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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

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