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Tax

Personal loan interest rate is tax deductable or not?

Personal loans are unsecured loans that are great when you need money but don’t have anything to put up as collateral. These loans are often not taxed since they are not considered part of your income when completing your IT reports. However, the loan must come from a legitimate source, such as a bank or other money firm, as loans from unknown sources may be taxed as income. As a result, you may claim an income tax deduction. There are, however, certain limits tied to it. People considering a loan may question whether such loans are tax deductible. In a nutshell, the answer is yes! Many consumers are unaware they might get tax perks on personal loans and lose out on refunds. The final use of the loan amount will determine whether or not you get a personal loan tax benefit. [B-01] Is Personal Loan Tax Deductible? No, in most cases, but there are a few exceptions. Personal loans may be tax-exempt if the revenues are used for firm costs, qualifying education costs, or eligible taxable assets. A personal loan will not impact your taxes if you do not use it for one of these reasons. A personal loan may help you save money by consolidating high-rate debt or offering the cash you need to cover an urgent or surprise cost. While there are exceptions, personal loans do not affect your taxes. This is why: 1. It is not earnings The money you get from a personal loan is not added to your taxable income, so you don’t have to pay taxes. 2. It is just for personal use Loans are often used for personal purposes, and personal costs are typically not deductible. 3. Even when it is permitted, only interest is tax deductible Certain forms of loans may be eligible for a personal loan tax deduction. Yet, you may deduct only the interest portion of the loan, not the whole amount. Is Personal Loan Interest Tax Deductible? The amount given back to the lender in interest is tax-deductible and can be written off as payments for work costs. Firm costs are costs incurred to create income from a firm and may be subtracted from total revenue to determine the taxable amount. In short, a user may deduct the rate from firm costs to know the taxable amount. It is an excellent tool for small firm owners and startups to reduce their tax obligation and use the profits to develop their operations. Yet, the principal amount borrowed from the lender is not tax-deductible and cannot be claimed as a business expense. The whole amount taken as a firm loan is the principal amount, and no tax is due on the main amount. It is a component of the total salary, and the firm owner pays tax on the net income received. Personal Loan Tax Benefit The Indian Income Tax Act does not mention any special personal loan deduction, but there are tax breaks for other regular loans such as education, home, etc. Yet, this does not rule out the possibility of obtaining tax savings via a personal loan. As there is no mention of a personal loan deduction in the Indian Income Tax Act, the reason the loan was obtained will be taken into account when granting tax deductions for a loan. In the case of a bank loan, tax benefits are available only if the loan was taken for a purpose that qualifies for an income tax deduction. The following situations will qualify for a personal loan tax deduction: For Commercial Purposes If a person uses a personal cash loan to invest in his/her firm, the rate on the loan becomes a liability for the firm. In this case, the rate paid is an expense that can be deducted from the firm’s net profit. This lowers the amount subject to net tax profit. Besides, no limit has been set by the Income Tax Act on the amount of a firm’s tax-deductible liabilities. The person’s interest is tax deductible if the loan is used for business purposes. For the Purchase or Building of a Home Section 24 of the Income Tax Act, titled “Deductions from Income from House Property,” allows for tax breaks. Section 24 mentions that the rate paid on funds obtained through a bank loan can be deducted from net taxable income from residential property. Section 24 will apply if the funds are used to buy or build the same property. Education Costs If you use a personal loan to fund your higher education, you can claim tax breaks under Section 80E of the Income Tax Act. This perk only applies to loan interest payments, not principal, but there is no upper limit on the amount of the rate that can be claimed as deductible. Section 80E currently allows for a personal loan tax deduction of up to Rs. 1.5 lakhs for education-related costs incurred by you, your spouse, or your children. And you may also claim savings if you are a student’s legal parent and have taken out a loan in their name to assist in funding their education. To Purchase Assets Assume the loaned money is used to purchase jewellery, stocks, or other non-residential assets. In such instances, the user cannot claim immediate tax relief when acquiring the assets. The rate paid on lent money used to purchase the item, on the other hand, is added to the overall cost of obtaining that asset. As a result, if the debtor sells an asset, the paid rate is subtracted from the capital gains. It is reduced as part of the buying price. This lowers the taxable profit. [B-02] Conclusion Even though the Income Tax Act does not explicitly state a personal loan tax deduction, you may profit from them. The main factor when providing tax deductions on personal loans is the reason you obtained the loan, never the original amount. Finally, you may claim tax deductions if you use the personal loan balance for tax-favourable reasons. Before deciding on a loan, be sure you understand all of the details. To learn more about the personal loan tax deduction, visit Piramal Finance for related blogs and explore their products and services.

08-11-2023

Business Loan

Loan Against Commercial Shop In India

If you are looking for sizeable funding, you can opt for a loan against commercial shop. You can use this property loan to fund your expansion or buy expensive machinery. We have gathered the best and most relevant information about property loans. In this article, we will tell you why it is a good idea to collateralize your commercial property against loan. We will also tell you how to apply for a loan against commercial shop. [B-01] What is a loan against commercial shop? A loan against a commercial shop is a type of loan in which you mortgage your commercial property against loan.You can get approximately 70% of the current market value of your mortgaged property as property loan amount. You can use a rented, self-occupied, or vacant Office space Shops Showrooms You can use this loan amount to buy raw materials or invest it in advertising. Banks, NBFCs, or digital lenders provide loan against commercial shop. You can pledge ready-to-use and fully constructed commercial property against loan. These properties should be litigation-free and must have all the required permits and approvals from the respective authorities. However, you can’t use under-construction properties to avail of this loan. Eligibility Requirements for Getting Loans Against Commercial Property To qualify for the property loan, you must meet the requirements listed below: You must be an Indian national. You must have a regular income. The commercial property should be fully constructed. There shouldn’t be any legal concerns. You must have a credit score of 750 or more. Documents Required for a Loan Against Commercial Property Documents required to apply for this property loan are: Address and identity proof: Aadhaar card, PAN card, passport, voter’s ID, or driving licence You can use one of these documents for identity and address proof. Income Proof: You can use ITR filings and bank account statements as proof of your income. Documents related to property: For pledging property against loan as collateral, you will also need documents related to the property. It could be the title deed, buyer agreement, certificate of occupancy, or letter of allotment. Your lender could ask for more documents, so make sure you have all the documents that you might need to obtain this loan against commercial shop. Things to Consider While Going for a Loan Against Commercial Shop Taking a property loan against your commercial shop might sound like a good idea. However, it is not always so. Here are some things you should consider before you put your property against loan as collateral. Collateral To be eligible for a loan against commercial shop, you must first own a business property. It may be a store, office, factory, or another type of commercial building. According to the lender, the requirements can change. To get the loan, your business property will be mortgaged, so you should have legal ownership. Payback period The maximum payback period is 15 years. However, it can vary depending on the policy of the lender you have chosen. Pick the payback tenure you are comfortable with. You are being charged interest Generally, if you have mortgaged property against loan, you get a cost-effective interest rate. So, compare the interest rates various lenders are offering. Make sure you are receiving the most reasonable offer for your asset. People tend to miss out on a lot in this case. Find a bank or lender who will provide you with an affordable interest rate for property against loan. It would be best if you put some effort into your research. Even insignificant variations in interest rates have a significant impact on your ability to repay the loan in the long term. There are additional costs. Loans of any kind come with additional costs. There will be stamp duty and state fees. Certain lenders may also charge service fees, prepayment fees, and statutory fees. So, it’s crucial to include all those fees when calculating the actual cost of taking out the loan. These fees can appear insignificant. However, they have the potential to reduce the cost of borrowing the loan and have a role in your capacity to pay it back. Processing Fees You would have to pay certain fees, generally referred to as “processing fees.” They would cover things like registration fees, legal costs, brokerage fees, and loan assessment fees. You will have to pay a processing fee of 1% to 2% of the loan amount, depending on the lender. Real Estate Appraisal Loan against commercial shop is given in exchange for collateral, as the name implies (in this case, a shop). The bank’s representative values your property against loan to establish the maximum loan amount the bank is willing to offer. Also, the bank bases the loan amount on the property’s current value. The maximum loan amount that you can receive is also 70–80% of the value of the property. You should assess the loan-to-value (LTV) ratio offered by banks in light of these considerations. Also, check the value of your property and see if there are chances it will go up shortly. If there are chances of a rise in your property value, waiting will get you a higher loan amount than now. [B-02] Summing-up: This article aims to provide information about factors that you must know before going for a loan against commercial shop. Before making the decision, know all about it. Pay attention to the information mentioned before while making any decisions. Also visit, Piramal Finance for more in-depth, educational articles.

08-11-2023

Tax

Simple tips to manage your personal finance in 2022

How easy would life be if someone could give us a magic formula to manage all our personal finance? While this might not be realistic, some efficient planning could work like magic for this. In this article, you will find some tips to manage your personal finance efficiently. Personal finance is crucial for achieving financial freedom. At every stage of our lives, we must prepare for and manage our finances. We wouldn’t be able to effectively pay our debts off and free ourselves from a life of servitude without precise planning, which would make us slaves to debt and credit. Living paycheck to paycheck is a very challenging way of life. Even if we have a job that pays for our daily needs, unforeseen fees like expensive medical bills or car repairs could have a terrible impact on our finances. Consequently, having enough personal finance management abilities can help us handle our money well. Additionally, it ensures a bright financial future. [B-01] The following advice will help you define your financial objectives: 1. Establish long-term objectives: You must establish long-term objectives such as paying off debt, purchasing a home or retiring early. These objectives are distinct from your immediate objectives, such as setting aside money for a romantic date. Establish short-term objectives such as sticking to a budget, cutting back on spending, paying off debt or refraining from using credit cards. Prioritize your objectives to aid in the development of a financial strategy. 2. Recording your strategy: The secret to success is your budget. You will have the most influence over your financial destiny using this tool. The success of the rest of your plan depends on your budget. You should continue assisting with long-term objectives, like retirement savings. Another important element in achieving financial success and reducing stress is setting up an emergency fund. Keep these items in mind when developing a financial plan: 1. Eliminate unnecessary costs : Pay bills on time to avoid late fees and extra tax, etc., set up reminders or schedule future payments to avoid fault. 2. Cut on day-to-day costs: Savings is what makes the future peaceful. Make a list of all necessities and prioritize your personal finance. This will help you save money on all the extras. Try getting housing bills like water, gas, electricity, and internet in terms of a plan. It makes the overall deal better in terms of both service and money. 3. Track your spending: Get out of debt and keep it that way. It is very important to know where all your money is going. Thus maintain a record of your personal finances. Try using an online payment mode to keep it easy. You can also stick to traditional pen-paper records or excel spreadsheets. Eliminating debt should be the primary priority. For many people, debt presents a significant barrier to achieving their financial objectives. Additionally, there are certain programs for tracking finances that can be utilized to achieve this more effectively. Here are some pointers for quickly paying off debt: To raise additional funds for your debt repayment plan, sell any unwanted or unused items you have lying around the house. If you want to make quick or long-lasting improvements to your condition, a second job may help accelerate the process and could be required. To have more money for your debt repayments, look for places in your budget where you may cut back. 4. Save for retirement now, regardless of your age: Save in small amounts, which will add up to a surplus in the future. This will also enhance your personal finances and will make you efficient in spending. 5. Don’t be afraid to seek assistance: Work with advisors, gather data and seek clarification on your inquiries. You’ll feel more comfortable financially, and your personal financial stress will decrease as a result. Find a mentor who is ready to assist you in creating and working through your budget over the initial months. This mentor can be useful if you’re feeling overburdened by the budgeting process. Create a personalized financial strategy. Make smart preparations for the financial milestones of life. Use debits over credits: Paying via debits will limit your expenditure and not put a heavy load to return like when paid in credit. One of the best things is you can’t spend more than the amount you have. This gets you out of unnecessary debts. Some advantages of debts are:- Convenient to Use Works as an Emergency Fund Self Protected. Easy to Obtain Sets a Budget 2. Set clear goals to accelerate your savings : List down the things that you need to purchase in the near future. Work out how much money you will need for this. Try keeping a certain amount aside for this. Decide the timeframe which will keep you more motivated and keep track of the saved amount. This will help you boost your personal financial status. Overall tips to improve personal finance management. Create a budget Save first, spend later Set financial goals Start investing early Avoid debt Save Early [B-02] Conclusion: In summary, planning and tracking are crucial to your personal finances. The key to financial success has a personal financial plan. Every stage of life’s financial objectives must be included in this strategy. You must safeguard your wealth. Thus, you must be aware of every expenditure. Every person manages their personal finances to some extent. Finding the ideal balance between income, expenses, savings, and investments is crucial. This harmony will guarantee that the person’s personal financial planning and management are at their best. If you are ready to write your own financial management plan, then don’t forget to visit https://www.piramalfinance.com for more information on personal financial management. You will surely get positive takeaways from here and will be able to excel in your goal.

08-11-2023

Personal Loan

Can A New Employee Get A Personal Loan After Less Than Three Months?

In theory, having steady employment is not required to secure a loan. A loan based on a person’s work status does not exist. Instead, other criteria, including your work status, go into a lender’s decision on whether or not to grant a loan. Some personal loans are doable, provided you have a good credit score and a trustworthy cosigner. If you are applying for a loan as a new employee without a cosigner, your chances of approval will vary from lender to lender. Lenders’ eligibility criteria may include a minimum period of employment in your current or prospective place of employment, such as six months or a year. However, some loan providers don’t care how long you’ve been employed at your current company. [B-01] By following these guidelines, you’ll learn how to improve your chances of getting approved for a personal loan as a new employee. Since you don’t yet have any employment history with your present workplace, you’ll need to find alternative ways to demonstrate your stability and trustworthiness to the financing company. Here are some things you can do to make your loan application less risky for the bank or lender, increasing the likelihood that it will be granted and allowing you to earn a better interest rate on your personal loan. Make sure you have a good credit record. Before approving a consumer loan, financial institutions look at various factors, including the borrower’s income and job history. This means checking your credit score is essential before applying. A low debt-to-income ratio and a history of timely payments are indicators of fiscal responsibility and dependability. If your credit rating is low, you can raise it by being prompt with payments on things like credit card bills and other loans. Wait to Apply There is usually a 3- to 6-month probationary period when starting new employment. If you don’t need the money right now, it’s best to wait until you’ve proven yourself in your new role before applying. Since your credit history will seem better, lending institutions will be more likely to provide you with a loan. Hold off on applying for a loan until after your probationary term has ended to demonstrate financial stability to potential lenders. Apply for a smaller loan amount. The larger the loan amount you seek, the greater the risk for the lender. Consequently, applying for a smaller loan will enhance the likelihood of your application being granted. Because banks are more likely to give you a smaller loan amount. However, if you make a strong monthly salary and stay in a position for a long time, you can also apply for a big loan. Inform your boss The bank or lender verifies the employment information by contacting the current employer. Tell your company in advance if you want to get a consumer loan quickly. Make Direct Contact With Your Lender Any questions about the terms and conditions and other criteria of a loan provider can be answered by calling or emailing the company in question. In addition to the loan application, you may acquire a clear understanding of what they expect, and you may take the necessary actions to be considered for a loan. Acquire the Bare Minimum You need to meet the minimal income and credit score standards that lenders have before they can approve your loan application. Make sure you’re in good standing with the following before submitting your application for financing. Remember the paperwork! Having a good relationship with the loan provider is essential. Therefore, you may also provide details about your savings and assets in your application. The lender’s confidence in your ability to repay the loan on time will increase if you take these steps. If you do not meet the requirements for an unsecured loan, a lender may still offer you a personal loan using them as collateral. Why take a personal loan when you have a new job? You don’t have to put up any collateral to get accepted for a personal loan, and the rates are reasonable. Therefore, it is available to students and recent graduates without collateral who need a loan. Personal loans are short-term, unsecured loans that may be authorised in as little as a few minutes and funded immediately into your bank account. You won’t have to fill out a mountain of paperwork to apply for a personal loan. There is no need to go to any physical location to apply for a personal loan. A loan application may be submitted quickly and simply from the convenience of your own home through a computer or even a smartphone. It’s easy to receive a personal loan, and you don’t need a lot of paperwork. Due to the online nature of the procedure, approval times are significantly reduced. In addition to submitting your identity documents, you will also need to provide proof of your income and living expenses. Your application is accepted after our team reviews the information you provided and checks it against your credit report. Can I Get a Loan If I’m Temporarily Employed? Loans are available, but with fewer choices, for temporary workers. Getting a loan for a temporary job sometimes depends on the applicant’s present employment status and whether or not they already have a letter of employment for their future position. This demonstrates to loan providers that you will still be gainfully employed and able to make payments after the temporary position has ended. Temporary workers with a firm employment offer should expect a smoother clearance procedure than their non-offer counterparts. You may still be eligible for a loan even if you work temporarily and have no permanent job offer. Your eligibility to borrow will depend on your credit history and current salary. [B-02] Conclusions Regarding Borrowing Money When Starting a New Job Lenders prefer borrowers with stable work; thus, a recent job start or no job at all is not ideal when applying for a loan. While an offer letter is a good starting point, numerous other elements will determine whether or not you are approved for a loan. Have any doubts? Contact Piramal Finance for all the financial information.

08-11-2023

Home Loan

Know about the Home Improvement Loan, Eligibility and Procedure

Buying a home is a dream-come-true experience for most people across the globe. Having a home with your name and complete ownership gives you a sense of accomplishment and authority. However, sometimes you don’t need to purchase another home. You can make that work if you already have a house. A certain advantage is that it will provide you with readymade shelter in no time and prevent you from a huge financial investment. Sometimes, the condition of your house might need a touch-up and buying a new house is not the right substitute. And to make that happen, you need a lump sum to improve the aesthetics. So, people tend to take a home improvement loan instead of going for a home loan. A home renovation loan can also give you the experience of living in a new house. You can use the loan amount to upgrade your house’s existing features, upgrade the design, and increase comfort. In today’s article, you will learn about home improvement loans, their benefits, their eligibility to apply for them, and the process of applying for them. [B-01] What is a Home Improvement Loan, and What is Its Significance? Like financial assistance, a home improvement loan is financial assistance that you borrow from a lender for a specific period in the promise to repay the loan amount. The lender charges you a specific rate of interest within which you are bound to repay the loan. These loans are very different from home loans, where you can upgrade the existing features of your home rather than go for a new one. This loan amount can be used to level up your house’s external and internal features. You can use it for various purposes like tiling, flooring, painting, sanitary work, etc. In India, most home renovation loans are flexible and have low-cost options to increase the borrower’s repaying capacity. Now that you know the meaning of the home improvement loan and its significance, you should know about some of its benefits. What are the Benefits of a Home Improvement Loan, and Why Should You Take It? There are plenty of benefits to taking a home improvement loan, and some of them are as follows: Low rate of interest: The interest rate on most home renovation loans is quite low to help you easily repay the debt. The interest rate varies from lender to lender and depends more on the borrower’s credentials and the financial muscle to tackle the instalment payments. The interest rate for a home improvement loan in India is similar to that of a home loan and starts from 6.85% per annum. Lower EMI amount: Another striking benefit of going for a home improvement loan is that you will have to pay a lower EMI amount. A low EMI amount will add no financial distress to your monthly budget, making the entire process less painful. You can easily repay the loan amount without going overboard. Less paperwork: Many banks and other lending institutions do not entertain rigorous paperwork to avoid unnecessary delays. You will be asked for a few legal documents and have to carry out fewer formalities. The long tenure of repayment: The tenure of repayment of a home improvement loan can be as long as a home loan. In many cases, the term to repay the loan for the home renovation can go up to as high as 30 years. What are the Minimum Eligibility Criteria to Go for a Home Renovation Loan? Here is the eligibility you require to go for a home improvement loan: You should have at least completed 18 years of age and should be less than 65 years old to get a home renovation loan. You can both be a resident or a non-resident Indian to apply for a loan for renovation. You can be salaried or self-employed and must either have a permanent or a rented residence where you have lived for at least 12 months. You should also have a decent credit score, more than 700, while going for a home improvement loan. You can either apply for the loan as an individual or jointly, depending on the ownership of the house. How to Go for a Decent Home Improvement Loan in India? The process to get a home improvement loan in India is quite simple; you need to focus on these parameters: Setting a home renovation loan goal Though you can get a higher loan amount which can go as high as INR 25,00,000, you should have a clear goal with what you will do with that money. Since you have to carry out the borrowing cost of the loan, you should take what’s essential instead of going for a huge amount. For example, if you want to convert the house’s attic to a small room or paint and tile your house, you can take as much as required. Explore all the home improvement loan offers In India, plenty of lending institutions provide low-interest rates, low-cost EMI options, and high loan tenure. So, while you are applying for a home improvement loan, you should compare all the offers and choose the best one. Find a lender who has easy eligibility criteria Search for a lender who is less demanding in the eligibility section of a home improvement loan. The eligibility criteria for such loans are complex compared to other types of loans available in the market. See if you can sneak into the easy eligibility category to get a better deal. [B-02] The Bottom Line Renovating your existing house is better than just buying or building another one. You can add some aesthetics to your home by painting, tiling, following, furniture, etc. In that case, a home improvement loan is a better preference than a home loan. It will add less financial stress and will help you keep the advantage of already having a suitable location. You can use a home loan calculator to compare different interest rates provided by lenders to choose the best one for you. To learn more about home renovation loans, you can visit Piramal Finance.

08-11-2023

Home Loan

Factors you need to know that affect your home loan eligibility

A home loan offers the longest payback period of any loan, with a repayment term of up to 30 years. This feature makes it easier for individuals with limited resources to achieve their dream of owning a home. However, lenders carefully assess your eligibility to minimize risks. Here's a simplified guide to the top factors affecting home loan eligibility: Age - Lenders evaluate your age to estimate how many working years you have left. Applying for a loan earlier in your career increases the likelihood of approval with better terms. However, stricter conditions like a higher down payment or adding a younger co-applicant may apply if you're nearing retirement. CIBIL Score - A strong credit score (700 or above) is key to getting your loan approved and securing favorable terms. Lenders use this score to gauge your creditworthiness and repayment capacity. If your score is low, focus on improving it before applying. Existing Debt - Your debt-to-income ratio should ideally not exceed 30% of your monthly income. If a large portion of your income already goes toward EMIs, it may affect your eligibility. Clearing existing debts or including a co-applicant with a strong financial profile can help. Employment Stability - A steady job, especially with a reputable organization, improves your chances of loan approval. Lenders prefer borrowers with a stable income source. Income Level - Minimum income requirements vary based on location, loan amount, and job type. Due to the cost of living, borrowers in metro cities may need to meet higher thresholds. Down Payment - Lenders typically expect at least 10% of the property's value as a down payment. For example, if a house is worth ₹50 lakh, you'll need to arrange ₹5 lakh. The larger your down payment, the better your chances of securing the loan. Family Dependents - Lenders may view your repayment capacity as limited if you're the sole earner in a family with many dependents, which could affect your home loan eligibility. Tips to Improve Your Home Loan Eligibility Apply with a co-applicant to increase the loan amount. Maintain a stable income and savings. Reduce existing debts and avoid multiple loan applications. Regularly monitor and improve your CIBIL score. Document additional sources of income. Conclusion The first step in securing a home loan is ensuring you meet the eligibility criteria. Platforms like Piramal Finance provide tools to help assess your eligibility and guide you through the process. Focusing on these factors can improve your chances of approval and move you closer to owning your dream home.

08-11-2023

Personal Loan

Top Pros and Cons of Availing an Instant Personal Loan

Everyone needs a financial boost to cover their requirements. Especially for all types of big-ticket expenses, you might need a lump sum at one time. Whether you’re buying a house, buying a dream car, financing a wedding, or finding higher education, you might worry while carrying out the expenses. In such cases, an instant personal loan is the best option to look for. However, getting a personal loan instantly can be tricky, especially if you do not have the requisites, the required documents, and the eligibility. Getting a personal loan instantly in India requires benchmark credentials like credit scores, credit histories, etc. You should know the eligibility criteria, the documentation process, and any extra charges like stamp duty and processing fees, etc. On top of that, you must compare all the interest rates of different lenders and choose the one that suits you the best. Do you want to know the pros and cons of paying a personal loan instantly? In this article, you will learn about instant personal loans, their benefits, and their downsides. [B-01] What is an instant personal loan, and what is its significance? A personal loan is financial assistance provided by a lender to cover all of your personal needs that require a lump sum. The lending institution, in return, charges you a specific interest rate on the principal amount provided. You must repay the loan to the lender monthly until the entire debt is repaid. Instant personal loans have a loan tenure of about 12 months to 84 months, and accordingly, the EMI amount is set for the borrower. When you apply for a personal loan instantly, you don’t have to pledge your security or assets to get a loan amount. So, even if you lack collateral, you can still get a personal loan. On top of that, you can use the amount for various reasons without stating the reason to your lending institution. In India, there are several lending institutions where you can apply for a personal loan instantly, like Banks, Non-Banking Financing Companies, Private Financiers, etc. Now that you know the meaning and significance of going for a personal loan instantly, you should know the pros and cons of applying for a personal loan. What are some of the merits of going for a personal loan instantly? There are several benefits to going for an instant personal loan, and they are: Appealing interest rates To make an instant personal loan more appealing, banks and other lending institutions charge borrowers a nominal interest rate. This also helps lending institutions attract more customers to take up their offers. The interest rates vary from lender to lender, but most charge between 8% per annum and 25% per annum. High flexibility Most lenders try to provide you with high flexibility when you go for a personal loan instantly. The flexibility could be provided to you while choosing the loan amount, loan tenure, EMI type, etc. In addition to that, you also have the liberty to choose the loan type while going for an instant personal loan. For instance, the “Flexi Option” allows you to pay the interest on the amount you use instead of paying the draw for the entire principal amount. No requirement for collateral You won’t be asked for collateral while applying for a personal loan. You don’t need to pledge your assets, like your properties or shares, instantly while going for a personal loan. Even if you don’t have a pledge-worthy asset, you can still apply. Flexible loan tenure The loan tenure of the personal loan is also flexible to ensure the borrower’s convenience and suitability. You can choose the repayment term between 1 year and 7 years, according to your comfort. Quick disbursement Since it is an instant personal loan, your loan amount is quickly disbursed into your bank account within a day. These loans involve minimal documentation and the least amount of paperwork, which makes it possible for you to get approved and get the loan amount as soon as possible. What are the demerits of applying for a personal loan instantly? There are certain limitations to going for a personal loan instantly, and they are: Not apt for some borrowers Since the interest rate varies between 8% per annum and 25% per annum, you might fall on the higher side, depending on your bank’s charges. Some banks charge a high interest rate, especially if they find the borrower less creditworthy. Also, if you don’t have a decent credit score of about 750, you might face difficulties instantly getting a personal loan at a nominal interest rate. Penalties Most personal loans come with additional charges like processing fees, prepayment and foreclosure charges, and stamp duty charges. Besides that, several document-related fees and legal charges are involved in instant personal loans. Before knowing about all these charges, the borrower can put an additional financial strain on the monthly budget. Unnecessary splurging If the borrower obtains a personal loan for expenses like buying expensive gifts, financing tours, or celebrating a festival, this adds to their financial distress. [B-02] The Bottom Line Though going for a personal loan instantly might help you during a financial crunch and help you gain leverage, you should be aware of the pros and cons of going for it. It is a good move if you are applying for an instant personal loan to finance higher education or invest the money in a business venture. You should also try to improve your credit score and pay all your dues and pending credits to get a better interest rate. You should use an instant personal loan calculator to compare different offers from the banks and see what’s best for you. If you want to know more about personal loans and want to go with a genuine lending corporation, you can go with Piramal Finance.

08-11-2023

Business Loan

Is it a good idea to take a small business loan during the festive season?

Small companies must prepare several months in advance to make the most of the holiday mood of the customers. If companies prepare for the festive season beforehand, then it will be easier to meet consumer demand and boost sales. Just before the festive season starts, small business owners who want more funding to grow can think about obtaining a loan. Many lenders are offering business loans to help small companies capitalise on the holiday rush. When looking to finance a small business, several loans are available such as a working capital loan, term loan, secured loan and many more. These loans may be used for many tasks such as funding for day-to-day operations, expanding your business, or updating the infrastructure. Small firms can access business loans from banks and NBFCs as per their needs. [B-01] Read on to learn how business loan terms can impact your company during the holiday season. How to Use Business Loans? Here are some of the ways for you to use business loans for your venture: – Replenishing Stock Since the holiday season falls at a time of higher customer demand, retailers must stock up in advance to be ready for the increased demand. Before the start of the festive season, they have a lot of money tied up in the stock. This has the potential of having a big impact on the turnover cycles and cash flows of the company. It’s possible that taking out business loans will be good for reducing the frequency with which small businesses run out of cash. This has become a crucial aspect of modern times since there is a rise in the number of small firms vying for clients’ attention with new products. Hence, you can also get a small business loan, get new and updated products, and attract more customers for higher profits. Investing in New Equipment During festivals, you may need to invest in new machinery and tools to keep up with demand. You might have to pay for maintenance and repairs out of your pocket if you want to see an increase in output. With a small business loan, you can easily meet your money needs. Keeping the Operations Running Before the holidays, it can be difficult for small companies already strapped for cash to spend more money on running expenses. This is especially true for retail and food service companies. This is because a lot of resources must be spent on storing products and equipment. If your business can get a loan, you can direct all of the efforts for growth rather than worrying about ensuring the current level of operations. Refinancing might be an option worth considering if you are working to minimise the debt you carry. Many small companies borrow money from unregulated lenders at high-interest rates to meet the expected demand during the holiday shopping season. As a result, you can build up a large credit card debt in preparation for the festive season. In circumstances like these, obtaining business loans for your company is a good option. Most banks and NBFCs offer small business loans at low-interest rates. You can use this option to take care of your needs for money without going for high-interest loans. Marketing and Public Relations in the Organization During the festive season, customers always look for the best offers. Hence, it is more vital than ever before for small companies to get the top-of-the-mind space in the minds of the people they are trying to sell to. At this time of year, you have the ideal opportunity to bring in new clients while also improving your ties with your regulars. When businesses take out loans, part of their funds might be put into marketing efforts. By doing so, you can enhance your profile, publicise more products, and draw the attention of potential clients. Getting Latest Tech Several companies have automated their procedures by adopting the technologies. During the busy festive season, you can obtain useful details on the preferences and routines of the customers. Applying machine learning (ML) and data analytics offers the potential for your company to improve the quality of customer service. Due to the high cost of integrating the latest tech, a small or medium-sized firm (SME) can benefit from a business loan to pay for such costs. Online Marketing You must invest money to market your venture through digital and social media marketing. It is easier for micro, small, and medium-sized businesses (also known as MSMEs) to market their promote their products and services through a website. In addition, it enhances the reputation of the business, which is vital for a new business looking to establish a strong presence in the market. Exemptions from the payment of taxes The Income Tax Act allows for the interest paid on loans to be deducted by firms. During the festive season, a small business could pay less in taxes with these benefits. Small businesses are eligible for certain tax breaks if the revenue is under a given limit. In addition, the firm’s financial stability is safe from a sudden need for cash to pay taxes. [B-02] Conclusion The expense of creating a robust online platform could be out of reach for certain ventures. However, micro, small, and medium-sized enterprises should invest in this avenue since doing so will help attract more customers, which in turn may increase sales. A business of any size can apply for a business loan to help grow its online presence. Piramal Finance is a leading NBFC in India that offers business loans at low-interest rates. You can use this money for various needs of your business and boost your profits.

08-11-2023

Personal Loan

Is it a good idea to take a personal loan and invest in the stock market?

Investment is one of the best options to grow your money. For improving your financial stability, you must invest your money using options. It is way better than just saving your money without getting any return. Out of many options out there, investing in the stock market is a popular option. Investing in the stock market is the best way to gain leverage and multiply the money in a quick time. But, having said that, the stock market comes with many risks that you must be aware of. So, a very genuine question shows up, “Should a person take a personal loan to invest in the stock market to get profits?” [B-01] The answer to this question cannot be an objective one, you have to go through all the aspects, and only then reach a decision. Read on to learn more about personal loan investment as well as the pros, and cons of investing in the stock market. Understanding personal loan investment A personal loan is usually taken to cover personal needs like buying a new house, financing higher education, planning a foreign trip, or making a down payment. It is taken during times when there is a shortage of funds. When you don’t have any other source to rely upon during a crisis, you can go for a personal loan. When it comes to investing, a personal loan investment can be a good option but there are both benefits and downsides to it. If the investment is giving you decent returns without any risk, then opting for a personal loan is a strategic move. But, if there are huge risks involved in the particular investment, then it might not be the best option for you. The stock market is one of the best investment options with high-yielding returns. But, is using a personal loan to invest in the stock market a witty approach? The answer to this question is highly subjective and depends on what level of expertise you hold in terms of investment options. You have to know the pros and cons and then make an assessment by yourself. What are the benefits of using a personal loan to invest in the stock market? There are multiple benefits of using the corpus amount of your personal loan and investing in the stock market. High returns: Investing in the stock market gives you high returns and if you are a full-time investor, you must know its potential. The returns are much higher than most of the other options present in the market. If you utilise your skills properly and invest your loan amount in the stock market, you can make enough money to easily repay your loan. High loan amount: When you apply for a personal loan to invest in stocks, you need not use your own savings or entire monthly income. This is a benefit because you don’t have to cut your monthly expenses or manage with a lesser available income anymore. If you are already making a profit, then repaying the loan amount won’t be an issue in the first place. Tax benefits: There are certain tax benefits that you will be getting for applying for a personal loan for investment. Under section 80(c) of the Income Tax Act, 1961, you will have tax rebates on some investments. Meeting extra costs of the loan: Repaying a personal loan is not confined only to the instalment, there are some other costs that you have to bear. Paying them could be tough, in case you are not saving enough after your expenses. But, reaping good profits from your investment in the stock market can help you cover these ancillary costs. Now that you know the benefits of personal loan investment in the stock market, it’s time for you to go through the downsides of the same. What are the downsides of taking a personal loan to invest in the stock market? Talking about the cons of using a personal loan to gain leverage in the stock market, there are things you need to keep in mind. Risk factor: If you are someone who knows a lot about the stock market and also understands the ups and downs of the process, then taking a personal loan might be a good option. But in case you don’t have the right knowledge about the way the market functions, you are vulnerable to market risks. Since you are taking a loan that comes with an interest rate and other costs, you should know how to reap profits to be able to pay off your debt. The problem of interest rates: Personal loans come with an interest rate that you have to pay during the loan tenure. In many cases, the rates of interest are quite high and it will create some financial burden. If you do not make enough profits already, you might not be able to repay the loan and that creates additional distress. [B-02] Conclusion While there are many risk factors associated with the stock market, the right strategy can help you make decent profits. Personal loan investment in the stock market yields high returns and makes the process of repayment easier. But before taking a personal loan for investing in the stock market, you must analyse the risk factors and the downsides as well. If you have come this far, it is evident that you like reading about similar topics. In that case, visit Piramal Finance because there are many articles and blogs related to this topic that can help boost your financial skills.

08-11-2023