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Personal Loan

How to Reduce Car Loan EMI?

Buying a car, whether new or used is an exciting step. But for most people, it also means taking a car loan and paying EMIs every month. Over time, these EMIs can feel heavy on your budget, especially if you're trying to manage other expenses. The good news is that there are smart ways to reduce your car loan EMI and make your monthly payments easier. Whether you’ve taken a loan for a new car or a used car, you can still lower your EMI by planning wisely and making a few smart decisions. In this guide, we’ll share simple and effective tips to help you reduce your car loan EMI, so you can enjoy your drive without stressing about your monthly payments. [B-01] Tips to reduce your car loan EMI If the EMI of your car loan consumes a major part of your monthly income, you might have to sacrifice some of your expenses. To avoid this, you can follow a few simple tips given below. These tips will help you reduce your car loan EMI. Opt for a bigger down payment – Before buying a car, you should plan your purchase in such a way that you can pay a larger amount as a down payment. You cannot afford to pay the whole cost of the vehicle in one go, but you can try to accumulate a big portion for the down payment. A big down payment can reduce the principal amount of the loan. You can save money on interest by taking out a smaller loan. A smaller loan will have lower interest and monthly payments. Go for a loan with a long tenure – If you are not in a position to pay off higher EMIs but still want to finance a car, you should choose a loan with a longer tenure. If the repayment term of the loan is long, you will have to pay EMIs for a long period, but the amount of the EMIs will be less. Long-term loans have shorter monthly repayments as compared to short-term loans. You can use the vehicle loan EMI calculator to know the EMIs payable with different loan tenures. Use your surplus money to pay the outstanding loan amount – The major part of the initial EMIs of a loan is apportioned to the interest on the outstanding principal. If you want to lower your EMIs, try to pay off the outstanding principal amount whenever you have surplus money in your hands. It will assist you in lowering future monthly payments by saving interest on the outstanding loan amount. You can use the car loan interest rate calculator to see the effect of a decrease in the outstanding loan amount on your car loan EMIs. Take a loan from your existing bank – It is better to get your car financed from your existing bank in which you maintain your savings or current account. Your existing bank is aware of your creditworthiness and financial background. You can negotiate for a lower processing fee, and the bank can help you choose the most suitable financing scheme that allows you to pay reduced EMIs. Maintain a good credit score – Banks check your credit history before approving your loan. If you have a poor credit history, a bank can still approve your loan, but with high-interest rates. Therefore, you should plan your decision to buy a car at a time when you have a good credit score so that you can procure a loan at a low-interest rate. A loan with a lower interest rate can ensure you have small EMIs. Negotiate the final price of the car with dealers – Compare the prices and discounts offered by several car dealers before purchasing a car. You should opt to buy from a dealer who offers the maximum discount so that you have to get the lowest possible amount of loan from the lender. A lower purchase price results in a lesser loan amount, which will consequently result in lower EMIs. You can use the car loan interest rate calculator to calculate EMIs payable at different loan amounts. Choose a lender that offers loans at the lowest interest rate – You should get your car financed from a lender that offers you the best deal in terms of long tenure and low-interest rates. You should explore various finance schemes offered by banks and NBFCs and then choose the one that can provide you with the desired benefit of lower monthly payments. Select a car according to your repaying capacity – The decision to buy a car should be taken after considering your present and future financial needs. If you have other major expenses lined up, it’s better to buy a car that can fulfill your needs rather than an expensive, luxurious car. If you already own a car, you can exchange it for cash and increase the amount of the down payment for your new car to reduce the EMIs. NBFC loan options – Car dealers have tie-ups with non-banking financial institutions (NBFIs). You can get a beneficial financing scheme from these NBFCs. The car dealer has to sell the car, and the NBFC has to forward a loan, therefore, you can get a good offer from the car dealer’s NBFCs. Procure a loan with low processing fees – Processing fees and other administrative costs of a loan are negotiable. You can ask the bank to reduce or lower the processing fee. You can use your savings to increase your down payment and lower your loan amount, lowering your car loan EMIs. [B-02] Conclusion Buying a car is everyone’s dream. Getting a car loan can be the best option for buying a car. With the help of the above tips, you can reduce the burden of high EMIs. Plan your decision according to your level of income and expenses, and then choose a lender that can offer you the best deal. Take calculated steps from time to time to lower the burden of the outstanding loan and reduce your vehicle loan EMI.
08-11-2023
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Personal Loan

Digital Pre-Approved Personal Loan Offer Without Documents

For banks, a pre-approved personal loan instantly is just a personal loan given to qualified customers based on several factors, such as their relationship with the bank, the amount of money they have in savings or checking accounts, fixed deposits, card usage, and so on. Pre-approved personal loans are top-up instant personal loans that non-banking financial institutions offer to their current customers who have paid their bills on time and have a good credit score. The interest rate on a personal loan depends on the borrower, and there is no need to put up collateral. [B-01] Eligibility for a Pre-Approved Personal Loan Instantly It has a special calculator for determining who is eligible to help make the process easier. You can use it to figure out how much of a personal loan you might be able to get by entering your birth date, monthly income, total monthly EMIS (if you have one), interest rate, and loan term. Here are the things you need for an instant personal loan: If you were an Indian citizen, that would help. You have to be hired by either a private or public limited company. You must be at least 21 and no more than 58 years old. Your Credit Score should be above 700 Minmum monthly Salary 15,000 INR Pre-approved Personal Loan Instantly: What You Need to Know Here are some of the features of an instant personal loan that has already been approved: Quick Loan Disbursement If you are already a customer of the bank or NBFC, the pre-approved loan would be moved quickly to your account. Zero Documents Instant loans are easy to get, and the process is seen as easy because it doesn’t take a lot of paperwork to get a loan approved. You need to provide simply digital documents like kyc documents and current income documents No Collateral Are Needed For pre-approved loans, the customer doesn’t have to use any security or collateral to get a loan immediately. Differential Loan Amounts Every person’s pre-approved personal loan instantly is different. The amount of the loan depends on things like the customer’s credit score and payment history. Payment Choice Equated Monthly Instalments (EMIs) are needed to pay back loans that have already been approved. Customers who already have a bank account with the lender (bank) may choose to have their EMIs paid automatically this way. The average time to repay a loan is between 12 and 60 months. Charges Before and after pre-approved loans are given out, lenders charge customers different fees and costs, such as processing fees, security fees, EMI bounce fees, outstation collecting fees, penal interest, foreclosure fees, etc. Different lenders have different service terms and fees that go with them. Benefits of Personal Loans with Pre-Approval Here are some of the pros of personal loans that have already been approved: Quick Funding and Immediate Funds Pre-approved loans could be a safety net when you need cash quickly to take care of your bills. Once the checks are done, the loan will be approved and paid out within a few minutes on the same day. You can use the loan money for anything you want. Low-Cost Interest Rates If you have good credit, you might be able to get a personal loan right away. Your history of making payments on time shows you are good with money. Because you don’t pose a credit or lender risk, the lender will give you a good interest rate. Adaptable Loan Terms You can choose the best way for you to pay back your loan. Most ranges are between 12 and 60 months. When choosing the loan length, you should consider how much money you can pay back. Pre Approved Personal Loan Application Without Documets or Little Documentation Existing clients who qualify for fast loans don’t have to provide documents because the bank already knows your KYC, bank, and income information. Loan Application Procedure Without Paper Most lenders have an online loan option where you can fill out and submit an online form to request a pre-approved loan through their website or mobile app. Soft copies of the important documents can be sent in the right format on the lender’s website or mobile app. Power in Negotiations Instead of you asking for a loan, the bank will come to you with an offer for an already approved loan. This means you can negotiate the loan terms with your bank manager and relationship manager to get a lower interest rate or a longer time to repay the loan. Since you wouldn’t be talking to a person if you sent in your application, this benefit wouldn’t apply. Special Savings To get you to take out a pre-approved personal loan, the bank may offer small perks like no processing fees, lower interest rates than those for regular customers, EMI holidays for 1–3 months, etc. If you need a loan, these benefits will make you less likely to end up with a lot of debt. How to Get Pre-Approved for a Personal Loan? For a pre-approved loan, you need a good credit score, a clean credit history, a history of making payments on time, a steady source of income, and a lot of money saved up. Check with your lender because you may only be able to get this kind of loan quickly. Make sure to talk to your lender about the terms and conditions of these loans, paying close attention to the fees. Do your homework before you apply for a quick loan. Compare the loan’s features and interest rate to other pre-approved loan offers and choose the one that best fits your needs. Disadvantages of Personal Loan Instantly with Pre-Approval Loans that have already been approved might only be available for a few days. So, if you want to take the loan, you must act quickly. A bank is not required by law to give you a loan once it has given you an offer for a pre-approved loan. Your application could be turned down if your credit report or other documents don’t match up with what you said on your application. Even though the interest rate on a loan you get here will probably be 1% to 2% lower than the market rate, some banks can raise their rates for already approved customers. Before you sign the loan agreement with a bank, look at the list of fees. Some banks can charge a higher fee for foreclosures or partial prepayments, charge extra processing fees for loans that have already been approved or add other costs like transaction fees. You don’t have to take the loan the bank gives you just because they offer it. Only borrow money if you need it. If you decide to take the offer, be sure to take the amount you need, not the amount the bank is willing to give you. Make a deal. For example, if the bank is willing to give you Rs. 5 lakh for 5 years, you only need Rs. 3 lakh that you can pay back in 3 years, you can negotiate a deal. [B-02] Conclusion Pre-approved personal loan instantly is disbursed to a limited number of customers. There isn’t much paperwork to fill out, and you don’t have to put up any collateral or security. The fast loan facility only needs a good credit score and a history of paying back loans. In India, many banks and non-banking financial institutions (NBFI) offer this type of loan facility to increase loan sales, meet customers’ urgent financial needs, or drastically cut the time it takes to give out loans.
08-11-2023
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Personal Loan

Personal Loan or Home Renovation Loan – Which is Better?

Loans may help you make purchases, bridge a short-term cash flow deficit, or create a long-term asset like a house. Most financial firms, including banks, non-banking financial companies (NBFCs), as well as housing finance companies (HFCs), offer a diverse variety of loans to fulfil the needs of their clients. You may choose between home renovation loans and personal loans based on your individual needs. You often look out for home renovation loans when they’re ready to buy their first buy on your own. On the other hand, a personal loan may be the ideal answer if you need a bit more cash for a down payment. What is a Home Renovation Loan? You may fund your renovation work with a home renovation loan. Fixer-upper houses are often funded with a home loan that includes a loan for house repairs. The “after renovation” worth is vital in funding home repairs. Renovation loans are based on your home’s expected worth after upgrades. You are eligible for a raise based on the expected rise in home value as a result of the recommended repair, the loan sum, and the rate of interest. What is the Meaning of a Personal Loan? A personal loan is a sum of money obtained that you may use for a variety of purposes such as major buys, debt settlement, crisis needs, and so on. These loans are repaid in monthly payments spanning a few months to many years. It may take longer based on your context and payment integrity. What You Should Know About Home Renovation Loans Vs. Personal Loans Collateral A home renovation loan, such as an education or a vehicle loan, is a secured loan. Banks and lending firms may take your home as security if you cannot repay a loan or other debt. A personal loan for home renovation does not need collateral. As a result, security is not needed when taking out a personal loan. Amount at stake Home renovation loan amounts range from Rs. 15 lakh to Rs. 8 crores. Several factors, including income, impact the capacity to repay a loan. Personal loans are offered for sums ranging from a few thousand rupees to as high as Rs. 25 lakhs or Rs. 30 lakhs if you want something more flexible. Certain financial firms offer personal loans of up to Rs. 60 lakh. Tenure Home renovation loans last from 5 to 30 years. Loan terms are longer because of the higher buying price of land, which aids in keeping EMIs low. In contrast, personal loans come in lengths varying from 12 to 60 months. Payments for EMI The fixed monthly payments paid by your lenders on a certain day each month for a set sum of time are known as EMIs. Due to the longer payback term, the EMI on a home renovation loan is cheaper than a personal loan for the exact sum. In contrast, personal loans have a shorter payback duration and, as a result, a higher EMI. Processing time A home renovation loan usually takes 3 to 4 weeks to complete. Yet, if the needed papers are lacking or the builder lacks the required credentials, the process may be further slowed. E-banking has sped up personal loan distribution even more. For new customers, a personal loan can be approved instantly or within minutes and given within 24 hours. Rates of Interest The rate of interest on a home renovation loan is lower than that on an unsecured loan since it has security. Current interest rates in India vary from 6.9% to 8.5%. Personal loans offer much higher interest rates than secured loans, ranging from 9.6% to 22% based on your unique profile. Those with low credit scores pay higher interest rates, while those with strong credit pay lower interest rates. Tax benefits There are tax perks linked with home renovation loans that assist in lowering your income tax liability. Therefore, your loan may be repaid as per schedule by enjoying all the tax benefits of up to Rs. 1.5 lakhs per year. As personal loans do not offer tax benefits, prepaying it in whole or part does not affect your tax planning. What is The Best Choice? Personal loans are ideal for modest home repair tasks that you may finish rapidly. The higher rates of interest will be less of a problem, but you will profit from an unsecured personal loan’s rapid application procedure and flexible lending terms. Home renovation loans are ideal if you are considering big home improvement projects that will boost the value of your home. Those who have built up enough equity will profit from cheaper bond yields if the work takes longer than expected. You will also be able to take benefit of the tax advantages given by a secured loan. In the end, both forms of loans will do the job. As a result, you’ll have to weigh the benefits and drawbacks of each to decide which option is best for your home renovation project. Conclusion A home loan is appropriate for large financial movements such as a home purchase or building, but it is not always the best option for financing a home renovation. It provides cheaper interest rates and payback terms of up to 25 to 30 years. Borrowing money is possible with a home loan and a personal loan. On the other hand, a personal loan provides a collateral-free alternative to funding home repair at fair bond yields and shorter payback durations. If you are unable to get finance via other means, having no collateral necessary to receive a loan is an excellent option. You may also budget your monthly payment with a personal loan since it has a defined period. Do your research and discover all you need to know before applying for a personal or home renovation loan. If you want to know more about home renovation loans, visit Piramal Finance for related blogs and explore their products and services.
08-11-2023
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Personal Loan

How Piramal Finance Helps You To Calculate Personal Loan Emi Online In India?

Planning your finances allows you to better manage your monthly budget and set aside some money for emergencies. However, you can never be too prepared financially. A personal loan can be helpful in difficult, unforeseen situations. It does not need any sort of collateral and can be used for whatever purpose the borrower sees fit. However, just because unsecured personal loans are an option doesn’t mean you should rush out and apply for one without first conducting some research. Personal loan EMI calculators may be found on the Piramal Finance website, and they should be used before you hit the “personal loan apply” button. Otherwise, you can end yourself in a position where you can’t afford to make your regular loan payments. Everyone looking for a loan would benefit greatly from using a personal loan interest calculator or a monthly payment calculator. You may estimate your personal loan EMIs in advance, which is useful for budgeting purposes. Let’s take a deeper look at the Piramal Finance Personal loan EMI calculators. [B-01] What is a personal loan EMI calculator? It’s obvious what a personal loan monthly payment calculator does. The overall interest accrued, as well as the total amount owed each month, and the monthly EMI payment, are all calculated for you. Input the amount you wish to borrow, the interest rate you would like to pay, and the length of time over which you would like to pay it back. The Personal loan EMI calculators will show you the monthly payment amount, the total interest paid on the principal, and the total amount owed based on the information you provide. Keep in mind that the Personal loan EMI calculator provided by Piramal Finance is simply a rough estimate and your actual interest rate for a loan will be based on the bank’s evaluation of your financial standing. How can you use the Personal Loan EMI Calculator? Piramal Finance’s personal loan EMI calculator is shown below. First, go to Piramal Finance’s official website Go to Piramal Finance’s webpage for further information. Use the Personal loan EMI calculators by going to the Calculator menu. Enter the loan amount Following this, you will be prompted to input the desired loan amount. Enter the tenure The term of the loan is how long you plan to pay it back. The Personal loan EMI calculators require you to enter the tenure of your loan. Enter the rate of interest The last step is to input the interest rate that is displayed on the Piramal Finance website. Typically, it rises from the 10% range. If you want to know how much you will have to pay each month toward your house loan, you may use a Personal loan EMI calculators to figure out your monthly payments. What affects your personal loan EMI Your EMI will mainly be affected by three variables. Your EMI will increase in proportion to the size of your loan’s principal. The amount of your EMI is closely related to the interest rate on your loan. The interest rate determines the monthly payment amount (EMI). If your loan has a fixed interest rate, your monthly payment won’t change. If the interest rate on your loan fluctuates, you’ll pay a lower monthly payment (EMI) while the rate is low but a larger EMI when the rate is high. Your loan’s EMI will go down as its term length increases. The longer the term of the loan, the less money you’ll have to pay each month. Remember that a longer tenor will result in higher interest rates. Utilizing the EMI calculators provided by Piramal Finance Some benefits of utilizing Personal loan EMI calculators include: Compare Loans Calculators that estimate monthly payments are a great resource for evaluating loan packages. Interest rates for personal loans vary from one financial institution to the next. So, it is helpful to use an EMI calculator to estimate how much money you will owe each month. Using an EMI calculator for a personal loan, you can quickly determine if a certain loan program is a good fit for your budget. Get the proper tenure There are many possibilities for tenure that may be explored with the help of an EMI calculator. EMI decreases as the tenor increases and vice versa, hence a longer tenor yields a lower EMI. If the monthly payment is low enough, you won’t feel overwhelmed by the obligation to repay the loan. Find the entire amount of interest If you need a breakdown of your repayment plan, a personal loan EMI calculator might help. You can see how much of your payment goes toward the principal and how much toward interest. Using an EMI calculator on Piramal Finance’s website provides quick access to all this data. Save time It’s unrealistic to contact the lending departments of many financial institutions every time you have a question. One option is to utilize an online Personal loan EMI calculators, which may provide the necessary information in a matter of seconds. [B-02] Conclusion Personal loan EMI calculators help borrowers make educated borrowing choices. By using the Piramal Finance EMI calculator, you may examine your equivalent monthly instalments, total interest amount, total payback amount, and planned repayments. You may also determine what term length will be most manageable for you to repay your loan. An EMI calculator can help you evaluate personal loan offers from several banks and select the best one. You should always be on time with your loan EMI payments. If your loan EMI is too expensive, there are many options available to you. It is prudent to do some homework before committing to a loan. Choose a lender that provides a competitive interest rate on loans and keep your monthly EMIs within reasonable bounds. Piramal Finance can assist you in preparing a home loan application.
08-11-2023
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Personal Loan

Why Borrowing Money From Other Individuals Is Not a Good Thing Compare To Personal Loan

If you have faced a financial crisis, then you must have faced this dilemma of whether to borrow money from your immediate acquaintances, such as your family members and friends, or opt for a personal loan. Although there is nothing inherently bad in borrowing money from people you know, it has some flip sides too. It might affect your relationship. Hence, it is always recommended to keep monetary affairs and relationships separate. Hence, the wisest thing to do is to apply for a personal loan from an authorised financial institution. To help you understand better why it is wiser to apply for a personal loan instead of borrowing from other individuals, here’s an article that will discuss the reasons in detail. Hence, let’s start right away! [B-01] 6 reasons to opt for a Personal Loan over other individuals Following are the 6 reasons to opt for a Personal Loan instead of borrowing money from other individuals: 1. More borrowing options In times of need, you can secure an instant personal loan from a bank, online lender, credit union, or an instant loan app. Depending on your requirements and eligibility, you can choose any option from the above-mentioned lending platforms. However, when borrowing money from individuals such as your friends or family, you might need to find out who would be willing to lend you money. 2. Personal Loans have clearly stated terms and conditions An unorganised borrowing, i.e., a loan from either family or friends, usually involves a verbal arrangement and isn’t equipped with clear terms and conditions. Although both the involved parties might have the best intentions, it is always possible that with time any one or both involved parties might forget some of the details of the loan agreement. This can lead to confusion and stress. On the other hand, a personal loan is a vividly documented financial transaction between the lender and the borrower. Since it is a written agreement, it leaves no room for confusion about the loan terms and conditions, interest rate, and tenure. Unlike unorganised borrowing, which usually doesn’t have a well-defined and pre-determined repayment schedule, a personal loan, on the other hand, allows you to be well-informed about your loan repayment schedule and the exact amount of EMI that you need to pay regularly. It is a legally binding contract that protects the financial interests of both the lender and the borrower and ensures transactional transparency. 3. Borrowing from acquaintances can put a strain on the relationship Borrowing money from other individuals, such as your friends and family, can be risky. This is because once you borrow money from one of your acquaintances, the monetary matters now involved can put a strain on your relationship. If you fail to return the money on the verbally agreed-upon date, it can damage the relationship. Also, the lender himself might end up in a financially tight spot and ask for the loan amount from you earlier than the agreed-upon date. If you are unable to return it as per the whims of the lender, your relationship with the lender might turn sour. Moreover, when you borrow money from your family or friends, the borrowings are generally interest-free. This means the lender doesn’t get to earn anything from the loan arrangement. While this might sound attractive initially, it might cause trouble later. The lender might later regret lending the money or demand an unreasonable amount as interest. 4. Personal Loans can help you build a credit history Another glaring disadvantage of borrowing money from an individual rather than from a financial institution is that you won’t be able to build your credit history. By taking a personal loan from an authorised money lending institution such as a bank or online lender helps you build a good credit history. A good credit history, in turn, will help you to qualify for better rates on your future loans and lines of credit. 5. A Personal Loan doesn’t come with any obligations The best thing about personal loans is that you can use the loan amount for a wide range of purposes, including making home improvements, consolidating debt/debts, or funding a major purchase. This flexibility qualifies personal loans as a versatile option for borrowers. Moreover, the lender of a personal loan won’t ask you or supervise where you are spending the loan amount. However, if you borrow from individuals such as a friend or family member, you might feel obligated to inform the lender where you will be spending the borrowed fund. This might also elicit some kind of disapproval from the lender, provided the lender finds your cause for borrowing unconvincing. Moreover, borrowing from an acquaintance keeps you indebted to them long after you have repaid the debt amount. You might be reminded now and then about the favour that you owe them, and also, you might be forced to help them whenever they are in need. To avoid such awkwardness and obligations, opting for a personal loan is always better. 6. You can borrow the exact required amount from one lender If you want to borrow a hefty amount, then applying for a personal loan makes more sense. This is because authorised money lending institutions will lend you the exact amount of cash you need. However, there are chances that if you ask for a hefty amount from an individual such as a family member or a friend, they might refuse to part with such a huge sum. Moreover, they might not even have enough cash to lend the amount to you. If that is the case, you might end up borrowing money from more than one individual, further complicating your financial matters. [B-02] Conclusion Now you might ask, “which is the better option?” However, there can be no definite answer to this question because it wholly depends on your situation. That being said, it is always considered wise to consider personal loans’ advantages. Moreover, now you can easily apply for an instant personal loan from Piramal Finance Limited. It is a registered finance company that offers quick, hassle-free and easy personal loans with zero foreclosure and prepayment charges. Their team of expert advisors would help us through the entire loan application process, thus ensuring fast approvals and quick disbursals in your account. They also guarantee minimum documentation and pocket-friendly monthly EMIs. Visit the official website of Piramal Finance now!
08-11-2023
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Business Loan

What Are The Different Pros And Cons Of Startup Business Loan

There are many different types of loans that businesses can seek when they’re starting up. One of the most popular options is an MSME business loan or a startup business loan. However, this type of loan comes with some pros and cons. You’d want to be aware of these before deciding if it’s the right option for you. This blog will look at the advantages and disadvantages of taking a startup business loan or an MSME business loan. Let’s dig in! [B-01] What is a startup business loan? A startup business loan can also be called an MSME business loan. It is a type of small business loan that can be useful for businesses in their early stages. These loans help initial-stage entrepreneurs and their businesses grow and expand. Startup business loans are ideal for companies with little or no credit history. The reason is that they don’t require collateral upfront. Startup businesses typically have high start-up costs. This means they often struggle to meet debt obligations as they grow. An MSME business loan can help these companies cover those expenses while they continue to build their credibility and financial stability. If you’re interested in applying for a startup business loan, speak with an experienced lender. They could advise you on the best option based on your specific situation and goals. And remember: always consult a lawyer if any legal matters are involved in your loaning decisions! Advantages of a Startup or MSME Business Loan Startup business loans are indeed a great funding option for entrepreneurs. Let’s strengthen this point by looking at some of the obvious advantages of taking a startup business loan. Own Control Increasing your equity funding through investors can give them more oversight and control of the company. Raising money by selling shares finds you investors who are eager to know what’s happening with their investment. Hence, they may want board seats or signing authority over large purchases. On the other hand, when you get a loan, it’s not just the money that commits to certain covenants—your business does too. You can decide what kinds of operations will be allowed within the business. You will hold power over how these conditions will affect your business. You will decide when repayments must be made based on those decisions. All in all, you will have complete control. Build Business Credit Taking a startup business loan can be one of the best decisions you make when building your business credit. By taking out a small loan for your growing startup, you’ll show lenders that you can handle responsibility and manage funds appropriately. This will help you get better terms on future loans and loans from different lenders. Plus, other opportunities (such as with angel investors) will come more easily with good business credit. Strong financial stability allows businesses to operate in an uncertain environment with greater flexibility and agility. Saves personal wealth As anyone who has started a business knows, it takes a lot of money to get a new venture off the ground. From rent and office supplies to marketing and employee salaries, there are numerous expenses to account for. And if you’re self-funded, those expenses can quickly eat into your savings. A startup business loan can significantly help you in this case. By taking out a loan to finance your business, you can keep your personal wealth intact. You can also use it as collateral for the loan. This can be especially helpful if you’re planning on starting a business with high start-up costs, such as a restaurant or manufacturing company. So, if you’re looking to save your personal wealth while financing your new business, a startup business loan may be your best option. Keep Equity to Yourself Taking a startup business loan can be a valuable tool in helping to keep equity to yourself. By taking out a loan, you can access financing that will allow you to hold on to more company shares. As previously discussed, this can give you greater control over the direction of your startup and help protect it from potential threats or outside investors. Disadvantages of a Startup Business Loan While we have discussed the advantages of a startup business loan, there are also some cons. Let’s read what they are! MSME business loans have high interest rates. Many small businesses don’t realise startup business loans have high interest rates. This is a common misconception. Many people think that all startup business loans have low interest rates. However, this is not always the case. Some startup business loans have extremely high interest rates that can be damaging to a small business’ financial stability. If you’re considering a startup business loan, it’s important to research and compare different lenders’ offers side by side. MSME Business Loans are Not Easy to Get Startup business loans are not easy to get. Several factors determine whether or not a startup will be approved for a loan. This includes the company’s credit score, revenue, profitability, and track record in terms of paying back previous loans. Loans from traditional lenders such as banks can take up to six weeks to process. They may require collateral (usually 50% of the loan value). To qualify for an alternative lending platform loan, your business must have: A clear strategy High potential Strong market position Sound team Realistic projections Startup loans or MSME business loans can restrict cash flow. A startup loan can give you the capital you need to get your business off the ground. However, it’s important to be aware of the potential downsides. One potential problem is that a loan can restrict your cash flow. This is because you’ll have to make regular loan repayments. This can leave you with less money to invest in your business. Additionally, if your business isn’t successful, you’ll still be responsible for repaying the loan. As a result, it’s important to carefully weigh the pros and cons of taking out a loan before making a decision. But if you plan and do things right, a startup loan can be a useful tool for getting your business off the ground. [B-02] Parting Words So, if you are a startup business owner searching for some quick cash, a startup business loan may be the right option. Always weigh the pros and cons carefully before making your decision. Take help from the finance experts at Piramal Finance to get rid of all your doubts and concerns related to MSME business loans. Contact us today!
08-11-2023
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Business Loan

Understanding the Different Types of Working Capital Loans

Working capital is the money used to run the day-to-day operations of a business. These could be rent, salaries, utilities, the purchase of raw materials, and other expenses. It is calculated as the difference between current assets and liabilities. Working capital reflects a company’s liquidity level and financial health. Without it, a business might not function smoothly. As a result, businesses often take out working capital loans to keep their operations running. These loans are not used for investments or buying long-term assets, but to meet the company’s short-term operational needs. [B-01] What is a Working Capital Loan? Businesses don’t generate revenue throughout the year. There are ups and downs in sales. And some businesses are seasonal. However, they need to keep the operations running. There might not be enough cash on hand or liquid assets. Hence, they require working capital. For this purpose, they secure a working capital loan. It helps during low sales and revenue periods. Banks and other financial institutions offer working capital loans to keep businesses going. The loans can be secured or unsecured. The repayment period is usually flexible, with a tenure that ranges between 6 and 48 months. The loan amount, interest rates, and tenure may vary from lender to lender. Not just that, working capital loans are of multiple types. Let’s have a look at its various types. Types of Working Capital Loans Cash Credit Cash credit is a short-term solution for working capital financing. It is a secured loan. Hence, collateral needs to be pledged. It can be stock-in-trade, assets, work-in-progress, finished goods, etc. It is necessary to open a separate cash credit account in order to take advantage of the facility. Cash credit lets you withdraw money without keeping a credit balance. You can withdraw more than the balance maintained in the account. The interest is charged on the daily closing balance or the used limits, not the amount sanctioned. Overdraft Facility The overdraft facility lets a current account holder withdraw more cash than what is available in their accounts. The overdraft limit and time period depend on the provided collateral. People who have a good credit history and a long-term relationship with the bank are generally preferred. Interest is charged on the amount drawn until repayment. Bill Discounting Bill discounting is a financial tool where a bank buys the bills or invoices of the seller. The bank pays the borrower the bill amount after deducting a commission or discount. Later, on or after the due date, the bank presents the bill to the purchaser and collects the bill amount directly from them. This method is most commonly used by traders, manufacturers, wholesalers, and businesses engaged in transport and logistics. Bank Guarantee A bank guarantee is offered by banks or lenders in lieu of collateral or commission. It is to ensure that in the event a debtor is unable to repay their debts, the bank will take care of the losses. For example, Company 1 wants to make a large purchase from Company 2. But Company 2 is unsure of the payment capacity of Company 1. So, Company 2 asks Company 1 to issue a bank guarantee regarding the payment. Company 1 will approach their lender for a bank guarantee. This will state that if Company 1 cannot make the payment by the due date, then Company 2 can seek payment from the lender of Company 1. Letter of Credit A letter of credit is a financial document generally used in international trade. It lets the two parties do business without worrying. It assures that if the borrower cannot pay the debt of another party, the lender will take care of the credit. Letters of credit serve as security, while bank guarantees act as insurance. Accounts Receivable Loan Accounts receivable loans are a way to raise funds for issued invoices. A business uses its accounts receivable as collateral to raise funds from a bank. Accounts receivable is the amount for which the invoice has been submitted but the payment has not yet been made. These loans are usually provided to businesses with a good sales reputation and a healthy credit history. Benefits of Working Loan Capital Working with loan capital comes with many benefits. Some of these include: There is no restriction on using the funds. The loans are easy to secure, and the disbursement is quick. This makes them a great option for immediate financial needs. Some types of working capital loans are unsecured and can be issued without collateral. Flexible tenure and reasonable interest rates. [B-02] Conclusion Working capital loans are a great option to meet your day-to-day business needs. Some of them are unsecured, which doesn’t require collateral. The loans can be taken easily, and the money is quickly disbursed. This helps in providing sufficient liquidity for reducing short-term obligations. Working capital loans also help in maintaining cash reserves and managing sales fluctuations. To read more informative blogs, you can visit us at Piramal Finance. Our experts will help you with all your finance-related queries.
08-11-2023
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Home Loan

Stamp Duty and Registration Charges on a Home Loan

If you intend to purchase a house, keep in mind that the price the seller has offered you does not represent the total cost of the transaction. According to Indian tax laws, stamp duty is an extra cost that all homebuyers in our country must cover to become legally responsible for their properties. When purchasing a property, it is essential to have clear, crisp paper since you will need these legal papers for a variety of purposes for a very long time. In other words, stamp duty must be paid as soon as everyone signs the sale agreement. When you register it in your name, the price you were quoted is likely to rise by a few lakhs. [B-01] What is Stamp Duty? The state government charges this cost for the paperwork required to register your property. This tax is imposed on transfers of both freehold and leasehold real estate, including residential and commercial buildings. When you pay stamp tax, the government registers your name. The stamp mark on the paperwork confirms that the paper has obtained official approval and is now genuine, which is why the fee is so named. States have different stamp taxes and registration fees. When registering a property, you are required to pay stamp duty according to Section 3 of the Indian Stamp Act, 1899. Registration Fees The ownership paperwork must be registered once stamp duty has been paid. Registration must be completed within four months after the execution date. Registration costs are payable at 1% of the market value or the agreement value, whichever is greater, up to a maximum of Rs. 30,000. How is Stamp Duty Calculated? Stamp duty is estimated depending on the property’s worth. In India, however, stamp duty fees are between 3 and 10 percent of the property’s worth. You will end up paying a large fee if the market value of your property is high, and vice versa. The rate of stamp duty depends on a number of factors, including the property’s location, gender, the owner’s age, the property’s use, the kind of property it is, and the amenities of the project. The value of the property is established by authorities using the Stamp Duty Ready Reckoner. Every January 1st, the government releases the market values. One cannot lawfully claim the property without paying the required stamp duty. Factors Affecting Stamp Duty State-to-state differences in stamp duty exist. The following variables affect how much duty is charged. Location: The stamp duty fees will be more expensive if the property is situated in an urban region compared to a suburban or rural one. You will end up paying less to have your property stamped if it is situated inside the Panchayat borders or on the outskirts of the town. Age of the owner: Almost all state governments have reduced the cost of senior citizens’ stamp duties. The age of the property owner has a sizable impact on stamp duty rates in the majority of states. Age of the property: Since stamp duty fees are computed as a proportion of the property’s total market value, older structures often have lower fees while newer structures have higher fees. Gender of the Owner: When compared to women, men spend around 2% more getting their property registration paperwork stamped. In Delhi, you are still qualified for a stamp duty discount if you agree to register the property jointly with the woman as the principal owner. The availability of this amenity, however, varies across the nation. Purpose: Comparatively speaking to residential structures, commercial buildings are subject to higher stamp duty fees. Your stamp duty expenses will differ depending on whether you are purchasing land, an apartment, a standalone home, or a villa. Does a Home Loan Cover Stamp Duty and Registration Charges? As we talk about the importance of stamp duty and how to calculate it, you should also budget for the additional costs that will be imposed on your budget as a house buyer, including stamp duty and registration fees. Banks are advised not to include stamp duty, registration, and other documentation fees in the home loan charges of housing properties to prevent the Loan to Value (LTV) Ratio’s effectiveness from being diminished, according to the Reserve Bank of India’s circular on “Housing Loans by Commercial Banks – Loan to Value (LTV) Ratio” dated February 3, 2012. These fees will be paid by the government. Your loan does not cover stamp duty or registration; each must be paid separately by the buyer of the property. Tax Benefits Stamp duty and registration fees are exempt from taxation under Income Tax Act Section 80C. Section 80C’s maximum benefit for stamp duty and registration expenses is Rs. 1,50,000. When there are joint owners, each co-owner is allowed to submit their income tax returns based on how much of the property they own. Payment of Stamp Duty and Registration Charges Purchasers may use any of the following methods to pay their stamp duty, both online and offline: Physical Stamp Paper: In this case, you buy non-judicial stamp paper from a licensed seller. E-Stamping: One of the most practical ways to pay for stamp duty is through the SHCIL website. Fanking: The majority of banks offer homebuyers franking agent services. [B-02] Conclusion Stamp duty and registration fees are typically not included in the home loan amount that the bank has approved. To take possession of your new home, you must pay these fees in addition. When registering your property, you must pay the correct stamp duty as required by law. Many people give their property a low market value to avoid paying expensive registration and stamp duty fees. Therefore, once your sale agreement is signed, registered, and the registration and stamp duty fees are paid, you are deemed the owner of the home. Explore more informative articles on Piramal Finance.
08-11-2023
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Home Loan

What is The Rate of Interest of a Loan Against Property in 2022?

Do you need a mortgage loan? With just a few clicks, you can get the money you need at low-interest rates. As a secured loan, a loan against property (LAP) has a much lower interest rate than a loan that isn’t backed by anything. Another way, a LAP loan shouldn’t only provide you with a low interest rate but also a fair appraisal of your home’s worth. LAP also has a repayment plan that suits your needs and low or no closing costs. Let’s continue the topic of the interest rate on loans against property and how to get a lower rate. [B-01] What is Loan Against Property? A loan against property (LAP) is approved as long as the lender keeps an asset as a mortgage. This asset can be a piece of land, a house, or any other place where business is done. The asset stays with the lender as collateral until the total loan against the property is paid back. Most of the time, you have up to 20 years to repay the loan. Lenders usually let you borrow between 50% and 70% of the property’s market price as a mortgage loan, which you can pay back over time through EMIs. You can use the LAP to meet your or your business’s needs. Interest Rate of LAP Depending on your profession, the interest rate on a loan against property will differ. For example, lenders charge higher interest rates on loans to salaried people than to self-employed people or businessmen. Generally, most lenders apply 11.5% p.a. interest to a mortgage loan. Interest Rates on Different Properties (LAP) Conditions Industrial Property Commercial Property Residential Property Interest Rates 9.35%-13.7% 7%-20.6% 7%-20.6% Loan to Value 50%-80% 40%-80% 1%-80% Processing Fee 0.2%-1% 0.2%-3% 0.1%-3.0% FOIR 0.65 0.65 0.55-0.65 Factors Affecting Loans Against Property Credit Score A high credit score shows that you use credit wisely and are good with money. As a result, many lenders provide mortgage loans with lower interest rates for people with high credit scores. Loan Amount Many banks set interest rates on mortgage loans based on the loan amount. Most of the time, the interest rate on loans against property up to Rs 30 lakh is lower than that for loans for more than Rs 30 lakh. Property Type Some lenders charge less interest on loans for homes owned and lived in by the borrower than on loans for commercial properties or properties that are not owned and lived in by the borrower. Women Applicant Many lenders give women borrowers a break on their interest rates, usually 0.05%. If your female family member applies, it can help you get a lower interest rate. LTV Ratio The loan-to-value ratio (LTV) measures how much of the property’s value you can borrow. Most lenders will give up to 70% of the property’s value as collateral for a loan. When you borrow less, the loan-to-value ratio decreases, making you eligible for more loans and lowering your interest rates. How to Lower the Interest Rate of LAP? Here are some essential things to think about if you want to lower the interest rate on a loan against property: Find out what the interest rate is for each type of loan. For example, it’s possible that the interest rate between Rs. 30 lakh and Rs. 20 lakh will be lower than the interest rate on a loan between Rs. 20 lakh and Rs. 30 lakh. Choose the term carefully because it directly affects the interest rate that the lender will offer. Watch out for loan providers who offer low-interest rates. Don’t fill out multiple applications with different lenders. Each application rejection will lower your CIBIL score, and a low CIBIL score will cause the lender to charge you a higher interest rate. Choose a loan amount that you can easily pay back. Documents Needed for a Loan Against Property You will have to send in the following general documents: Address proof: Aadhaar card, driving license, voter ID card, etc. Identity proof: passport, Aadhaar card, PAN card, etc. Form 16 Bank statements IT returns certificate Income proof documents Salary slips Property documents: sales deed, property tax receipt, registration certificate, building plan, etc. Steps for Getting a Loan Against Property Here is a general outline of how to get a loan against property: Choose a lender with a good reputation that has the best loan against property deals on the market and fits your budget. Fill out the lender’s website’s online application form. Type in your name, address, income, and other necessary information. Enter the details about the loan you want, like how much you want to borrow, how long you want it to last, etc. Based on your information, the lender will decide if you can get a loan. The lender will get the paperwork they need and check the value of your property. A loan approval letter will be sent to you after the lender has checked your information. You must show the original property papers before the loan is paid out. [B-02] Wrapping Up Real estate is an asset that can be used as security for a mortgage loan, whether for a home, a business, or something else. When unexpected financial needs arise, like growing a business, sending a child to college, paying for a wedding, or dealing with a health emergency, having property may help. You can get a loan quickly and easily by pledging your home as collateral. The loan against property rate has a direct impact on your finances. Its interest rate fluctuates from bank to bank, state to state, and even city to city. So check the interest rate before applying! Follow Piramal Finance for the latest news on mortgage loans, daily blogs, and articles.
08-11-2023
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