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Personal Loan

Procedure to Follow While Closing a Personal Loan

A personal loan is taken for fulfilling personal benefits like renovating your home, making a down payment, or financing a marriage. Every day many people get their loans sanctioned and applying for a personal loan in India is no big deal. But, when it comes to closing it, there are some considerations that you should keep in mind. Do you also want the closure of your personal loan? Well, if yes, then this article is the right direction towards the closing of a personal loan. In this article, you will know about the two popular options to close your personal loan, the documents that are required, and the correct procedure to do it. [B-01] What are the different ways to close your personal loan? There are two different ways through which you can close your personal loan. They are- pre-closure of personal loans and regular closure of personal loans. Both ways are different from each other and require different approaches likewise. The regular closure of personal loans is the most adopted option because of less hassle and convenience. But, some people also follow the second option – pre-closure of personal loans because of their requirements. You need to decide which one to prefer based on what your bank offers and your requirements. What is the regular closure of a personal loan? This is the most widely opted option to close your personal loan. In a regular closure option, the borrower has completed the repayment tenure successfully and paid all the loan amount in the form of instalments. By this, you will be sectioned with a green card by your bank and your debt is all over. Suppose, you took a loan of about 10 lakhs for 5 years in the form of monthly instalments. At the end of 5 years, if you have successfully paid all your instalments, you can apply for a regular closure at your bank. The bank then verifies your loan status, you are free from repayment and your loan account gets closed forever. What is the correct procedure for the regular closure of a personal loan? Here are the steps for regular closure of your personal loan: After you have paid all your instalments, contact your bank and let them know that all your dues have been paid and you want to close your loan account. Make sure that you have paid all your extra charges, fines and penalties, in case you have them. In case you forgot about that and any amount is pending, pay it immediately to get ahead of this process. After clearing everything, including extra charges, set up a meeting with the bank officials. Know about the formalities and the date of verification to close your personal loan account forever. On the day of verification, take all your documents with you including your EMI leaflet. The bank verifies all your documents, your EMI status, your repayment of dues, etc. After the successful verification process, your personal loan account is now closed forever. The bank now gives you a “No Objection Certificate” or NOC for any future reference. If by chance there is something you don’t understand, you can contact your bank officials or customer care support. What is the pre-closure of a personal loan? A pre-closure of a personal loan is an option adopted when you want to pay your loan amount before the completion of your tenure. This happens in case you have surplus money and you want to repay before the lock-in period. But for this, you might be charged some extra fees, known as a prepayment penalty. The foreclosure charges depend on the bank and range between 0 to 5 per cent. The advantage of a pre-closure of a personal loan is that it either helps you reduce your EMI or tenure of repayment. Both ways, you are going to be on the profitable side. What is the correct procedure for the pre-closure of your personal loan? Here are the right steps to follow for a pre-closure of a personal loan: After you have successfully paid all your dues, extra charges, etc. contact your bank and let them know that you want to pre-close your loan account. After you make sure that you paid for everything, set up a meeting date with the bank official for the verification process. Ask the bank about the formalities for closing your account before the due date and the date of verification. On the day of verification, take all your documents, EMI leaflet, and payment slips with you to the bank. The bank then verifies all your documents and gives an” acknowledgement letter” and a green card for closing your loan account. You might also need to pay some foreclosure charges in case your bank tells you to do so. After your loan account is closed, the bank gives you a No Due Certificate or NDC, which you should keep for future reference. In case you don’t understand something and have a query, contact your bank’s support system. What are the required documents required for closing your personal loan? Here is the list of documents that the bank asks you for verification before giving you a NOC or NDC certificate. ID proof– This includes your Aadhaar card, PAN card, Voter ID card, and other KYC details. Address proof– This includes your Aadhar card, Voter ID, Domicile certificate (optional), etc. All your bank details, loan account number, EMI leaflets, etc. [B-02] Conclusion: Closing your personal loan account might seem like a big deal to you but is a very subtle process. The whole process gets over within a few days and you can permanently exit the loan. If you love reading about personal loans, home loans, mutual funds, MSME, Public Provident Fund, Stock market, etc. then there is an ideal place for you. Piramal Finance is a corporation that solely focuses on these topics.

08-11-2023

Personal Loan

The Different Types of Loans Available in India

By definition, a loan is when a lender gives money, commodities, or property to a borrower, expecting that the loan would be repaid with interest later. The wealth can be used for various purposes. The general working class of the country usually borrows money when required from financial corporations. There exist different categories of debt under which there are different types of loans. To avail of a loan, you might sometime need some active assets as the same value of money you need to borrow. Now let us analyze the many types of loans that are in the market now and how they differ from one another in ways that benefit clients. [B-01] Personal Loan Personal loans are the most popular type of loan that most banks provide. The money borrowed can be used for any purpose. No collateral or security is deposited with the lender for financing a personal loan. Therefore, it is an unsecured loan. However, the bank will ensure you have assets and a steady income to repay the amount. The interest rates are on the higher side. The tenure might not be very long. Therefore you will need proper financial planning to repay any big personal loan. Home Loan Home loans are sanctioned when you need money to acquire a property. Other than a personal loan, it is the most popular type of loan. The benefits include longer tenure, low-interest rates, tax deductions, and many more. There are other types of loans falling under this category such as home-renovation loans, home-extension loans, land-purchasing loans, etc. Generally, a credit score above 750 can help you achieve lower interest rates. It gives you financial assistance and enables you to purchase a home for your family and yourself. Gold Loan In exchange for a loan amount equal to the market value of gold per gram on the day the gold is pledged. A gold loan is a secured loan in which gold is used as security or collateral. Since collateral is offered, loans are available at low-interest rates. A gold loan can be utilized to raise money to cover urgent or anticipated financial needs. Instead, of taking a personal loan it is advisable to opt for a gold loan if you have enough collateral. However, the attached sentiments of people with gold jewelry sometimes obstruct them. Education Loan Education loan is a great help for students who cannot afford college fees. Any bank in India offers educational loans to students who want to pursue higher education. They must pay back the money from their salary if they get a job. The student is the borrower, while any other immediate family member—such as a parent, grandparent, spouse, or sibling—is the co-applicant. Interest rates are low and the money can be used only for educational purposes. Credit card loan A credit card has a set, pre-approved credit limit that the owner can use once every month. Taking out a loan against your credit card is similar to taking out a personal loan. Most institutions provide you the option of loans against a credit card if you need money immediately. You may obtain a loan using the credit limit that has been granted to you. Most credit card loans are pre-approved, so you don’t need to provide additional proof, and the loan will be processed and issued swiftly. Vehicle loan One can get a loan to buy two- and four-wheeled vehicles for personal usage. On behalf of the borrower, the lender makes a direct payment to the dealer. Vehicle loans are secured loans, meaning that until the full amount of the loan is repaid, the vehicle you acquired acts as collateral with the lender. The payback time for two-wheeler loans and commercial vehicle financing is five years, while the repayment period for a new car loan is seven years. You may buy and register your car immediately because lenders frequently promptly give the money to the car dealer. Agricultural loan Agriculture loans are loans given to farmers to cover the costs of their ongoing or generic agricultural needs. These loans have extremely low-interest rates and assist farmers in purchasing seeds, farming tools, tractors, pesticides, etc. to increase productivity. Business loan Small and medium-sized firms can get loans for different business needs through business loans. These loans can be used for several things that support business expansion. Compared to share capital, a loan is also a preferable source of funding for a successful organization since it allows for more leverage. To see if you qualify for a business loan from a lender, you must first determine eligibility criteria. The interest rates are generally higher. Other loans Apart from these loans, there are other loans such as loans against FD, loans against shares, loans against insurance policies, overdrafts, consumer durable loans, etc. You can apply for a loan against a fixed deposit you have with a bank. You may apply for an 80,000 INR loan if your fixed deposit is at least INR 100,000. When granting a loan against shares, banks often lend less money than the investment’s entire share or mutual fund value. Consumer durable loans are available to finance the purchase of consumer durables like electronic devices and home appliances. Additionally, you could use the insurance investment as security. There are a whole lot of other options to choose from as well. [B-02] Conclusion In India, a wide variety of loans are offered. Personal loans now cover all financial needs of individuals. Despite having a range of assets they may mortgage to obtain loans at a cheaper interest rate, most consumers choose personal loans over other kinds of loans. Piramal Finance keeps providing guides to help you choose the best for you. Tune in to the website for more personal finance articles.

08-11-2023

Know More

How Does an IPO Get Priced?

What is an Initial Public Offering (IPO)? An IPO, or initial public offering is a process by which a private company goes public by selling its stock through the issuing of shares to the general public. It can be a new, young company or an old company. They can go public by getting listed on the NSE (National Stock Exchange of India). Whenever new IPOs come onto the market, the issuer hires an investment bank. It trades the shares on an open market. The company that offers the share is an “issuer.” They can raise equity capital in two ways. One method is to sell its stock to the public. But, the issuer is not obligated to pay back capital to public investors. Another is when shareholders sell their shares to the public without raising any fresh capital. The method by which an analyst ascertains the fair value of a company’s shares is known as an IPO valuation. [B-01] Why does a company enter into an IPO? The private company launches an initial public offering for two main reasons: 1) To raise money for growth 2) To cover debts or losses. Why does an investor need to know about IPO valuation? Knowing the Initial Public Offerings valuation process is essential for investors for two reasons: It tells you about the company’s business prospects and potential for future growth. Examine the financial, income, and cash flow records of a company. Through this, you may easily understand if a company’s stock has strong investor interest. How does a public investor determine if the pricing is right? As an investor, investing in a new company that has not been listed on an exchange before is challenging. But smart public investors try to understand and analyse the issuer by looking at their registration documents and financials. The financials give you an idea of how fair the prices of IPOs are. Read on to know what factors are responsible for determining the price of the Initial Public Offerings. How Does An IPO Get Priced? Listed below are the factors that determine the pricing of an IPO: 1. Demand Demand and supply govern IPO prices. The higher the demand for the shares of the company, the higher the price will be. A company’s value may not always increase if its shares are in high demand. The company will, however, be valued at a greater level. Due to the timing of the IPO and market demand, two identical companies may have different IPO prices. A firm will only conduct an IPO if it believes its stock has strong investor interest. 2. Industry comparisons Comparing different companies listed on the exchanges is important in determining IPO pricing. As new IPOs arrive, they are listed on the exchange. Smart investors compare a company’s IPO pricing with that of its already listed competitors. They can decide not to invest in the IPO if they think it is overpriced and too different from its competitors. If the price is the same as that of competitors, they believe the price is reasonable and thus make an investment. 3. Growth prospects The growth prospects of the issuer play a crucial role in determining the price of an Initial Public Offering. Companies raise capital to fulfil the company’s ambitions and fuel their growth. But if the company’s primary purpose is to recover its debts and losses, the IPO pricing will be quite low. Investors prefer investing in a company with a solid growth story. They will see whether it will expand in the future. The company that showcases its growth has a higher chance of gaining investors. 4. Industry narratives Not all factors determining the IPO price are measurable in numbers. Some factors, like the industry narrative, are beyond that. A company’s story is as important as its revenue projections. A valuation procedure evaluates a company’s potential to transform an industry. And if it is at the forefront of a new business model by producing novel goods or services. For instance, the COVID-19 pandemic renewed interest in the pharmaceutical industry. When a pharmaceutical business launches its IPO, this can raise its valuation. Upcoming IPOs 2022. Now that you know how an IPO is priced, you must be wondering about the upcoming IPOs in 2022 to invest in. Here are the upcoming IPOs in 2022: CompanyStatus.Go Digit. To be announced.Go Air.To be announced.Bajaj Energy. To be announced.OYO.To be announced.KFin Tech.To be announced.Emcure Pharmaceuticals. To be announced. [B-02] To sum up, IPOs are significant stock market events for a reason. You have a chance to make good profits over the long term by investing in the right business. Check the list of upcoming IPOs in 2022. The challenge, though, is to separate the top achievers from the others. Before buying shares, you must compare its IPO prices with those of its competitors. This gives an idea of whether the pricing is appropriate. Besides, always know a company’s growth story, which indicates if it will expand in the future. Visit our website to find more useful and informative blogs.

08-11-2023

Other

Impact of GST on the Working Capital of Small Businesses in India

The introduction of the Goods and Services Tax, also known as the GST, has been one of the most comprehensive and revolutionary tax reforms of independent India. Since the implementation of the national indirect taxation system, there have been both positive and negative effects across the board. The new system comprises four tax brackets, with rates of 5%, 12%, 18%, and 28%, respectively. The Goods and Services Tax (GST), directly related to your working capital loan, may affect the available cash. The term “working capital” is commonly used to refer to this type of funding. Working capital is sometimes called the “oxygen of a business.” This article will discuss how the Goods and Services Tax (GST) could impact your working capital. [B-01] Impact of GST on the Working Capital of Small Businesses in India Stock management The management of inventories has been significantly altered due to the GST. In the past, businesses had to have a network of warehouses in many states to avoid paying cross-border tax charges. Businesses had to spend a lot of working capital loans and time to meet the state’s tax laws and keep track of their numerous warehouses. If the items were sent to a different state, the corporation would be responsible for paying the CST, the octroi, and any other applicable state taxes at that time. The expenses of maintaining the wide network of warehouses owned by the corporation and the costs of adhering to various tax regimes placed significant pressure on the operating capital owned by the company. Since the Goods and Services Tax was implemented, all the corporation has to do to serve demand in all fifty states is maintain four or five strategically located warehouses. In addition, taxes on the goods are not required to be paid at any of the ports of entry along the transportation route. Because there is less of a need for the maintenance of warehouses, businesses can realize significant cost reductions in their working capital. Additionally, it enables unrestricted participation in international commerce. The eradication of tax collection at international crossings reduces the time required for travel. Input Tax Credit The Input Tax Credit (ITC) system was established before the establishment of the GST and could only be used in conjunction with taxable outputs. If the company already paid tax on it, it will not be eligible for the credit. The input tax credit’s potential uses have broadened since the advent of GST. Input tax credits may be claimed. The tax burden and the working capital loan interest rate impact will both be beneficial. Breaking the chain reaction Removing the cascading effects of previous taxes is among the most significant advantages of the GST. In the context of the computation of value-added tax, cascade effects do not meet the criteria for a tax on the product or an excise charge. The first advantage is that cash flow is shielded from the possibility of being disturbed by cascading impacts, which benefits the amount of working capital loan available. Investing in primary materials Before the GST’s introduction, it was widely believed that all businesses would benefit from the new tax system. However, this has yet to be the case. Expenses for running a company vary widely from one sector to another. For instance, if a manufacturing facility imports raw materials from outside, it will now be subject to a GST of 18%. The former slab would have only subjected him to an import duty of 14%. Because of this subsequent tax rise, a company’s working capital loan interest rate will grow. The service industry is also affected, as its tax rate has increased from 15% to 18%. Companies must allocate more working capital loans and revise prices to reflect the new reality. They must also find ways to work capital finance to compensate for the higher tax rates. Tax return due date Experts agree that this facet of the GST has the greatest effect on the company’s liquidity. Items are liable for GST at the time of transfer. However, businesses may only claim a tax rebate when customers pay for their products. The time it takes to sell products once they have been transferred might be substantial. The input tax credit is not available until after a sale. Firms are often forced to take out a working capital loan to compensate for the sharp drop in operational cash caused by this waiting period. Impact of GST on resellers Since the government has set a minimum size for businesses, this cap also applies to e-commerce sites. Therefore, all online businesses must sign up. Operators under the new tax system must refund a portion of the GST tax paid by the seller to the government. Impact of GST on business loans Since the GST was initially implemented, there has been an increase in the overall cost of the working capital loan. The introduction of the GST has resulted in repercussions for all categories of commercial enterprises. Impact of GST on Startups The straightforward procedure for forming a business and the consequences of doing so have been centralized due to the establishment of the GST. The tax legislation stipulates that the federal and state governments are exempt from imposing certain indirect taxes. The initial working capital loan investment required will be lower due to this solution. [B-02] Conclusion: Managing working capital loan, which is becoming increasingly important over time, is one that every company must undertake independently. It is in the best interest of the company to improve its performance. As a direct result of this, the goods and services tax (GST) is a very recent innovation within the context of the new tax regime. For more information, you can ask for help from a well-known institution like Piramal Housing. As a result, the company needs to be able to use the numerous benefits associated with the input tax credit without running the risk of losing this credit. This will inevitably affect working capital.

08-11-2023

Know More

Difference Between ELSS and PPF

Certain saving schemes such as PPF(Public Provident Fund) and ELSS (Equity Linked Saving Schemes) help to enable the benefits of the tax. The article will present a comparative analysis of the investment schemes and help investors select the right one. [B-01] ELSS: A Brief about the Scheme ELSS, an acronym for Equity Linked Savings Scheme, is a type of mutual fund that invests in direct equity and helps in saving up to Rs.1.5 lac in tax rebate. Higher returns in fewer periods and tax rebates have made the scheme highly popular today. The lock-in period under the scheme is three years, which means you can liquidate the investment in three years from its purchase. To get the maximum returns when investing in ELSS funds, you need to keep the investments for a longer period. If you invest in a Systematic Investment Plan, each installation will have a lock-in of three years, which means each installation will have varied maturity dates. Functioning of ELSS Funds ELSS funds can be considered diversified funds involving equity. When you invest in ELSS, you invest in listed companies for a specific objective defined by the fund’s investment objective. People choose stocks across industry sectors and market capitalization, such as Small Caps, Mid Caps, and Large Caps. The funds are made to maximize capital gains over time. The fund manager picks stocks after conducting in-depth market research. It helps in delivering good portfolio returns for the long term. Advantages of ELSS Mutual Fund Here are the advantages you receive when you invest in ELSS mutual funds. Potentially higher returns The scheme offers its investors significantly higher wealth in a medium-to-long-term investment horizon. Since its inception into the market, ELSS has delivered the highest returns in the category of tax-saving products. Earlier data indicates that the scheme generated approximately 11-14% returns in three-year and five-year periods, respectively. SIP Option When you invest in ELSS, you can start investing a low amount of INR 500 per month through a Systematic Investment Plan (SIP). Besides, you can conveniently start and stop the SIP. Investing in ELSS is beneficial, as it offers investors enormous flexibility and convenience with small and regular investments. Better Post-Tax Return Investors can enjoy tax-free returns of up to INR 1 lac while investing in ELSS. Gains over the specified amount attract a nominal tax rate of 10%. Lower tax rates with higher returns ensure investors with the best post-tax returns. PPF: A Brief About The Scheme A PPF account or Public Provident Fund scheme is a traditional and popular scheme. It is a long-term saving-cum-investment product, combining returns, safety, and tax savings. The Finance Ministry’s National Savings Institute opened the PPF scheme to the public in 1968. Since then, it has emerged as a powerful tool for creating long-term wealth for investors. Investors use the scheme to build a corpus for their retirement by putting aside specific capital regularly and over a long period. The scheme offers a 15-year maturity with an added facility to extend the tenure. The attractive interest rates and tax benefits make the scheme the biggest favourite with a small saver. The Functioning of the PPF Account An adult can open a PPF account for themself or a minor for 15 years. The amount deposited in the account ranges between INR 500 and INR 1.5 lac per financial year. You can deposit the amount as a whole or even in instalments. Investors must deposit the amount every financial year during the tenure, and the investor receives an exemption from income tax under section 80C. The minimum amount you must invest in the scheme is INR 500 every financial year to keep the account activated. In certain circumstances, investors fail to pay the amount. In such a scenario, the ministry will discontinue the amount, and you require paying a payment of INR 50 along with the minimum deposit of INR 500 to reactivate it. The PPF interest rate levied is 7.1% per annum to the deposit, compounded annually. You can even take a loan on your account balance. The scheme allows investors to make partial and premature withdrawals on the account balance, subject to certain conditions. After maturity, investors have the option to close the account or extend the tenure of the account with or without making additional investments. Benefits of PPF Account Enlisted are the benefits of having a PPF account: Low-Risk Instrument Since the government guarantees PPF returns and deposits, it is one of the safest investment options nationwide. PPF is a popular investment option even with low returns, as it offers the safety of capital and returns. Tax Benefits PPD investments fall under exempt- exempt- exempt (EEE) category. It means the government does not levy taxes at any state of PPF. An investor wanting to make deposits up to INR 1.5 lakhs can avail of tax benefits under the Income Tax Act 1968. The interest credited every month and the maturity amount are tax-free. Fixed Returns PPF deposits offer fixed returns in the form of interest rates every year. The government fixes the PPF interest rate quarterly. The average return on PPF for the past five years has been approximately 7%. ELSS or PPF: Which Is The Right Choice? Since both schemes help save taxes, investors must invest in the right scheme. When selecting a scheme for investment, investors must consider certain factors like risk appetite, return expectations, and their time horizon. If you are risk-averse and are okay with a 15-year lock-in period, PPF is the best choice. However, ELSS is an excellent option if you can take slightly more risk to earn higher returns. Investing for a longer period helps in reducing the risk. [B-02] Wrap Up Now you should know what the advantages and disadvantages of both the ELSS and the PPF schemes are. But these advantages and disadvantages usually vary depending on what people want. While one person would be seeking a long-term investment, the other must be seeking one that is relatively more immediate (more than 3 years). Due to this, the ways to invest are very different. So, compare these two based on what you need and choose the best one. For more blogs like this, you can visit the Piramal Finance website and explore their products and services.

08-11-2023

Know More

Here Are Some Reasons To Start A SIP Today

Long-term planning is critical for your financial health. It also helps to understand why you wish to invest. Investments are an excellent option since they may bring in money while retaining and growing wealth. If you have a large expenditure coming up, such as college tuition for your children, a down payment on a home, or a once-in-a-lifetime vacation, investing could be an excellent choice. Both the fixed-income and variable-income markets provide excellent prospects. [B-01] But do you believe it’s a wise investment? These five compelling reasons to put your money to work for you will persuade you of the importance of investing. SIP Mutal Funds and How They Function Mutual and exchange-traded funds (ETFs) are two kinds of investment organisations that provide investors with various investing options. SIPs allow investors to stretch out their investments over a longer period and invest less money overall than if they had to put it all in at once. Most SIPs need regular plan payments, often made once a week, once a month, or once every three months. How crucial are SIP investments? If you want to have your finances in order, you need to understand the fundamentals of money and be able to save some. However, many individuals may not gain since they need to know where to invest their funds. Those fortunate enough to have some savings may utilise them to navigate difficult economic and market periods. So, the first advantage of investing is that it allows you to create a safety net. Investing is also beneficial since it allows things to go as planned. Successful people in business can achieve their objectives more quickly. And soon, you’ll be able to live only on passive income. A strong investment portfolio is the outcome of a comprehensive examination of the available possibilities and how they match the investor’s specific profile. This is because all investments contain some degree of uncertainty, from the least risky to the riskiest. It would help if you also considered the time constraints that come with investing. There are occasions when one option is superior to another. So, before making any financial commitments, consider your long-term, medium-term, and short-term objectives. SIP investments are easy. You can do it while sleeping. A SIP allows you to invest a set amount of money regularly without keeping track of the dates or amounts. To begin the plan, you must invest at least INR 500 per month, and the funds must be deposited on the same day each month. After you begin the plan, your payments will be automatically deducted from your bank account and invested until you change the plan or withdraw funds. SIP Mutual Fund Is Low Risk. There isn’t much danger here. If you invest a set amount regularly, you’ll still have some money in the market when it recovers. If it does not return, try something else. And if the market rises, that’s even better because it means you’ll be able to make more money. SIP Plans Are Long Term Savings It’s a great way to put money aside for the future. The more frequently contributions are made, the more money will be saved. Instead of relying on a risky investment strategy, SIPs can help you save consistently and steadily every month for long-term goals such as purchasing a home or funding your retirement. SIP Mutual Fund Is Diverse This allows you to spread out your investments. Unlike manually investing or making lump-sum contributions to a single account with only one or two businesses, a SIP allows you to spread your investments across multiple asset classes, including stocks, bonds, mutual funds, and more (which is what most people do). SIP Investment Don’t Need Market Timing How to Avoid Market Timer Scams When you invest a predetermined amount of money at a predetermined rate, you can ride out the market’s ups and downs without missing out on potential rewards. A “Systematic Investment Plan” (SIP) allows you to save money regularly and earn a return on that money. Most of the time, these programmes necessitate monthly investments for an extended period. You can also invest a lump sum or make monthly payments. A SIP’s goal is to assist investors in building wealth over time by investing in mutual funds or stocks through regular monthly payments without having to guess when the market will rise or fall. A SIP can make it easier for investors to stay involved for extended periods. This increases their chances of earning higher returns on their assets due to compounding interest rates and the other advantages of long-term investing strategies. An Example of a SIP Mutual Fund Investment People who put money into mutual funds 15 years ago have made a lot of money back. Here are a few things to think about. Let’s say you opened a SIP in 1999 and put ₹3,000 into it monthly. Over 15 years, you would have spent about ₹5,40,00. At the same time, your money would be worth about 35,000 rupees. Again, the total cost would be INR 5.4 lakhs. In 15 years, your money will be worth about Rs. 31 lakh more than what you put into it. You can protect yourself from risks using a systematic investment plan, or SIP. Some signs include spending too much money, making snap decisions, taking too many risks, and reacting emotionally or quickly. SIP plans are one of India’s most secure and easy ways to invest in mutual funds. Read this article to learn more about SIP. So, it shouldn’t be a surprise that SIP plans are becoming more and more popular among investors. [B-02] Conclusion SIP mutual funds are the best for everyone to invest in. Get the best SIP to invest plans with Piramal Finance.

08-11-2023

Home Loan

Rental Deposit Loan – Get a Security Deposit for Rental Property

An amount of money is given to a landlord, lender, or seller to ensure that the buyer will maintain the property in a habitable condition during the tenancy. There is no set rule regarding the return of a rental deposit loan; it depends on the deal’s specifics. Furthermore, a security deposit can be used to cover the cost of any necessary repairs to protect the receiver. [B-01] Why You Should Put Down Money to Ensure You Get Paid A security rental deposit loan must be in place before a tenant can move in, or a buyer may close on a property. Often, these amounts are sufficient to cover an entire month’s rent. It is possible to use a tenant’s security deposit to fix or replace broken equipment if the tenant is at fault for the damage. Landlords have the right to deduct the cost of repairs from a renter’s security rental deposit loan if the tenant breaks a window or causes severe structural damage to the building. If the apartment is in good condition when the tenant moves out and no repairs are needed, the landlord will usually return the security rental deposit loan. A tenant’s security rental deposit loan may be used to repair or replace property damaged, lost, or stolen by the renter. Most security deposits are returned to renters upon moving out, provided the property has been kept in “reasonably” good shape, considering normal wear and tear. The usage of security deposits is limited by state restrictions and is often required ahead of the move-in date. Bail in the form of a deposit is expected. The standard amount for a loan for a deposit on a rental house is one month’s rent; however, this amount can be increased at the landlord’s discretion. The escrow security deposit might be insufficient if the property’s rent increases. The security deposit’s value may rise due to interest payments. Still, even if this happens, more than the value of the rental deposit loan will be required to cover the ever-increasing cost of the rent that must be paid every month. If this scenario plays out, the tenant will be held entirely accountable for the increased total amount of the refundable rental deposit loan, which will be put squarely on their shoulders. In addition, the renter will be required to pay the additional amount. While loans for deposits on rental houses are not considered taxable income, they are treated as trust funds in many jurisdictions. Any rent not yet due from the security rental deposit loan must be recorded as advance rent and taxed when received. 1. Familiarise yourself with your state’s rental and security deposit policies. Rent, security deposits, and relocation costs are only some topics governed by these established norms between landlords and tenants. For instance, if a tenant is late in paying rent, late charge caps and grace periods may be mandated by local law. In some countries, the security deposit must be kept in an interest-bearing account and supported by a security deposit receipt. 2. Get down with the tenant and review the rent and security deposit. Tenants should know immediately if they will have to fork out a security rental deposit loan and the first month’s rent to secure their property. Therefore, consumers may plan for the financial impact of relocating by having accurate information at their fingertips. In most countries, it is mandatory by law for a lease to specify the monthly rent and security deposit. 3. Create a website for renters to make payments There are several options for accepting rent payments online, but it’s important to pick a system that was made with that goal in mind. Avail can be used in place of a property manager to handle the rent collection procedure for several units. 4. You should put your security deposit in a separate envelope from your monthly rent. When rent and rental deposit loans are treated as separate transactions, keeping track of both is much easier. If the tenant has paid the security deposit but has yet to receive the first month’s payment, record that fact here. The process of tracking rent payments and communicating with tenants is simplified. States have strict regulations governing the handling of rental deposit loans. Although you should probably have your tenants’ security deposits deposited into a separate account from the rest of your rent payments, it’s still in everyone’s best interest to have the deposits collected in a way that’s easy for you (not combined with your assets). If you get checks regularly, this will facilitate their deposit into the correct account. Funds may be sent to the correct account if rent is collected digitally. 5. The first month’s rent is payable within five days of signing the lease. Once the lease is signed, the landlord should collect the security deposit before handing over the keys to ensure the tenant has read and agreed to the lease terms. Rent and rental deposit loans should only be collected from tenants once the lease is fully executed. 6. If necessary, determine the rent proportion. If the rental term is less than one month, the rent will be adjusted accordingly (either at the start or end of the lease). For example, if your lease starts on January 15 and ends on December 31, you’ll need to figure out the prorated rent for that period. For example, if your lease begins on January 1 and ends on December 15, you would calculate the prorated rent from January 1 through December 15. [B-02] Conclusion: The tenant’s rental deposit loan can be used to mend or replace broken, misplaced, or stolen goods. When renters vacate the property in “relatively” decent shape, accounting for reasonable wear and tear, the bulk of their security deposits is refunded. Security deposits, typically needed before move-in, are subject to limits set by state law. If you want to know more regarding loans, do not hesitate to consult the financial experts at Piramal Housing Finance. They will assist you to meet your requirements.

08-11-2023

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Pradhan Mantri Mudra Yojana (PMAY) Scheme For Women

For women who want to start a business venture and are in need of funding, there are various options including the Pradhan Mantri Mudra Yojana scheme for women who are citizens of India. The Government of India has launched several programmes to help and support ambitious women who want to start their own businesses. This article provides information on different aspects of the scheme including who is eligible and how an online application can be made. [B-01] What Is The Pradhan Mantri Yojana Scheme? In 2015, the Government of India started the Pradhan Mantri Mudra Yojana scheme to help small businesses grow. Through this programme, both for-profit and non-profit organisations can apply for loans up to Rs. 10 lakh to get their businesses started. The Pradhan Mantri Mudra Yojana schemehas wide support throughout the country. Its goal is to help small businesses in India get access to low-interest loans. The Pradhan Mantri Mudra Yojana scheme works to bring businesses into the formal banking system and “finance the unfunded.” The application process is easy and people can fill out an online application form for a Pradhan Mantri Mudra Yojana loan or apply through their local bank and use the EMI calculator to get started. What Is The Mudra Yojana Scheme For Women? The scheme offers loan principals between Rs. 50,000 and Rs. 10 lakh to women who want to start or expand their businesses. This loan is provided in three distinct types: Shishu: This is a loan of up to Rs. 50,000 and is available for businesses that are just getting started. Kishore: This is a loan that has a lending range of Rs. 50,000 to 500,000 for well-established businesses in need of expansion capital. Tarun: This is a loan for an amount between Rs. 5,00,001 and Rs. 10 lakh and is available for established firms that meet the loan eligibility requirements. Organisations Eligible To Issue Loans Through Pradhan Mantri Mudra Yojana Scheme These are the organisations that are eligible to issue loans for the Pradhan Mantri Mudra Yojana scheme: RRBs or Railway Recruitment Boards (in charge of hiring railway employees) Institutions that provide microloans (MFIs) Corporate banks NBFCs Microlending institutions Businesses Eligible For Loans Through Pradhan Mantri Mudra Yojana These are the businesses that are eligible for loans through the Pradhan Mantri Mudra Yojana scheme: Business vendors Shopkeepers Agriculture sector The food production industry Handicraftsman Small-scale manufacturers Self-employed entrepreneurs Restorative and repair shops Service-based businesses Truck drivers Objectives Of Pradhan Mantri Mudra Yojana The Pradhan Mantri Mudra Yojana scheme loans can be used for a wide range of purposes that contribute to the development of the economy and the creation of new jobs. The most common uses for a Pradhan Mantri Mudra Yojana loan are as follows: Equipment financing for micro and small businesses Business loans for retailers, wholesalers, and other service sector enterprises Card-based working capital loan finance for transport vehicles Operations like poultry farming, beekeeping, pisciculture, etc. For those who use tractors, tillers and bicycles in their businesses Why Can Apply For Pradhan Mantri Mudra Yojana Women from various socio-economic backgrounds are encouraged to apply for loans under the Pradhan Mantri Mudra Yojana scheme. These are the requirements women must fulfil to be eligible to apply for loans: Female entrepreneurs in charge of production or manufacturing operations, including weavers, crafters, artisans, and more. Female entrepreneurs who want to develop or improve enterprises that provide services such as tailoring, phone repair, photocopying, auto repair and servicing facilities, beauty salon services, and more. Pradhan Mantri Mudra Yojana Eligibility Requirements To be eligible for a Pradhan Mantri Mudra Yojana loan, applicants must meet these requirements: The applicant must be between the ages of 18 and 65. The applicant should be equipped with the abilities needed to carry out the suggested business plan. The applicant must be creating or funding a non-farm income-producing enterprise in the manufacturing, trading or service industries. The applicant must have a solid repayment record without any loan defaults. Pradhan Mantri Mudra Yojana Documents The following documents are required when applying for a Pradhan Mantri Mudra Yojana loan: Completed application form Passport-sized photos KYC documents of the applicant and the co-applicant such as utility bills (water and electricity), passport, voter ID, Aadhaar card, driver’s licence or PAN card Proof of special category membership, such as SC / ST / OBC / minority (if applicable) Recent 6-month bank statement Business address and tenure documentation (if necessary) Other paperwork required by the bank or NBFC It should be noted that the loan application under the Pradhan Mantri Mudra Yojana scheme is the same for both Shishu and Kishore loans. But there is a different application form for the Tarun loan. To apply for loans, applicants can either make an online application through their bank’s website or apply in person at their nearest bank branch or other lending institution. Other Schemes In addition to the Pradhan Mantri Mudra Yojana scheme, the Government of India also has other initiatives such as Pradhan Mantri Awas Yojana (PMAY) to make affordable housing available to the urban poor. Another element of this scheme is the Pradhan Mantri Awas Yojana (PMAY) Gramin which follows the same concept but is for the rural poor. [B-02] Conclusion For women who want to start or expand their small or medium-sized businesses, there are three types of loans that are available in the Pradhan Mantri Mudra Yojana scheme which has quick and easy online application options. Once applicants have done their research and prepared their documents, they can either apply online or visit the bank (or other financial institution) closest to them. For more articles like this one with details on loans for women who want to start a new business or grow an existing one, Piramal Finance has more information and guidance on the financial aspects of business loans and more!

08-11-2023

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What Is Stamp Duty And How It Works: All You Need To Know

What is Stamp Duty? While purchasing or selling property, transferring possession is not the only thing to consider. It requires paperwork and stamp duty. Despite being only a small step in the transfer process, stamp duty is an important step required for a successful and legal sale of a property. In simple terms, stamp duty is a tax on the sale of real estate. The imposition of stamp duty is a state-bound act and varies between states. The central government also has the power to impose stamp duties on various instruments. In exchange for property, both the seller and buyer need to pay the stamp duty. The Indian Stamp Duty Act, of 1899 governs the rate and collection of stamp duty. [B-01] Importance of Stamp Duty Stamp duty is important for agreements such as gift deeds, mortgage deeds, partition deeds, license deeds, lease deeds, and so on. These agreements accept the transfer by the original nomination in a cooperative housing society. Who is Liable for Stamp Duty? Stamp duty is paid before the document’s execution date or on such a document’s execution date. Execution of documents means putting signatures on instruments by the parties to the document. In the absence of any kind of agreement, the buyer has to pay stamp duty. In the case of property exchange, both parties bear the stamp duty cost equally. Stamp Duty Rate State-by-state registration costs are uniformly set in a few countries. Some states also impose a fixed fee for the registration of real estate and other properties. Maharashtra and Haryana are two of these states. Stamp duty is a one-time payment made by Section 3 of the Indian Stamp Duty Act, of 1899. Piramal Finance charges a stamp duty on actuals. Actuals refer to the market value of the property, including any additional applicable taxes. Balancing the Transfer of Home Loans Every bank has a different process when it comes to the balance transfer of home loans. On the other hand, various aspects remain universal for all banks. You can visit the bank either online or physically and check the terms and conditions. It is essential to understand the home loan charges and any documentation. You will then need to submit an application form with the current loan details and pay the required fees. How Should One Sign an Instrument That is Affixed With Adhesive Stamping? According to Section 12’s provisions, any person that has a stamp can cancel the order system by writing a cross on their name or initials. If stamps from another system are not cancelled in the manner specified in the report, they are considered unstamped. Considerations Before Transferring a Home Loan Consider the following things before transferring a home loan: Home loan balance transfer charges: Home loan charges depend upon new lenders that decide to complete the transfer. Documentation Needed: Another aspect to consider when going ahead with a loan balance transfer is the documentation required to complete the process. The home loan transfer documents can vary between banks. They can also vary depending on the home loan details, including collateral, loan amount, and other aspects. Lender Credibility: By understanding what credibility is, you can be aware of the benefits and risks of a home loan transfer. Verification and understanding the credibility of new lenders are essential to ensure that your home loan transfer is seamless and quick. Calculation of Stamp Duty Stamp duty varies from one state to another. When any property or flat is transferred by a nominee to the legal owner, the document or instrument that is transferred has to be stamped according to the value of the market. Several parameters must be considered when determining stamp duty on a property. Included in the stamp duty are the registration charges, which are the total area of construction for individual homes as well as surrounding areas, in the case of flats. The government determines and takes into account the minimum value at which a plot, property, or house must be registered. Registration charges and stamp duty are directly proportional to the property’s market value. Stamp duty charges are also affected by whether the property is urban or rural. State and central taxes are also included in your stamp duty. Factors That Determine Stamp Duty If you are looking for a house, stamp duty charges need to be taken into account. Calculate your stamp duty through reputable institutions such as PCHF. This will help you get an idea of the amount you need to pay. The stamp duty shall be calculated based on non-judicial stamp paper and the prevailing rate for the same. Another aspect you need to keep in mind is the property value. The value of the property determines the stamp duty that shall be charged. [B-02] The Bottom Line Stamp duty is an important thing to keep in mind while transferring property. It is a legal document stating that you have registered as a property owner. Hence, make sure you pay your stamp duty on time to avoid any penalty charges. To read more such blogs, head to the Piramal Finance website and learn about other loan options.

08-11-2023