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Personal Loan

Go Paperless Personal Loan Without Documents

A personal loan is probably one of the best ways to borrow money to fulfil your dreams and aspirations without facing any financial distress. It can help you buy a house, finance the higher education of your children, or even cover your medical bills. The best thing is that you are not accountable to the lender regarding the reason for which you are applying for the loan. In today’s time, a personal loan can give you the financial leverage that you have always wanted. However, during a crisis, you might want the loan amount to be disbursed as soon as possible. And in that case, you might think of eliminating unnecessary paperwork, delays, formalities, and document submissions. But is it possible to get a personal loan paperless, without the documents? Read this article to find out. We will talk about personal loans, their features and eligibility, and the paperless process to apply for them. [B-01] Personal Loans: Meaning and Significance Personal loans are financial instruments that you borrow from lenders without putting up collateral. These loans are applied to meet various personal needs like financing a wedding, covering medical bills, making a trip to a destination, or even clearing a down payment. These loans are quite popular in India as they are highly flexible and have comparatively low rates of interest. In addition, you can get approved for a personal loan within a very short period of time. Because these loans do not require collateral, you do not have to pledge any of your assets, such as real estate, to obtain the loan amount. As a result, these loans are unsecured and easier to obtain as compared to other types of loans. The terms and conditions of the loan vary from bank to bank and depend on the individual’s credentials. What are the features and benefits of a personal loan? There are many features and benefits of a personal loan, and they are: Higher loan amount: The loan amount for a personal loan can go as high as 40 lakhs and in some cases even more than that depending on your credentials. Low rate of interest: Despite being an unsecured loan, the interest rate on a personal loan ranges from 10.5% to 24% per year. These numbers are highly variable and depend on the borrower’s credentials and the bank. Free from collateral: Personal loans do not require collateral to get approved; you can easily apply for them even if you don’t have a property or security deposit to use as a guarantee. Flexible tenure: The tenure of repayment of a personal loan is highly flexible, which gives you the advantage of having enough time to plan your finances. The period of repayment of a personal loan varies from 12 months to 84 months. Flexible terms and conditions: In addition to a flexible tenure, a personal loan has flexible terms and conditions as well. You have the freedom to choose the type of interest rate, the type of loan, the loan amount, etc. How to get a personal loan without any documents? To get a personal loan without any documents, you have to focus on the following things: Focusing on your loan history: Creditworthiness is a very important thing that the lender looks for in borrowers. You must make sure that you pay all your existing dues to make your loan history flawless. So, you have to pay your credit card bills and loan EMIs on time to ensure that you are loanworthy. You should also avoid defaulting on loans and delaying payments. Levelling up your credit score: Your credit score should be at least 750 to get a personal loan without documents. Your CIBIL score plays an important role in enhancing your eligibility for a personal loan. Any type of dues might affect your credit score, and the more it’s negatively affected, the chances of getting a loan without documents get lesser as well. Maintain a standard debt-to-income ratio: You should also focus on your debt-to-income ratio before applying for a paperless personal loan. Your debt-to-income ratio must be less than 50%. The lower your debt-to-income ratio, the better your ability to repay. Relationship with your lender: This is another important thing that you must consider while going for a personal loan without any documents. If your relationship with your lender is decent and you are a regular customer of the bank, your chances of getting the loan sanctioned within a short span without any documents will be easy. Approach for online mode: If you want your loan to be processed within a short period, you should opt for the online mode when applying for a personal loan rather than focusing on the offline mode. After COVID, many banks and NBFCs chose the online mode to give loans to people to decrease delays and help people during emergencies. So, you can prefer an online mode to fill out your application instead of choosing an offline mode. [B-02] Summing it up: Getting a personal loan without any documents is easy, but you need to make sure that you have enough eligibility to cover that. You should make sure to show the lender that you have the financial muscle to tackle the stress of repayment. In case of emergencies, banks and NBFCs disburse the loan amount to the borrowers immediately if they find them creditworthy.

08-11-2023

Home Loan

Why Should You Choose A Home Loan Balance Transfer?

Does your bank charge higher interest rates on your home loan than the other banks? Are you regretting your decision to choose that bank? Do you want to learn how you can lower your home loan interest rate? Then this article is for you! It can be as simple as transferring your loan to another bank. We will discuss home loan balance transfer and its benefits. Also, we will learn the points you should consider before opting for a home loan balance transfer. It will help you plan your investments accordingly. A home loan balance transfer is simply transferring your home loan from one bank to another to enjoy a lower interest rate in exchange for a one-time processing fee. However, the lower interest rate means that the total amount of interest paid over the loan's life is less, saving a lot of money. What is a home loan balance transfer? Let’s say you suddenly realise you are paying a massive amount of interest to your bank on your loan compared to the rates available at other banks. You ask your bank to reduce the rates, but your request gets denied. This is the ideal time to opt for a home loan balance transfer. When you opt for a home loan balance transfer, your new lender bank pays off the outstanding amount to the old lender. You now pay back your loan to the new lender in installments. But it will be at a much lower home loan balance transfer interest rate. When should you opt for a home loan balance transfer? Here is a list of certain scenarios in which you should consider getting a home loan balance transfer. Eligible for a lower-interest loan from another lender Home loan interest depends on many factors, including the Reserve Bank of India changing the interest rates, your credit profile, and other financial factors decided on by a lender. Home loan interest rates differ from bank to bank depending on these factors. Home loan borrowers might take this opportunity and opt for a home loan balance transfer to pay off the remaining loan at a lower interest rate. Improved credit profile Your credit profile is determined by your CRP, or credit risk premium, which the respective lenders use as criteria for setting the home loan interest rate. The CPR score improves when the credit score improves or when salary and job profile growth increase. If your credit score goes up this way, you can get a much lower interest rate on a home loan from another lender, making a home loan balance transfer the best choice. Huge outstanding loan amount When the loan amount is huge or most of it is yet to be paid, you can save a significant chunk of money by getting a home loan bank transfer because of the lower interest rates. Longer Loan Payment Tenure Although you will save money on interest regardless of how many years of loan payments remain, the longer the loan term remains, the more money on interest can be saved. Also, it is often seen that when the loan term is short, even if the borrower saves money on interest, the cost of transferring the loan will be more than the amount saved, so the borrower loses money overall. Change the type of interest rate A home loan can have a fixed or floating interest rate. The fixed interest rate will remain constant throughout the loan tenure, but the floating interest rate varies with changes in the repo rate set by the RBI. If home loan interest rates are possibly falling shortly, changing to a floating interest rate is the ideal option if you are doing otherwise. However, if interest is predicted to increase, opting for a fixed interest rate on a home loan is the best option. Thus, a home loan balance transfer is ideal in this condition where changing the type of interest ends in monetary benefits. Points to keep in mind when opting for a home loan balance transfer Fees and overall charges Individuals will opt for a home loan balance transfer to decrease their interest rate, ultimately saving some money in the process. But sometimes, the fee involved in the transfer exceeds the gains from the savings on interest money. A home loan balance transfer often includes additional expenses such as processing fees, stamp duty, home loan balance transfer fees, and many other additional charges. To remain in overall profit, consider the above expenses when considering a balance transfer. Foreclosure charges You need to check for the foreclosure charges imposed by the new lender. If the foreclosure charges are heavy, it will hurt your overall profitability. Timing of the transfer When the loan tenure ends in a few months or years, opting for a home loan balance transfer will only increase the expenses instead of reducing them. It is best to choose a balance transfer when more than half of the loan term is still left. Terms involved in the process Opting for a home loan balance transfer every time there is a reduction in interest rates is not necessarily an intelligent option. You should understand the terms of the transfer very clearly, and the overall profitability analysis of the entire process is a must. Different lenders might offer lucrative offers, but often, they will be attached with different underlying terms and conditions. You must understand them and only opt for the home loan balance transfer. [B-02] Final Thoughts A home loan balance transfer is an excellent option for saving money on interest as long as you understand the underlying costs involved and analyze the profitability of the entire process. To avail yourself of our services or learn more about home loans and other important financial concepts, visit the Piramal Finance website.

08-11-2023

Banking

Why Should You Have A Nominee For Your Bank Account?

These days, having a bank account is important. Irrespective of whether you have a joint account or an account in your name only, what matters is having an account where you can deposit cash. It would be best if you did not keep your savings at home, as doing so involves several risks. Hence, it is best to put your savings in a bank, protecting you from theft. But what happens to the money in the event of your death? This is why it is important to have a nominee for bank account. Life is uncertain, and you can never be sure about the future. As such, you must be prepared to handle any uncertain outcomes. Your bank account holds the money you have saved over a period of time. Thus, you will not want it to fall into the wrong hands. This is why all banks offer the option of naming a bank nominee. Read on to learn more about what is nominee for a bank account is and why you must have one. [B-01] What is Nominee for Bank Account? When you open a new bank account, you can name a bank nominee. A nominee for bank account is the individual who will, upon your death, receive the funds in your bank account. The person you have named as a bank nominee has all the rights to the money in your account without the need for a court order. If you do not name a nominee for your account, the bank will place a lien on the money until someone gets a court order or succession letter and submits it to the bank. If you did not add a nominee for bank account at the time of account opening, you can do it later. The process is simple and takes only a few minutes. No additional documentation is required for this process. Here are some key aspects regarding a bank nominee: Your bank nominee can be your spouse, mother, father, child, or sibling. Most banks now insist on adding a nominee for bank account and lockers. Hence, you must name a person you can trust with your money and assets. You can cancel a nomination or add a new nominee as you wish. If you are naming a minor as your bank nominee, you must also give the legal guardian’s details. As this person will have the money till the minor is of age, so choose wisely. You can only name one nominee for one bank account. But you can name separate bank nominees for different bank accounts and lockers. The bank nominee will get the money only in the event of your death. How to Add a Nominee for Bank Account If you have not named a nominee for bank account, you must do so as soon as possible. This will save you from a lot of problems later on. To add a bank nominee, follow the steps below: Offline Visit the base branch of your bank, i.e., where you first opened the account, as they will have all your documents. Reach out to the manager and put your request in writing. The manager may ask for a valid ID proof to verify your identity. So, make sure you carry an ID proof like an Aadhar, voter ID, or passport. The manager will give you Form DA1. This is the form to add a new bank nominee. Fill out the form and ensure all the details are correct. Sign the form and submit it to the manager. You may also need to give a self-attested copy of your valid ID proof. It will take a few days for the bank to add the nominee for bank account. If you want to cancel a nominee, you will have to fill out the form DA2. If you want to change the bank nominee, form DA3 is required. The remaining process will remain the same. Online You can also add a bank nominee online. To do so, ensure that you have internet banking enabled on your bank account. Log on to your net banking account. Here, you will have to select the “Account Update” or “Profile Update” option. Now you can see the link for “Add a nominee” if you have not named any yet. Click on this link. Now, you can enter the name of the person you want to name as the nominee. You will also have to specify the relationship you have with that person. Check the details once again, and then click on the submit button. You will need to enter an OTP that has been sent to your mobile number to verify the request. You will get a reference number on your phone with the details of the update request. The process will take a few days, and the nominee’s name will appear in your bank account details. [B-02] You can also cancel a nomination or change a nominee using the same steps. You can follow the offline process if your net banking does not show this option. To ensure that your money and assets are in the hands of the right person, make sure you name a nominee for bank account soon. This is a very useful financial tip that will help you in the future.

08-11-2023

Your Guide for Fixed Deposit as an Investment Option

One of the safest and most secure investments is Fixed Deposits. Those who avoid investing in mutual funds or equity due to the risk associated with them consider FDs a great choice. With a fixed deposit, you can easily deal with your financial risks and fulfill your life goals. People invest in FDs to secure their child’s future, education, or marriage or to deal with unexpected expenses. You can also save a substantial amount for your future with FDs by putting aside a lump sum amount and letting it grow over a while. [B-01] Types of Fixed Deposits: Standard Fixed Deposit: It is the most common deposit. It can be opened in any bank with your savings account. 1. You can deposit money for a predetermined period 2. Interest rate is set by the bank 3. Duration- 7 days-10 years. Corporate Fixed Deposit: This deposit is made by private companies. 1. Offers high rates as compared to banks 2. Always check the company's credit rating to ensure your investment is safe. Cumulative Fixed Deposit: This can be your choice if you plan for a long-term investment. 1. Money invested for a predetermined period 2, Restricted from regular payouts 2. Money received at maturity Non-cumulative Fixed Deposit: This is the investment you have been looking for for short-term investors with monthly goals. 1. You can choose from monthly, quarterly, half-yearly, and yearly interest payout 2. Enjoy the interest on your invested money Tax-saving Fixed Deposit: You can avail of this deposit to save tax. It is available at all banks. 1. Tax redemption up to 1.5 lakh in a year. 2. Lock-in period of 5 years. (Funds cannot be withdrawn during this period) Senior Citizen Fixed Deposit: As the name suggests, this deposit is specifically for senior citizens. 1. Minimum age should be 60 years 2. FD Interest rates higher than standard rates Interest Rate in Fixed Deposits The FD interest rates range from 3-9%. The minimum period for an FD is 7 days The minimum amount for a fixed deposit is INR 1000. The interest rate on an FD depends heavily on which bank or private company you are borrowing from and for how long. The longer the period, the higher the rate of interest. Pros and Cons of Investing in FD PROS: Assured Returns: This is one of the main reasons people invest in FD. You can invest your money for a fixed period and relax. You will receive a lump sum amount on maturity. This helps an investor in making a stable financial decision. Allows Premature Withdrawal: In an emergency, you can withdraw funds from an FD. This comes with a fee, but it is a great assistance. Also, there are no complex rules and regulations for premature withdrawal in fixed deposits. Tax Exemptions: The interest that you earn from an FD is taxable. Tax exemption is available to a certain level. Investors and senior citizens can legally evade taxes under Section 80C of the Income Tax Act. Loan against an FD: This is one of the greatest advantages of investing in an FD. If you are not planning to break an FD in case of an emergency, you can get a loan against your FD. You can avail of up to 90% of the FD amount as a loan from financial institutions. High security: Investing in FDQ is safe and secure. This is because the principal amount and interest you will get are pre-decided. Factors like an unstable market and economic fluctuation don’t affect your returns. Availability: This scheme is available in almost all banks/financial institutions. This makes it easier for investors to visit their nearest government or private banks, NBFCs, or post offices to take advantage of this scheme. Quick renewals: If you want to build wealth, you can renew your existing FD. This way, you can double your interest and build a profitable portfolio. Higher rate of interest for senior citizens: In almost all banks and financial institutions, senior citizens get a higher rate of interest on a fixed deposit than standard interest rates. Flexible Tenure: One of the most attractive features of a fixed deposit. You can choose the period for your deposit at your convenience. Open to all: There are no complicated criteria for investing in a fixed deposit. Anybody who is an Indian citizen and NRI can open a fixed deposit with banks or NBFCs by just verifying their KYC. CONS: Lock-in period: You can withdraw your money from an FD easily. But still, there is a lock-in period until you cannot take out your funds. The lock-in period for your fixed deposit is mentioned on your FD receipt. You must check on it and plan your withdrawal accordingly. Penalties on withdrawal: One of the biggest advantages of opening a fixed deposit is a premature withdrawal facility, but a penalty fee is attached. A fixed percentage is charged for withdrawal by reducing your pre-determined interest rate. TDS: Interest earned from an FD is taxable. If your interest earned comes under the tax slab, 10% of TDS will be deducted from your interest. Lower Interest Rates: A fixed deposit is a secure investment, but some banks and financial institutions offer lower interest rates than inflation. Fixed interest: The interest rate for your fixed deposit remains unchanged till maturity. Even if the FD interest rates are revised, you will receive the pre-determined interest rate only. [B-02] Every investment has pros and cons. It depends on your expectations from an investment and its features. Based on these factors, you can choose the best investment that suits your purpose. This blog must have solved your queries about FD as an investment option.

08-11-2023

Home Loan

Home Loan Sanction Letter- Meaning, Process, Contents

Buying yourself and your family a new home is probably one of the heavenly experiences. However, with the increasing prices of properties, it is difficult to buy a home with all your savings. So, a home loan is a more convenient and affordable option for this. Having a home loan is not an easy job, especially when you have to go through paperwork, make sure that you are eligible enough, and submit your legal documents. Out of all the documents, a home loan sanction letter is one of the most important ones. A home loan sanction letter is a piece of document in your pile that you get from your lender after your loan is approved. It is imperative to have this document with you while getting the loan agreement letter. You must have this document throughout the loan tenure and post that for future reference. Keep scrolling through this article to know more about the home loan sanction letter. In this article, you will know about the home loan sanction letter, its features, the process of getting it, and some important facts related to it. [B-01] What is a Home Loan Sanction Letter and What is its Significance? A home loan sanction letter is a piece of document that you get from your lender after the loan is sanctioned. It carries the consent of the lender and therefore shows that you are eligible for the loan and have been verified by your lender. After you get permission from the lender through a home loan sanction letter, you can further move to the process of claiming the disbursal of the loan amount. A home loan sanction letter is also the document that shows that you and your lender have mutually agreed to the terms and conditions of the home loan. After you submit all your legal documents including your application form to the lender, the lender verifies them all and gives you the sanction letter. Besides that, this letter consists of other important information, features, and conditions regarding the home loan. You will get to know about all of that in the coming section of the article. What are the Contents of a Home Loan Sanction Letter? A home loan sanction letter consists of the following information regarding the home loan: Loan Amount and Loan Tenure: A home loan sanction letter consists of the loan amount you have applied for. It also contains the tenure of repayment within which you are bound to repay the loan to the lender. Interest rate: A sanction letter of a home loan also has the type of interest rate that has been applied to the loan. It might be either a floating rate of interest or a fixed rate of interest, whichever you opted for. It also mentions the rate of interest that the lender has charged you and the base rate at which the rate of interest is to be calculated. EMI details: A home loan sanction letter also has information regarding the EMI details of the home loan. It shows the pre-EMI and EMI amounts that you have to pay through monthly instalments. Validity of the sanction letter: It also has a validity period until which the loan sanction letter is valid. Terms and Conditions: After all that, in the end, there is a list of the Terms and Conditions of the home loan. These terms and conditions are important as they show that you and the lender have agreed to them. What is the Process of Getting a Home Loan Sanction Letter? Now that you have known what a home loan sanction letter is and what it contains, now it is time for you to know the process of getting one. The process is quite similar to getting a home loan. Filling out the Application Form: The first step for you to get a sanction letter for a home loan is to fill out all the details that are given in the application. All your basic details with the documents to prove them are needed while filling out the application form. Loan Processing: After you apply for a sanction letter, you might face doubts regarding filling out the form. In that case, you can reach out to the bank officials through the toll-free number of the bank or go for a chat assistant. Verification: After you fill out the application form and submit all your documents, the lender goes through all the details and verifies them before sanctioning you the letter. These details include your credit history, credit score, income, type of job, etc. Loan Approval: After you are completely verified by the lender, you are approved for the home loan. To show consent in the written form, you are given a home loan sanction letter. You now have to keep this document’s lifetime for future reference. [B-02] Summing It Up As important as it is to have a home loan sanction letter, it is equally important to understand that this letter is not the loan agreement letter. A loan agreement letter states that the lender has agreed upon giving you the loan, which is the final letter before loan the amount is disbursed. A sanction letter for a home loan is often an initial approval from the lender’s side. You have to show this letter while getting the loan amount in your bank account. In case you have come this far, it is evident that you like reading about these topics. If that’s the case, you must visit Piramal Finance. In addition to that, it has plenty of engaging content on all types of loans, different investment schemes, financing tips, etc.

08-11-2023

Schemes

ECLGS - Emergency Credit Line Guarantee Scheme

As small businesses shut down in economically stressful situations, a slowdown of trade and commerce affects the livelihood of people. The government introduced a scheme to reduce stress and help build their trade again. Emergency Credit Line Guarantee Scheme (ECLGS) provides 100 percent coverage to banks and other institutions that lend to these businesses identified by the Kamath Committee. Read on to know more about ECLGS including its features, the purpose of the scheme, and eligibility. [B-01] What is Emergency Credit Line Guarantee Scheme (ECLGS)? The Indian government announced ECLGS in 2020 as a part of the Atma Nirbhar Bharat Package. Their objective is to aid MSMEs (Micro, Small & Medium Enterprises) to resume business and build their business that suffered during the pandemic. As per the scheme, Member Lending Institutions (MLIs) have been assured a 100 percent guarantee in case of non-repayment of the loan. After being introduced in May 2020, ECLGS was extended multiple times to include more sectors and increase the borrowing limit. In February 2022 it was extended till March 2023 to implement the announcement made in the Union Budget 2022-23. Also, the guarantee cover was expanded by Rs 50,000 crores to increase the total limit of the scheme from Rs 4.5 lakh to Rs 5 lakh crore. As of August 5, 2022, loans of about Rs 3.67 lakh crore were disbursed, as per government data. While earlier the scheme aimed at reviving SMEs and MSMEs, the finance ministry recently enhanced the ECLGS loan amount eligibility for domestic airlines, from Rs 400 crore to Rs 1,500 crore. Purpose of the Scheme The scheme aims to help MSME borrowers with the capital required to restart businesses affected by the pandemic. Who are eligible for ECLGS? Below, we have listed the eligibility criteria for ECLGS and it has been divided into points for better understanding. The components in the scheme includes ECLGS 1.0, ECLGS 1.0(Extension), ECLGS 2.0, ECLGS 2.0(Extension), ECLGS 3.0, ECLGS 3.0(Extension), and ECLGS 4.0. 1. ECLGS 1.0 As on February 29, 2022, the scheme provides fully guaranteed credit to business enterprises and individuals for specific business purposes. Their total outstanding credit across lending institutions should be up to Rs. 50 crore. 2. ECLGS 1.0 (Extension) Under this section, businesses that have availed financial aid under ECLGS 1.0 as of March 31, 2021, are eligible for the scheme. 3. ECLGS 2.0 As on February 29, 2022, borrowers belonging to 26 sectors identified by Kamath Committee with loans above Rs.50 crore to Rs.500 crore and due up 60 days are eligible for the scheme. However, it is also mandatory to meet other terms of the guidelines. 4. Under ECLGS 2.0 (Extension) As on March 31, 2021, those who have taken aid under ECLGS 2.0 as per the revised date are eligible for the scheme. It’s also mandatory to meet other terms of the scheme. 5. ECLGS 3.0 As on March 2021, those belonging to travel and tourism, leisure, catering, sporting, civil aviation, hospitality, floricultural products, and handling supply chains with due up to 60 days are eligible for the scheme. 6. Under ECLGS 3.0 (Extension) Businesses that have taken assistance as per ECLGS 3.0 or businesses that qualify under ECLGS 3.0 as on March 31, 2021, or January 31, 2022, are eligible. It is also mandatory to meet other terms of the scheme. 7. ECLGS 4.0 Under this section, hospitals, medical colleges, and units involved in providing liquid oxygen, oxygen cylinders, etc. are eligible. As of March 31, 2021, they should have taken a loan from a lending organization with a due up to 90 days. They are eligible for the aid of up to Rs 2 crore to set up Pressure Swing Adsorption for on-site oxygen-producing plants. An exception has been allowed if their credit card or savings account does not exceed 1 percent of the total loan amount. under ECLGS 1.0, ECLGS 2.0, and ECLGS 3.0, businesses or entities which had NPA or SMA-2 status as of February 29, 2020, are not eligible. Under ECLGS 4.0, accounts that had NPA status as of March 31, 2020, are not eligible. However, there will be an exception if the borrower’s savings account is not more than 1 percent of the loan. Under ECLGS, the overdue must be regularized before assistance is provided. Also, MLIs should ensure the process they follow covers the overdue. Other Eligibility Criteria The business requesting financial aid must have their GST number. However, MSMEs or enterprises that do not need GST registration do not fall under the category. ECLGS 2.0, ECLGS 3.0, and ECLGS 4.0 will be on an ‘Opt-in’ basis. The loans don’t need to be covered under NCGTC or CGTMSE Scheme. There will be no guarantee fee for credit facilities provided under this scheme. Similarly, there will be no processing fee or prepayment charges. The charges for documentation or other charges will be based on the extant guidelines of the bank. [B-02] Conclusion While the above-mentioned are the norms of the current structure of the scheme, the Management Committee for the ECLGS Fund will be the deciding authority about any changes to eligibility, criteria, guarantee fee, rate of interest, and tenor of GECL. There is no guarantee fee for credit facilities provided under this scheme. Similarly, there is no processing fee or prepayment charges. Documentation and other charges will be as per the guidelines of the bank. There will be comprehensive insurance for the securities charged to the bank should be taken depending on the bank clause.

08-11-2023

Personal Loan

Difference Between Two-Wheeler Loan and Car Loan

Owning a vehicle is a dream many people nurture. Having your own vehicle means that you can commute at your leisure and convenience. However, the cost of two-wheelers and cars is rising every year. Thanks to several loaning facilities available in the market, you can easily apply for a vehicle loan to realise your dream of buying a car. Once you decide to own a vehicle, you need to decide whether you want a two-wheeler or a four-wheeler. There are loan facilities available for both kinds of choices, but it is imperative to know what both of these choices entail in terms of a loan. Due to recent improvements, loan applications are now processed quickly and easily. You can choose from a variety of plans and options, especially when it comes to automobiles. The majority of applicants end up postponing their application procedure since they are ignorant of the difference between a two-wheeler and a car loan. To choose the one that is best for you, you should understand how they differ from one another. This article attempts to explain and highlight the main differences between a two-wheeler and a car loan. [B-01] Two-Wheeler Loans Versus Car Loans Compared to a car loan, a two-wheeler loan is very different. Even though both two-wheeler loans and car loans are classified as vehicle loans, the lender sees them as two different investments, thus there are some variances between the two. Bike prices are typically lower than car prices. Due to its affordability as a means of transportation and the rise in fuel prices, motorcycle use has increased among the general public. Additionally, COVID-19 and the rise in home delivery jobs have raised the demand for motorcycles and decreased default rates. Because of all these variables, getting a loan for a two-wheeler is easier than getting a loan for a car. How Do Two-Wheeler Loans Differ From Car Loans? Though both are vehicle loans, two-wheeler loans and car loans differ from each other in the following aspects: Compared to a car loan, a bike loan has distinct eligibility requirements. The repayment period of a bike loan is also shorter than that of a car loan. Though the interest rates are not fixed, the bike loan interest rate is different from the vehicle loan interest rate. It varies depending on the lender. Typically, a car loan is sanctioned for a significantly larger loan amount than a two-wheeler loan. These differences are further explained in a detailed manner below: Eligibility Criteria In comparison to a two-wheeler loan, a car loan has more stringent eligibility requirements. Your credit history, past repayment behaviour, history of prior loans, defaults, level of income stability, etc. will all be examined by the lender if you apply for a car loan. Nevertheless, it is simple to obtain a bike loan. You may easily apply for a bike loan because the procedure is straightforward. Repayment Tenure A bike loan has a shorter repayment period than a car loan. When compared to a car loan, which can last up to 5 years, a bike loan typically has a payback period of 2—3 years, though this can vary depending on the lender and be extended. The age of the vehicle at the time of purchase plus the loan’s term shouldn’t be greater than 10 years (in special cases, 12 years). Rate of interest A two-wheeler loan often carries a lower interest rate than a car loan. Despite this, there are several circumstances in which the interest rate for the bike loan may be higher. The same lender may charge varying interest rates for two-wheeler loans to various bike manufacturers. The financing rates on premium motorcycles are lower than those on regular vehicles. Two-wheelers loans have a different interest rate structure than car loans. Similarities Between Two-Wheeler and Bike Loans Loans for a motorcycle and a car are comparable. You can reasonably understand how to apply for a motorcycle loan, provided you have the right information about the various aspects of the loan process. Additionally, knowing the distinctions and parallels between loans for two-wheelers, cars, and even used cars will help you make the best choice. Automobile and bike loans have numerous differences, but they also have many similarities. For the most part, the same documents are needed for loan processing. Salary stubs, evidence of income, bank statements, proof of residency, identity proof, PAN cards, etc. are the primary documents needed. Both automobile and bike loans are secured loans. How to Get a Motorcycle Loan? After comparing the two types of loans—two-wheeler and four-wheeler—we can now look at the motorcycle loan application process. Of course, the loan application process is handled in a somewhat different way by each lender. The fundamental steps that must be taken to obtain a two-wheeler loan are similar. To learn more about how to apply for a motorcycle loan, read the following pointers: Complete the loan application with personal information and bike information. Determine your eligibility and the repayment period. Get your loan approved. Get your loan acceptance letter from the lender next. Go to the store where you want to buy your dream bike and buy it. [B-02] Summing it Up Car and bike loans differ, although they are nonetheless comparable in many ways. If you’re thinking about buying a bike, you should first look into the lenders who are providing the greatest interest rates on the market. Concerning loan tenure, interest rates change. So, make an effort to appropriately adapt the loan term for the bike. Purchasing a car has a similar process. Visit Piramal Finance’s website to know more about vehicle loans and other products and services offered by them.

08-11-2023

Credit Score

Difference Between Credit Score and Cibil Score

If you’ve ever applied for a loan or credit card, you’ve likely come across the terms credit score and CIBIL score. Many people use them interchangeably, which often leads to confusion. So, is credit score and CIBIL score same? The answer is not exactly. While both relate to your creditworthiness, there are some important differences you should understand. Credit Score vs CIBIL Score What is Credit Score? A credit score is a three-digit number that reflects your creditworthiness. It is calculated based on your credit history, repayment behaviour, credit utilisation, and other factors. The score typically ranges between 300 and 900, with a higher score indicating better credit health. Multiple credit bureaus in India generate credit scores — such as CIBIL, Experian, Equifax, and CRIF High Mark. Hence, the term credit score is a general category that includes scores from any of these bureaus. What is CIBIL Score? A CIBIL score is a type of credit score generated by TransUnion CIBIL, one of the major credit bureaus in India. When people refer to the CIBIL score, they are specifically talking about the score given by TransUnion CIBIL based on your credit information report (CIR). So, while all CIBIL scores are credit scores, not all credit scores are CIBIL scores. Difference Between Credit Score and CIBIL Score Let’s break down the key differences in the table below: Feature Credit Score CIBIL Score Definition General term for your creditworthiness rating Specific credit score by TransUnion CIBIL Issued By Multiple bureaus (CIBIL, Equifax, Experian) Only by TransUnion CIBIL Score Range 300–900 (varies slightly by bureau) 300–900 Usage Used by all financial institutions Widely used and most recognized in India Data Source Based on credit report from the issuing bureau Based on Credit Information Report by CIBIL Uniqueness Can vary depending on the bureau Fixed calculation method by CIBIL Reputation in India All are valid, but may vary in weightage Most popular and trusted score in India Hence summarising the above table, credit report is a generic term that refers to your overall creditworthiness whereas CIBIL report is a specific credit score given by TransUnion CIBIL. Furthermore, classifying the difference as follows. Issued By Credit Score: Can be issued by any authorised credit bureau in India such as: CIBIL (TransUnion) Experian Equifax CRIF High Mark Each bureau may calculate the score slightly differently based on their own models. CIBIL Score: Is exclusively issued by TransUnion CIBIL. It is not a general term — it refers only to their calculation of your creditworthiness. Difference Between Score Range Both types of scores typically range from 300 to 900. Higher score = better credit health. While CIBIL and other bureaus use the same range, the actual score may differ slightly for the same individual due to different scoring algorithms. Credit Score Vs CIBIL Score Usage Credit Score: Used broadly by financial institutions and lenders. Depending on their preference, they might refer to the score from any bureau. CIBIL Score: Most commonly requested score in India. Many banks and NBFCs have long-standing partnerships with CIBIL, making it the go-to score for most evaluations. Difference Between the Data Source Credit Score: Based on the credit report maintained by the respective bureau. Each bureau pulls data from lenders, credit card companies, and financial institutions to build their report. CIBIL Score: Based on your Credit Information Report (CIR) maintained by TransUnion CIBIL, which is updated monthly with your credit activity from member institutions. Method of Calculation Credit Score: Since each bureau uses different scoring models, your score may vary from one bureau to another, even with the same data. CIBIL Score: Uses a specific and consistent algorithm by CIBIL, so there’s only one CIBIL score per person at a time. Reputation in India All bureau scores are valid and accepted, but some lenders may give preference to one over the others. CIBIL Score: Has the strongest brand recognition in India. It was India’s first credit bureau, and over the years, it has become the most trusted and widely accepted credit score. How Can I Check my CIBIL Score? You can check your CIBIL or credit score online for free from various platforms. Here's how: To check your CIBIL score: Visit Piramal Finance CIBIL score page. Enter your mobile number and captcha. Click on ‘Get Your Free Credit Report’. Verify the OTP sent on your mobile number. Enter your PAN card details and basic personal information. View your CIBIL score and report. To check your credit score from other bureaus: You can also check credit scores from other bureaus through Piramal Finance like: Experian India Equifax India CRIF FAQs What is a good CIBIL score? A CIBIL score of 750 or above is generally considered good. It improves your chances of getting loans approved at better interest rates. What is a good credit score? Just like the CIBIL score, a credit score of 750+ from any bureau is considered healthy and creditworthy by most financial institutions. What is considered while getting a loan – credit or CIBIL? Lenders consider both terms — but what matters is the credit report from a recognized bureau, most commonly CIBIL. Factors include: Repayment history Loan utilisation Credit mix Recent credit inquiries Length of credit history

08-11-2023

Home Loan

Home Loan Document List For Self-Employed Individuals

Understanding the intricate details of the home loan process can be overwhelming, especially for self-employed. But it doesn’t have to be. This is a comprehensive guide to documents required for home loan for self-employed individuals. It will provide you with all the information you need to make a well-informed decision about obtaining a loan. [B-01] Documents Required for Home Loan For Self-Employed Home loan applications have a lot of documentation requirements. There are, however, a couple of documents that are usually required in every loan application. These documents include the following: Credit Report: A credit report is a document that has all the details regarding your credit history and credit score. A credit report will show your credit history and give a general idea about the amount of risk you pose to the lender. Credit reports are generally needed for most kinds of loans and are used to determine the interest rates of a loan. Statement of Financial Information: The Statement of Financial Information (SOFI) is a document in which you provide details about all your assets, liabilities, and income. This document is needed for many types of loans and can be used to decide on the terms of your loan. The lender will use this document to check if you have enough money to repay the loan without being a risk to them. These are the documents you can submit: Income Tax Returns with calculation for the last two years P&L and Balance Sheet with all annexures (must be audited and certified by CA) Account statement for the current account for the last six months Your savings account statement for the last six months Proof of Other Financial Obligations: Lenders will also want to see proof of your financial obligations, such as any existing debts you have. To prove your debt obligations, you’ll need to provide: Mortgage statement Car loan statement Any other loan statements Identity Proof: This is yet another important document required for home loan. This document includes one or a few of the following: Voter Card Aadhar Card Passport with validity Driving License Credit Card with photo Government-issued Photo ID card Identity verification letter with a photograph from a recognized public servant or figure (less than a month old) Address Proof of Residence: You will also need to submit proof of your address to the lender. You can submit one or more documents from the following list: Voter Card Aadhar Card Valid Passport Letter from a recognized public authority or public servant verifying your residential address Latest Utility bill Rent agreement on stamp Paper Bank Statements reflecting your address of any commercial nationalized bank Credit Card Statement (not older than 3 months) Life Insurance Policy Copy of Sale of the property (residence), if you own it Address Proof of Business: Apart from address proof of your home, the same for your business is also a document required for home loan. You can submit a copy of any of the following: Shops & Establishment Certificate Trade License Certificate SSI Registration Certificate PAN Card/ Sales Tax/ VAT Registration Certificate Partnership Deed (for firms) or MOA for companies Export-Import Code Certificate or Factory Registration Certificate Professional qualification Certificate and Degree Certificate for Professionals SEBI Registration Certificate The registration number issued by ROC Tips for Preparing Home Loan Documents It is important to submit complete, accurate, and genuine documents while applying for a home loan. Here are a few things you can do to prepare the complete and accurate documents required for home loan: Gather all the relevant documents: Collect all the documents that are relevant to your loan. If you don’t have the documents, then you will have to take them from the previous business or homeowners. Make sure to request genuine and legal documents from the previous owners. Submit original documents: Make sure to submit original and genuine documents. Don’t submit photocopies of the documents since the lender will reject these documents. Scan documents and store them in a secure place: Make a scanned copy of all the documents and store them in a secure place such as a cloud storage or a password-protected folder. You can also store them on an offline hard drive. How to Choose the Right Home Loan for You Pick the right type of home loan by keeping the following things in mind: – Budget: Before applying for a home loan, make sure that you have a budget that is realistic and tailored to your specific situation. Credit Score: Make sure to check your credit score before applying for a loan. If your credit score isn’t very high, you can consider applying for a loan with a lower interest rate. Rate: Choose a home loan that has a lower rate when compared to all other loan types. Make sure to check the different types of interest rates that each loan type has to find the best one for you. Term: A home loan term is the length of time for which you take the loan. Make sure to choose a long-term home loan since short-term loans have higher interest rates. Repayment: Choose a home loan that has a flexible repayment plan since most self-employed individuals may face difficulties in making monthly repayments due to their fluctuating incomes. Down Payment: Choose a home loan that has a low down payment since having a high down payment can make it difficult for you to apply for a loan. [B-02] Conclusion Instant Loans and Instant Funds are a quick, simple, and stress-free solution to supplement your current Home Loan. Given this, it’s an excellent solution for covering any unexpected or urgent monetary demands.

08-11-2023