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Home Loan

What You Need To Know About Property Loan

Buying a property is one of the biggest investments an individual can make. One option for financing a property purchase is applying for a loan. In this blog, we’ll be discussing everything you should know about property loans in India. [B-01] What is a Property Loan? A property loan is a type of loan used to finance a real estate purchase. Property loans are usually issued by banks or other financial institutions. They are typically secured by the property itself. This means that if the borrower defaults on the loan, the lender can sell off the property and recoup its losses. Property loans are typically repaid over a long period. They often have relatively low-interest rates. For these reasons, property loans are an attractive option for many homebuyers. It is important to know that a property loan is a significant financial obligation. Hence, borrowers should only take on as much debt as they can afford. Benefits of a Property Loan There are several benefits to taking out a property loan: A property loan can help you to buy a home or invest in real estate. The interest rate on a property loan is usually lower than the interest rate on a credit card or personal loan. A property loan can be used as collateral for other loans. A property loan is tax-deductible. A property loan can be paid off over a long period, which can help to keep monthly payments low. How to Apply for a Property Loan? Applying for a property loan in India can be complicated and time-consuming. In addition, the application process can vary depending on the lender. However, there are some general steps that borrowers can follow to make the application process easier. First, borrowers should research the different types of loans available and compare interest rates, fees, and eligibility requirements. Next, they should gather all of the necessary documents, including proof of income, tax returns, and bank statements. Once they have everything in order, they can begin the loan application process. This typically involves submitting an online form or contacting the lender directly. Finally, borrowers should be prepared to answer questions about their finances and provide additional documentation if required. By following these steps, you can increase your chances of being approved for a property loan in India. Property Loan Documentation Applying for a property loan can seem like a daunting task, but it doesn’t have to be. One of the first things you’ll need to do is gather all the necessary documents. This includes documents like your tax returns, salary slips, and bank statements. The lender verifies your income and assets through your documents. In addition, you will need to provide proof of insurance, as well as the deed to the property you’re looking to purchase. If you’re self-employed, you may also need to provide additional documentation, such as a profit and loss statement. Once you have all your paperwork in order, you’ll be one step closer to getting the loan you need. Property Loan Interest Rates in India When it comes to taking out a property loan in India, you will find that interest rates can vary greatly. In general, banks tend to offer the lowest interest rates, although this is often subject to a number of conditions, such as a high credit score. Buyers who are not able to meet these conditions may find that they need to look elsewhere for a property loan. Housing finance companies are another option, although their interest rates are generally higher than those offered by banks. However, housing finance companies are often more flexible in their lending criteria. This makes them a good option for buyers who do not have a strong credit history. Ultimately, it is important to compare all of the different options in order to find the best deal for your individual circumstances. Factors That Determine Property Loan Interest Rates Economy, inflation, the type of loan, and the lender are some factors that determine interest rates on property loans in India. The economy is perhaps the most important factor, as it impacts both inflation and the availability of credit. Inflationary pressures can push up interest rates, while a weak economy may lead to lower rates in an attempt to stimulate borrowing. The type of loan also plays a role, with variable-rate loans typically having higher interest rates than fixed-rate loans. And finally, lenders often set their own rates depending on their cost of funds and desired return. As a result, property loan interest rates can vary widely depending on these and other factors. Parting Words Home buyers should do their due diligence on both home loans and property loans to find the best option for them. It is important to read the fine print and understand all the terms and conditions before signing any contract. [B-02] Property buyers should also factor in other associated costs such as stamp duty, legal fees, etc. Taking all these into consideration will help you make an informed decision about which type of loan is best for you. We hope that now you are all clear about property loans. If you want to read more such articles, check out the Piramal Finance website.
08-11-2023
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Business Loan

MSME Loan - An Ideal Choice for Startup Businesses

The Government of India has launched many schemes in the form of loans and subsidies to help and promote individuals in their business ventures. One of them is the MSME loan scheme. Its mission is to finance and support medium-sized, small, and microbusinesses. Do you also want funds from the MSME loan for your startup? Well, this article will help you navigate through it in detail. In this article, we will discuss the MSME loan scheme, why it was introduced, its benefits, and how to get one for your new business. [B-01] What is the MSME loan scheme, and what is its primary objective? The MSME Ministry of India is an individual body. It has executed and implemented the MSME loan scheme for the betterment of emerging small businesses. This loan system provides unsecured loans to individual, small business units to help them meet their business-related expenses. This is its prime objective. Not only the government, but private financiers and private banks have also started giving MSME loans to individual, rising businesses. The main differences between government and private MSME loan schemes are the interest rate of the loan and the loan amount. This loan has self-tailoring features. This means you can get an MSME loan scheme as a short-term loan scheme, a medium-term loan scheme, or a long-term loan scheme. You can take it as a cash credit, letter of credit, working capital loan, etc. You can use this lump sum amount to buy raw materials, use them in transportation, or pay for any services. What are some of the exclusive benefits of the MSME loan scheme? Here are some of the exclusive benefits of getting an MSME loan: Low rate of interest: Small and microbusinesses are charged low interest rates by banks. This is to ensure that the minimum amount is spent on repaying the loan and the maximum amount goes into funding the business venture. The rate of interest for MSME loans in India is somewhere in the range of 10 percent to 25 percent per annum, with an exception of 1 to 1.5 percent by some lenders like FlexiLoans and ZipLoan. Accessibility: MSME loans in India are highly accessible and easy to apply for. The whole process is hassle-free, with serious exemptions. This makes it an ideal loan system with the fewest cons. Collateral-free: It is an unsecured loan system. There is no requirement for collateral, a security deposit, or a guarantor. If you don’t have any of those, you don’t need to worry about your loan getting sanctioned. This decreases the burden on small and microbusinesses. It helps them see beyond this. High flexibility: MSME loan schemes are also a short-term affair. You require them only to cover your short-term requirements. An MSME loan isn’t a long-term commitment. This enables you to easily focus on developing your business. The long tenure of repayment: The tenure of repayment is not fixed for every bank, but it can often be started at 3 years and stretched up to 15 years. This seems like a reasonable amount of time. You can repay your loan within this period in the form of instalments. High loan amount: If you get your MSME loan sanctioned, your loan amount can go up to Rs 50 lakh. You can use this in your business venture. You can use it to buy new types of machinery, and raw materials, expand your manufacturing, hire more workers, and pay for other services. What is the eligibility to get an MSME loan in the first place? Here are some of the eligibility requirements to help you get an MSME loan: Type of business: It is the type of business that decides whether you are eligible for MSME loan schemes or not. The types of businesses that are eligible for MSME loans are: Manufacturing sector Service sector Any form of non-farming activity Business experience: In your current business, for which you are applying for the MSME loan, you must have a minimum of one to three years of business experience. This is due to the fact that you must demonstrate to the banks that you have extensive experience in the business venture in question. Business turnover: A business turnover of about 12 lakh rupees per year is the benchmark for an MSME loan. However, it is again very subjective because different banks have different criteria. Credit score: It is a common analogy that a good credit score will increase your chances of settling on a better deal on any type of loan. This stands to be true here also. If your credit score is 750 or more, that is always a plus. This increases your chance of getting a larger loan at a lower rate of interest. Clean loan history: If you have been regular at paying your previous debts, then you are always a way ahead. Banks look for candidates who have a clean track record and who pay their instalments regularly. [B-02] Conclusion: The interest rates from the top banks for MSME loan schemes range between 8.5% to 15% per annum. Even some of the popular banks go lower than that with increased tenure of repayment. You should use calculators in this case, where you can spin different loan amounts and interest rates to see what suits you best. You should focus on improving your credit score, improving your business venture, and increasing your business experience to make a better pitch and get a decent loan. If you prefer consuming articles and blogs on these topics, you can have a look at the official website of Piramal Finance. They have some amazing content on loans, investments, financial consulting, SIPs, etc.
08-11-2023
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Home Loan

What Are The Importance Of Mortgage Loans You Need To Know

Everyone will not have sufficient funds at all times. Sometimes, there will be an urgent need for money to meet the requirement. In that situation, you can think of a mortgage loan. In this article, you will find information about why loans against property are important. [B-01] What is a Mortgage Loan? In simple words, the term “mortgage” means submitting something as a guarantee for availing of a loan. A mortgage loan is a loan against any immovable property. An immovable property for a mortgage loan includes houses and commercial properties. This immovable property will be used as collateral (pledged as security). A mortgage loan is sometimes referred to as a loan against property or claims on property. Banks and other financial institutions generally provide this property loan and are referred to as lenders. These lenders will provide you with the principal loan amount and charge interest for the same. What is the process for applying for a mortgage loan? If you require funds to start your business, you can approach banks or other financial institutions for a mortgage loan. You should submit non-agricultural property as a pledge to get a mortgage loan. You also have your house, which is half-built in your town. You can now submit this house as a security (collateral) to the lender. The lender will use this as collateral and will provide you with a loan for 60-70% of the actual value of your property (house). Now you will pay the interest for the amount that you received. If you fail to repay the loan on time, the bank will have the right to sell or auction your property. The bank will get funds from doing so because the bank has the right over your pledged property. What properties will be accepted under a mortgage loan? The properties that are accepted to get a mortgage loan are as follows: Property under construction Fully-constructed property Self-occupied property Rented or unoccupied (vacant) property Lenders will not accept your agricultural property as a security or collateral for the mortgage loan. Above all, the most important requirement is that the property you use as a pledge/ security should be free from all legal issues. What is the eligibility to get a mortgage loan? To get a mortgage loan, you must first be an Indian citizen. The property that you submit as a security should be non-agricultural. You must be a salaried or self-employed person to get a mortgage loan. This will be calculated based on your annual income. This eligibility differs from bank to bank and from institution to institution. You must have a good CIBIL score. It is generally advised to have a CIBIL score of more than 700. What are the advantages of having a mortgage loan? Loan amount: You can get 60-70% of your property’s value as the principal amount. This is subject to change, and some lenders will even provide 80% of the value of your property. Lower interest rate: The interest rate for a mortgage loan is generally lower when compared to other loans. Usage of funds: The principal amount you get for the loan against a property can be used for personal and business needs. Flexibility in paying interests: Even within mortgage loans, there are a few types (fixed type, floating type, and hybrid type) to repay the interest rate. So you can choose as per your preference and personal choices. Longer duration loan: As the period for a mortgage loan is usually longer (between 20 to 30 years), your EMI will also become lesser. Thus, it is a very cost-efficient option. Pre-closure of loan: If you want to close the loan by paying the amount before the fixed tenure, it is possible. But the lender may charge you some extra amount as a token of penalty. The extra amount charged is subject to changes. Will increase your credit score: Credit score is the most important factor in improving your financial trustworthiness. After availing of a mortgage loan, if you pay the interest regularly, you will definitely have a chance to improve your credit (CIBIL) score. *Click this link to know more about your CIBIL score and its advantages. What will happen if you do not repay the mortgage loan on time? This is the most important thing you must know before taking a mortgage loan. If you fail to repay or do not on time, the lender (banks or other institutions) will take action on your pledged property. As you have pledged your property as a security to the lender, the lender will have the right over your property. The lender may either foreclose your loan or auction your property. So you have to be punctual in repaying the mortgage loan. [B-02] The bottom line We hope that you are now aware of what exactly is a mortgage loan, its features, and its importance. Always remember that a mortgage can make or break your credit score, which is why you must be very careful while applying for one. Availing of a mortgage loan with Piramal Finance is a safe option. If you have any doubts, contact Piramal Finance, and we will guide you through every process. We are happy to assist you. You can visit Piramal Finance‘s website for more information on home loans and related topics.
08-11-2023
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Personal Loan

How Debt Consolidation Loan Works In India

There is no doubt that a debt consolidation loan can help you merge all your existing debts into one loan. It makes it easier to repay what you owe. But if you are not careful, you may end up worse off than earlier! You should make sure you know how debt consolidation loan works in India. [B-01] What is a debt consolidation loan? A debt consolidation loan is a one-time loan that pays off all your unsecured debts (e.g., credit cards, personal loans, or payday loans). The interest rates on these loans are usually much lower than the rates you pay for other forms of debt. For a debt consolidation loan in India, you can use your house, land, furniture, car, or any other asset as security. The primary goal of this loan is to consolidate all of your loans from various lenders. It enables you to make one single repayment for the whole amount at the end of the term. Your monthly payments will be reduced as a result. Once you have consolidated all your debt into one payment at one interest rate, tracking how much money you owe every month becomes easier. Ensure that you repay your monthly instalments on time. Debt Consolidation Loans by Piramal Finance Piramal Finance offers debt consolidation loans for people who owe many creditors a lot of money and want to avoid bankruptcy. Piramal Finance provides debt consolidation loans ranging from Rs 25 lacs to Rs 3 crore at 11.5% per annum. It allows you to apply for this loan against residential, industrial, or commercial property. Piramal Finance allots you a relationship manager who assists you throughout the process. Other benefits of opting for a debt consolidation loan from Piramal Finance are that they offer doorstep service, higher loan amounts, and quick sanctions. Indian citizens between the ages of 21 and 70 can apply for this loan. You can be a salaried employee of a government organisation, PSU, private firm, or NGO. Self-employed people can also apply for a loan, provided that they are qualified doctors, business owners, partners in a firm, or directors of a closely held private company. You need minimal documents like an ID, an address, income proofs, Form 16, bank statements, and collateral papers. How Does a Debt Consolidation Loan Work? Some lenders offer personal loans designed to consolidate student loans, credit card balances, and other types of debt. The first step is contacting a lender who provides this type of financing, like Piramal Finance. You can find out how much they charge for the service. The next step is filling out an application form, giving information about your income level, credit score, and how much cash you need for the loan. A debt consolidation loan works in the following way: Loan TypeA home equity loan is the most common way to apply for a debt consolidation loan in India. Home equity loans are usually unsecured and not arranged by agents. You can apply directly to a bank or an NBFC. In some cases, you can take out a loan of this type for as little as 10% of your home’s value; in other cases, you can borrow 100%. Terms and ConditionsIndia’s debt consolidation loans are usually private loans between two parties, namely the borrower and the lender. In the case of government-sponsored loans, the government decides the interest rate and the loan amount. EligibilityYou must demonstrate some legal responsibility for the collateral property. So, you must show your legal capacity to sign mortgages and similar documents. Loan AmountA personal loan is generally limited to the amount in your designated savings or investment account. On the other hand, the amount you can borrow with a debt consolidation loan depends on your financial situation. A large credit card bill may prevent you from having a high loan amount. Allows SavingsSince the interest rate on a debt consolidation loan is usually lower than the rates you pay for your various debts, you may end up saving money with this loan. You can even be left with more disposable income to spend on things other than debt repayment. Prohibition on Borrowing MoreA debt consolidation loan restricts the lender from borrowing more money during the loan tenure, which could range from 3 months to 5 years. This helps you emerge from all debt and manage your finances with some accountability. [B-02] Conclusion Owing money to too many creditors might drown you in a never-ending cycle of borrowing money and repaying it at high interest rates. Debt consolidation loans are a lifesaver for people struggling with debt. By taking out such loans, you can pull yourself out of a financial crisis. With Piramal Finance, you can consolidate your debts into one loan with one monthly payment. It can help reduce stress and save more money every month. Paying off your debts is a vital step in foolproof fiscal planning that should not be overlooked. The interest rates depend on your credit history and vary from person to person. So, if you want to apply for a debt consolidation loan, visit Piramal Finance and check out all their offers before making any decisions. You can also read more about such financial topics or check out more such products and services on their website.
08-11-2023
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Personal Loan

Reasons To Choose A Gold Loan For Emergency

Indian families collectively own almost 25,000 tonnes of gold, according to the World Gold Council. The sentiments of people attached to gold are very personal. Gold jewellery, coins, and other articles often act as gifts between families, and individuals. This is one of the main reasons gold loan is a big thing for people. But if you analyze the benefits of gold loans you can make the most out of it. For the duration of the loan, the bank uses your gold as security for a gold loan. Once you have fully repaid the loan, the bank will return your jewellery. In India, gold has changed from being a treasured metal used to create exquisite jewellery to becoming one of the most well-liked investment options. A gold loan can help you meet short-term fund requirements. [B-01] Reasons to Choose Gold Loan Here are some reasons why the Gold loan is considered better than any other loan: Interest rates Regardless of the financial circumstances, borrowers usually appreciate cheap interest rates. Gold loans often represent a reduced lending risk for financial organizations since they are secured. There is less strain on your finances when repaying the loan because of the low gold loan interest rates. Personal loans, on the other hand, will have higher interest rates because they are unsecured. The quantity and carat of the gold you have pledged determines the gold loan interest rate. No restriction on the purpose of spending The loan amount is available for a range of requirements. It may be personal, a sudden medical need, or a work obligation. You don’t need to state the purpose of the fund. You can use the loan amount on a variety of things, including your child’s wedding, a medical emergency, your vehicle’s down payment, company expansion, agricultural needs, and more. Quick approval and disbursement The quick approval and payout procedures make the gold loan one of the best loans for emergencies. You may apply for this loan option by visiting the branch with your gold jewellery, and you can receive the maximum loan amount in one day. Not many documents are required for the authentication process. The loan amount will then be deposited into your account. Minimum paperwork getting a gold loan is simple and requires little documentation. All you will need are some simple KYC paperwork and passport-sized photos to get started. Due to the fact that they don’t require income verification, gold loans are a great emergency credit choice. To apply for a gold loan, you don’t have to provide a lengthy list of supporting documentation. Mandatory documents like a passport, driving license, voter’s ID Card, Adhaar card, PAN Card, passport-size photographs, etc would be required. Flexible repayment You may have more than one repayment option available to you if you choose a gold loan, making it simple for you to pay back the loan amount. The Gold loan does not impose rigorous qualifying requirements, like income proof or CIBIL score, unlike other loans. In addition to an EMI, a number of well-known lenders also accept an advance interest payment. As an alternative, borrowers can pay for everything at once. You may pick between four basic types of repayment options: the EMI method, interest payments made at regular intervals (monthly, quarterly, semi-annually, or yearly), upfront interest payments, and the bullet repayment method The best gold loan plan will offer you the most simple repayment method. High Loan Value A gold loan‘s relatively high LTV (loan-to-value) ratio, which enables a greater loan amount during financial necessities, is one of its benefits. You may borrow up to 90% of the total value of your gold with a gold loan, with a minimum loan amount of 75%. By pledging more security, borrowers can enhance the gold loan amount. As a result, lenders had to make sure that their risk management and valuation procedures remained reliable, whether they were banks or NBFCs. Factors affecting gold loan interest rates Although applying for a gold loan is simple, you should be aware of the factors that affect the gold loan interest rate: Principle Amount: The amount of loan you need affects the gold loan interest rate. The higher the loan amount, the higher will be the interest rate. So, before you decide to get whatever amount you can get via gold loan, calculate you EMI with the interest and make sure you can afford to repay it. Market Price: Because there is less credit risk, lenders might be able to offer better interest rates when the price increases. People frequently invest in gold because it serves as an inflation hedge since the value of the currency declines during inflation. As a result, people can benefit from lower interest rates and increased gold prices. Income: Before issuing a loan, lenders will like to know your income. Higher income will assure the lender of timely repayment. Hence, they will charge you a lower gold loan interest rate. You can get a lower interest rate if you have a steady and high income. [B-02] Conclusion Consequently, for individuals who own gold and need money for a variety of objectives, a gold loan is a great option. Keeping family gold reserves in a locker leaves them useless. The same gold, nevertheless, can save you in a pinch. For all of these reasons, many middle-class people find the gold loan alternative more advantageous. We may therefore conclude that gold loans are a quick and practical option to cover your financial need. Check the best gold loan options at Piramal Finance which can save you from all the hassle. Easy loan processes, fast reimbursement, and tons of other facilities are available. For more details check the website now.
08-11-2023
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Know More

Area converter – area conversion using online

Living in such a diverse nation as India, one could have trouble adjusting to conversation metrics that vary by region. Using hand computations can be challenging because they do not guarantee accurate results. The professional area conversion calculator tool assists you in reaching correct conclusions regarding the worth of any property or piece of land. These calculations are particularly useful for those considering applying for a loan against the property because they enable them to determine the worth of their landed property. Read on to know how the Area Conversion Calculator works and the different measurement units used in India. [B-01] Understanding Area Conversion Calculator. An Area Conversion Calculator is a useful tool that assists you in calculating land areas by converting them to other metrics quickly and easily. The area conversion calculator is used to convert various units of area measurements. The common units of land measurement are Hectare Acre Square Meter Square Yard Square Foot Bigha Biswa Katha Ground Square Inch Square Kilometer Square Mile Benefits of Using Area Conversion Calculator. Here are the benefits of using an online Area Conversion Calculator The Area Conversion Calculator tool guarantees quick, error-free calculations. The Area Conversion Calculator makes it possible to convert the land area into some unknown land units. Making selections about real estate while fully informed of the land’s actual value is possible using the area conversion calculator. Most Common Land Measurement Units in India India has a wide variety of land measurement units which differ depending on the location. Use the area conversion calculator to convert the particular unit to the desired units. The most well-known land metrics in India are listed here in brief: Hectare Hectare or ha measures an area of square land with each side of 100 meters. It is used as a Standard International (SI) unit even after being a non-SI unit. Hectare is a unit that measures large land areas like forests, agricultural lands, etc. Acre Acre is a land metric popularised mainly in the UK and US. However, Acre is used in India to measure the large plot areas like farmland or estates. Bigha In the Indian states of Punjab, Haryana, Bihar, Uttar Pradesh, Himachal Pradesh, Uttarakhand, Gujarat, and parts of Rajasthan, a bigha is a traditional unit of land measurement. However, there is no standard size for this unit of measurement. Bigha has two subunits- Biswa and Katha. Its measurement varies according to state. For instance, in West Bengal, one bigha equals 1,600 square yards. However, in Uttarakhand, it is 756.222 square yards. Square Feet A square foot is a standard land measurement unit used worldwide. This standard measurement unit is included in both imperial and US customary units. A square foot is the size of a square, with each side being only 1 foot. Square Meter Square Meter or m2 or sq m is a Standard International(SI) unit. The most commonly used land metric measures an area of square land of side 1 meter each. Square Yards Square Yards, also known as sq yd or yd2, measures the area of square land of side 1 yard (3 foot). This unit of measurement is replaced by a square meter. However, it is still used in India as Gaj. Ground The ground is a land measurement unit primarily used in Tamil Nadu, India’s southernmost state. One ground is equal to 24,000 square feet (203 square meters). Square Inch Square Inch or sq. in is a unit of measurement of the area of square land with a side of 1 inch each. Square Mile A square mile, also known as sq mi or mi2, is a unit that measures the area of square land with a side of 1 mile each. Common Area Conversion Units Used in India. Unit of AreaUnit SymbolsConversion Unit1 Square Metersq. m to sq. ft10.76391042 Square Feet1 Square Inchsq. into sq. ft0.0069444 Square Feet1 Square FeetSq. ft to sq. m0.092903 Square Meter1 Square KilometerSq. km to ac247.10 Acres1 Square YardSq. yd to sq. m0.836127 Square Metre1 AcreAc to gaj4886.92 Gaj1 BighaBigha to sq. yd2990 Square Yard1 HectareHa to ac2.49 Acres1 Square MileSq. mi to ac640 Acres 4 Steps-to-follow for Area Conversion. When working with measuring units from all across the country, the Area Conversion Calculator dramatically simplifies the process. Geographically speaking, there are various ways to measure land, including the acre, hectare, square, etc. Using an online area conversion calculator, you only need to follow these 4-steps to finish your calculations of area conversion: Select the conversion unit you want to use. Select the units of selected measurements. Select the measurement you want to convert from. The calculator will instantly and accurately display the conversion. [B-02] The bottom line There are numerous units of land measurement. Indian land area measuring is based on several state-specific land measurement systems. Typically, agricultural property is measured in acres, whereas residential plots are measured in square feet. You can use the Area Conversion Calculator to convert one measurement unit into another without dealing with the inconvenience of manual conversions. To read more such blogs, head to the Piramal Finance website and learn about the varied loan options.
08-11-2023
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Personal Loan

Which Has a Low-Interest Rate, a Gold Loan or a Personal Loan?

There is no shame in researching loan options if you need financial assistance. Due to the numerous borrowing options, you may find it challenging to decide. Buyers often utilise personal loans and gold as a source of fast cash since they don’t restrict how the loan profits may be used and because they pay out. Creditworthiness is still considered when applying for gold and personal loans, but less so than with higher-profile loans. [B-01] Gold Loan and Personal Loan Gold Loan: When a gold loan is referred to by its other term, a “loan against gold,” you will have a clearer understanding of what it is. To create what is known as a secured loan, the borrower pledges their gold assets and is given a portion of the piece’s worth as the loan amount. The lender then gives the gold deposited back to the borrower when they have paid off the debt in full. Personal Loan: A personal loan functions as a gold loan, except that it is an unsecured loan. Hence there is no need for collateral. The loan amount would often be smaller without a guarantee of repayment, and getting a loan approval will be more difficult. The loan agent will review the applicant’s credit history throughout the application process for both loans, although gold loans are approved regardless of the applicant’s credit history. What is a Low-Interest-Rate Personal Loan? Personal loans with low-interest rates often have annual percentage rates (APRs) under 12%. Generally speaking, banks, peer-to-peer lending platforms, and credit unions provide personal loans as short-term loans. The money borrowed may be used to pay off credit card debt, make a large purchase, or even go on vacation, depending on who it is borrowed from. There is usually a defined payment duration, often between three and five years. However, loan lengths vary depending on the lender. These are instalment loans, so you make monthly instalments to repay the money. It’s a good idea to determine your debt-to-income ratio, or DTI ratio, before submitting a loan application. This ratio is calculated by dividing your total monthly debt payments by your total gross monthly income. Low DTI ratio candidates are seen as more dependable borrowers by lenders. Gold Loan Interest Rates By using gold or gold jewellery, coins, or other gold items as safety with a bank or lender, it is possible to get a gold loan to take care of urgent financial demands. After the loan is repaid, the gold items kept as proof are returned, and the bank charges interest on the amount borrowed. The gold loan low-interest rates start off at only 7.00% per year, despite being a secured loan. Tips to Avail Personal Loan at Low-Interest Rate The following are a few crucial factors to take into account to get a personal loan low-interest rate: Obtain and maintain a credit score of 750 or above. Look for offers of pre-approved, immediate personal loans from banks and NBFCs. Consult the banks or NBFCs with whom you already have loan and savings accounts. Keep note of lenders’ interest rate reductions over the holiday season. Check and compare personal loan offers from numerous lenders by going to online financial markets. Let’s examine these two loan options to aid borrowers in making their decision: Process Duration To complete their loan application, borrowers of personal loans must submit their paystubs, ITR forms, and numerous other papers. Since it takes some time to verify these papers, personal loans take 2 to 7 days to disburse after the loan application. Some lenders claim that they can process personal loans quickly. Sum Borrowed Although some lenders claim they were accepted for loans up to Rs 40 lakh. Personal loan amounts often range between Rs 50,000 and Rs 20 lakh. This often depends on the loan’s term and the borrower’s ability to pay back. In the case of a gold loan, the loan amount is based on the value of the gold used as proof since it is a secured loan. The RBI has, though, forbidden lenders from granting gold loans that are more than 75% of the gold’s value. Mortgage Rate Personal loan low-interest rates vary from 8.45% to 26% annually (p.a.). Depending on the loan length, the LTV ratio, and the kind of repayment option chosen, the interest rate on gold loans may vary from 7.25% to 29% per year. Long-term loans or loans with greater LTV percentages often have higher interest rates on gold loans. The difference in interest rates between a personal loan and a gold loan may not be significant for individuals with strong credit. However, gold loans may be a more affordable choice for those with bad credit. Loan Duration Personal loans usually have terms of one to five years, while some lenders offer terms of up to seven years. For gold loans, the term may be seven days to three years, with some lenders offering lengths of up to five years. Gold loans may be a more cost-effective option for clients who are certain they can pay back their loan within one or two years since longer loan terms result in higher interest expenses. For those searching for a bigger, longer-term loan, a personal loan low-interest rate would be a better choice. Payment Alternative EMIs, which include interest and principal components, are used to repay personal loans. On the other hand, gold loans provide a variety of repayment choices in addition to an EMI-based repayment plan. For instance, some gold loans allow borrowers to pay only the interest portion each month, leaving the principal amount to be repaid on the loan’s maturity date. In contrast, other loans give borrowers the choice of paying their interest portion upfront during the loan disbursal and the principal portion at the end of the loan term. Therefore, people experiencing short-term cash flow inconsistencies and repayment difficulties may benefit from the non-EMI alternative of gold loans. Processor Charge Personal loan processing fees range from 1% to 3% of the loan amount. In the case of gold loans, some lenders impose a fixed processing cost of as little as Rs 10, while others impose a fee ranging from 0.10% to 2% of the loan amount. Therefore, evaluate the processing fees when deciding between the two loan choices. You may calculate the cost of obtaining a loan by considering the processing fees. [B-02] Conclusion The borrower’s demands and profile will determine which option is best for them, between a gold loan and a personal loan. Personal loans will be more acceptable for people who need larger loan volumes for longer terms. Gold loans will benefit borrowers who need more repayment flexibility or have a low credit history and need to get personal loans at competitive rates. Visit Piramal Finance for related posts if you want to learn more about personal loans low-interest rates and gold loans. You may look at their offerings as well.
08-11-2023
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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
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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
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