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General Insurance

Life Insurance Vs. General Insurance

Insurance is a vital tool that helps manage many risks affecting a family or a person. You must pay the yearly premium on time to keep the risk cover active. While you can opt for various types of policies, they are all listed under two broad options, life insurance and general insurance. Before you decide to opt for any policy, you must learn about all the cover options that you can get under life and general insurance. Read on to know more about the benefits of policy options and if they differ. [B-01] What is Life Insurance? Under this plan, the insurer will offer cover for losses related to your death. If you die during the policy period, the insurer will pay the policy amount to the nominee. This nominee must be a family member with the name listed in the policy. The claim amount can vary based on factors listed in the policy papers. The main purpose of this policy is to offer support in the form of money in case of the death of a family member. What is General Insurance? This type of insurance can be taken for any asset you own. Herein, the insurer will offer the cover and give money if the asset suffers any damage or loss. The insurer will pay for the costs for the repair of the damage or to compensate for the loss of the asset. The well-known types of plans under this category are home insurance, health policy, car insurance and many others. Life Insurance vs General Insurance: Comparison Here are some key variances between life insurance and general insurance: – Nature: When you get life insurance, it protects your family from money problems due to your untimely death. You must get a life cover if you are the sole earning member. In contrast, general plans protect you from any loss from various risk events that can affect your assets. Under this policy type, the insurer pays the money in case of any damage to a given asset. Payment: For a life cover, the insurer must pay the amount to the nominee whose name is given in the policy. This payment will be made in case of the death of the person. You can also opt for a life policy that will pay you a given sum after the policy term is over. The plan must be active at the time of the risk event given in the policy. In general insurance, the insurer must pay the money when the asset suffers any damage or loss. The policy terms will define the loss amount. Coverage: Life plan offers cover for risks to a person’s life. The loss here means death due to an illness or an accident. On the other hand, general plans offer cover for events like damage to assets such as cars, houses, and others. Premium: The premium for a life policy is fixed based on the coverage amount. This amount will not change till the policy is active. To continue the cover, the person must pay the premium before the due date. At the same time, the premium for general plans would depend on factors listed by the insurer. Here, the type of asset, its value, and risk factors are also taken into account. In the case of mediclaim, age and lifestyle are also considered. Tenure: The term of a life plan is usually longer. Here the premium is meant for a given period based on the policy term or the person’s age. This tenure can extend for a given period or till the person is of a certain age. In the case of general plans, the premium is meant for one year. It is up to the insured person to continue or stop the policy. If you want to enjoy the cover, it is vital to renew the policy every year. Sum assured vs sum insured: In the case of life insurance, the nominee is paid the sum assured as given in the policy. This is the amount for which the policy was taken and is paid in case of the person’s death. You can also opt for some policy riders when getting a new policy; it will increase the payout to the nominee as per the policy terms. The extent of risk cover for general plans is known as the sum insured. This is the maximum amount an insurer will pay in case of loss or damage. Beneficiary: The benefit of a life plan is for the person’s family or the nominee whose name is given in the policy. If there is a need, the insured can also change the nominee. For general insurance, the claim amount will only be paid to the insured person. Any nominee can get the amount only if the insurer has agreed to this at the time of issue of the policy. [B-02] Conclusion When it comes to opting for life insurance or general insurance, you can, in fact, not compare the two. Life plans offer cover for the risks to your life, and general plans will offer cover for your assets. Having a balance of various policies is vital for a secure future. Your focus should also be on getting high coverage for every policy you want. A higher amount will offer better safety from risks and events that may take place in the future. It is vital to have suitable insurance coverage for your life and assets. You can not guess what events will take place in the future. Though, what you can do is prepare for any serious problems. For a safe future, in terms of money, you must opt for suitable insurance policies. Make sure you conduct in-depth research to know all the available general and life insurance plans to make the best decision. For any help, you can contact experts at Piramal Finance, the leading name in the sector. We can help you with the knowledge and know-how of applying for insurance and all kinds of personal loans to manage your finances swiftly.

08-11-2023

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The Consequences of Defaulting on a Business Loan

When you take out a business loan, you agree to certain terms and conditions. One of those is that you will make regular payments on the loan until it is paid off. If you should ever default on that loan, there are serious consequences. Your credit score will take a hit, and you may have to pay back the entire amount plus interest and penalties. This blog post will discuss the consequences of defaulting on a business loan. Let’s get started. [B-01] What is Loan Default? Loan default occurs when a borrower is unable to make their loan payments on time. This can happen for several reasons, but often it’s due to financial difficulties. If you’re struggling to make your loan payments, you must talk to your lender as soon as possible. They may be able to work with you to find a solution. Defaulting on a loan has serious consequences for both the borrower and the lender. For the borrower, it can damage their credit score and make it difficult to get future loans. Defaulting on a secured loan can also lead to the loss of collateral, like property or equipment. For the lender, default means they are unlikely to get their money back. This can damage relationships with other borrowers and make it difficult to get future loans approved. Consequences Of Defaulting a Business Loan Drop-in CIBIL Score One of the most important consequences of defaulting on your business loan is the drop in your CIBIL score. Your Credit Information Bureau (India) Limited or CIBIL score is a three-digit number that reflects your creditworthiness as a borrower. A high CIBIL score means you’re a low-risk borrower and vice versa. Therefore, if you default on your business loan, it will directly impact your CIBIL score, making it difficult for you to avail of any kind of credit in the future. Moreover, the interest rates on any future loans that you do manage to get will be higher than usual, further compounding your financial woes. Loss of Business Assets Another consequence of defaulting on your business loan is the loss of your business assets. This is because most business loans are secured loans, which means they’re backed by collateral. So if you default on your loan payments, the lender has the legal right to seize your business assets and sell them off to recover the outstanding amount. This can devastate your business, as it not only robs you of important resources but also disrupts your operations, leading to a loss in revenue. In extreme cases, it can even force you to close down your business altogether. So, it’s important to be mindful of the risks involved in securing a business loan and make sure you can afford the repayments. Difficulty in Availing Future Loans One of the most significant consequences of defaulting on a business loan is that it becomes difficult to avail of future loans. Lenders become wary of giving out loans to businesses with a history of defaulting, making it challenging for businesses to get the funding they need. Moreover, businesses that have defaulted on their loans also see a significant drop in their credit score, making it even harder to get approved for future loans. Declaring Bankruptcy Defaulting on a business loan can have some pretty severe consequences, the most drastic of which is declaring bankruptcy. This will ruin your business credit score, making it very difficult to secure future financing. It will also likely result in the loss of any collateral you put up for the loan, such as your home or car. In short, defaulting on a business loan can be a very costly mistake with long-lasting repercussions. If you’re having trouble making payments on your business loan, reach out to your lender as soon as possible to discuss your options. They may be willing to work with you to create a more manageable payment plan. Defaulting should always be seen as a last resort because of the significant damage it can cause to your business. Legal Action or Foreclosure If you default on a secured business loan, the lender may take legal action against your company to recoup the money owed. The lender could also foreclose on your business, which would mean that you would lose ownership of your company. This would be a severe consequence of defaulting on a business loan and should be avoided at all costs. [B-02] The Bottom Line Defaulting on a business loan can have serious consequences for your business. Not only will it damage your credit score and make it difficult to get future financing, but you may also be required to provide collateral if you default on a secured loan. If you’re having trouble making payments on your business loan, talk to your lender about other options before defaulting.

08-11-2023

Tips & Advice

Is It Possible To Get A Business Loan With Low Revenue?

As a business owner, you require funds for various aspects. This can be for covering expenses, expanding your business, covering up for any loss or any future goals. Though you might have the finances required for this, often you might find yourself in need of a business loan. However, many may find getting a business loan easier said than done. Several lenders or banks require a lot of documentation or may assess the loan amount depending on your revenue. What if your business is a start-up? Or a small business that does not have high revenue? Are you not eligible for a small business loan? Well, you need not worry, there are several options where a low revenue-generating business is eligible for a business loan. This is what you can do to get a business loan despite low revenue. [B-01] Prepare a detailed business plan: A well-drafted and comprehensive business plan will make a significant difference in getting a business loan. This business plan should include your strategy for revenue generation, a firm model for business revenue, a proper management chart, a realistic projection of income, and a crystal clear manner of timely repayment of loans. Collectively they should convince your lender to approve your new business loan application. Ensure that you have a healthy credit score: One aspect of loan eligibility is the CIBIL score. This is a standard that several lenders follow. Maintaining a healthy credit score is important as it reflects well on your repayment characteristics and habits. Despite a low revenue, a lender may approve your business loan if you have a good credit score. You should intend to have a score of 750-900 as this is the accepted norm of a good CIBIL score making your case stronger in front of a lender. Prepare the paperwork diligently: Besides a firm business plan and a credit score, another vital aspect of attaining a sme loan is to ensure that you have all the required documents and in order. This will add genuinity to your cause and will give an insight into your company’s profitability and cashflow. If you can prove through your documents that you have regular income, profits, and cash flow, it is highly likely that you will attain your business loan. An easy way to attain a business loan is to get in touch with Piramal Finance. With over 1 million customers and a presence in 300+ locations across India, PCHF is the ideal lender to get a business loan with low revenue. It offers business loans to fund business expansion, machinery installation, inventory stock up, supplier payment or any other business related expense. It has simpler programs designed as compared to other lenders allowing higher eligibility. Their comprehensive assessment facilitates them to give the maximum loan amount to business loan seekers. Here are some key features of their business loan mechanism: Loan to a wide range of customers: Piramal Finance offers business loans to a wide range of customers. It caters to self-employed non-professionals and self-employed professionals. So in case you are a small business owner, PCHF can prove to be the ideal lender Digital driven process: Their digitally driven process offers you an online business loan along with quick sanctions of business loan ensuring that you do not have to worry about the usual hassles of getting a business loan. Maximum loan amount: PCHF’s business loan is programmed and designed much simpler than other banks and financial institutions. This means that you get the maximum loan to meet your financial requirements. Convenient doorstep service: At PCHF, you don’t need to spend hours waiting for your application. Its quick doorstep service allows you to get a loan without you leaving your home or office. [B-02] Conclusion: Though a business loan usually requires you to meet several requirements, it’s not mandatory for him or her to have a large revenue. There are several financial institutions that offer business loans despite the business having low revenue. All it requires is for you to reach out to the right financing company.

08-11-2023

Tips & Advice

Top 6 Common Real Estate Scams Which Home Buyers Can Avoid.

Before the onset of the early 2000s, homeownership was viewed more as a necessity rather than an investment one can make. However, as property prices skyrocketed, real estate investing opportunities became crystal clear. With real estate finance companies and private players jumping at the opportunity, so did the potential for real estate scams. Here are six such scams and how to avoid them. 1. Rental scams: Owning a house is still a dream for many, making renting the next best option. With properties being listed online, it has created a feeding ground for scamsters who list properties that don’t exist to extract a security deposit. Alternatively, the bait and switch is also a popular method, wherein you are convinced to pay a premium for a low-quality location. To avoid rental scams, do not make any payments online without further interactions, and it would be best to visit the property before you sign any agreements. 2. Title Scams: Venturing into real estate finance can be tricky, and oftentimes, you might find that someone is selling you a house they don’t even own. Scamsters could sell you a house using false documents and transfer the ownership without the real owner’s permission. It is easy to see why this can cause problems for the owner and buyer. With a push to dematerialize property ownership certificates (like how stocks are stored in Demat accounts), there should be little room for ownership disputes going forward, but always ensure you are on the lookout for this. 3. Broker Side Scams / Wire Fraud: If you are looking to venture into real estate finance or buy a home, you might look for an agent to go through. In the absence of a trusted broker, there are several ways you could be convinced by a fraudulent broker to transfer money. Remember that your broker’s job is not to create a disconnect between buyers and sellers but to facilitate seamless interactions. 4. Faux Foreclosure Relief: Often, homeowners cannot pay their loans and are about to have their homes foreclosed on or seized by the bank. Scammers prey on this fear, offering real estate finance options, such as altering the loan agreement terms or postponing foreclosure in exchange for a fee. Read the terms of your agreement carefully, and do not trust anyone over the phone unless you can verify their identity. You should only interact with your bank through official channels. 5. Commercial Real Estate Fraud: This is especially tricky because institutions like real estate finance companies are involved. If you are venturing into real estate investing, you could come across this scam, where loan amounts are spent towards unapproved objectives. You should get your loans exclusively through trusted vendors such as Piramal Finance. 6. Moving Fraud: From loan flipping to fudging real estate loans, India has seen many homeowners on the receiving end of the devious and deplorable actions of homeowner scamsters, and you must watch out even when you have to move furniture. A moving company might move your furniture based on a quote, only to raise the price after moving all the furniture to corner you into paying extra. Alternatively, an even more disgraceful form of the scam involves moving companies taking a deposit and/or collecting the furniture, only to disappear with a single track. Ensure you get multiple quotes from your movers and packers, try to rely on recommendations from friends and family, and do not pay any additional amounts, no matter how much they insist. Generally, companies that ask for large cash deposits are red flags. [B-02] Conclusion India still finds itself steeped in real estate scams, with many loopholes in the law. However, you can avoid six of these scams with a little due diligence. Ensure you double-check all agreements and quotes (you can use the Piramal Finance EMI calculator to get a rough estimate so you know you are not getting scammed with high EMI rates) and get your loans through reputable vendors only.

08-11-2023

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Importance Of ITR For Availing Business Loan

As someone who is either wanting to start a business or invest in business, a business loan can be a good option. This can help you with much needed business capital and fulfil your business objectives and goals. However, a business loan requires several necessary documents and conditions. One of them being, your ITR (Income Tax Return) form. We will be understanding the importance of an ITR form to avail a business loan. Before we start, let us know what exactly is an ITR form, an Income Tax Return form is a form that contains information related to a person’s taxes and income to be paid during the year. This is submitted to the Income Tax Department of India. [B-01] So Why do you need an ITR form for a Business Loan? Shows that you are financially responsible: Filing your income tax return within a government set date is a rule prescribed by the government. This is mandatory for people who are earning a particular amount of income. Filing the return reflects on your sense of completing a duty towards your nation and is an example of you being a good citizen. ITR is one of the important documents: A business loan requires several documents such as a balance sheet and profit & loss account. Along with these, it is also required to submit the filled ITR form of the last three years. These are part of the compliance and help in strengthening your loan case even further. Helps the lender understand your business: An ITR form lists your income from your business, interest earned from your savings and fixed deposits or an income from any secondary source. It also includes any interest that you might have paid for a loan. Overall, it gives a glimpse of your financial conditions and insight into your business. This will help your lender understand your financial position and assess your eligibility for an amount for your business financing. To calculate your income: An ITR form helps your lender to calculate your net income. This is done considering all the elements of an ITR form. On the basis of this income, the lender may decide how much loan amount is to be given or whether a loan amount is to be given or not when you apply for a business loan. Though we have listed the significance of the ITR for a business loan, there are many out there who don’t have an ITR form. So does that mean that you cannot get a business loan without an ITR? Fortunately, that is not true. You can get a business loan without an ITR. At Piramal Finance, you can get a business loan without the hassles of an ITR. The relevant documents required for a business loan at Piramal Finance are: Application form with a recent photograph Proof of identity such as passport, driving license, Aadhar Card, or Voter’s identity card. Proof of Income in the form of 6 months primary bank statement Proof of residence like passport, Aadhar card, driving license, Voter’s Identity Card, or utility bills like telephone bill /electricity bill etc. You can opt for online business loans and make the most out of their digitally driven process for quick sanctions and smooth processes. Their comprehensive assessment allows them to give you the maximum possible loan amount. It offers loans up to 10 lakh rupees without any collaterals. [B-02] Conclusion An ITR is an important document when it comes to fulfilling your tax obligations and assessing your financial position. However, it is not mandatory for you to have a filled ITR form to avail a business loan. Piramal Finance offers you hassle-free business loans thanks to their prompt services and simpler programs at your doorstep without requiring an ITR form.

08-11-2023

Other

Looking to Invest in the Best Gold ETF This Year?

If you’re starting to invest, the whole know-how of the process can be daunting. With multiple options at your disposal, it can get very confusing as to what would suit you and your needs. Of course, you would want to start with something small and, at the same time, something safe, right? And what if we were to tell you that there is an investment option for you that is just that and more, aka Gold Investment? Yes, you heard that right; the opportunity that we are talking about is investing in Gold ETFs. If you want to know more about this very lucrative option, read on and find the best Gold ETFs to buy and invest in. [B-01] What Exactly is a Gold ETF? Gold Exchange Traded Funds are passive investment instruments that can be treated as a stock because of their flexibility and are as simple to invest in as gold. Gold EFTs are better for multiple reasons but primarily because they do not have to be maintained or stored as they are just paper but are represented as physical gold. Gold EFTs are based on gold prices and invested in gold bullion, i.e., in bulk, before being valued by weight. One Gold ETF equals 1 Gram of Gold and is equivalent to the purity of physical gold. As these ETFs follow real-time gold pricing, it is very convenient to keep transparency in check. Now that you know what Gold ETFs are, how about a comprehensive list of the best gold ETFs to buy? Best Gold ETFs to Invest in Right Now! Let’s get to the hero of the story, shall we? Here are the top 8 best-to-buy gold ETFs you should get your hands on IDBI Gold ETF This gold ETF belongs to IDBI Mutual Fund House, and its Return Since Launch has been 4.27% The fund size of IDBI Gold ETF is worth Rs. 88.07 Crore The expense ratio is 0.35% The net asset value of this Gold Exchange Traded Fund is Rs. 4647.81 The minimum investment that is to be made under this ETF is of Rs. 10,000 Invesco India Gold ETF Invesco Mutual Fund House-owned gold ETF’s Return Since Launch has been 8.29% The fund size of this gold ETF is around Rs. 87.06 crore The expense ratio is 0.55% The net Asset Value of this Gold Exchange Traded Fund is Rs. 4,530.53 The minimum Investment to be made under this ETF is Rs. 5,000 Aditya Birla Sun Life Gold ETF Birla Sun Life Mutual Fund House-owned gold ETF’s Return Since Launch has been 6.59% The fund size of this Exchange Traded Fund is worth Rs. 349.84 crore The expense ratio is 0.54% The net Asset Value of this ETF is Rs. 45.91 Rs. 5,000 have to be invested as the minimum value to get started. HDFC Gold ETF Return Since the Launch of this HDFC Mutual Fund House has been 7.81% The fund size of HDFC Gold ETF is worth Rs. 3157.97 crore The expense Ratio is 0.59% The net Asset Value of this ETF is Rs. 44.68 The minimum investment to get started with this ETF is Rs. 5,000 SBI Gold ETF This ETF comes under SBI Mutual Fund House and has made an 8.63% Return Since its Launch. The fund size of the SBI ETF is worth Rs. 2677.85 crore The expense ratio is 0.55% The net Asset Value of this ETF is Rs. 44.76 The minimum investment to be made under this ETF is Rs. 5000 Axis Gold ETF Axis Mutual Fund House-owned Exchange Traded Fund’s Return Since Launch has been 6.76% The fund size of Axis Gold ETF is worth Rs. 702.53 crore The expense ratio is 0.53% The net asset value is Rs. 43.58 The minimum investment to be made to get started with this ETF is Rs. 5,000 Kotak Gold ETF Kotak Mahindra Fund House-owned Gold Exchange Traded Fund’s Return Since Launch has been 11.21% The fund size of Kotak Gold ETF is worth Rs. 2426.43 crore The expense Ratio is 0.55% The net Asset Value of this ETF is Rs. 43.61 The minimum investment value for this ETF is Rs. 5,000 Nippon India Gold ETF This Nippon India Mutual Fund House-owned Gold ETF’s Return Since Launch has been 10.32% The fund size of this Gold Exchange Traded Fund is worth Rs. 6532.62 crore The expense ratio is 0.83% The net value asset of this ETF is Rs. 43.21 The minimum investment value that is to be paid is Rs. 10,000 Things to keep in mind while investing in Gold ETFs Every ETF could be the best ETF to buy if you make sure to research thoroughly and keep these points in mind: Keeping track of the fund’s past performance is vital to know what you’re investing in and ensuring the most negligible risks are involved. To do so, it is advised that you consider at least three years’ worth of data. The market constantly fluctuates, and you must keep asset liquidity in mind to minimize risks. You must always track index funds to check for any inconsistency between the Net Asset Value (NAV) and the actual gold value, which could otherwise lead to an error. [B-02] Final Takeaways If you’re an investor, you know how important it is to diversify your portfolio and what could be better than a less-risk and more-profit option of a Gold Exchange Traded Fund? Gold acts as a shield against never-ending market volatility and inflation. Investing in Gold ETFs is as secure as security can get since there are no theft threats, and on top of that, you wouldn’t even have to incur any making or additional charges. It’s not without any reason that investing in gold ETFs is becoming increasingly popular, so all in all, get investing in the best gold ETFs in India today! Piramal Finance offers you relevant information regarding multiple exchange-traded funds across India. For any banking loan-related query, you can visit the website. The financial experts will help you better understand your finances, from personal loans to mutual funds, better.

08-11-2023

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Best business loan rates with no credit check options

When looking for a business loan, it’s important to compare rates and terms from multiple lenders. You can use an online lending marketplace to get multiple offers and compare rates. You may not qualify for a traditional bank loan if you have bad credit. But there are other options available, such as a cash advance from your merchant account provider. With this type of loan, you don’t need good credit to qualify – but you will pay higher interest rates and fees than a traditional bank loan. So what’s the best option for your business? It depends on your individual situation. Compare rates and terms from multiple lenders to find the best deal for your business. In the section below, we’ll discuss the factors to consider before applying for a capital loan and the long-term loan risks. Let’s get started. [B-01] Requirements of Qualifying for Business Loan Business & Personal Credit Scores Lenders will look at two types of credit scores: business and personal. Your personal credit score is important, but it’s not the only factor lenders will consider. They’ll also look at your business credit score to get an idea of your business’s financial health. Annual Business Revenue & Profit The next step is to annualize your business revenue and profit. This will give you a good indication of how much revenue and profit your business generates annually. Once you have your annualized revenue and profit figures, you can begin to compare different loan options. Debt-to-Income Ratio Your debt-to-income ratio is the percentage of your monthly income that lenders use to decide whether or not to give you a loan. A higher debt-to-income ratio means more of your monthly income is going towards debts, making it difficult to qualify for a loan. Capital loan finance is also a concern for lenders when processing your loan application. Debt-Service Coverage Ratio The debt-service coverage ratio (DSCR) is a financial ratio that measures a company’s ability to repay its debts. A company with a DSCR of less than one may have difficulty repaying its debts, while a company with a DSCR of more than one should have no problem doing so. Collateral for Secured Loans If you’re looking to take out a secured loan, you’ll need to put up some form of collateral. This is usually in the form of property or assets, which the lender can claim if you default on your loan repayments. The amount of collateral required will depend on the size and type of loan you’re applying for. Business Plan The next step is to develop a business plan. This will help you determine how much money you need to borrow and what kind of terms you can expect. A business plan will also give lenders an idea of your company’s financial stability and growth potential. Things to Consider Before Applying for a Loan Your business’s credit score: Lenders will review your personal and business credit scores when considering you for a business loan. If you have bad credit, you may still be able to get a loan, but it will likely come with a higher business loan interest rate. How much money you need: You should have a clear idea of how much money you need before applying for a loan. This will help you determine which type of loan is right for your business. The repayment terms: Repayment terms vary by lender, so be sure to compare options before choosing a lender. You’ll want to find a loan with terms that fit your budget and repayment schedule. The fees and costs: Be sure to compare the fees and costs of different loans before choosing one. Some loans have origination fees, prepayment penalties, or other hidden costs that can add to the total cost of the loan. Your business’s financials: Lenders will want to see your business’s financial statements when considering you for a loan. Be sure to have these documents ready before you apply. Long-Term Loan Risks Long-term loans tend to have higher interest rates than shorter-term ones, meaning you’ll pay more in interest over time. They also typically require collateral, which can put your business assets at risk if you can’t repay the loan. And finally, long-term loans can be difficult to obtain if your business doesn’t have a strong credit history. For these reasons, long-term loans are generally best used for established businesses with a good track record of profitability. You may want to consider alternative financing options if you’re a startup or small business with limited operating history. [B-02] The Bottom Line Business loan rates are determined by many factors, but most importantly, by the business’s creditworthiness and the collateral’s strength. Loan terms and conditions also play a role in setting rates. When shopping for a business loan, comparing offers from multiple lenders is vital to ensure you get the best deal possible. For businesses that don’t qualify for traditional loans, alternative financing options are available, such as merchant cash advances and factoring.

08-11-2023

Tips & Advice

Things To Consider Before Transferring Your Home Loan

With the increasing amount of inflation, the daily expenditure and other expenses have been soaring high up. Especially when it comes to buying a house, it has been increasingly expensive to go through the whole process. With respect to some home loans, the interest rates and other charges have been increasing. Due to this, it is reasonable for the overall financial burden to increase over a period of time. This can lead to increased stress and financial distress. It can also be possible for these high amounts of EMIs to hamper your monthly budget. If that’s the case, many individuals consider transferring their home loans. This option of refinancing will absolutely open doors for offering improved interest rates and benefits. [B-01] Benefits of Home Loan Balance Transfer There are many ways in which a home loan balance transfer can be beneficial. Let us have a look at the different benefits. 1. Save on Interest: One of the key benefits of a home loan balance transfer is that it helps save on interest. Once you have availed a home loan, in case the lending rates in the overall landscape have dropped but your lender is still holding a high interest rate, then it would help save money on interest rates while transferring your home loan. 2. Get Additional Funds: You can also have the option to receive additional funds in case your funding needs may have increased. For instance, you may require additional funds for home renovation or home extension. In such a scenario, home loan balance transfer can help you get additional funds. 3. Reduce Home Loan EMI Amount: In case there is any change in your financial requirements or your financial position, transferring your home loan may be beneficial. What to Consider Before Transferring Your Home Loan While a home loan balance transfer can be attractive and has several benefits, it is key to consider a few aspects before going ahead with the balance transfer process. Here is a list of the most important factors to be considered. 1. Credibility of the New Lender: To begin with, it is very crucial to consider the credibility of the new lender. By gauging their credibility, you can be aware of the potential benefits and risks that come along with going ahead with the home loan balance transfer. Understanding and verifying the credibility of the new lender is very important as it makes sure that the rest of your home loan balance transfer process is seamless. 2. Home Loan Balance Transfer Charges: The cost of a home loan balance transfer can vary depending on the new lender that you decide to complete the transfer with. The different aspects of the transfer charges include the interest rate, processing fee, and the EMI that has to be paid. The different rates offered can depend on the nature of the bank and the competitive landscape. It is also dependent on the range of financial products that they offer and the types of benefits offered along with each of these products. 3. Documentation Requirement: Another aspect to consider while going ahead with a loan balance transfer is the documentation that will be required to complete the process. The home loan balance transfer documents may vary depending on the bank and may also vary depending on the details of your home loan including the loan amount, collateral, and other aspects. How to Balance Transfer Home Loans? Each bank may have a different process when it comes to the process of balance transfer of home loans. However, certain aspects remain universal for all these banks. Typically, you would have to visit the bank either physically or online and check all the terms and conditions involved. Next, it is key to understand the charges incurred and the documentation required. Then, you would have to submit an application form with your current loan details and pay the necessary fee. Finally, you would have to submit the required documentation and then wait for the approval. [B-02] In a Nutshell Balance transfer of home loans can be beneficial in certain aspects. It is key to check for the required documentation, credibility of the new lender, and the interest rate along with other aspects before shifting to the new lender.

08-11-2023

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What is SBA From 912, and Do You Need to Complete It?

Small Business Administration Form 912 is a form that checks the individual’s personal history when requesting a loan. The purpose of small business loans is to aid their growth, but there are certain eligibility conditions that the business owner has to meet. This form is filled out to get an idea of the criminal standing of the person applying for the business loan. However, if you do not have a criminal history, you need not fill out this form since many lenders do not require you to submit it. So, make sure to ask your lender if this form is needed. [B-01] Other employees might also have to complete this form apart from the person submitting the business loan application. This would depend on the structure of your business. ● In the case of a sole proprietorship, only the owner of the business has to submit this form. ● A cosigner who is providing the guarantee of the business loan for small businesses has to fill this form. ● If a trust owns the business, then any trustor has to submit this form. ● If the business has hired a specific person to carry out and maintain the daily activities of the business, they have to complete it. ● In the case of a partnership, all the general partners and the limited partners with more than 20% stake are responsible for the completion of this form. In the case of LLPs, all the partners with a 20% or more stake have to be a part of the same process. ● In the case of a corporate company, all the officers and directors have to complete it along with any owner who has a 20% or more stake in the company. However, if one is looking to avail of the most popular loans like SBA and SBA 504, it is mandatory to complete this form. Information on SBA Form 912 Even though it is an important form, it is short and does not take much of the applicant’s time. It will start with the individual’s personal details and the information of the lender of the small business loan. The main thing that will be asked will be the criminal history. ● They will have to specify if they have any prior criminal charges against them and if they are being carried out right now. ● It has to be brought to their notice if they have been to jail for any criminal offense committed in the past six months. ● They should be aware of whether the applicant has been convicted in the past, is out on parole, or if they have pleaded guilty to any offense. The Right Way to Fill SBA Form 912 Even if one thinks that this might have an effect on the approval of their business loan, they must give only correct information. All the information that one puts on their form can be verified later on. If they give wrong information about their previous criminal records, they may face criminal charges according to Form 912. The questions will be straightforward, and if their answer is ‘yes,’ the applicant has to provide certain other information. This information would be about the date, location, fines, sentences, documentation at the court, and other information related to the court and the case. After the submission of this form with the business loan application, one might have to go through a background check. However, keep in mind that the application will be rejected if an individual is currently on parole or probation. This is because the SBA does not give out loans to such individuals. Documents Required for SBA Loans The first and foremost document required for the business loan application would be a personal background statement. It will include personal information (current and prior), criminal record, and educational background. Along with that, one has to submit their personal resume, like they do in the case of job applications. Apart from these two things, the applicant has to show their credit score, personal and business. Other things included would be their personal tax returns, a business plan, legal documents of the business, and its financial statements. If they are pledging collateral, documents related to it and their debt-to-income ratio showing the debt they already owe are also significant. [B-02] The Bottom Line Even if someone has a criminal history, they should not hesitate to submit a business loan application. There is still a chance that their loan will be approved. However, SBA Form 912 might reduce the chances of the loan getting approved. As a business owner, the SBA requires individuals to have character and a good credit standing. These two would help them win over their trust and get the loan sanctioned by them. If an individual has submitted the form with a criminal history, they have to be prepared for a background check.

08-11-2023