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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

Tax Savings

Know the Tax Benefits of a Joint Home Loan

Having your own house is a dream for many. A home is a “once-in-a-lifetime” investment that gives you. Buying a house is no cakewalk (primarily due to fluctuating market prices). With so much competition between buyers, financing a home can be difficult. Many turn to loans to help them finance a new property. A housing loan is a viable option. However, sometimes even qualifying for housing loans can be difficult. In this case, you can apply with a partner for a joint home loan. Do you want to apply for a joint home loan but are confused? You will find the correct answer to this question in this article. This article discusses all you need to know about joint home loans, their benefits, and all the tax exemptions available to applicants. What is a joint home loan, and what is its significance? A joint home loan is a form of financial assistance you take from a lender with a co-borrower to build or buy your own house. The co-applicant can be an immediate family member or your spouse. If you don’t qualify for a home loan, you partner with another person, and both can repay the loan. You and your co-borrower share the responsibility of repaying the loan at a specific interest rate. The lender gives both of you a stipulated time limit within which you have to repay the debt in instalments. What are the benefits of applying for a joint home loan? There are several benefits to choosing a joint home loan. These benefits are as follows: A larger loan can be sanctioned. Lenders allow a larger loan amount as two borrowers bear the repayment responsibility. The loan amount can go as high as Rs. 10 crore or even more in some cases. However, this depends on your and your partner’s income, CIBIL score, creditworthiness, etc. The risk is reduced. As the housing loan is taken on a joint basis, the responsibility falls on the shoulders of both borrowers. So, the level of accountability is lower, and as a result, banks are less concerned. The tenure of repayment is longer. In India, most banks allow a tenure period of 30 years for joint home loans. If you have applied for a home loan alone, you will probably not get a longer tenure for repayment. The approval process is faster. The approval period varies from bank to bank, but most loans are approved within 3-5 days. Some also provide pre-approved joint home loans. You get appealing interest rates. In India, the interest rate for joint home loans starts at 8.25% per annum. Adding your spouse as a co-applicant will give you an additional discount on the interest rates. What are some of the tax benefits of applying for a joint home loan? If you and the co-applicant are contributing together to the repayment process, there are twin tax benefits that both of you will be enjoying. First, under Section 80(c) of the Income Tax Act, 1961, you and the co-borrower can claim a tax exemption of up to Rs. 1.5 lakhs per annum on the principal amount. Second, under Section 24(b) of the Income Tax Act, 1961, each co-borrower can claim a tax deduction on the interest of the loan, which is up to Rs 2 lakh. What are the conditions to claim tax benefits on a joint home loan? Here are certain conditions that you need to fulfil to claim tax benefits for a joint home loan: You should also be mentioned as the co-owner of that property. You may not be able to claim the tax benefits if you do not have the property registered in your name. Since it is a joint home loan, you can only claim the tax benefits if you own that property. You have to be a co-borrower on the joint home loan. According to the loan documents, you must also be an applicant for the loan in addition to being a co-owner of the property. Otherwise, you cannot claim benefits under these sections. Tax benefits can be claimed only if the construction of that property is complete. You cannot claim any tax benefits if the property is incomplete or under construction. Under-construction properties are strictly prohibited from receiving any tax benefits. What are the joint home loan tax benefits? For two different categories, there are many benefits: For the borrowers who own the property: If you and the co-borrower co-own the property, each of you can claim a tax deduction of up to Rs. 2 lakh on the loan amount. The total interest paid by both is divided between the applicants in proportion to their stake in the property. For the borrowers who rent a property: If you and your co-borrower jointly claim the house, you can ask for larger tax advantages against the interest you pay on the joint house loan as a family, provided that the interest is more than Rs 2 lakh per year. [B-02] Conclusion A joint home loan is a great way to get financial backup to build a house for your family. It can help you get a larger loan amount because the risk is divided. Furthermore, the tax benefit is often shared between you and your co-applicant. The tax benefits are divided according to the percentage of the property you hold. Ownership is the fundamental requirement to get any tax benefit, and the whole system is different if you have a rented property.

08-11-2023

How To?

How To Invest In A Public Provident Fund Or PPF?

What are your plans for investment this financial year? Are you aware of tax saving schemes? Want to learn more about investments? While investing, make sure you have a forecast for the long term. At the same time, the investment must be a tax-saving option. High returns and low risks are the key features of a long-term investment. These include shares, mutual funds, public provident funds, LIC, and so on. If you want a minimal-risk long-term investment, the Public Provident Fund (PPF) is one of the best options. It guarantees both the principal and the returns it provides. Want to know more about the PPF scheme? Keep reading further. [B-01] Public Provident Fund Public Provident Fund (PPF) is one of the most popular long-term investments in India. The Finance Ministry’s National Savings Institute introduced the PPF scheme in 1968. Its primary goal is to encourage people to save money. PPF also pays interest on savings. This investment combines tax benefits, financial returns, and security. It also offers an attractive interest rate. Income tax is not applied to the interest earned or the returns. Below is a table that explains the different aspects of the PPF scheme. Interest rate7.1% Per AnnumMinimum and Maximum amountRs. 500 to 1,50,000 Per AnnumInvestment tenure15 yearsTax BenefitUnder Section 80C, up to Rs. 1.5 lakhs Per AnnumMaturitysubject to the tenure of the investment Features of Public Provident Fund (PPF) Here are some of the key features of PPF: 1. Tenure PPF is a long-term investment with a lock-in period of 15 years. Only upon maturity, you can withdraw the accrued funds. You can also choose to extend your tenure for another 5 years when the real lock-in time is over. Only in cases of emergencies are premature withdrawals permitted. 2. Interest rate The government determines and pays the PPF interest rate every quarter. The PPF interest rate for the third fiscal quarter of 2022–2023, has been set at 7.1%. 3. Amount of Investment You can invest a minimum of Rs. 500 to a maximum of Rs. 1,50,000 every year. 4. Tax Benefits Section 80C of the Income Tax Act of 1961 exempts the PPF interest and maturity amount from taxation. 5. Nomination You can name a nominee for your PPF account when you open the account or even later. 6. Loan against PPF A PPF account holder can borrow against their balance. However, you can obtain the loan only in the third and sixth years. The maximum loan amount is 25% of the PPF balance. 7. Risk Factor PPF is a risk-free investment. You get guaranteed returns from it. 8. Mode of deposit You can deposit the PPF amount by cheque, demand draft, cash, or online transfer. 9. Joint Account You can have only one PPF account under your name. How To Invest In A Public Provident Fund Or PPF? Below are the steps to invest in a PPF scheme: The right time to invest in PPF There is no such ideal time, but the best time to invest in a PPF is at the start of the year. This is because if you invest in PPF in this manner, you can earn interest on your deposits for a full year. Eligibility Criteria You can open a PPF account only if you are an Indian citizen. There is no age limit for opening the PPF account. For minors, parents or guardians can open the account. You can open only one PPF account. Opening a new PPF account offline You can open a PPF account by visiting any bank or post office branch. The documents you require are as follows: Fill out the application form for opening the PPF account. You must produce ID proof, such as a passport, Aadhaar card, or Permanent Account Number (PAN) card. You must submit address proof that shows your current residence. Signature proof documents (Pan card., Aadhar card, Passport) 2 Passport-size photos. Fill out Form E for nomination details. Birth Certificate (for minor) along with the above documents for parents or guardians. After verifying the documents, you can deposit the amount in your PPF account. Each document requires self-attestation. Additionally, you must have all the original documents for validation. After validation, you will receive your PPF account number with the passbook. Opening a PPF account online Step 1: Log into the selected bank’s internet banking or mobile banking portal. Step 2: You can select the ‘Open a PPF Account’ option from it. Step 3: If the account is for yourself, click on the ‘Self Account’ option. If opening on behalf of a minor, select the ‘Minor Account’ option. Step 4: Fill in the application form. Step 5: Enter the deposit amount you plan per financial year. You can set standing instructions at this stage. Step 6: Now Apply. Once done, you will receive an OTP on your registered mobile number. Enter the same and verify. Step 7: Once verified, your PPF account is good to go. You can see the PPF account number on the screen. You will also get an email to your registered email address with all the details. Linking your Aadhaar with your PPF account online. Step 1: Log in to your internet banking account. Step 2: Select “Registration of Aadhaar Number in Internet Banking” Step 3: Type your 12-digit Aadhaar number and then click ‘Confirm’. Step 4: Choose the PPF account and link it with your Aadhaar. Step 5: Click on “Inquiry” to check the status. Withdrawal of the PPF amount You can only entirely withdraw your PPF account upon maturity, or after 15 years have passed. The whole amount and any interest accrued may be withdrawn at any time after 15 years. You can close the account upon withdrawal. However, you can choose partial withdrawals after the completion of 6 years. Premature withdrawals are permitted up to 50% of the balance in your PPF account at the end of the fourth year. [B-02] The Bottom Line The PPF scheme can be a fantastic alternative if you don’t like taking on high-risk investments, yet want the assurance that comes with government-backed investments. To learn more about financial instruments or investments, you can always visit the Piramal Finance website.

08-11-2023

Home Loan

Pro tips to reduce home loan interest rate in the current time

Having a house of your own is a great accomplishment but with that comes the burden of repaying the housing loan. At times the burden keeps on banking on your shoulders and ineffective planning can even cause you more trouble. Having said that, there are many things that you can do about it. You can reduce your housing loan interest rate by just making some smart choices and investing correct strategy. This article will let you know more about the housing loan and its benefits, the factors that influence your installments, and some of the best ways to reduce your interest rate. [B-01] What is a housing loan and what are the benefits of going for it? A housing loan is financial assistance that you take from a lender to buy, renovate, or construct your house. In return, the lender charges you an interest rate which is added up to the installments that you pay on regular internals. The lender also gives you a set period within which you have to clear all your dues. There are many benefits of applying for a housing loan and they are: Tax benefits: This is one of the biggest advantages of applying for a housing loan at the current time. To encourage people more and more to have their shelter and fulfill their dreams of owning a house, the government reduces the tax percentage on both the principal amount and your interest rate. Low rate of interest: Interest rates on housing loans have decreased a lot, especially in this decade. Banks often charge you a low rate of interest on the principal amount so that you can easily pay off your debt in the form of small installments. On top of that, several government schemes aim to provide home loans at low-interest rates. Saves you from paying rent: When you have your own house, you are away from the hassle of paying rent. Paying EMI every month is way better than paying rent for a house that you don’t own. And also, in many cases, the amount of rent is quite high and it gets difficult for you to manage this amount from your monthly budget. Easily payable: Banks give you the option of equated monthly installments or EMI which is a very small amount. So, you can easily cut that off from your monthly budget and pay your EMI at your convenience. The long tenure of repayment: You have options to prolong the period of repayment of your loan amount. In many cases, you can stretch up to 20 to 30 years and steadily pay off your debt. No prepayment penalties: Another benefit of applying for a housing loan is that you don’t have to worry about the extra charges or the penalties in case you want to pay your installment before the scheduled time. You have the authority to pay your due before the arrival of the date of repayment. How to reduce your house loan interest rate at the current time? When it comes to saving money from your housing loan, all you need to do is opt for smart choices. The smarter the choices, the lesser the interest rate and EMI. Due to the unavailability of guidance and consultation, you can get into the mess of paying more than you are expected to. So, three things revolve around this whole concept– the principal amount, the rate of interest, and the tenure of repayment. You just need to adjust them in such a way that you pay less and save more. To reduce your house loan interest rate, you need to follow these simple steps: Reduce your repayment period: It might seem lucrative to opt for a tenure of 20 years or 30 years to repay the existing debt. But what is more important is that you need to reduce your interest rate and to do so you should reduce your tenure as well. Banks charge you a low-interest rate if you reduce your period of repayment. Say, 10 years to 15 years are an ideal preference to repay your housing loan. Make down payments: If you make a down payment at the beginning, your total principal amount is reduced. The lesser the loan amount, the lesser your rate of interest. Make sure you at least pay 25% of your loan amount as a down payment, so that the interest rate becomes tiny as well. Make prepayments whenever possible: Since most banks don’t charge you a prepayment penalty, consider paying it before the due date. Suppose you have surplus money before the month ends and you are not sure if you could save that much till the month’s end, pay it now. You should take advantage of this feature to reduce your rate of interest. Look for balance transfer options: If you are quite uncomfortable with the installment amount and the rate of interest that your current lender is charging, look for a new lender. Look for a lender who charges you less, gives you options with your EMI, and has better terms and conditions. Compare different interest rates: Make sure you conduct a lot of self-research by approaching different banks. Compare different offers, different interest rates, etc. and choose the one that suits you the best. [B-02] Summing it up A housing loan is your way to go to have a house of your own but with it, you also have to repay the debt. And when it comes to reducing your housing loan interest rate, you should make smarter choices and devise the correct strategy. You can use a housing loan calculator to spin different offers and see what you are comfortable with. If you loved this article and you want to read more on this topic, then there is a great website called Piramal Finance. It has multiple write-ups on topics like personal finance, housing loans, investment schemes, smart financing, etc.

08-11-2023

Business Loan

Pro Tips To Grow Your Small Business This Festival With The Best Business Loan

Growing a business is a responsibility that every entrepreneur holds and wishes to accomplish. Especially due to a lack of finance and cutthroat competition, it might get tough to stand in the battle sometimes. A business loan, however, can help you have the leverage and take your business venture to another level. Want to know how to grow your business in the festive season with the help of a business loan? Stick to this article to find out everything about business loans, the benefits of taking them, and the ways to grow your business and take it to another level. [B-01] What exactly is a business loan and why is it applied for? A business loan is a type of loan that you take from a lender to invest in your business and multiply your growth. The lender lets you borrow money to help you invest in buying raw materials, investing in equipment, spending money on advertising, etc. In return, the lender charges you a specific rate of interest on the principal amount and gives you a set period within which you have to clear the due. You can take that money and invest in it, growing your business, producing more goods and services for your businesses, and increasing your sales over time. It gives you a kick-start to your business and helps you overcome the cutthroat competition in the business world. What are the benefits of taking a business loan during the festival season? Since the festival is around the corner, you need to meet consumer demands effectively. And for that, you need to ensure that you produce more products, focus on providing quality services, and tackle the marketplace. Here are some benefits of getting an online business loan this festival: High loan amount: Banks offer you a high loan amount to help you invest more in your business venture. The loan amount can go up to as high as 50 lakhs. In some cases, if your credentials are strong and your business is profitable, then the loan amount can be stretched to even 1 crore. In addition, various government schemes also focus on providing you with high loan amounts and charging you minimal interest rates. No collateral: Since most business loans are unsecured, there is no need for collateral or any type of security deposit while applying for it. This is a benefit for you if you are a new entrepreneur and you lack collateral of any kind to make a start. Low rate of interest: The rate of interest on most business loans is quite low to make sure that your maximum money is invested in your business. You have to deposit a minimum amount of money as instalments and the rest you can use to grow your business. Mostly, the interest rate that most banks charge is between 15 per cent per annum to 20 per cent per annum. You can also look for government schemes that subsidise more so that you don’t have to pay high interest. Quick disbursal: The approval process is quite fast and you can get your money disbursed within a day Or sometimes, within two to three days. If your credentials are well and the bank has special offers for the festive season, then you can get approval in lesser time. How to scale up your small business with a business loan during the festive season? With increasing consumer demand, you have to make sure that you focus more on the quantity part along with maintaining the quality of your products. And to do all of that, it takes a good strategy and smart financing choices. Invest in equipment: Especially, to increase the production of products to meet customer demands, you need to buy more equipment. The new equipment will be more efficient than the previous ones and help you produce on a large scale. Invest in the workforce: The best way to intensify the whole process, you need to hire more workers. Hiring more workers will not only increase production but also fasten the process. You have to make your inventory full of your goods so that when the time of sale comes, all you have to do is focus on selling more products. Invest in manufacturing: Invest the money you take from the business loan in your manufacturing sector as well to produce more goods and keep it in surplus for your inventory. Make sure you have all the raw materials and other requirements to produce more goods in bulk. Invest in advertising and marketing: This is a very effective and huge step to increase your sales and take it to the roof. Advertising your product will let people know about your products and offers, and will bring more customers to you. This will amplify your sales and to even fasten the process, you need to market that effectively. Make sure that you don’t invest a lot of money in advertising, and focus more on product manufacturing. Website creation: If you have always wanted to have your business website, this is the right opportunity and the right time to do so. You can use a small part of this business loan to invest in creating a website for yourself. Make your website appealing, curate it, and add your social media handles to increase insights and traffic on your website. [B-02] Summing it up During the festive season, you have to make sure that your inventory is always in surplus and that you never run out of any raw materials. Use the business loan to curate your website as well so that you can connect with more customers who would like to purchase your goods. If you can manage home delivery services in your city, that would even help you increase your sales. If you liked this article, and you want to read more on this topic, you can visit Piramal Finance. It has ample content on personal finance, investment schemes, loan systems, stock market information, etc.

08-11-2023

Business Loan

Everything you need to know about evolution of business loan interest rate

Are you a business owner looking to invest? Or do you want to grow your business? Either way, a business loan is your answer. Running a successful business is no simple feat. Growing it is an experience. It can be both enjoyable and stressful. But, it has many financial-related points. Starting from investment to salaries, the range of expenses is vast. And businesses can have dips in certain periods. So, maintaining these necessary expenses at times can be difficult. And this is where business loans help you. All business loans have interest rates. But it depends on the lender or financial institution. It also includes loan duration and other factors. Some lenders provide cheap loans. But some charge high-interest rates. So, always negotiate the interest rates and terms ahead. [B-01] What is a business loan interest rate? A business loan interest rate is the amount a borrower must repay the lender. It is beside the principal borrowed. It is often calculated as a percentage of the total amount borrowed. Sometimes, interest and annual percentage rates (APR) are interchangeable. But they are not the same. APR also includes any extra lender fees. Many factors influence these rates. It includes credit score, loan type, and loan amount. Lenders may also have certain conditions. E.g., minimal requirements for qualification. The history of business loans in India Do you know that India’s banking system has existed for a long time? It dates even before the British empire. The Vedas and Manusmriti have talked about many money-lending practices. Sanskrit scriptures also contain terms like kusida, vardhusa, vridhi and vyaja. These refer to business loan interest rates in ancient India. As early as the 5th century, business loans were given in cash and kind. The interest that may have been imposed on such loans is mentioned in ancient texts. Baudhyana, Gautama and other lawgivers wrote these. In ancient India, offering high business loan interest rates was unethical. Later, the culture of loans in India flourished. We have proofs of the same in Arthashastra and Dharmashastra. It talks about providing business loans at different interest rates. The Dharmashastra only allowed Vaisyas to become moneylenders. They used to levy higher interest rates to lower caste borrowers. Then, during the Mughal era, Dastawez came into play. It was a new type of money lending that became popular. The Industrial Revolution (1733–1913 A.D.) shifted India’s focus from agriculture to industrial processes. People needed more capital for business. Thus, the whole system developed. Many merchants offered business loans to entrepreneurs. It was to help them expand their workforce. Indentured loans were also common. The borrower had to repay the amount by working on the lender’s land. Seths and Shroffs were moneylenders. They helped merchants with business loans during the early days of the EIC. Many banks were also established in India during British rule. The first European bank, the Bank of Hindoostan, opened its doors in Calcutta in 1770. It offered loans for overseas trading. It did, however, fail in 1832. Banking activity began in full swing in three presidencies. These are Bombay, Calcutta and Madras. The Bank of Calcutta was established in 1806. It aimed to fund the battles of the Marathas and Tipu Sultan. The Allahabad Bank was formed in 1865. It is still operational today. After this, other banks were created between 1906 and 1911. It was due to the Swadeshi Movement. The Reserve Bank of India was created in 1935. It was in response to India’s economic difficulties after World War I. Business loans during the 20th century: The advent of technology The nationalisation of banks was a major practice post-1947. In 1949, the RBI was nationalised. It was appointed as the reserve bank regulator for all banks. India nationalised fourteen banks in 1969. This was to increase public access to banking and commercial financing. With technological advancement, economic liberalisation in 1991 marked a new beginning. The global internet revolution was in full swing. The financial industry quickly jumped on the wagon. Since then, many banking functions have been automated. Customers can now apply for business loans online. This boosted the lending process. It also encouraged more people to apply. There was a rapid modernisation of payment systems and settlements. This includes ECS, RTGS, and NEFT. These generated many business opportunities. And it helped small businesses to function well and fast. Business loans of the 21st century The whole peer-to-peer lending gradually underwent a drastic transition. Previously, financial institutions offered a wide range of services. But they were under a single umbrella. This included almost everything. For example, typical banking, mortgages and trade services. FinTech, in its most basic form, separates these services into discrete offerings. It combines services and technology to offer better solutions. This is how FinTechs are more efficient and reduce transaction costs. Mobile payments, blockchain and digital currencies are prominent Fintech inventions. These have radically revolutionised the financial system. Today fintech has changed the whole banking process. Now, many business loan providers offer all businesses simple and quick platforms. It helps people to apply and get working capital fast. Also, lenders can now better understand their clients’ demands. They can provide customised products and services. Now borrowers can get business loans within a few hours of applying. All thanks to FinTech. You do not have to wait for loan approval for days. It takes just hours if you provide the correct documents. [B-02] Final thoughts If you are looking for quick business loans, Piramal Finance has got you covered! We have over 40 years of expertise and over 1 million customers. So, we are dedicated to offering you good business loan interest rates. We also have many company loans with no collateral at low rates. Get your loan approved fast without much hassle. The whole loan application procedure is paperless. Loan repayments are also quite flexible! You can pay in instalments at your capacity.

08-11-2023