More articles for you

Your one stop place for everything related to finance and lending

Tax

How does LTCG tax impact you?

There are different tax rates for money made in India. You must pay income tax on any gain from selling assets, just like any other income. Gains from selling stocks, LTCG on shares, real estate, gold, and even original works of art are taxed. Capital gains, whether they are short-term or long-term, are taxed. This article talks about the latter and how it affects money. [B-01] What is the tax on long-term gains? Long-term capital gains tax, or LTCG tax, is the tax you must pay on the increased value of assets you’ve owned for a long time. Some investments can be considered long-term holdings after a shorter time, while others need to be held longer. Shares of stock and equity-based mutual funds held for more than a year are taxed as LTCG tax. A 10% long-term capital gains tax is levied on stock gains over Rs. 1,000,000 has been held for more than a year (LTCG). For long-term investments, more than three years is the norm for debt mutual funds. After indexing, long-term capital gains from debt mutual funds are taxed at 20%, no matter your marginal LTCG tax rate. The unit prices of debt mutual funds are adjusted to reflect changes in the general cost of living. It usually makes people pay less in taxes. The long-term capital gains tax (LTCG tax) is paid on land and buildings owned for more than two years. After indexing, long-term capital gains from real estate are taxed at 20% as debt mutual funds. After indexing, the LTCG tax rate for gold is 20%. Gold could be a long-term investment if it is kept for at least three years before being sold. LTCG tax also applies to paintings, sculptures, and even cars owned for over three years. How Does LTCG Tax Affect your Finances? LTCG tax limit is paid on money made from selling assets that have been owned for a long time. For example, the long-term capital gains tax rate is 20% when an asset bought more than a year ago is sold. You have to count this money as income when you file your taxes. But you don’t have to pay taxes on any money you get as a gift or inheritance. Gifts of property, gold and other capital assets from family are not taxed. LTCG tax is paid on the sale of inherited property. After the LTCG tax limit goes into effect, you don’t have to pay taxes on the first Rs. 1 lakh of capital gains you make, but you do have to pay a 10% tax on everything else. So, if you made Rs. 1.5 million from LTCG in a given fiscal year, you would owe Rs. 5,000 (10%) in taxes on the Rs. 50,000 above the exempt amount. Your finances will be affected, but not in the way you think. With the introduction of a tax on long-term capital gains, investors are looking forward to the arrival of unit-linked insurance products (ULIPs) and government bonds, which are not subject to the tax. Because of this tax, short-term capital gains have become more popular, which is not surprising given that the difference between the two rates has shrunk. For tax reasons, investors used to wait a full year before selling capital assets, putting themselves at risk of making a loss. Since waiting for more than a year won’t change much or anything about how much money they can save on taxes, they are more likely to sell their assets if they find a better deal. Investors have found alternatives that work using this strategy, but the LTCG tax has not had the big effect on earnings that was feared at first. Lowering the Tax Rate on Long-Term Capital Gains You can cut your costs in several ways without giving up your ability to avoid paying LTCG tax. When you sell real estate, land, or other movable assets, you can put the money you get from the sale into more movable assets or long-term bonds approved by the government. If you want to avoid paying taxes on your capital gains, you could put the whole amount back into the real estate market. It’s not like selling a house, where you might put all the money you got from the sale into something else. The money made from the sale must be put back into the business. If you sell Rs. 1,000,000 worth of debt mutual funds and make a profit of Rs. 2,000,000, you must reinvest the entire amount in property to get the tax exemption. Sales taxes Section 54B says that the LTCG tax does not apply to the sale of land used for farming for at least two of the five years before the sale. To get the exemption, the gain must be put into qualifying new agricultural land within two years of the date of the transfer. It is possible to get an exemption. Also, the land must have been bought more than three years ago for it to be sold for agricultural uses. Landowners who can’t use their capital gains to buy new agricultural property before the deadline for filing their income LTCG tax limit returns can instead put the money into an account at any public sector bank of their choice. If a person qualifies for certain exemptions, they may be able to cut their overall tax burden by a lot. Because of this, assessors have to make sure they are eligible for all of the exemptions they claim to get a good idea of how much tax they will have to pay on their long-term capital gains from real estate. [B-02] Conclusion India’s tax laws say you may have to pay long-term capital gains tax if you sell a capital asset. This depends on what kind of capital asset you sell. If this LTCG tax limit seems to be a lot, there are ways to avoid paying it. Before you do anything with your capital gains, talk to a tax professional from Piramal Financing House.
08-11-2023
Read More
Cards

Credit Card Cash Withdrawal: How to Get Cash from Credit Card?

Credit cards have changed the way we use credit services. Earlier, they provide a 45-50 days free credit period. Now some cards started paying customers in the form of cashback for using credit cards. With technological advances, people have high expectations from every aspect of their lives. The cash withdrawal solution is no exception to this recent trend. With the facility of credit card cash advance, you can withdraw cash from your bank account using your credit card at an ATM. It is one of the best solutions for those who are careful and considerate of their finances. Credit card cash withdrawal is another feature offered by the credit card provider. Making cash withdrawals is easy; swipe as you do it with your debit card. It’s more like a prepaid debit card where you must pay the amount with interest and extra charges charged by the provider within a specific period. The best part is it does not require any documentation and approvals from a bank. [B-01] Almost all credit card providers provide this service, and the permissible limit varies from 10% to 40% of your total credit limit, depending on your card. Consider this feature because it will help you in various emergencies. Also, you will only be charged when you use this service. Difference between the credit limit and Credit Card Cash Advance Limit: The credit limit is the maximum limit provided to you to spend, while the credit card cash advance is a portion of the credit limit you can use as liquid cash. There is no interest or other charges when you use a credit limit and pay it back within the free credit period. You must pay interest monthly when you use the cash advance limit to withdraw cash from ATM. For example, if your credit card has a limit of 1Lakh, you can use that amount to pay through the payment gateway, POS and pay back that same amount; there will be no extra charge within the credit period. A cash advance is generally 20% of the credit limit. So, you can withdraw only twenty thousand from ATM. Also, you must pay interest for the withdrawn amount chargeable monthly. How to Get Cash from Credit Card? Getting/Withdrawing cash from a credit card is straightforward. Visit near ATM kiosks, and follow the credit card provider’s instructions to withdraw some money. Note that every ATM provider charges a fee upon withdrawal. Charges vary from one another. Please go through the terms and conditions of a credit card. Advantages and disadvantages of withdrawing cash using a credit card Every coin has two faces, and so has the credit card cash withdrawal. Let’s look into the first side, i.e. Advantages. It acts as an emergency fund as it provides instant cash. ATMs are available 24*7 everywhere, and you can access them very quickly. You can withdraw money from any ATM provider. Hassle-free Credit: You don’t need to fill out any document or get anyone’s approval to give cash, unlike any other loan. Limit enhancement: You maintain good credit history when you spend and pay your bills on time without any late payments. This makes credit card providers increase your cash limit. Now comes the second/opposite face, i.e. Disadvantages High-Interest Rates: Credit card companies charge a very high interest on cash withdrawals. Their interest rates range from 24% to 48% annually, whereas personal loan interest rates range from 9% to 24% annually. Fee & Charges: Every time you withdraw cash from ATM with your credit card, you must pay a cash withdrawal charge. Reward Points: You will not receive any reward points for cash withdrawals, unlike other transactions made on the credit card. No FREE Credit Period: Credit card offers a 45-50days free credit period on POS/online transactions, but you will be charged interest and withdrawal charges on cash withdrawal. Impact of Credit Card Cash Advance on Credit Score There is no impact on your credit score on cash withdrawal if you repay it on time. However, the Total outstanding is reflected on the credit score, not the specific cash withdrawal. Use your credit card wisely and repay it on time. If you reply before the due date, it will significantly impact your credit score. . Charges on Credit Card Cash Withdrawal The primary usage of credit cards is to make a transaction with a card, whether through payment gateways or POS. Credit card cash withdrawal is an additional feature offered to you. Everything comes with a price so is this extra feature. They charge you in the name of a ‘credit card advance fee. Every time you drawback cash from ATM, they will charge you a certain percentage of the amount as a credit card advance fee. Usually, they charge 3% to 5% of the amount withdrawn with a minimum charge of 300 to 500. This fee will come under the next billing cycle and be paid on your next bill. The cash advance fee comes along with the finance charge, which is nearly equivalent to each other. If you withdraw cash multiple times, you will be charged for each transaction based on the withdrawal amount. [B-02] Interest Charges on Credit Card Cash Withdrawal: Interest rates on credit card cash withdrawals vary from one provider to another. The bank that issued the Credit CardMonthly Interest Rate in %Yearly Interest Rate in %HDFC Bank Credit Card1.99% – 3.5%23.88% – 42%Axis Bank Credit Card2.95% – 3.5%35.4% – 42%SBI Credit CardUp to 3.35%Up to 40.2%Citi Bank Credit Card3.1% – 3.5%37.2% – 42% Takeaway: Credit card cash withdrawal advantage helps you get access to instant funds, but this should be used only as a last option.
08-11-2023
Read More
Personal Loan

Do You Need To Mortgage An Asset To Take A Personal Loan?

Personal loans are very dynamic. You can use an instant personal loan to consolidate your debt, pay off medical bills, or pay for home repairs, among other things. So, these types of loans become the top choice for people looking for instant cash. Some instant personal loans may be secured by collateral, but most of them are not. You can use your savings account balance, car, or house as collateral for an instant personal loan. Read on to find out what collateral is and what you can and cannot use as collateral for a secured personal loan. [B-01] What is a Personal Loan? A personal loan is one of the easiest ways to borrow money for a short time. With a personal loan, you can avoid asking family and friends for money, which can be embarrassing. The best feature of a personal loan is its flexible usage. The lender does not put any restrictions on the end use of loan money. You can use it to pay for a range of expenses like a luxury trip or an urgent medical bill. Some people borrow money from individual creditors or get credit with their credit cards. But they come with much higher interest rates, so you end up paying more in interest. If you want to borrow money but do not own any assets or do not want to put your gold jewellery or house up as collateral, a personal loan is the way to go. Until a few years ago, getting a personal loan took a lot of time. However, this has changed with online applications. Now, you can get yourself an instant personal loan within hours of applying. The application process also takes only a few minutes. What Does Collateral Mean? Collateral is an asset, like a car or house, that a borrower gives up to get a loan. You can still use the car or house during the loan tenure. The lender only holds the documents for the asset. When you get an instant personal loan with collateral, the lender usually puts a lien on the collateral. If you do not repay the loan, the lien gives the lender the right to take your property. When you repay the loan, the lender takes the lien off your property. If you do not repay the loan, the lender can sell the asset to make up for the money they lose. A lender’s financial stake is protected by collateral. This makes them more likely to give a loan. If you default, you not only lose your asset but also greatly damage your credit score. An unpaid debt also negatively affects your credit score for seven years after the default has occurred. In general, the interest rate and loan tenure for secured loans are more favourable than those for unsecured loans. Can I Get a Personal Loan without Collateral? Yes, you can. Borrowers need not put up any property or security for an unsecured personal loan. Lenders of unsecured loans want to know that they can count on you for paying their money back. So, they evaluate your application based on your credit scores, credit reports, income, and other criteria. Personal loans have the same effects on your credit as secured loans. But if you do not pay them back, you do not lose your property. Pros of Unsecured Personal Loans Special Offers for New BorrowersWhen you apply for a personal loan, you can get a better interest rate, a lower processing charge, and other perks. Quick Approval These days, fintech companies and banks offer pre-approved loans to customers with good credit who maintain a good account balance. High Loan AmountsMany NBFCs give high loan amounts even for unsecured personal loans. For example, some lenders might let you borrow up to ₹25 lacs for personal use. No Collateral You do not put up any assets for collateral for unsecured personal loans. This ensures that if you fail to repay the loan, you do not lose your assets. Best for Low-Limit Credit Card HoldersIf your credit card has a low credit threshold, a personal loan is a good way to meet your monetary needs. Long Repayment TenureYou can repay the loan amount in 12 to 60 months. Some lenders even allow for a 5-year loan tenure. Cons of Unsecured Personal Loans Strict Eligibility CriteriaBanks have a lot of rules about who can get an unsecured personal loan. They look for people with better credit, a higher minimum monthly income, and jobs with well-known organisations. Time-Consuming It may take lenders between 3 and 5 days to process an application for an unsecured loan. This is because unsecured personal loans require a thorough background check of the applicant. This helps the lender assure that the applicant can repay the loan amount in full and on time. Rigid Repayment StructureMany lenders have strict rules about the repayment of personal loans. These include charges for paying off the loan early, penalties for failing to make payments on time, etc. [B-02] Conclusion Unsecured instant personal loans are a type of loan that does not have to be backed up by anything. Lenders give money to people based on how likely they are to pay it back, even if they do not have a mortgage or other security. So, a personal loan is the simplest way to get a loan if you do not have any personal property to put up as collateral or if you do not want to do so. You can read more about instant personal loans at Piramal Finance. Also, while there, look into their other financial products and services. You will many solutions for your fiscal needs.
08-11-2023
Read More
Other

Documents Required for Opening a Demat and Trading Account

Demat account is a term for Dematerialized Account, which holds all your securities and stocks in digital form. All assets are transformed from physical to digital form to make online trade more usable and easier for all. If you want to open one, here are the specifics for all the documents required for a Demat account. Since a Demat account is similar to a bank account, you must offer certain papers. You may also open a Demat account over the internet. You may create a Demat account with a variety of firms and banking groups. Read on for more info on the procedure and documents required to open a Demat account. [B-01] Documents Needed to Open a Demat Account If you want to begin investing in the stock market, the first step is to create a trading account. It functions as a pass to the gate of profits. The list of necessary papers is not out of the ordinary. Knowing which documents are needed ensures that you do not face any issues while opening a Demat account. You may now finish the step of creating a trading account online while sitting in the safety of your own home. The following papers are needed for the opening of a Demat account in India: Identity Proof Address Proof Income Proof Bank Details Photograph Signature Identity Proof When opening a Demat account, you must give proof of identification. Various papers are acceptable as identity proof. 1. PAN Card – Your PAN card with a clean photo is a must-have document for a Demat account. It is only exempt under limited cases, which include, If a person is a Sikkim resident If the deals are carried out by or on account of the state or federal governments. The transactions are carried out by the official appointed by the court. In India, entities (UN) are not obliged to submit income tax returns. Institutional users are likewise free from having to provide a PAN card. 2. Specific papers with a unique identifying number. This includes your Aadhaar card, driving licence, and voter identification card. 3. An identification card issued by authorised or regulating agencies of the federal or state governments. The applicant’s photograph should be clearly visible on this card. You may use valid papers to prove your identity before proceeding to the following stage, which is giving proof of residence. Address Proof As a stockbroker in the Country, most of you need proof of address. When opening a Demat account, you have many choices for a valid proof of address. Passport Aadhaar Card Voter identification card Driving Permit Ration Card Bills for utilities (electricity bills, gas bills, telephone bills, water bills, etc.) Please keep in mind that these invoices should be no more than three months old. Your address is clearly shown on the identification card. A legally binding rent/sale arrangement. Note: Please keep in mind that your Aadhaar card must be connected to your cell phone in order for you to get the needed OTPs to finish your KYC. Income Proof If you want to trade in the area of the future, you must show evidence of income. Do you know why? When compared to the equities market, futures and options are a bit riskier. This is due to the large sum of money involved as well as the high danger. As a result, it is vital for you, as a stockbroker, to verify whether you have a strong source of income to bear the penalty if things go wrong. You may provide the following papers, such as proof of income. You may provide a copy of your Income Tax Return acceptance slip (ITR). A declaration of your net worth. A Chartered Accountant should confirm this. Recent Salary Reduction. Form 16. You may submit your holdings’ statement if you already possess another Demat account. 6-month bank statement Bank Information You must give your bank information while creating a Demat account. You must provide your account number as well as your IFSC code. In certain situations, you must additionally provide a cancelled check. Simply ensure that your name, account number, bank name, and IFSC code are clearly visible on the cheque. The cancelled cheque allows you, as a stockbroker, to thoroughly check all of your bank data. Photographs In addition to the papers listed above, you must provide two current passport-size photos. The image should be clean and current. The number of photos may vary from one stockbroker to the next. To create an account online, you must supply a clean, scanned passport-sized photograph. There are, however, certain sizes of the same. As a result, ensure that you confirm the required size recommended by your brokerage before resizing your photograph. Signature The last document required is a signature. If you are opening a trading account online, you need to have a scanned copy of your signature. Make certain that the signature is on blank white paper. Following this, your verification will be completed, and the account opening procedure will begin. By supplying the necessary paperwork, you may quickly open your Demat account. It takes around 4 hours to get your Demat account authorised after you submit your paperwork. If you have problems with the account opening procedure, the app support staff may phone you and walk you through the steps. You must submit these papers for the online application or send self-attested copies together with the trading account opening form. Documents Needed to Open an NRI Demat Account Are you an NRI looking for a place to register a Demat account? So, even if you are not a resident of India, you may register a Demat account there. It is known as an NRI Demat account. Let’s start with the documentation needed to create an NRI Demat account. A passport and visa photocopy PAN Number Address verification (utility bills from the nation where one resides, a sale/rent agreement) Photographs A cancelled check from an NRI or NRO bank account. FEMA’s proclamation You may establish an NRI Demat account if you have all of these papers. [B-02] Conclusion The papers necessary for Demat account opening are not difficult to gather, and you may have them on hand to make the process simpler and reduce the time it takes to activate your Demat account. A minor Demat account, a HUF Demat account, an NRI Demat account, and a corporate Demat account may all be opened. The vital papers are proof of identification, proof of residence, and bank account information. If you have all the documents for a Demat account, go ahead and open one now! If you want to know more about how to open a Demat & trading account, visit Piramal Finance. You may also explore their products and services.
08-11-2023
Read More
Other

Corporate Finance – Scope, Types & Definition of Corporate Finance Explained

Corporate finance is a study of a company’s financing area. Corporate financing efficiently plans and designs a company’s capital structure. It deals with investors for capital acquisition, managing debt issues, etc. These are only a few examples of how your company benefits from corporate financing. Learning about this concept will help you to use your company’s earnings in a better way. So, keep reading ahead to know how corporate financing works. The guide also talks about its various types and other relevant information. [B-01] What Is Corporate Finance? To know about Corporate Finance, you must first learn what a Corporate Investment is. Corporate Investment is the money spent to increase a firm’s total assets. It includes the company’s existing assets. The purpose here is to produce a greater output using the available funds. Your firm can receive funding from both external and internal sources. You can use them to invest in many promising projects. Borrowed amounts or raised capital are examples of external fund sources. Internal sources include the earned profits by your company over the years. For example, depreciation provision, reserves, etc. Deciding how to use these funding resources is a crucial step. It can either make or break your company’s financial health. A well-planned finance framework is a must to make wise corporate investment decisions. This is where corporate finance comes into play. It is a subpart of a finance strategy. It oversees how your firm addresses available funding sources. Plus, it manages your company’s capital structure, investment decisions, and accounts. Corporate financing aims to enhance shareholder value. It creates short and long-term financial planning and strategies for future implementation. Financing executives create these strategies after studying the financial history of your company. Capital investment comes under these strategies. Proper financial planning boosts revenues and reduces the company’s expenses. Scope of Corporate Finance Scope refers to the responsibilities and goals of corporate financing. It focuses on improving your firm’s sustainable growth and capital reserves. The following are the relevant scopes of corporate financing: Capital Funding It sources funds from debt or equity financing or both combined. Companies take long-term loans from investment banks to cover expenses or investment needs. The aim here is to come up with the best plan on how to fund capital investments. Corporate finance balances these two resources. Depending too much on debt as a source can lead to repayment default. It can affect your firm’s reputation. In contrast, more equity will dilute value and earnings for new investors. Due to this, they might not show interest in funding your firm. Corporate finance decreases the Weighted Average Cost of Capital (WACC) to the lowest. This way, it optimises your business’s capital structure. Dividends and Return on Capital: Corporate financing uses a company’s excess earnings in two ways- It distributes excess earnings to shareholders as dividends or buybacks. It keeps the capital for the firm’s future operational and investment needs. Using excess capital for business growth is the best financing source. It eliminates the need to take external loans. Thus, reducing the risk of repayment defaults. It also reduces the dilution of equity value by offering more shares to shareholders. You must keep excess capital only when financing officials are confident of a higher ROI (Return on Investment). If not, then buying back shares or paying dividends to shareholders is the best choice. Goals of Corporate Financing Keep your company’s expenditure in check. Find and involve with beneficial projects only. Run market analysis to keep your firm updated with the latest trends. Takes the company’s financing decisions after deep research using trustworthy sources. Perform advisory roles for takeovers, mergers, and acquisitions. Survey investment options to offer the most effective financing strategies. Supervise the company’s expansion and investment profile. Different Types of Corporate Finance There are two types of corporate financing: equity financing and debt financing. Equity Financing It uses funds from the earnings of the company and equity issuance. Some examples of equity include preferred stock and common stock. Equity lets your company list itself on a stock exchange. But you can also list the company on an OTC (over-the-counter) exchange. The aim here is to sell the company’s shares to gain funding. Debt Financing Your company gets funding through banks and bond issuance. The financing type involves regular interest payment costs. You can pay the principal amount at the end of the loan’s repayment term. Corporate Financing Options Short-term Loan The loan has a short repayment term of a few months or a year. The following loan options are part of a short-term corporate financing loan: Trade Credit: The loan follows a B2B structure. Here, an agreement takes place between the company and the financing entity. It says a company can buy offered products and pay the entity later at a pre-defined date Financial Lease: The lender owns the company’s assets until you repay them. Yet, the company still has operating control over the assets. Accrual Account: It refers to the use of accrual accounting methods for raising funds. An accrual account enables your company to pre-record future revenues. The company can also pre-record expenses that the company has to pay. Long-term Loan The loan tenure lasts over a year or more. Following are examples of a long-term corporate financing loan: Debentures: It is a form of debt instrument that doesn’t need any collateral. Instead, it considers the reputation and creditworthiness of the issuer. Its tenure can go over 10 years. Governments and big companies commonly use debentures to raise funds. Floatation: It converts a private corporate sector to the public. To do so, it issues the private sector’s shares to the general public. The financing type assures fundraising from external sources only. It helps your company to invest in new projects to enhance the corporation. Bank Loan: It allows you to choose a medium or long-term loan option. Consider your company’s financing needs before making a choice. [B-02] Final Words In conclusion, corporate finance is vital for all company sizes. Financing plans help your business grow and enable it to spend wisely. You get a hold of where your investments are going and study their ROI. Most importantly, corporate financing keeps your company out of trouble with debts. Do you want to get the best financial advice for your company? Visit Primal Finance. It offers expert solutions for business investments. You can also check out business loan offers by the company.
08-11-2023
Read More
Personal Loan

Can I Use a Personal Loan to Purchase a Car?

Personal loans can be used for many different purposes. But one common question people have is if they can use a personal loan for car purchases. Cars are no longer considered a luxury for most people and are more of a necessity in our lives. But buying a car can impact your finances, especially if you are using money from your savings. For this reason, people opt for personal loans. There are both pros and cons of taking a personal loan for car purchases, which are discussed below. [B-01] Personal Loans and Car Loans To make things simpler to understand, people can buy a car with a personal loan even though personal loans are not designed specifically for buying a car. Before applying for a personal loan for car purchases, consider these six factors: 1. Collateral Collateral is an important aspect to consider. A car loan takes the car as collateral, whereas a personal loan for a car does not have any collateral. So if you are not able to pay your loan instalments on time, the bank can seize your car if you take a car loan. But if you take a personal loan for a car and are unable to pay your EMIs, many additional charges will keep getting added to the amount of money you will have to repay and your credit score will be affected. 2. Costs When taking a personal loan for a car, the loan amount will cover the entire cost of the car. On the other hand, when it comes to a car loan, only 80% of the car’s cost will be paid by the bank and the other 20% will be paid by the customer. 3. Interest Rate The interest rate of personal loans is higher compared to the interest rate of car loans. However, interest rates may sometimes fluctuate. 4. Credit Score Another important factor to consider is your credit score. If you have a good credit score, then a personal loan for a car is a good option since the interest rate is lower. On the other hand, if you do not have a good credit score, then a car loan is an attractive option. 5. Purpose The purpose of the loan must be clear. If you are looking for a loan to buy a car, then you can consider taking a car loan. But, if you want to buy extra accessories with that car, then you can apply for a personal loan for car-related expenses. 6. Application and Approval The process of applying for both of these loans is simple and similar. But, applying for a personal loan may take less time since it is an unsecured loan and with the online application process, can be granted within the same day of your application. When To Take a Personal Loan Instead of a Car Loan These are some situations when you can take a personal loan for a car purchase: 1. If you are trying to purchase a car from a private party If you are trying to get a car from a private party, then you can take a personal loan rather than a car loan. A private party who has listed their used car on different websites will prefer to get their payments in the form of cash or a cheque issued by the buyer. This is only possible if the buyer has the money from a personal loan. On the other hand, car loans are more complicated when purchasing from an individual. 2. If you are trying to save some money on insurance When you take a car loan, the bank will have the car as collateral and will want the car to be insured. The bank will give full compulsory coverage and comprehensive insurance to the car, which might cost a lot of money. On the other hand, this is not the case when you take a personal loan for a car. With a personal loan, you can choose the type of insurance you want rather than opting for full coverage insurance, which will ultimately help you save more money. 3. If you are trying to buy a car that is highly damaged If you are going to buy a car that has been damaged to such an extent that it cannot be used without proper repair, then it is unlikely that a bank will issue a car loan for this purchase. In this case, a personal loan is preferred over a car loan since you can take a personal loan for any purpose and are not required to disclose to the bank the reason for taking the loan. You will, however, be required to prove your repayment ability. Personal Loan Eligibility, Documents and Application If you are between the ages of 21 and 68, have an income from a salary or business, have been employed for 1 to 3 years and have a CIBIL score of 750 or higher and meet other requirements, you are eligible to apply for a personal loan. Once you have decided to take a personal loan for a car, either visit your nearest bank branch or go to the bank’s website to apply for a loan. You will be required to submit identity proof documents and address proof documents, and provide details on your bank account and other requested information. If your personal loan is approved, the money can be transferred to your bank account within a few minutes or hours. [B-02] Conclusion When you are planning to purchase a car, you can either consider taking a car loan or a personal loan. There are benefits and disadvantages to both so it is important to carefully consider your financial situation and repayment abilities before making a decision. If you prefer to take an unsecured loan and use the money from a personal loan to finance the purchase of your car plus other related expenses, then a personal loan for a car is a good option for you. Applying for a personal loan is a simple process that is available as an online option as well. For more information, visit Piramal Finance for more articles like this one and further financial guidance and advice!
08-11-2023
Read More
Know More

What Are the Different Types of Bank Fixed Deposits?

Fixed deposits have remained a popular form of investment for decades. It is probably still the first thing that comes to people’s minds when they think of investing a sum of money. Thanks to a wide range of fixed deposit types, you can choose to invest your money the way you want, while having the peace of mind that your money will remain safe, earning you a fixed sum of return for a given period. A fixed deposit, or more popularly, an FD, is an investment instrument where you deposit a certain sum for a fixed period. It earns you interest at a fixed rate, which is communicated to you at the time of investing. There is a guarantee on the principal as well as the interest amount, which makes fixed deposits one of the safest investment options. [B-01] Fixed Deposit Types Different investors have different investment objectives. FDs come in a wide variety of choices, catering to different kinds of needs. Let us take a look at them: Standard Fixed Deposits This is one of the simplest types of fixed deposit types where you can invest for 7 days up to 10 years. Your investment earns a pre-defined interest rate, which varies as per the time period. For example, the interest rate on a 1-year fixed deposit can be 6.1%, while the interest rate on a 5-year FD can be 6.25%. Although your money is invested for a certain period of time, a premature withdrawal facility is available, unless specified otherwise. However, breaking the FD prematurely will attract a premature withdrawal penalty. Most banks offer loans as well as overdraft facilities on these types of fixed deposit types. Please bear in mind that the interest rate is not directly correlated to the time period; that is, keeping your money for a longer period does not necessarily guarantee a higher interest rate. Check the bank’s interest rate chart before creating the fixed deposit. When it comes to the interest component, two options are available to you: i) Withdraw the interest as and when it is paid (monthly, quarterly, etc.). This option is known as the “non-cumulative” option. ii) You may also choose not to withdraw the interest component and reinvest it in the fixed deposit interest. In this case, you earn returns on this interest component as well. This is known as a cumulative option. Since you earn interest on interest, the final return on your FD works out to be higher, under this option. For example, suppose you invest ₹10,000 in a fixed deposit for 1-year at an interest rate of 6.1%. The total interest earned by you under the cumulative option will be ₹624 while that under the non-cumulative option with a quarterly payout will be ₹610, and the monthly payout will be ₹607. Senior Citizen Fixed Deposits These fixed deposit types are specially designed for senior citizens over the age of 60. They work like standard fixed deposits, however, and earn a slightly higher interest rate than them. Cumulative and non-cumulative options are available in senior citizen FDs. Tax Saving Fixed Deposit Types As is evident from the name, these fixed deposits obtain tax benefits under Section 80C of the Income Tax Act. These FDs have a lock-in period of 5 years, and premature withdrawal is not allowed. You can invest up to ₹1.5 lakh in these fixed deposit types. Loan and overdraft facilities are not available for these fixed deposits. Both cumulative and non-cumulative options are available in these fixed deposits. Hence, although your money remains locked in for five years, you can withdraw your interest monthly or quarterly, if you wish. Recurring Deposits These fixed deposit types allow you to invest a specified sum of money every month over a given time period. They earn you a fixed interest rate, like standard fixed deposits. For example, let us assume a 1-year recurring deposit has an FD rate of 6.1%. If you invest ₹ 10,000 per month for 1 year, you will obtain a total payout of ₹124019 (₹120,000 principal + ₹ 4019 interest) at the end of 1 -year. Since you invest a fixed sum of money regularly in these fixed deposit types, the non-cumulative option is not available in this case. You can withdraw the interest along with the principal only at the end of the fixed deposit tenure, upon maturity. Regular Income Fixed Deposits As the name suggests, regular income fixed deposit types earn you a fixed return at regular intervals. They are standard fixed deposits where you can choose to withdraw the return quarterly or monthly. If you require regular income from your investment, these fixed deposits are an ideal choice. Flexi Fixed Deposits Types Flexi FDs offer the benefit of higher interest rates than fixed deposits and the convenience and flexibility of a savings account. They combine flexible FD tenure and competitive rates with the ability to withdraw the amount at any point in time. Some banks offer the facility to put a limit on your savings account so that any excess amount is transferred to a Flexi FD, thus enabling you to earn higher interest on idle funds. For example, you may set a limit of ₹ 100,000 in your savings account so that any balance over ₹100,000 is swept into a Flexi fixed deposit. [B-02] Conclusion Fixed deposits are indeed a great investment option if you are a risk-averse investor. From a wide variety of tenures to investing as per your needs, fixed deposits are indeed a great addition to your investment portfolio. Explore all the options wisely and choose the right one for you. Happy Investing!
08-11-2023
Read More
Travel
Travel

Ways to Plan Your Vacation Using a Credit Card

Are online credit card miles a good way to reduce airfare? How can you maximize your credit card bonus? When is the best time to apply for an online credit card? At some point, everyone needs a break. Take a vacation to break the monotony of daily life and spend some quality time with your loved ones. Traveling, however, necessitates cautious budgeting. But don’t panic, using an online credit card can help you pay less for the trip. Rewards points are given by credit cards in exchange for your purchases. These reward points can be used for a variety of deals, including travel, lodging, and dining options. There are occasionally excellent offers that can improve the standard of your trip. [B-01] Four Ways to Plan Your Vacation Using an Online Credit Card Benefit from credit card miles Online Credit card miles are a great way to save money on airfare, whether you’re traveling domestically or abroad. Some companies provide credit card lounge access to consumers with online credit card miles. This is a type of loyalty program that rewards customers for making purchases. The more you spend with your credit card, the more miles you earn. You can use reward points from some credit cards to pay for airfare. You should first find out what kind of rewards program your online credit card offers. Then, look up the locations and airlines that have agreements with your credit card provider. You can choose where to go based on this information. You can even be bumped from economy to business class if you’ve taken enough flights with the airline. Look for hotel affiliations Due to partnerships between credit card companies and high-end hotels, cardholders are entitled to sizable discounts throughout their stay. Room rates are subject to discounts of up to 20%. This implies that you can reserve a room for Rs. 8,000 instead of the customary Rs. 10,000. The discount might add up to a significant amount if you book numerous rooms or a longer stay. A few online credit card providers also have partnerships with international organizations and low-cost hotels. You can check out hotel specials and reserve opulent locations at a discount, depending on the type of vacation you’re planning. Make use of retail and restaurant discounts Many online credit card companies collaborate with stores and restaurants to offer their clients discounts and special offers. Take advantage of these savings to reduce the overall cost of your trip. For instance, you might be going to a hill station and need to get warm clothing for your family and yourself. You can shop at the relevant businesses and take advantage of discounts if you are aware of the retail affiliations that your card has. Another approach to maximizing your credit card benefits while traveling is to take advantage of restaurant specials and promotions. Take advantage of lounge amenities Access to airport lounges is also provided by online credit card companies, typically for a small price. The experience of using an airport lounge is worthwhile because you can enjoy your wait time in a posh setting while choosing from a variety of food options. Most credit cards, however, only allow one user per card. You should find out if your partner’s credit card offers access to airport lounges as well. You have the option of paying the cover charge for your children’s access or getting add-on cards. In either case, it will lower your travel expenses and make your vacation even more enjoyable. Tips for Using Your Online Credit Card While Traveling Research the travel benefits of your credit card Look into your credit card benefits if you are unsure which to bring along on a vacation. The more travel-related benefits you use, the more incentives you’ll receive for your spending. For instance, it would be useful to have a card that accumulates points for eating if you frequent many restaurants. Use your issuer’s rewards system to make your travel arrangements Booking choices for lodging, travel accommodations, rental vehicles, and other services are frequently available through your issuer’s rewards system. Usually, you can use a credit card, rewards points, or a combination of the two to pay for your journey. Track the due date for your bills Keep track of the due date on your bills to prevent any payment delays. Although traveling may divert your attention, remember to pay your online credit card account. Late fees may apply to missed payments. To ensure that you don’t forget to make payments while on vacation, think about setting up automatic or recurring payments. Bring many cards on your trip It’s crucial to have backup payment options when traveling. You should have a backup card in case your primary one is declined while buying something. Bring credit cards with additional points for travel-related purchases, if possible. [B-02] Summing Up When used properly, credit cards can be a sensible way to control your spending. Never substitute a credit card with actual cash. Instead, become familiar with the credit card benefits and make use of them to organize an unforgettable family vacation. Visit Piramal Finance for even more in-depth, insightful articles about money.
08-11-2023
Read More
Personal Loan

Complete Guide on How to Finance Your Education Abroad Using a Personal Loan

The cost of higher education is increasing. In recent years, many students have opted for study abroad programs to further their studies; however, the high costs can be difficult to manage when you have to fund it on your own. If you want to finance your education abroad, consider applying for a personal loan. A personal loan can help you pay for tuition and other expenses such as books and housing while giving you access to flexible repayment options that fit your budget. [B-01] Why Do We Need to Finance Education? Education is the key to success. It helps you achieve personal and professional growth. It changes your perspective on the world and makes it easier for you to understand it. Education loans come in many forms. These can be grants, scholarships or student loans. The most common is student loans, usually paid back with interest later (after graduation). How to Fund Your Education Abroad Using a Personal Loan? A personal loan is a flexible way to fund your education abroad. It can help cover all costs while studying abroad. These personal loans allow people who don’t qualify for student loans or have no credit history of applying. The interest rates are higher than those with student loans. Features of a Personal Loan to Finance Abroad Education Most of these loans benefit students. The main applicant is the student, and the co-applicant could be an elderly parent or a family member. These loans are available in both local currency and US dollars. Generally, personal loans for higher education are offered at a fixed interest rate that remains constant over the term of the loan. There are no hidden charges or fees involved. Most of the time, no collateral is needed for a student loan. Yet, some banks may ask you to pledge your savings account as collateral. Students can use personal loans for higher education to pay back any outstanding balance on their educational loans and living expenses while studying at a university. Benefits of Personal Loan for Higher Education Personal loans are easy to avail of when you need them the most. The entire process of availing of a personal loan is simple. It takes a few minutes to apply for a personal loan, and once you receive approval from the lender, your funds are transferred into your account within 24 hours. One of the best things about personal loans for higher education is that they give you flexible repayment options. Some people choose to pay on a monthly or quarterly basis. The best part about these choices is that lenders don’t charge extra. This means if you have access to more capital than you need at once, you have plenty of options for paying them back. The biggest benefit of taking a personal loan for higher education is avoiding debt traps. Many people end up with huge debts after graduation and have no idea how to repay them. Personal loans allow students to study without worrying about the financial burden. One more major benefit of taking personal loans is their flexibility. You can use them for any purpose, including tuition fees and accommodation costs. With the help of these loans, you can easily meet your financial obligations after graduation. Documents Needed for Personal Loan for Higher Education To avail of a personal loan for higher education, your lender will need the following documents. Identity Proof: You need to submit two documents as identity proof. These are your passport or an official photo ID (driving licence/pan card / Election Card / Aadhaar Card). Address Proof: You need to provide some official document that contains your current address. This could be a copy of an electricity bill, phone bill or even a letter from the bank stating that the current address is correct and has been updated in their records. Income Proof: The lender will need proof of income if you are applying for a personal loan. This could be your salary slips for the last three months or any other document that mentions your name and address along with the amount of money you are paid in salary per month. Tips to Get Personal Loan Approved for Education Abroad You might wonder how you can finance your education abroad with a personal loan. Well, here are some tips that will guide you: Choose a reliable lender. When applying for a personal loan, make sure the lender is trustworthy. This will help you avoid fraudulent companies and scammers. Look for positive reviews from other customers who have worked with them. Be ready with all the documents. Before applying for a personal loan, it is vital to ensure that you have gathered all the necessary documents. Some of these include proof of income (such as payslips), copies of utility bills and bank statements. Estimate your expenses and income. When applying for a personal loan, you should ensure that the amount you are looking to borrow is, at most, what you need for your education abroad. You should also calculate all the expenses associated with your education and compare them with your income. This will help you determine if you can afford to take out a loan. Choose the right repayment plan. Most personal loans allow you to repay your debt over 10 years or more. Considering your current financial situation and future goals, you must choose the best repayment option. Make sure you are eligible for a personal loan. Before applying for a personal loan, it is vital to make sure you are eligible for one. This can be done by checking your credit score and looking at other factors, such as your employment status and current income. Apply online. Once you have gathered all the necessary documents mentioned above, apply online for a personal loan from any bank or financial institution of your choice. Apply Online for a Personal Loan Applying for a personal loan online is easy and convenient. You can apply for a personal loan at any time of the day or night. The application form is short and easy to fill out, so you save time. Furthermore, the entire process is fast and allows you to receive the money within days after approval. When you apply for a personal loan online, you can choose the best lender. This way, you will receive the best rates and terms of the market. If you want to compare rates and conditions from different lenders, it’s easy to do so. You can use the comparison tools provided by most banks and financial institutions. [B-02] Conclusion We hope this article helped you understand all the aspects of a personal loan and how it can help you finance your education abroad. The process is simple, but knowing what financing options are available is important to choose the best one for your needs. If you have questions about this topic or want more information on financing your education abroad with a personal loan, please go through Piramal Finance blogs and explore their products and services.
08-11-2023
Read More