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Home Loan

Top Advantages of Taking a Home Loan

For most people, owning a home is a major accomplishment and the fulfillment of a long-held goal. If you own your home, you can design it to meet your needs and preferences. However, constructing your ideal home might be expensive. For that purpose, you can apply for loan aid and use a home loan to boost your budget. Continue reading to find out more about what a housing loan is and how it can help you buy the home of your dreams. [B-01] What is a Home loan? A home loan is a secured loan that is received for the purpose of buying a property by pledging the collateral as security. Housing loans enable high-value financing with affordable rates of interest and substantial durations. EMIs are utilized to repay these loans. The borrower receives ownership of the property immediately after completion. A type of financial resource offered by banks and other financial institutions is a home mortgage. These banks and other financial institutions will assist you in raising your budget so that you can buy a house with the loan amount provided. If you meet the requirements for a specific home loan tenure, you may apply for one. You must repay the loan amount you took out over the agreed-upon time, with interest calculated at the predetermined rate. The home loan is repaid in equal monthly payments, just like any other loan. Most banks today provide home loans that enable you to build a home from the ground up in addition to purchasing pre-built properties. You can also use home loans for remodeling or repair projects. Financial institutions will cover up to 75–90% of the value of the home, and you will be obligated to make an initial deposit (down payment) exactly equivalent to the remaining amount. With house loans, it’s simpler than ever to finance your own home. What Advantages do Housing Loans Offer? Despite the considerable sum and more extended repayment period, your home loan does come with several advantages. The perks of taking out a home loan are highlighted below. Feeling of achievementApart from the sentimental value, purchasing a home is one of the largest financial investments you may undertake in your lifetime. The majority of us invest a significant amount of money in our homes, making them the most important part of our financial portfolio. A minimal rate of interestThe decision to purchase a home is generally made over a period of 10 years, and there may be multiple cycles of rising and falling interest rates. Consequently, you may be sure that you will benefit from declining rates at some point during the cycle.Actively managing your home debts is the smartest approach to minimizing borrowing costs. That’s not as difficult as it may appear. Various uses:You are free to apply for a home loan to buy any kind of property. For instance, you may use the loan money to acquire a plot of land, build a new home on land you already have, or buy a brand-new, used, or even vacant property. Also, with money obtained through a home loan, you can renovate or rebuild your property. Dynamic repayment termYour home loan can be reimbursed over intervals of up to 30 years. Longer terms lead to smaller, more economical Equated Monthly Instalments (EMIs). Due to their flexibility, home loans are a very appealing option. Different types of home loansYou can select between fixed and adjustable interest rates for home loans. If you choose a fixed-interest loan, your EMI won’t change during the loan. In comparison, when you choose a home loan with a floating interest rate, your EMI is affected by the current interest rates in the real estate market. Your variable rate home loan EMI may drop significantly if there is little demand for housing loans. The Next Big Thing: Home Loans and Tax Benefits Home loans include several important benefits, including tax savings. You are qualified for tax savings on principal repayment of up to INR 1,50,000 under Section 80C of the Income Tax Act of 1961. You might deduct up to INR 2 lakh in tax from the amount of your interest on your mortgage that goes toward repayment under Section 24. Under Section 80EEA, the new homeowners are entitled to a taxable advantage of up to INR 1.5 lakh. The home loan had to be approved between March 31, 2019, and April 1, 2022. The first step is to complete an application and submit the required documents. After that, you must wait for verification and obtain the sanctioned letter. When you receive the letter, sign it, pay the security fees, and wait for a technical inspection of your property. After the property verification is complete, you sign the final agreement with the lender or bank and then sit tight for the loan to be reflected in your bank account. [B-02] Bottom Line It can be tough to select the house loan provider that would be best for you when there are so many of them. At Piramal Finance, we put a lot of effort into giving our customers the best options to make buying a home easier. Check out the different plans that facilitate your choice between construction loans, renovation loans, home extension loans, home loan balance transfers, and so many more advantages. We recognize the value of home ownership and provide home loans that can enable the construction of your dream residence.

08-11-2023

Other

How business financing is helpful in 2025

What is business financing? How do I get it? How much does it cost? Even large-cap companies often search for other sources of funding to satisfy their short-term needs. A small company must choose the right kind of business financing for its needs. Business financing is the process of providing funds in exchange for some form of collateral or other security. The term “financing” is typically reserved for larger companies that do not have cash flow enough to purchase assets, such as machinery and inventory. If you don’t pick where to receive financing properly, you might be in for a big loss. This is why you must check the repayment conditions and interest rate to go forward. [B-01] Financing decisions play a key role in the company’s development. They are usually taken up by people who have the needed expertise. One needs to be sure of their financing needs. This will help in choosing the correct business financing role. During these times when companies are funded, financing has a long way to go. In old times when the funding spree was not going on for start-ups, owners had to borrow money. They used to go to banks or NBFCs for capital. But now, business financing is made easy. Keep reading to learn more about this. Why should you consider obtaining a business loan? Working hard is the road to success. But, you should also have some cash on you. Many small company owners get business loans when they want funds to keep their operations running. If you don’t earn enough money to cover your expenses and stock up on supplies, you may need to take out a loan. Manufacturing facilities often take out loans to pay for the pricey capital equipment they need. Marketing campaign spending for publicity of the company’s goods or services is essential, but it may be costly for a startup. To cover charges, you may need business financing. The value they offer to your company’s culture, operations, and bottom line may make hiring excellent team members costly. It would be simpler to identify and recruit individuals who can help your company expand if you can acquire a loan. Save some money in case of urgency. This includes equipment breaking down or a client not paying on time. You may need to take out a loan to keep your company running during these difficult times. Applying for a business loan may be time-consuming. There are a few things you can do to ensure your application is as perfect as possible, regardless of the kind of loan you wish to apply for. It might take anything from a few minutes to a few hours to apply for a business loan. The owner decides to finally choose the right loan provider. Let’s go through the remaining four options for getting business financing. Bootstrapping Many successful businesses adhere to the notion of launching a firm with their cash, and this strategy does as well. This is called bootstrap. They don’t need business financing. Owner financing is the use of one’s own money and resources. It is essential if you want to keep your expenses as low as feasible. The control of the company is not diluted. Ownership lies with the founders. When the government distributes money or reduces tax rates, it is called “subsidy financing.” · Sales provide the funds required for the firm to remain open and running well. Cash from Investors Venture capital, abbreviated as “VC,” is a form of private equity. It is a business financing whose primary purpose is to make high-risk investments in early-stage, non-publicly listed enterprises. Venture capital differs from private equity in that it invests in a new company’s expansion capital. This kind of business financing is ideal for organizations that have progressed beyond the “seed stage” and are searching for funding in series A or series B. Most venture capitalists do not immediately invest in new enterprises. As a result, its purpose is to assist organizations in growing quicker than they would on their own, such as when a company wants to go worldwide. Angel Investors Angel investors are also known as “private investors.” They are wealthy individuals who assist small firms through a business loan in return for a stake in the company. On occasion, angel investors are also referred to as venture capitalists. They are also referred to as “seed investors”. They are frequently the first to put money into a new enterprise. Angel investors often provide smart funding as well. In addition to financing financial help for a project, they often give their knowledge and networks in the same industry. As a result, having an angel investor whose expertise and business financing abilities are comparable to those of your organization’s sector is beneficial to your firm. Many outstanding firms are performing well in the market today due to the expertise and resources brought to the table by their angels. [B-02] Summing up If you want to acquire business financing, you will need proper information about the same. Debt financing is without a doubt the most convenient option for a small company to get funds. This is true even if the company owner lacks financial support from family or friends.

08-11-2023

Tips & Advice

Here Are the Top 5 Golden Tips for First-Time Home Buyers

Most people make their biggest investment when they buy a home. Buying your first home is one of the most important moments of your life; it is just like going on your first date or getting your first job. When buying your first home, you need to learn to plan your budget, choose the right type of property, think about location and amenities, check the builder’s reputation, and get a home loan. Getting a home loan and making sure you can afford it takes a lot of work. Want to buy your first house? What are the best tips that will make the process smooth for you? [B-01] Top 5 Tips for First-Time Home Buyers in 2025 1. Manage Your Finances First, you need to figure out how much money you have and how much you will need. Prices for homes vary a lot depending on the type of property and its location. So, you must decide beforehand the amount of money you can spend. You might want an expensive house in a posh neighbourhood, but it might put a dent in your finances. A home loan eligibility calculator is one way to check how much money you can borrow with a home loan and how much you will have to repay each month. For this, you should take into account all your financial obligations. Ideally, your EMIsshould not be more than 40% of your take-home pay. You can also use a home loan affordability calculator to see if you can afford a loan. 2. Decide on the Type of Property The type of property depends on what you can afford. Think about how many family members you have, how many rooms you need, and so on. Find the best fit for your needs and your budget. You should also think about why you want to buy a house. If you want a house to live in, think about how long you plan to stay. If you are buying a house to rent it out, it is a good idea to think about what the tenants in that location are looking for. Based on the type of property and the purpose of the purchase, you can also avail yourself of some tax benefits. Under Section 24 of the Income Tax Act, you can claim up to 2 lakhs on the interest paid on your home loan. 3. Think about the Location and Amenities When buying a house, choose the right location, especially in a big city where commute times can be long. Consider where you work, how far away the schools and hospitals are from your home, how easy it is to get to public transportation, etc. Check if the neighbourhood has a proper sewage system, good road infrastructure, etc. Because the location also dictates the property prices, you should prioritise some of these factors and pick a location that best suits your budget and needs. For example, if you use a personal vehicle, you can choose a house far away from public transport hubs. If there are no children in your family, you can choose a house with no schools nearby. You should think about what kind of amenities you want and need. New apartment buildings and residential properties come with pools, gyms, spas, clubs, and so many more facilities. You should avoid getting swayed by all these amenities and pick only those that you need and will use. For example, if you have kids, you might want to buy a house with a play area. If you own a car, you will need a parking space. You should pick the extras carefully because they add to the total cost. 4. Choose a Builder with a Good Name Buying a home is a big decision, so look into the builder’s background. Check their past projects to see if they were all finished on time. You can also talk to the builder’s past customers to find out about the quality of the work and whether or not what was promised was delivered. Avoid fly-by-night companies that make big promises but do not have a reliable track record. When in doubt, ready-to-move-in units are the best way to avoid problems with builders. 5. Get a Home Loan Since buying a house is a big expense, you should consider getting a home loan. You can talk to your bank, but it is best to compare the home loan rates and features offered by several lenders. One of the most crucial steps in buying a house is getting your home loan approved. Home loans also come with some tax benefits. As a best practice, keep the length of your home loan as short as possible. Long-term loans have very high interests that may add up over time. For example, a 25-year home loan has a total interest payment of 160%, while a 10-year home loan only has a total interest payment of 55%. [B-02] Conclusion For someone who has never bought a house before, the process can be scary. But if you follow these tips, you can plan well and make buying your first home a memorable experience.

08-11-2023

Home Loan

Features & Benefits Of Piramal Finance Home Loan

You all might have a dream to own a house. However, it is very costly to construct your ideal home from scratch. A home loan could be a great way to fund your purchase. Let us find out how. [B-01] What Is A Home Loan? A home loan is borrowed from a financial institution to buy or build a house. Not everyone indeed has the cash to buy or construct a home at once, here is where banks and other lenders come to the rescue. They fill in the gap by funding in exchange for regular repayments, with interest. The most common sort of home loan offered by financial institutions is used only for residential purposes (such as buying a house or apartment, constructing a dwelling, etc.). Additional benefits that are available with this loan include longer loan terms, more adaptable repayment schedules, tax rebates, and so on. Advantages Of Obtaining A Home Loan Here are some benefits of obtaining a home loan: Tax benefits The ability to deduct interest and principal payments from your taxable income is the biggest perk of getting a house loan. Stamp duty payments up to Rs.1.5 lakh u/s 80C. Interest repayments up to Rs.2 lakh u/s 24B. Interest repayments up to Rs.2 lakh in specific situations u/s 80EE and 80EEA, and principal repayments up to Rs.1.5 lakh u/s 80C are all tax-deductible. Lower rate of interest The interest rate on a house loan is cheaper compared to other loan options. If you’re having trouble making ends meet, refinancing your house loan is a cheaper option than taking a personal loan. Property research due diligence In the case of a home purchase funded by a financial institution, the latter will perform extensive due diligence on the property from a legal point of view, including verifying the authenticity of any supporting papers. The chances of getting scammed will be minimal in this case. Thanks to the bank’s attentiveness on the matter. Assuming the bank is satisfied with the property, you and your home, both are protected. Long repayment tenure Mortgage loan repayment periods are quite lengthy, generally lasting between 25 and 30 years. This is because taking out a mortgage requires a significant amount of debt. Repaying the principal and interest over a longer period will lower the EMIs. No penalty for advance payment. With a floating rate of interest, you can make pre-payments anytime you have a large sum of money available, without incurring any penalties. This will allow you to pay off your house loan much before the end of the agreed-upon term. Balance transfer facility The home loan interest rate, fees, and satisfaction with customer service are just a few of the factors that might prompt a homeowner to switch mortgage lenders. Home Loan Interest Rates As of March 2021, the average interest rate on a house loan in India is 11%. Lender to lender, the repo rate set by the Reserve Bank of India (RBI), inflation, economic activity, and other variables also influence interest rates. When we talk about house loans, certain banks provide discounts to women, bank employees, and senior citizens. In addition, the home loan interest rate might be either fixed or variable. An adjustable-rate mortgage’s interest rate remains constant irrespective of market swings, whereas a floating-rate mortgage’s rate might change often. The borrower may or may not reap any benefits from this. Features Of Piramal Home Loan The following are some of Piramal Home Loans’ features: Low CIBIL Score To qualify for a loan from a bank or other financial institution, your CIBIL score needs to be 750 or above. However, if you meet the other requirements for a house loan with Piramal Finance, you may be eligible for a loan even with a CIBIL score as low as 650. Cash Salaried If you are salaried and want to apply for a mortgage, your pay slips will serve as proof of income. Employees who are paid in cash, such as housekeepers, drivers, etc., can apply to Piramal Housing without submitting a pay slip. This feature proves vital for people working in informal economic sectors. Self-employed Business owners, sole proprietors, and others in similar professions often have their house loan applications denied because their monthly income fluctuates often. These applications are reviewed and approved by Piramal, who works with entrepreneurs and freelancers to create unique repayment plans. Proprietorship firm employees Companies that are sole proprietorships are not required to register under the Companies Act or the Establishment Act. There are unincorporated businesses that offer paid services to clients both online and offline. Workers of proprietorship firms are also more likely than those of corporations to get their pay in cash, and not necessarily on the same day of the month. Moreover, to lend the customers, Piramal also loans to the staff of these companies. Extended Tenure Borrowers might get up to 30 years to pay back their loan from Piramal Finance. Repaying a debt over a longer period means the borrower may spread out the cost of repayment. This means lower EMIs. A convenient method of recording information The application process at Piramal Finance is easy for potential borrowers. Borrowers can apply for a house loan from Piramal Finance even if they don’t have pay slips proving their employment with the company for at least a year. Proven Methods When you apply for a loan with Piramal Finance. You will have access to a personal finance expert who can answer any questions you may have. They will also help anyone looking for a home loan, and find the best options for their unique needs. [B-02] The Bottom Line To learn more about home loans and the application process, read similar blogs on the Piramal Finance website.

08-11-2023

Home Loan

All You Need To Know About Home Loan For Salaried Persons

Are you a salaried person looking for an affordable and convenient way to buy a home? Home loans and housing loans are great options for salaried individuals, as they provide easy access to funds to purchase a home. In this blog post, we’ll cover everything you need to know about a home loan for salaried persons, from eligibility requirements to loan repayment options. Read on to learn more. [B-01] Home Loan- An Overview When you’re looking to buy a home, the process can be overwhelming. However, a home loan is one of the most common ways people finance their dream home, and understanding the basics of housing loans can help make the process easier. Banks or other financial institutions usually provide a home loan. In most cases, they have secured loans, meaning they are backed by collateral—usually your home itself. The amount you can borrow depends on various factors, including your credit score, income level, and property value. The terms and conditions of a home loan vary depending on the lender. Common home loan terms are 15, 20, or 30 years. You will also need to make monthly payments to your lender that include both the principal (the amount you borrowed) and the interest. When you apply for a home loan, you’ll likely need to provide some documents like bank statements and tax returns to prove your income and creditworthiness. Your lender may also require you to purchase private mortgage insurance if you don’t have a large enough down payment. The Eligibility Criteria It’s important to understand what requirements you must meet in order to apply for housing loans in India. The person must be between 23-62 years of age. The applicant should be a salaried employee or a self-employed individual with a regular source of income. Their income must be more than Rs. 25,000 a month, depending on the city of residence. Their credit score must be above 750 to apply for housing loans. The Documents Required Before applying for a home loan, it is important to know what documents are required to get the loan approved by the lender. The lender will use these documents to assess your creditworthiness and determine whether or not you qualify for the home loan. Proof of Identity: This includes documents such as a passport, driving license, PAN card, or Aadhaar card. Proof of Residence: This includes documents such as an electricity bill, landline bill, water bill, or rental agreement. Income Proof: This includes salary slips, bank statements, and income tax returns. Bank Statements: You will need to provide copies of your bank statements for the last three months. Property-Related Documents: You will need to provide documents such as the sale deed, title deed, mutation certificate, and other relevant documents related to the property. It is important to remember that each lender may have different requirements regarding the documentation they require. Be sure to check with your lender beforehand to ensure you have all the necessary documents ready when applying for your home loan. The Application Process for Housing Loans For salaried persons in India, the process is relatively straightforward and easy to understand. The first step to obtaining a home loan is to gather all of your financial documents and prepare them for submission. These documents include your income tax returns (ITR) for the last two years, salary slips, and any other documents related to your finances that you may need to provide. Once you have all of these documents together, you will need to fill out an application form provided by the lender. Once the application form is completed and submitted, the lender will assess your eligibility based on their criteria. After they approve your application, they will issue you a sanction letter outlining the terms and conditions of the home loan. The lender will verify all the documents and check for any discrepancies before disbursing the home loan amount. Once the lender provides the loan amount, you will need to start making timely repayments according to the loan repayment schedule provided by the lender. It’s important to note that late payments may result in additional charges or even foreclosure of housing loans, so be sure to make payments on time every month. The Benefits Of Housing Loans If you’re a salaried individual, taking out a home loan can be one of the most rewarding investments you make. While it’s true that the responsibility for managing and paying off the loan comes with it, the potential benefits far outweigh the risks. Here are some of the key advantages of opting for housing loans if you’re a salaried individual: Affordable interest rates- The interest rate on your home loan is determined by factors such as your personal credit score, income bracket, and type of employment. As such, whether you opt for a fixed-rate or an adjustable-rate mortgage will depend on which kind of rate suits your needs best. Quick loan disbursal- Generally, it takes less than 48 hours to complete all paperwork and get the final approval from verified lenders. In comparison, when applying for other loans, you would need at least a month to obtain formalities like background checks and character verification before getting into negotiations about your eligibility for funds. Lower risk– You also have lower risk when investing in a home because many banks offer insurance against unexpected events like death or disability, where they would pay back part or all of the outstanding balance on your mortgage, should anything happen to you. Tax benefits- Taking out a home loan also allows you to avail several tax benefits. The Indian government has various tax deduction schemes, such as Section 80C of the Income Tax Act, which lets you deduct up to Rs. 1.5 lakh on the principal component of your home loan. [B-02] Conclusion Understanding how housing loans work is essential for making an informed decision when it comes to financing your dream home. It’s important to know what kind of loan you’re getting into, how much you can afford, and what kind of terms you can expect. With the right knowledge, you can find the best loan for your financial situation. For more information, head over to Piramal Finance.

08-11-2023

Other

Top 5 Investment Options for Retired People in India

Retirement is called the “golden age” because it is considered the beginning of a new life. Once you’ve done all your hard work, you are ready to reap the benefits. The choice is to use the hard-earned money you’ve saved over the years as you see fit. One thing retired people worry most about is their dried-up income source. What will happen once your savings are gone? It will not. Here we have brought to you some of the best investment options you can use to make a steady income after you retire. The Indian government has introduced many retirement investment options. Now seniors don’t have to keep looking for ways to make money or worry about inflation, living longer, or the rising cost of health care. These investment options give senior citizens several benefits and options for investing. With them, you can keep your financial freedom as a retired senior citizen and live the life you always wished for. This blog discusses the top 5 retirement investment options that can guarantee you a steady stream of income after retirement. [B-01] Senior Citizen Fixed Deposits For many people in India, fixed deposits have long remained one of the most popular retirement investment options. Since the amount of interest paid out can be set monthly, quarterly, semi-annually, or annually, it is also a safe bet for the age of the country. The plan is for those who are 60 years of age or older. Eligibility Fixed Deposits for Senior Citizens are open to all citizens over 60, including NRIs. Some banks and financial institutions allow those over 55 to apply for this investment option if they have chosen to retire early voluntarily. What Can You Invest? Seniors can open a fixed deposit at their preferred bank for as little as Rs. 5,000 (if they do it online) or Rs. 10,000 (if using a bank’s branch physically). The amount for this retirement investment option varies from bank to bank, but it never exceeds Rs. 2 crore. The term can range from 180 days to 1, 3, or 5 years. National Pension Plan Anyone who works in the public or private sector can join this program. They might want to put money into a pension account to use its benefits when they retire. The plan lets you withdraw a set amount after you retire. The balance is paid out as a pension each month. Eligibility Before, only government workers could use the program, but now, any Indian citizen can. What Can You Invest? It depends entirely on your accumulated pension and what you withdraw. Senior Citizen Savings Scheme The Government of India introduced this as one of the best investment options for retired seniors in India in August 2004. It is an instrument of debt and bears no risk. Eligibility It is only for people over 60 years old. Also, only Indian citizens are eligible, not NRIs or Hindu Undivided Families. Those who opt for voluntary retirement or superannuation at the age of 55 or if they are retired defense personnel aged 50 and above can also apply. What Can You Invest? The minimum amount you can invest in this retirement investment option is Rs. 1,000, while the upper limit is capped at Rs. 15 lakh. You can invest individually or jointly. The payout is quarterly on the first date. Post Office Monthly Income Scheme The Post Office Monthly Income Scheme is yet another risk-free way for seniors to put their money to work with much less risk. This program is under the purview of the Ministry of Finance and ensures that senior citizens get a set interest rate every month. That’s why this program is well-liked by retired seniors. Eligibility This program differs from the others discussed in this post because it is not just for seniors. Anyone who is at least ten years old can choose this program. The application process is also easy to understand. You can take care of this at a post office near you. What Can You Invest? It is also pretty popular in rural areas. For the Post Office Monthly Income Scheme, you only need Rs 1,500 to open an account. The most you can invest is Rs. 4.5 lakh. Mutual Funds Although the stock market is not everyone’s cup of tea, mutual funds have increasingly gained popularity for their ease of use and lower risk. You can invest in mutual funds by yourself, or even better, use the services of a fund manager to manage this investment option better. You can invest a certain amount monthly or make a lump-sum one-time investment. Eligibility Anyone is eligible. There is no bar to age or income. What Can You Invest? Monthly investments in some Mutual Funds start as low as Rs. 100. Ask your fund manager about how much you can invest in mutual funds. [B-02] Conclusion Retirement is a time to relax, but it can also cause worry, especially if you lose a steady source of income. The retirement investment options described in this article can help older people enjoy this time without worrying about money. One of the best things about these investment options is that they give you a fixed and guaranteed return for as long as the program lasts. Senior citizens can now pursue all their goals after retirement without having to worry. Before you invest, you should look over the details of each plan. You can find out more about each of these plans online. Piramal Finance offers some of the best investment options for retired people. Visit our website to explore more investment options and financial ideas!

08-11-2023

Tax

All About Business Loan Tax Deduction Under Section 80C

People who have taken loans for business are entitled to certain tax deductions under Indian income tax laws. Section 80C of the Income Tax Act allows a deduction for the interest paid on loans taken for businesses. The deduction is available for both new and existing businesses. To claim this deduction, you must be able to show that the loan was used for business purposes. The deduction is limited to the amount of interest paid during the year. If you are planning to take out a business loan, it is important to understand how the tax deduction works. This will help you maximise your tax savings. Continue reading to learn more about business loan tax deductions under Section 80C. Section 80C Business Loan Tax Deduction A business loan tax deduction under Section 80C is a deduction that businesses can claim on the interest paid on their loans. The deduction is available for new and existing loans and can be claimed for up to five years. To claim the deduction, businesses must provide evidence of the loan agreement, repayment schedule, and interest paid. The deduction can be claimed in the year the loan is taken out or in subsequent years. The maximum amount that can be deducted yearly is Rs 1 lakh (Rs 100,000). This limit applies to all deductions under Section 80C, including those for home loans, education loans, and life insurance premiums. The business loan tax deduction under Section 80C can save businesses thousands of rupees a year in taxes. It is an important tool for businesses to reduce their tax liability and improve their bottom line. Business Loan Tax Deduction Calculation To calculate a business loan tax deduction in India, you will need to follow these steps: Determine the eligible amount of the business loan. The eligible amount is the total loan minus any prepayment penalties or fees. Calculate the interest paid on the business loan. This can be done by taking the eligible loan amount and multiplying it by the interest rate. Add the calculated interest payment to your other business expenses when filing your taxes. The total amount of deductions for all business expenses cannot exceed 50% of your total income from the business. Types of Business Loans that Qualify for a Tax Deduction Under Section 80C There are many types of business loans that qualify for a tax deduction: Home loans: Under Section 24 of the Income Tax Act, home loans used for business purposes are eligible for a tax deduction of up to Rs. 1.5 lakhs per year. Auto loans: Auto loans taken for business purposes are eligible for a tax deduction of up to Rs. 1 lakh per annum under Section 80E of the Income Tax Act. Education loans: Under Section 80E of the Income Tax Act, education loans taken for business purposes are eligible for a tax deduction of up to Rs. 1.5 lakhs per year. Personal loans: Under Section 80C of the Income Tax Act, personal loans taken for business purposes are eligible for a tax deduction of up to Rs. 2 lakhs per year. Machinery loans: Similar to vehicle loans, you can deduct the interest paid on machinery loans used for business purposes. Startup loans: Many startups take out loans to get their businesses off the ground. The interest paid on these startup loans can be deducted from your taxes. Working capital loans: Often, businesses need extra funds to cover their day-to-day expenses. The interest paid on working capital loans can be deducted from your taxes. Business Loan Tax Deduction: How Much Can Be Saved? Assuming your business is structured as a pass-through entity, such as an LLC or sole proprietorship, the loan proceeds are generally taxable. However, you may deduct a portion of the loan as business expenses if the funds were used for business purposes. Let’s see how much can be saved in taxes. For example: If the business owner takes a loan for business purposes and pays interest on that loan, then she can avail herself of a deduction for the interest paid under Section 80C of the Income Tax Act. The maximum amount that can be deducted is Rs 1.5 lakh per financial year. This deduction is over and above the limit of Rs 1.5 lakh that can be claimed under Section 80C for other deductions such as investments in PPF, life insurance premiums, etc. Thus, if a business owner takes a loan of Rs 10 lakhs at an interest rate of 10%, she can claim a deduction of up to Rs 1.5 lakhs on the interest paid every year. This effectively reduces her annual tax liability by up to Rs 45,000 (30% * 1.5 lakhs). These significant savings can be used for other important expenses, such as growing the business or personal needs. Ways to Claim Business Loan Tax Deduction Under Section 80C Assuming that you have obtained a business loan for your company, you can claim a tax deduction under Section 80C of the Income Tax Act of 1961. The maximum deduction amount is Rs. 1.5 lakhs. To avail yourself of this deduction, you must submit various documents to the lender, such as: Your business loan account statement for the financial year A copy of your income tax return filed for the previous year A certificate from a chartered accountant certifying that the loan has been used for business purposes Once you have submitted these documents, the lender will calculate the eligible deduction amount and send you a confirmation letter. You can then claim the deduction by submitting this letter to the Income Tax Department. Tips for Section 80C Business Loan Tax Deductions Remember a few things to remember while claiming business loan tax deductions under section 80C: Make sure your business loan is for a genuine business purpose, not personal use. You can claim tax deductions on the interest payments made on the business loan under Section 80C of the Income Tax Act. The maximum amount you can claim as a deduction under this section is Rs 1.5 lakhs per financial year. You must submit all supporting documents and income tax returns to claim the deduction. [B-02] Key Takeaways You can save money on your taxes with the right business loan tax deduction. Be sure to talk to your accountant or financial advisor to see if this could benefit you and your business. If you’re interested in learning more about the business loan tax deduction under Section 80C, visit Piramal Finance, where you can read more articles like this and get started on your business loan taxes with the aid of a professional.

08-11-2023

Business Loan

Everything About Unsecured Business Loan Eligibility And Interest Rate

India’s economy is called an “emerging economy.” It has given a lot of chances to young people who want to make a name for themselves in the business world. Firms need money to operate. From the idea stage to putting the first working system on the market, they need to have a lot of money. There are also other costs. It includes wages, raw materials, utility bills, transportation, and other small things. Most business owners get loans to pay for their businesses. Business loan eligibility is also different for many lenders. There are two kinds of business loans: Secured Business Loans Unsecured Business Loans [B-01] Secured business loans are those that the person backs with a security deposit or a kind of collateral. Most of the time, secured loans are given out in the form of equipment loans, vehicle loans, term loans, or loans against property. Unsecured loans are given out based on the business’s reputation, not on collateral or a guarantee. Most people get these loans for a short time, up to a year. Good credit, submitted documents, income, and other factors are required for unsecured business loan eligibility. Read on to learn more. What is an Unsecured Business Loan? An unsecured business loan is granted based on your credit history and does not need collateral. These loans are used to develop or sustain a firm’s functions or to maintain cash flow. You may use it to bring extra money to a firm. It helps it achieve its aims. Interest rates vary from lender to lender. They might exceed 14.99%. Although the standard concept of an unsecured loan does not need security, the reality is a bit different. Rather than seeking collateral, the banks impose a general law on vital assets until the debt is fully repaid. This enables those with strong credit or solid firms to get loans without giving large assets to small firms’ loans. Benefits of an Unsecured Business Loan Different banks have different business loan eligibility criteria and benefits for their best-unsecured business loan offers. Here are some traits that these loans have in common: Unsecured business loans are those that do not need collateral or security. These loans are made based on the applicant’s reputation and payback history. The lender may also take into account other relevant aspects. Most banks ask that the said firm be profitable for at least two years. The loan sum might range between Rs. 10,000 and Rs. 1 crore. This is based on the size and needs of the firm. The loan term is generally varied, ranging from 1 to 5 years or more. Unsecured Business Loan Eligibility Criteria Given below are the unsecured business loan eligibility criteria: Minimum age of 18 at the time of loan request and maximum age of 65 at the time of loan completion. A credit score of 750 or above is needed. Presence of a business for a minimum of one year in the same place with proof of profit. You must have a steady source of income and wage slips. Bank information or the most recent six months’ bank statement. Documents needed for Unsecured Business Loan eligibility The papers needed for unsecured business loan eligibility are as follows: You will need to give a recent passport-sized photo of yourself, proof of your identity, address, signature, income, bank statements, and proof that your business will keep running. Customer letter for the end use or proposed end use of BIL funds OD sanction letter, where DP/OD limit is not listed in the bank statements. Certificate of professional qualification for experts Partnership deed, or MOA/AOA for partnership firms, and a certificate of incorporation, or Form 3CB and 3CD or Form 3CC and 3CE for companies, as applicable. Factors affecting Business Loan eligibility Small business owners can get business loans from multinational firms. Their revenue projections differ, as do their business loan needs. To figure out the best interest rates, the bank must carefully evaluate the entities’ eligibility. The factors which affect business loan eligibility are given below: Credit Score Banks must be confident in your ability to repay. A good credit score guarantees that to the bank. To determine credibility, the bank will look at the firm’s credit score. They investigate your repayment history for other loans and liabilities. A good credit history will make it easier to get a loan with favourable terms and interest rates. Business Stability The economic stability of the business is critical for loan approval. Banks will investigate the vital’s sales and profit margins. This can be deduced from your business record and the duration of your vital’s existence. Banks typically prefer to lend to companies that have been in operation for at least three years. The older the business, the better the chances of obtaining a business loan with an attractive interest rate and other terms. Profitability and continuity of the Business Another vital criterion is that your business should make a lot of money. A business that isn’t doing well wouldn’t be a good candidate for a loan from a bank. The bank could ask to see your profit and loss statements from the last two years. Profitability and revenue are vital factors in deciding whether a business can get a loan. Your current relationship with the Bank Your present position with the bank is also vital. All your dealings with the bank, such as your cash flow and payments, will be looked into by the bank. It will see how well you’ve paid back any bank loans you already have. Collateral Many government programmes offer business loans without collateral, but the borrower can offer any kind of collateral he is comfortable with to get good loan terms and interest rates. The government rules say that the applicant does not have to provide collateral, but they can if they want to. By putting up something of value as security for a loan, you can borrow more money and pay less interest. [B-02] Conclusion Unsecured business loans are an effective way to get quick financing for your vital needs. You may give your dreams wings and help you to reach new heights. Yet, before applying for and closing on an unsecured business loan, you should carefully examine the factors affecting unsecured business loan eligibility. For more blogs on the best-unsecured business loans, check out Piramal Finance and explore their products and services.

08-11-2023

Personal Loan

Education Loan Calculator: Its Features, Benefits, Functions and More

A good education is important to get your dream job and lead a successful life. However, education costs are rising around the world. These rising costs mean that parents must start saving for their children’s education at a very early age. However, many families still struggle with a shortage of funds when paying for their children’s education. For many families, applying for an education loan is a necessary part of getting an education. There are many aspects to an education loan and they must be understood well to ensure that the right loan amount is taken and that repayments are made diligently. In such a scenario, an education loan calculator helps families know the exact amount of money they will be taking and paying back, and what calculations were used to arrive at these amounts. [B-01] What Is An Education Loan? An education loan helps students meet the financial requirements of pursuing a degree. It can be used to complete your course either in India or overseas. The money borrowed is used to pay the course fee and other education-related expenses including accommodation, examination fees and other miscellaneous costs. There are two primary eligibility criteria to secure an education loan in India. First, you must be an Indian citizen. Second, you must have an official admission letter from a recognized educational institution. Currently, there are many lenders offering education loans in India. So, you have many options when selecting the right education loan for your needs. What Is An Education Loan Calculator? An education loan benefits many students. However, students and parents must consider the EMIs before applying for an education loan. EMI is Equated Monthly Instalments. These are the monthly payments the student will make to repay their loan, with interest. An education loan calculator helps students understand the three important components of EMIs: the principal, interest and tenure. Principal: The money borrowed by the student from the bank or financial institution. Interest Rate: The percentage charged by the lender on the education loan. Tenure: The timeframe within which the principal and interest should be repaid in full. Students will pay EMIs every month for a fixed tenure and some education loans come with a fixed interest rate. So graduates will pay a fixed EMI throughout the repayment period. For these reasons, you must consider your ability to make EMI payments before getting an education loan. This is where an education loan calculator comes in. An education loan calculator helps calculate the EMI of an education loan based on the details you enter. For example, you must enter the principal amount, the interest rate and the tenure period. The education loan calculator will then tell you the EMIs you must pay. How Are EMIs Calculated By The Education Loan Calculator If you do not use an education loan calculator, you must use the following formula to calculate your monthly EMIs manually: [P x R x (1+R)^N]/[(1+R)^N-1] Where: P = the principal loan amount R = the interest rate N – the repayment tenure or the number of monthly instalments Let’s try to understand this using an example. In this example, you are getting an education loan of Rs. 10 lakh. The repayment period is 60 months and the interest rate is 12%. If you follow the mathematical formula, you will be paying around Rs. 22,244 in monthly EMIs for 60 months. Solving this formula with various factors once or twice is fine. However, you will be consulting different lenders when looking for an educational loan. Each lender will have a different education loan offering. This means you will have to spend a lot of time calculating the EMIs of different lenders. It is entirely possible that you may get confused or make a mistake in your calculations when done manually. In this case, even a small mistake could impact your financial future. An easier and more reliable method is to use an education loan calculator, which is easy to use and available for free. With an education loan calculator, just enter the three components listed above and check your EMIs instantly. Benefits Of Using An Education Loan Calculator There are many advantages of using an education loan calculator. Let’s take a look at some of the most important benefits: Saves Time And Effort An education loan calculator can be used on the go. This makes it easy to calculate the EMIs instantly. Simply enter the principal amount, tenure and interest rate. The accurate result will be in front of you in a few seconds. This saves you the time that goes into doing manual calculations. Accurate Results Every Time Stress and distractions can lead to errors when doing manual calculations. In contrast, an education loan calculator has no room for error. Therefore, you get accurate results every time. This is important to plan your finances efficiently. Better Financial Planning Having a clear idea about your monthly EMIs helps you plan your finances properly. With an education loan calculator, you can calculate the amount you have to pay in the form of EMIs instantly. This helps you decide whether you can afford a loan and how an education loan will affect your financial situation. Additionally, it will also help you find the right lender. Free To Use Most education loan calculators are free to use. So, you can find one that works the best for you and use it endlessly. Furthermore, you can use them whenever and wherever you want, given you have a stable internet connection. [B-02] Conclusion An education loan calculator can help you compare the details of loans offered by various lenders. Additionally, you can work out the monthly EMIs instantly to assess your ability to make repayments. You can then use the education loan calculator to find a lender who offers the right loan amount and terms and conditions for you. Visit Piramal Finance for more interesting and informative articles about how to use education loan calculators and other useful loan-related tools!

08-11-2023