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Personal Loan

What Are The KYC Documents Required For Personal Loan

A personal loan is given by a bank to any person who requires funds. This money is then repaid to the bank within an agreed timeline and interest rate. The actual sum borrowed is known as the principal amount, and the additional amount to be paid over time is called the interest. The interest rate is a percentage of the principal amount that is payable on the loan over time. This rate can vary anywhere from 7% to 50%. The interest rate varies from bank to bank and can also change over time. Let’s look at an example to understand this better. [B-01] Suppose X has applied for a loan of Rs. 10 lakh at an annual interest rate of 7%. This means that at the end of one year, X has to repay Rs. 10.7 lakh. The interest is accrued every year. A personal loan is usually not very difficult to acquire. It also does not need any collateral or security, as is the case with other kinds of loans. A simple requirement for a personal loan is documentation. This is known as the KYC documentation. Some banks also have a pre-approval loan system that requires less documentation. This means that the bank has already looked at your viability as a candidate and is comfortable granting you a loan. However, when applying for a personal loan, there are certain key documents that every lender needs. This article looks at these KYC documents and additional documents required to obtain a personal loan. It is important to have these documents in place to avoid any delays or rejection of your loan application. What Documents Are Required for a Personal Loan? Although the documentation required also depends on the bank you are engaging with, there are certain basic documents that you must be prepared with, regardless of the bank. The purpose of these documents is to identify the person, understand their requirements, and determine their credibility for repayment of the loan. Since a personal loan does not need security, a bank uses these documents to also determine the risk of granting a personal loan. This means that the bank will check how likely and able a person will be to repay the principal amount as well as the interest. A bank also checks the overall profile of a person to fix the interest rate. KYC documents assist the bank in making these key decisions. It is also worth noting that the KYC documents differ based on whether a person is a salaried employee or self-employed. Let’s first understand the meaning of these two terms. Salaried employee – A salaried employee is a person who receives a salary from a company or organisation in exchange for professional services. This means that they have an employer to whom they are accountable and contractually bound. Self-employed – A self-employed individual is also sometimes referred to as a “freelancer.” They do not work on a salary basis and are not considered full-time employees of a company for tax purposes, employee insurance, increments, and other purposes. Due to the different nature of these two kinds of employment, there is also a difference in the documentation needed. However, for KYC purposes, there are mainly two kinds of documentation required: Identity proof Address proof Most banks consider the following documents to be valid for KYC purposes: Identity Proof Identify proof is needed to determine the legitimacy of the person seeking a loan and usually needs to be a photo ID. It is also important to determine the citizenship of a person to avoid cases of fleeing. In India, banks consider the following to be valid identity proofs: Adhaar Card PAN Card Passport Driver’s licence Voter ID card Address Proof Banks also require proof of residence. This means that the most updated residence proof must be submitted as part of your KYC documents. The acceptable documents for this purpose are: Passport Ration Card Registered Sale Agreement Registered rent agreement Adhaar card Utility bills such as the electricity bill, water bill, and gas bill Driving licence These are the KYC documents that are required for a personal loan. It is important to note that for documents such as utility bills and rent agreements, banks require up-to-date documents that are no more than 3–4 months old. Additional Documents So far, we have looked at the KYC documents required for a personal loan. However, based on the nature of employment (salaried or self-employed), some additional documents need to be submitted along with the loan application. Salaried employees For salaried employees, in addition to the KYC documents, banks require the following: 2-3 month bank statement displaying credited salary Salary slips for the latest 2-3 months Income Tax Returns or Form 16 Self-employed Audited financial statements for the past 2 years (profit and loss statement, balance sheet, etc.) Income tax returns for the past 2 years Proof of registration in the case of business ownership The Significance of KYC Documents KYC documents are mandatory to obtain any kind of loan. However, an original copy of these documents need not be submitted. A self-attested photocopy of these documents is sufficient. Self-attested simply means that a photocopied version must be signed by the applicant before submitting it. However, it is always good to have the original copies handy in case further verification is needed. Proper documentation will also help avoid delays in the verification process. This would allow the bank to speed up the application and disburse the loan without having to request further documents. Nowadays, personal loans can also be applied for online, making it easier to obtain one. [B-02] This article looked at the various KYC documents required for a personal loan. However, these are just the basic documents. Several factors can affect the documents needed, such as the loan amount and credit score of the applicant. Some banks also have their own policy requirements and may need additional documentation, such as previous or existing loan applications, professional degree certification, signature proof, and so on. However, the most important documents are the KYC documents, and you must be prepared with those before filling out your personal loan application. Found this article interesting? Head over to Piramal Finance to know more about personal loans and overall financial well-being.

08-11-2023

Home Loan

Purchase Your New Home with Zero Down Payment Housing Loan

For all of us, buying a home is a dream. The markets now offer many house loan programs. This makes things easier than ever. You can properly secure the money to purchase a home. House loan interest rates have decreased a lot over time. Occasionally, you can get a loan even at 8.5% p.a. But, most lenders only give 90% of the property’s worth. A down payment of 10% is required. It is followed as per RBI guidelines. Depending on the cost of the house, the sum can vary. If the value of your home is higher, the down payment will likewise rise in line with it. What if there isn’t enough money in your bank account? The situation might get difficult. Many will want a way to reduce the down payment to zero. To be frank, there isn’t a way to nullify it. However, there are ways to reduce it. Before we get into the ways to reduce it for a house loan, let’s discuss the down payment. [B-01] What is Down Payment? It is the amount a buyer pays at the beginning of a good or service purchase. The down payment covers a part of the full price. The buyers usually take a loan to cover the balance. It’s an upfront payment made in a purchase. This article, it’ll be focused on house purchases and house loans. Buyers obtain loans to cover the remaining balance of the purchase price. The more money the buyer puts down, the less they’ll need to complete the deal. It lowers their monthly payments. Ways to Reduce/Compensate for Down Payment Apply for an unsecured loan An unsecured loan can save the day if you lack the money for a down payment. Let’s say your property is worth Rs. 80 lakhs. You can secure a house loan of Rs. 55 lakhs. Now, Rs 25 lakhs are left to cover. For this, you can get an unsecured loan. Try to keep your credit score around 800 or more. This will get you a personal loan at a favourable interest rate. It also applies to house loans. Try to raise your credit score before taking a loan. Participate in the Pradhan Mantri Awas Yojana program This is a government-sponsored program. It gives affordable homes to people in need in urban areas. According to the plan, you might receive a house loan interest rate rebate of up to 6.5% if you qualify. The amount of the subsidy, however, depends on your income range. Make use of your investments It’s always good to begin investing young. A strong investment profile is useful in many ways. You can withdraw money from your investment to pay for the down payment. You can also get a loan against mutual funds or fixed deposit accounts. The loan will help cover the needed down payment sum. The interest rate given will probably be cheaper than an unsecured personal loan. It is so because these loans are secured. As a result, there will be less repayment load. Get a loan from Employers Many employers provide their employees with low-interest loans. These loans are for general purposes. Such loans are easy to obtain and require little paperwork. If your employer gives such a service, you can use it. It’ll help to secure money for the down payment on your house loan. In these cases, your relationship with the employer is crucial. It matters how long you’ve worked for them. You might have to submit proof of a house loan. Prepare properly Proper planning is important for funds. It’ll be very useful for reducing the down payment. Setting aside a part of your monthly salary for this is prudent. You can also invest money in the following: Gold Fixed deposits Mutual funds, etc. The purpose is that you shouldn’t become financially stressed. Down payment often leads to this. Good planning will let you avoid these cases. Sell some Assets This route may also help with the down payment. It includes any assets that you can liquidate at that moment. These can include: Real estate Easily traded bonds Intangible assets Automobiles Jewellery Borrow from your relatives and friends It is understood that buying a home is costly. If your friends or relatives could lend a hand, that would be very useful. Find out if they can assist with the down payment. It’s a simple method for allocating money. It saves time and effort. There will likely be no interest on the amount you borrow. Moreover, you are not subject to any late penalty fees. This might go on even if your payments are late. Things to Keep in Mind It might be hard to get a new loan. To maintain your credit score, you must make your payments on schedule. You can find yourself in debt if you take out a house loan with no down payment. The effects of taking money from family may not be what you expect. Indeed, you won’t have to deal with much if you borrow money from relatives. But, if you fail to pay the loan, your family ties may suffer. Secured loans could put your assets in danger. You risk the assets when you take out a loan with security. Think twice before requesting these loans. [B-02] Summing up It’s best to plan well before you take out a house loan. You need to avoid all the risks. It is better to have enough money in your bank account. You won’t feel as pressured and can purchase your dream home without worrying about money. Piramal Finance will be your best source of help to avoid risks and reduce down payments. We provide a wide range of financial services and advice. For further details, you can visit Piramal Finance. It’ll be our sincere pleasure to serve you.

08-11-2023

Tips & Advice

4 Tips To Get Your Personal Finances In Order

Personal finances can be anything from a rupee in your wallet to a lakh taken from a bank or BFSI. All are meant for personal usage like weddings, holidays, or festivals. If you’re a beginner, you will indeed find difficulty managing money, especially when there are multiple sources to rely on. Fund management for personal finance is all about personal planning. However, if you’ve lost track or messed up, you must consider taking cues from peers. Even if you want to begin without losing track or messing up in the future, you No matter where your finances are coming from, the following tips from experts and fund managers at Piramal and elsewhere will help your money grow or stay stable, at least. [B-01] Budget to bud! The simplest method to get your finances in order is to create a realistic, well-thought-out budget that you can follow. Although it may seem obvious, many people face a vicious cycle as a result of their financial stress. They avoid thinking about money because it makes them anxious, which leads to them falling deeper into debt, which in turn leads to even more anxiety, and so on. Setting realistic goals for how much you will save and how much extra money you will make is the key to making a budget that works. Instead, thoroughly track and report your financial situation using your budget. The first step toward true financial freedom is having a solid understanding of how much money you truly have, spend, and have available for saving. Create a spreadsheet document to begin. Include a list of your monthly expenses under the very last row. Then, to the right, enter the amount you spend on each one, along with the reminder due date. To be sure you’re not spending more than you’re earning, add up the sum at the bottom. Try to identify any areas where you might be spending more or less. Create an emergency fund. Building an emergency fund to meet unforeseen costs is another efficient strategy to lessen financial stress. Building up a sizable fund may seem impossible if you are suffering from debt and aren’t making enough money to save. However, saving Rs 10,000 every month will quickly grow into a useful nest egg. To get things going, you should also think about selling any clothing, books, or other possessions you own but haven’t used in a while. At least until you are debt-free, you should strive to have at least Rs. 10,000 in your emergency fund. Aim to have three to six months’ worth of living expenses in your fund once you have enough money to save a little extra. Your stress can be reduced in several ways with an emergency fund, and it most likely will. Most significantly, it will give you the psychological safety you require to remain composed in the most trying circumstances. You will have enough money to cover any unforeseen expenses, such as a car repair or an impromptu vacation to see family. As a result, you won’t fall deeper into debt and will be able to avoid alternatives like taking out loans or racking up credit card debt that you can’t afford to repay. Be honest. Now that you’ve created a budget and an emergency fund, it’s time to confront some unpleasant realities. Financial stress usually means you’re in debt, which either indicates you’re spending more than you’re making or indicates you’re dealing with other stressors like caring for family members or other people in your life. The good news is that making extra money is a lot simpler than it used to be, thanks in large part to the growth of online freelancing opportunities. Typically, Indian freelancers earn Rs 400 per hour. Many people can effectively increase their income and reduce their debt by working just a few extra hours per week. Nevertheless, it will be easier to change your spending habits than your income in the short to medium term. Cutting expenses entails refraining from compulsive shopping and missing those pricey nights out with pals. It also involves making some less obvious decisions, though. One of these entails relocating to a less expensive apartment. This may sound like a significant improvement, but for the majority of individuals, rent accounts for roughly 30% of their monthly outgoings, making it by far their largest monthly expense. Living in a less expensive place for six months will save you thousands of dollars, not just in rent but also in lowering interest payments on your debt if you can afford the high, one-time cost of a move. Ask peers The guilt or embarrassment that accompanies financial stress is sometimes the hardest part. What are you afraid of? Being unable to manage daily expenses or learning that you aren’t rich? The latter, right? No. To eliminate your debt and reduce stress, you must overcome this phobia. There are many programmes available that can help you regain control, including debt management consultants, credit counselling services, and financial planning. Even websites primarily focused on assisting you with financial investments offer free advice on how to reduce debt and balance your budget. It is worthwhile to take the time to research these services in depth. Beyond the professional assistance and support they may offer, the benefit of utilising them is that you relieve your friends and family of some of their responsibilities. Although you should always be open and honest with your loved ones about your finances, the anonymity of a professional advisor lessens some of the pressure you might feel about handling the issue on your own. BONUS: Track Let us now complete the circle. Review your budget and make adjustments to it. It will reflect your current financial situation. Monitor this progress as you start to pay off your debt(s) and as your financial stress fades. Instead of living in ambiguity, knowing how much money you have will lower your stress levels. If you’ve saved, treat yourself. Reward yourself! For every Rs 500 you save, you can spend Rs 50 on a McDonald’s burger. [B-02] Conclusion Many will tell you ‘how.’ But only we have told you why, where, when, and then: how to bring your finances back on track. Piramal Finance has many such blogs and articles to help you do the right thing with your money. Do visit our official website to learn more about everything related to money.

08-11-2023

Personal Loan

Is a Personal Loan or a Credit Card Better for Travelling?

Loans are the best possible way to fund your needs and not put much stress on your budget. There are a lot of things that you need to keep in mind regarding loans. Be it a credit card or a personal loan, you need to know about the basics to make an informed decision. When you need instant money, be it for your expenses or meeting your urgent needs, both personal loans and credit cards can help you out. Having said that, there are still many variations between a credit card and a personal loan which you must learn. [B-01] Read on to learn about personal loans and credit cards, the differences between them, and the best option during travelling. Personal Loan for Travelling Expenses A personal loan is a financial tool that you get from a lender to cover your urgent needs. You can use this money to make a down payment, pay for your education, or plan out a trip to a destination. The lender in return charges you with a given rate of interest for a specific period within which you are bound to repay the loan. For travelling purposes, if you are planning for a long stay and you think that you need a lump sum amount, then a personal loan can be the right fit for you. Make sure that you don’t go astray at the same time because it is a form of debt. It will create certain financial distress on your expenses in the long run. Benefits of opting for a personal loan for travelling purposes Low rate of interest: Lenders charge a low rate of interest on a personal loan. So, you can easily repay the loan. A low rate of interest enables you to smartly better your expenses and plan your finances. No collateral: Banks and NBFCs don’t ask you for collateral for a personal loan as it is an unsecured loan. You don’t have to pledge any of your assets to get the loan. The long tenure of repayment: The loan tenure is longer for personal loans. The range is between 12 months to 72 months. You have to pay the loan amount in EMIs till the loan period ends. Quick approval: The approval period is quick, often between two to three days. Once all your papers are verified and you get a loan sanction letter, the amount will be sent to your account within this period. Easily payable: Banks and NBFCs need you to pay the loan through EMIs. This option makes the repayment process easier to manage. There are other options like a “Flexi” option in which you only have to pay the interest for the amount you utilise, instead of paying for the entire amount. Using credit cards for travelling purposes Credit cards are a great form of short-term debt that allows you to use money up to a certain limit. At the end of the month, you have to repay the amount, failing which you will be subject to late payment fees and charges. Credit cards are a great way to prevent unnecessary splurging and good credit points are always going to help you, be it in loans or while availing any offer. For short-term travelling purposes, where you think that the expenses are not at all on the higher side, you can consider using a credit card. Benefits of using a credit card for travelling purposes Easy to apply: You can apply for a credit card online at any time in a few basic steps. The benefit of a credit score: With a good credit score, you can easily avail of any type of loan, be it a personal loan or a business loan. Getting a credit card is an easy way to create a credit history and get a high credit score. Discounts and cashback: Using your credit card to pay your bills at restaurants and while shopping, often helps you in availing discounts and cashback. Which is better for travelling: a credit card or a personal loan? The answer is both of them can be used to cover your travelling expenses, depending on the place you visit and the duration of your stay. Credit cards have their own benefits, but a major benefit is free stays, free lounge use and discounts at restaurants. Some banks often give you these benefits for credit cards and not for debit cards. But, it is also vital to keep in mind that credit cards are known as revolving debts, and the interest rates are quite high. In the case of a personal loan, you get a lump sum amount to use for your trip to your favourite destination. You can use this corpus to plan a vacation with your family and repay the amount in EMIs. The interest rates are also low, and you get a lot of time to repay the loan. But, if you just need a little amount of money and your stay is going to be on the cheaper side, then you might not avail of a personal loan. [B-02] Conclusion So, the answer depends on the purpose of your travelling: if you want to make a trip for a shorter duration where the expenses are going to be minimal, go for a credit card and if your stay is going to be expensive, then a personal loan is more suitable. Before you plan your trip-related expenses, make sure you assess both options before making an informed decision. Visit Piramal Finance to get the best offers on personal loans with low-interest rates. You can also check the blogs and articles on the platform to boost your finance skills.

08-11-2023

Tax Savings

Tax Benefits on Business Loan in India

A business loan is a form of debt financing. With business loans, you can buy assets, pay for expenses, fund new firm tasks, or repay existing debt. As with any other type of financing, business loans are also subject to taxation under the Income Tax Act. This means that you must know how income tax laws in India may affect your business loans. You can plan your finances keeping that in mind. The Indian government offers many tax benefits on business loans. If you have taken out a business loan and are paying off EMIs each month, you can claim these in your income tax return. This article will discuss the tax benefits on business loans in India. [B-01] What is a Business Loan? A business loan is a type of loan given to firms to help fund their tasks. Banks, NBFCs, NBFC-MFIs, and other financial firms may provide the loans. Firms take out loans to finance their tasks or fund growth plans. The process is quite simple. You approach a lender with your business plan. It should have details about your firm’s fiscal health and projected profit. The lender will then decide whether or not they want to lend you money. Types of Business Loans Available Many business loans can help you fund your firm growth, expansion, or cost of buying assets. There are two types of business loans: Term Loans A term loan is a long-term debt repaid over an agreed time. It is paid in instalments over four to five years. A lender can get a loan against real estate assets. It can be sold if the person defaults on payments. Working Capital Loans A working capital loan needs short-term financing for day-to-day tasks. Although some lenders offer longer repayment time, it is repaid within one year at most. How to Qualify for a Business Loan The Indian government has made it easier for firms to get loans by offering tax benefits on business loans. The purpose for which a business loan is sought is one of the most important factors in business loan eligibility. A business owner can take up a loan for two reasons: to start their own business or expand it. For this reason, you need to be sure that your application clearly states what you want to do with the loan sum. Small firms generally qualify for business loans at a lower rate than large corporations. However, they may have to provide collateral in the form of real estate or equipment. Lenders consider your credit score and financial history while evaluating loan applications. Most lenders require you to have at least three years of operating history before applying for a business loan. Lenders also want to make sure you can afford the monthly payments on the loan. This process is called underwriting and determines whether you qualify for a business loan. Lenders will also ask about your business plan. They may also request proof of you knowing how you will use the loan amount. You should also be able to provide documentation of your current business assets and liabilities. Tax Benefits on Business Loans A business loan has two components: the principal amount and interest. It includes low-interest rates and long repayment time, making it cheaper than other types of loans. Moreover, you can claim tax benefits on business loans. The interest component of a secured business loan is not tax-deductible unless used to purchase immovable assets like commercial property or land. Business owners can only claim tax benefits on business loans for the principal amount paid to the lender. Interest Paid on a Business Loan is Tax-Deductible The interest paid on a business loan is an expense of the business. It is not taxable to calculate income tax. First, the rate on the debt must be paid from the business’s income, not from any other source. Second, the debt must be incurred by the business. In addition, only the principal amount paid back will be eligible for the deduction. You can deduct the rate you pay on a business loan from your taxable income. It includes loans to buy or improve land, buildings, and machinery. The Principal Amount of the Business Loan is Not Tax-Deductible The principal amount is the total financing or loan amount sourced from the banks or NBFCs to finance business tasks. A business loan’s principal amount is not tax-deductible. Paying income tax on the principal or borrowed amount is not necessary. Additionally, you cannot deduct the amount from your income. Taxes are generally due on the net profits generated by entrepreneurs in a financial year. This is true for most types of business loans. The principal amount borrowed is not subject to tax. The net income earned by the business owner is exempted from tax. Tips to Get a Business Loan In case you are wondering how to get a business loan in India, here are some tips: Research the banks and NBFCs offering loans through their websites or by contacting them personally. Compare the interest rates and repayment tenure offered by each lender before making a choice. Check if you will get any freebies along with the loan amount, such as travel or accident insurance. Ask about these benefits before applying for a loan. Finally, remember to stay organised and track all your expenses. Keep good records so there will be clarity when tax time comes around. [B-02] Conclusion Business loans may be a game changer for you as an entrepreneur or seasoned business owner. The funds might be utilised to expand the business or to start a new firm. The tax benefit on business loans through interest payments and certain company costs such as salary or bonuses might affect your ability to get a rapid business loan. Before asking for any business loan, you should constantly assess your company’s needs in light of the current market. Business owners who take out company loans may benefit from tax breaks. This is especially since business loans are tax-deductible. To learn more about the tax benefits on business loans, do visit the website of Piramal Finance. They provide a variety of products and services and also have many informational blogs on various topics.

08-11-2023

Home Loan

Top Reasons Why You Should Pay The Home Loan Last If You Have Multiple Loans

Every household in India has multiple loans and EMIs to take care of today. When you have a salary coming in monthly, it becomes easier to pay off the monthly EMIs of the loan than to pay a huge amount at once. Though taking loans while keeping an eye on your cash flow and expenses is always a smart decision. It will save you from complications in handling your finances later. There are multiple types of loans that are common in every household, such as home loans, vehicle loans, personal loans, credit card EMIs, etc. But life almost always comes up with surprises that you are not always ready to tackle. Similar ones are job loss, medical emergencies, or other unexpected expenses. These kinds of emergencies and expenses make it very hard to keep track of all the EMIs. [B-01] In those times, it is very important to decide what EMIs/ loans are needed to pay off first, which one to pay off last and which one you can pass. To help you make a smart decision and make it easier for you, we have a list of reasons why you should pay home loans at last. It doesn’t only give you relief for some time but also helps you attain some benefits that you may not know of. On that note, here are all the reasons why you should be paying your home loans at last. List of Reasons Why You Should Pay Your Home Loan at Last Cheapest interest rate The most affordable loans are those for homes virtually invariably. It is better first to pay off the loans with the highest interest rates. These typically include personal loans and credit card debt. These loans have interest rates that can go up to 20%. On the other hand, some banks provide house loans with interest rates as low as 7% for specific sorts of borrowers. Look into strategies to lower your interest because it is on top of the principal. It is best to pay off the personal or credit card debt first because it has the highest interest rate. The next topic should be auto loans. Auto loans typically have fixed interest rates that are higher than those for mortgages. They currently stand around 7—8%. Auto loans should be repaid after a personal loan because the interest rates are higher than those on a home loan, and they are for depreciating assets like autos. Tax Advantages You can deduct interest and principal payments made on your home loan from your taxes, unlike personal loans, credit card debt, and auto loans. Home loans should be paid back after all other debts because they have tax advantages. There are advantages to house loans, such as tax deductions for both principal & interest payments. This is advantageous over time because a house or property is an asset that appreciates, so you can attempt to hold onto it for some time. You may deduct the main portion of your EMI payments for the year up to a maximum of Rs 1.5 lakh under Section 80C of the Income-tax Act. If you don’t sell the property within five years of receiving it, keep in mind that you can still claim this deduction. You may deduct up to Rs 2 lakh from the interest portion of the EMI by Section 24B. The house must be purchased or built using this loan and completed within five years of the end of the fiscal year in which the loan was obtained. Home/ Building — An Investment Remember that a home loan is distinct from other types of loans as it assists you in acquiring an asset. A consumer loan or vehicle loan might also assist you in purchasing an asset. These assets, however, lose value over time, unlike a house. There is no greater sense of success than repaying a loan before it is due or having it taken away. You should bear in mind that there are additional fees for paying off a personal or auto loan early. These fees are not included in the majority of house loans. After paying off the total closing sum, don’t forget to get the lender’s “No Objection Certificate” (NOC). The closing will then be recorded in the credit bureau’s database. Remember to request and obtain your original documentation and the lien release from the property or vehicle you pledged. Final Words Paying off loans is relieving, but knowing which loans to pay first and educating yourself about the benefits and deductions you are eligible for certain loans is advised. Always learn and get all the required information about the loans you are taking, the EMIs you have to pay, and the consequences of payoff, passing, or delaying an EMI. Piramal Finance is an Indian financial services company that provides personal loans, business loans, housing loans, and other financial products for you with a very simple process. Visit our website today for a simple and seamless instant personal loan process. [B-02] FAQs Is having many loans a smart idea? Multiple loans might be an excellent strategy to improve your credit score. However, this is only useful if you can return all of your debts on time; otherwise, the move will be bad for your credit health. Is it possible to receive a personal loan if I already have a house loan? Yes, there is no upper limit on the number of loans that can be obtained at the same time. Technically, a personal loan and a home loan can be obtained concurrently. The prospect of repaying two debts at the same time may be intimidating. However, taking out both loans at the same time might be advantageous. If you have personal debt, is it difficult to secure a mortgage? A personal loan will always have a negative influence on your serviceability, even if it won’t make or break your prospects of getting a house loan,” the expert said. Any debt is a liability, and the more liabilities you have, the more difficult it will be for you to pay back your mortgage.

08-11-2023

Tax Savings

Everything You Need To Know About Tax Benefits On Personal Loans

Personal loans can come in handy for many reasons, such as meeting financial needs or taking care of unexpected expenses. There are a variety of loans available from different banks, depending on your needs. Today, we’ll discuss the tax benefits on personal loans. Buckle up, it’s time to take a financial ride! A personal loan is a type of unsecured loan that can be used for a variety of purposes, including consolidating debt, financing a large purchase, or covering unexpected expenses. Personal loans are available from banks, credit unions, and online lenders, and typically have terms of three to five years.In India, personal loans are subject to the same laws and regulations as other types of loans. However, there are some unique aspects of personal loans in India that borrowers should be aware of. [B-01] First, personal loans in India are typically only available to borrowers with good or excellent credit. This means that if you have a history of late payments or other negative information on your credit report, you may not be able to qualify for a personal loan.Second, personal loans in India typically have higher interest rates than other types of loans. This is because personal loans are unsecured, which means they are not backed by collateral. In India, the tax benefit of a personal loan is the amount of money that the borrower can save on taxes by taking out a personal loan. This tax benefit is available to both salaried and self-employed individuals. The amount of tax benefit that a borrower can avail of depends on the interest rate of the personal loan and the income tax bracket that the borrower falls under. For salaried individuals, the tax benefit on a personal loan is available only on the interest component of the loan. The principal amount of the loan is not eligible for any tax benefit. The interest component of the loan is eligible for a deduction of up to Rs. 1.5 lakhs from the borrower’s taxable income. This deduction is available under Section 80E of the Income Tax Act. The tax system in India can be quite complicated, especially when it comes to loans. There are a variety of taxes that can be applied to loans, and the amount of tax you pay can vary depending on the type of loan you have. Here is a brief overview of the tax system for loans in India. The first type of tax is called interest rate tax. This tax is applied to the interest you pay on your loan. The rate of this tax varies depending on the type of loan you have, but it is typically around 10%. The second type of tax is called stamp duty tax. This tax is applied to the total value of the loan. The rate of this tax varies depending on the state you live in, but it is typically around 0.5%. The third and final type of tax is called service tax. This tax is applied to the service charges you pay on your loan. For self-employed individuals, the tax benefit on a personal loan is available on both the interest and principal components of the loan. The interest component of the loan is eligible for a deduction of a certain amount. Here is everything you need to know about the potential tax benefits of personal loans. If you use a personal loan to consolidate debt, you may be able to deduct the interest you pay on the loan from your taxes. This can be significant savings, particularly if you have a high-interest rate on your loan. You may also be able to deduct the interest you pay on a personal loan if you use the loan for business purposes. This includes using the loan to purchase equipment or inventory for your business, or to make improvements to your business premises. Finally, if you use a personal loan to pay for education expenses, you may be able to deduct the interest you pay on the loan from your taxes. This can be a valuable tax break for those pursuing higher education. Personal loans can offer several tax benefits, depending on how they are used. Many tax benefits come with taking out a personal loan. Here are some of the most common questions that taxpayers have about these benefits:1. Can I deduct the interest I pay on my loan?Yes, you can deduct the interest you pay on your personal loan from your taxes. This deduction is available whether you itemize your deductions or take the standard deduction.2. Can I deduct the origination fees I paid on my personal loan?No, you cannot deduct the origination fees you paid on your personal loan from your taxes. These fees are considered part of the cost of borrowing money and are not tax-deductible.3. Can I deduct the prepayment penalty I paid on my personal loan?No, you cannot deduct the prepayment penalty you paid on your personal loan from your taxes. [B-02] Conclusion Personal loans can offer several tax benefits, depending on how they are used. If you enjoyed reading this blog, don’t forget to stick around and read more finance-related blogs on Piramal Finance to know more about personal loans! Browse to learn more about their products and services.

08-11-2023

Personal Loan

Personal Loan Advice and Tips for Students and Professionals

Are you worried about your education fee? Are you stressed about getting a personal loan for your profession? You are not alone. A lot of people feel anxious and overwhelmed when it comes to their finances. But don’t worry, this article goes over student personal loan advice and tips for both students and professionals. [B-01] What Is a Student Personal Loan and Why do Students Need it? A student personal loan is a type of loan taken up by students. As students don’t have a job and not enough funds for higher education, they resort to education loans and student personal loans. Professionals also take loans to further their profession. These loans are for peope who are going for professional courses like CA, CFA etc. These loans don’t require any collateral. Why do students need loans? Studies Extra curricular activities Daily chores Why do professionals need loans? Enhancing skill set Moving to a new place for a job Studying more Career growth A student might need a loan for their studies, books, any extra curricular activities and much more. A professional might need it for their career growth. How Can a Student Personal Loan Help Students and Professionals? Students do not have money for basic needs. Let alone any form of money for higher education. This is why students go for loans. It is either to take coaching classes for higher education or to live their daily life. So you’re a student and you need to borrow money for tuition. Or you’re a professional and you need to borrow money for a new business venture. What do you do? You could go to a student personal loan company and get the money you need in a lot less time. How does the loan help a student or a professional? Eases the mental burden on the students life. Helps student focus more on studies than finances. Makes the student on par with other rich kids. Personal loans for professional companies are experts in lending money, so they know how to make the process as smooth and stress-free as possible. They work with students and professionals every day, so they know what kind of loan for the profession is best for each situation. And they have a wide variety of loans for professions available, so you’re sure to find one that fits your needs. How to Apply for a Personal Loan as a Student and as a Professional? Now that you know all about student personal loans, it‘s time to learn how to apply for one. The application process can seem daunting, but it’s not that difficult. Here are the steps you need to take: Check your credit score Your credit score is one of the most important factors lenders look at when deciding whether to approve your loan application. Gather your documentation.You’ll need to provide proof of identity, income, and residence. So gather your driver’s licence, Social Security card, pay stubs, and utility bills, and have them ready to go when you start the application process. Complete the online application formThis is where you’ll provide all of your personal and financial information. Be sure to answer all the questions accurately and honestly. The lender will be checking your credit score and looking into your financial history, so there’s no room for mistakes. Wait for a decisionOnce you’ve submitted your application, it will take a few days for the lender to review it and make a decision. If you’re approved, you’ll receive a loan agreement detailing the terms of your loan. Tips for Choosing the Right Personal Loan When it comes to choosing the right student personal loan, there are a few things you need to keep in mind. Here are a few tips: Do your research: It’s important to compare different lenders and find the best deal for you. Consider your needs: Make sure you’re taking out a loan for something you need, and not just for luxury items. Check your credit score: Make sure your credit score is in good shape so you can qualify for the best interest rates. What Are the Interest Rates for Personal Loans? When it comes to student personal loans, you want to make sure you’re getting the best interest rate possible. After all, you don’t want to be paying a fortune in interest every month. So, what are the interest rates for student personal loan? Well, it depends on the lender and your credit score. But generally, student personal loan interest rates range from 3% to 36%. So, it’s important to shop around and compare interest rates before you decide on a lender. How to Use a Personal Loan Calculator? The great thing about personal loan for profession is that they can be used for a variety of purposes. But before you apply for one, it’s important to understand how they work. That’s where a personal loan calculator comes in handy. A personal loan calculator can help you figure out your monthly payments, as well as the total amount of interest you’ll end up paying over the life of the loan. It’s also a good way to compare different loans and find the one that’s right for you. How to Get Approved for a Personal Loan? So you want to get a student personal loan, but you’re not sure how to go about it? Well, we’re here to help. The first thing you need to do is make sure you’re eligible. Most lenders will require that you be over 18 years of age and have a regular source of income. Agencies can help you find the best loan for your profession for your needs and ensure you don’t get in over your head. [B-02] Conclusion This article’s goal is to provide a thorough analysis of crucial considerations for student Personal Loan Advice, Tips for Students & Professionals. Taking out a student personal loan can be a big decision, but it can also be a helpful way to finance your education or consolidate your debts. If you’re looking for additional information on loans, mortgages, MSME financing, personal loans, business loans, and even a handy loan calculator, check out the many resources provided by Piramal Finance.

08-11-2023

Tax Savings

Is There Any Tax Benefit On Personal Loan?

Getting a loan could be a good option if you need more funds to pay for significant life events. When it comes to events like a wedding or a vacation, you are always short on cash and need some more. In this kind of scenario, you can get a personal loan. Apart from being able to meet your urgent needs, tax benefits on personal loan are an added benefit. The application process for a personal loan is simple, and only some basic rules must be satisfied. You will be making payments on a personal loan through EMIs. You might be thinking about getting a personal loan, but before you do, you should find out if there will be any tax implications. [B-01] Can you write off the interest you pay on a personal loan? The Income Tax Act does not state any specific tax benefits on personal loan; but in fact, such loans are still eligible for tax benefits. You may qualify for tax benefits if you have a personal loan and use it right. There are three cases in which you could be eligible to get a personal loan tax deduction. Read on to learn more. Interest Payment on Personal Loan Used for Business When a firm wants to expand, loans are often used as a capital source. Your interest payments on a personal loan used to start your business can be claimed as tax benefit on personal loan. This personal loan tax deduction is available to all small businesses that file their income tax returns on time. Purchasing or developing a house as an investment It is possible to deduct the interest paid on a personal loan used to improve your home as a tax benefit on personal loan. This is given in Section 24 of the Income Tax Act and applies to other home projects of a similar nature. Keep in mind that the only person who may obtain tax benefits on personal loan is the property owner. If the interest on a loan you took out and repaid was paid from your funds, you could deduct those payments from your taxes. However, if you took out a loan from a non-bank lender, such as your parents or other relatives, you cannot claim the interest you paid on that loan. Acquisition of things of value Under Section 80C of the IT Act, the interest paid on a personal loan used to acquire goods such as jewellery, non-primary residences, enterprises, or stocks is valid for tax benefits on personal loan. This provision offers investors the potential to reduce the amount of revenue subject to taxation. The borrower must factor in this amount when figuring out the cost basis for future tax advantages. Important Information About the Personal Loan Tax Deduction Because the person receiving the money does not consider the money to be income but rather a loan, there is no need to pay income tax on it. To be eligible for a deduction, there has to be proof that may satisfy the need to show that the money obtained via a personal loan was used for the given objective. To claim income tax benefits for a personal loan, retain a copy of all key papers, including the amount of the loan obtained, the amount and interest that must be paid, and any other useful data. Personal Loans for Tax Savings Personal loans are eligible for tax exemptions as well. However, tax breaks are only available on rare occasions. The amount of the loan you can deduct from your taxes depends on how you intend to use the money. You may be able to use a personal loan to claim tax benefits in the following situations: Home Remodeling According to Section 80C of the Income Tax (IT) Act, a tax deduction for a personal loan used for home projects of up to Rs. 1.5 lakh can be claimed for each year. Hence, if you get a personal loan to fix up or rebuild your home, you may be eligible for a tax benefit on personal loan as a result of doing so. Acquiring or building a home Suppose you acquire a personal loan to buy or fix a home. In that case, you can deduct up to Rs. 2 lakhs of interest from your income, as per Sec. 24 of the IT Act. This allows you to reduce the tax you owe on your income. To avail of tax benefits on personal loan, you must own the property in question. Investment in a business If the loan funds are used to invest in a business, the interest component of the loan can be deducted as a business cost. This may help the business owner reduce net taxable earnings and, as a result, income tax liabilities. Acquiring assets Those profits may be exempt from taxation if the proceeds from a personal loan are used to purchase non-residential real estate, jewels, stocks, or shares. The interest on the loan may be included in the cost of acquiring the item. As such, the capital gains obtained from the asset’s sale are reduced. [B-02] Conclusion Personal loans are not taxable, although they may help with tax deductions. That, however, depends on the goal of the personal loan. As previously stated, there are three scenarios in which tax benefits for personal loans can be claimed. As a result, as a borrower, you can avail of these tax benefits to reduce the cost of a loan for you. If you need a personal loan with minimal paperwork and a payout within a few hours of the process, visit Piramal Finance to get the best deals.

08-11-2023