Popular article

Your one stop place for everything related to finance and lending

Home Loan

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

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

08-11-2023

Home Loan

Stamp Duty and Registration Charges on a Home Loan

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

08-11-2023

Other

5 Unique Ideas to Set Up a Business in the Trading Sector

The trading sector is a dynamic and vital part of India's economy, significantly connecting producers with consumers. As part of the service sector, the country's largest industry, trading allows businesses to influence market trends and meet consumer demand innovatively. Whether you're looking to launch a new venture or diversify your existing business, exploring opportunities within the trading sector can be rewarding. In an industry where inventory management and responsiveness to changing demands are key to success, having the right resources and financing is crucial. You can easily establish or grow your business with access to business loans specifically designed for traders. Here are five lucrative ideas to help you succeed in the thriving trading industry: 1. Sustainable and Eco-Friendly Products: Trading for a Greener Future With increasing concerns over environmental degradation and climate change, there is a rising demand for sustainable and eco-friendly products. Consumers are now more inclined to purchase items that are environmentally friendly, such as reusable household products, biodegradable packaging, energy-efficient appliances, and sustainable fashion. This sector presents an exciting opportunity for businesses to enter the growing green market by trading in eco-conscious products. The options are diverse, from selling solar-powered gadgets to offering eco-friendly home decor or zero-waste products. Many people, especially younger generations, are willing to pay a premium for products that have a positive environmental impact. By sourcing and selling sustainable products, you can capitalize on a profitable market and contribute to a greener planet. The demand for these products is expected to keep rising, making this an ideal sector for entrepreneurs who want to make a difference while earning a profit. 2. Health and Wellness Products Trading: A Booming Industry The health and wellness industry has experienced significant growth in recent years, and this trend is expected to continue as more people become conscious of their physical and mental well-being. From nutritional supplements, fitness equipment, yoga accessories, and organic skincare products, there is a wide range of health-focused products that people are eager to buy. The Indian market for health and wellness products is booming, driven by factors such as increasing awareness about healthy lifestyles, a rising middle class, and a focus on preventive healthcare. Entrepreneurs can consider trading in fitness equipment, dietary supplements, essential oils, or even wellness gadgets like fitness trackers and smartwatches. With an increasing number of consumers focusing on staying fit and maintaining a balanced lifestyle, this sector has tremendous potential for growth. By sourcing high-quality products and offering them through online and offline channels, you can build a business that caters to the health-conscious community. 3. Auto Care: Capitalizing on the Rising Demand for Vehicles The automotive industry in India has witnessed substantial growth, with passenger vehicle sales crossing the 3 million mark in 2016-2017. The sector grew by 9.23% during this period, driven by a combination of factors such as higher disposable incomes, changing lifestyle choices, and the increasing demand for luxury vehicles. The potential for success is immense for those interested in starting a business in the auto care sector. The opportunities are endless, from selling spare parts to providing auto accessories and maintenance services. Currently, the auto care industry is valued at Rs. 20,000 crore and is expected to grow to Rs. 34,000 crore by 2020. This presents a fantastic chance for entrepreneurs to tap into the expanding market and offer products or services that cater to vehicle owners' needs. Trading in vehicle parts and accessories, such as tyres, battery chargers, or car cleaning products, can be lucrative. Additionally, offering services like car detailing, maintenance, and car modification can make your business a one-stop shop for automobile owners. 4. E-Commerce Trading: Expanding Online Retail Business In the digital age, e-commerce has become a major avenue for businesses to reach consumers. With increasing internet penetration, online shopping has gained immense popularity in India, especially in the wake of the COVID-19 pandemic. This presents an opportunity for businesses to establish an online presence and engage in e-commerce trading. Whether you're dealing in consumer electronics, clothing, beauty products, or groceries, e-commerce trading offers the chance to reach a wide customer base without the overheads associated with traditional brick-and-mortar stores. By setting up an online store, you can trade products directly to consumers, manage inventory effectively, and leverage digital marketing to drive traffic to your website. In the fast-evolving world of e-commerce, staying ahead of trends and continuously offering value to your customers is essential. Whether it's by providing seamless shopping experiences, offering personalized products, or focusing on customer service, a successful online trading business requires a solid strategy and access to the right resources. 5. Electronics and Gadgets Trading: A High-Demand Market The demand for consumer electronics and gadgets in India is rapidly growing, thanks to technological advancements and increasing disposable incomes. With the rise of smart homes, mobile devices, wearables, and entertainment gadgets, there are numerous opportunities for entrepreneurs to tap into the electronics and gadgets trading market. India’s tech-savvy population is eager to invest in the latest gadgets, ranging from smartphones and laptops to home automation systems and audio equipment. This market is driven by the urban population and younger consumers in smaller towns and cities who are adopting new technologies faster than ever. By sourcing high-quality, in-demand electronics and gadgets, you can meet the needs of a growing customer base. Additionally, offering after-sales services such as warranty extensions, installation support, or tech accessories can provide added value and boost customer loyalty. Conclusion: Unlock the Potential of the Trading Sector with the Right Support The trading sector presents a wealth of opportunities for aspiring entrepreneurs looking to capitalize on growing trends. Whether you're interested in organic foods, pet care, auto services, furniture, or e-commerce, there is no shortage of lucrative ideas to explore. Securing a business loan for traders allows you to access the necessary funds to start or grow your business. With flexible repayment options and affordable interest rates, these loans offer the financial support you need to succeed. Start planning your trading business today, and with the right strategy and financing, you can set yourself up for long-term success in this thriving industry.

08-11-2023

Business Loan

Step-by-step Process to Get MSME Loan for New Business?

The Government of India has launched many schemes in the form of loans and subsidies to help and promote entrepreneurs in their business ventures. One of them is the MSME business loan which targets to finance and foster medium, small, and micro businesses (MSME). Do you also want funds from the MSME loan for your startup? Well, this article will help you navigate through it in detail. In this article, we will discuss the MSME business loan why it was introduced, its benefits, and how to get a startup business loan for your new business. [B-01] What is the MSME loan scheme, and what is its primary objective? The MSME Ministry of India is an individual body that has executed and implemented the MSME business loan schemes for the betterment of emerging small businesses. This loan system’s prime objective is to provide unsecured loans to individual, small business units to help them meet their business-related expenses. Not only the government, but private financiers and private banks have also started giving MSME loans to individual, rising businesses. The main differences between government and private MSME loan schemes are the interest rate and the loan amount. This loan has self-tailoring features, which means you can get an MSME startup business loan as a short-term, medium-term, or long-term loan scheme. You can take it as a cash credit, letter of credit, working capital loan, etc. You can use this lump sum amount to buy raw materials, use them for transportation, or pay for any services. What are some of the exclusive benefits of the MSME loan scheme? Here are some of the exclusive benefits of getting an MSME loan: Low rate of interest: Banks charge a low rate of interest to small and micro businesses to ensure that the minimum amount is spent on repaying the loan and the maximum amount goes into funding the business venture. The rate of interest for MSME business loans in India is somewhere in the range of 10 to 25 percent per annum, with an exception of 1 to 1.5 percent by some lenders. Accessibility: MSME startup business loans in India are highly accessible and easy to apply for. The whole process is hassle-free with serious exemptions, which makes it an ideal loan system with the fewest cons. Collateral-free: Since it is an unsecured loan, there is no requirement for collateral, a security deposit, or a guarantor. If you don’t have any of those, you don’t need to worry about your loan getting sanctioned. This decreases the burden on small and microbusinesses and helps them pay better attention to their businesses. High flexibility: MSME business loans are a short-term affair, and you require them only to cover your short-term requirements. Since an MSME loan isn’t a long-term commitment, you can easily focus on developing your business. The long tenure of repayment: The tenure of repayment is not fixed for every bank, but it can often be started at 3 years and stretched up to 15 years, which seems like a reasonable amount of time. You can repay your loan within this loan period in the form of installments. High loan amount: If you get your MSME startup business loan sanctioned, your loan amount can go up to Rs. 50 lakhs, which you can use in your business venture. You can use it to buy new types of machinery, and raw materials, expand your manufacturing, hire more workers, and pay for other services. What is the eligibility for an MSME Business Loan? Here are some of the eligibility requirements to help you get an MSME business loan: Type of business: The type of business determines whether or not you are eligible for MSME loan schemes. The two types of businesses that are eligible for MSME loans are those in the manufacturing sector and those in the service sector. Business experience: In your current business, for which you are applying for a startup business loan, you must have a minimum of one to three years of business experience. This is due to the fact that you must demonstrate to the banks that you have extensive experience in the business venture in question. Business turnover: A business turnover of about 12 lakh rupees per year is the benchmark for an MSME business loan. However, it is again very subjective because different banks have different criteria. Credit score: It is a common analogy that a good credit score will increase your chances of settling on a better deal on any type of loan, which stands to be true. If your credit score is 750 or more, it is always a plus point for you and increases your chance of getting a bigger loan at a lower rate of interest. Clean loan history: If you have been paying your previous debts diligently and on time, then you are always a step ahead. Banks prefer candidates who have a good track record and pay their instalments on time. [B-02] Conclusion The interest rates from the top banks for MSME business loan range from 8.5% to 15% per annum. Some of the popular banks might go lower than that with an increased tenure of repayment. You should use calculators in this case, where you can spin different loan amounts and interest rates to see what suits you best. You should focus on improving your credit score, improving your business venture, and increasing your business experience to make a better pitch and get a decent loan. If you prefer well-researched and easy-to-understand articles and blogs on these topics, you can have a look at the official website of Piramal Finance. We have some amazing content on loans, investment, financial consulting, SIPs, etc.

08-11-2023

Home Loan

What is Better Between a Gold Loan and a Property Loan?

People are now more welcoming to loans than ever. Loans are no longer seen as the last option for getting cash. Instead, they are seen as a way to manage money. People are happy to take out loans with low-interest rates and pay them back in easy installments because it helps them keep their savings. Gold loan and Loans Against Property (LAPs) are two examples of collateral loans. They don’t require selling valuables as a means to cover monthly payments. Both loans have low-interest rates, and you can use them for anything you want. Also, compared to other loans, there aren’t as many rules. The question here is whether a property loan or a gold loan would be better. [B-01] Difference Between a Gold Loan and a Property Loan When people are in financial trouble, they often get personal loans. These loans are made to help you out of a sudden money jam. The high-interest rate, however, makes it hard on the pocket. And what if you don’t qualify for a personal loan? Or what if the amount of money you need is much more than what you can get with a personal loan? In this case, you might consider using the money you’ve saved to get out of your tight financial situation. But it might not always be a good idea to sell assets like mutual funds and fixed deposits. Here is a quick look at how a gold loan differs from a loan against property. Collateral Money lenders will keep the collateral you provide as protection for the loan. It will be called security. You can make monthly payments until you have paid the debt in full. This can be done in the form of EMIs. If you can’t repay the loan for any reason, your lender will use the pledged collateral to get back the amount you still owe. Since both a loan against property and a gold loan are secured loans, you will need to put up an asset as collateral to get them. You must put up gold jewelry or coins as collateral for a gold loan. For LAP, on the other hand, you have to put your commercial or residential property up as collateral. Criteria for Eligibility To get a loan, you must first be eligible for one. When someone wants a gold loan, the lender doesn’t care much about their job, credit score, etc. This, in turn, helps all possible borrowers, especially when they need money quickly, because it is more likely that their loan applications will be approved. Most gold loan companies will give money to anyone between the ages of 18 and 75. This is so long as the gold jewelry or coins put up as collateral meet their requirements. On the other hand, the requirements for getting a LAP are stricter than those for getting a gold loan. All lenders examine age, income, property worth, previous liabilities, business stability or continuity, and credit history before approving a loan application. The Time it Takes to Get a Loan Loan processing time is the amount of time it takes to get the loan. This is important when someone needs money quickly. Most of the time, gold loans are easy to process and get approved. Also, you can get the money quickly, which makes it a great way to deal with a financial emergency. Getting a gold loan is easy, and the loan is processed immediately. After the paperwork is turned in, the loan amount is usually processed in 30 minutes. On the other hand, a loan against property takes longer to process than a gold loan because the lender needs time to check the property documents. Repayment Tenure When deciding which loan to get, the length of time you have to pay it back is very important. The longer the borrower has to pay back the loan, the lower the EMIs are, and vice versa. But a longer term makes the loan more expensive in the long run. Most gold loans have short payment terms. They can be repaid in as little as a year or between two and three years. However, a loan against property has a 10- to 20-year repayment term. Paperwork Requirements Borrowers and lenders can save time and effort by using a gold loan application procedure to streamline the application and approval processes. Lenders only need a few documents before giving out the loan. Gold loans don’t usually require as much paperwork as property loans secured by real estate, but a lender may still want proof of employment, identification, and domicile. [B-02] Conclusion Whether you should get a gold loan or a loan against your property depends on what you need. Gold is a valuable thing that most people own. It moves around a lot and is worth a lot on the market. Since you only have a short time to pay back a gold loan, it would be best to borrow a small amount. LAP doesn’t have a high interest rate and gives you a long payback time. So, it’s the best option if you need to borrow a lot of money. A gold loan should be your initial choice in a financial emergency. This is because it is easy to get and requires little paperwork. To learn more about gold loans and property loans, check out Piramal Finance, and the products and services they offer.

08-11-2023

Gold Loan

What Is Digital Gold Loan?

India’s houses have pieces of gold just sitting in their lockers. But the good news is that you can use them when you need them. When you need money quickly, you can use your gold items to pay for your immediate needs. Not by selling your gold but by giving it as collateral to a place that lends money. Many banks and non-bank financial companies (NBFCs) in India offer gold loan with attractive interest rates. Moreover, digital gold is the cherry on top and gives people attractive gold loans. But before applying for a digital gold loan, you should know the features and benefits of these types of loans. This post goes into more detail about these things. [B-01] What is a Digital Gold Loan? Digital gold is a new way to buy gold that doesn’t require holding. You can easily and quickly buy it online from the comfort of your own home. The least amount you can buy or sell is Rs. 10. You can buy and sell gold around the clock, even on weekends and holidays. People can avail themselves of a loan against their digital gold. Borrowers can get their digital gold loan money at their front door. If they have gold to use as collateral for a loan, a lending executive may come to their home, figure out how much it’s worth, and give them the loan in as little as 30 minutes. Features of a Digital Gold Loan Some of the most important features of digital gold loans are: Attractive Interest Rates Digital gold loans are secured loans. The interest rates are lower than those for loans without collateral. No Need for a Good Credit Score For gold loans, lenders don’t need to know your credit score or how much money you make each month. The loan’s value is based on how much gold was used as collateral. Safety Lenders keep your gold pledges safe by putting them in solid vaults. Once you pay back the loan, they give it back to you. Loan-to-Value (LTV) The Reserve Bank of India (RBI) has set the maximum LTV ratio at 75%. So, if you put up Rs 1 lakh’s worth of gold as collateral, you can get up to Rs 75,000 as a gold loan. Little Paperwork You only need your ID and proof of address to apply for a gold loan. This is part of the “Know Your Client” (KYC) process. Lenders don’t need proof of your income or bank statements to figure out if you qualify. Versatile End-Use You can use the money from the loan to pay for anything you want without having to worry about end-use restrictions. Fast Processing Processing is faster, so you can get the money you need in minutes. The lender calculates the value and immediately gives out the loan amount. No Foreclosure There are no fees for foreclosure or paying off the loan early. You can pay back the principal and interest on your gold loan at any time without worrying about foreclosure or early payment fees. Benefits of a Gold Loan There are many good things about gold loans that make them an attractive way to get money. Among the most popular are the ones below. Benefits of a Secured Loan Most loans either have collateral or don’t. Unsecured loans don’t require collateral, but there are strict rules about who can get them. Since a gold loan is secured, the lender will want something in return. But they usually make it easy to get a loan. You don’t have to show proof of income to get a high-value loan. Plus, because of the gold, lenders charge less interest. Adaptability When you apply for a digital gold loan, you only have to show that you have gold in the form of coins, jewelry, etc. You can still get the loan even if your credit score is low. Many gold loan lenders do not care about your credit score, which is why these loans are so popular. Using the Same Gold Repeatedly Once you’ve paid back your gold and gotten it back, you can use the same gold to get another loan. Since the gold loan amount is based on how much gold is worth on the market, you can get a bigger loan if gold prices go up. Flexible Repayment Terms Gold loans are not amortized, meaning you don’t have to pay the interest and the principal in each EMI. Instead, you could only make EMI payments on the interest during the loan’s term and pay off the loan’s principal in one lump sum when the loan is paid off. Because of this, a digital gold loan is a great option that is easy on the wallet. You can also pay back some of the principal amounts before the loan is due, which will lower your interest. Steps to get a Digital Gold Loan 1. Application The application is the first step in getting a loan. This is done online in the case of a digital gold loan. Borrowers fill in the basic information, like their name, age, gender, home address, and cell phone number. After that, a lender’s representative will contact them and show them what to do next. 2. Evaluation The lender will send an executive to the home of the person who wants to borrow money so that the gold can be valued. Once this is done, the official will provide the loan, usually between 60 and 75% of the gold’s value. 3. Disbursement Once the lender approves the loan amount, the money will be sent to the bank account in as little as 30 minutes. The process is quick and easy. [B-02] Conclusion Since the COVID-19 epidemic, most things in life, including gold loans, have moved to the digital world. It’s only a matter of time before they become popular and replace traditional payment methods as the norm. Borrowing a digital gold loan from a trustworthy lender like Piramal Finance is a quick and easy online process that only takes a few minutes to finish. Want to know more about digital gold loans? Visit Piramal Finance and explore the different options they offer!

08-11-2023

Personal Loan

What is Flexi Loan and What Are its Benefits?

What is a Flexi Loan? A Flexi loan is a type of personal loan. It credits money to your account instantly. You can use the loan amount as per your requirements. Unlike other loans, Flexi personal loans don’t charge interest on the amount sanctioned to you. Instead, interest is charged only on the money you spend. In other words, you will pay interest only for the amount used by you and not for the total amount credited. Flexi Loans allow you to use the funds and repay the interest whenever you wish. They are often referred to as Flexi personal loans. Flexi personal loans are similar to the overdraft facilities provided by banks and other financial institutions. [B-01] What is the Difference Between Personal Loans and Flexi Personal Loans? Here is how personal loans and Flexi loans differ: Personal Loans Let’s assume you have borrowed Rs. 1,00,000 as a personal loan from a bank or any other financial institution. You are charged an interest rate of 10% p.a. for this principal amount, and the total period of the loan is 1 year. The bank, in general, will charge you an interest rate of Rs 12,000 for the one-year tenure. Thus, you will be required to pay Rs. 1000 as interest per month. Flexi Personal Loans For example, if you borrowed Rs 1,00,000 as a flexible personal loan from a bank or an institution at an interest rate of 10% p.a., you are not required to pay an interest rate of Rs 12,000 as you did in a personal loan. Instead, you will be paying interest only on the amount that you withdrew or utilized. Assume that you have used only Rs. 50,000 out of the total Rs. 1,00,000 credited to your account as a Flexi loan. As a result, you will pay only Rs. 6,000 in interest over the course of a year, i.e., Rs. 500 per month. What are the Eligibility Criteria for Flexi Personal Loans? The eligibility criteria for Flexi personal loans depend upon various factors. These include the type of employment you have, your age, income, financial obligations, credit score, citizenship, any criminal records you may have, etc. You can opt for a Flexi loan if you are a salaried employee or a self-employed individual. But the above criterion is subject to change from bank to bank or from institution to institution. Another major factor that determines your eligibility for getting a Flexi loan is your total credit (CIBIL) score. In general, to avail of any type of loan from banks and other financial institutions, it is recommended to maintain a minimum credit score of 700. What are the Benefits of Flexi Personal Loans? Below is a list of the advantages of a Flexi loan: Unlimited Withdrawals: Once the loan amount is credited to you, no one can question you on the number of withdrawals. It is because there is no limit on the number of times a Flexi loan can be withdrawn. No Need For Multiple Applications: In Flexi personal loans, whenever you withdraw money, you will not be required to fill out any application. Hence, no lengthy paperwork or approval is required for using the loan amount credited by the lender. Lower EMI: With Flexi personal loans, you are not required to use the entire loan amount. As a result, the interest rate and EMIs will be lower, compared to other types of loans. Pre-payment Option: Whenever you have a cash inflow or a lump-sum amount, you can pre-pay towards the total value of the Flexi loan. Furthermore, you will not be charged or penalized for making partial prepayments on the borrowed loan. Bullet Repayment Option: Flexi personal loans not only allow you to make partial prepayments but also provide a bullet repayment option. Bullet repayment is when you can pay back the loan principal and interest rate all at once at the end of the loan’s maturity period, also called its “tenure.” Helps You in Unexpected Situations: Flexi personal loans are a great aid in your unforeseen or unexpected circumstances. The loan amount is credited to your account instantly. Thus, a Flexi loan helps meet both your planned and unplanned needs. Minimum Documentation: As compared to ordinary personal loans, a Flexi loan needs a few documents at the time of application. Usually, an application for a Flexi loan asks for your Aadhaar card, address proof, income tax returns, salary slips, etc. No Need for Collateral: To avail of Flexi personal loans, you do not need to pledge any collateral, assets, or other financial securities. Closing of Loan Before Tenure: If you repay the Flexi loan amount before the maturity date, your loan will be closed. The main advantage of closing the loan before the term is that the interest payments are reduced. However, some banks or institutions may impose charges for early loan repayment. Easy Cash Flow Management: As your monthly EMI is reduced, you will be better able to manage your cash flows. This helps reduce your cash outflows and expenditures. [B-02] Final Takeaway Flexi personal loans are flexible not only in their name but also in their usage. We hope this article has helped you understand Flexi loans and the importance of maintaining a high CIBIL score. You can easily apply for and get a flexible personal loan with Piramal Finance. We, at Piramal Finance, will guide you through each and every step. Our executives are available to answer any queries related to Flexi loans. You can visit Piramal Finance‘s website to learn more about loans and related topics.

08-11-2023

Other

Tips for Digital Business Owners to Become Successful

As a digital business owner, chances are that you have either experienced success or are on the way to achieving it. Becoming successful is never easy. With the right steps, however, you can slowly get there. Today, digital business owners have several options to expand their reach. One such option is digital marketing. The following article will look at how digital business owners can succeed. It will discuss how digital marketing, as an internal strategy, can help make business operations efficient. Tips for Digital Business Owners to Become Successful Here are some ways in which digital business owners can succeed: 1. Know Your Target Audience It is important to know who your target audience is. What are the demographics of your existing customers? What are their interests? Where do they spend their time? Despite an excellent marketing strategy, your efforts won’t be effective if they aren’t targeted at the right people. The easiest way to find out who your target audience is is through social media. It is important to understand which social platforms your customers use. 2. Create a Targeted Marketing Plan Creating an effective marketing plan is essential for any digital business. An effective marketing plan involves budgeting, identifying strategies and tactics to implement, and translating the results into KPIs. It is also important to note that marketing plans can be created for specific products and services or your overall business’s brand. 3. Know Your Competitors Just like you need to know who you are marketing to, you also need to know who is competing against you. The more information you have on your competitors, the better your marketing efforts will be. Identify the areas in which they are weaker than you, and try to capitalize on them. Make sure that if there is any competition for a potential client or customer, that person knows about it. Provide a detailed description of what their competitors are offering and why your offerings are better for customers and businesses alike. 4. Implement a Digital Marketing Campaign It is important to implement the strategies that you have laid out in your digital marketing plan. Marketers, who can consistently implement the guidelines they set forth, tend to have more success than those who are inconsistent. Common digital marketing strategies include social media campaigns, email marketing campaigns, PPC ads, blogging, content creation, and so on. 5. Utilize All Social Media Platforms Social media is an incredibly powerful tool for any digital business. It is quick, free, and provides immediate results. It is important that you utilize every social media platform that is relevant to your target audience. This means being active on each platform, having a unique strategy for each, and ensuring that you have addressed any customer concerns promptly. 6. Speak to Your Customers It is important to interact with your customers regularly. Try to get a sense of what drives them, what they like about your products and services, and what areas you can improve in. It is also helpful to reach out to those who have given negative feedback. This will help provide better customer service and, thus, a better experience for clients. 7. Create a Website It is important to have a website, especially if you plan on selling products or services online. Not having a website makes it hard for customers and clients to locate your online digital business. If you have a website, ensure that the content aligns with what you are selling. There are many free platforms that allow you to create a website. A simple search on Google will give you a list of free or low-cost websites you can use for your e-commerce business. Don’t forget to mention contact information, an address, images of your products or services, different methods of payment, and other similar things that customers will find helpful. 8. Improve your SEO While building your website, make sure to use SEO. SEO is the act of modifying the content that you post on your website, social media platforms, and emails to rank higher on search engines. Improving your SEO will make it easier for search engines to find you. This helps you get more traffic from people searching for what you sell or offer. To attract more visitors to your site, or in other words, boost your SEO, you need to improve the quality and quantity of the content on your site. Since the content is a key factor in SEO, make sure that it is relevant, accurate, and well-written. Also, make sure to submit regularly updated blog posts to increase organic traffic. To improve your SEO rankings, try using keywords with high volume searches. [B-02] Final Thoughts Digital marketing is a powerful way to grow your online digital business. It is a great way to reach out to customers and clients in ways that other marketing methods can’t. If you are a newly launched digital business and need help with finances, you can always consider taking the help of experts. You can also read similar blogs or articles on the Piramal Finance website. Here, you can learn about the different loan options available for digital business owners.

08-11-2023

Tax

What is Income Tax Payable And How to Calculate

The government is entitled to a cut of the total revenue of your company, called the income tax. Paying income tax is your company’s financial obligation. However, an accounting term often used is income tax payable. [B-01] What is the income tax payable? The income tax payable is the amount that your company needs to pay in income tax within the following year. Simply put, it is the tax your company has to pay within the next 12 months. Income tax payable grows in proportion to your company’s profit. You will not always have the same tax payable on the total income. The income tax payable on the total income is shown on the balance sheet as a liability. Liabilities can be decreased through tax credits provided by the relevant government agency. Most tax credits have a time limit on when they can be used on your taxes. It is necessary to track when your company becomes eligible for each. Formula to determine the income tax payable Your organization’s taxable income is not determined exclusively by its bookkeeping profit. The total profit reported on the books can differ from the taxable profit that must be applied to the income tax rate. This is because the government permits many modifications that affect the accounting profit. Income tax payable and income tax costs can fluctuate because it takes time for a company to record the earnings in the account. This often happens because some clients are given late payment due dates. Income tax payable is not included in the statement of operations. Instead, it is shown on the balance sheet. There is typically a disparity between income tax expenditure and income tax paid. The difference may be due to depreciation, tax deductions, and other accounting issues. Since the process is complicated, your business needs help calculating its taxable revenue. There is no set method for determining income tax payable. However, the calculation is done according to set standards. Tax costs can be estimated using the following formula: Taxable income x tax rate = income tax payable For example, if the total taxable income is INR 10,00,000 and the tax rate is 25%, your company has to pay INR 2,50,000. Deferred income tax liability vs. income tax payable Income tax payments and deferred income tax liabilities are financial obligations on a company’s balance sheet. It is a common misunderstanding that they are the same thing. These two things couldn’t be more different from an accounting perspective. Income tax payable represents tax that has not yet been paid. It is still not paid often because the filing dates are far. For example, your company expects to pay Rs. 2,50,000 in taxes for the upcoming tax period. Then, you can record an income tax payable of this amount on the balance sheet. This sum is due on the same day as the rest of the company’s tax obligations. On the other hand, a deferred income tax liability refers to an outstanding tax bill that has been postponed until a later tax filing season. Obligations result from discrepancies between tax accounting and generally accepted accounting procedures. Income tax expenses and income tax payable Income tax expense and income tax payable are not the same. Expenses have to be recorded when they are incurred. An income tax expense is an amount your firm estimates it will have to pay in taxes for the reporting period. Income tax expenses can be utilized to record income tax charges. A business that makes its tax payments monthly or quarterly should make corrections to its income statement. On the other hand, the balance sheet will show income tax payable on the total income as a liability. Types of Income Tax Payable Your corporation’s taxable income can be broken down into two categories. There are two types of income taxes that must be paid: Current income tax payable: The estimated tax payment for the current year. Deferred income tax payable: The taxable income in the current year that will not be paid until the following year. How do you calculate the income tax payable for your company? You can use the formula given above to calculate the income tax payable. However, it is not always clear whether the income is taxed. Companies use GAAP-calculated pre-tax net income as a starting point. You can account for changes between the net income and taxable income. You have to make adjustments if there is any discrepancy between accounting and tax regulations. The fines and other costs you deducted from your net income may not be tax deductible. Adding and subtracting these amounts is often done. Once you have completed these processes, you will have your initial taxable income, from which you may deduct any tax-related expenses (such as tax credits). Apply the government’s tax rate to determine your total income tax. This is the amount your company has to pay. On the balance sheet, record this amount as a liability. Deferred impacts of items like future year tax credits, revenue, costs, and net losses might be difficult to account for when calculating income tax payable on the total income. [B-02] Conclusion Your company’s expected income tax payable is a liability. It is your company’s responsibility to pay the income tax in full. The income tax payable by your business might be due in the current or next financial year. Income tax payable is an important obligation for any business. Businesses need to account for various state and local income tax rates. The process can be confusing. If you’re unsure where to start, look to a professional for help.

08-11-2023