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Personal Loan

Benefits of Taking a Loan to Buy a Tractor in India

Tractor loans for farmers are the industry standard for agricultural machinery in India. Tractor finance in business and industries is a need. Hence, top banks offer tractor loans. The demand for tractor finance is highest in the country’s rural and semi-urban areas. Tractor loans help you buy new or old tractors. These tractors have a wide range of applications in industry and agriculture. Farmers must have at least three acres of land to qualify for a tractor loan. But, this number varies lender by lender. This article will highlight some benefits of applying for a tractor loan for farmers in India. [B-01] Benefits of Taking Out a Tractor Loan in India Better productivity A tractor can make you more productive. And, due to the increased productivity, you will have more time to devote to each task. Also, a tractor outfitted with a cultivator, rotavator, sprayer, and thresher is handy. It makes farming far more efficient than using farm animals. It also speeds up the process. Hence, you can make the most of your time. Cut the cost of production The level of automation in a farm directly impacts crop harvest. Investing in a tractor can save 15–20% on seed and fertilizer costs. That’s because of the increased accuracy it provides. You’ll feel confident about farming again. That’s because tractors make tillage, sowing, inter-row crop cultivation, and harvesting easier. Together, these factors allow for a higher level of cropping intensity. Which, in turn, yields greater yields. Hence, we recommend applying for a tractor loan. Finally, it can help you cut down on production costs. Increase land cultivability Farmers in hilly areas know how labour-intensive it is to cultivate their produce. They frequently give up and give in. A piece of farm automation equipment, like a tractor, can be quite helpful in this situation. The innovative techniques used by tractors save time and effort. Hence, they allow you to transform the unusable area into productive farmland. And, help you to increase your earnings during harvests. Comfortable A tractor is very comfortable and convenient. And, due to the robust hydraulics, they can lift harvests weighing up to 1500 kgs. Also, investing in a tractor can make large-scale fieldwork much easier. Make your selection from the available options There is a diverse selection of tractors available. You can choose from over 16 a handful of national and international brands. So, it doesn’t matter if you have a tiny orchard or a sprawling farm; you have options. You won’t be disappointed if you buy a tractor with a tractor loan. Suppose you’re looking to improve your output on the farm. In that case, a tractor is your best bet. Important Things to Think About When Applying for a Tractor Loan There are several things to think about before applying for a tractor loan. Interest Rate The interest rate charged by the lender is a primary factor. The APR on tractor loans can be anything between 10.55 and 23.95 %. The interest rate is determined by the lender based on several factors. For example, the loan amount, the loan term, and others. Borrowing money at a low-interest rate will reduce your monthly outlay. Tenure The longest possible loan period for tractors is 7 years. In contrast, some lenders only allow a maximum payback time of 5 years. Suppose you choose a shorter repayment period. In that case, you will pay less interest. But, your monthly EMI payments will be higher. To that end, you should think about the following: How long can you afford to pay the loan back How long will the lender let you have the loan Repayment period Extra Costs Various costs can be added to your loan amount. For example: Processing fees Prepayment fees Documentation charges Thus, look for a loan with a good interest rate and consider the costs involved. Collateral The lender you choose to borrow from will determine if the collateral is required. Thus, it is important to read the fine print before giving a loan the green light. Margin When applying for a tractor loan, verify the margin your lender has offered. The average loan amount offered by lenders is 90% of the price of the tractor. Hence, you must pay the remaining 10%. If the lender gives a higher margin, you should ensure that you have the funds to make timely payments. Loan Rates for Tractors Tractor loan interest rates in India can vary widely based on certain criteria. For example: Type of loan The creditor The individual’s credit score The amount of the down payment But generally speaking, the interest rate for a tractor loan is around 10% to 12%. In India, you can take out tractor loans for short or long periods. Loans with terms longer than 3 years are long-term. In contrast, those with less than 3 are short-term. The lending institution sets the interest rate for tractor loans in India. But, interest rates offered to vary from lender to lender. The applicant’s credit rating also plays a significant role in the interest rate. Interest rates are inversely proportional to credit scores. So, the higher the credit score, the lower the interest. Last but not least, the interest rate on tractor loans also depends on the down payment. When the down payment is high, the interest is low. And, when the down payment is low, the interest is high. [B-02] Conclusion Borrowing money is typically the only option for Indian farmers who want to buy a tractor. In this article, we discussed tractor loans for farmers in detail. Using this data, securing the loan necessary to buy your dream tractor should be much simpler. Want an instant personal loan? Apply for a personal loan with Piramal Finance right now!
08-11-2023
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Everything You Need To Know About Convertible Debentures

Convertible debentures are long-term debt instruments. Firms issue convertible debentures. It has one unique feature. They can be converted into equity shares. Shareholders can convert debentures into equity shares. This conversion gives security to the holder. And this security can balance the risk of investing in unsecured debt. The issuer often holds conversion rights. A debenture can be converted into stock or shares only after a certain decided time. Note that Non-convertible debentures can’t be changed into equity or shares. [B-01] What are Convertible Debentures Convertible debentures are unsecured loans or bonds. Often, there is no collateral as security. Firms issue long-term debentures to take advantage of tax benefits. They are issued as fixed-rate loans. The bondholder gets fixed interest based on a schedule. Let us take an example. A company that has issued convertible debentures can claim tax deductions for interest paid to investors. These can be fully, partially, or optionally convertible. The interest rate on convertible debentures is low. This is because it can be changed into stock for the investor’s benefit. Difference Between Convertible and Non-Convertible Debentures FactorsConvertible DebenturesNon-Convertible DebenturesRate of InterestThe rate of interest is lower. This is because convertible debentures can be converted into shares or equity.The rate of interest is higher. This is because non-convertible debentures cannot be converted into stock.Maturity ValueThe maturity value depends on the stock price of the company. If the stock price goes high, it can lead to poor returns.Non-convertible debentures have a fixed and decided value by the coupon rate. The returns are fixed for every quarter, biannually, or annually until maturity.Impact of Market ConditionsConvertible debentures can be converted into equity stocks during unstable market conditions.Non-convertible debentures cannot be converted at any time. Non-convertible debenture holders have to wait until maturity for redemption.StatusConvertible debenture holders can be creditors or shareholders in the company.Non-convertible debenture holders are always creditors or lenders.RiskThere is a lower risk* in convertible debentures.There is a higher risk^ in non-convertible debentures. * This is because the investor can convert them into shares. ^ This is because investors have to wait until maturity to redeem the value. Types of Convertible Debentures Convertible debentures are wholly or partially convertible. Fully Convertible Debentures The entire value can be changed to match the equity shares of the company. The conversion of these debentures leads to higher equity capital. These have a highly favourable debt-to-equity ratio. They are classed as equity or stock. The conversion ratio is decided at the time of issuing. This is good for companies that do not yet have a good track record that is well known. This is popular among investors. Partly Convertible Debentures Only a part can be converted into equity. They have a favourable debt-to-equity ratio. The convertible part is classed as equity. The non-convertible part is classed as debt. The conversion ratio is checked when the securities are issued. Conversion leads to lower equity capital. This is best for those companies that have a good track record. This is not as common among investors. Features of Convertible Debentures These are some common features of convertible debentures. Conversion Price The conversion price is the price at which a usual share is issued. These are then assigned to the holders. This price depends on various factors. This includes market price, current book value, and the expected rise in share value. A higher conversion price means lower inclusion to the capital base. Conversion Rate This shows the number of equity shares acquired in place of a convertible bond. Quantum of Conversion This is the number of debentures that has to be converted. It is shown as a percentage of the face value. Coupon Payment The value of a coupon payment depends on the issuer’s credit quality and interest rate. A study of the “break-even point” is useful to distinguish coupon payouts from dividend yields of common shares. Convertible Value The value is set on an investor’s right to receive equity shares. This value is received by multiplying the conversion ratio by the market price of each equity share. Conversion Timing The time ranges from one year (from the date when allotted) to five years. Market Price The market price depends on the investment and conversion value. The market price is the value that the market associates with a convertible debenture. Premium This is the difference between the current stock price and the conversion price. Benefits of Convertible Debentures From the point of view of business, convertible debentures are a quick and easy way of raising funds. These funds can speed up the growth and profit of a company.These are some of the benefits of convertible debentures. Convertible debentures have a fixed rate. There is also the option to take part in the rise of stock prices. If the price of the issuer’s stock decreases, investors can retain the bonds until maturity. Convertible debenture holders are paid before other stockholders at the time of liquidation of the company. This is a hybrid investment option. Investors receive fixed-interest payouts. They can choose to convert their loan to equity too. This is done when the stock prices are high or when the company is performing well. Limitations of Convertible Debentures Just like any other investment, there are also limitations. These are some disadvantages of convertible debentures. Convertible debenture holders obtain a lower interest rate than other bonds. The company’s actions may affect convertible debenture holders. In such cases, the company may not be able to repay the principal amount to the investors. If the stock price decreases after the conversion into equity, investors may suffer losses in their investments. [B-02] Conclusion Convertible debentures attract investors because they have fixed interest payments. If the share prices of the firm rise, the investors benefit. This is because of the pre-set conversion terms. Investors can then buy shares at a discount with conversion. This depends on the terms of the contract. If the share price goes down, they can keep the security as a bond. In this case, they can earn higher interest than if they had bought traditional bonds.
08-11-2023
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Things You Should Know About PPF Accounts in India

One of the most common retirement savings methods, the Public Provident Fund (PPF) offers a restricted set of risk-free investment options. The current annual interest rate for PPF accounts is 7.10 per cent. PPF, on the other hand, is an entire debt instrument, and most investors are unaware of its characteristics. When it comes to retirement savings, a PPF post office account offers an excellent balance of security, returns, and tax advantages. You can also apply for post office PPF online. In this article, we will talk about PPF accounts and more. So, let us get started. [B-01] 12 Things to Know About a PPF Account in India If you are considering purchasing PPF, here are 12 things you should know: 1. Safe Investments Due to Government Backing You can avoid the stress of stock market fluctuations by putting money into a personal retirement fund. The government of India determines and provides the interest rate for the PPF pension. With this guarantee from the government, PPF is a secured investment choice for any Indian citizen. 2. Variable Rate of Returns but Assured Returns As a long-term investment, the PPF is a good bet because its returns are better than those of most other fixed-income plans. In addition, the government periodically adjusts the interest rate, and the current quarterly return on PPF is 7.1%. If the present PPF interest rate of 7.1% holds constant over time, a person can easily amass a sizeable retirement money of over 1 crore by the time he retires. 3. Allowed to Make a Partial Withdrawal After the account has been open for at least six years, the owner should be able to withdraw money. The account must be at least six years old before you can remove more than half of the total balance. The remaining balance is kept in the PPF. As of the sixth fiscal year following the creation of the PPF account, partial withdrawals are permitted. 4. PPF Lock-in Period To get the most out of your PPF investment, you should have a long-term investment horizon. Five years of regular payments must be made into the account before any withdrawals are permitted. The plan matures after 15 years. After the first 15-year commitment period ends, however, investors have the option of extending the lease indefinitely in 5-year increments. 5. Tax Benefits Income tax implications for PPF are EEE (Exempt-Exempt-Exempt). As a result, under Section 80C of the Income Tax Act, you can claim a tax break on PPF payments of up to Rs. 1.5 lakh. Second, the interest accrued on the principal and the principal upon maturity is tax-free. In some cases, this may be sufficient to convince an individual to select PPF. 6. Time Your Deposits Wisely to Maximize Your Returns Interest accrued on a PPF balance is added to the account once a year on the last day of the fiscal year. However, interest is based on the 5-day rolling average of the account amount, rather than the final value at the end of the month. Therefore, you should make a PPF contribution on or before the 5th of each month. 7. Earn the Most From Your PPF PPF has the potential for high profits for investors. To accomplish this, you can put away Rs. 1.5 lakh all at once at the beginning of the fiscal year. Interest on a PPF account is computed on a fiscal year basis (April–March). The best time to put money into the account, then, is on or before April 5th of each year. A single investment like this will yield interest for a whole year. 8. The Best Investment for a Kid’s Future A parent or legal guardian can set up a PPF account in a minor’s name. When it matures, after 15 years, and after the minor reaches 18, the money in it is free of taxes and can be used for the child’s future needs, education costs, etc. 9. Funds in Your PPF account Can Be Used as Collateral for a Loan One more of PPF’s many advantages. You can get a loan against your PPF balance if you find yourself in a bind. The loan option is, however, only offered to you between the third and sixth fiscal years after you start your account. Furthermore, the closing of the first loan is required before the second loan may be secured. 10. Without Contributions, the PPF Is Inactive One must invest at least Rs. 500 each year to qualify as a regular investor. Every calendar year, you can put up to Rs. 1.5 million into your PPF account. The account will expire if the investor doesn’t put in at least the bare minimum each year. If the account has been dormant for more than a year, you can get it back into use by sending a written request and the appropriate fee (currently Rs. 50 per year). 11. Profiting on One’s Spouse’s Earnings You can get more out of your PPF account if you set it up in your spouse’s name. To comply with Indian tax regulations, any money given to a spouse as a gift and subsequently invested will be considered part of that person’s taxable income. You won’t have to worry about increasing your tax bill if you put money into a PPF account. This means you can take advantage of the PPF scheme by investing up to Rs. 1.5 million every year. 12. Make a PPF Contribution on or Before the 5th of Every Month If you want to increase your monthly earnings, you must make your PPF deposit before the 5th of every month. The next optimal opportunity to make a PPF deposit is between April 1 and April 5. Once each month, your PPF account will be updated with your accrued interest. Instead, interest is added to the PPF account after the fiscal year. [B-02] Conclusion The Public Provident Fund (PPF) is a good option for anyone who wants to put their money in a government-backed investment program over the long term. This is a great scheme for those who don’t qualify for the EPF, such as the self-employed and small business owners. The Public Provident Fund is another option for people who want to begin saving and take advantage of tax-free investing gains. Want instant funds? Apply for a personal loan with Piramal Finance and get up to Rs. 10 Lakhs.
08-11-2023
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Schemes

How Does the Pradhan Mantri Awas Yojana Work in India?

PMAY, generally recognized as Pradhan Mantri Awas Yojana, is an initiative by the government of India to provide affordable housing. This scheme has been specially developed to help the urban poor. This scheme falls under a “credit-linked subsidy scheme” (CLSS) that targets the middle-income group as its beneficiaries. The interest rate for PMAY is 6.50% per annum, which can be repaid over 20 years. This scheme was first introduced on June 25, 2015, but it has now been extended until December 31, 2024. Although this scheme aimed to provide houses to everyone on the beneficiary list by March 2022. There is also a Pradhan Mantri Awas Yojana—Gramin (PMAY-G) named the Indira Awas Yojana earlier. This scheme was started in 2016 with the main objective of developing housing units for beneficiaries in rural regions. This scheme is available across the nation except for Delhi and Chandigarh. In this category of PMAY, the central government and the respective state governments will share the expense of making these house units. The ratio for the plain region is 60:40 for the plain and 90:10 for the northeastern and hilly regions. Features of PMAY One of its highlights is that if you are a senior citizen or a differently abled person, you will be assigned to the scheme’s ground floors. In the Pradhan Mantri Awas Yojana, the government provides a subsidy rate of 6.50% p.a. on a 20-year housing loan. The PMAY scheme in India covers urban areas. These comprise 500 class 1 cities and 4000+ statutory towns. The initial plan was to implement this scheme in three phases. In PMAY, the government emphasized using sustainable development principles, eco-friendly technologies, and modern development mechanisms. This scheme is only for those who don’t have their own home. If you own a house, then you will not be eligible to apply for PMAY. Although you can use this scheme even if you already own a home, if you want to upgrade to a Pucca house, Categories of Subsidies on Pradhan Mantri Awas Yojana This scheme has been developed by considering the earnings of the various segments of the country. Accordingly, the beneficiaries of PAMY are divided into four segments. Economically Weaker Section (EWS) – Annual income of less than ₹3 lakhs This category in PMAY can benefit up to 6 lakhs with an interest subsidy of 6.50%. If your family is in the category of the EWS section, then you can buy a house with a maximum of 30 square meters of carpet area. Lower Income Group (LIG) – Annual income of ₹3 to ₹6 lakhs. In the lower income category, families can avail of a loan up to Rs. 6 lakhs with a 6.50% p.a. subsidy on the interest rate. In this category, your family can also purchase a house with a maximum carpet area of 30 square meters. Middle Income Group 1 (MIG 1) – Annual income of ₹6 -₹12 lakhs. Under the Pradhan Mantri Awas Yojana, families in the middle-income category (Category 1) may get a loan of up to Rs. 9 lakhs, on which there is an interest subsidy of 4.00% p.a. If your family falls under the MIG 1 category, you can purchase a house with a maximum carpet area of 160 square meters. Middle Income Group 2 (MIG 2) – Annual income of ₹12 – ₹18 lakhs. Under Pradhan Mantri Jan Awas Yojana, the middle-income group category II, your family may get a loan of up to 9 lakhs, on which there is an interest subsidy of 3.00% p.a. If your family falls under the MIG 2 category, then you can purchase a house with a maximum carpet area of 200 square meters. How Does PMAY Work? The Pradhan Mantri Awas Yojana benefits can be availed if you want to buy a new house from a developer and acquire a house from the secondary market. You can also take out loans under this scheme to upgrade your kaccha houses to pucca houses. For example, assume you fall under MIG category 2 and your family wants to buy a house for ₹ 60 lakh. In the usual scenario, you will have to make the mandatory minimum down payment of 20 percent, i.e., ₹12 lakh, and take a loan for the remaining ₹48 lakh. Whereas under the Pradhan Mantri Awas Yojana, you will get a subsidy of 3 percent up to ₹12 lakh, so the home loan interest rate will be applicable only on the remaining ₹36 lakh. How do I apply for the Pradhan Mantri Awas Yojana? There are several options for applying for PMAY, such as Pradhan Mantri Awas Yojana Gramin online. There aren’t many complications involved in applying for this scheme. The application process for PMAY is very easy, and the interface for the online portal is also very user-friendly. You only require a few documents to apply for this scheme, such as your Aadhar card number, PAN card, etc. As soon as you open the portal, all you need to do is open the screen and follow the directions. Fill out the application per the instructions, and you will be eligible for the PMAY scheme. [B-02] Conclusion Everybody deserves to live under a good, safe roof they can call home. The government has been trying to help people buy their dream homes. This is why they started the credit-linked scheme for people who couldn’t afford to buy homes alone. This scheme has been really helpful in eliminating poverty and homelessness in India. The government’s efforts should always be complemented by those of private companies.
08-11-2023
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Gold Loan

Which Company Provides a Gold Loan Instantly?

You can get an instant gold loan anywhere in India if you need urgent cash. This is a secured loan you can get by pledging your gold ornaments or coins. The gold that is pledged must be 18 to 24 karats in fineness. You can get up to 75% of the market value of the gold that you have pledged, depending on its quality. The paperwork is minimal, and the process is quicker than other loans. A few companies that you can approach for an instant gold loan include: [B-01] Non-Banking Finance Companies (NBFCs) These are financial organisations that provide almost all the services that banks offer. However, they don’t have banking licenses. Nevertheless, these registered businesses carry out lending activities per the rules of the RBI. A few well-known NBFCs when it comes to providing gold loans are: Muthoot Finance: Muthoot Finance is one of the biggest names in gold financing. With about 4265 branches spread across India, they provide gold loans at interest rates starting at 11.9% p.a. The maximum payback period is 36 months, which can be extended with consent. A simple loan application procedure and minimum paperwork can help you get a loan of up to INR 1 crore within 5 minutes. Manappuram Gold: Another well-known name in gold financing is Manappuram Gold, with about 3200 locations across India. They have a variety of programmes for people of all income levels. The interest rate starts at 12% p.a., and they have a maximum payback period of 12 months (extendable with consent). The maximum loan amount you can get from Manappuram Gold is INR 1 crore (disbursed within 5 minutes). Banks Banks have public deposits that they use to provide loans to borrowers. With a banking license, banks are authorised to provide various financial services, including gold loans. They strictly adhere to the rules established by the RBI. The interest rates and terms might vary from one lender to the next when applying for an instant gold loan. A few banks that you can approach to get a gold loan instantly include: Union Bank: Union Bank of India has a gold loan programme called the Union Gold Loan to help people in need gain access to instant money. The gold you pledge must be bought from a bank if you need to apply for an instant gold loan here. You can get INR 1800 for each gramme of 22-karat gold you pledge here. The total amount that can be borrowed is INR 20 lakhs. The interest rate is around 7% p.a. (MCLR + 2.65%) with 1% processing charges. The maximum payback period is 12 months. SBI: The most significant public sector bank with a sizeable branch network in India, SBI offers its gold loan programme for people who need instant cash. This program can help you get a maximum amount of INR 50 lakhs at an interest rate starting from 7.5% p.a. The maximum payback period is 36 months, and the processing charges come to 0.5% of the total loan amount. Kotak Mahindra: Its gold loan is available for one to four years if you have a pressing need for cash. You can pledge bank-minted coins (up to 50 g) and gold jewellery of 18 to 22 karat fineness. The maximum loan amount you can get is INR 25 lakh if you are a new customer. Existing customers are eligible for up to INR 50 lakhs. The interest rates start at 10.5% p.a. with processing charges of 2%. ICICI: The ICICI Bank also has its gold loan program with an approval procedure of 30 to 60 minutes. You can get an instant gold loan of up to INR 1 crore that you need to pay back within a year. The interest rates start at 10% p.a. with 1% processing fees. There are also documentation charges of INR 199. HDFC Bank: The Sampoorna Bharosa Gold Loan Program of HDFC is an excellent instant gold loan to apply for if you need urgent cash with minimum paperwork. The interest rate starts at 9.9% p.a. with processing fees of 1.5% (plus taxes). The maximum payback period is 24 months, and the minimum loan amount is INR 25,000 (INR 10,000 for rural residents). AXIS Bank: Axis Bank offers cheap gold loans at interest rates starting at 13% p.a. The maximum payback period is 36 months, and the total amount you can get is INR 25 lakhs. The processing charges total up to 1% of the loan amount. You can only pledge gold coins and jewellery sold to you by banks. Central Bank of India: You can borrow money equivalent to 50 grammes of gold against the Cent Personal Gold Loan program. You can get up to INR 1750 for every gramme of gold you pledge, depending on the quality. Interest rates start at 9.05% p.a., and the maximum payback period is 12 months. The processing charges total up to 0.5% of your loan amount. Federal Bank Gold Loan: You can get an instant gold loan up to INR 1.5 crores from Federal Bank, for interest rates as low as 8.5% p.a. The maximum payback period is 12 months, which is adjustable. You can choose to repay as a lump sum or in the form of an EMI. Only 22-karat gold ornaments are eligible for pledging. [B-02] Summing up Make sure your gold will be safe with the company before pledging it for an instant gold loan. Compare the interest rates, processing charges, repayment options, and other terms of the various lenders before you decide on one to get a gold loan instantly. If you need a personal loan without pledging gold, visit the website of Piramal Finance.
08-11-2023
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How Does Employee Provident Fund (EPF) Work?

An essential financial benefit that all of us obtain while getting employed with any public or private sector organisation in India is the EPF Account. First launched in 1952, the employee provident fund has been an integral part of employee benefits. From the most junior employee to the CEO – every employee of an organisation gets benefits from EPF. All organisations with 20 or more employees need to register for EPFO mandatorily. However, organisations with less than 20 employees can also voluntarily join EPFO and provide their employees EPF account benefits. But how does it work? What happens to the amount deducted from your salary every month? We will take a look at all this and more in this article. But first, let us take a brief look at what an employee provident fund is and what are its benefits. [B-01] What is an Employee Provident Fund? EPF is a scheme under the Employees’ Provident Funds and Miscellaneous Act, 1952 where-in both the employee and the employer each contribute 12% of the employee’s basic salary and dearness allowance toward an employee’s EPF Account. This money earns a fixed rate of return which changes from time to time. The current interest rate on EPF is 8.1% (as of 22nd November 2022). EPF is promoted by a non-constitutional body named the Employees’ Provident Fund Organisation (EPFO). The Ministry of Labour and Employment, Government of India, governs this organisation. All schemes of this organisation cover Indian workers as well as International workers from countries with whom EPFO has signed a bilateral agreement. Your contributions towards EPF are eligible for deduction under Section 80C of the Income Tax Act. Earnings generated from EPF contributions are also eligible for deductions, up to an amount of ₹ 1.5 Lakhs. How Does the Employee Provident Fund Work? EPF primarily works through a three-step process: 1. EPF is deducted from your salary As mentioned earlier, 12% of your basic salary is deducted as EPF every month. This appears in your salary slip. This is a compulsory deduction. 8.33% of the deduction goes towards Employee Pension Scheme or EPS and the remaining 3.67% is deposited into EPF. 2. Your employer matches this amount So, while you contribute 12%, your employer also contributes the same amount. Employers’ 12% is also treated in the same way – 8.33% toward EPS and 3.67% toward EPF. Hence, effectively, you compulsorily save 24% of your basic salary every month. While the amount may look small on the salary slip, when accumulated over the years along with interest, this amount can grow up to a handsome amount, which may come useful for major expenditures such as retirement, children’s higher education, wedding, and others. 3. All EPF contributions earn interest All EPF contributions across the country are pooled together and invested by a trust. This fund earns interest at a rate decided by the government. In general, the interest rate varies between 8% to 12%. EPF balance grows at a compound rate as in you earn interest on interest. This helps you to accumulate a significant amount every year. EPF Withdrawal EPF balance can be fully withdrawn in three scenarios: On retirement While switching your job from one organisation. When unemployed or in between jobs. In this case, a person should be without a job for at least 2 months. However, partial EPF balance withdrawal is allowed under certain circumstances, for example: Higher education Wedding Constructing or purchasing a house Repayment of home loan Renovation of home How to Withdraw EPF? The withdrawal process of EPF balance is quite simple and can be done online or offline. Online process: Register for a Universal Account Number (UAN) on the EPFO portal. This is your unique login through which you can access all your EPF details. Ensure to use an active mobile number while creating the UAN. Link your UAN to your Aadhar. Verify your KYC details on the portal and proceed as per instructions. You will need to input your PAN details and bank account details along with the IFSC code. Offline process: Fill up the composite claim form. Get it attested by your previous employer. Submit the form at the EPFO office under whose jurisdiction your EPF is collected. Transferring Employee Provident Fund We discussed the process of withdrawal of EPF. But what happens if you leave an organisation and join another one? You have to transfer your EPF balance from your old employer to your new employer. The process of transfer is quite simple. It can be done by your new employer. You simply need to fill up a few forms and submit them to your new employer. The process will be handled by them. These forms are usually a part of the joining kit. However, if they are not, you can ask your employer about them. You can also initiate the transfer process yourself. You will need your Universal Account Number (UAN) and simply follow these simple steps. 1. Log into the EPF member portal. 2. Go to Online Transfer Claims Portal and request an EPF transfer. 3. Select ‘Request for Transfer of Funds’ and input your previous employer details. 4. Herein you will need your old or new employer to authenticate it. 5. Once you submit your information, you will receive a PIN on your mobile. 6. You will be able to track your application using the tracking ID provided to you. The EPFO website also has a grievance section. Hence, in case you have any issues with your withdrawal or transfer or any grievance against your employer, you can complain on the website itself. [B-02] The EPFO website also has a passbook section where-in they issue passbooks to all members. The passbook can help you keep a track of your EPF account balance and ensure your EPF is being deposited on time. EPF, at the end of the day, is an immensely beneficial financial buffer. With multiple benefits, it is the “friend in need”.
08-11-2023
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Other

How does Corona Virus Impact the Economy of India

The coronavirus outbreak has affected the Indian economy in many negative ways. It hit economic growth in the first few weeks of 2020. The outbreak brought all nations, including India, to a standstill. Nearly every country implemented strict lockdowns. Many of them also had a second lockdown due to the second wave. The second will arrive in the winter of 2020. The economy’s work slowed down a lot. It affected the output of the products. The pandemic closed most offices and industries for a while. Supply chains suffered a lot of issues. As businesses closed, lots of people lost their jobs and income. Effective demand decreased too. This article will provide a comprehensive analysis of the impact of coronavirus on the Indian economy. [B-01] GDP loss India’s economy had one of the sharpest global reductions. Due to the coronavirus outbreak lockdown was implementted. During that time, the GDP growth reduced by 23.9%. The nation’s GDP shrank to 7.3% in 2020–21. The decline brought on by the coronavirus outbreak is visible here. India’s growth rate in 2019 was among the best. The national unemployment rate was 7.1% in 2020. The government transferred funding in March 2021. It was when the second wave of the epidemic broke out. It strengthened India’s vaccine drive. Over a billion vaccine doses were provided across the nation until February 2022. It was estimated that domestic inflation would start to drop in 2021. But, protests rose in various areas in 2022. Thus, the issue of unemployment remained. The NSO made preliminary estimates public on August 31, 2022. India’s GDP during the first quarter (April-June) of the current fiscal year 2022–23 increased by 13.5%. The GDP increased by 20.1% in the corresponding quarter of 2021–2022. (Note: NSO stands for National Statistical Office.) Impact on Agriculture and Food The rabi harvest in India was ongoing when the lockdown took place. The sale of the product could’ve brought large profits for the farmers. But it was stopped due to the partial collapse of the food supply system. The declining farm-gate prices also hit revenue. The impact of coronavirus on the Indian economy was huge. The coronavirus outbreak suspended international trade. It reduced the demand for Indian agricultural products on a large scale. Not only had global trade ceased, but so had domestic trade as well. Due to a lack of transportation, farmers could not take the produce to markets. The holds on the domestic movement of products were also a hindrance. Agriculture market arrivals in India were ineffective. It was so because the supply networks were improper. Online grocery platforms were affected due to restrictions on transport. Thus, farmers all around India suffered a lot of financial damage due to the coronavirus outbreak. Oil The Indian oil and gas sector accounts for 5.2% of the world’s oil demand. India is the third-largest energy user after the United States and China. The nationwide lockdown reduced the demand for fuel. It was responsible for two-thirds of the oil and gas sector’s demand. Bulk and personal transportation were also impacted. There was a sharp decline in crude prices during the coronavirus outbreak. Even so, the government hiked the excise and special excise taxes. It aimed to make up for the lost revenue. Moreover, the government also raised the price of toll roads. Tourism and Flight Networks The flight industry and tourism cover quite a bit of our GDP. They were the first businesses to be harmed by the pandemic. Experts agreed that COVID had a greater impact on them than the 2008 financial crisis. There were nearly 35 million layoffs in these two businesses. It accounts for about 65% of the workforce. The massive cash flow problems were responsible for it. IATO (Indian Association of Tour Operation) estimates that these industries could lose up to 85 billion rupees. Thus, the coronavirus outbreak affected aviation and tourism finance in India. E-Commerce Following the coronavirus outbreak in March 2020, unemployment increased a lot. In the first few months of 2020, many workers left the labor field. From May 2020 on, there was some recovery. Yet, the size of the labor force continued to suffer. It had decreased from its early 2020 level by mid-2021. The number of employed people shrank even faster than the labor force. The official sector also experienced an influence on employment. The informal sector was no different. In India, there were more than 80 million salaried employees during 2019–2020. More than 10 million people had lost their jobs by April 2020. Cash Flow More than half of Indian businesses are still having functional problems. Nearly all are experiencing cash flow issues. The coronavirus damaged more than 50% of businesses. This data was provided by FICCI. Cash flow issues brought on by the slow economic growth affected principal, interest, taxes, liquidity, and other crucial expenses. (Note: FCCI is the Federation of Indian Chambers of Commerce and Industry.) Pharmaceuticals Since the COVID-19 pandemic began, this industry has been expanding. India, being the biggest supplier of medicines, was crucial here. Indeed, this had a major effect on the Indian economy too. At the beginning of 2020, a market worth $55 billion was booming in India. The country was supplying hydroxychloroquine to countries all over the world. This also included: USAUKCanada Middle Eastern countries Due to the coronavirus outbreak, the cost of raw materials imported from China has increased. The generic medications and their cash flow were affected due to: Reliance on importsImproper supply-chain. Lack of workers in the field. Despite the drawbacks, the government vaccinated more than 1 billion people in India. [B-02] Conclusion Every crisis creates a new chance to reconsider the steps taken for improvement. Given the impact of coronavirus on the Indian economy. should adopt formative models. For further details, you can visit the website of Piramal Finance. We provide excellent financial services and advice. It will be our sincere pleasure to serve you.
08-11-2023
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Personal Loan

What Is Education Loan And How Can You Apply For Abroad Studies?

Education loans are like any other loan. You borrow money and then you pay it back with interest. But instead of paying the money back to a bank, you pay it back to your school. Education loans are a way to pay for school. They are given out by banks and other financial institutions. You can use higher education loans to pay for college, university, or other types of school. Education loans have some of the lowest interest rates among all types of borrowing. The repayment period can be up to 25 years. This makes education loans more attractive than other types of loans. A personal loan for education gives borrowers more time to pay them off. Some lenders may even provide special forbearance periods. In this period, payments are not necessary, and the interest rate is stable. [B-01] Types of Education Loans in India Course-Based Loans for Career Development A lot of people who have worked at a job for a few years take a career break. They go to school to learn new skills. This helps them to get a better job. Such people would strive to get admission to prestigious technical and commercial schools. They perfect their skills and enhance their careers. Undergraduate Loans This loan helps students pay for college. A college degree lasts 3 to 4 years. A college degree makes it easier to get a good job and start earning money. Loans for Postgraduate Studies Many students decide to get a post-graduate degree. A post-graduate degree is an advanced degree. To get a post-graduate degree, you need to study for two years. A post-graduate degree will help you understand the field you are studying much better. Location Based International Education Loan These loans let students attend a foreign university to pursue their desired degree. If they meet the conditions, students who wish to study abroad may apply for a loan. The loan will cover their airfare, accommodation, and tuition. Domestic Education Loan Students may apply for this loan if they plan to study in India. Approval from an Indian educational institution is necessary before loan approval. Collateral Based Assurance from a Third Party The student may be able to get an education loan with the aid of a guarantee letter from a bank employee or a home bank. Loan against Assets, Deposits, and Securities You may add assets like equity shares, fixed deposits, real estate, flats, houses, and more. You can even put up gold deposits. Education Loan Eligibility To be eligible for an education loan, you must meet the following requirements: You must be an Indian citizen. You must have been admitted to a reputable university in India or overseas. Your age must fall between 18 and 35. You must be undergoing a graduate, post-graduate, or post-graduate diploma. Your enrollment in a school connected with the University Grants Commission (UGC). Or, The All India Council for Technical Education (AICTE), the government, etc. Full-time students must have a co-applicant. The co-applicant needs to have a steady source of income. A solid academic background speeds up the process. What Will Increase Your Eligibility for a Student Loan? Banks are careful while assessing loan eligibility. It guarantees that financial help reaches deserving students. Some of the assessing points are: Good marks in the qualifying examinations Having a strong academic record Admission to a prestigious institution Co-borrower with a strong financial background Possessing promising future income generation potential How Can You Apply For Abroad Studies? Applying for studies abroad in India can be a daunting process for many students. However, with the right guidance, the entire process can become easier. Research The first step in applying for studies abroad in India is to find a suitable institution. Research different universities and programs. Find the best fit for your academic and career goals. It would help if you considered factors such as: School’s reputation Courses offered Cost of tuition Availability of scholarships You can find this information online through university websites or an education consultant. Apply for Admissions Once you have found the right university you must apply for admission. The admission process starts by filling out an application form. This form is on the university’s website. After that, you must submit documents. Some of them are academic transcripts, letters of recommendation, and a purpose statement. Also, depending on the university, you may need to take an English proficiency test. If your application is accepted, you will receive an acceptance form and a letter of the offer. Please review them before accepting. It may have restrictions that you need to be aware of. Student Visa After receiving the offer letter, the next step is to apply for your student visa. You must assemble the necessary paperwork. Each nation has its unique requirements that you must fulfil. You should keep the following documents ready. Passport (with six-month validity) Student visa application form Passport pictures Proof of admission Evidence of financial means Civil documents International student health insurance Previous university records Travelling Make your flight reservations as soon as possible. Always be on the lookout for cheaper fight tickets. You should also confirm with the airline about the maximum luggage allowed. Accommodation The campus may or may not provide accommodation. You may need to find a place to live while studying abroad. Looking for a room on rent or a local host would be best. The price will vary from city to city. Let’s say you decide to rent an apartment. You may need to pay for tenant’s insurance and extra utility costs like power, internet, and water. (in some housing areas). [B-02] Wrapping Up Applying for studies abroad from India involves several steps, besides evaluating higher education loans. It includes thorough research, analysis, document submissions, and studying for the admission tests. If in doubt, consider consulting an institution like Piramal Finance. Their experts can help you calculate how much you need to borrow and how much EMIs you need to pay when taking a personal loan for education. You can check out more helpful articles like this on their site for free.
08-11-2023
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Other

EMI – Everything You Wanted to Know About EMIs

EMIs are significant since they help finance anything from a smartphone to an entire apartment. Despite its apparent advantages, many consumers must be aware of the EMI repayment process. This article will help you understand EMI’s meaning and everything you need to know about them. [B-01] What is an EMI? An Equated Monthly Instalment (EMI) is a fixed sum of money paid by the borrower to the lender of funds on a defined day each month for a set time. An EMI comprises two parts: the principal and the interest. Before taking out a loan from any financial institution, the borrower must understand these two components, particularly the calculation of EMI by banks. No-cost EMIs are one of the most popular EMI repayment methods that ease the pressure of paying a large sum upfront. However, lenders charge a processing fee so you must carefully study all terms and conditions before opting for such loans. How do EMIs Work? An EMI is made up of two parts: principal and interest. When a loan is granted to an individual, the interest rate is initially higher than the principal. The loan amount, interest rate, and loan term determine the EMI. During the first stage of EMI payments, the interest is greater than the principal. However, while the EMIs continue, the principal grows, and the interest shrinks. You can alter the loan duration based on your demands and ability to pay to determine how much EMI is required in each situation and then make a decision. Types of EMIs There are two types of EMI payments: EMI in Arrears Standard EMI. The entire principal loan amount (after deducting the processing fee) is released by the lender to the borrower’s bank account without any advance EMI payment reduction for EMI in arrears. Several banks offer standard EMI wherein the principal amount (after subtracting the processing fee and the first EMI amount) is released to the borrower’s bank account. In this case, the advance EMI paid does not include the interest payment but only the principal amount. This reduces the principal loan amount for the remainder of the EMI payments. How are EMIs calculated? EMI calculation is mainly of two types: The flat rate method The reducing balance method Flat Rate Method Each interest charge is calculated using the initial principal amount under the flat rate approach when the loan is repaid in instalments. On personal loans and auto loans, the flat rate technique is popular. Borrowers profit less from this plan since interest payments must cover the principal amount, resulting in a higher effective interest rate than the reducing-balance strategy. This technique charges interest on the loan amount, regardless of any previously repaid principal. Vehicle loan lenders typically use this strategy. EMI = (Principal + Interest)/Monthly Period. For example, suppose you want to buy a car and take out a loan of Rs. one lakh with a 12% interest rate and a term of 2 years using the flat rate technique. In that case, the interest calculation is on the loan amount of Rs.2 lakhs. As a result, in this case, the EMI would be calculated as follows: EMI = (1000000 + 24000)/24=42666.67. Reducing Balance Method Compared to the flat rate method, the declining balance strategy determines the interest payment based on the outstanding principal. This means that the interest and principal payment components of each EMI change. As a percentage of the outstanding loan, interest payments make up a higher amount of the EMI at the start of the loan period. As you repay your loan over time, the interest amount reduces, and a more significant proportion of the payments go toward principal repayments. Lenders charge interest on the outstanding balance of your loan amount following monthly repayment of the principal amount under this method. The EMIs will remain unchanged in this case, but the interest amount reduces each month. The formula for calculating EMI using this method is: P=the principal loan amount R = monthly rate of interest N = duration of the loan in months So, using the same example as in the previous way, the EMI calculation would be: EMI = [P x R x (1+R)^N]/[{(1+R)^N}-1]. Thus, EMI = [1000000 x 12/(100 * 12) x (1.01)^24] / [{{1.01)^24}-1] = 10000 x 1.2697 / 0.2697 =47078.23 Advantages of EMI Affordable You can afford high-value products like vehicles through EMIs that would otherwise take a long time to save up. Convenient Immediate demands can be met with easy EMIs deducted from your salary account. Manageable Rather than paying a large sum from your savings all at once, paying off smaller and regular sums from your monthly salary is better. Thus, EMIs a better method of financial management. Flexible EMIs allow you to choose the amount and tenure of repayment. This makes it a convenient and adaptable solution for meeting requirements. Factors that influence EMI calculation Loan Amount: The amount borrowed by an individual is an important factor affecting the EMI. The EMI is directly proportional to the loan size; the higher your loan amount, the higher your EMI. Interest Rate: The interest rate on a loan is calculated by considering the borrower’s income, credit rating, borrowing history, current market conditions, ability to repay, and so on. Loan Tenure: The third most crucial consideration is the loan’s tenure or length. If you choose a loan with a longer term, your EMI will be lower than if you choose a loan with a shorter period. Manage your EMIs better Never missing an EMI is one of the most important things to remember when taking out a loan. When applying for a loan, carefully consider all possibilities and calculate EMIs in each situation. You can use a loan EMI calculator to aid you with this. Estimate your financial flows in the future and avoid pressures with EMI payments. Saving money on small expenses will assist you in better managing your EMI. You can use them to pay off a significant chunk of your loan EMI and save money on interest. You can avoid excessive fines if you pay your loan EMIs on time. The penalty is determined as a percentage of the skipped EMI. If you have applied for a used car or a home loan, making timely EMI payments will qualify you for a top-up loan. [B-02] Conclusion EMIs are double-edged swords. They help maintain your expenses, but they come with a cost. The longer the loan term, the lower the EMI, but the higher the interest expense you must bear. However, with careful planning and budgeting, you can use EMIs to pay off debt regularly and conveniently. You can benefit from EMIs since the debt is divided. You can schedule your income and expenses carefully and set your EMI payments every month.
08-11-2023
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