or non-bank financial company. A personal or peer loan is an option. Interest on such loans is normally set at a predetermined rate. It’s a less complicated way to get a loan. Peer-to-peer loans have fewer qualifying restrictions. Competitive interest rates are offered for various borrowing options. Instant loans: These loans are usually small and are extended to paid professionals. These loans are also offered by a select few financial institutions to freelance workers. Here, the loan is due when the borrower receives his or her next paycheck. These loans have far higher interest rates than regular bank loans. Some of the Major Pros of an Unsecured Loan Unsecured business loans often have short repayment periods since they are meant to be used as a stopgap measure in emergency situations. Because of this, the repayment period for such loans is often between 1 and 5 years. Unsecured loans of any kind are issued only on the basis of the borrower’s creditworthiness, and no collateral is required. When making such loans, it is presumed that the borrower’s credit is excellent. Hence, collateral is not necessary. Rates of interest on the best unsecured business loans are not fixed and might fluctuate. This is often based on the requested loan amount, the chosen repayment period, and the applicant’s credit score. Unsecured debts, in contrast to secured loans like mortgages, are not eligible for tax incentives. Disbursement and loan amounts for unsecured loans are more favorable than for secured loans because of the smaller loan amounts and shorter approval and disbursement times. Unsecured business loans are typically taken out in order to cover unexpected but relatively small expenses, such as those associated with house repairs, medical care, etc. Because of this, the loan amount is often lower than, for instance, a mortgage loan. Because they don’t need to be backed by collateral, unsecured loans can be approved and disbursed more quickly than secured loans because applicants need to provide fewer data and documentation. Things to Consider Before Applying for an Unsecured Loan Loan companies side by side: Before applying for a loan, it’s a good idea to shop around and see what terms other providers are offering. Before committing, it’s a good idea to shop around and see what other discounts there could be. Verify your qualifications: Loan eligibility is determined when you provide information such as your monthly income, preferred loan amount, and employer. It’s possible that this is below or above the target quantity. A loan eligibility calculator is available if you’d like to use it to see if you qualify for a loan. Accurately describe: Don’t ever lie about who you are, how much money you make, or where you work. If your loan application is rejected because of false information, it might have a negative impact on your credit score. Examine one’s credit rating; applicants with scores over 750 may be eligible for better terms in terms of interest rate, loan amount, and loan term. Having a high credit score also increases your chances of receiving pre-approval. You should never apply for unsecured business loans without first checking your credit score. [B-02] Conclusion Unsecured business loans might be a great choice for people who need money quickly. However, more penalties may be imposed in the event of a loan default because of the unsecured nature of the transaction. To avoid unnecessary stress, it’s important to keep one’s financial house in order and to pay bills on time. Consult a financial specialist such as Piramal Finance for customized financing options for company owners and professionals if you have any questions.

08-11-2023

Business Loan

How is a Mudra Loan Different from a Business Loan?

When running a business, it is vital to ensure that the cash flow is properly managed. There can be situations when you are on a growth path and need more funds to support your efforts. But there is a chance that you do not have enough reserves to support your targets. This is where you need to opt for a business loan. Many banks and NBFCs offer a range of loans. These loans help you with your urgent money needs. Mudra loans are one of the popular loan options for business owners. There is no need to offer any security to get this loan. You can use this amount for any business need that you may have. This could include paying bills, buying materials, machines, or other costs. Mudra loans are given for amounts of up to Rs. 10 lakhs with interest rates starting from as low as 8% per annum. Mudra loans are given through banks and NBFCs. Do you know that a business loan is not the same as a mudra loan? Read on to learn more about how these two options are different. [B-01] Differences between Mudra Loans and Business Loans As an owner, you must ensure enough cash is available in the business. While you might have to opt for a loan to ensure this, you must know all about the options available. This will help you make an informed decision. Here are the major variations between mudra loans and business loans. Type: A Mudra loan is an unsecured loan. This means you do not need to offer any security to get this loan. As the government gives this scheme, the process to get this loan is very simple. Female borrowers are given a preference under this scheme, though all types of business owners can apply. When it comes to a business loan, it can be secured as well as unsecured based on the lender. The amount you want to get as a loan will also decide if the loan is secured or unsecured. Most lenders offer loans of up to Rs. 10 lakhs without any security. Any amount more than this would need you to provide security to get the loan. Amount: When it comes to Mudra loans, the maximum amount you can get is Rs. 10 lakhs. These loans are given under three heads, Shishu, Tarun, and Kishor. No lender can offer more than Rs. 10 lakhs as a Mudra loan. On the other hand, there is no upper limit for a business loan. Many lenders offer even more than Rs. 5 crores as a business loan if you can give security, i.e., a loan against property. If you do not have any assets to pledge with the lender, you can get up to Rs. 10 lakhs as the loan amount. Security: There is no need to offer security to get a Mudra loan. It is a scheme given by the government to help medium and small companies that do not have any security to offer. Through this loan, you can address any issues your venture has been facing. On the other hand, a business loan may or may not need security. This will depend on the lender, purpose, and the amount of the loan. Most lenders offer loans of up to Rs. 10 lakhs without any collateral. Any amount more than this may need you to offer security. Interest Rate: The interest rate for a Mudra loan can vary across lenders. You can get this loan for as low as 8% per annum. It is one of the lowest interest rates for business loans. The reason for such a low-interest rate is that the scheme has government support. It aims to support small business owners. When it comes to a business loan, the interest rates can vary. The interest rate for an unsecured loan will be higher than a secured loan. For eg, Piramal Finance offers unsecured business loans starting from 17% per annum. It also offers secured business loans starting from 11.5% per annum. Application: You can apply for a Mudra loan online and offline. This scheme is available with banks as well as NBFCs. So, you can identify a suitable lender and then decide to apply at their office or from the website. The same is the case with a business loan. You can apply for this loan online as well as offline from the website of the lender. You must submit copies of various papers to start the loan process. Suitability: Mudra loans are meant for small and micro enterprises. Shopkeepers in urgent need of money can also apply for this loan. The maximum amount of Rs. 10 lakhs can optimally meet their needs. When it comes to business loans, they can be used by all types of businesses. Based on your profile and credit history, you can apply for any type of business loan. These high-value loans are great for medium and large businesses to fund their growth or invest in machinery. [B-02] Mudra loans are a good choice for a small-sized business to drive growth going forward. But it does have its limitations, and this is where a business loan comes into the picture. It can be a good choice if you need a higher amount for your business. Hence, you need to learn all about the pros and cons of every loan type to make a decision. This is where Piramal Finance comes into the picture. They have many articles and blogs on various topics to help improve your skills in the world of finance. They also offer a range of business loans to help fund your growth.

08-11-2023

Other

Types of ETFs Return and its Performance

Rather than taking the chance of active trading, would you rather make huge returns passively? Investing in an ETF or an exchange-traded fund may be a good option for you. Exchange-traded funds (ETFs) are similar to index funds in that both allow you to put your money to work buying and selling a group of assets that all fall under the same broad heading. By investing in many firms, you can reduce the overall market risk of your share portfolio. But unlike index funds, exchange-traded funds (ETFs) can be bought and sold whenever the market is open on the Stock Exchange Board of India (SEBI). [B-01] What are the types of ETFs? The underlying assets of an ETF determine its classification. Thus, while the Sensex and Nifty make up the vast majority of ETFs, there are additional varieties available. Let’s check out a few of them. 1. Equity ETFs Equity ETFs, often known as stock ETFs, invest in businesses within a certain market. Those lists compile the stocks in a certain industry that have shown the most promise or the greatest gains. Investing in an industry-specific ETF might be a good idea if you believe the sector as a whole will develop, but it is unclear which specific firms will provide the highest profits. Dividends will increase in line with the value of the ETF’s underlying holdings. As a result, the underperformance of a few stocks will not have a major impact on your bottom line. 2. Bond ETFs Bond ETFs are exchange-traded funds that only trade in fixed-income securities like government bonds and debentures. You might think of them as a basket of investments with varying costs and terms. You will get monthly dividend payments for interest income and yearly dividend payments for capital gains on these bonds. Given the large number of bonds held by an ETF, some of them will be approaching their coupon payment dates. This ensures that your investment will provide consistent revenue. 3. Commodity ETFs At the moment, gold and silver are the only two commodities that may be traded via ETFs in India. With them, you may make a virtual investment in commodities like gold and silver without taking on the real risk of actually owning the metals or the money. Also, commodity ETF values are similar to their respective bullion markets. To avoid the hassle and difficulty of selling physical gold or silver in an instant, consider investing in exchange-traded funds (ETFs) instead. 4. International ETFs Foreign securities can be purchased using these ETFs. Investing in a basket of foreign-listed firms is now possible without the need to find a broker with international connections. If you just have a modest amount of money to invest, you may still participate in these indices thanks to the use of the Indian rupee. The MOSL NASDAQ 100, the Mirae Asset NYSE FANG+ETF, and the HDFC World Index Fund are three of the most widely held exchange-traded funds (ETFs) in India. 5. Currency ETFs The best ETF fund that trades in currencies provides access to the foreign exchange market. Profits can be made by investing in the growth of a basket of currencies held in an EFT, regardless of their origin. The volatility in value between two currencies can be capitalized on by purchasing a pair of those currencies and holding them. How Does an ETF Work? Mutual funds serve as a good starting point for understanding how an ETF operates. It is the asset management firm with which you will be interacting when purchasing shares in a mutual fund (AMC). Their role is to aggregate the money they’ve raised from investors and utilize it to purchase genuine stock in firms. A custodian holds these shares on behalf of the mutual fund and its unitholders. Contact the fund house now if you want to sell your shares. You are dealing with the fund house, not the firm in which you have invested, during this entire process. Therefore, when you invest in mutual funds, you know there will always be a buyer for your shares if and when you decide to sell. Exchange-traded funds are unique in this respect. The purchasing and selling of ETFs are subject to the availability of buyers and sellers on the stock market. Only until you’ve found a suitable counterparty will you be allowed to sell your units. Another key distinction between ETFs and mutual funds is how prices are determined. Mutual fund investors are issued units based on their investment in the fund at the end of the trading day (NAV). Every investor, whether they put in Rs 1,000 or Rs 10,000,000, receives the same NAV after each trading day. But in the case of exchange-traded funds, the price discovery happens on a real-time basis. As a result, ETF units may be purchased by investors at a wide range of prices. To better understand ETFs, let’s weigh their benefits and drawbacks. 5 Important Advantages of ETFs: Pros of Exchange Traded Funds ETFs allow investors to spread their bets around: By purchasing an ETF, an investor is effectively purchasing a group of equities. Because gains in one asset can offset losses in another, this is a useful strategy for diversification. Second, most ETFs have low management fees since they are passively managed. This results in reduced expense ratios, which is good news for investors looking to save money on fund administration costs. Nifty BeEs and HDFC Index Fund Nifty 50 Plan, for instance, both put money into the same 50 stocks. However, HDFC Index Fund – Nifty 50 Plan charges 0.40% in expenses, whereas Nifty BeEs just charge 0.05%. Therefore, lower overhead is a major benefit of ETFs. ETFs provide flexibility: ETFs give strong exposure to diverse asset classes and industries. This lets investors create a portfolio without any difficulty. Fourth, ETFs are open and transparent about their holdings, as required by the Securities and Exchange Board of India (SEBI) for index ETFs. So, ETF investors are constantly aware of exactly where the fund is invested. ETFs permit intraday trading: This is one of the greatest advantages of ETFs. The NAV of a mutual fund is published daily. In contrast, exchange-traded funds (ETFs) allow purchases and sales to take place at any time. Let’s pretend the market dropped 500 points, or 2%, at noon. By 3.30, though, the market had gained 200 points and ended higher. [B-02] Conclusion The best ETF fund combines the reliability of a mutual fund with the potential profits of stocks. They don’t confine your earnings to the success of a particular enterprise or asset. They also provide you with the freedom to quickly shift your assets if a specific asset is underperforming. With so many upsides, it’s easy to see why ETFs should be on your list of potential investments. So, start looking into ETFs to find the one that best fits your needs. When in doubt, company owners and professionals can go to the experts at Piramal Finance for tailored financial services.

08-11-2023

Personal Loan

How Does An Education Loan Help You to Achieve Your Dreams?

In today’s world, getting a good education is important if you want a successful career. In developing nations like India, sending your kids to reputable and top schools is sometimes necessary. They can get a good start on a well-paying job if they do so. But these well-known colleges and schools are often hard to get into and cost a lot. This has caused more parents than ever to look for an education loan in India. The costs are even higher for students who want to go to college abroad. Also, the costs of private institutions are much higher than those of public colleges. When this happens, students and their parents prefer to get a loan to pay for school. [B-01] Education Loan Versus Personal or Property Loan Is an education loan better than a personal or property loan? Many believe a personal or property loan is better than an education loan. But that’s not true. Personal loans have higher interest rates, so in the long run, you’ll pay more. On the contrary, education loans have a lot of benefits and are designed specifically for education. It makes students’ lives better and helps them have successful careers. Helps That an Education Loan Provides The Safety of Savings When you take out an education loan, the savings stay the same. This lets you reach your long-term financial goals. The goals include retiring, helping your kids get married, and buying a house. Education loans help your kids get the right education for their future. It helps you keep your own money in retirement. You won’t need to put any extra stress on your child. Coverage For Expenses A student loan pays for the cost of the course. It includes room and board, lab fees, exam fees, library fees, and more. It also pays for the costs of books, travel, and other things related to finishing the course. Education loans help you financially and ensure your child can finish school without problems. Tax Benefits One of the best things about getting a student loan is that you don’t have to pay taxes. Section 80E of the Income Tax Act lets you deduct student loan interest in full. You can get this tax break for up to eight years. Higher education loans don’t have to be paid back in taxes, so don’t worry about your child’s education. Postponement Period Postponement or Moratorium period is like taking a break from your loan payments. During this time, you don’t pay back the loan. Most student loans have a grace period between six months and a year grace after graduation. This gives your child enough time to find a job and save enough money to repay the loan. History of Credit Responsibly repaying student loans will help your credit score. This shows financial institutions that they can trust you. If you have a higher credit score, you can get loans in the future with lower interest rates. So, take the benefits of both worlds and get a student loan for your kids. How to Obtain an Education Loan? Indian government launched a Comprehensive Educational Loan Scheme with IBA and RBI. This program pays for all sorts of coursework in colleges and schools in India and other countries. Interest Rates on an Education Loan in India So what are the interest rates for an education loan in India? Different banks in India charge different interest rates for education loans. Depending on the bank’s base lending rate, it could range from 12 to 16%. The RBI says that the base lending rate for Indian banks is between 9 and 10%. Requirements to Apply for an Indian Education Loan Before you can get a loan, you need to meet some basic requirements. The requirements and details of the education loan are as follows: The main factors are the course cost and the applicant’s family income. There must be a co-applicant, a spouse, a parent, or a sibling. Loans under Rs. 4 lakhs require neither security nor a guarantor. For loans of greater than Rs. 7.5 lakhs, one requires collateral. Students who desire to study abroad may need part-time employment or a sponsor due to low loan balances. If you’re going to study abroad, you must get insurance. Tips to Consider Before Going for an Education Loan Education loans need to be planned for just like every other type of loan. Here are some good ideas to think about: First, take a look at your finances and know how much you can afford to pay back. Then, choose a loan amount that is easy for you to pay back. Be careful about who you borrow from. An education loan is a lengthy financial investment. Just choose a lender with a favourable interest rate. Even a 0.5% change in interest rate can affect the loan’s overall cost. Before you choose the best lender, make sure you understand the terms and conditions. Just as you plan to get the loan, you must also carefully plan to pay it back. As soon as you graduate and start working, start paying back the loan. Your main goal should be to repay the loan as soon as possible. Part-time work in school is a good way to save for loan repayment. A part-time job might help you get work experience and save money for loan repayment. [B-02] Conclusion Every parent wants their child to get the best college education possible. Choose a reputable and well-known bank to get an education loan for your child’s education. Banks often have good offers and deals on student loans and know what you need. Let your child go after their goals, and your banking partner will care for the rest. Piramal Finance is a great option for you for such finance-related content. Visit their website to learn more about the products and services they offer.

08-11-2023