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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

Home Loan

Top Benefits of Loan Against Property in 2022 You Need to Know

Financial problems often come up when you least expect them. People who need loans have access to several different lines of credit. You can choose the best fit for your needs through loan products. Getting a loan can be time-consuming. It is because you have to go through the necessary paperwork. You also have to satisfy your customer checks and do other formalities. If you are not eligible for any loans, you can obtain a loan against property. It is often known as a LAP. An entirely constructed freehold residential, commercial, or industrial property is always a good bet when looking to borrow substantial quantities of money. A loan against property is flexible. And it doesn’t depend on what it will be used for. So most people prefer to get one for all their big and small needs. Let’s get a grasp on what a Loan Against Property is. And some of the benefits it offers in 2022. [B-01] What exactly is a Loan Against Property or (LAP)? A loan against property is a very secure loan. It can be advantageous to salaried individuals and businesses. You can put your home or business up as collateral for the loan. Then you will have your application approved. The financial institution will sanction the credit amount. It is proportional to the property’s current market value. To secure a loan, you can use your primary residence or another piece of real estate you own as collateral. You must check to see if there are no doubts about the property’s title. The lender agrees to provide the loan on the understanding that the borrower will pledge their property as collateral for the loan repayment period. Also, the lender keeps the borrower’s necessary documentation and property title. It lasts until the borrower repays the loan. In cases of default or nonpayment, the lender might seize the borrower’s assets. They can sell them to pay off the loan. Since a loan against property is very secure, it has several benefits. Suppose you are considering a loan against your property. This list of benefits will help you determine if it is an ideal fit for your budget and needs. Here are the top 7 benefits of getting a loan against property in India A higher loan amount One of the best things about a loan against property is that you can get a considerable loan. The lenders determine the loan’s value based on the property’s current value on the open market. They use a ratio known as the “loan-to-value ratio.” It helps to make these determinations. Borrowers can get between 70 and 80 percent of the property’s actual market value from lenders for the loan’s whole term. Flexible repayment tenure The payback period for a loan against property can be adjusted to suit your needs. It makes meeting your monthly installment payments easier. Secured loans, like mortgage loans, have a 15-year repayment period. The extended time frame decreases the borrower’s EMI payments, interest rates, and stress. It gives them time to figure out their finances and set aside the monthly EMI for loan repayment. Utilization of the property over time Suppose you acquire a loan against your property. You can still use it and exercise your ownership rights even after repaying the debt. Therefore, even though the property is being used as collateral for the loan, you still receive the benefits initially promised you by the asset. You can use different types of property as a mortgage. No matter if it is rented out or owned by the owner, if it is a home or a business. Easy eligibility requirements to meet Applying for a loan secured by real estate has fewer requirements. It is less than applying for an unsecured loan like a home loan. However, the qualifying requirements may differ. The following are some factors that are typically required. The borrower needs to be between 21 and 25 years old, at the very least. It is required that the borrower be a resident of India. It is required that the borrower be self-employed. Or they should get regular payments from an employer. Even a person or corporation can apply for a loan secured by real estate. The potential borrower must demonstrate a history of continuous employment. It can be either their own practice or a firm. The potential borrower is required to have a certain quantity of monthly or annual net income. (The maximum income a person can make depends on whether they are salaried, self-employed, or work for a firm or company.) Quick loan approval Loans against property have the advantage of a faster application and verification process than unsecured loans. Unsecured loans don’t require any collateral. So the lender can’t rely on anything the borrower owns as security. Therefore, the screening process and eligibility criteria have been made more stringent. Lenders now check the borrower’s repayment capacity in greater detail. As a bonus, you can apply for a LAP online, saving you time and effort. You should anticipate that the loan amount will be authorized on the same day that it is requested. Minimal documentation required One further perk of borrowing against property is the small amount of paperwork involved in getting the loan approved. The borrower is responsible for providing the following. Address proof – (Passport / Rent agreement / Electricity or utility bills) Identity proof – (Pan card / Aadhar Card / GST registration) Bank statement proof – ( Statement of an active bank account, salary credit statement) Property documents Income proof – ( Income tax returns, salary slips, employment letter) Low-Interest Rates As a loan against property is secured, the lender knows they have something to pull back on if the borrower doesn’t pay or doesn’t pay on time. The use of the property as collateral is highly advantageous. Because of this, financial institutions provide loans against property at interest rates that are more reasonable when compared to those of other mortgage or secured loans. The interest rate charged on a loan secured by property can vary from one lender to the next. Initial rates are typically between 8% and 10% per year, with some lenders charging as much as 20%. This low interest rate ensures you get the most excellent benefits possible from a loan against property and eases the burden of paying considerable EMI payments every month. [B-02] Conclusion As you can see, taking out a loan against property has various advantages. Make sure you get extra benefits like easy paperwork, door-to-door service, and quick processing to improve your experience. When looking for a loan against property in 2022, you should consider the lender’s credentials carefully. Consider the benefits and disadvantages of each option, then choose the one that works best for you.

08-11-2023

Business Loan

How Can You Grow Your Revenue With An MSME Business Loan?

Any product you place in your grocery bag or even order online is a part of the Micro, Small and Medium Enterprises (MSME) ecosystem. MSMEs are accelerants to a growing and economically sufficient India. These small businesses are significant contributors to economic growth. There are times when MSMEs run into financial trouble and during these times, it is essential for business owners to have access to MSME business loans or other startup business loans to help them build their businesses. This article explores the features and benefits of MSME business loans and other startup business loans. [B-01] What Are MSME Loans? MSME loans are usually unsecured loans of a special nature that provide start-ups, small business owners, female-lead companies and more with the means to finance themselves. MSME loans may also be given to department stores, salons, restaurants, clothing and similar businesses. MSMEs can go through financial issues during certain unforeseen circumstances and the aim during these times is to get access to finances to grow and expand. MSME loans are multi-purpose loans that borrowers can utilise for various purposes including procuring inventory and buying or renting property for business purposes. Features of MSME Loans In the matter of exports and imports, MSMEs are big mechanisms and contribute to 50% of India’s revenue. They are starting points for newcomers who are entering any profession and are an opportunity for them to flourish. Considering all this, MSMEs not only accelerate development in the urban sector but also integrate development in the rural sector as well. However, with all these developments, including being the country’s reason for sustainable development, MSMEs face several dangers and challenges to survive. The lack of sufficient funding is the main issue. Newer technology, better infrastructure and talent acquisition can be a hassle. For that reason, an MSME business loan is a great way to increase revenue and propel businesses to success. The Government of India has created an innovative framework for MSMEs to get business loans easily. These MSME business loans have been a constant propellant for new MSME businesses. Small businesses during the pandemic and other difficult times can take advantage of these finances to generate revenue and propel the growth of their MSMEs. Different MSME Business Loan Programmes The different types of MSME business loan programmes include: Pradhan Mantri Mudra YojanaThis is an MSME business loan that offers small and non-farm micro-enterprises with the possibility of availing loans of Rs. 10 lakh. The loans are offered by banks, micro-finance lenders, MFIs and NBFCs. Prime Minister’s Employment Generation Programme LoanThis unique loan is a credit-linked subsidy program. This specific loan is provided to groups that have covered 15% to 35% of the project’s total cost. Advantages of an MSME Business Loan There are many advantages of an MSME business loan including: You can get an MSME business loan with no collateral. Your company or organization can receive income tax exemptions, industrial promotional subsidies, safety from late payments, reimbursements for ISO certifications and also concessions on electric costs. MSME business loans are quickly approved through online portals and the loan amount is quickly and easily sent. MSME business loans are easy to manage from the banking websites of the business’s financial service providers. Ways To Grow Your Revenue With MSME Business Loans These are the following ways in which MSME business loans can help you grow your revenue: MSME business loans are usually disbursed quickly and lenders do not take more than a week to disburse the loan amount. They are also collateral free and do not have a lengthy verification or inspection process. MSME loans can help in tackling cash flow issues when running a business. In off seasons when sales are down, businesses suffer. During those times, MSME business loans can be of great assistance, and interest will only be charged for the amount utilised. MSME entrepreneurs do not have the means to keep investing their savings into their businesses. Getting startup business loans is one of the best ways to build and expand their business. MSME business loans are ideal sources of funds to meet the requirements of borrowers for business growth. They can utilize these funds for a range of activities that are related to the growth of their business revenue. MSME business loans can be utilised to meet working capital, buy raw materials or inventory, purchase fixed assets, and equipment, adopt newer technology and importantly, invest in marketing. Eligibility Requirments For MSME Loans These are the eligibility requirements for MSME loans: Credit ScoresFor a business to be eligible for MSME business loans, the credit score is important. If borrowers default on loans, then lenders face credit risks. The lender will assess the applicant’s credit history and credit score. A great credit score such as 750-800 and above helps a business get startup business loans easily and also helps the borrower negotiate a better interest rate. RegistrationLenders will grant MSME business loans to registered businesses. Businesses must also obtain a unique number from the relevant tax authorities. Business PlanLenders who provide MSME business loans assess business plans for future growth. These business plans offer a realistic view of the business’s future. [B-02] Conclusion MSMEs are the lifeblood of the Indian economy and provide a large portion of the country’s growth. Many businesses, in their initial stages, face trouble with stable cash flows and profits to invest in their businesses. Hence, MSME business loans are an important form of financial assistance. MSME loan programmes create several unique opportunities to help in the growth of emerging companies in India. Significant features of MSME business loans include quick division of amounts, flexible repayment tenure and good interest rates. These features make MSME business loans attractive to businesses that want to grow and expand. For more information on MSME business loans and other startup business loans, visit Piramal Finance to read more articles and receive guidance on how to grow your revenue.

08-11-2023

Business Loan

How Can You Get a Small Business Loan Without Collateral in a Few Simple Steps

Initiating and sustaining a business requires good ideas and sufficient capital. If you are a small business owner, you might have experienced a need for funds at one point or another. You might think of loans, but there are criteria for providing collateral. However, it is not easy for everyone to have one, reducing the chances of getting a secured loan. But there is hope. Today, entrepreneurs can get collateral-free business loans easily. With the government coming up with schemes and banks and NBFCs supporting them, you can avail of small business loans at reasonable interest rates. Let us know how. [B-01] Collateral-free Loans: Features and Benefits As the loan is collateral-free, it differs slightly from any traditional loan. You must also be aware of collateral-free loans’ features and related benefits. Collateral-free: You don’t have to submit any assets to avail of the loan amount. Documents: All you need is business proof, identity proof, and a simple KYC (know your customer) process. Fast processing: As you don’t need to provide any collateral, the amount is processed almost instantly. Flexible interest rates: You get a competitive interest rate and thus have less burden than traditional loans. Easy repayments: You have the option to repay at your financial convenience. Now that you know about the features of collateral-free business loans, it is time to explore some government schemes under which you can get small business loans. Government Schemes Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) The Indian government launched a credit guarantee trust (CGT) in collaboration with SIDBI (the Small Industries Development Bank of India). You can get a loan from any private or government bank in India. For more information, go to www.cgtmse.in. Pradhan Mantri Mudra Yojana (PMMY) Under the Mudra Yojana, you can get the following types of loans: Loan Type Amount Interest Rate SHISHU Up to 50,000 INR 12% @ five years of repayment KISHOR 50,000 to 5 lakhs Depending on the lender TARUN 5 lakhs to 10 lakhs Depending on the lender To know more about the scheme, visit this website: mudra.org. How to Apply for Collateral-free Loans? You can obtain more information about collateral-free loans by visiting the lender’s official website or visiting your nearest physical branch. In both places, you will find an application form that you can fill out to apply for the loan. Several lenders also have customer service executives who can guide you through the entire process. Now, let us know the eligibility criteria. Eligibility for a Collateral-free Business Loan To avail of a collateral-free loan, you need to meet the following criteria: You need to be an Indian citizen between 23 and 65 years old. You must be self-employed and have your own business. A good credit score (usually more than 700) increases the chance of getting approved. Visit the website of CIBIL to know more. Lastly, you must have a business history of around three years. You also need to know how to improve your chances of becoming eligible. Things to Consider While Applying for a Collateral-free Business Loan There are options for you to get collateral-free loans. However, in some cases, there are chances that you may get rejected. Therefore, you can follow some steps to improve your chances of getting a loan. Explore your requirements: You must know why you are taking the loan and how much is sufficient for your business. Justification in front of lenders is necessary to improve your chances. Furthermore, your reasoning must be clear in your mind. Improve your credit score: If your credit score is below 700, you might have difficulty getting a loan. Therefore, you must try to bring it up to $700–750 to get eligible and negotiate lower interest rates. Clear any pending loans: There are chances of not being eligible for a collateral-free loan if you have multiple pending loans. You should clear these debts before applying for a fresh loan, which can increase your chances. Come up with a robust business plan. Before applying for a collateral-free business loan, a strong foundation and business plan must present in front of the lenders. Trust and confidence are two factors that will help you move forward with your plan. After ensuring your eligibility, the bank can ask you to present some documents for KYC. Let us delve into the details. Documents Required for a Collateral-free Loan Bank Statements: You must have a bank account with financial activity for the past six months. Some lenders may ask for a bank statement before disbursing loan amounts. Business proof: Registration proof, such as the GST number and address of the business, is also required. Also, you can expect the lenders to ask you about your business details. Identity Proof and Address Proof: You can present either your Aadhaar card or driving licence for your identity and address proof. Passports are also valid. PAN Card: You must have your Permanent Account Number (PAN) for KYC. Two recent passport-size photos [B-02] Final Takeaway After reading the above information, you might be well-versed in all the information related to collateral-free business loans. As a business owner, no matter how small or large, you can easily get loans from banks and other financial institutions. However, if you are looking for easy disbursement of collateral-free loans, you must consider Piramal Finance. They have simplified the online loan system for your business needs. In addition, you can also get an expert consultation about your requirements and other business loan-related information.

08-11-2023

Business Loan

Top Advantages and Disadvantages of Startup Business Loans In India

When you begin a startup, it is one of the best feelings in the world. Several like-minded individuals collaborate on a shared idea that can shake up the entire industry. But there is a lot of difference between having an idea and turning it into reality. Enough funds are vital to get the startup venture off the ground and help it grow. Like most startups, you might also face a lack of funds at some point. You must look for a source of funds, and this is where a business loan can come to your aid. Many banks and NBFCs offer startup business loans that help startups with their money needs. Startup business loans can be secured or unsecured based on the amount you need. You can use the loan amount only for business and related activities. The loan tenure for such loans can go up to 8 or 10 years. There are many advantages and disadvantages to applying for startup business loans. Read on to learn about them and make an informed choice. [B-01] How to Apply for Start-up Business Loans? Many banks and NBFCs offer startup business loans. If you want to apply for a business loan as a startup, then here are the steps you must follow: Online Log on to the website of the lender or a suitable mobile app. On the home page, visit the business loan section. Here you will find the link for startup loans. Click on it. There can be multiple startup business loans available. Select the best option. Here you will need to enter basic details like the business’s name, vintage, ownership, and other vital information. You may also need to upload some papers like licenses and registrations. Click on the submit button. The lender will process the application and revert if more papers are required. If they approve your profile, they will send an email confirming it. You will need to sign the loan agreement, provide cancelled cheques, and other essential documents related to the business and partners/directors. After the process is complete, the money will be sent to your account. You can use it according to your business needs. Offline Contact the branch office of the lender and connect with the business loans department. Ask them about the various startup loans that are on offer. After understanding all the loan types, select the best business loan for your needs. They will give you several forms, which you must fill out and sign. Then you must also provide the vital documents that they need to process the application. After you apply, a rep will come to your premises and verify the details. Make sure you have all the documents with you. Then, they will process the application. If you meet the lender’s rules, they will approve the loan. The money will be sent to your account in a few hours, and you can use it for your business needs. Advantages of Startup Business Loans Here are some of the benefits that you can get with startup business loans: High-value loans: You can get high-value business loans to meet all your needs for money to pay daily expenses and create assets. Long Tenure: Many lenders offer 8–10 years of loan tenure for startup business loans. This will ensure you get an EMI amount you can easily pay without stressing your finances. Easy Process: Most lenders follow an online process for this business loan. You only need to provide some basic papers to process the loan. In most cases, it takes between 7 and 10 days to complete this process. Many lenders will offer their help in the process if you require it. No Security Needed: You can apply for this business loan even if you do not have any security to offer the lenders. Most lenders offer high-value unsecured business loans that will give you enough money to take care of your business needs. Flexibility: While you must use a business loan for the company’s needs, there is no limit on how you can use this money. There is a lot of flexibility regarding how you can use the money for your start-up. No Venture Debt: When you can get a business loan from a bank or NBFC, there is no need for you to apply for venture debt. This ensures that you do not need to give a share of your company to get the money to grow. Disadvantages of Startup Business Loans Here are some of the issues that you can face with startup business loans: High interest rate: Most startup business loans come with high interest rates as they are unsecured. You will have to pay high EMIs right from the next month. This can stress your finances in this crucial growth stage. High EMIs: The loan tenure for such loans is capped at around ten years, and the interest rates can be high. You must be ready to pay high EMIs for your startup business loan. False sense of security: Easy access to a business loan can give you a false sense of security, and you might take out a high-value loan when you do not need it. This can lead to wasteful expenses that you cannot afford. [B-02] Startup business loans are very useful for new startups needing urgent money to grow and expand. It is essential, though, that you select the best lender for your business loan. Piramal Finance is a leading NBFC in India that offers high-value business loans at low-interest rates. Contact their experts to discuss your needs and get the best loan offer for your startup. You can also read their blogs and articles to learn more about other loan options.

08-11-2023