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Stocks Markets

Pros and Cons of Investing in the Stock or Share Market

Investing in the stock market is one of the best ways to grow your wealth over time. There are a lot of benefits to investing in the stock market, but it is also important to be aware of the disadvantages. In this article, we will discuss the benefits of stock market investment and help you figure out the right percent of your portfolio that should be invested in stocks. So whether you are thinking of investing for retirement, creating long-term wealth or just trying to get ahead on your savings goals, keep reading for all the information you will need. [B-01] Pros and Cons of Investing in the Stock Market Regarding stock market investing, there are pros and cons to consider. The potential for high returns is an advantage and so is the potential to diversify your portfolio. However, stock market investing can also be risky, with the possibility of losing money. It is also essential to research before investing, as the market can be unpredictable. To make well-informed decisions, you should have a basic understanding of financial concepts like earnings per share (EPS), value-to-earnings (V/E) ratio and price-to-book (P/B) ratio. When you are familiar with this information, you will be ready to make wise investment choices. Advantages of Stock Market Investment Investing in the stock market is a great way to make money, but it requires thorough preparation. These are four main advantages of investing in the stock market: 1. Probability of higher short-term returns The share market is a volatile and risky investment arena. However, if you are prepared for possible losses and understand the mechanics of stock markets well, there is potential to earn higher returns in the short term. You can invest in stocks through individual or mutual funds and exchange-traded products (ETFs). There are also options like hedge funds that offer a combination of stock and derivatives investments. The key to success with any of these investment avenues is research. Knowing your financial statements will help you make more informed decisions about whether investing in stocks is beneficial for you. 2. Acquired ownership in the stakes of the listed company If you are interested in owning a piece of a company but do not have the time or money to invest in the stock market, there is another way. This involves acquiring an ownership stake in the listed company through investment in its shares. There are many different ways of doing this from buying individual stocks to investing through mutual funds and other financial arrangements. The upside of investing this way is that you can get immediate exposure to new businesses and products while minimizing your risk in case they fail or do not perform well. 3. Unmatched liquidity A stock market is an excellent place for businesses to raise capital quickly and easily. This is because the stock exchange offers unmatched liquidity. This means you can buy and sell shares at any time and can make money from the fluctuations in the market price of stocks. 4. Interests well-protected by a regulatory body The share market is a great way to make money, diversify your income portfolio, and participate in companies that are doing well. However, it can also be volatile, which means you may lose money if you do not stick with it for long periods. It is essential to have access to a financial adviser who can help you navigate the stock market and protect your investments. If you are ready to start investing, start by researching and consulting a financial adviser who can help you get started. Disadvantages of Stock Market Investment When it comes to investing, the stock market is risky, and there is always the potential for loss. However, if you are prepared for the risks, stock market investing can be lucrative. These are some disadvantages of investing in the stock market: 1. Increased chances of volatilities When you invest money in the share market, risks are always involved – even if it is just a small sum. This volatility means that stocks can change rapidly and for no reason. This can lead to huge losses if you are not careful. To make matters worse, volatility is not limited to the stock market alone. It impacts other investments such as real estate. So, before investing, be sure to do your research first. That way, you will not spend more than you intended and lose out on potential rewards altogether. 2. Brokerage can eat into profit margins Regarding stock brokerage, there are a few things to keep in mind. For starters, commissions can quickly eat into your profits. Secondly, the stock market is notorious for being volatile and risky so be prepared for losses along the way. Thirdly, remember that investment success or failure often hinges on long-term decision-making rather than day-to-day guesswork. How Much of My Portfolio Should Be in Stocks There is no one-size-fits-all answer to the question of how much of your portfolio should be invested in stocks. This decision depends on your individual circumstances and goals. Some people feel that a small percentage of their portfolio should be allocated towards stocks, while others choose to invest entirely in bonds or other securities. The best way to decide what proportions of your portfolio should be allocated towards stocks is to do your research and consult an investment advisor or financial planner. Make Your Share Market Investment Less Risky Investing in stocks comes with risks and rewards, but it is still essential for any well-diversified portfolio. Always do your research before investing, as there are various factors to consider, such as the company’s financial stability and past performance. Be wary of investments that offer higher returns but involve more significant risks. A diversified stock portfolio will help minimize risk levels while allowing you to participate in market growth opportunities. [B-02] Conclusion Investing in the stock market can be a great way to make money, but there are also risks associated with the market. Before investing your money in the stock market, it is essential to understand the pros and cons of stock market investing. For more information on stock market or share market investing, visit Piramal Finance for more helpful information, guidance and articles like this one!
08-11-2023
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Other

All You Need To Know About What Is Education Loan And How It Works For Students

Education loans can be a valuable resource for students who want to pursue their education. With the cost of education rising every year, obtaining an education loan can assist you in covering tuition and other college-related expenses. This detailed article will help you understand everything you need to know about education loans, whether you’re a freshman or a senior. This article will lead you through the entire process, from the different sorts of loans available to how to apply for one, so you can make the best option for your future. [B-01] What are Education Loans? Education loans are financial instruments offered to students and their families to help pay for college-related expenses. Students can obtain these loans from the government or private lenders, like banks, credit unions, or online lenders. The government also aids students to go for higher education by providing them with loans. Different types of loans are provided for different types of education programmes. Various financial institutions across the country provide loans to students depending on the type, of course, they are pursuing. Given below are some of the prominent types of education loans that students can based on the course they pursue: Graduate Loans: These loans are given to students who wish to continue studying in India. Students who wish to pursue a postgraduate degree in the country can apply for a loan. However, to get this loan, the students must complete their undergraduate program. Undergraduate Loans: Undergraduate loans are meant for students who seek financial support for their undergraduate degree. The duration of the course ranges from three to five years and the students will get a wide range of opportunities for pursuing a career later on. Professional Education Loans: NBFCs and various banking institutions provide these loans to students who wish to establish a career in the educational field. Eligibility Requirements for Education Loans To be eligible for a federal education loan, you must be accepted and enrolled in a college, university, or vocational program. Government student loans are only offered to undergraduate students, but graduate students can apply for student loans to determine efficiency. If you’re looking to get a private student loan, there are no eligibility requirements. However, you may have to meet certain credit requirements, provide proof of income, and pass a credit check. Unlike federal loans, private student loans don’t require a credit check. This means you can apply for a private loan even if you have poor credit. How to Apply for an Education Loan Families can apply for federal education loan at any time. There is a wide range of schemes available from the government and private lenders. If you’re applying for a federal loan, there are two steps you should take before applying. Make sure you meet all eligibility requirements. You can find information about eligibility requirements on the bank website. In addition, you could speak with a lender or industry professionals. Learn what kinds of loans you are eligible for. You should consider all of your options before applying for a loan because there are various kinds of loans available. Pros and Cons of Education Loans The biggest advantage of taking out an education loan from UGC or any other organization is that you can use the money to pay for college-related expenses, including tuition, textbooks, and living expenses. Education loans are also a good option if you don’t qualify for other types of financial aid. Education loan also has some disadvantages. The biggest disadvantage is the high cost of taking a loan. When applying for a loan, make sure you understand the terms of the contract and how it will affect you in the long run. Apart from that, you can also consult the lender or professionals who have been in the business. Find out what types of loans you are eligible for. There are many types of loans available, so you should research all of your options before applying for a loan. Strategies for Managing Education Loan Debt While the best way to pay off education loan debt is to find a high-paying job, it can take some time to pay off your student loans. If you can’t wait that long to repay your loan, there are ways to speed up the repayment process. The first thing you should do is check over your budget and see where you can make adjustments to free more money for repayment. If you’re having trouble finding more money in your budget, you should consider refinancing your loan. Before refinancing your loan, make sure you understand the conditions of the contract and how they will affect your total payback. Another way to speed up the repayment process is to make a repayment plan. You can do this with your loan lender or with an online repayment assistance service. This will help you stay on track and keep you motivated to pay off your loan as quickly as possible. Student Loan Refinancing If you have federal student loans and want to lower your interest rate, you can think about refinancing. Refinancing is the process of getting a new loan from a different lender to get a different set of terms and conditions. Applying for a proper loan system that would meet the fees is one option to refinance your government college loan. This is a private student education loan that combines all of your federal student loans into a single new loan with a new interest rate. You can then use the money from the new loan to repay your old debts. You can refinance your overall expenses if you have a distinct structure for student loans at a certain bank. However, for the structure option, it is important to understand the system. You can also get the same benefits by refinancing your private student loans and a government lender. [B-02] Conclusion When you get accepted to college, you will likely be offered a range of financial aid options, including education loans. Although taking out an education loan is a good way to cover the cost of college, it’s important to understand that you have to repay the money. Make sure you are aware of the terms of the loan and have a repayment plan in place. Even if you have a low credit score, you can still apply for government loans. With an education loan, you can pay for college and have a degree to show for it. Since there is a wide type of loan options available consulting professionals at Piramal Finance can help you.
08-11-2023
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Home Loan

All the benefits of property loan you should know

There are several instances in life when a large sum of funds is required. These may include weddings, accidents, further studies and more. However, there are various options available for you. Securing funds through unsecured and secured loans is one of those options. If you require a huge amount of funds then go for a personal loan or a property loan. There are various other loan options available if you don’t wish to go ahead with these. However, there are distinct benefits to getting a personal loan and a property loan. If you have a perfect credit score and are confident of not missing your EMIs then go for a property loan. There are various benefits to getting a property loan. [B-01] What is a loan against property? A loan against property is a secured loan for individuals or businesses that need funds for personal or business purposes. You have to put up your commercial or residential property as collateral with the bank to receive a loan against the property. It is a flexible loan option that provides various benefits mentioned below. Before choosing to get a property loan you should check out the interest rates provided by various lenders, the principal amount you can receive for your property, and the duration the banks are offering. You should also look at the documentation process as it doesn’t have to be tiring for you. A property loan usually has attractive interest rates and longer tenure with hassle-free documentation. You can simply and easily repay your loan through monthly instalments. A loan against property is used for various purposes such as marriage expenses, emergency medical expenses, business expenses, or other personal needs. Benefits of Loan Against Property There are various benefits of property loans that you should know before applying for one. These benefits may help you in easing the process of applying for a property loan: Availing a large principal amount You can receive a large principal amount as while applying for a property loan you put your commercial or residential property as collateral. The principal amount is decided on the value of your property. The maximum principal amount you can get is 70-80% of your property’s value. The ratio may also differ if the property is residential or commercial. You can utilize the funds to finance your personal or business expenditures. You cannot access such large sums in personal loans Lower interest Rate As a loan against property is a secured loan the interest rate provided on the loan is less. The interest rate is less as the bank’s risk is reduced and any losses incurred can be set off by selling off the property. The less interest rate can benefit you in future monthly loan payments as it minimizes your overall cost of borrowing. If you choose an unsecured loan like a personal loan then you might have to pay a higher interest rate for a longer duration. Longer Repayment Duration The repayment duration is one of the major benefits of choosing a loan against property. If you have chosen a property loan with a large principal amount then it is helpful for you when you’re repaying the loan. The long tenure and the low-interest rate make it a feasible option to choose. Tax Benefits You can receive tax benefits on getting a property loan. The tax benefits are on the interest payments and are only applicable if you use the sanction for particular reasons. According to Section 37(1) of the Income Tax Act, you can get a deduction when you use the property loan for business expenditures. You can also get tax benefits on interest paid and processing fees. If your property is residential then you can get a tax deduction under section 24(B) of the income tax act, 1961. Pre-closure charges When you’re closing your property loan before the end of your tenure you don’t have to pay any pre-closure charges. Documentation The documentation process of a property loan is simple and convenient. The documentation includes a clean and original deed of the property. Flexibility The loan against property allows you the flexibility of spending your loan amount for any purpose, unlike other loans. Gold loans or automobile loans are supposed to be spent for a specific purpose. Various property options You don’t have to worry if your property is residential or commercial. You can receive a property loan on any type of property. The property options are flexible. This would make taking a loan simpler and use of the property efficiently. Approval process The approval process for a loan against property is quite easy when compared to other loans. Documentation requirements are minimal and some institutions also provide doorstep facilities. Ownership During the repayment period, the borrower has ownership of the property, so if he is unable to repay the amount then they can sell the property to pay off the loan. [B-02] Conclusion Loan against property can be used by individuals as well as businesses and is very flexible when it comes to property. The banks provide loans on residential as well as commercial property. Property loans come with flexible loan amounts, lower monthly payments, longer tenure of the loan cycle, fewer interest rates and high eligibility. The overall financial burden on the borrower is low and he can constructively utilize the rest of his spending income. If you’re thinking of getting a property loan do check out Piramal Finance’s loan against property. You can also check your monthly payment on the EMI calculator.
08-11-2023
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Is PPF Risk-Free: Everything You Need to Know About it

The Indian Government offers the Public Provident Fund (PPF). It is a way to save for the long term. After the lock-in period, investors are eligible for tax breaks on their investments and withdrawals. The government has supported this initiative since its inception on July 1, 1968. It aims to provide financial security for self-employed persons or working in the “unorganised sector.” The project’s assured profits and tax advantages have increased its attractiveness even though it is not essential. [B-01] Characteristics of the PPF Age: No specified minimum account opening age. Eligibility: A permanent Indian resident is required for eligibility. Interest Rates: Annually, you will earn a compound interest of 7.10%. The lowest balance between the month’s fifth and final working days will be used to determine interest for the whole month. Investment: Monthly investment limits are set at 500 Indian rupees. The cap is set at Rs. 1.5 million each year. The choice is yours all at once or in multiples of Rs 50. The number of disbursements made throughout a fiscal year is unlimited. Tenure: You can make annual contributions or keep the account open for a total of 15 more years. It may multiply indefinitely. After a year has passed since the PPF account’s opening, the account holder will no longer be able to deposit funds into the account. PPF accounts are closed after 15 years of service, even though contributions are required until 16 years. Since the 15-year term begins on the first day of the fiscal year in which the account is created, this is the case. Exit Options: The only ways to get out of a PPF account are death or when five years have elapsed since the end of the fiscal year the account was created. This holds even though the cash may be used to cure a life-threatening sickness or put a child through college. Opening Process of PPF Once you’ve determined where to create an account, you’ll need the following documents: Fill out a form to request an account. Two photos the size of a passport. Aadhaar cards, passports, PAN cards, Income-Tax Act of 1961 Forms 60 or 61, driver’s licences, voter ID cards, and ration cards may be used to prove identity and domicile. Please bring the original documents with you when you set up your account Select a nominee. The nominee can be your spouse or another family member. After you submit the form, your account will be opened. You will get a passbook with all details of your account and other details as required. How to Create a PPF Account Online? Sign in to your bank account using a desktop browser or a mobile banking app. Choose “Open a PPF account” from the available options. Choose “Self Account” if a single individual will use the account. Make sure you choose “Minor Account” if you’re doing this on behalf of a minor. The next step is to fill out the application form accurately. Input the yearly amount you want to deposit into the account. Submitting your application is your next step. The registered phone number will get an OTP. Enter the OTP in the proper place. Once you click, your PPF account will be created instantly. Your PPF account number will be shown. They’ll confirm everything with you through email. Opening a PPF Account at the Post Office The first thing to do is to visit your neighbourhood post office or get an application from the Postal Service’s PPF website. The second step is to complete the form and submit it with a passport-size picture and the required Know Your Customer (KYC) documentation. The third step is to bring in the opening deposit for your PPF account at the post office. Depending on the budget, the annual amount might be anything from Rs. 500 to Rs. 1,50,000. Fourth, you will receive a passbook to access your PPF account after your approved application. Withdrawal From PPF Until your PPF account matures or after 15 years have passed, you cannot withdraw the whole balance. A PPF account may be terminated, and the balance, including interest, will be withdrawn after 15 years. However, account holders who require the money before the 15-year period can do so in instalments beginning in the seventh year or after the sixth year. At the end of the fourth year, the account holder may withdraw up to half of the remaining amount. Only one withdrawal per fiscal year is permitted. Withdrawal Procedure for the PPF You may take that step if you want access to any or all of the funds in your PPF account. Visit the PPF post office or bank where you created your PPF account and request a Form 3/Form C application for PPF withdrawal. Completing the Application Form with the Necessary Information. Submit the form to the branch of the bank or post office where you want to open your PPF account. [B-02] Conclusion In 1968, India established the Public Provident Fund (PPF). The goal was to pool a bunch of little donations into a larger sum that could be invested and provide a return. It is a way to invest money that reduces yearly taxes and enables individuals to put away money for the future. If you want to guarantee your financial success, reduce your tax liability, and invest responsibly, a PPF account is a must. In addition, contributions of up to Rs. 1.5 lakhs to a PPF account are free from tax, as are any subsequent revenues from interest or maturity. You should visit the Piramal Finance website for further details on the Public Provident Fund now that you have all you need to know.
08-11-2023
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Types Of Alternative Investments Everyone Should Know

Investment is a great way to make money without lifting a finger! All you need is your capital and the best investment option. But the question is- What is the best investment medium? Time-tested mediums like fixed deposits, shares, gold, and cash are often the first preference. But you may be missing out on the big profits that the best alternative investment opportunities can offer. So, we have listed the top 8 alternative investment options that can make you a fortune if you act quickly! Sounds interesting? Let’s begin! [B-01] What Are Alternative Investments? An alternative investment is an alternative to investment plans in ‘conventional’ assets. Conventional categories include cash, stocks, and bonds. And alternative investments include all other investment options and types such as: Private equity Venture capital Managed futures Peer-to-peer lending Hedge funds Commodities Collectables Real estate Structured products Derivatives contracts The Top 8 Alternative Investments Let us now explore the pros and cons of the 8 best alternative investment options that will help you gain impressive returns. Here are the most profitable yet relatively safe alternative investment opportunities you should consider: Private Equity Private equity funds invest in companies not listed on public exchanges. These companies cannot raise capital from the public as they are not listed. But you can make private equity investments in them and earn as they grow. Investing in profitable businesses through private equity can bring you very high returns. But the investment period is very long, and the risks are high if you make the wrong choice. Commodities Commodities are tradable assets such as oil, grain, metals, energy, and agricultural produce. They can be bought and sold quickly and protect you against inflation. The downside is that commodities markets are very susceptible to market instability. So, you must make well-informed decisions to lower the risks of loss. Hedge funds Hedge funds collect money from investors and invest it in equity markets or international/domestic debt. They usually offer high returns to investors. However, hedge fund managers charge a high management fee of 2% to 20% of your total annual returns. The risk involved is also significant. Real estate Real estate investments usually need large sums of money. But real estate investment trusts allow you to invest in real estate with as little as Rs. 5000! Using these methods, you can have fractional ownership in grade A properties or buy entire properties if you have the funds. But, real estate is a long-term investment plan with high taxes and maintenance costs. Venture capital Venture capital funds invest in young startups that need capital to develop themselves. You can earn large returns if the fund invests in successful startups. And this is especially true in a large startup ecosystem like India. However, venture capital investments always carry the risk of losses. And this is because even the best ventures can fail in the uncertain business world. Moreover, you won’t have control over business decisions while investing in a company. Collectables Collectables include a wide range of unique physical assets that are likely to appreciate over time. Investing in collectables involves purchasing and maintaining special items until they are sold at a much higher value. These include items such as: Fine art Rare wines Vintage cars Mint-condition toys Stamps Coins Other artworks or antiques Collectables can bring you very high profits. However, there won’t be any regular income from the items and you would have to pay for their maintenance regularly. Peer-to-peer (P2P) lending Modern P2P lending involves direct lending between peers without including banks. And this means lenders and borrowers can earn high interest using authentic P2P lending platforms. Currently, these platforms offer an impressive 18-22% net returns. On the flip side, P2P lending involves the risk of the borrower defaulting. So, you must research and take expert help before going for P2P lending. Angel funds Angel funds are investment funds that collect money from several investors and invest it into new businesses. Investors receive high dividends once the new business grows and becomes profitable. Unlike venture capital, angel funds involve direct individual investments without any intermediary. Hence, they allow better control over the use of your investment. However, angel funds are subject to unpredictable business risks. They also involve higher complexities and higher losses than venture capital. When Should You Prefer Alternative Investments? Alternative investment plans are usually more profitable, stable, and less regulated than traditional mediums. They are a great option to improve returns and diversify your investment portfolio. However, you must have high expertise, large capital, and time to spend. That’s because alternative investments involve higher complexity, higher fees, and lower liquidity. They are also less predictable and less transparent as compared to traditional investments. So, you should go for alternative mediums only if you have the required capital backed by proper expertise or guidance. You may also approach financial consultants to make the best alternative investment options that provide higher returns at minimum risks. Summing up This blog has covered the best alternative investment options that offer good returns without high risks of loss. We saw that the 8 best alternative investment options are- Hedge funds Private equity Commodities Real estate Venture capital P2P lending Angel funds Collectables Each option has its unique pros and cons. And it is up to you to build a portfolio by investing in the correct mediums. But alternative investments can get tricky and hurried decisions can land you in a financial fix! So, you must check the pros and cons and verify the terms before investing in any medium. [B-02] Do you still have doubts or concerns? Solve them by taking expert advice from a trusted financial agency like Piramal Finance! The experts at Piramal will help you make the best alternative investments easily so you can make the most of your savings.
08-11-2023
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Personal Loan

Check Eligibility of Loan for Women & Apply Online

When women start a small business, they often face numerous challenges. Hence, they need special loans tailored to their needs. Here are some factors affecting business loans for women, their eligibility, and how to get special offers for women business owners on loans. [B-01] What Do Business Loans for Women Mean? Today, there are more and more female entrepreneurs. They are taking control of their finances and becoming more stable and educated. It also means that they can help other women because they know what other people might need when it comes to finances or business advice. Here are a few reasons why a loan for women is the way to go: Women in business are on the rise. Women make up 20.37% of India’s MSME (micro, small, and medium enterprises) owners. They account for 23.3% of the labour force and are the economy’s backbone. Women reinvest in their businesses more than men—and for a good reason. To succeed as an entrepreneur, you need to put your money where it counts: into your business and its growth. Women tend to do this better than men because they have more empathy for their community and family needs, which means paying employees better and ensuring workers’ rights are respected. When women receive microloans, it improves their lives and the lives of their families. They can invest in new businesses and create jobs for more people. This creates a ripple effect that impacts their communities and the country’s economy. Why Do Women Need Business Loans More Than Men? Women are considered to be the backbone of every society. However, they lack the opportunities to explore their potential. As a result, many female entrepreneurs and small businesses fail in their endeavors. This can be attributed to a lack of financial support, which is a vital factor in running a successful business. Women need business loans more than men because they have fewer options for borrowing capital from banks or other financial institutions. This is due to various reasons like lower income levels, etc., thus making them ineligible for bank loans. A small Business Loan for Women is perfect if you are starting as an entrepreneur and need capital to get your business going. You might need this loan to open a new location or add a new product line. The best part about this type of loan for women is that it comes in all shapes and sizes, so no matter what kind of business you own, there will be a loan that fits your needs. Many different repayment options are available; choose the one that works best for your budget. Eligibility Criteria for a Business Loan for Women To apply for a business loan for women, you must be: A citizen of India. You should also be residing in India at the time of your loan application. No past loan defaults. A minimum credit score of 650 You should have a business plan in place. This includes outlining what kind of business you wish to start, how much money it will cost, and how much profit you expect to earn. Have an active bank account to deposit the loan repayment amount each month (the lender will use this account to transfer funds). Documents Required to Apply for Business Loans for Women To apply for a business loan for women, you need to submit the following documents: Filled out and signed the application form KYC documents like business incorporation certificates, business entity proof, articles of association, partnership deeds, shop certificates, and establishment certificates. Income proof (last 6 months’ bank statement) Passport-size photograph of applicant and co-applicants Identity proof (PAN card, Aadhaar card) Address proof A detailed business plan How to Apply for Business Loans for Women? You can apply for a small business loan for women by visiting your bank’s website or lender. The bank will review your application and check your credit rating. If approved, it will deposit the money into your account within 3 business days. Factors That Determine Your Business Loan for Women Eligibility Several factors determine your business’s loan eligibility. These include: Your business’s credit history Your business’s profitability, cash flow, and growth potential The industry in which you operate Your personal credit history, income, and assets Your business’s stability and financial strength The size of the loan you need Your business’s financial statements The quality of its management team Your business’s creditworthiness Women Have Access to Special Loans at a Lower Interest Rate Most lending agencies offer special rates and terms on loans for women, so they can take care of themselves, their families, and all the other things that make them happy. You can get a business loan of up to Rs. 1 crore and working capital loans for women entrepreneurs. The interest rate on these loans is lower than on standard loans, making them more accessible to women who want to start their own businesses. Access to special business loans at a lower interest rate makes them more affordable for the female borrower and easier for the lender to service. [B-02] The Bottom Line Women entrepreneurs can get special loans tailored to their needs. With loans for women at lower interest rates and tailored repayment periods, it’s easy for women to get the financing they need to start or grow their businesses. To read more similar blogs and other finance-related articles, head to the Piramal Finance website.
08-11-2023
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Business Loan

What You Need to Know About Entrepreneur Loans

Any expanding business constantly worries about finding new sources of working capital. Getting access to loans may be difficult for a small or medium-sized enterprise. However, banks and NBFCs provide entrepreneur loans to those who need to start or expand their business operations. Entrepreneur loans are calculated based on the borrowed amount, interest and repayment period. It will benefit business owners who need access to funds to finance various aspects of their business. [B-01] What Is An Entrepreneur Loan When you need access to finances for your business, an entrepreneur loan can help. An entrepreneur loan can be used for multiple purposes such as business growth, the acquisition of new machinery, investment in personnel and more. To help business owners, an entrepreneur loan can help to kickstart or grow the businesses of qualified applicants who meet the eligibility requirements. Since an entrepreneur loan is an unsecured loan, you do not need any collateral to be eligible to apply and the interest rate is also reasonable. Ways To Increase Your Chances of Getting An Entrepreneur Loan To qualify for an entrepreneur loan, businesses must meet certain requirements. A loan application can be denied by the bank if the borrower does not meet the bank’s requirements. The following recommendations will help you get your entrepreneur loan application approved: 1. Raise Your Credit worthiness The first thing to do if a company or its owner has a low credit score is to pinpoint the causes. Not paying credit card bills on time or late EMIs payments can negatively impact your credit score. This is why it is crucial to make all repayments on time and ensure that your bank account linked to your EMIs always has sufficient balance. 2. Do Not Apply For Loans Multiple Times Banks reject loan applications because of poor credit reports. Businesses should know that bank loan denials affect their chances for future loan approvals. Banks are more hesitant to lend to those who have been rejected for loans in the past. 3. Find a Reliable Lender It is crucial to research all lenders that provide the best entrepreneur loans. Selecting a bank with low-interest rates and favourable loan terms is important. Applicants are advised to use an eligibility calculator to assess their EMIs and make a better decision on whether they can make their repayments. 4. Business Longevity Banks and lenders grant entrepreneur loans to businesses that have been in operation for at least three years. It may be more difficult to get an unsecured entrepreneur loan for a new or struggling business. As a result, businesses may be forced to search for entrepreneur loans that are secured with collateral. 5. Assess Repayment Capacity A business owner should apply for an entrepreneur loan only after they have determined their ability to repay the loan amount plus the interest. If the entrepreneur loan amount is too high, the lender may turn down the loan application by deeming the amount too much to be repaid. 6. Keep Accurate Documentation Any legitimate business must register for GST and have their audited financial records. Lending institutions and banks consult these documents while determining whether entrepreneur loan applicants qualify for loans. What to Do If Your Loan Application Is Rejected In the event of an entrepreneur loan application rejection, these are the steps to be taken: 1. Find Out The Reasons For Rejection Usually, the reasons include a low credit score and a high debt-to-income ratio. Finding out the reasons will help you in the future if or when you decide to reapply. 2. Verify Your Credit Record Negative credit history can be a major reason behind the rejection of an entrepreneur loan. Before submitting another application, double-check and resolve any inconsistencies you find. 3. Reapply for the Loan Before reapplying, check the reasons behind your loan rejection. Work on your credit score and resolve the issues for your loan rejection. Follow the lender’s further instructions to get your entrepreneur loan approved. Eligibility Requirements These are the eligibility requirements for a business loan for entrepreneurs: Between 21 and 65 years of age The business must be a minimum of 3 years Must be an Indian citizen or resident Must be self-employed under any of the categories: business owner, sole proprietor, partner of a partnership firm, promoter/director, doctor, CA and architect Must have a CIBIL score of 700 or higher In addition, some banks also require a minimum annual revenue or ownership of at least one property. Documents Required These are the documents required for an entrepreneur loan: ID proof documents such as Aadhaar card, voter’s ID and more Address proof documents such as utility bills, voter’s ID, Aadhaar card and more PAN card Proof of business ownership Company’s financial documents for the required period Bank statements and other financial statements for the required period Application Process You can either apply for an entrepreneur loan online or at the nearest branch of the bank or lender. The application process is simple and requires you to: Obtain the application form from the bank branch or website Fill out the form with accurate information that matches your supporting documentation Attach or upload all required documents mentioned above Submit your application plus documents to the bank personnel or online Each lender will have their own approval process which includes the time required to approve the loan and transfer the funds to your bank account. [B-02] Conclusion If you are considering applying for an entrepreneur loan, it is important to go through all the factors mentioned in this article including assessing your eligibility, preparing your documentation and figuring out your ability to repay the loan. Before applying, it is important to determine the exact loan amount that you require and not more or less since the amount will impact your repayments. Once you research the different lenders that offer a business loan for entrepreneurs, check the interest rate and tenure of the loan to determine whether the EMIs are within your repayment ability. For more information and guidance on entrepreneur loans, visit Piramal Finance and read informative articles like this one.
08-11-2023
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Investment

What Is A Financial Investment? – Definition & Types

The question “what is a financial investment” is quite common. Most people understand it as investing in stocks, bonds, and other financial instruments. However, there is more to investing than simply buying shares in a company. In this blog post, we’ll define what a financial investment is. We will also break down the different types of financial investments. By the end, you would have learnt how to optimise your money flow starting today. Let’s dig in! [B-01] What is A Financial Investment? The financial investment can be any type of asset. It must have the potential to generate income or appreciate over time. Common examples of financial investments include real estate, precious metals, and collectables. There is no guarantee that any investment will succeed. However, careful research and diversification can help to minimise risk. It can also help to maximise the returns. For many people, investing is a way to secure their financial future. It is a way to build their wealth over time. With the right approach, it can be a powerful tool for achieving financial security too. The key to successful investing is carefully researching potential investments. It is also important to diversify one’s portfolio across a variety of asset classes. This minimises the risk involved in investments. Over the long term, investments typically outperform other savings vehicles. This includes savings accounts and CDs. As a result, investing is one of the best ways to grow one’s wealth over time. Types of Investments There are numerous financial investments. Here are 6 most popular financial investments in India: Stocks Stocks represent ownership in a company. When you buy stocks, you become a shareholder. It entitles you to a portion of the company’s profits. Stocks are often associated with large corporations. However, smaller companies can also issue stocks. When a company issues stocks, it is selling a piece of itself to investors. The primary benefit of investing in stocks is that you have the potential to earn a high ROI. Unlike bonds, which provide fixed payments, the value of stocks can rise and fall. As such, stocks offer the potential for both growth and income. For this reason, stocks are an important part of many portfolios. However, it’s important to remember that they also come with risks. The value of stocks can decline sharply very quickly. There is no guarantee that you will earn a good ROI. Bonds Bonds are debt securities issued by corporations and governments to raise capital. When you purchase a bond, you are effectively loaning money to the issuer. In return, the issuer agrees to pay you a set rate of interest over the life of the bond. They are required to repay the principal amount when the bond matures. Bonds are an attractive investment option. They are relatively low-risk. They also provide a steady stream of income. However, they also tend to offer lower returns than other investment options. This includes options such as stocks and real estate. As such, bonds may only be suitable for some. Fixed Deposits For those looking for a safe and predictable ROI, fixed deposits (FDs) are often a popular choice. FDs are offered by banks and other financial institutions. They typically involve placing a sum of money into an account for a set period. During this time, it will earn interest at a fixed rate. The main advantages of FDs are their safety and stability. The interest rate is fixed. Hence, the investors know exactly how much they will earn on their investment over the term of the deposit. In addition, FDs are relatively low-risk. They are also easy to understand. All these factors make them an ideal option for new investors. However, FDs tend to offer lower returns than more risky investment options such as stocks and shares. Therefore, it is important to carefully consider your needs and objectives before investing in FDs. It might or might not be the right option for you. Mutual Funds Mutual funds are managed by professional money managers. They typically invest in a diversified mix of stocks, bonds, and other securities. This diversification can help to minimize risk. It can also potentially maximize returns. For investors who are looking for a hands-off approach, mutual funds can be attractive. However, it is important to remember that mutual fund performance can vary. There is also no guarantee of how any particular fund will perform in the future. As with any investment, it is important to do your research before investing in a mutual fund. But for those who are willing to take on some risk, mutual funds can be a smart way to grow your wealth over time. Real Estate When it comes to financial investments, there are a lot of options to choose from. Stocks, bonds, and mutual funds are all popular choices. However, each comes with its own set of risks and rewards. For some people, the stability and potential for growth offered by real estate make it an attractive option. Stocks and bonds can go up or down in value very quickly. But real estate is a slower-moving market. This can make it easier to predict trends. It is also easier to make sound investment decisions. Additionally, real estate can offer several other advantages. This includes the potential for rental income, tax breaks, and many more. Of course, real estate is not without its risks. It is affected by the possibility of market downturns and maintenance costs. However, for some investors, the potential rewards outweigh the risks. Crypto One of the most popular financial investment options today is cryptocurrency. It is also known as a virtual or digital currency. Cryptocurrency uses cryptography for security. It is not controlled by any central authority, making it decentralised. There are several cryptocurrencies present today. Investors can purchase cryptocurrency through a cryptocurrency exchange. They can also mine it. Mining involves verifying transactions and adding them to the public ledger. Cryptocurrency is often praised for its security and anonymity. However, it is also volatile. It has also been known to lose value quickly. [B-02] Conclusion We hope that now you are all clear with what financial investment is and what are its various types. But if you still need investment advice or have concerns regarding your finances, you can contact finance advisors at Piramal Finance!
08-11-2023
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Difference between Cumulative FD versus Non-cumulative FD

Do you want to sign up for a fixed deposit scheme? Learning about the two types of fixed deposits would help. For the uninitiated, there are two types of FDs: cumulative and non-cumulative. A cumulative fixed deposit scheme accrues interest through a process called compounding. It provides better returns than non-cumulative FD which pays interest periodically. So, which one should you invest in? The answer depends on your liquidity needs. This blog highlights various aspects of the two FD types to help you make an informed choice. Before we explore the differences, let’s understand what these FDs mean. [B-01] What is a Cumulative Fixed Deposit? A cumulative FD is a type of fixed deposit where the interest is compounded over time and paid on maturity. The interest earned in a year is reinvested and added to the principal. This pumps up the interest amount. In other words, the interest earns more interest. And when the deposit matures, you receive the principal and the accumulated interest. Cumulative FD works best for those with a long-term investment horizon. Examples include salaried individuals who do not depend on interest income. Hence, invest in this FD to diversify your investment portfolio. What is Non-Cumulative Fixed Deposit? In non-cumulative fixed deposits, the depositor receives the interest amount periodically. The interest is paid annually, biannually, quarterly, or monthly, depending on the depositor’s preference. Since the power of compounding plays no role here, the returns are less than the cumulative FD. Non-cumulative FD works best for retirees, freelancers, or homemakers without a fixed income. Difference Between Cumulative and Non-cumulative Fixed Deposit Now that you understand the meaning of the two FD types, let us understand their differences: Given below are the major differences between cumulative FD and non-cumulative FD: Payout of Interest The payout frequency is one of the major differences between cumulative and non-cumulative FD. In the case of cumulative FD, the interest income remains locked in for the entire tenure. However, for non-cumulative fixed deposits, the interest is paid out periodically depending on the choice/preference of the investor. The interest on the cumulative fixed deposit compounds every three months and is paid at maturity. On the other hand, non-cumulative fixed deposits do not harness the power of compounding. Based on their requirements, the depositor can choose from different interest payout options, from monthly to annually. Income Frequency In cumulative fixed deposits, the depositor does not earn extra income during the investment term. The entire income, with the interest accrued, is paid as a lump sum at the end of the term, on maturity. If you invest in non-cumulative FD, you will receive constant payouts. In other words, the FD will act as an income source. Suitability While you will not receive constant income with cumulative FD, you will get bigger returns as the interest compounds. The maturity period for cumulative fixed deposits lies between six months and ten years. The cumulative FD is therefore a suitable option for individuals who wish to receive a fixed income at the end of their deposit tenure. Often, this type of fixed deposit is also referred to as a money multiplier. If you do not want a monthly income but wish to use the FD simply to build a corpus, go for cumulative FD. It is best suited for people with a stable income. If you have liquidity needs and want to use your savings to generate consistent income, opt for a non-cumulative FD. Therefore, non-cumulative FD is a reliable option for freelancers or retired individuals. In other words, it suits individuals without a fixed income source. Which is Better: Cumulative FD or Non-Cumulative FD? It can take time to decide which account is right for you. As you can see, cumulative FD accounts offer many benefits. However, non-cumulative FD accounts also provide the same benefits. The main difference lies in the interest payouts. Which one to choose out of the two depends on your expenses and how much you wish to save over a specific period. [B-02] Conclusion A fixed deposit is a practical investment option for those looking to save money for the future. A cumulative fixed deposit (FD) offers investors the advantage of cumulative interest over time. Non-cumulative FD provides investors with the same returns without the cumulative interest. However, both FDs offer great returns with minimal risks. If you are not familiar with cumulative and non-cumulative FD, reach out to professionals at Piramal Finance to help you with the entire procedure. Being experts in their field, they will help you make an informed choice.
08-11-2023
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