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Gold Loan

How to Take A Gold Loan Against Your Ornaments

How to Use Your Jewellery to Secure a Gold Loan? Are there any benefits of taking out a gold loan against jewellery? Loan against gold: What is it? People frequently find themselves in precarious situations when they require money to cover an unexpected expense or to pay for a long-awaited need, such as a home renovation. A gold loan could be quite beneficial in these circumstances. A gold loan is essentially a secured loan. In this borrowers use their gold jewellery or even gold coins as collateral to borrow money from a bank or non-banking financial institution (NBFC). The gold pledged as security may be obtained back by the borrower following full loan repayment. The borrower’s credit history is not a major worry for lenders because gold loans are only offered in exchange for a piece of collateral. Gold loan’s biggest advantage is how straightforward it is to apply for one. A reputable lender’s website will allow prospective borrowers to complete the entire process online. [B-01] Loan Amount: The loan amount is determined by the weight and purity of the gold that is pledged. The amount is inversely related to the gold market price at the time of pledging. The majority of lenders often do not accept ornaments with a purity of fewer than 18 carats for a gold loan. The loan-to-value (LTV) ratio is essential in gold loans. This ratio is the maximum amount that the lender will advance as a percentage of the value of the gold that the borrower has pledged, after assessing and verifying the purity of the gold loan against gold ornaments. Therefore, if a person pledges gold jewellery worth Rs. 10 lakh and the lender offers a loan-to-value ratio of up to 60%, after which a maximum loan of Rs. 6 lakh is imposed. The maximum amount of a gold loan would increase to Rs 8 lakh, however, if another lender offered a loan-to-value ratio of 80%. The Technique: An application must first be completed, either online or at a lender branch. The majority of trustworthy lenders enable consumers to apply for gold loans online. Aadhaar cards, bank account numbers, and basic know-your-customer (KYC) credentials like Permanent Account Numbers are required of applicants. For application reasons, anything can be uploaded online, even photos. Officials from the lender get in touch with the applicant once the application is submitted to evaluate the gold that is being promised. Although this evaluation is physical, the majority of lenders will provide the borrower with the option of having it done at home. Otherwise, the applicant may go to the lender’s closest branch office. This assessment is a brief procedure that frequently just takes a few minutes. The executives of the lender will assess the quality of the gold, its weight, and its current market value before determining how much can be loaned. The money is sent into the borrower’s bank account, typically within a day, while the promised gold is maintained with the lender. What Kind of Gold can be Accepted as Collateral? Gold coins, gold bars, and jewellery made of 18-to24-karat gold digital (but digital gold must be exchanged for physical gold against which a loan can be availed). A few things to think about before taking out a gold loan include the following: The convenience of gold loans is undeniable, but before applying for a loan, it’s crucial to evaluate gold loans and loan providers. Before you take out a loan, be sure to negotiate the best conditions and interest rates. Assess interest rates for gold loans against gold ornaments. Do your research to identify the best loan options. Determine which lender will provide the largest loan amount for the value of your gold. Consider the lender’s reputation. Examine the security precautions the lender has taken for the gold you have pledged. Evaluate how quickly various lenders disburse loans. Pick a lender with a solid customer support system and respect for the interests of its clients. What Are Some Common Options for Gold Loan Repayment? As a secured loan, gold loans are straightforward to apply for. The lender is confident that the loan won’t go south because the quality of the gold has been confirmed in advance. To make it convenient for the customer, they typically offer a variety of repayment choices. 1. Pay Interest as EMI and Principal Later: This option allows you to pay back the interest by the gold loan’s EMI schedule, but the borrowed principal must be completely repaid when the loan matures. Make Partial Payments: As necessary, make partial principal and interest payments. No matter the predetermined EMI plan, partial or full payment of both the interest and principal components is allowed. Your total interest payout will be lower if you pay off your principal first. Interest is typically calculated daily based on the amount of the loan that is still outstanding. By doing this, you can save a lot of serviceable interest. 3. Bullet Repayment: When the loan’s term is up, you must pay back the total principal plus interest using the bullet repayment method. With this repayment plan, interest is computed each month, but payment, along with principal repayment, is only required when the period is complete. 4. Regular EMI option: The regular EMI gold loan against jewellery is intended for those with steady monthly incomes in their bank accounts and is targeted at the salaried class. The EMI in this instance consists of principal and interest payments. It is also a quick process because this loan is only available to salaried individuals. [B-02] Summing-up: The purpose of this article is to give comprehensive information on gold loans against gold ornaments. You don’t even need to visit a branch to apply for a gold loan secured by gold jewellery. To take a loan, go to its website, register, and fill in your key details, such as address and bank account details, and a company representative will come to your home to complete the process. Competitive interest rates are offered on gold loans to assist you in getting money right away. The gold loan application and repayment procedures are also tailored to provide special features to accommodate all of your capital needs. Also visit, Piramal Finance has more in-depth, educational-related articles.
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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Gold Loan

Mistakes to Avoid While Applying for a Gold Loan

In today’s period, it is said that a GOLD LOAN is the most successful loan in the eyes of the Indian population. The demand for gold in India has increased by 804%. In our country, we use gold for jewelry and articles. It also has many corporate uses, one of which is using gold loans, which is the easiest solution to get easy finance in India. It is a secured loan taken out against one’s gold holdings. It has no restrictions. You can use this loan for various events like education, marriage, going abroad, or any project you are working on. A gold loan is offered by most banks, such as Muthoot Finance, SBI, ICICI, and others. More than half of the families in our country have benefited from this secured gold loan. [B-01] Gold Loan Interest Rate The goal of gold loans is to meet your financial needs whenever they arise. Gold loan interest rate is charged by the banks on the loan taken. The gold collateral is given back to its owner after he/she pays back the loan with interest on it. The gold loan interest rate ranges from 7% and onwards. The bank provides hassle-free submission of legal forms and documents for the process of a gold loan. All you have to do is make sure you repay the loan amount plus interest on time and without fraud. You can use the online calculators that different banks offer to figure out your EMI and find the best plan for you. These online calculators are free. Hence, you can use it for free as many times as you want. You have to be aware of certain factors that can affect your gold loan interest rates. Steady income: A person with a low income is majorly affected by the banks, as they charge high-interest rates for low incomes that are not on continuous terms. Gold loans for a person with a low and slow income cannot be extended. Banks prefer to extend credit only to people with high incomes. Purity of gold: The banks always question your collateral gold. The authorized person will make sure that your gold is of sufficient weight and that the gold is pure. It can affect your gold loan interest rate. Avoid These Mistakes While Applying for a Gold Loan More than half of people don’t know the correct area to focus on while applying for the easy-to-acquire gold loan. Everyone makes these tiny mistakes while choosing their suitable gold loan interest rate from different banks. Let us look at some of the small but significant mistakes that people make when selecting banks or loan plans. 1. Check your bank or institution When you lend the gold as collateral security, make sure that your bank or any institution that is lending you the loan is not fraudulent and can give your gold or gold articles back safely. These frauds are frequently reported by loan recipients. The best solution for this situation is to take a gold loan from government banks or NBFCs, they deal at the nominal gold loan interest rate. 2. Understand loan repayment building To achieve your goals easily, you should plan your finances first. You should understand the loan repayment terms from the bank. It will help you plan your finances and achieve your goals. 3. Calculate your LTV-LOAN TO VALUE ratio Your LTV amount should be the lowest. The bank uses this ratio to calculate the amount of loan you get. 4. Hidden charges Before applying, kindly read the privacy policy or the terms and conditions of the bank or institution from which you are taking the loan, as it might have charges relating to penalty, auditing, or other legal charges that are not shared at the time of agreement by the banks or institutions. It might create problems for you after. 5. Do a purity check Check your gold’s purity. Many banks lend loans according to the purity of the gold. The gold loan interest rate varies according to purity. Note that the Banks or institutions give gold loans on purity ranging from 18 to 22 carats. 6. Connect with hassle-free institutions Verify the process of the gold loan from various banks and choose the one that is easy to apply for and submit documents to. It gives you relief in your daily activities. 7. Choose your bank or institution wisely If you want to be at ease after applying for a gold loan, you must select the bank or institution that provides the best support or customer service. It will help with your problems paying the interest on your gold loan. 8. Save your interest with different schemes There are various schemes offered by banks. Connect through the authorized person and commute. You can go for partial repayment. It means you can pay your interest and principal amount partially or as they feel suitable. EMI method: In this method, you will only pay your gold loan interest amount to the bank as per your EMI period. On maturity, you will be required to pay the principal amount of your gold loan. Check to See If You Are Eligible for a Gold Loan You should meet the following criteria to apply for the gold loan at an affordable gold loan interest rate: You should have the appropriate amount of gold that is acceptable to the bank or institution. Your gold should be attested with a proper hallmark. The minimum age requirement to apply for a gold loan is considered 18 years old and above. [B-02] Conclusion The buyer should be aware of the mistakes and the solutions listed above. Make proper use of online platforms to learn about your LTV ratios and calculators. Have proper credit evaluation tools to find the right interest rate for your gold loan. Explore more finance articles on Piramal Finance and enhance your financial wisdom.
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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Gold Loan

What are the New Norms for a Gold Loan?

Gold is no longer just a luxury item owned by a select few socioeconomic classes. It is currently one of the most highly prized commodities, and due to its rising costs, it is one of the most highly traded commodities. Gold has aesthetic, economic, and cultural importance. Indians consume it in many ways, such as through gold bars, jewelry, and coins. Usually, there has been an increase in research about gold loans. Also, the number of people looking to sell their gold jewelry for cash in times of need is increasing. Apart from all other basic information about gold loans, you must be aware of the new rules and regulations about gold loans that exist in the economy. [B-01] How Easy is it to Access Gold Loans? To access various gold loan facilities, you must first find a gold investment company that is locally based. You can find out if one in your area is licensed to provide this service. The only thing that you’ll need to do after this is read their website. Most of these companies will have a website, and the websites are not just for show. These websites contain plenty of helpful information about how gold loans work and what needs to be done by the borrower if they want to use them. On the website of a gold loan company in your state, you may notice that a significant emphasis is put on how the money is received in exchange for your gold. Some companies allow their borrowers to invest with this money, while others do not. But remember, if they allow it, they may charge an additional fee of 10% of the amount borrowed to be deposited into another account. If you locate a local gold loan company that allows you to make investments, you can use your funds to invest wisely in them. What is a Gold Loan? The gold loan works like a pawn shop with some key differences. Your gold is stored in their vault, and you are given a receipt for it and told how much you could borrow against your gold’s value. The money received in exchange for gold can be used for any purpose; however, it costs an extra fee if you want to use it for an investment opportunity. This fee is not to exceed 10% of your original amount. The borrower will receive the principal amount but no additional funds. Borrowers seeking to meet their immediate or long-term monetary demands may apply for a gold loan or a loan against gold, a secured loan. The borrower is offering up their gold jewelry as security in this instance. Typically, a proportion of the value of the gold pledged is used to determine the loan amount, up to 75%. You must repay the loan in installments. You will receive your gold back once you have paid the loan and interest. Affordable gold loans are available from nationalized banks, commercial banks, and NBFCs. Your gold loan may have an annual interest rate between 7% and 29%. It, however, differs from lender to lender. A gold loan is also helpful to cover a short-term credit need. It could be paying for your child’s schooling, a medical emergency, a family wedding, etc. It is usually better to take a gold loan than to sell your jewelry. Further, EMIs are a payment option for gold loans. Even better, you can pay the interest in full upfront and repay the loan’s principal at the end of the term. New Gold Loan Norms Introduced by the RBI The Reserve Bank of India (RBI) recently changed the gold loan regulations. It has made it easier for lenders to offer more money as a loan against jewelry with easy returns in the form of gold. The RBI raised the loan-to-value ratio through its regulatory statement in August 2020. It ranges from 75% to a maximum of 90%. According to the RBI’s rules for gold loans, lenders, including banks and non-banking financial institutions, are permitted to give up to 90% of the gold jewelry’s value. It strictly demands that the loan against gold jewelry be used for non-agricultural purposes. For borrowers who find it challenging to repay personal or company loans, the modification in the loan-to-value ratio for gold loans is a blessing. The LTV value was changed, allowing borrowers to borrow more money against the same amount of gold. Banks were permitted to import gold or participate in the gold monetization scheme. They could offer gold loans to jewelry exporters and manufacturers, with the repayment of these loans being made in Indian rupees. However, the RBI has since announced the new norms after the current notification. According to a recent RBI statement, physical gold can now be used to pay back gold (metal) loans. It is being hailed as a significant breakthrough, particularly in business and bullion. The move is anticipated to aid in promoting Indian refined gold. Plus, assist jewelers in covering their debts with gold holdings. Only prospective borrowers will have access to this option. As per RBI regulations, the loan agreement must expressly state that the borrower can use it. Also, it must specify the standard of gold that is needed. The refiner has to pay back the bank with Indian gold delivery standard metal that was made locally. What Are the Gold Loan NPA Norms in India? NPA norms for gold loans in India are a document that lays down norms and practices followed by the National Personal Asset Authority. It guides the industry in deciding how to value gold and other financial assets. Hence, they do not just operate as an authority but also work with their peers across the globe. Gold is an asset to many individuals because of religious beliefs, cultural and social reasons, and many more. Some people consider gold a good investment instrument due to its fluctuating prices. Usually, buyers wish to have gold as an investment or hedge against adverse market events. Gold is sometimes considered an instrument of value preservation or a currency. It does not have a fixed nominal value and is traded at its market price. Hence, the idea of gold loan NPA norms is to fix the value of gold. [B-02] Conclusion With so many benefits, a gold loan is among the finest ways to handle any unforeseen financial circumstances. The fact that you must mortgage your gold to the lender is the sole drawback of a gold loan. Therefore, close the loan properly and make the repayments on schedule. Additionally, there are several new norms for gold loans that we have stated above. You must know this before applying for a gold loan. So, go through that. Further, you may check out Piramal Finance to learn more about gold loans and explore their products and services.
08-11-2023
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