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Home Loan

Ultimate Guide on Home Loan Eligibility Calculator

Building a house is everyone’s dream. It is a lifetime achievement and investment. It is important to have enough funds to build a beautiful home. Do not sacrifice comfort for a lack of funding. A home loan is a one-stop solution for all of your funding needs. You should take a look at the eligibility requirements for a home loan. It is smart to compare and check the terms before applying. [B-01] You can check your eligibility online at home. The home loan eligibility calculator helps you fill in details and know your eligibility. Details like job type, monthly income, and amount check eligibility. The monthly income of an individual determines the loan amount. It helps divide EMIs and offers a repayment mode. This manual is all about the home loan eligibility calculator. What is home loan eligibility? If applicants want easy approval, they must meet the eligibility criteria. The criteria are simple yet mandatory. The lender decides the criteria for a home loan. The criteria ensure the lenders are safe with their money. The monthly salary ensures timely repayment. It helps determine EMIs and interest rates. During the tenure, the principal and interest amounts are gradually repaid. If the applicant fails any criteria, it may result in rejection. The negative remark may degrade your credit score. A low credit score can affect future loans and finances. It is better to read the eligibility criteria properly. Complete them prior to applying for a home loan. These steps will lead you to easy approval and disbursal. Factors in the home loan eligibility calculator Here are the following details for the eligibility criteria for the applicant: Age of the applicant The age bar for a self-employed individual is 23–70 years old. The salaried applicant’s minimum age is 21 years. Government employees with pensions can apply until 70 years age limit. Other age-related information can be found on the official website. Monthly income The monthly income of government employees is fixed. So, repayment is not an issue. But salary applicants might not have a stable income. So they have to provide an alternative way to repay the loan. If they fail to pay on time, the nominee has to pay. In the eligibility criteria, you have to provide an income statement as proof. It creates a safety net for lenders. Credit score Credit, or CIBIL, scores provide information about past credit performance. It is a three-digit number that defines creditworthiness. The minimum credit score is 750 for home loans. A low CIBIL score may result in rejection. Maintain your score of more than 750 for a quick approval. Pay your bills on time and make a score of 900. The higher the credit score, the lower the interest rate. The applicant can lower the interest rate with a good CIBIL. Property and LTV value The property value can increase the loan amount. The lender offers a high loan amount for the high-value property. It also helps in quick approval. Occupation The applicant must be employed in the public or private sector. It can be a government office or a multination organization. The company’s reputation also contributes. It increases the chances of approval. How to use the Piramal Finance home loan eligibility calculator? The Piramal home loan eligibility calculator is easy to use. You can use it online. Follow the steps given below. Step 1: Visit the Piramal Finance website. Go to the calculator on the top left area of the home page. Step 2: Select the home loan eligibility calculator. Step 3: Fill in the mode of employment, from self-employed to salaried. Step 4: Enter the gross monthly income of the applicant. Step 5: Select the loan tenure period. Longer tenure facilitates approval. Step 6: Fill in the interest rate of your choice. To find the current interest rates, enter % per year. Step 7: Enter the EMI amount of the existing loan (if any). Step 8: Click the “Apply Now” button. That’s how you can calculate it using the home loan eligibility calculator. Documents for Piramal Finance home loan Banks and financial institutions ask for documents in loan processing. The documents vary for self-employed and salaried applicants. Please check the list of documents given below. Complete the application with the borrower’s signature. Two passport-size pictures. Identity proof includes a PAN card, an Aadhaar card, a driver’s license, a passport, and a voter ID card. Age proof of the applicant, like an Aadhaar card, 10th grade mark sheet, birth certificate, and bank account passbook. Residence proof like utility bills. Income proof of applicants like ITR statement and profit and loss statement of last 3 years. Proof of all educational certifications. Suppose the co-applicant is part of the loan, then their qualifications. You can include additional certificates, such as sports skills. Property documents like occupancy certificates and sales deeds. How to get easy approval for a home loan? Some factors can affect your loan approval. You may follow these tips for fast approval of a home loan. The applicant should board a co-applicant for extra coverage. Plan a repayment plan for a disciplined process. The applicant must maintain a stable income. They should invest and save for repayment. You can mention your extra income. Please keep track of loan money and use it in the best way possible. You should pay your credit card bills on time. It increases the credit score. You must pay off past debts for a clean image. The bank sees every factor separately. You should use tips to keep each of them in good condition. Small steps can lead to fast and easy disbursal. Top 10 home loans with an interest rate The applicant should compare the interest rates of different banks. You can use the home loan eligibility calculator to test your eligibility. Only apply if you meet the eligibility requirements. S.NoBank nameAge LimitInterest Rate1.SBI Home Loan18-70 years8.05-8.55%2.HDFC Home loan18-70 years8.60-9.50%3.Axis Bank21-60 years7.80-8.05%4.ICICI Bank23-70 years8.45-9.80%5.Bank of Baroda21-65 years7.40-8.45%6.PNB Home Loan23-65 years8.30-11.40%7.LIC Home loan21-60 years8.0-9.25%8.Aditya Birla Home Loan18-65 years8.10-13.00%9.Bajaj Housing Finance265 years7.70-14.00%10.Citibank Home Loan21-60 years6.50-7.40% [B-02] Conclusion The home loan eligibility calculator is a tool for easy assessment. Any individual can use a calculator to check eligibility for a home loan. The loan will help you build a new home. The applicant should fulfil all eligibility criteria before applying. This practice helps facilitate easy approval. Check the above manual for fast disbursal. Visit Piramal Finance for similar blogs and look at the products and services they offer.
08-11-2023
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Personal Loan

Things to Know Before Taking a Loan against Fixed Deposit

Do you have the ability to put your money to work for you? Initially, this may seem like a pipe dream. The truth is, there are plenty of productive ways to invest your money. Most of us are forced to sell assets like fixed deposits during an emergency. This strategy may help you weather a temporary storm, but it defeats the point of your investment. What is the next best option if you do not want to cash your fixed deposit? To get a loan against it! This blog will discuss what you need to know before applying for a loan against a fixed deposit. [B-01] Things to know before taking a loan against a fixed deposit Loan eligibility Making sure you qualify for a financial product is a top priority. Anyone with a fixed deposit may take advantage of this lending option. The lender will consider your application against their criteria when you request an overdraft. Your occupation, monthly earnings, or credit history will be considered. But, the deposit does not qualify for the lending facility if it is in the name of a juvenile or if the FD was established only to avoid taxes. Borrowing limits Loans secured by fixed deposits have credit limits. The amount in your checking account directly affects how much you can borrow. Lenders often only lend 90-95% of the FD amount. Lien on the fixed deposit There is interest to pay when you use a fixed deposit as collateral for a loan. The bank will create a lien on the deposit when you use it as collateral for a loan. The bank will have an immediate and irrevocable claim on the funds. This claim will be there until the loan term ends. Because of the lien, the loan interest rate is lower than that of a traditional fixed deposit. So, the bank may use the FD to reclaim the loaned money if you fail to make the required payments. After complete repayment, the lien will be lifted automatically. Tenure of the loan The term of the loan is of utmost importance. There is no set repayment period for a loan against a fixed deposit. Hence, the max loan term is equal to the tenure of your fixed deposit. Things to know about loans against a fixed deposit The income, employment, or credit background do not matter. Anyone with a savings account may apply for a loan against a fixed deposit. Any person or couple with a fixed deposit may apply for a loan against FD. You cannot obtain a loan against a fixed deposit on behalf of a minor, nor can a depositor. Self-employed people are also eligible for a loan against a fixed deposit. You may apply for this loan regardless of your credit history. No fees are associated with taking out a loan against a fixed deposit. The interest rate is often lower than other unsecured loans like personal loans. It is possible to repay the loan in a single lump sum or instalments, but only when the FD period has expired. Typically, a loan against a fixed deposit will incur an interest rate of 2% more than the FD interest rate. If the interest rate on your FD is 6%, you might end up paying 8% on your loan. Still, a few banks will provide you with a loan against a fixed deposit. A fixed deposit is used as collateral when someone borrows money from a bank. If you default on a loan against a fixed deposit, the bank will seize the deposits to recover the lent funds. What are the benefits of a loan against a fixed deposit? You can get a loan of up to 70% to 90% of the total amount needed. Based on your bank, you may borrow between 70% and 90% of the value of your fixed deposit. If you have Rs. 10,000 in a fixed deposit, you are entitled to benefits of up to Rs. 9,000. After a loan is approved, any funds still in the fixed deposit account will continue to add interest. Each financial institution has its set limits. You will incur a relatively low-interest rate. A loan against a fixed deposit has a lower interest rate. It is usually a few percentages more than the interest on a savings account. If the bank offers a 9.25% interest rate on your savings account, you may have to pay approximately 11.25% for a loan against a fixed deposit. This rate is far lower than what banks charge for a personal loan. There is a flexible payment procedure. The loan term secured by a fixed deposit matches the term of the fixed deposit. Loan terms may be less than the term of the fixed deposit, but they cannot be more. For example, if the fixed deposit term is five years, the loan term cannot exceed that. There are no processing fees. Unlike other types of loans, you do not have to pay additional charges for application processes. Furthermore, the application process is hassle-free. This financing option is one of the simplest out there. Very little paperwork is necessary when you have a fixed deposit account. After completing the required paperwork, you can get a loan against a fixed deposit with minimal paperwork. You do not need to break the fixed deposit. Many people need urgent access to cash. They must break their FD savings due to this. You may still meet your financial requirements without withdrawing from your FD. Your investments are still secure when you take out a loan against a fixed deposit. [B-02] Conclusion A loan against a fixed deposit might be a good option when you’re short on funds. You should see it as a way to get funds quickly. If you take out a loan against a fixed deposit and fail to make the required repayments, the bank may foreclose on your FD to recoup the money it loaned to you. These factors will make it straightforward for you to apply for a loan against a fixed deposit. Looking for a quick personal loan? Apply for a personal loan with Piramal Finance and get up to Rs. 10 Lakhs!
08-11-2023
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Other

What is PPF And How to Calculate it Online?

Public Provident Fund (PPF) is financial security for life after retirement and is suitable for a long-term stable investment. It is a powerful tool for investment and savings, making it the most preferred savings option among Indians, mainly because of the government’s intervention. Read this article to understand Public Provident Fund and how to calculate it online using a PPF Calculator. [B-01] What exactly is a Public Provident Fund (PPF)? Public Provident Fund (PPF) was first introduced in India in the year 1968. The PPF scheme is guaranteed fully by the Central Government of India. For this reason, it is regarded as the most secure option for investment in the nation. Public Provident Fund is also called savings-cum-tax savings investment. What is a PPF Account and What are its Features? PPF Account When you choose to invest in the PPF scheme, a PPF account is created. In this account, the money you invest every month is deposited. The interest is also compounded. A PPF account can be opened with participating institutions like post offices or banks. Features Principal: Principal amount is the amount you invest in the PPF account. It can range from INR 500 to 1,50,000 for a year. Deposition of the Principal Amount: You can deposit this principal amount partly or as a whole. You can also opt for monthly payments. Minimum Deposits: You must deposit mandatorily at least once a year into your PPF account. Interest Rate: The interest rate for PPF is 7.1 % p.a. This interest rate is fixed by the Finance Ministry every year. In most cases, the PPF is not influenced by inflation (general rise of prices). Lock-in Period: The amount you deposit in the PPF account can’t be withdrawn for 15 years. Lock-in Period Extension: You can also extend this 15-year period by 5 years. But it is entirely optional. Nominee: A PPF account allows you to add a nominee by option. Loan on Investment: You can avail of a loan for the principal that you invest. But it is allowed only from the 3rd year to the 5th year of the account opening. Account Closing: You may close the PPF account whenever you want. But you can do it only after 5 years of opening the account. What are the Eligibilities to Open a PPF Account? Indian Citizens: A PPF account can be opened only by an Indian citizen. NRIs: Non-Residential Indians (NRI) cannot open. But, if an NRI already has a PPF account, it will be accepted. However, the 5-year extension period does not apply to NRIs. Minors: PPF accounts can also be opened in the name of a minor. But their parents should operate the account. What are the Documents Necessary to Open a PPF Account? The documents necessary to open a PPF account are: Passport Size Photograph Account Opening Form KYC Documents Address Proof Declaration Form (filled by the applicant) How to Calculate PPF Online? PPF Calculation The formula used to calculate the Public Provident Fund and its maturity rate is as follows. A = P [({(1+i) ^n}-1)/i] where A- Amount you get at the maturity period. P- Principal amount you invest in the PPF account. I- The interest you get as a return for the PPF. n- Total period for which you make the PPF investment. Example A person X plans to invest INR 10,000 for a year in their PPF account. The total period for the PPF account is 15 years. The rate of interest is 7.1 %. So, at the end of the PPF investment (15-year period), they will get Total Investment: 1,50,000 Total Interest: ₹1,21,214 Maturity Amount: ₹2,71,214 How to use the online PPF Calculator? Using our online PPF Calculator is as simple as eating chocolates. First, it will ask you to enter the amount you plan to invest for a year and the period. It will then calculate your interest. Now you will get to know your maturity amount. Note: The interest is subject to changes. It is fixed every year by the Ministry of Finance. Benefits of Using an online PPF Calculator Making calculations is not easy for everyone. You may get errors in manual calculations. Our online PPF Calculator is an error-free tool for your PPF calculation. It will give you an exact figure for you to invest. Benefits of Public Provident Fund (PPF) Secure Option: For PPF, the government guarantees the investment. As the government is involved, it is one of the safest investments. Security is one of the most popular advantages of the Public Provident Fund. Higher Interest Rate: The interest rate for the Public Provident Fund (PPF) is higher when compared to fixed deposits. This is because the authority to fix the interest rates lies with the government. Flexible Deposits: Depositing in a PPF account is very flexible. You can deposit via cash, cheque, demand draft (DD), or online mode. Flexible Number of Deposits: The number of deposits you make does not matter. You can deposit as many times as you need. Emergency: If you have an emergency, you can partially withdraw the principal. But it is possible only from the 7th year of the account opening. Tax Exemption: The greatest benefit is the tax exemption. As per section 80C of the Income Tax Act (ITA), the PPF is exempted from tax. The returns from PPF are also tax-free. [B-02] The Bottom Line Open a PPF account and live a happy life after retirement! Our user-friendly PPF Calculator will make your job easier. If you have any doubts, consult Piramal Finance. Our expert team will help you through the entire process.
08-11-2023
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Other

How Decrease In Repo Rate Affects Interest Rate?

From interest rates to tenure and monthly EMIs, people consider several factors when taking out a home loan. Nonetheless, most people don’t think much about the repo rate. In other words, the interest rates your bank offers on home loans depend on the lending rate at which funds are provided to the bank by the Reserve Bank of India (RBI). Still confused? Well, the concept of repo rate is still a puzzle to most borrowers. However, it doesn’t have to be so. Here’s a complete guide on the repo rate and how it can influence interest rates on home loans. When you urgently need funds, you approach banks or other financial institutions for a loan. But what do such financial institutions do when they face a crisis like inflation? [B-01] Well, they approach the country’s central bank, in our case, the Reserve Bank of India (RBI). And just like you, financial institutions borrow funds from the RBI at a fixed interest rate, known as the repo rate. So in simple words, the repo rate is the interest rate at which RBI lends funds to financial institutions when they face a shortage of funds. “Repo” stands for “repurchasing option”. When financial institutions need funds from the RBI, they use their government securities (bonds and treasury bills, aka T-bills) as collateral. They sell these securities to the RBI and sign an agreement to buy them back later at a predetermined price. Now that you know what the repo rate is, let us look at its importance. RBI Repo Rate: Why is it Important? The repo rate plays an integral role in the country’s monetary control. Primarily, it helps authorities deal with inflation. During inflation, the repo rate is hiked by the RBI. This means that financial institutions have to pay a higher interest rate on funds they borrow from the RBI. This makes lending expensive for such organizations. So, they use two methods to mitigate their loss and help tame inflation. First, financial institutions pay interest rates on deposit accounts. This encourages customers to keep their money in banks for higher returns. As a result, the flow of money in the economy (liquidity) decreases, and growth is restricted. Second, financial institutions increase the interest rates on various loan options. This prevents people from taking out loans. So, consumers take fewer loans and make fewer purchases. Again, this reduces the money at their disposal and results in a fall in liquidity and demand in the economy. Both these ways contribute to bringing down inflation. Now, what happens when the country is inching toward deflation? During a period of deflation, RBI lowers the repo rate. This makes interest rates cheaper and the return on deposits minimal. Therefore, businesses feel more encouraged to avail of loans and withdraw funds for investment. As a result, the supply of money in the market increases, and the economic growth rates improve. The Repo Rate and its Effect on Interest Rates As per the update from RBI on 30th September 2022, the current repo rate is 5.90%. The repo rate was increased by 50 basis points from 4.40% in May 2022. The apparent change in interest rates and deposit rates was to be implemented soon. This resulted in much distress for people planning to get a loan. The hike would make loans costlier, whether they are housing loans, car loans, or personal loans. Hence, borrowers will be subject to a hefty interest rate and huge monthly EMIs. This affects both people who are planning to get a loan and those who are in the process of repaying a loan with a floating interest rate. All housing loans issued since October 2019 are subject to the repo rate. So, every time there is a hike in the repo rate, the home loan rate will be revised. Typically, the change in the repo rate leads to a tenure adjustment. Meaning people who are planning to get a home loan will have to deal with longer loan durations and in turn, more EMIs, and more money repaid in the form of interest. Nonetheless, people who have taken a loan with a fixed interest rate, such as personal and car loans, are safe. An increase or decrease in the repo rate wouldn’t affect their monthly instalments. [B-02] Final Thoughts Financial experts believe that the RBI will continue to raise the repo rate. The rise in the repo rate in September was the third hike in 2022. It was earlier increased by 40 basis points and then 50 basis points in May and June, respectively. The inflation in India is growing beyond RBI’s tolerance level. So, it is forecasted that the repo rate might be raised by 0.5% by the end of this year. As a borrower, you must stay prepared to deal with the hike in repo rates. As a first step, apply as soon as possible if you plan to get a loan. The repo rates will only increase. So, the earlier you get a loan, the lower the interest rate you pay. Also, ensure you get a fixed-interest rate loan, such as a personal loan from Piramal Finance. This will keep you on the safer side as far as EMIs are concerned. Next, if you are in the process of repaying a loss, ask your lender if the loan terms can be revised. If yes, request your lender for an increase in EMI if your loan has less than 5 years of tenure remaining. Additionally, switch from a floating to a fixed interest rate loan. Lastly, if your remaining tenure on an ongoing loan is more than 10 years, you might want to think of a loan balance transfer. Research the various loan interest rates offered by multiple lenders. Find the most affordable one and switch to that option.
08-11-2023
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FD

All you need to know the features, benefits and disadvantages of FD

A fixed deposit (FD) is one of the best investment products you can include in your portfolio. It is reliable, safe, steady, and simple, even for new investors. Best of all, it is a tried and true method of growing your money despite market volatility. One of the primary advantages of investing in an FD is that you may make a lot of money. This is because of the interest rate. This rate is greater than the interest on savings accounts and a few other alternatives. As an investor, you need to consider the pros and cons of an FD to make an informed selection. The benefits and drawbacks of a fixed deposit are listed below: [B-01] What exactly is an FD? An FD is where money is placed at the start of a period, and interest is earned before it is credited and saved at the end. It is similar to a savings account. In this, the account user has to invest money once and receive returns for the amount funded. The accrued interest is credited to that account, and interest on interest is also supplied. This process is known as a compound of interest. After the deposit term, the investor or account holder receives the money deposited plus any extra interest collected throughout the year. Features of Fixed Deposits Now that you know what fixed deposits are, let’s look at some of their features: Fixed interest rate This is among FD’s greatest features. A fixed deposit is among the most reliable and safe new assets for anybody seeking to begin their money journey. Its rewards are new by market volatility. Secure FD investments are completely safe. Rates are not affected by market fluctuations. The interest rate on an FD plan is fixed for the length of time until it matures. Exempt from tax The initial monetary amount the depositor places in the FD is tax-free under Section 80C of the Internal Revenue Tax Act. FDs are a popular tax-saving option for salaried people, workers, and salaried people, employees, and stockholders. The clause provides an exemption of up to Rs 1.5 lakhs for FD deposits. Renewal and Term Flexibility You may start your fixed deposit for as little as a week and as long as ten years. Yet, before selecting any fixed deposit plan, remember to verify the interest on FD. The rate of return is mostly defined by the fixed deposit term. Fixed deposit perks The rate may not be higher when compared to equities mutual funds or stock market holdings. But bank FDs provide safety in terms of low risk compared to those other business investment options. They also ensure capital returns at maturity. Here are some of the advantages of fixed deposits. Payments of interest Based on the consumer’s needs, interest payments might be set monthly, quarterly, or yearly. It may also be renewed at maturity with the principal sum to continue as an FD. FD with tax breaks Tax-saving fixed deposits are also qualified under Section 80c Tax Act. One of many investment options within 80C gives a Rs 1.5 lakh income deduction. Tax-saving FDs have a 5-year lock-in term. Deposit safety According to the latest update of the DICGC Act, an account holder can get coverage up to Rs 5 lakh within 90 days after a bank (except NBFC) is restrained due to an unusual closure of business. Senior persons get a tax break FD income paid by a senior individual is free up to Rs. 50,000 from income tax. Senior folks’ deposits also get greater interest rates. Loan secured by a bank FD Loans against FDs are available. Almost all banks provide this option. The deposit amount and the term of the FD determine the loan. The rate on such a loan might even be as much as 10%. Several FDs may be opened One may open an endless amount of FDs at a single or many banks. The FD is a perfect option to invest one’s savings. The earned would be tax-free till it hits the Rs 1.5 lakh exemption limit. Credit facility A savings account may also be utilised to get a loan. The lending facility enables the depositor to get funds when they are needed. The loan may be extended to cover up to 90% of the debt plus interest. Senior Citizens Get Better Rates Senior citizens benefit from even higher fixed deposit rates. Interest rates may vary according to the bank selected and the duration of the FD. It might be as much as 10%. As a result, older adults may earn much more money via deposits. This s exactly what they want and desire in their golden years. Starting a Single or Joint Account A joint account allows two or more people to create an FD jointly. Any account member can deposit or withdraw funds from the account. This simplifies the operation and maintenance of the FD accounts. HUFs are accepted. Members of any Hindu family may create an HUF and open a Fixed Deposit jointly. HUF is taxed differently (from individual family members). So a family may save more on taxes by creating an HUF FD account. Fixed Deposit Drawbacks While some plans offer help, they also have downsides. Assess the following flaws of FD: Funded money Your cash will be trapped in a fixed deposit for a certain period. To convert your money, you must go through a separate procedure. As a result, until you remove your cash, this money will be unavailable to you. Exiting penalties If you withdraw money before the term is over, you may be assessed a penalty for pre-closure. The interest income so far may also be removed before crediting the principal amount. Fixed interest rate FDs offer many benefits. But the rate does not grow with inflation. The deposit may give less than the inflation rate in certain samples. And it is for this reason that investors are losing rates in fixed deposits. In most cases, the rate on a fixed deposit is set throughout the deposit. As a result, they will not profit from increased interest rates if interest rates rise in the market. [B-02] Conclusion Even those with a low-risk tolerance spend their money on FD, making it the most reliable and adequate financial tool. An FD is the only option in the market if you want a safe return without putting your funds at risk. But, when investing in any market instrument, you should do some research and analysis. And for this, you can visit Piramal finance for more related blogs and explore their product and services.
08-11-2023
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Personal Loan

How a Personal Loan is Better Than a Business Loan?

Loans provide support during financial crises, help with emergency treatments, and much more. Sometimes, small and medium-scale businesses can take a loan for their growth. If you require a loan, you have two options. These are personal loans and business loans. Every person must understand the differences between these loan types. This will prevent from things going wrong. For instance, you might take a personal loan for your business when you don’t require it. Similarly, the consequences won’t be good if you choose a professional loan for personal purposes. So, to help you understand, we have listed the details of business and personal loans. This will help you understand the fundamentals of these credit types excellently. [B-01] What is a personal loan? What is a business loan? Both business and personal loans are different credit types. They differ in terms of usage. You can apply for a personal loan when you require funds for personal use. For example, your wedding expenses have crossed the budget. You can opt for a wedding personal loan to meet the funds shortage. Similarly for medical emergencies. It helps solve fund emergencies or shortages for private use. On the contrary, creditors grant business loans to businesses and companies. It can be due to many reasons, like: Getting new stocks for the business Kickstarting the business Expansion of the business location Building the new infrastructure Paying off business debts Creditors grant the personal loan to the applicant’s name. But when it comes to the business loan, creditors do so for the applicant’s and the business’s name. Features of personal loan A personal loan doesn’t require any fees. For instance, if you prepay the debt amount, you won’t get charged for the same. Similarly, most creditors do not charge any processing fee when you apply for a loan. Sometimes, creditors offer discounts based on different situations. For instance, they can give you a discount for an automatic payment method. Similarly, you can enjoy a rebate if you pay an additional month to clear the debt faster. This is one of the best features of a personal loan. Personal loans do not require too many documents and proofs. You must submit income proof (salaried employees), ID proof, and credit report. If you do not have a good score, go for secured loans. Most creditors offer payment flexibility for personal loans. It means you can extend the repayment term based on your convenience. Furthermore, if you cannot pay the debt on time, you can easily foreclose the personal loan. Almost all creditors offer personal loans. You won’t have to search a lot to get in touch with the creditor. Features of business loan Most business loans do not require any collateral. It means you won’t have to keep any asset as the mortgage. Business loans are risk-proof. You won’t have to worry much about suffering from any risk, like a poor credit report. You can ask for a higher principal amount with the business loan. This is because the creditor grants the loan to a commercial entity. Business loans also come with flexible repayment terms. Moreover, you can extend the repayment term if you cannot pay EMIs on time. You won’t have to submit a credit report for the business loan. But yes, you do require to submit business earnings, capital investment, and tax reports. Pros and cons of personal loan Pros A personal loan helps grow the credit score with on-time EMI payments. The documentation process is less intense. You only have to submit income documents, a credit report, and ID proof. Personal loan offers an excellent opportunity for debt consolidation. You can use a personal loan for almost anything without any explanation. The principal amount can be as low as possible for lower interest. Cons Security on a personal loan can create problems. It depends on your credit score. In addition, a lower score can lead to application rejection. Personal loans involve several penalties, like late payment interest charges. Pros and cons of business loan Pros You can use the funds flexibly according to business requirements. There are no hard and fast rules. Usually, the sum assured for business loans is higher. You can ask for INR 50,00,000 and more as the capital for the credit. The interest rates are usually low for business loans. Repayment terms are flexible. Therefore, you can adjust the total time for debt repayment at your convenience. Cons The funding process is slow and takes approximately weeks. You have to go through an intensive application process. Most creditors keep eligibility criteria quite strict. Personal loan VS business loan: A parallel study Attribute Personal loanBusiness loanPrincipal amountYou can get flexibility for the personal loan principal amount. Moreover, you cannot expect it to be much higher. Often, creditors offer higher principal amounts for business loans. You can get the exact amount of credit that you require.Repayment termsRepayment terms are more flexible.Business loans have flexible repayment terms. But it is mostly for startups and small-scale businesses.PurposeYou can get a personal loan for any purpose. For instance, you can take it for weddings, education, medical emergencies, and more. Business loans are strictly for business purposes. For instance, you can expand the business location with the same. You can also get new stock for inventory. Interest ratesAlthough rebates will be there, the interest rates are usually high.For business loans, you will get flexible interest rates. Additionally, you can lower the same by increasing the capital amount from your pocket. SecurityPersonal loans involve higher risks. But you can reduce the same with security. You don’t have to give security for a business loan. However, that might increase the risks.Documentation processAn easy documentation process makes a personal loan more feasible. You only need to give three to four documents.Business loans involve more documentation. You need to submit documents in the name of your business. [B-02] Conclusion In this article, we have explored the differences between business and personal loans. Additionally, we have also learned about the features of the loan types and their pros and cons. If you want to know more about a personal loan or business loan, you can read the online materials on Piramal Finance.
08-11-2023
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Business Loan

Everything About Unsecured Business Loan Eligibility And Interest Rate

India’s economy is called an “emerging economy.” It has given a lot of chances to young people who want to make a name for themselves in the business world. Firms need money to operate. From the idea stage to putting the first working system on the market, they need to have a lot of money. There are also other costs. It includes wages, raw materials, utility bills, transportation, and other small things. Most business owners get loans to pay for their businesses. Business loan eligibility is also different for many lenders. There are two kinds of business loans: Secured Business Loans Unsecured Business Loans [B-01] Secured business loans are those that the person backs with a security deposit or a kind of collateral. Most of the time, secured loans are given out in the form of equipment loans, vehicle loans, term loans, or loans against property. Unsecured loans are given out based on the business’s reputation, not on collateral or a guarantee. Most people get these loans for a short time, up to a year. Good credit, submitted documents, income, and other factors are required for unsecured business loan eligibility. Read on to learn more. What is an Unsecured Business Loan? An unsecured business loan is granted based on your credit history and does not need collateral. These loans are used to develop or sustain a firm’s functions or to maintain cash flow. You may use it to bring extra money to a firm. It helps it achieve its aims. Interest rates vary from lender to lender. They might exceed 14.99%. Although the standard concept of an unsecured loan does not need security, the reality is a bit different. Rather than seeking collateral, the banks impose a general law on vital assets until the debt is fully repaid. This enables those with strong credit or solid firms to get loans without giving large assets to small firms’ loans. Benefits of an Unsecured Business Loan Different banks have different business loan eligibility criteria and benefits for their best-unsecured business loan offers. Here are some traits that these loans have in common: Unsecured business loans are those that do not need collateral or security. These loans are made based on the applicant’s reputation and payback history. The lender may also take into account other relevant aspects. Most banks ask that the said firm be profitable for at least two years. The loan sum might range between Rs. 10,000 and Rs. 1 crore. This is based on the size and needs of the firm. The loan term is generally varied, ranging from 1 to 5 years or more. Unsecured Business Loan Eligibility Criteria Given below are the unsecured business loan eligibility criteria: Minimum age of 18 at the time of loan request and maximum age of 65 at the time of loan completion. A credit score of 750 or above is needed. Presence of a business for a minimum of one year in the same place with proof of profit. You must have a steady source of income and wage slips. Bank information or the most recent six months’ bank statement. Documents needed for Unsecured Business Loan eligibility The papers needed for unsecured business loan eligibility are as follows: You will need to give a recent passport-sized photo of yourself, proof of your identity, address, signature, income, bank statements, and proof that your business will keep running. Customer letter for the end use or proposed end use of BIL funds OD sanction letter, where DP/OD limit is not listed in the bank statements. Certificate of professional qualification for experts Partnership deed, or MOA/AOA for partnership firms, and a certificate of incorporation, or Form 3CB and 3CD or Form 3CC and 3CE for companies, as applicable. Factors affecting Business Loan eligibility Small business owners can get business loans from multinational firms. Their revenue projections differ, as do their business loan needs. To figure out the best interest rates, the bank must carefully evaluate the entities’ eligibility. The factors which affect business loan eligibility are given below: Credit Score Banks must be confident in your ability to repay. A good credit score guarantees that to the bank. To determine credibility, the bank will look at the firm’s credit score. They investigate your repayment history for other loans and liabilities. A good credit history will make it easier to get a loan with favourable terms and interest rates. Business Stability The economic stability of the business is critical for loan approval. Banks will investigate the vital’s sales and profit margins. This can be deduced from your business record and the duration of your vital’s existence. Banks typically prefer to lend to companies that have been in operation for at least three years. The older the business, the better the chances of obtaining a business loan with an attractive interest rate and other terms. Profitability and continuity of the Business Another vital criterion is that your business should make a lot of money. A business that isn’t doing well wouldn’t be a good candidate for a loan from a bank. The bank could ask to see your profit and loss statements from the last two years. Profitability and revenue are vital factors in deciding whether a business can get a loan. Your current relationship with the Bank Your present position with the bank is also vital. All your dealings with the bank, such as your cash flow and payments, will be looked into by the bank. It will see how well you’ve paid back any bank loans you already have. Collateral Many government programmes offer business loans without collateral, but the borrower can offer any kind of collateral he is comfortable with to get good loan terms and interest rates. The government rules say that the applicant does not have to provide collateral, but they can if they want to. By putting up something of value as security for a loan, you can borrow more money and pay less interest. [B-02] Conclusion Unsecured business loans are an effective way to get quick financing for your vital needs. You may give your dreams wings and help you to reach new heights. Yet, before applying for and closing on an unsecured business loan, you should carefully examine the factors affecting unsecured business loan eligibility. For more blogs on the best-unsecured business loans, check out Piramal Finance and explore their products and services.
08-11-2023
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Personal Loan

Know different types of unsecured loans and how they work

Whether you need the money for a future project, unforeseen expenses, or even school fees, unsecured loans can help you get funding without providing capital like your home. These loans have less strict eligibility and application requirements than secured loans, and many lenders offer same- or next-day financing. Even so, unsecured loans come with higher rates and less good treatment than secured loans because they pose a greater risk to lenders. We’ll walk you through how unsecured loans work and help you decide if they’re right for you. [B-01] What are Unsecured Loans? Unsecured loans may be issued without any security. A lender offers it to you based on your lender’s creditworthiness. A reason, having good credit is needed to be approved for an unsecured loan. Since asset acts as safety for the lender, it is crucial to the loan approval procedure. The interest rate on this loan is often higher when compared to secured loans. How do Unsecured Loans Work? You may use unsecured loans, which usually range from $1,000 to $100,000, for several purposes. Loan terms range from two to seven years, with annual percentage rates (APRs) ranging from 6% to 36%. Today, several lenders provide online prequalification so buyers may compare rates without applying or enduring many demanding credit checks. Depending on the lender, prospective borrowers can also submit an online loan application and get the lender’s decision. In addition, as unsecured loans do not need collateral, clients are not obliged to wait for an appraisal or provide evidence of the value of any assets. When an unsecured loan is approved, funds are disbursed in one lump payment, and interest is added to the loan balance. Interest is only applied to the outstanding balance, and the lender can use unsecured credit cards and other lines of credit to make the necessary purchases. Monthly payments are needed, and late payments must usually be reported to the three major credit reporting agencies after a time limit. What are the types of Unsecured Loans? Continuous Loan With a revolving loan, you borrow, pay it back, and then borrow again. The bank sets a max credit limit. Depending on your needs, you may use the whole credit limit or only a part of it. Once you have paid all your debts, the credit limit is restored. Time Loan A term loan is a great way to have cash when you need a sizable sum of money. On this loan, a set interest rate is often provided. You may repay the loan in equal payments at regular intervals for a certain period. When purchasing expensive fixed assets, a loan is useful. Loan Consolidation While you are having trouble with money, your debts may grow. You could find it challenging to make your payments as a result, especially with the rising interest. In this case, a joint loan could be of the most help. You may erase your debt growth and reduce your repayment duration with the aid of this loan. Types of Unsecured Loans Based on Utilization We previously characterized loans in terms of their makeup – unsecured loans are divided into several sorts depending on their intended usage. Marriage Loan Weddings in India are sometimes expensive ceremonies. You could decide on a term loan to make your wedding special and fund it. You could also be well enough to pay for the wedding’s expenses. But sometimes, you may need to loosen your spending constraints because of other little fees. A revolving loan could be the best choice for covering little or infrequent expenses. Holiday Loan A client could use a term loan to cover their holiday costs. You could opt for a revolving loan to pay for recurring or erratic expenses for items like food, shopping, or hobbies. Many people also carry a credit card that may be used to make purchases of any amount of money, wherever in the world. Festival Loan Festival loans are personal loans made available during the holiday season at low-interest rates or with added benefits like no processing fees. You may utilise a credit card or revolving line of credit for little expenses. Yet, acquiring a personal loan is an option for several things, like investing in gadgets or organising. Loan for Home Renovation You may make your house seem better and more attractive with the help of this loan’s funding. By making improvements to your house with the help of home renovation loans, you may also increase the market value of your property. Booster Loan Money is borrowed to pay off an existing debt as a top-up loan. As a result, if you now have a personal loan but need more money, you may apply for a loan that combines all the extra funds you need into one. The result is a straightforward EMI payment rather than having to cope with the challenges of paying and recording many EMI instalments. A Bridge Loan A bridge loan is a short-term loan that is necessary. The period may be extended for a total of 12 months. Loan for agriculture The agriculture sector continues to employ 50% of the country’s workforce. There is a great demand for agricultural loans as a consequence. A term loan might be used to purchase land, farm equipment, irrigation systems, etc. Yet, revolving credit might be arranged to pay for running expenses like seed purchases and other working capital requirements. Loan for Pension Retired people receiving a pension are eligible for a pension loan. It gives you money in unexpected, unforeseen financial situations that must be attended to immediately. Loan for Consumer Durables A loan may be taken to purchase gadgets or white goods like computers and mobile phones. Couples often use these loans to buy TVs, fridges, and washing machines. [B-02] Conclusion Unsecured loans, often called personal loans, are often granted to clients with great credit ratings. Depending on an actual base rate, personal loan interest rates may be fixed or liable to vary. This essay has helped you understand unsecured loans better. To learn more about Piramal Finance, go to their website.
08-11-2023
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Business Loan

Main Perks Of Unsecured Business Loans You Need To Know

Firm owners may use collateral to get a loan in certain instances. As the asset is linked to the term loan, if the firm owner fails on the secured loan, they must give the asset to the lender. As a result, the asset covers the working capital loan if they are not reimbursed. An unsecured business loan is another choice. Unsecured business loans do not demand assets, which makes them less risky. Many types of loans can meet money needs, with unsecured loans for businesses being one of them. [B-01] What is an Unsecured Business Loan? An unsecured business loan is given without the use of any asset. In this case, the lender or bank relies on your credit ratings and payback abilities. If you cannot improve credit ratings or income stability, the bank or lender may request assets in return for the unsecured business loan. Any firm or person may obtain an unsecured loan for many reasons, including: Enhancing firm stocks. Purchasing new tools. Extending work to new markets. Infrastructure or building construction. Buying stocks or assets. Micro and small firms often use unsecured loans. Yet, the bank or lender may provide loans to firms, self-employed people, and others that they see as a good option. Features of Unsecured Business Loans The terms and perks of banks’ unsecured business loan plans vary. The following are a few features of these loans: No asset is needed to be put up when requesting a firm loan. These loans are approved depending on the applicant’s credit and payback record. Other vital factors could also be taken into consideration by the lender. Banks often require that a firm has been successful for at least two years. The loan amount might vary from Rs. 10,000 to Rs. 50 lakhs, depending on the demands and size of the firm. The loan’s length is between one and five years. Startups, owners, merchants, SMEs, MSMEs, private firms, public firms, and big firms may all apply for unsecured loans. Perks of Unsecured Business Loans Here are some major perks of getting an unsecured business loan: No Collateral Required As the name suggests, these firm loans are “unsecured”. You are not required to put up assets to get credit. This function is particularly helpful for newly established firms without tangible assets to provide as collateral. Thus, obtaining a loan becomes much more attainable for firm owners or entrepreneurs just beginning their activities. Fast Processing & Distribution When a loan is secured, the bank is needed to confirm the value of the pledged asset. This activity often takes more time. The lender is not needed to know the worth of the asset or support records, such as firm revenues and credit reports, in the case of a loan. Affordable Interest Rates You may get an unsecured business loan at reasonable interest rates thanks to the RBI’s record-lowering repo rates and bank competition. Little Paperwork Required The paperwork needed to apply for an unsecured business loan is modest. You simply have to upload scanned copies of your ID, address proof and a voided check. To verify your firm’s age, some lenders may additionally want bank account records, necessary paperwork, and a certificate of firm existence. Flexibility Most lenders provide short-term finance in the form of an unsecured loan. An unsecured business loan lasts between 12 and 60 months. This relieves firm owners of their need to make lengthy EMI payments to repay their loans. People find maintaining a positive cash flow simple due to the shorter loan term. Many lenders now provide flexible loan payback plans to make payments simpler. No Shared Ownership Many firms turn to venture capitalists to finance their operations. Getting these folks to invest in startups is a big challenge. Without a complete firm plan, asking these venture investors may often result in rejection. Contacting a bank or nonbanking money firm is simpler. In addition, many angel investors want a cut of the firm’s earnings in exchange for their contributions. Business owners often forfeit their firm’s exclusive ownership while seeking funding without taking on debt. But, you need not be concerned about giving up or splitting your ownership when you ask for a firm loan. Makes The Loan Process More Efficient It is simple to submit an online application for a loan since the paperwork needs are modest and fast. The loan distribution process is streamlined, and less time is spent appraising assets due to the lack of assets. With no need for assets, an unsecured business loan enables the lender to pay attention to factors like credit score, monthly sales, and length of operation. Suitable For New Borrowers It is a fantastic method to build credit as first-time users have no credit records. Lenders are more concerned with your firm’s profitability than your credit record. Minimum Criteria Even if your loan needs are far less, you would still need to provide proof of stable monthly revenue. A financial statement from the previous 6 to 12 months & your PAN is needed. Therefore, your chances of receiving an unsecured business loan are higher if you can supply this data. [B-02] Conclusion Any firm owner seeking more working capital must assess their present financial status. Due to the faster approval procedure and low risks for you, an unsecured business loan makes the most sense. This is the case for many scenarios. But, a secured loan may be a better option for your firm if you have a poor credit score or need to hold vital assets. Consider your firm’s needs and base your choice on them. Do you have any other questions regarding obtaining an unsecured business loan? You can visit Piramal Finance to read similar blogs to get your doubts solved. You may also explore their products and services.
08-11-2023
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