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Everything You Need To Know About Pension Scheme In India

Getting old is a sure-to-come phase in every individual’s life, and there is no stopping it. However, it is up to you to plan your retirement so that you can enjoy your retired life and live stress-free by being financially independent. Rising nuclear families and children migrating to other countries for better career opportunities often leave their parents alone in the later stages of their lives. A pension plan is exactly what is needed in this scenario. Pension schemes such as the National Pension Scheme (NPS) help them to be independent when it comes to their finances so that they do not have to depend on their children for their every need. The best pension scheme is designed to meet your post-retirement needs without having to rely on others for financial support of any kind. Right from your small day-to-day bills to the big medical bills, you can pretty much take care of it all provided you have started a pension scheme and saved towards the same from a very early age itself. [B-01] Understanding the National Pension Scheme in India The NPS, or National Pension Scheme, is an investment instrument that is available to all employees from the public, private, and unorganised sectors, apart from those in the Armed Forces. Under the purview of this pension scheme, those who subscribe to it can invest a nominal sum, which can be a minimum of Rs 6,000 annually. This amount can be invested as a one-time premium or be disbursed into staggered monthly instalments, which can go as low as Rs 500. Under NPS benefits, the contributions made by investors for market-linked instruments such as debt equities and their returns are dependent on the performance of the investments in the long run. Currently, the rate of interest offered under this pension scheme is between 8 and 10%. An Indian citizen who is above the age of 18 can open a National Pension Scheme account. Managed by the Pension Fund Regulatory and Development Authority, the National Pension Scheme is tailor-made to offer pension and investment solutions at an older age. In a default setting, the funds are used to invest in different assets such as bonds, government securities, and equity on behalf of the investor, but they can choose to make the investment choices themselves as well. They are tax-free under Section 80 CCD (1b). Knowing the Benefits of the National Pension Scheme Some significant benefits of the National Pension Scheme are: Return on investment A portion of the invested amount in the pension scheme is allocated towards investing in market-linked equities, which are known for offering high returns when compared to a general investment plan. This pension scheme’s interest rates are also significantly higher than those of other market investment instruments. Currently, this pension scheme offers 9%–12% interest rates. This rate of return on investments highlights the national pension scheme’s benefits even further. Tax Benefits For investments made under the National Pension Scheme, the tax benefits are one of the more lucrative features of this investment plan. NPS tax benefits [1] allow an investor to avail of up to Rs 1,50,000 in tax exemptions under Section 80C of the Income Tax Act of 1961. Additionally, the tax benefits from this pension scheme also allow the employer’s and employee’s contributions to be eligible for tax exemption. For employer contributions, the maximum tax exemption amount is limited to the lowest of the three: NPS Contribution Amount by Employer 10% of the Basic Wages and Dearness Allowance Gross Taxable Income This provision under NPS tax benefits does not apply to self-employed professionals. One can also claim an additional sum of Rs 50,000 as a self-contribution sum under Section 80CCD (1B) as a tax benefit. Exit Clauses The National Pension Scheme offers benefits later in life when you need a financial resource pool the most. NPS schemes mature at the age of 60; therefore, one must continue to invest until one reaches maturity age. Partial withdrawals are also allowed after a minimum of three years have transpired in the NPS scheme window, and only 25% of the investments made can be withdrawn. If an investor requires liquid funds to meet a financial obligation, they can withdraw three times during the five-year tenure of the NPS scheme. Equity Setting The investor in the National Pension Scheme has the option to choose. As per the equity allocation rules; one can only invest 50% of their investment in equities. Risk Margins The risk margins for this pension scheme, despite being market-linked, are relatively low. Equity exposures for investors turning 50 will be reduced by 2.5% every year to curb any investment losses. This ensures fund security with the added benefit of high returns. Understanding The National Pension Scheme Eligibility[2] To avail of the benefits of this pension scheme, along with the tax benefits that aid investment and fund growth, one must fulfil the following criteria: Should be an Indian citizen and taxpayer. Should be between the ages of 18 and 65. An NPS scheme matures at age 60; hence, the higher limit is closer to the age of retirement. Should comply with KYC guidelines. Should not have an existing NPS account. Start Planning Your Retirement At The Earliest Like in the case of most financial planning, you need to start thinking about your retirement corpus and picking out a pension plan to begin investing while you are still working. Understanding the importance of retirement planning and saving towards your pension scheme is very vital, right from the time you start earning. If you want to maintain your standard of living post-retirement and be financially independent while you are at it, then saving a large chunk of your current salary is the key. [B-02] To read more such articles about smart financial management, visit the Piramal Finance website. You will also find a host of other financial tools here, such as personal and home loans. So, what’s the wait? Get started on securing your financial future now!
08-11-2023
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Investment

Benefits of Investing in the EPF

Although people’s motivations for investing money vary, most begin saving with the objective of retiring comfortably, providing for their family, and maintaining their standard of living. There are many financial assets, but the Employee Provident Fund (EPF) is the only one that meets all of the above needs and many more. [B-01] We attempt to simplify investing in EPF and how it might protect your future in this article. What is EPF? The Employee Provident Fund, or EPF, is a way for all salaried workers in the country to save for their retirement. The government backs this plan, which has a fixed rate of interest. The Employees Provident Fund Organization (EPFO) is a legal body run by the Ministry of Labour and Employment. It is in charge of the fund and makes sure it is run properly. The EPFO also controls both the employer’s and employee’s contributions to the EPF. Government-managed plans like the Employee Pension Scheme (EPS) and the Employee Deposit Linked Insurance Scheme (EDLIS) are all rolled into one umbrella programme called the EPF Scheme (EDLI). The salaried class can build up a large retirement fund through these plans by making monthly payments while they are working. Together, the employer and employee are responsible for putting away 12% of the employee’s monthly salary into the fund, for a total of 24% of each paycheck. How do I know if I’m qualified to join EPF India? The EPFO is open to all workers in both the government sector and the private sector. Companies with more than 20 members are required to offer EPF to their workers. Features of the Employee Provident Fund (EPF) The list below shows some of the most important parts of EPF: In a health or financial emergency, an employee can take money out of the fund before it is fully grown. Anyone in the employee’s family can be nominated. The nominee can claim the saved money when the employee dies. If the employee quits their job, they have two months to withdraw funds from the EPF account. Employees also get a life insurance policy with their EPF. When the employee dies, the nominee can file a claim with the insurance company. According to the rules of the Volunteer Provident Fund, employees can contribute more than the minimum of 12% of their basic salary to the EPF. Tax on EPF Contributions and interest from Employee Provident Funds were not taxed until 2020. If your total contributions to your EPF and VPF in a given fiscal year are more than Rs. 2.5 lakh, the interest you earn on the contributions beyond Rs. 2.5 lakh will be subject to taxation, as revealed in the Budget 2021. If the employer doesn’t put any money into the EPF account, the interest on the account is tax-free up to Rs. 5 lakh in any given financial year. What happens to an EPF account that is not being used? In some cases, the employee can’t put money into the EPF account for a long time, so the account stays dormant. The Employees’ Provident Fund Organization implemented a new policy in 2011–12 that eliminated interest payments on inactive accounts older than three years and thirty-six months. Even though this was done to keep PF members from ignoring their EPF accounts, it was taken away in November 2016 after a lot of pushback. So, even if your account hasn’t been used in more than 3 years, it will still earn interest until you turn 58. Returns from EPFs Every year, the EPFO proposes and approves the EPF interest rate. In the 1990s, the EPF rate of interest shot up to almost 12%, which was a very high number. Since then, it has gone down to a more reasonable (but still high) 8.5% for the fiscal year 2020-2021. Advantages of Investing in EPF Workers can get a lot of benefits from investing in EPF. However, neither the company nor the employee does much to help the employee achieve financial security and independence after retirement. EPF is supposed to make them feel safe about the future instead. The Employee Provident Fund gives these benefits: Funds for Old Age The EPF plan requires employees to put away 12% of their basic pay. The amount that the employee builds this way will help them when they retire. The retired worker may relax and enjoy life without financial worries. Corpus EPF helps people deal with unplanned situations like health and money problems. When things like this happen, they can use the money in their EPF account. Early Withdrawal Getting money out of the EPF is easy and doesn’t cause any trouble. In case of an emergency, employees can take money out of the fund before it matures. Employees can also make incomplete withdrawals in case of an emergency. Saves Taxes Any interest or earnings made via EPF are not taxed. Withdrawals made after the fund have reached their end date and are not taxed. Any money an employee puts into the EPF qualifies as a tax deduction thanks to Section 80C of the Income Tax Act. Also, after completing five years of service, you don’t have to pay taxes or TDS on any money you take out. [B-02] Conclusion To grow your portfolio, it is always a good idea to think about different ways to invest. This lowers your risk. And it can help you get the most out of your gains. Investing in EPF offers several advantages, as discussed in the article. You can check out more blogs about choosing the best investment vehicle at Piramal Finance.
08-11-2023
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All About EPF and UAN

Who doesn’t wish to have a sizable sum to lead a lifestyle of their choice after retirement? If you are a full-time employee in India, an EPF account gives you a golden opportunity to make this wish come true. This government programme requires a financial contribution from both your employer and yourself. A certain amount gets deducted monthly from your salary, and your employer also contributes some amount as per EPF rules. [B-01] Keep reading ahead to learn more about this scheme and how you can benefit from it. Understanding EPF (Employee Provident Fund) The Employees’ Provident Fund is a government-backed employee retirement scheme. It falls under the purview of social security government schemes governed by the Employees’ Provident Funds and Miscellaneous Provisions Act of 1952. A statutory body, EPFO (Employees Provident Fund Organization), controls the EPF scheme. All companies with 20 or more employees can take advantage of PF or EPF accounts. It is to be noted that EPF is a combination of three different schemes with unique objectives. These are the following: EPF (Employee Provident Fund): Saves your retirement benefits. EPS (Employee Pension Scheme): EPS generates pension amounts for those aged 58 or over. EDLI (Employee Deposit Linked Insurance Scheme): It serves as a life insurance cover for employees in scenarios of death during the service period. As per the scheme, employees and their employers make an EPF contribution (12% of salary). This amount is deducted every month throughout the service period. At the time of retirement, employees receive a lump sum along with interest. You don’t have to pay any income tax on the received amount and the interest. Here’s how to check your EPF balance via the EPFO portal: Go to the EPFO portal. Select Member Passbook. Log in with your UAN and account password. You will see closing and opening balances, PF transfers, and earned PF interest. Understanding UAN ( Universal Account Number) UAN is a unique 12-digit number that each EPF member is allocated by EPFO. You can use UAN to sign in to your EPFO membership portal to check or withdraw your EPF balance. Note that your UAN number remains exactly the same even after you switch jobs. However, the member ID will change, and you will be provided with a new ID linked with the UAN. To avail of these online services, each employee needs to activate their UAN first. Here’s how you can activate your UAN via the UAN portal: Go to the EPFO Member Portal Tap on the option: Activate UAN Fill in the requested details (Member ID, full name, Aadhar number, mobile number, and DOB). Enter the captcha code Tap on the option: Get Authorization PIN You will receive an authorization PIN at your registered phone number with EPFO. If your employer has not provided you with a UAN, you can get one from the UAN portal. Use your member ID to enter the portal and get your allocated UAN. Who Can Apply for an EPF Account? Employees from both the private and public sectors can open their EPF accounts in India. The following criteria must be met to become an active member of the programme and avail of EPF, pension, and insurance benefits: You must work for an establishment with 20 or more employees. Such companies are liable to provide EPF benefits to their employees. On the other hand, employees working for organisations with fewer than 20 employees can join the programme voluntarily. You must have a monthly salary of less than 15,000 INR to register your EPF account. People earning over 15,000 INR can also register their accounts if the Assistant PF Commissioner approves. Except for Jammu and Kashmir, EPF provisions apply throughout India. EPF Calculations Employee and Employer EPF contributions. As an EPF member, you have to contribute 12% of your salary to the programme each month. Your employer is liable to match that 12%, which gets divided into 3 parts: 8.33% goes to the EPS (Employee Pension Scheme). 3.67% goes to the EPF (Employee Provident Fund). 0.50% goes to EDLIS (Employees Deposit Link Insurance Scheme). 0.01% goes into the EDLIS regulation fee and 1.10% into the EPF regulation fee. Let’s take an example: Suppose your salary is 18,000/month 12% of your salary goes to the EPF account each month: 18,000*12% = 2160. And your employer’s contribution will be: EPF scheme: 18,000*3.67% = 660.6 INR EPS scheme: 18,000*8.33% = 1499 INR EDIS scheme: 90 INR At the time of retirement, the beneficiary receives the entire principal amount and the interest. EPF Interest rate. For the 2022–2023 financial year, the pre-fixed EPF interest rate is 8.1%. The interest rate is calculated each month using the following formula: Interest rate p.a./12 Thus, if the present EPF interest rate is 8.1% p.a., the monthly rate would be 8.1/12 = 0.675%. The payable interest is applied to employees’ EPF accounts who have a long time left to retire. The interest rate is taxed based on the tax slab of an EPF scheme member, which does not involve any applied tax on the Employee Pension Scheme. The EPF amount is then calculated depending on the total of your basic income, retaining allowance, and dearness allowance. The monthly interest rate gets credited to each EPF account at the end of the financial year. Note: An online EPF calculator is available for employees’ convenience. Steps to Apply for an EPF Account To generate your EPF account, you need to go through your employer. Only organisations registered under EPF Act Schedule I can enrol their employees in the scheme. The basic KYC details you will need to open your EPF account are as follows: Passport/Aadhar Pan details Electricity bills or house papers for proof of residence Benefits of Having an EPF Account You get the following advantages from the EPF program: The amount can be used in an emergency. PF account is eligible for tax exemption under Section 80C of the Indian Income Tax Act up to a limit of 1.5L. Members are eligible to process a partial withdrawal to pursue their current personal financial needs. EPF rewards at the account’s maturity increase overall employee funds and enhance capital appreciation. [B-02] Conclusion All Indian employees who meet the criteria for the EPF scheme can avail themselves of all its benefits. The same is not applicable to those belonging to Jammu and Kashmir. It is due to some administrative laws. Having an EPF account leaves you stress-free about saving or investing throughout your working life. A sizable sum is automatically deposited into your PF account. To gain detailed insights on more such financial solutions, visit Piramal Finance. Check out several loans offered by the company that ensure amazing returns along with flexible payment options.
08-11-2023
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GST

What are the Effects of GST on AC in the Festive Season?

During the festive season, many retailers and e-commerce platforms offer discounts, but due to the heavy GST on electronic devices, you can’t buy an AC as you have other expenses. And on top of it, you have to figure out what the GST is on the AC; do the installation, and other services fall under the final amount? Also, if you are a small business owner, can you claim ITC? While you do your research on this, the discount season has passed! This article covers all your issues to save you valuable time and resources. What is the GST on AC? What is included in the final price? Most importantly, how can you buy AC if you need more cash? As you might know, almost all electronic goods have the GST tax applicable to them. Let’s first understand what GST is. [B-01] What is GST? The Goods and Services Tax is a destination-based tax on consumer goods and services. What we mean by the destination-based tax is that the tax burden is to be borne by the final consumer, the person buying the AC for their consumption. It might be for your personal use, home, apartment, office, or workshop. As long as you are the final consumer, you must pay GST. GST Rates GST tax rates are divided into four segments: 5% GST for essential goods 12% for standard goods 18% for standard goods 28% for luxury goods ACs are considered luxury goods, which means they are purchased for lavish use, so they have a 28% GST rate. According to HSN Code 8415 of CBIC, Air conditioners with motor fans, refrigerator units, and split air conditioners are also covered under the 28% slab. Installation and Other Charges When you buy AC during this festive season, keep in mind that installation charges are also included in the final price of the AC. So if the seller is trying to sell the AC without the installation services, please ensure that they are added. The Maharashtra GST Advance Appellate Authority has clarified this point in the Nikhil Comforts case. The court has ordered that the “supply of goods and services is connected and interdependent.” This means that the unit and installation are inextricably linked. After all, you can’t possibly use AC just by purchasing it; you have to install it, which is the seller’s job. Price of AC Before the implementation of GST, the VAT-era tax rate on ACs was around 12-14.5 per cent. After the GST, the prices of ACs have significantly increased. This is both true and false. Consider this: while tax rates have risen since the implementation of GST, the manufacturer can now claim the Input tax credit on the raw materials of ACs, which has stabilised their prices. During the VAT era, there were hidden variables that fluctuated prices. Ways to Buy AC When You Have a Cash Crunch Now, if you are among those who wish to take advantage of the discounts offered on ACs during this festive season but cannot spend a massive chunk from their pockets, Piramal Finance offers multiple easy-payment loan options. Personal Use AC If you buy AC for personal use at your house or apartment, you can take a quick loan from Piramal Finance. This loan has no prepayment penalties, so there is no need for a down payment. Also, you don’t have to worry about the documentation, as the company executives will do most of the work, and you can get a loan quickly. Professional Use AC It will be a significant expense if you are an entrepreneur or a small-business owner and need to purchase multiple AC units for your company. A small business sometimes cannot bear this burden. In this case, you can also get a business loan or professional loan from Piramal Finance, depending on the nature of the business or your needs. These are non-collateral loans, so you don’t have to worry about the collateral. Who Can Apply for a Personal Loan for an AC? Salaried employees If you are an employee that gets paid regularly, whether weekly, biweekly, or monthly, working in any of the following institutions: private sector public sector or enterprise MNCs proprietorship or partnership social sectors like NGOs Then you can apply for a personal loan to purchase an air conditioner during the holiday season. Self-employed individuals You are considered self-employed if you run a private practice as a lawyer, CA, or architect. If you have your business enterprise or a partnership firm, and want to buy heavy electronics like an AC for your personal use, then this festive season, you can take a personal loan for an AC. Who Can Apply for a Business Loan? If you are a self-employed professional like a doctor or CA, or a non-professional like a business owner, and wish to install an AC for your professional use, such as a doctor for his clinic or a pharmaceutical shop owner for her shop, AC in such conditions is considered a business requirement. You can apply for a business loan. To be eligible for the business loan, your business or practice must be at least four years old and have one property registered in your name: your house, a shop, or office space. You can find more details here if you’d like. [B-02] It is no secret that today there are many loan-related frauds. So, you should take your loans from trustworthy finance aggregators like Piramal Finance. Piramal Finance is a well-known, reliable aggregator legally registered, has a dedicated workforce, and promotes financial empowerment.
08-11-2023
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Gold Loan

Apply for Gold Loan In India at Low-Interest Rate

Gold is viewed as an auspicious element in India. Thus Hindus observe a special day called Dhanteras shortly before Diwali, the festival of lights. India has enough gold to supply the tremendous demand, which is a positive thing. Statista claimed that the country’s gold stockpile was between 600 and 700 tons in 2019. Gold is the major factor that fuels the jewellery sector in the nation. Recent projections predict that the jewellery market will bring roughly Rs.6 billion to India’s GDP by 2021. Even though gold is supposed to bring good luck, many houses don’t utilise it. [B-01] What is a gold loan? A loan backed by gold is termed a gold loan. People must first put up their gold jewellery as collateral to secure a loan from an NBFC. The loan-to-value ratio shows a borrower how much they may borrow depending on how much their collateral is worth. The Reserve Bank of India used to set the ceiling LTV for gold loans in India at 75%. But right now, anybody may pick principles that are worth up to 90% of the value of gold. The restriction won’t apply to gold loans granted on or before March 31, 2021, according to a statement from the RBI. For example, if the market value of the gold you promised is Rs. 1 lakh, you might collect up to Rs. 90,000. Borrowers of gold loans should realize that the LTV can’t be greater than 90% to prevent any mistake. Gold In India It is difficult to obtain an accurate count of the gold held by Indian households, but estimates place the total amount at approximately 25,000 tons. Since such a substantial quantity of gold is secured in vaults and safes, it cannot contribute to the growth of the Indian economy. Even if only a small portion of this inflow of assets worth Rs. 110 lakh crore is invested in the national economy, it could significantly impact GDP growth. You have a few options, one of which is to sell the gold directly, while another is to use it as security to get a gold loan. Eligibility for Gold Loans People who aren’t eligible for traditional loans might find that their best option is to look into gold loans instead. You must be 18 years old to apply for one of these loans. In addition, you should accessorize with jewellery or other items made of the type of gold that has been specified and wear them. To qualify for one of these loans, a credit check or meeting any other criteria is not required of you. Because gold is a reliable form of collateral, the requirements might not be as stringent. If the loan is not repaid within the allotted time, the lending company can liquidate the asset pledged as collateral to secure the debt. Kinds of Gold that Are Eligible as Collateral Even if a lender allows a borrower to use any gold they own as collateral, the borrower is still required to fulfil a set of minimum requirements. For instance, the item in question should have a purity of 18 karats or higher. In addition, gold jewellery made of gold can only be hypothecated if a trustworthy company manufactures it. As a result, you may be unable to store gold in the form of coins or bars. Paperwork for Gold Loan The following is a list of the documentation that a potential borrower would be required to provide, although the exact documentation process could vary from one lender to the next: Identification documents such as Aadhaar card. Permanent Account Number (PAN). Voter Identification Card (VID). Driver’s License (DL). Passports are required. The individual who applies is required to provide evidence of their current address. This can be in the form of an Aadhaar card, a voter identification card, a passport, a driver’s licence, or even utility bills. When searching for the best gold loans online, a potential borrower should make it a point to ask whether or not they need to bring anything else along with them. Advantages of Gold Loans Gold loans have been performing well recently, thanks partly to the following factors. Rapid Approval and Payment Borrowers of gold loans may be able to get their funds within a few hours after approval rather than having to wait days or weeks. As a result, this sort of finance may be utilized to cover unforeseen expenses such as medical expenditures or company difficulties. The short, straightforward application procedure is a plus, along with the quick cash. Most loan applications may be completed online, saving borrowers a significant amount of time. Services that are easily accessible Whether for a large or small gold loan, receiving credit at one’s front door may make a great difference in the borrower’s life. After the application is submitted, a lender’s representative will visit the borrower’s home to measure the gold and return it to the lender, along with any supporting documentation. Within minutes, the gold loan principle is electronically deposited to the borrower’s account, and the collateral gold is moved to a secure location. Because of this approach, the individual in need of a gold loan does not have to take time out of their hectic schedule to visit the office of a gold loan provider. Interest rates that can be paid As previously stated, the underlying security reduces financial institutions’ default risk. Because the lender’s risk is minimal, they may issue these loans at affordable rates. Because of the cheap pricing, it is simple to use and accessible. Reduced gold loan interest rates imply lower monthly EMI payments, making it simpler for borrowers to repay their loans. [B-02] Conclusion According to an April 2022 study, gold loans are growing faster than any other type of retail loan. The many useful features and ease of obtaining these lines of credit are rapidly changing how Indians perceive them. Because there are a lot of gold owners in India, the rising demand for gold loans is likely to last for a while. Get the best with Piramal Finance.
08-11-2023
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Everything you need to know about fixed rates in India

Are you worried about the interest rates going up? Then it would be best if you study more about fixed-rate loans. By applying for a fixed-rate loan, you can fix your interest rate. Then you will be able to enjoy a fixed EMI for your loan term. Fixed-rate loans are best if you want to keep a tab on your EMIs. It also allows you to calculate the interest you’ll pay throughout the loan. If you take a fixed-rate loan, you will also know how much you will repay. Fixed-rate in India is a loan product where the interest rate is the same for a specific period. Fixed-rate loans are meant to be simple and practical. Several banks in India offer fixed loans, which are a popular choice for borrowers who want to lock in a low interest rate. Read on to learn more about fixed-rate loans. What is a fixed-rate loan? A fixed-rate loan has a fixed interest rate. Experts explain a fixed rate as an interest rate set to stay identical for a loan term. It provides the borrower with an option to forecast their EMIs. Unlike variable interest rates, a fixed rate is easier to calculate and predict repayment. The loan is given at a fixed interest rate for a set period. As you know the overall interest cost, you can calculate the EMIs easily. A fixed interest rate is mostly given on instruments like mortgages, corporate bonds, etc. You will mostly see the fixed interest in percentage per annum. Fixed-rate loans in India are a good option for borrowers who want certainty about their payments. There’s no guessing about your interest rate throughout the life of the loan. There’s no need to make extra repayments or borrow more money to keep up with repayments. Fixed-rate loans are great if you are looking for a backup to face new financial challenges. It can also help in critical financial situations like buying a house or starting a business. How does a fixed-rate loan work? Borrowers are usually most attracted to loans with fixed rates as they do not fancy non-static interest rates during the loan period. This is because there is an increase in interest payments, which will extend to mortgage fees. With this rate, you can avoid the risks associated with variable interest rates. When you choose a variable interest rate, the interest on the loan will change periodically. The change depends on an index or base interest rate, which is uncertain. On the other hand, a fixed rate is always certain and stays constant throughout the loan tenure. It’s easy to calculate the cost overall of a fixed-interest rate loan. All you have to do is put the following into consideration; Amount of the loan, Applicable fixed rate. Loan repayment tenure. Once you know all these three factors, you can calculate your interest rate. Advantages and disadvantages of taking fixed-rate loans Generally, when considering a loan, there are a lot of things you should keep in mind. Some of these things can range from the present economy to when and how the mortgage can be fixed. Fixed-rate loans are more favourable to borrowers than lenders. Advantages of fixed-rate loans: Here are some of the known advantages of taking a fixed-rate loan; Predictability: With fixed interest rates, you can predict your monthly loan fees as the payments are static from month to month. Reduced rates: A fixed-interest rate loan comes with low interest rates, which are constant. Costs computing: It is much easier to calculate the lifetime borrowing cost of a fixed-interest rate loan as the cost is always constant. Certainty in interest rates: The fixed interest rates ensure clarity on the expected amounts to be paid, as it is constant. No movement in interest rates: Fixed rates protect the borrower from unexpected rate increments and ensure that the borrower is prone to market volatility. Disadvantages of fixed-rate loans Even though there are numerous advantages from the borrower’s perspective. There are also some disadvantages of taking a fixed-rate interest loan. Here are some of the drawbacks; Higher interest rates: Sometimes, a fixed-rate loan may come with a higher interest rate if you compare it with a flexible-rate loan. Dwindling rates: In some cases where there is a decline in the fixed interest rate, you will still be compelled to pay your usual interest rate, which will be higher at the time. Refinancing: Refinancing from a fixed-rate loan to another or a variable-rate loan can be profitable when interest rates drop. Although it may take too long, the accrued gain may be significant. Early payback charge: If you need to exit a fixed loan contract before the expiration of the contract term, you will be charged an early repayment fee. Thus, early payment of fixed-rate loans can be expensive. So, you must make this payment only if the savings exceed the foreclosure fee. [B-02] Conclusion In conclusion, getting a fixed-rate loan in India is very helpful, especially in favorable conditions. Moreover, Piramal Finance India is your best option if you are looking for a reliable source to get your fixed-rate loan. Piramal Finance offers the best services and plans for fixed-rate interest loans, business and housing loans, etc. They are always ready and available to you. To know more about this, visit their website today. They have many articles and blogs related to the topic that can help you improve your finance skills.
08-11-2023
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Investment

5 Basic Things You Should Know Before Investing in a PPF Account

The PPF, or Public Provident Fund, was set up in 1968. It was made so that people could put away small amounts of money. It also encourages people to invest money in ways that give them a decent return. It is also a savings-accumulative-tax-saving investment vehicle. It enables you to save for retirement while paying less in yearly taxes. Those who want to save on taxes and make money should open a PPF account. Most people think of PPF as a long-term investment for saving for retirement. It’s a tax break because you don’t have to pay taxes immediately. Tax and investment experts say that they usually mature in 15 years. The Department of Economic Affairs has maintained the PPF interest rate at 7.1% from April to June 2020. As an investor, PPF account holders should know the following. [B-01] Eligibility to Create a PPF Account To start a PPF account, you must meet the following requirements: Only people who live in India can create a PPF account. If a non-resident Indian (NRI) opens an account while living in India, the account could stay open for 15 years. But NRIs can’t choose to keep the account open for longer. Hindu Undivided Families (HUFs) can’t open a PPF account. Each person can only have one account in their name. People can also create a PPF account on a child’s behalf. 5 Basic Things to Remember Before Investing in a PPF Account 1. A Safe Investment Option By putting money into a PPF account, you can bypass the anxiety of financial risks. It is a plan secured by the government. The Indian government regulates the PPF interest rate and begins to pay interest. Due to the government’s backing, it is a safe investment option for all Indians. 2. Guaranteed Returns But Fluctuating Return Rates Since PPF is a government-backed plan, the return on investment is guaranteed but not set. Every three months, the government decides the interest rate for the PPF. According to historical returns, the PPF interest rate has decreased from 12% to 7% over the past few years. The PPF interest rate was 7.1% for Q3 of FY 2020–21 (October–December). 3. A Lock-in Period of 15 Years A PPF account is best for people who want to invest their money for a long time. It comes with a 15-year maturity period. You can only withdraw money after 5 years of monthly payments. After the 15-year lock-in period, investors can add another 5 years to the term. 4. Ability To Take Loan Opposed To Your PPF Balance You can invest in real estate, which is another great thing about PPF. In a pinch, you can purchase against your PPF account balance. The loan is available from the third to sixth years after the account is opened. You can only get a second loan after the first one is paid off. 5. Your PPF Account Could Stop Working A person who wants to invest must put in at least Rs. 500 per year. You can only put Rs. 1.5 lakh into a PPF account in a year. If the investor doesn’t make the annual payment, the account will stop being used. To get the account back online, send a written request. Every year the account is inactive, you must pay a fee of Rs. 50. Other Points to Remember 6. Gaining From the Earnings of the Spouse More money will come to you if you open a PPF account on behalf of your spouse. If a spouse is given money and invests it, the income from the investment is added to the giver’s income. Since PPF is an investment that doesn’t cost you taxes, your tax bill won’t go up. So, you can put Rs. 1.5 lakh into the PPF scheme every year and get the benefits. 7. Best Investment for a Child’s Future A guardian or parent can open a PPF account on behalf of a child. It can help build a tax-free fund for the child’s future needs. After the PPF account matures and the youngster turns 18, you can use the money properly. 8. Increase PPF Returns With a PPF account, investors can get the most out of their money. Invest Rs. 1.5 lakh at the start of the year. Interest in the PPF is calculated from April to March each year. To get the maximum money back, invest before April 5 each year. This way, an investment made once will earn profits for a whole year. 9. Strategic Deposit to Get Higher Interest Interest on PPF balances is added at the end of each fiscal year. The amount in the account between the fifth and last day of the month determines the monthly PPF interest rate. So, it is suggested that you put money into the PPF every month before the fifth. 10. PPF Falls Within the Category of EEE Tax Exemption PPF falls into the Income Tax category called EEE, which stands for “Exempt, Exempt, Exempt.” The Income Tax Act’s Section 80C permits you to deduct up to Rs. 1.5 lakh for PPF contributions. Second, neither the interest earned on the principal balance nor the amount due at maturity are taxed. This could be reason enough for people to choose PPF. [B-02] Conclusion To invest in a government-backed plan for the long term, a PPF account is an excellent option. It helps people who are self-employed or run small businesses but don’t get help from the EPF. Also, people who want to keep saving and enjoy investments that don’t get taxed can put money in the PPF. Piramal Finance is a great option for you for such finance-related content. Visit their website to learn more about the products and services they offer.
08-11-2023
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Personal Loan

Small Loans – Check Eligibility, Interest Rates and Benefits

Sometimes, unexpected things can mess up your budget and put you in a tight spot financially. You might not be able to get by because of this squeeze, which is usually not a big problem. All you need is a little financial push to keep these promises when certain debts come due, or you realise you forgot to pay other bills on time. Small loans, also called short-term loans, are becoming more popular because they are easy to get. They also have very good terms and conditions for people who want to borrow money. People who work for themselves or a company can get small personal loans. They can also be used by people who have never borrowed them before. [B-01] How Do Small Loans Work? Small loans are short-term, unsecured loans given to people with urgent needs. You can apply for a Mini Cash Loan online easily because you don’t need to put up any collateral. But some companies don’t let their employees use it. Since it’s a personal loan, you can use it for many things. The amount of the Small Instant Loan can be used for any kind of emergency. Things like paying for health care, school, home repairs, and costs for trips abroad and other things. Any salaried worker or independent contractor can get a small personal loan in India. The money can be used to pay for both personal and business needs. Even company owners and entrepreneurs might qualify for a modest personal loan to get the money that they need for working capital. You can change it to meet your immediate and short-term needs. What are the pros of filling out an application for a small loan? Nothing Hooked Up Unsecured loans are small loans. So, you don’t have to put anything up as collateral to get the loan amount. They are great if you need money immediately but don’t have anything to put up as collateral. Less paperwork Since there is no collateral, you don’t have to complete a lot of paperwork to get one of these loans. You can speed up the application process by sending in very simple paperwork. Quick Approval Some small loans can be given out quickly. When you apply for one of these loans, and it is accepted, the loan amount is sent to you the same day. So, you won’t have to wait for the money to be sent to you, and you can be sure it will be there the same day. How Do I Apply Online for a Small Loan? You should consider which bank or other lenders you want to borrow from. Then, go to the lender’s official website and click “Apply Now.” Then you’ll be sent to the application process, where you’ll need to give some information to move forward. Before the lender can figure out the interest rate, you must tell them how much money you need and how long you need it. Small personal loans can be applied for on both the lending institution’s website and on websites owned by third parties. In reality, it’s easier to apply through these sites because you can compare several lenders and choose the best one for your needs. Qualifications for a Small Loan An Indian citizen A person who works for himself or herself or gets a salary The applicant must be at least 21 years old when they apply for a loan. Make at least Rs. 10,000 a month (varies from lender to lender) Must have a valid ID from the government Documents Needed to Apply for a Small Loan You need the following to apply for a small personal loan: Proof of ID (PAN card, passport, Aadhaar card, or voter ID) How old are you (Voter ID, passport, Aadhaar card, or driving licence) The bank statement from the last six months Photos of the size of passports Income evidence (income declaration statement, ITR of the past year, or salary slips for the past three months) What are the pros of a small loan? Getting money quickly Cost-effective interest rates Rapid approval Flexible payment options Full transparency in the process of borrowing Electronic approval Spread out quickly No guarantor Indian Small Loan You can get a small loan when you need money right away, like at the end of the month. Most of the time, the terms of these small loans are between 7 and 90 days. The terms and length of your small loan will depend on the lender you choose. Interest rates on instant small loans can be as low as 18% per year. Depending on your loan size, you may have to pay extra fees like processing fees. A short-term personal loan can be used for many things, including: Bills for utilities paid on time On-time tuition payment Lack of money at the end of the month To cover medical expenses Any trouble On the internet, it’s easy and quick to get a small loan right away. You might be able to get a loan in two to three hours. You could also use short-term loans to help you in times of financial trouble. How to Get Your Small Loan Application Approved Quickly? Send pictures of the original documents. Your document’s address must match the address you put in. Clear post pictures. Make sure the information you put on the loan application is correct. In your profile, you can see where your application is in the process. You will also get phone calls, text messages, emails, app alerts, and info about the app. [B-02] Conclusion Small loans are a good way to pay for things you need immediately. Getting a short-term loan is easy because you don’t need any paperwork. To finish the application, you must upload your ID photo. When you apply for a small loan, ensure the amount and length of time you choose are right. Don’t ask for a big loan if you can’t pay it back on time. Some websites and apps offer small loans for a short time. Small loans are easier to get approved for and can be used by anyone. Piramal Finance can help you get a short-term loan, so you don’t have to ask your friends and family for money. It is easy to get. You can use it if you don’t have enough money, which usually happens at the end of the month. You don’t have to wait until payday to get what you need.
08-11-2023
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Gold Loan

Which finance is better for a gold loan?

Being a highly coveted metal in the country, gold stands to be of high value and worth. Not only does it have physical significance in everyone’s life, but there is also a strong emotional attachment to the yellow metal amongst the people. For centuries, gold has been used as a medium of exchange for valuable commodities and other precious metals. Gold, besides being used as a metal for making precious ornaments, is also used for a variety of purposes. In India, millennials started using this coveted metal extensively for loans and investments. However, with so many options available in the market, you might face problems while choosing the best gold loan option. It becomes quite tricky when choosing the ideal gold loan financing company. In this article, you will learn about gold loans, their benefits, and some of the best financing options that you should opt for. [B-01] What is a gold loan? What are its objectives and significance? A gold loan is financial assistance that you take from a lender by using physical gold as collateral. This makes the loan a secured form of loan, which provides additional benefits to you as a borrower. The lending institution charges you a specific interest rate for the loan amount it provides. This interest amount is charged on your principal amount, which you must repay through instalments within a set period. You can apply for a gold loan from multiple financial institutions, including banks, non-banking financial companies (NBFCs), private financiers, etc. If you face a financial crunch and need immediate funds, a gold loan is your way out. In India, you can apply for a gold loan with both EMI and overdraft facilities, according to your requirements and convenience. Now that you know what a gold loan is and its purpose, it is time to learn about some of its benefits before learning about the best gold loan financing companies. What are some of the exclusive benefits of taking a gold loan? There are several benefits to taking out a gold loan, and they are as follows: Low rate of interest: Compared to unsecured loans, a gold loan provides you with a low interest rate on the loan amount. India’s gold loan interest rate starts at 7% per annum and goes up to a maximum of 29% per annum. The gold loan interest rate varies from lender to lender and depends on the credentials of the loan applicant. Easy eligibility: Unlike other loans, gold loans can easily be applied for by anyone and do not require a high eligibility benchmark. You can easily meet the eligibility requirement without much documentation by using physical gold as collateral. No requirement of credit history: This is a remarkable advantage of taking a gold loan over other loan forms. You are not required to show your credit history to get a gold loan, as you pose less risk to the lender. Safety: From a security standpoint, your physical gold is kept in a secure environment to prevent theft. As a lender, I must provide safety for your possessions. Most banks use triple-layered safety features to protect your gold from exposure. Anytime Liquidity: Gold is a metal, but gold loans are subject to Anytime Liquidity, or ATL. This means you can use your gold to claim a loan and get the loan amount disbursed within an hour without getting into rigorous paperwork. Some of the best financial companies for gold loans Many financial corporations and financiers provide gold loans to borrowers. However, this list shows some of the most preferable ones. SBI Gold Loans: SBI Gold Loans are one of the best and most preferable financing options for applying for a loan against the hold. The gold loan interest rate is about 7.50% per annum, with 0.5% as the processing fee for the loan. The loan tenure ranges from 3 months to 36 months, depending on your credentials and the loan amount you take. Muthoot Finance: Muthoot Finance is also a very decent gold loan financing option available in the market. The gold loan interest rate is about 11.99% per annum, with an additional 0.25% to 1% as your processing fee. The tenure for the loan against gold in Muthoot Finance ranges from one week to 36 months. Kotak Mahindra Gold Loan: The gold loan interest rate provided by the Kotak Mahindra Bank ranges is about 10.50% per annum with 2% as your processing fee. You must repay the gold loan amount in the form of monthly instalments within 12 to 48 months. Union Bank: Union Bank stands to be one of the best gold loan options available in the market. The interest rate for gold loans starts at 7% per annum and goes up to as high as 12.50% per annum, with 1% as the processing fee. You will be given a maximum of 12 months as the repayment period within which you are bound to repay the loan. ICICI Bank: The gold loan interest rate provided by ICICI Bank is about 10% per annum, with a processing fee of about 1% of the loan amount. The tenure of repayment for the loan against gold ranges between 3 months and 12 months. [B-02] The Bottom Line: Gold loans are one of the most prominent secured loan options available in the market. Not only is it a safe option where you don’t have to pay a higher interest rate, but it also gives you plenty of other features. The best part about getting a gold loan is that the lender does not dictate how you use the money. You can use it to buy a house, buy a car, make a down payment, or even use the loan amount to invest in your business. However, with so many benefits comes an issue that you will face while choosing the right financing company. So, you should do ample research, contact bank officials, and use a gold loan calculator to find the best option. If you want to know more about gold loans and other types of loans like personal loans, housing loans, etc., you should visit Piramal Finance.
08-11-2023
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