Popular article

Your one stop place for everything related to finance and lending

Personal Loan

5 Things to Know About Gold Loan Interest Rates

A gold loan is a secured loan that lets you use gold jewelry and coins as collateral. Based on the rules laid down by the Reserve Bank of India (RBI), a lender can give you up to 75% of the value of your gold. Since gold prices change every day, most lenders will figure out how much your gold is worth based on the market price of gold on that specific day. When prices are high, you may be able to get a higher loan amount against your gold jewelry at good prices. The interest rates on gold loan will directly affect how much you have to pay back. So, it is important to understand how gold loan interest rates are set and what you can do to get the lowest gold loan interest rate. [B-01] Interest Rates on Gold Loans Gold loan interest rates range from 7% to 18%. The main things that affect the interest rate are the size of the loan and the borrower’s monthly income. The gold loan interest rate will be higher if you borrow more money. The interest rate will be lower if you have a stable, high income. The value of the loan is directly linked to how much gold you have. The purity of the gold doesn’t make a big difference in the interest rate. Some NBFCs and banks charge a foreclosure fee of up to 2%, not including GST, if you repay the loan before the pre-scheduled repayment period of 3–6 months. They also charge a minimum processing fee of Rs. 500, or 0.5%–2% of the loan amount. Factors Affecting Gold Loan Interest Rates There are many factors that affect gold loan interest rates. These are the following: Loan amount Your lender will give you a gold loan based on the value of the gold you give them. The amount of the loan affects how much interest you pay. The interest rate goes up as the loan amount goes up. The typical loan-to-value ratio for lenders is 75%. This means that they will give you no more than 75% of the value of the gold you give them. The more you borrow from a lender, the more interest you have to pay back. Monthly pay Gold loans aren’t the same as other personal and business loans in terms of what the borrower needs to do. In terms of other loans, the lender will assess everything related to your credit score, your job, and your business plans. But to get a gold loan, you only have to meet a small number of requirements. One of the things your lender will look at is how much money you make every month. The more money you make, the more a lender will trust you. The lender is sure that you will pay back the loan, so they charge you the lowest gold loan interest rate. But if you make less money, the lender might charge you a higher rate of interest. External lending benchmark rates Your gold loan interest rate is based on the external benchmark that the lender’s interest rate is tied to. All loans approved by banks are linked to an external benchmark. When the Reserve Bank of India raised policy rates, the lender immediately raised interest rates. Still, when the Reserve Bank of India lowered interest rates, they didn’t change right away. The RBI asked the lenders to tie their interest rates to a benchmark from the outside world. That could be the yield on 10-year government bonds or the RBI repo rate. This rate will affect the interest rates on gold loans. The interest rate on gold loans will change every time the Reserve Bank of India changes its policy rates. Credit score Along with your monthly income, your credit score is one of the aspects your lender will consider when determining your credibility. This score will reflect your loan repayment habits. The higher your credit score, the more confident the lender will be. This also means that the lender will offer you a lower interest rate because there is no doubt that you will repay the loan and avoid default. How Do Gold Loans Interest Rates Affect Your Repayment Amount? Gold loan interest rates will directly affect how much you repay the loan, which is true for all loans, not just gold ones. The repayment amount will be less if you opt for lower interest rates. A gold loan offers you two extra ways to repay the loan besides the EMI, unlike other types of loans. These strategies include periodic interest payments and bullet repayment. However, the gold loan interest rates will have an impact on the repayment amount regardless of which option you choose. Consider a scenario where a person wants to choose a 2 lakh INR gold loan with a 12-month term. Let’s assume he takes out a gold loan with interest rates of 10% and 20%. A 10% annual interest rate would result in an EMI of INR 4,249 and an outlay of INR 54,965 for interest. On the other hand, if we use a 20% annual interest rate, the EMI will be INR 5,299, and the interest outlay will be INR 1,17,927. Therefore, if you choose a higher interest rate for a gold loan, you will have to pay an extra 1,000 per month as opposed to a lower interest rate of 10% annually. Similar to this, paying more interest means spending a lot more money. Therefore, choosing lower interest rates for your gold loan is advised. Maximum Value of a Gold Loan One of the most important factors is the loan-to-value ratio (LTV), which is set by the RBI and determines how much a borrower can borrow against the gold’s value. Banks can give out loans for up to 75% of what the market value of the gold ornaments is. For example, if the LTV is 75% and the value of the gold is INR 10,000, the most the customer can borrow is INR 7,500. [B-02] Conclusion Before you apply for a gold loan, one of the first things you should check is the interest rate. Most people get gold loans, even though they have high interest rates, because it’s a fast way to get money. You shouldn’t be in a hurry to get a loan with a high interest rate. If the interest rate is higher, you’ll have to pay more each month. Visit Piramal Finance for more information on gold loan applications, interest calculations, and much more.

08-11-2023

Other

Everything You Need to Know About the EMI Calculator

Everything You Need to Know About the EMI Calculator The Equated Monthly Installment (EMI) is the monthly payment that people make to a bank after taking out a loan. When you borrow money, the bank gives you a contract that says how you will pay it back. The EMI includes both the interest and the original amount (principal) you borrowed, divided by the time you have to repay the loan. This means that the amount you pay each month depends on how much you borrowed, the interest rate, and the time you have to pay it back. Initially, EMIs can be high, but they go down as you continue to make your payments. What Exactly is the EMI Calculator? An EMI calculator is a simple tool that helps you figure out how much your monthly payments will be for a loan. You can find these calculators on the websites of various banks and lenders. This calculator not only helps you with the monthly payments but also shows you the total interest you'll pay over the life of the loan. To use an EMI calculator, you just need to enter three things: the loan amount, the loan period (how long you want to take to repay it), and the interest rate. What Exactly is an EMI Calculator for a Home Loan? When you borrow a large amount of money, like for a home loan, you might worry about how much interest you will pay. A home loan EMI calculator helps you see how much money you will owe each month. Since home loans can last a long time, sometimes decades, it’s essential to understand what you’ll have to pay. Knowing this amount helps you plan your finances better. With a home loan EMI calculator, you can see how much money you should set aside each month for your EMI. If the loan terms don’t work for you, you can change the loan amount, the interest rate, or the loan duration to find a better fit for your budget. EMI Calculation Formula The formula to calculate EMI is: [P x R x (1+R)^N] / [(1+R)^N - 1] = EMI Here:P – Principal Loan Amount (the money you borrow)R – Monthly interest rate; if the interest rate is annual, then R = interest / (12 x 100)N – Loan tenure in months (how long you will take to repay the loan) What Role Does EMI Calculation Play in the Planning? An EMI calculator helps you see exactly how much you need to pay each month for your loan. This information is useful for planning your monthly budget. By knowing your EMI, you can manage your finances better and ensure you don’t overspend. The calculator also helps you understand how much money you can borrow and how long it will take to repay. This information is crucial to ensure that your loan fits your financial situation. Factors Affecting the Loan EMI The principal sum (P)The principal amount is how much money you want to borrow. This amount directly affects your EMI. If you borrow a smaller amount, your monthly payment will be less. If you borrow a larger amount, your monthly payment will be higher. Interest rate (R)The interest rate is how much the bank charges you to borrow money. This rate directly influences the EMI. A higher interest rate means higher monthly payments, while a lower interest rate results in lower payments. The Benefits of an Online EMI Calculator AccessibilityYou can access an online EMI calculator anytime and from anywhere. You can use it multiple times whenever you want. Simple and time-savingUsing an online EMI calculator saves time. Doing all the calculations manually can be tedious and slow. With an online calculator, you can quickly see the results for different amounts and terms. AccuracyWhen you do calculations by hand, it’s easy to make mistakes. An online EMI calculator helps avoid errors, giving you accurate estimates for your payments. Helpful in the financial planning processWhen you calculate your EMI, you can see how much you need to pay back. This allows you to arrange your finances before you take out the loan, ensuring that the EMI fits within your monthly budget. You can also experiment with different loan amounts and terms to find the best option for you. The online EMI calculator for any loan type You can find EMI calculators for different types of loans, including car loans, home loans, and student loans. Although many calculators are similar, you might sometimes need to use specific calculators provided by different lenders. Conclusion If you have chosen a home loan plan, the home loan EMI calculator can give you a clear idea of how much you will pay in interest. If you are still exploring options, the EMI calculator helps you compare different loan offers. By entering various loan amounts, interest rates, and term lengths, you can see the different costs associated with the loans. This information allows you to make a well-informed decision about which loan to choose. Visit Piramal Finance to learn more about home loan calculators and explore their range of products and services.

08-11-2023

Personal Loan

Personal Loan Salary Less Than ₹20,000: Low-income Personal Loan

When faced with unplanned expenses, a personal loan can be a real lifesaver. As personal loans are unsecured loans, the lender will expect you to prove a stable financial situation and an ability to repay the loan amount. So, thinking about your base pay and any other sources of income is vital. As the process of getting loans has been made easier, people with a monthly income as low as Rs 20,000 can also get a personal loan. Continue reading to find out how to get a personal loan even if you have a low salary. [B-01] Criteria for Getting a Personal Loan for Low Income To get approved for a personal loan on a low income, check that you meet the following needs: To get a personal loan for low income in India, you must be a citizen of India. Borrowers at Piramal should be between the ages of 21 and 60 years to qualify for a personal loan. You must be employed full-time by a government organisation or a private firm. You should have worked at your current place of work for at least one year. To get a personal loan for low income, you must show at least six months of full-time work history. To qualify for a personal loan for low income, your monthly income should be at least Rs 25,000. Documents to Apply for a Personal Loan PAN Card ID Proof (one of the following) Passport Driving license Aadhaar card Voter’s ID Address Proof (one of the following) Rent agreement in the borrower’s name Passport Diving License Aadhaar Card Voter’s ID Electricity bill/Water bill/Gas bill (not more than 3 months old) Proof of Income Play slip from the last month Bank statements from the last 3 months Co-applicant If you need a personal loan for low income, you can club the income of a co-applicant. Only spouses can be entered as co-applicants. All the above-mentioned documents are also required for the co-applicant. Features and Perks of a Personal Loan No CollateralTo get approved for an unsecured personal loan for low income, you do not need to put up any collateral or security. Because of this, personal loans are one of the easiest ways to get money because of this. Flexible TermsBanks offer personal loans for low income with low rates of interest and easy repayment offers. You can choose the payment term that works best for you, so your EMIs do not go over your budget. Your loan tenure can last up to five years. This allows people with income less than Rs 20,000 to enjoy a stress-free loan tenure. Pre-Approved LoansMost banks offer their current customers personal loans that have already been approved. Customers get these loans based on how often they put money into and maintain the balance in their savings accounts. Low-salary personal loans that have already been pre-approved usually have lower interest rates. No PaperworkA personal loan for low income is an unsecured form of credit, so it usually does not require a lot of paperwork. If you want to apply for a personal loan, you only need to attach scanned copies of documents that prove your identity, address, and income, along with a duly filled loan application form. Quick Loan Approval and Payment ProcessingDue to the small number of documents that need to be turned in, banks usually approve and give out loans quickly. The loan amount is transferred to your savings account within hours after approval. So, personal loans are ideal for situations where you are in urgent need of cash. Why Choose Piramal Finance? Piramal Finance gives loans to even those who earn a salary of less than Rs 20,000. These loans are given without any collateral. Also, the loan is approved quickly with no hassle. You can get a personal loan of up to Rs 20 lakh if you fulfil the below-mentioned criteria. A wedding, a dream product, a vacation, or even school tuition might all be paid for with the help of a Piramal Finance Personal Loan. Piramal will guide you through the application process and work to make the transfer of funds smooth and quick. Features of a Piramal Finance Personal Loan There are no extra fees for the prepayment of the loan. A loan with a minimum amount of Rs 1,00,000 and a maximum amount of Rs 10,000,000 can be secured through Piramal. Fewer documents are needed for the personal loan application process. The loan is approved right away, and then the loan amount is also credited to your savings account without any delay. Piramal Finance offers a range of EMI offers that do not put any strain on monthly income and savings. It offers flexible plans for paying back the loan ranging from 12 months to 60 months. It allows applicants to combine several sources of income to improve their overall personal loan offer. [B-02] Conclusion Personal loans can save the day for people with any income range. So, if you are looking to get a personal loan on a low salary, you need not worry about rejection. Personal loans for a salary as low as Rs 20,000 can be taken out with the utmost ease with Piramal Finance. With a Piramal Finance Personal Loan, you can enjoy perks like low-interest rates and a variety of repayment tenures. If you want more such financial solutions, visit Piramal Finance and check out all their services and products.

08-11-2023

Home Loan

3 Simple Steps For Effective Home Loan Management

The most significant financial choice that most individuals want to make is buying property. Given that owning a home is expensive, many people choose to borrow money for it. A home loan from a bank or mortgage lender is a good option. Housing loans are secured loans obtained by pledging the property as collateral to the lender. They offer high-value financing with low house loan interest rates. Furthermore, they also have long repayment terms. They are repaid through EMIs. Following repayment, the borrower receives possession of the property. [B-01] 3 Simple Home Loan Management Practices Opt for home loans with lower interest rates As a borrower, choose housing loans that are available at affordable interest rates. This is the first step to consider before opting for a home loan. It will help you pay your EMIs in the future. Interest rates tend to fluctuate. So, thoroughly research low house loan interest rates before finding a suitable loan option. Enhance your EMIs Once you avail yourself of a home loan, you should keep a constant monetary check on the EMIs. Hence, it is recommended that your monthly repayments be increased. Home loans offer huge financial support to the borrower. However, repayment of such a heavy amount in a short period can be made possible by increasing your EMIs. This routine monthly practice will prove quite effective and helpful in the long run. For your convenience, you should use a loan calculator. Assess your monthly expenditures and enhance your EMI accordingly. Opt for the partial repayment option Getting a loan cleared is the primary concern of most borrowers. The best way to achieve this objective is by opting for partial repayments. This will cut a significant chunk of your loan repayment amount. Besides, this practice also ensures a cut on excessive interest payments. As a borrower, EMI enhancement and partial repayment are potential practices that lower the burden of your loan. What Is the Importance of Home Loans? Everyone wishes to enjoy the security of their home, and getting a home loan can help them get it. Obtaining a house loan comes with many benefits, including: Tax Benefits The government provides tax advantages on mortgage loans. Under Section 80C and Section 24B, individuals are eligible for tax refunds of 1.5 lakh rupees and 2 lakh rupees, respectively. Newly built residences are not eligible. Reduced Rates of Interest Housing loans are available with fixed as well as adjustable interest rates. They also have lengthy terms. If house loan interest rates are floating, you will enjoy declining ROIs. Enhanced Assets Property investment is a rising asset class. By taking out a mortgage, you can buy a home today that will increase in value tomorrow. The business of buying residential houses will keep prospering. This is due to India’s young population and a growing desire to own a home. Stay Liquid Preserving or investing your liquid assets is recommended if you have access to them. As life is erratic, it frequently throws our plans into a loop. You can experience a liquidity crisis in the future if you use up all your available cash to buy your favourite house in one go. Home loans enable you to maintain liquidity while only paying a small chunk of your salary or savings through EMIs. Rent Relief If you do not want to move frequently and waste money on rent, applying for home loans to purchase a home is the best alternative. It gives you the freedom to decorate your home and live your life as you wish while also providing enough space for each family member. Refinancing Facility Home loans allow borrowers to transfer a particular loan to another institution or lender to avail themselves of a feasible return on investment. Unsatisfaction with your current home loan ROI or the institution's representatives should motivate you to make a shift. This shift should offer lower rates of interest and good service. Selecting a Low House Loan Interest Rate Opting for a low interest rate is one factor to consider when applying for a home loan. You can borrow money from lenders to pay for a home at a predetermined interest rate. When you begin repaying the loan, you also have to pay the interest. Usually, there are two types of house loan interest rates: Fixed interest rate Simply put, a fixed interest rate is one that the bank or lender decides will not change during the loan. You get the advantage of knowing your loan repayment amount before you sign the loan agreement. Throughout the term, your home loan EMI will also not change. Floating interest rates A floating interest rate changes in response to market developments. The rate would increase or decrease depending on how the market is performing. Your interest payment may increase or decrease if the interest rate is variable. As a result, your EMIs will also rise or fall. Lenders have different interest rates that consider competitive factors, ranging from 6.5% to 13% p.a. You may calculate the interest using an EMI calculator. You only have to enter the loan amount, loan payback period, and interest rate there. Once the details are filled out, you receive a complete overview of the loan, including the amount due. [B-02] Conclusion Buying a house is a huge step. It can cause stress, but it also provides a great sense of achievement. Given the skyrocketing real estate prices, it is challenging for an average person to buy a home purely out of savings. On the contrary, home loans enable you to buy your dream home and provide other benefits. These loans have low interest rates. This makes them a central part of investment portfolios. They also aid in claiming an income tax deduction of up to Rs. 1.5 lakh for the entire interest paid on the home loan. Piramal Finance has various other blogs on home loans that you must check out. You may also take a closer look at their various financial services and products.

08-11-2023

Other

5 Smart Financial Steps Young Adults Should Take

A new year comes with many possibilities and the chance of a new start. Whether or not one’s goals were met in the past year, looking forward is always the first step toward a better future. If the last two years have taught us anything, it’s important to save money and be ready for whatever life throws at you. Building wealth takes time. According to scientific research, it takes a new habit about 66 days to become part of your daily routine. So, now is a good time to plan finance and build good money habits. Here are steps in financial planning you could take in 2025 to reach your goals. [B-01] 5 Smart Financial Steps for Young Adults Track Your Expenses Tracking your expenses is a good first step in financial planning. Know where and how much of your money is going. When you look at something from a different angle, it can help you understand it better. So, look at your income and expenses from a wider angle. Then, narrow your attention to how wisely you can spend your money. Keeping track of all your spending can take time and effort. Managing your expenses is the first step to plan finance better. You can keep an eye on all your transactions. You could better look at your spending history and decide how to spend your money. There has been a big shift toward digital spending in India in the past few years. So managing your expenses is one of the best pieces of financial advice. Start Investing There is no right or wrong time to start investing. You don’t have to be “The Big Bull” or “The Big Bear” to start investing in the stock market. Make several safe, low-stakes bets to get started. Systematic Investment Plans (SIPs) are a simple and effective technique that you should use. SIP has become a popular way to put money into mutual funds regularly. It is similar to a recurring deposit. So, it gives you freedom in your steps of the financial planning journey. After that, you can work on building a portfolio of different kinds of financial instruments. Look into low-risk mutual funds and always think about the long term. Fixed deposits, recurring deposits, provident funds, the national pension scheme, and other safe options are also good for people who don’t want to take as many risks. Also, remember another plan of finance, the power of compounding. This gives you a slow and steady income source. But keep in mind that market-linked financial programs cannot avoid risk. So, building a risk tolerance that fits our goals is important. Don’t let FOMO (fear of missing out) influence your investment decisions. Be sure to invest, but don’t invest just because you want to take advantage of it. As financial markets involve risks, you should always do your research and never depend only on the advice of others. Set Financial Goals Goals provide accountability. When did you last make a finance plan? If it has been a while, now is the best time. Think about what you want to do with your money in the coming year. Start a fund for emergencies or pay off your credit card debt. It’s okay if your goals differ from those of the other people in your life. Once you have written down your goals, you can figure out what steps you need to take to get there. If a goal seems too big, you can break it up into smaller tasks that are easier to do. This will make the goal as a whole easier to reach. Build an Emergency Fund No one knows when something bad will happen. It could be losing a job, getting sick, or fixing the house. These kinds of emergencies can make it hard to stick to your budget. An emergency fund can help in this situation. You should have an emergency fund with enough money to cover your living costs for at least six months. This will help you get through a short-term financial problem. Work on saving money for emergencies. At least 10% of your monthly income should go into a high-yield savings account that you can easily access in an emergency. You might have to cut back on spending or get a second job to put money in your emergency account. Tax Planning Tax planning is fundamental and essential financial advice. It helps to lower your tax bill. Don’t look for ways to save money on taxes only at the end of the year or when it’s time to file your taxes. Start making plans early, ideally at the start of a new fiscal year. There are many ways to lower your tax bill, such as investing in government programs to lower your taxable income. Another way is to plan your tax deductions ahead of time so that you can get a lower tax bill. Standard deductions include life insurance, health insurance, mutual funds, and house loan interest. Financial Advice for Your Better Financial Future Check out Your Credit Score It is one of the vital steps of financial planning. You need a good credit score to grow your assets and get good deals on loans and credit cards. Check your credit report from the three major credit bureaus once a year, and correct any errors right away. Know the Debt-to-Income Ratio Keeping track of how much money comes in and goes out is very important. This is the most important thing you can do to keep your money in good shape. The money that comes in is your salary, cash vouchers, bonus, rental income, investment returns, etc. The money that leaves your account is what you use to pay your bills and debts. Once you know how much debt you have compared to how much money you make, you can take the next step toward building wealth. Save Money for Retirement It’s always true that the earlier you start saving, the more money you’ll have when you retire. That’s how interest on interest works. When you regularly invest for retirement, your money grows steadily, which helps you be rich when you retire. [B-02] Wrapping Up Planning your finances is the first step to being financially secure. It’s vital to begin the journey by completing simple goals. You can get a good financial start if you know the basics. If you make smart money choices in your 20s, it can help you become financially successful. Using the tips above, you can work on getting a good credit score, getting out of debt, and saving money for retirement and other big events.

08-11-2023

Personal Loan

5 Things to Know about Gold Loan Interest Rate Calculation

Have you ever thought about the best way to figure out the interest rate on a gold loan? Are there other ways to calculate the interest rate on your gold loan than the one you are using now? Before choosing an interest rate calculation method for a gold loan, you need to know what kind of calculation method it is. There are different ways to determine the interest rate on a gold loan, and each has its own formula. The five things below will help you understand how the interest rate on a gold loan is worked out. [B-01] Why is Gold Loan Interest Rate Important? When you get a gold loan, the lender will charge you interest on the amount you borrow. Repaying a loan, also known as making interest payments, is a burden on a borrower that he has to pay to keep from defaulting. But what if someone who took out the gold loan can’t pay the interest? Looking for the best gold loan with a reasonable interest rate is important; you can pay on time and increase your credit score. This means you should consider the interest on a gold loan before applying for one. 5 Important Things About Gold Loan Interest Calculation Here are the five most important things you need to know about your gold loan interest rate. How much money you make from a gold loan depends on how well you know how to figure out the interest rate. Here are the top five things to think about when calculating the interest rate on a gold loan: The Size of the Loan: When calculating the interest rate for a gold loan, the loan amount is one of the most important things to think about. In a strict sense, the loan amount determines the amount of gold collateral needed and the interest rate. Interest rates change based on the length of the loan, with higher rates for larger loan amounts. The Type of Interest Rate: Most people who borrow money wrongly think that only one type of interest rate stays the same each month. Different lenders may charge different interest rates on gold loans. Borrowers can use many types of interest, such as compound interest (interest on interest), jumping interest (interest that goes up every month), EMI (interest on a certain percentage of the principle), and punitive interest (interest that goes up if you don’t pay on time) (charged if you have not closed your loan account after maturity). This is why it is important to know what kind of interest is being shown. The Loan Tenure: The loan term is very important in calculating a gold loan’s interest rate. The time you have to make monthly payments depends on the loan’s term. When everything else stays the same, the longer the loan term, the lower the interest rate on a gold loan will be. So, when calculating the interest rate for a gold loan, it’s important to think about how long the loan will be. The Legal Entity: Interest rates on gold loans are heavily influenced by the fees charged by the lending institution. For example, interest rates on gold loans are often higher if the company taking out the loan has to pay extra fees. In contrast to NBFCs, banks often charge a 1%–2% processing or valuation fee. So, the gold loan interest rate is calculated by calculating all the charges. Loan Calculators: Interest rates on gold loans are hard to calculate, but loan calculators may help. Borrowers can use online loan calculators to figure out how much interest they will have to pay based on several factors, such as the size of their loan, the current price of gold, and how long it will take to pay back the loan. If you already know these numbers, you can use a loan calculator to calculate the interest rate on the gold loan. What Affects the Gold Loan Interest Rate Calculation? Market Price of Gold If the price of gold is high, you can expect your gold jewelry or coins to be worth a lot. The interest rate will be lower for a loan secured by gold ornaments because the lender is taking less risk. If you don’t pay your EMIs, the lender can easily get the rest of the money by selling or auctioning off the ornaments. Inflation When inflation is high, people save gold because its value goes up while the currency’s value decreases. Gold could be a hedge against inflation that lasts for a long time. Because of this, the price of gold goes up, and if you want to get the best gold loan at that time, you can talk to your lender about better terms. Relationship with the Bank Most gold loans are only available to existing customers. However, some banks will also lend to people who never had an account. But people who go to the same bank or credit union often have more power to negotiate interest rates. How Can You Get a Gold Loan? Step 1: You can get a gold loan either online or offline. To apply online, go to the lender’s website and click on the loan product you want to apply for, which would be “Gold Loan.” Next, you must click “Apply Now” if the website has this option. After this, you will have to complete the online application form with the necessary information and submit it online. Step 2: If you can’t apply for the loan on the lender’s website, you’ll have to go to the nearest branch. Many lenders have a link on their website that lets customers find the closest branch. Make sure you have a copy of the necessary documents at all times. Step 3: The lender will check your application after you send it in. The loan amount will be sent to you if your application is accepted. Step 4: Getting a gold loan is a quick and easy way to get money in an emergency. Make sure you do your research and get a gold loan that fits your needs and your ability to pay it back. [B-02] Wrapping Up We hope you enjoyed the list of things to know about gold loan interest rate calculation and that it has helped make the process a bit clearer for you. As we said at the beginning, this is an area where there’s always more to learn; however, understanding how interest rates are calculated is a good place to start. To learn more about this topic, visit Piramal Finance. And if you have any thoughts about gold loans or interest rate calculation, let us know in the comment section!

08-11-2023

Personal Loan

What Will Happen If a Personal Loan EMI Bounces?

Most loans often come with a provision for equated monthly instalments (EMIs). You become a defaulter if you do not pay your EMI on time. Lenders offer a few solutions to mitigate such risks. The solutions offered depend upon various factors like your CIBIL score and your past payment history with the lender, but there are consequences to missing the payment/EMI due date. So, what happens when you default on personal loan payments? The article focuses on the consequences of missing a personal loan EMI payment. It discusses the different ways to avoid defaulting. We also provide you with an idea of the short- and long-term consequences of an EMI cheque bouncing. However, before delving into the consequences, you must understand the types of defaults. What are the default types on personal loans? Most banks and financial institutions categorise personal loan defaults into two types, as follows: Critical defaults Major payment defaults occur when you have gone more than 90 days without paying. Lenders will not work with you if you have a default history. A personal loan account is classified as a non-performing account (NPA) when payments are overdue by more than 90 days. Minor defaults Personal loan payments delayed by less than 90 days are considered minor payment defaults. In such cases, your CIBIL score will suffer. However, this problem is temporary, as the score can once again increase. You need to make payments on time. What are the consequences of missing an EMI payment on a personal loan? Missing a personal loan EMI can affect you in the following ways: Your CIBIL score may decrease. The most visible effect of missed personal loan payments is a drop in credit scores. To qualify for a loan from any financial institution, you need a CIBIL score of 750 or higher. If you miss an EMI payment, your credit score can go down. The decrease in your credit score depends on your payment history. Your creditworthiness decreases. The credit report includes your payment history and credit score. Personal loan applications with high CIBIL scores are rejected if they include negative remarks. Lenders will classify you as a high-risk borrower if you have negative remarks. These remarks show the lenders your probability of making the EMI loan payment on time. You have to pay penalties. Many banks and financial institutions charge late fees. The fee is between 1 and 2% of the total EMI amount. Some institutions may also include other penalties if you default several times. These penalties are mentioned in detail in the original loan contract. You get a visit from reviving agents. When the default period on an EMI exceeds 90 days, the financial institution will send an agent to collect the balance. Most lenders give a 60-day warning before the personal loan account becomes an NPA. You will have to pay extra charges if your account becomes an NPA. So, it is better to avoid such complications and pay your EMI on time. How do you avoid missing a personal loan EMI payment? You can use some strategies to ensure that you do not miss your EMI payments. These can help you plan your finances better. Keeping this in mind, here are some solutions that you can consider to prevent delaying payments: You will need a financial plan. Devise better financial preparations to reduce the likelihood of delaying the payment of your personal loan EMI. Most people know in advance if they can afford the EMI payment in a month. Therefore, you should create a plan and manage your expenses to pay the EMI. With the right plan, you will have fewer chances of defaulting. You can reduce the EMI. Talk to the lender about your financial situation if you are worried about missing an EMI payment. Many lenders give their customers a lower EMI by extending the tenure of the loan or by turning an unsecured personal loan into a secured loan. You can split the pending EMIs into multiple payments. You can also make pre-payments of your loan to manage your EMIs effectively. It is another preventative measure that you can use to manage EMIs for the loan you have taken. Making pre-payments a regular intervals for your loan is a good option if you have additional income. [B-02] Conclusion This article examines the consequences of missing a personal loan EMI. Go through the personal loan EMI plan before selecting a loan. You can also compare interest rates and EMIs when applying for a personal loan to get the best deal. However, remember that selecting the wrong EMI payment plan can have consequences. Choosing an EMI plan outside of your capacity will affect your CIBIL score and creditworthiness. Before you make a decision, consult an expert and read all the details. To learn more about personal loans, visit Piramal Finance for more in-depth finance-related articles.

08-11-2023

Home Loan

All The Features and Benefits You Should Know of Loan Against Property

Loans have become an essential part of modern life. It is considered a helpful tool for meeting long-term and short-term monetary needs during your journey. With changing lifestyles and increased demands, it is essential to plan your finances. Even though investments produce returns, some life milestones, like a child’s education, marriage, or a carefully planned international vacation, call for extra funding. So, getting a loan against property is useful. It is also named a mortgage loan. It allows people to use their assets as collateral. You can use this loan to cover major expenses or for personal use. This loan is available from banks and other financial institutions. It is secured by real estate on a home, a business, or a plot of land. [B-01] Purpose of Loan Against Property You can achieve your personal or professional goals easily with a loan against property. It is a secured loan. Getting one is easy as long as you are the legal owner of the property. This loan is available from the majority of top banks. It can be used for any personal needs, which include a wedding, education, medical expenses, or other financial needs. Mortgage loan interest rates range from 8.00% p.a. to 20% p.a. With mortgage loans, you can get loans with a maximum value of Rs. 25 crores and a maximum term of 20 years. Features of a Loan Against Property A loan against property is a basic loan product. It is secured by the mortgaged property. These are some of the primary features of this kind of loan: Banks have different loan amounts. The typical loan amount is up to 60% of the property’s market value. The sum is between Rs. 10 lakhs and Rs. 7.5 crores. The interest rate offered is competitive. It has longer pay-back terms. EMI allows for simple repayments. For this kind of loan, most banks only need a few documents. Processing only takes 3–4 days. The minimum age limit is 21, whereas the maximum age is 65. Self-employed people, salaried professionals, and IT analysts can all apply for this loan. Benefits of a Loan Against Property in India Several Uses You can put the money you get from a loan against property to many different uses. The lender doesn’t care if you use it for personal or business purposes. There are no restrictions. The ways you can use a loan against property may differ from lender to lender, but in general, you can use it for: Higher education or education abroad Marriage or Wedding Healthcare emergencies Combining debts with high-interest rates Growth of a business that already exists Remodelling/building a house Improvements to business infrastructure High Amount of Loan Approval One of the best things about a loan against property is that you can get a huge loan. In a loan against a property, the loan amount is based on the property’s fair market value. They do this with the help of a number called the loan-to-value ratio. Lenders grant you up to 70% to 80% of the property’s fair market value for the loan term. 70% to 80% is up to 15 crores, a large amount compared to other secured and unsecured loans. Fair Interest Rates A secured loan gives the lender something to fall back on if the person doesn’t pay or pays late. So, some security is needed to get a loan. For this reason, lenders offer loans against property with lower interest rates than other mortgages or secured loans. Different lenders charge different interest rates for loans secured by a property. It is around 8% to 10% per annum and can go up to 20%, depending on the lender. This low-interest rate maximises a loan against property and simplifies EMI payments. Property Categories Vary for Collateral You can use many forms of property as collateral for a loan against property. Lenders approve loans against residential and commercial property. Lenders with your best interests often approve industrial security. They will also verify the self-occupied, rented, and unoccupied properties. The property should not have any legal problems. Co-owned properties can also be used as collateral for a loan against property. Yet, standards differ by lender. Flexible Repayment Tenure Flexible and easy repayment terms allow you to pay EMIs promptly and without hassle. Secured loans, like a loan against property, can be repaid over 15 years, compared to 5 to 7 years for unsecured loans. The longer time frame doesn’t stress the person, lowering their EMI payments and interest rates. It helps you decide your financial needs and set aside your EMI. Fast Approval Loans against property have a faster application and verification process than unsecured loans. Unsecured loans lack collateral. So, lenders can’t rely on them. Lenders thoroughly assess the person’s repayment capacity during the screening and eligibility process. Online loan applications are convenient and time-saving. Same-day loan approval is typical. Minimal Documentation Another benefit of a loan against property is that the application for the loan doesn’t need much paperwork. Unlike the documents needed for a home loan, a loan against property only requires minimal paperwork. The person must give the following: Address proof Identity proof Bank statement proof (Salary credit statement, operative bank account statement) Proof of income or employment (such as a pay stub, letter of employment, tax return, profit-and-loss statement, or balance sheet) Property/ title documents Small Foreclosure Fees Loan against property has low-to-no foreclosure fees. Most banks or NBFC lenders charge between 2% and 4% of the outstanding principal plus taxes. Some lenders don’t charge this. You can close your property-secured loan for a minimal or no fee. Consider the lenders who mention every processing fee in loan documents. [B-02] Conclusion The loan against property is great for people who have assets that are not being used. Being a secured loan, a loan against property is simple to get with only a few needs. It includes the property and KYC documents. When considering a LAP, assess all the pros and cons carefully. If you can’t repay the loan, you risk losing your home. It is crucial to have enough income to repay the loan. For more details on loans against property, you can visit the website of Piramal Finance and explore their products and services.

08-11-2023

Home Loan

All the Pros and Cons You Need to Know of Loan Against Property

When money is tight, many people turn to expensive personal loans. With any of your real estate assets, you could get a bigger loan with a lower interest rate than a personal loan. When taking out a loan for a specific reason, most people have different options. Getting a loan against property can be helpful in many ways. However, you might have to deal with some issues as well. This article discusses the pros and cons of getting a loan against property. Before discussing the pros and cons of loans against property, let’s review the different kinds of loans. Then, we’ll talk about taking out a loan against property (LAP). [B-01] Loans can be Secured or Unsecured Most of the time, financial firms give people two types of loans: Secured loans When a loan is given as security for an asset, it is said to be “secured.” The most common types of secured loans are home loans and car loans. A Loan Against Security is another common type of secured loan (LAS). It is usually given as security for an asset, like a house, gold, stocks, a fixed deposit, etc. The security that is being offered is called collateral. If the borrower can’t repay the loan, the lender can sell the security and use the money to pay off the loan. Any money from the asset’s sale that exceeds the loan balance is returned to the borrower. Unsecured loans Unsecured loans are those that come with no guarantee of repayment. Personal loans, credit cards, and other unsecured loans are typical examples. Explain Loan Against Property. Loan Against Property (LAP) is a secured loan. A property owner gets it by putting their property up as collateral. You could use either a home or a business as collateral. The loan amount is based on the property’s market value and the loan-to-value (LTV) ratio. LTV is the amount of a property’s value that a bank can loan to its owners. There are many reasons why the borrower might take out a loan against the property. The person who wants to borrow money doesn’t have to tell the bank why they want to borrow money. Advantages of Loan Against Property Some of the main benefits of taking out a loan against property are mentioned below: Quick Approvals The approval time for a loan against property is shorter than for other loans because the property is used as collateral. The loan is quickly approved and paid out if the borrower has all the necessary documents. Long loan tenure Financial companies offer LAPs with terms of up to 15 years. With a longer term, the borrower doesn’t have to worry about their cash flow when making payments. The loan length would depend on the borrower’s age, income, and qualifications. Utilising property can be leveraged If you have a loan on a property, you can use it for a good reason. For example, you might already be making money from the house by renting it out. You can use it to your advantage by getting a loan against it and using the money for something useful, like starting a new business that could bring in extra money. Even though you will give the asset to the financial organisation as collateral, you will still own it. Additional loan amount Depending on their goals and the property’s value, a borrower may take out a larger loan against it. After finding out how much a property was worth, the bank would use the LTV ratio. The most that these institutions can give through LAP can be capped. The loan amount will depend on things like the property’s value, the LTV ratio, the borrower’s ability to pay back the loan, their credit score, and so on. Cons of Loan Against Property Let’s now examine some drawbacks of loan ownership of real property: Floating rate’s impact Financial institutions may agree to a variable rate LAP. When market interest rates go up, the interest rate may change to higher. This is called a “rising interest rate situation.” When interest rates go up, more EMI money will be paid out. After a certain point, rising interest rates could make it hard for the borrower to repay the loan, which could lead to default. Handling fees and additional costs When you sign the loan agreement, ask the bank to explain how much you will be charged as a processing fee and if there are any other fees. Look at the processing fees or interest rates different banks offer before making your choice. Risk of losing the property A loan against property requires a long-term commitment to making EMI payments on time and every month. If the borrower has money problems or misses an EMI payment, the bank could take the property, sell it, and use the money from the sale to pay off the loan. The borrower gets back any extra money from the sale of the property. A borrower may keep a few months’ worth of EMI in a separate bank account as a safety measure. They would help if you were having trouble paying your bills. [B-02] Conclusion Property loans have a lot of pros and some cons. You can put your property to good use, the process goes faster, the interest rates go down, the loan amount goes up, and the loan term goes on longer. Cons include having to deal with variable rates when interest rates are going up, losing the property if you go bankrupt, and loan amounts that are limited by the value of the property and the LTV. Think about what will work best for you by weighing the pros and cons. On the other hand, a mortgage loan is a secured loan that lets you get money by putting up an immovable asset like a home or business property as collateral. For more information, you can visit the Piramal Finance website and explore their products and services.

08-11-2023