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Home Loan

Difference Between a Land Loan and Home Loan

Are you looking to buy your dream home or acquire a piece of land in a prime location in the city for investment purposes? One of the quickest ways to put your ideas in motion is by getting a loan. This article discusses land and home loans to help you make an informed choice. If you want to buy a property, you will likely cross paths with these two types of loans. But how to differentiate one from the other? Let us explore and understand. [B-01] Home Loan Vs Land Loan Home and land loans typically have the same terms and conditions and the application process. However, a few fundamental differences exist between the two. Definition You can avail of a home loan for ready-to-move properties, properties under construction, to be self-constructed. Land loans, also known as plot loans, are offered for purchasing a plot of land. However, the plot must specifically be for residential use. Eligibility Criteria Both resident and Non-Resident Indians can avail of home loans. In contrast, a land loan is strictly offered to Indian citizens only. Plot and home loans are offered to salaried and self-employed individuals based on the following criteria: Age Source of income Credit Score Repayment capacity Property Location You can take a home loan for property outside the municipal area. However, any land inside a village or industrial area does not qualify for a land loan. In this case, the plot of land must reside within the municipal limits. In addition, the land in question must be demarcated. Tenure The tenure for home loans is exceptionally high, extending up to 30 years. In contrast, the tenure for land loans is 15 years. However, this is the maximum tenure. Lenders like the State Bank of India provide a tenure of 10 years for land loans. Interest Rate Interest rates on home loans tend to be the lowest in the market. On the other hand, the interest rate on land loans is typically 0.5% to 1% higher than on home loans. Tax Benefits Principal repayment and interest payment for home loans qualify for tax deduction under Section 80C and Section 24B of the Income Tax Act. Contrarily, land loans do not come with tax benefits. Loan to Value The loan to value (LTV) is the percentage of property value a lender can lend to the borrower. The LTV of land loans differs from that of home loans. The LTV can be as high as 90% for home loans. However, in the case of a land loan, a borrower can get only up to 75% of the property value. This limit applies only to loans meant specifically for land purchase. The lenders may fund higher if the borrower avails of a land purchase and construction loan. Remember that 75% is merely the upper limit. Most lenders are conservative in terms of the loan amount and valuation of the property. So, expecting approval on a lesser amount would be wiser. Summary Category Home Loan Land Loan Eligibility Criteria Both resident Indians and NRIs can apply for the loan. Only Indian citizens can apply. Objective The loan is meant for the purchase or construction of residential properties The loan is given for buying a plot of land. Tenure of the Loan Maximum tenure is 30 years. Maximum tenure15 years. However, the upper limit may vary from one lender to another. Benefits of the Taxes The principal amount and interest are both tax-deductible under the Income Tax Act. No tax benefits. Location of the Property No restrictions. Plots in industrial or rural areas do not qualify for the loan. The land should strictly be located inside municipal limits. Maximum Loan-to-Loan Value Up to 90%. Up to 75%. Rate of Interest 7.25 – 7.50% per year. 8.0-10.0% per year. Composite Loans Do you belong to the unique category of borrowers who want to purchase a plot and build a house on it? In that case, go for a composite loan. These loans are given by lenders to buy a plot and construct a house within a specified timeline. Before applying for such loans, note that the time limit is crucial here. Typically, borrowers must begin construction within 3-5 years. However, the period varies from one lender to another. Moreover, the construction-specific part of the loan is disbursed only when you complete the foundation work. A composite loan attracts the same interest rate as home loans. However, you may have to pay slightly higher interest till you do not begin construction. [B-02] Conclusion The application and repayment procedures are the same for home loans and land loans despite their differences. Both have their specific benefits and purposes. The article above has listed down crucial information to help you determine which one suits your needs. However, remember that your credit score is vital for both loans.

08-11-2023

Other

How to Finance your Home Renovation?

Have you just bought a new home or an apartment put on resale? Congrats! But hold on! Do you have enough money to revamp the place? It would be unfortunate if you bought a new house and were left crunched for funds to turn it into a beautiful home, wouldn’t it? A home renovation loan is a solution to this problem. This article will walk you through options to fund your home remodelling work. Here are several basic methods to secure funding for remodelling your home. [B-01] What is a Home Renovation Loan? Banks provide home renovation loans to people who need financial assistance to restore or repair their houses. You can use the funds to improve the decor of your house, such as redoing the flooring, tiling, plastering, painting, and also renovating areas such as the kitchen, living room, and bedroom. The paperwork process for a home renovation loan is simple and the interest rates are similar to housing loan rates. A home renovation loan is a good option to arrange funds for house repair. Yet, many people borrow credit lines for this reason, which might be an unfair or time consuming process. Even though a personal loan may be obtained in a week or two, the payout of a home repair loan may take longer. If you already have a house loan, your chances of getting a home renovation loan are better. You may also claim tax perks after taking out a home repair loan. However, home renovation loan interest rates at various banks might range from 10.25% to 11.00%. So seek choices that are both cost-effective and provide the most value. Ways to Finance a Home Renovation While a home renovation loan is a way to finance the renovation, let’s also take a look at some other options. Here are the top ways to finance your home renovation: Using One’s Savings If you have been planning to renovate your home for a while, there are chances that you may have considered setting aside some money regularly for achieving this goal. If you have enough money saved to support the repair work without risking your investment objectives, utilising your savings for a house repair is a smart choice. One way to plan this is to set aside some money as a fixed deposit (FD). Getting a Personal Loan Some lenders and banks offer personal loans that can be used to renovate your house. You can get a personal loan based on your monthly income. It is an unsecured loan and you can use the personal loan amount as you see fit. However, the loan duration and interest rate may vary from bank to bank. Also, some banks charge a fee for pre-paying a loan. It is important to carefully read the terms and conditions when availing such a personal loan. Taking out a Construction Loan If you are going to build yoru dream home from scratch, a construction loan can be of assistance. A construction loan enables you to draw cash from the loan when your bills come, whether for a minor expansion or a total knock-down rebuild. This saves you money since you only pay the interest on the progress fees paid until the loan is completely drawn. Property loan You may get a loan against your house to do house repairs. The majority of banks and credit unions provide this loan. Banks will lend up to 80% of the property’s worth. The interest rate on loan against property is lower than that on a personal loan. You can choose six months or more to pay back the loan based on your needs. This loan also provides tax savings. Using a Credit Card You can use your credit card to purchase materials for your home repair projects. Based on how much your credit limit is, you can also withdraw money to use for your home renovation. You can split your whole spend into easy EMIs and return it in a year or less based on your financial plans. Using a credit card enables yourepayturn the loan in advance without incurring any charges. However, this does not provide you with any tax benefits. Property Extension Loan Banks and other financial institutions provide property extension loans. This loan may be used for repair and property expansion. The interest rate may differ from one bank to the next. You may choose a tenure that meets your needs. This loan is also tax deductible. Use of Equity in the House If you are an eligible customer of yoru bank, you can use the equity in the house to top up (raise) or redraw the house renovation loan. Top-Up Loan Topping up your house loan may be a viable option if you’re planning repairs, merging debts, or just needing more money. You can obtain more on your current home loan without taking out a new loan. You may get help with a cheaper interest rate than other loans, such as a personal loan. Mortgage Loan Banks lend you money by taking your gold, jewels, and assets into debt. This is another way to get funds for your repair job. A mortgage loan, however, has a higher interest rate. You must pay 9.50% and 11.25% interest on your house and top-up loans. Yet, you will be charged a higher interest rate for this loan. [B-02] Conclusion Are you familiar with the saying, “Home is where the heart is”? This place, called home, is where a person’s life is rooted. Therefore, it is natural that one may want to spend on renovating it from time to time. A planned home renovation helps you revamp your house with minimum financial burden. Using a home renovation loan or other methods is a great way of funding the repair and redesign of your house. For more such interesting articles and financial products, visit Piramal Finance website.

08-11-2023

Guide

Difference Between Repo Rate Vs Reverse Repo Rate

The bank will charge interest when you borrow from them. Consequently, if you deposit money, the bank pays interest. But have you ever wondered how banks fund themselves? The answer is simple. Banks either utilise deposits or borrow from the central bank – the Reserve Bank of India (RBI). For these transactions, the RBI implements a tool called the Liquidity Adjustment Facility (LAF). Under this arrangement, banks can borrow from or lend money to the RBI through the repo and reverse repo agreements. The interest rate levied on these transactions is the Repo Rate and Reverse Repo Rate. This article explains the main differences between these two terms. What is the Repo Rate? The Reserve Bank of India (RBI) charges interest on loans borrowed by commercial banks. This rate is called the repurchase agreement rate or Repo rate. Typically, commercial banks secure loans from the RBI by pledging various government securities as collateral, such as treasury bills and bonds. The repo rate is nothing but the lending rate charged by the RBI. The repo or repurchase agreement allows the RBI and commercial banks to repurchase securities at a pre-determined rate. These agreements are set in motion when banks must maintain liquidity in uncertain market situations. The RBI uses the repo rate to control inflation. So, let us now understand how the repo rate works. How Does Repo Rate Work? The RBI uses repo rates to regulate money moving through the market. It increases the rate when inflation strikes. Banks borrowing money from the RBI during inflation pay a high interest due to a raised repo rate. This severely affects the bank’s capacity to borrow from the RBI. The end customer feels the impact of a repo rate increase in two ways: Banks increase the rate of interest on deposit accounts to increase the cash at their disposal. Thus, investors can enjoy higher interest on fixed-income instruments. To combat the repo rate hike, banks further increase the interest rate on loans, making them costlier and thus less sought after. With fewer loans to disburse, banks manage to retain greater liquidity. The decrease in liquidity lowers demand in the economy, reducing inflation levels. Repo Period The RBI has stated that the repo period can be ‘overnight, open, or flexible.’ Overnight repo does not extend beyond a night. However, the situation gets complicated if the term is predetermined and agreed upon in advance. This type of repo is known as the term repo. In this case, either side may request to stop the repo at any moment with one or two days’ notice. Term repo typically lasts for one week. However, there is no maximum limit on repo tenure. Current Repo Rate The current repo rate is 5.90%. The RBI increased the repo by 50 basis points in September 2022. What is the Reverse Repo Rate? Commercial banks deposit money with the RBI and earn interest when they have surplus funds. This interest paid by the RBI is called the reverse repo rate. In other words, the reverse repo rate is the rate at which the central bank borrows from commercial banks. How does the Reverse Repo Rate Function? RBI often applies the reverse repo rate during inflation. This increases the rate, prompting banks to park more money with the RBI and earn higher returns. As a result, the banks have less money to extend in the form of loans. Thus, the liquidity in the economy decreases. Current Reverse Repo Rate As of November 2022, the reverse repo rate is unchanged at 3.35%. Repo Rate Vs Reverse Repo Rate Parameters Repo Rate Reverse Repo Rate Definition The rate at which commercial banks borrow from the RBI. The rate at which the RBI borrows from commercial banks. Liquidity A hike in the repo rate drains excess liquidity from the economy. When the reverse repo rate goes up, the liquidity in the market increases. Objective Repo rate helps control inflation. A reverse repo rate helps manage the money supply. Interest Rate The repo rate tends to be higher than the reverse repo rate. The interest rate is lower than the repo rate. Mechanism of Operation The RBI lends funds to commercial banks against securities pledged as collateral. Commercial banks deposit surplus funds with the RBI and earn interest on their deposits. Current Rate The current repo rate is 5.90%., The current reverse repo rate is 3.35%. [B-02] Conclusion The repo and reverse repo rates are vital tools for managing the economy. However, we must remember that the repo rate will always be higher than the reverse repo rate. Further, the difference between these two rates determines the RBI's financial income.

08-11-2023

Personal Loan

Go Green: Paperless Personal Loans with Piramal Finance

Much has changed over the years in terms of how people access and use loans. Instead of waiting for days, most people today want fast and simple answers to their money needs. The era of digital platforms in the finance sector has made this easier. The government is already doing its share to digitise the economy. It is focusing on developing a cashless system. Piramal Finance’s paperless instant personal loans are one instance of how this sector is growing. People in the digital era want fast answers to money issues. Loans given by Piramal Finance meet these needs. These loans assist them in solving the money crisis. Many experts predict that the future of client finance will be online. Let’s talk about how paperless personal loans are helping to alter lending firms. [B-01] Features of Paperless Personal Loans with Piramal Finance Here are the features of paperless personal loans that you must note: No asset is needed. Users do not need to pledge security or assets to get a loan from Piramal Finance. This makes these loans a good choice for many people. Tenure of flexible repayment. Piramal Finance loans allow you to repay the loan according to your financial capacity. You may choose a payback period of 12 to 60 months. Huge loan amount. Piramal Finance offers large loans of up to Rs. 25 lakh to meet your money needs. Other Offers. Your needs are a priority at Piramal Finance. Piramal Finance’s loans are tailored to these specific demands and aims. Simple online access You can monitor your loan account online, check your current loan balance, and even arrange partial payments since the process is fully paperless. Before asking for a personal loan, research and compare loan rates, and look for hidden prices or charges. Piramal Finance places a premium on openness, and all charges are disclosed upfront. You may apply for an online personal loan on Piramal Finance now that you know the whole process of getting a loan. Perks of Paperless Personal Loans from Piramal Finance A lending platform aims to test your creditworthiness by assessing your data online. Getting a loan via digital lending platforms is faster and easier than going to a bank. Here are some of the benefits of a paperless personal loan: It is trouble-free. Getting paperless personal loans is easy. There is no need for lots of paperwork, many visits to the bank, or filling out and signing page after page. With a few mouse clicks, you may apply for a loan from the comfort of your own home. It takes less time. The entire process, from approval to disbursement, is done online. You may save energy and time by not having to visit the bank often to submit papers. The loan is granted quickly and with minimal human interaction. It protects your data. Digital lending sites are subject to strict security testing and must comply with bank-mandated security measures. Hence, the technology ensures that all data on the site stays private and secure. You must first match the eligibility rules to get a loan without papers. Eligibility for Paperless Personal Loans with Piramal Finance Following are the eligibility requirements for paperless personal loans with Piramal Finance: You must be a paid employee. You must be an Indian national. You must be between the ages of 23 and 58. You must have a clean credit history and an above-average credit score of 700 or higher. Use the loan calculator to assess your eligibility when applying for a loan. All you have to do is enter your net revenue and the EMI you can afford. You will have all the needed data. Make sure you have a soft copy of the papers available to expedite your digital rapid loan form process. Documents required by Piramal Finance Paperless personal loans are simple and quick to apply for. Yet, to get the loan money, the user must provide some papers to the firm. These papers ensure that the user is a real borrower capable of paying the loan amount. Users must provide digital copies of these papers and allow the firm to verify them. Users may now e-sign papers, making the process easier. The following papers are needed for online loans: ID Proof PAN card, Aadhaar card, driver’s permit, voter ID, and any other official ID with your picture and name are accepted as proof of ID. Proof of Address For a paperless personal loan approval, you can show that you live in the area with your utility bills, passport, ration card, or voter ID. Proof of Job Your work ID card acts as proof of employment. Money Records You must also supply your bank records, Form 16, and the last two months’ pay stubs. How do paperless loans function? Many firms today find it relatively simple to receive and verify digital applications. You no longer need to visit a branch office to finish loan applications. You may do this from any place and simply ask permission. The process is mainly the same for all banks in the market, and the stages are as follows: Go to the lender’s official website. Fill out the online form with your data. Provide digital versions of all vital paperwork. The bank will get the papers and check their validity. If the paperwork is approved, the loan is sent to the user’s bank account. [B-02] Conclusion Paperless personal loans provide various perks for both lenders and users. By eliminating the time-consuming process of paper filing, you can save a lot of time and receive the loan amount quickly. Most of the country’s main banks offer pre-approved loans to current clients. Pre-approved credit does not need any papers since the user profile is already present with these banks. The ease of paperless personal loans has already become popular in India, and it’s expected to develop much more in the future. Check out similar blogs on Piramal Finance and explore their products and services.

08-11-2023

Personal Loan

A Quick Guide: 5 Easy Steps To Get A Personal Loan In India

Personal loans are short-term loans that can be used for a wide range of purposes. For example, you could use a personal loan to pay off your debt, fix up your house, or plan the wedding of your dreams. Personal loans are available from banks, credit unions, and online lenders. When you borrow money, you have to pay it back over time, often with interest. Personal loans in India work the same as how most other loans work. When you want a loan, you fill out the paperwork and send it to the bank. The bank checks your creditworthiness and then gives you a loan. When you say yes, the money will be sent to your bank account and you can use it however you want. Personal loans in India are on the rise because they are becoming more popular and people want them. People can easily take advantage of the many benefits of a personal loan. [B-02] Why Should You Acquire a Personal Loan in India? Personal loans in India have several benefits. You should consider them if you’re trying to decide between a credit card, another type of loan, and a personal loan. It will help you make an informed choice in the long run. Here are the main benefits of personal loans: Easily spreads out the cost of a big purchase - A personal loan lets you spread out the cost of a big purchase like a vacation, wedding, or new car over a longer timeframe. This makes it much more affordable. And, it also means you won’t have to cut back on your own finances to pay for it. Teaches you to take care of your own money - Personal loans aren’t always used to buy big things. You can also use them to better handle the debt you already have. This comes in the form of a debt consolidation loan. In this loan, you combine several debts, such as those from credit cards, overdrafts, and old loans, into one product. You could save money on interest because you will only pay one rate instead of multiple rates which could add up to a higher total cost. No collateral or security is required - By choosing an unsecured personal loan, you avoid the risk that comes with a secured loan which requires you to put up your home or another asset as collateral. This type of borrowing is based only on your credit score. Hence, you do not need to put up anything else as security. What Are The Different Kinds of Personal Loans in India? Personal loans are one of the quickest ways to get money. But a lot of us are unfamiliar with the different kinds of personal loans in India. Let’s check them out. Short-Term Personal Loan A short-term personal loan starts at Rs. 25,000 and can be paid back to the lender in a few months. This personal loan adds money to your account within a few hours and doesn’t require much paperwork. Wedding Loan The goal of this loan is to help families and couples deal with the stress of paying for a wedding. It can be used to pay for big things like the venue, where guests will stay, jewellery, food, decorations, etc. Most of the time, the rates on these loans are higher during the wedding season. Travel Loan This is the kind of loan you should get if you’re planning a trip and want to pay for it without using up your savings or messing up your monthly budget. A travel loan can get you the amount you need faster and at a lower interest rate. Agricultural Loan Farmers can get this type of personal loan in India that will help them buy equipment, tools, and raw materials that they need for farming. This loan has a very low-interest rate, which encourages farmers to make more money with what they do. Home Renovation Loan As time goes on, your home and way of life should change, too. As the name suggests, this loan can help you pay for repairs or improvements to your home. So, if you wanted to fix that leaky ceiling or get wood floors, this loan can help you do that without putting a dent in your savings. Medical Loan A medical loan is a type of personal loan that you use to pay for things like surgery, routine medical procedures, and trips to the emergency room. You can also use a medical loan to pay for high health insurance deductibles or to consolidate medical debt. Get a Personal Loan in India With These 5 Steps Apply Online - If you want to apply for a personal loan in India, the first thing you’ll need to do is fill out an application form. This form will ask you for information about yourself and your job. The lender will get a better idea about your background and income here. Lender verification - When the lender gets your loan application, they check the information you gave. They specifically look at your age, monthly salary, profession, etc., to see if you are eligible for the loan. KYC process - Once your basic information has been verified, the lender will start authenticating the documents you sent with your application form. Maintain a good credit score - On average, to get a personal loan in India, you need a credit score of 600 or higher. But, as was already said, different lenders have different credit score requirements. When you apply for a personal loan, your credit score is a big part of whether or not you will get it. Processing fee - Once the loan amount and tenure have been decided, you’ll have to pay a processing fee to get the loan money. After you pay the fee, the personal loan amount will be sent to your account in 3–5 business days. Conclusion Personal loans are becoming increasingly popular in India. The trend can be attributed to the numerous advantages that these loans offer. With a personal loan, you are free to use the money for whatever purpose you see fit. Personal loans, in contrast to others, are simple to obtain, have interest rates that are reasonable, and require a minimum amount of paperwork. To learn more about personal loans in India, Piramal Finance has similar blogs for you to gain insight from. As an emerging loan lending platform, they also offer a wide range of products and services for you to benefit from.

08-11-2023

Personal Loan

Looking For Instant Personal Loans In Ahmedabad?

Many types of loans are available from banks and other financial entities. Thanks to technological advancements, applying for a loan is now easier and faster. This could mean that getting a loan is less of a hassle than before. When it comes to loans, personal loan in India is the most sought-after option. More than 78% of credit applications in India are in this category. These loans are popular among potential debtors. That’s because they are risk-free to the lender. Getting a personal loan from a bank, an online lender, or even your credit union is possible. You must start paying back the lender according to the repayment plan as soon as you have the money. If you’re looking for answers about how to get a personal loan in Ahmedabad, then you’ve found the right blog. Read on for detailed advice on securing a private loan in Ahmedabad. [B-01] How to Get Instant Personal Loans in Ahmedabad? When you ask for an instant personal loan, the bank doesn’t need to investigate your credit history. The bank doesn’t need to verify any collateral or security to approve your loan. Online applications and less documentation have made the procedure more practical and simple. Thus, this part is for you if you are interested in learning how to get a personal loan via the internet. Follow the steps below to get instant personal loan in Ahmedabad: Seek a dependable lender Many financial institutions now provide loan applications that you can submit online. This eliminates the need to visit a branch physically. Scanning digital copies of your paperwork and submitting them is a great option. It is especially great for people with busy schedules. That’s because it allows them to complete the entire process from their homes. You could even use lunch breaks to complete the application. Various financial institutions have speedy processing times. This feature ensures speedy disbursal of funds into your account. Maintain an excellent credit history and credit score A credit score is a three-digit figure that measures your creditworthiness. Higher scores show greater reliability in meeting financial obligations. Also, the bank will feel more secure knowing they can rely on you to make all your loan payments on time. If you keep a good credit score, you can get a personal loan online without talking to a bank employee. Also, suppose you pay your bills on time and don’t apply for too many loans. In that case, you’ll build a good credit history and have a good credit score. Maintaining your bank balance A bank will be more ready to give you a personal loan if you win their trust. You can show you can make your loan payments by keeping a healthy bank balance. Prequalification for a loan is a possibility in particular scenarios. But, there are a few upsides to maintaining a sizable amount in your account. In the first place, it’s useful in a dire situation. Second, it improves your chances of getting a loan. Third, It improves your chances of getting a better interest rate on your savings account. Which, in turn, means your loan will get approved quicker. Thus, you must not disregard your regular account balance if you seek an online personal loan. Online/offline application The first step in getting a personal loan is filling out an application. The application will need personal and professional information. You can fill out the form at the bank’s branch or online. But online loan applications streamline the procedure and save you time. Bank verification Once the bank gets your loan application, its staff will verify your details. They do this to determine your eligibility for a loan based on many factors. For example, age, monthly income, occupation, etc. Now, suppose you are already a customer at this bank. In that case, the bank will verify your financial history by looking at your bank statements. It will also look at any loans you have already taken out. KYC process Once your personal information gets confirmed, the bank will check the KYC documents. These are the documents you provided with the application or brought to a local branch. Applying for a personal loan is now very easy. A bank representative will visit your house to collect the paperwork. Address Confirmation A person from the bank may pay you a personal visit to verify your residential address. But, if you are self-employed, bank staff will visit your business to verify your residency. Credit score check The bank will look at your repayment history, pay stubs, or tax records. They’ll do this after they’ve verified your identity and determined your eligibility. Loan approval An instant personal loan gets approved very quickly if you match the requirements. Also, it gets approved quicker if your details are valid and your credit score is at least 750. Loan amount, tenure, and interest rate The bank will determine the loan amount and interest rate it will offer you based on several factors. For example, credit history, age, employment history, and other professional details. Banks also let you pick your payback term based on your finances and repayment capacity. Processing fee After the terms of the loan get finalized, the loan gets disbursed in exchange for a processing fee. You pay fees for personal loans in full. Moreover, the loan gets deposited in your account within 3-5 days. [B-02] Conclusion You can use a personal loan for anything. These include medical care, wedding costs, travel bills, and other bills. But, you should only take out a loan that you are confident you will be able to pay back. The lender will reduce processing, approval, and disbursement times. They can do this if you provide genuine documents with accurate information. With any luck, the information presented herein will aid you in your pursuit of a personal loan.

08-11-2023

Income tax return

How to Claim HRA While Filing Your Income Tax Return (ITR)?

You’ve been hearing a lot about HRA exemptions from coworkers, the HR director, and friends. It seems to be a profitable tactic to save taxes, yet you may be wondering: Can I claim HRA exemption? If so, what are the main needs that must be met to get this perk? How much HRA tax relief can I claim? Let’s find the answers to these pressing questions in the next sections. [B-01] What is HRA? HRA stands for House Rent Allowance. It is the sum the firm gives to staff to assist them in paying the costs of living in rental housing. HRA is paid as a sub-component of salary by most employers in the private and public sectors. The most exciting part is that salaried people who live in leased houses may claim HRA tax exemption under Section 10 (13A) of the Income-Tax Act. To claim exemptions such as HRA, LTA, and income tax deductions as per Chapter VI-A, you must submit Form 12BB to your employer. It should be noted that under Section 80GG of the Income Tax Act, self-employed people may also claim tax exemption for rent paid. How is HRA Tax Exemption Calculated? The deduction available is the least of the following amounts: Actual HRA received. 50% of [base pay + DA] for people who live in cities. 40% of [base pay + DA] for residents of non-metros. The actual rent must be less than 10% of the base pay and DA combined. Eligibility Criteria to Claim HRA If the following criteria are met, you may claim HRA exemption for the time you stayed in rental homes: You must be a salaried employee HRA-related tax perks are mainly given to salaried persons. This exemption is not open to self-employed persons. HRA is included in your CTC or payment package Your CTC or pay package is made up of many items, such as base salary, allowances, extra perks, and so on. To take advantage of this exemption, you must make sure that HRA is included in your CTC. Live in rental homes This exemption is only available if you live in a rented home. You must be paying rent. There is no tax perk if you live in a self-owned home. You’re surely curious if you can claim this deduction if you live in your parent’s home and pay rent to them. Yes! You may claim the exemption by paying rent to your parents. Your parents, on the other hand, must report rent income received from you on the income tax return. It is also suggested that you pay rent by bank transfer and sign the rental agreement. Submit a rent slip to your employer to inform them of your rent payment You must notify your employer of the rent you have paid and submit your rent slip. The landlord’s PAN must be given if the yearly rent is more than Rs. 1,000,000. Claim at the time of return Employers often do not provide HRA exemption on Form 16 owing to a lack of valid data. But if your HRA claim was not assessed in Form 16, you might claim the exemption directly in your IT return. How Do You Claim HRA Exemption While Filing Income Tax Returns? Section 80C of the Income Tax Act of 1961 exempts premiums from taxation. Also, any reward received under the savings policy is tax-free under Section 10 (10D). In most cases, your boss will require that you submit your home rent slip in the last quarter of the fiscal year to claim HRA exemption on Form 16 prepared by the employer. If you do not provide your rent slip to your employer, the firm will take TDS (Tax Deducted at Source) without considering the HRA on your wage slip. Even in this situation, you may claim HRA deduction on your ITR. You must manually compute the exempt HRA total. If you provide a rent slip to the employer: If you submit your house rent slip to your employer and other supporting papers, they will review the case and lower the tax withholding accordingly. Form 16 and your tax return will both disclose your exemption. Claiming HRA via your workplace is simple. However, if your yearly home rent exceeds Rs. 1 lakh, you must provide your landlord’s PAN card data to your boss to qualify for the HRA exemption. Also, because your Form 16 and ITR-1 forms are synced, filing for HRA tax exemption has become even easier since the amount is instantly pre-filled in the ITR forms when you submit your claim online. If the employer does not get the rent slip: If you did not submit your receipts to the employer, you might claim an HRA exemption in your ITR. In this situation, the firm would not have included the HRA exemption in the taxed wage, resulting in a greater TDS deduction. The excess TDS deduction will be repaid when you claim the HRA deduction on your ITR. Yet, you must compute the correct HRA exemption amounts and subtract the equivalent amount from your pay. Factors to Consider Before Making HRA Deductions Here are a few points to know regarding HRA tax exemptions: If you pay rent to your spouse, you cannot claim HRA tax exemptions. HRA exemption from income tax can be taken even when you have a house loan. If your landlord is an NRI, a TDS (Tax Deducted at Source) of 30% must be deducted from the rent before it is paid. [B-02] Conclusion A salaried employee should take advantage of the chance to claim an HRA tax exemption since it is one of the finest legal methods to save tax. Make a point to keep all solid pieces of evidence. To be on the safe side, send money via a bank account since it is hard to prove rent is paid in cash. The value of the exemption is assessed by section 10 (13A) of the Income Tax Act. If finding the sum of exemptions seems hard, you can visit Piramal Finance for more such blogs and explore their products and services.

08-11-2023

Personal Loan

How to Get an Instant Paperless Personal Loan Online?

Banking and non-banking financial institutions offer paperless personal loans to help you with urgent needs. Paperless personal loans are the best way to get some extra cash when money is tight. You must first determine what you need and choose the best type of paperless personal loan. Finding the right lender is necessary when you need a personal loan, especially if the interest rates are reasonable. Here are some tips to help you decide which paperless instant loan is the best. What are the things you should consider when choosing a paperless personal loan? 1. Documents You must provide digital copies of all the paperwork, like bank statements, income statements, and ITR reports. The documents should be submitted with your application. You can submit these documents as scanned documents (PDF) or images. However, some lenders may ask you for specific file formats. 2. Interest rates You may be offered an interest rate of 11 to 22%. The interest rate you are offered depends on your credit history, income and credibility. Your income and credit history influence the interest rates the most. 3. Fund distribution The principal amount is transferred directly to your account as a single payment. You are not required to do any additional formalities. This is the benefit of an online paperless personal loan. However, it also means you must provide the correct bank details. What are the benefits of a paperless personal loan? One of the best things about an immediate paperless personal loan is that it does not need any assets as collateral. It implies that you do not have to give the lender anything as security for the loan. Since the loan does not need any collateral, it is beneficial for those who do not have assets or strong finances. Because it is a paperless personal loan, the entire procedure is online. You will not have to request documentation. You will not have the stress of filling out forms, waiting in lines, and putting in time and effort to get approved. The paperless process is much more efficient and quick. Once your online paperwork has been confirmed, the personal loan transfer will happen swiftly. Several lenders also provide pre-approved loans to customers with existing profiles. These types of loans require even less documentation. You may not have to submit any documentation if you have a credit history with the lender. Other loans can only be used for specific expenses. For example, you can only use a car loan on your car. On the other hand, a paperless personal loan can be used for anything. You can use the borrowed money for medical expenses, vacations, marriages, education, etc. Who is eligible for an online paperless personal loan? Anyone can apply for a paperless personal loan. You must only meet the lender’s criteria to be eligible for a paperless personal loan. Different lenders have different eligibility criteria for a paperless personal loan. However, some of the criteria include the following. Your age must be between 21 and 60. Your credit score must be at least 700. This varies depending on the lender. Some lenders may accept higher or lower credit scores. Your monthly salary must be at least INR 25,000. Self-employed applicants and business owners should have a gross annual income of at least INR 5 lakhs. Salaried employees should have worked for at least 12 to 24 months before applying for a loan, and self-employed individuals should have run their businesses for at least three years before applying for a loan. How do I apply for a paperless personal loan? Getting a paperless personal loan is simpler than submitting a physical application. Visit the lender’s website and look through the loan options. Find paperless personal loans. Please review the lender's eligibility criteria and the documents you need to submit. If you do not have all the documents, collect them. You need to submit soft copies of these documents. Fill out the application form and upload the required documents. Once your application is checked, you will receive an e-approval. Some lenders check applications within minutes, but others may take 2-3 days. For more information, you can contact the lender’s helpline. You will receive a proposal from the lender. The proposal will include all details, such as the interest rate offered, EMIs, principal amount offered, conditions, and fees. Read through all the documents before you accept the proposal. Look through the charges you may have to pay. Some lenders charge pre-payment and foreclosure charges. Also, look through the default charges and delay fees before accepting. If the terms are to your liking, accept the proposal. The principal amount will be credited to your bank account. Who can acquire a personal loan if they do not have new documentation? Lenders often give personal loans without documentation to current clients. For example, your bank may offer you a paperless loan since they already have KYC data such as PAN card, Aadhar card, residence details, income details, debt repayment history, etc. Lenders may also provide you with pre-approved personal loans. However, this depends on your profile. There is no guarantee you will be offered a no-documentation loan. Collecting all documents before applying for a paperless personal loan is best. [B-02] Conclusion Lenders and borrowers can benefit from paperless personal loans in many ways. Personal loans have recently undergone significant changes and offer swift processes. Paperless loans can help you get any loan you need swiftly.

08-11-2023

Personal Loan

How to Get The Lowest Personal Loan Interest Rate

When taking a personal loan, the interest rate is one of the most important factors to consider. A lower interest rate means you pay less money over time, making your loan more affordable. However, lenders decide the rate based on different factors like your credit score, income, and repayment history. By understanding how interest rates work and taking the right steps, you can get the best possible deal. In this guide, we will explore the ways to secure the best personal loan interest rate. When it comes to personal loans, picking the right plan is vital. Piramal Finance provides you with a variety of packages. Employ their online calculator to get the best personal loan with the lowest interest rate for your budget. [B-01] Best Way to Get a Lowest Interest Rate Personal Loan Here are some tips and tricks that will help you get a personal loan at the lowest interest rate possible from Piramal finance. Boost Your Credit Rating. Your credit score shows how credit-worthy you are. With a high credit score, you will receive the best deals on your debts in terms of the interest rate charged, loan fees, etc. So, before asking for a loan from Piramal Finance, you should always monitor your credit score. Prevent Skipping Repayments. Your credit score may suffer if you don’t make a loan or credit card payment on time. Before deciding the interest rate for a loan, Piramal Finance typically considers your history of timely repayments. A personal loan with lower interest rate will likely be offered to those who have a history of making timely EMI and credit card payments. Employer. Many lenders base the interest rates on the employer account of the loan seeker. Salaried people pay lower rates than self-employed people because the income is more predictable. State and PSU workers receive lower rates than salaried people because of their higher job safety. The next group of users for loans are those who work for MNCs and other reputable firms. These groups are thought to have a higher chance of surviving recessions than other listed firms. Keep an Eye Out for Offers. During festivals, Piramal Finance typically provides special borrowing costs. Make the best of this opportunity. While such a promotion is active, you might be given a personal loan with a lower interest rate. Compare Lowest Interest Rates for Personal Loans. Try comparing the borrowing costs charged by Piramal Finance before requesting a personal loan. This will help you get a personal loan easily at a reasonable interest rate. Talk to Piramal Finance About The Loan. If you are an existing client/customer of Piramal Finance or have a good relation with them, you can bargain to get an easy personal loan with the lowest rate. It is advised to send the loan provider a formal, written request when doing this. Interest Rate of a Personal Loan The interest rate on your loan is defined by three factors: the loan sum, the loan term, and the rate of interest. Personal loan rates differ from person to person. The sum you pay monthly will also be decided by the term of the personal loan. The shorter term will result in bigger payouts, whereas a longer one will result in lesser payments. With a shorter loan term, your overall interest payments will be cheaper. A longer-term means larger interest payments. Advantages of Using a Piramal Finance Personal Loan Quick Approval. Get digital approval in minutes with minimum paperwork. Go to the site, input your data, and upload your papers. Borrow in Parts. You may borrow any sum from Rs. 3,000 to your credit limit as and when you want it. You don’t pay interest on funds you don’t utilise. Save Money On Interest. As interest is paid only on the sum utilised and not on the total allowed limits, you may save a lot of money on interest when compared to typical personal loans. Piramal Finance’s interest rates start as low as 12.99% per annum. Adjustable Repayments. You may set your payback plan. Pick flexible EMI choices of 2-36 months and make payments when best for you. Manage Loans, Repayments, & Fund Transfers Through Their Website. Everything you want is at your fingertips. Manage your account from the comfort of your home with Piramal Finance’s website. Factors Influencing Personal Loan Rates Piramal Finance has developed guidelines for a low-interest rate personal loan. They base their interest rate offers on those guidelines. The following factors influence Piramal Finance’s personal loan rates: Loan Amount. The most vital factor Piramal Finance considers is your required loan amount. The loan value given to you is set by your income and the sector in which you work. Repayment Period. The duration of the line of credit directly affects the interest rate. The tried-to-offer rates would then reduce as the tenure lengthened. Borrower’s Earnings. The loan interest is dictated by your income. If you have a great salary and a steady income stream, Piramal Finance will ensure that you can make timely loan payments. You will benefit from lower rates and an easy personal loan if you make this impression. Potential for Repayment. The capacity of the person to repay the loan is key in assessing interest rates. Piramal Finance believes that you will repay the loan on time if you have no other debt obligations. Rating of Credit Your credit score influences how much you can finance and the rate of interest. As a result, if you possess a credit score of least 750 and no defaults, interest rates can be much lower. [B-02] Conclusion Personal loan rates are determined using the declining balance approach. Your monthly interest burden will be decided by the main sum left after prior repayments. With each payment, the amount left reduces, as does your interest load. You may calculate your monthly EMI payments using Piramal Finance’s EMI calculator. If you want to know more about the lowest personal loan interest rates, visit Piramal Finance for related blogs and explore their products and services.

08-11-2023