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Personal Loan

How Should You Take a Personal Loan To Buy A Car?

Taking a call on a big purchase is always tough. But you should not worry about the payment when you have many loan options. The best of all is a personal loan. Personal loans are versatile; they serve many purposes, including buying your dream car. Research shows that there has been an increase in the number of personal loan applications in India over the last few years. It is easy to see why borrowers prefer personal loans: they require no collateral and have lower interest rates. [B-01] A personal loan for a car is preferred over a car loan in India. A car loan typically only covers 80% of the total cost of the vehicle. A personal loan, on the other hand, covers the entire cost of the car. What Is a Personal Loan? A personal loan is a sum of money that you can borrow and spend on many things that are for your personal use. For instance, you may use it to pay off your debt or use the personal loan amount for a car. Features of a Personal Loan Unrestricted use of loan amount Minimal paperwork and formalities Quick loan approval Fast loan disbursal Flexible tenure for EMIs No need for collateral Types of Personal Loans Secured LoansA secured personal loan comes with collateral. e.g., an asset like a deposit account, home, or car. The collateral is used as security by the lenders. They have the right to keep the collateral as payment if you default on the loan. Unsecured LoansMost personal loans are unsecured. There is no need for any collateral to get such a loan. Because of the absence of collateral, banks view unsecured loans as risky. So, the interest rate on an unsecured personal loan is higher. Can I use a personal loan to buy a car? Generally, there is a misconception that you can only use a personal loan for certain expenses. Examples include home renovations, emergency expenses to repay debt, vacations, and so on. But in reality, you can use a personal loan for a car instead of taking out a car loan. Personal loans have a quick funding process and involve a simple application process. Personal Loans vs. Car Loans Personal loan for a car Car Loan Loan Type Unsecured Loan.There is no need for collateral. Secured Loan.The car is used as collateral security. Purpose Can be used for many purposes. Can only be used to buy a car. Credit Score The better your credit score, the more you can borrow. There is no need for a credit score. Interest Rates A higher credit score means a lower interest rate. It is determined by the amount of the car loan. Benefits of Getting a Personal Loan for a Car With a personal loan for a car, you have the option to borrow any amount you want. It is not restricted to the cost of the car. This helps you apply for part of the car’s value or the full amount, whichever is feasible for you. You can select a loan tenure of your choice. This means that you can repay your personal loan for a car according to the convenience of your budget. You can avail yourself of a personal loan with a low-interest rate by keeping your credit score high maintaining a strong repayment record. keeping no outstanding debt comparing the interest rates of different lenders You can have complete ownership of your car, unlike with a car loan. How to Take Out a Personal Loan for a Car You can take a personal loan for a car with these steps below: First, you have to compare the annual rates offered by different lenders. This includes the interest rate and all other fees. This helps you find the best annual percentage rate. Then, calculate your credit score to know how much you can borrow as a personal loan for a car. The higher your credit score, the more you can borrow. Next, check if the monthly repayment amount and the total amount you will end up paying the lender to fall within your budget. Finally, calculate the type of interest rate: fixed or variable. Now that you can plan your finances according to the loan, approach the best financial lender. Eligibility Details For salaried applicants For self-employed applicants Age Limit 18-60 years 21-65 years Minimum Income (which may vary across lenders) Rs 15,000 per month Rs 15 lacs per annum Work Experience/Business Continuity 1 year (at least 6 months with current employer) 2 years of business continuity Credit Score 750 or higher Documents for a Personal Loan for a Car PAN Card Identity Proof (any one of the following)PassportDriving LicenseAadhaar CardVoter’s Identity Card Address Proof (any one of the following)Registered Leave and Lease AgreementPassportDriving LicenseAadhaar Card/Aadhar AcknowledgementVoter’s Identity CardUtility bills like telephone bills, electricity bills, etc. (not more than 3 months old) Income Proof Last month’s salary slip Bank Statements from the Last Three Months Adding a Co-Applicant To qualify for a higher loan amount, you need to combine your income with that of a co-applicant. Only your spouse can become a co-applicant. You need to submit all the above documents for the co-applicant too. [B-02] Conclusion Buying a car is no longer a mere dream. With a personal loan, you can turn this dream into reality. But you should always analyse your finances before you get a personal loan for a car. Compare the annual rates, EMIs, and loan terms offered by various lenders. Also, keep your credit score high and have no history of default payments. If you are eligible for a personal loan, then what are you waiting for? Prepare your documents and submit them as soon as possible. Take advantage of your loan and enjoy car rides with your loved ones. To avail of a personal loan for a car quickly or for any queries related to it, talk to the financial experts at Primal Finance. While there, also check out their other products, services, and articles related to such topics.

08-11-2023

Home Loan

Factors you need to know that affect your home loan eligibility

A home loan offers the longest payback period of any loan, with a repayment term of up to 30 years. This feature makes it easier for individuals with limited resources to achieve their dream of owning a home. However, lenders carefully assess your eligibility to minimize risks. Here's a simplified guide to the top factors affecting home loan eligibility: Age - Lenders evaluate your age to estimate how many working years you have left. Applying for a loan earlier in your career increases the likelihood of approval with better terms. However, stricter conditions like a higher down payment or adding a younger co-applicant may apply if you're nearing retirement. CIBIL Score - A strong credit score (700 or above) is key to getting your loan approved and securing favorable terms. Lenders use this score to gauge your creditworthiness and repayment capacity. If your score is low, focus on improving it before applying. Existing Debt - Your debt-to-income ratio should ideally not exceed 30% of your monthly income. If a large portion of your income already goes toward EMIs, it may affect your eligibility. Clearing existing debts or including a co-applicant with a strong financial profile can help. Employment Stability - A steady job, especially with a reputable organization, improves your chances of loan approval. Lenders prefer borrowers with a stable income source. Income Level - Minimum income requirements vary based on location, loan amount, and job type. Due to the cost of living, borrowers in metro cities may need to meet higher thresholds. Down Payment - Lenders typically expect at least 10% of the property's value as a down payment. For example, if a house is worth ₹50 lakh, you'll need to arrange ₹5 lakh. The larger your down payment, the better your chances of securing the loan. Family Dependents - Lenders may view your repayment capacity as limited if you're the sole earner in a family with many dependents, which could affect your home loan eligibility. Tips to Improve Your Home Loan Eligibility Apply with a co-applicant to increase the loan amount. Maintain a stable income and savings. Reduce existing debts and avoid multiple loan applications. Regularly monitor and improve your CIBIL score. Document additional sources of income. Conclusion The first step in securing a home loan is ensuring you meet the eligibility criteria. Platforms like Piramal Finance provide tools to help assess your eligibility and guide you through the process. Focusing on these factors can improve your chances of approval and move you closer to owning your dream home.

08-11-2023

Tax Savings

Tax Benefits on Business Loan in India

A business loan is a form of debt financing. With business loans, you can buy assets, pay for expenses, fund new firm tasks, or repay existing debt. As with any other type of financing, business loans are also subject to taxation under the Income Tax Act. This means that you must know how income tax laws in India may affect your business loans. You can plan your finances keeping that in mind. The Indian government offers many tax benefits on business loans. If you have taken out a business loan and are paying off EMIs each month, you can claim these in your income tax return. This article will discuss the tax benefits on business loans in India. [B-01] What is a Business Loan? A business loan is a type of loan given to firms to help fund their tasks. Banks, NBFCs, NBFC-MFIs, and other financial firms may provide the loans. Firms take out loans to finance their tasks or fund growth plans. The process is quite simple. You approach a lender with your business plan. It should have details about your firm’s fiscal health and projected profit. The lender will then decide whether or not they want to lend you money. Types of Business Loans Available Many business loans can help you fund your firm growth, expansion, or cost of buying assets. There are two types of business loans: Term Loans A term loan is a long-term debt repaid over an agreed time. It is paid in instalments over four to five years. A lender can get a loan against real estate assets. It can be sold if the person defaults on payments. Working Capital Loans A working capital loan needs short-term financing for day-to-day tasks. Although some lenders offer longer repayment time, it is repaid within one year at most. How to Qualify for a Business Loan The Indian government has made it easier for firms to get loans by offering tax benefits on business loans. The purpose for which a business loan is sought is one of the most important factors in business loan eligibility. A business owner can take up a loan for two reasons: to start their own business or expand it. For this reason, you need to be sure that your application clearly states what you want to do with the loan sum. Small firms generally qualify for business loans at a lower rate than large corporations. However, they may have to provide collateral in the form of real estate or equipment. Lenders consider your credit score and financial history while evaluating loan applications. Most lenders require you to have at least three years of operating history before applying for a business loan. Lenders also want to make sure you can afford the monthly payments on the loan. This process is called underwriting and determines whether you qualify for a business loan. Lenders will also ask about your business plan. They may also request proof of you knowing how you will use the loan amount. You should also be able to provide documentation of your current business assets and liabilities. Tax Benefits on Business Loans A business loan has two components: the principal amount and interest. It includes low-interest rates and long repayment time, making it cheaper than other types of loans. Moreover, you can claim tax benefits on business loans. The interest component of a secured business loan is not tax-deductible unless used to purchase immovable assets like commercial property or land. Business owners can only claim tax benefits on business loans for the principal amount paid to the lender. Interest Paid on a Business Loan is Tax-Deductible The interest paid on a business loan is an expense of the business. It is not taxable to calculate income tax. First, the rate on the debt must be paid from the business’s income, not from any other source. Second, the debt must be incurred by the business. In addition, only the principal amount paid back will be eligible for the deduction. You can deduct the rate you pay on a business loan from your taxable income. It includes loans to buy or improve land, buildings, and machinery. The Principal Amount of the Business Loan is Not Tax-Deductible The principal amount is the total financing or loan amount sourced from the banks or NBFCs to finance business tasks. A business loan’s principal amount is not tax-deductible. Paying income tax on the principal or borrowed amount is not necessary. Additionally, you cannot deduct the amount from your income. Taxes are generally due on the net profits generated by entrepreneurs in a financial year. This is true for most types of business loans. The principal amount borrowed is not subject to tax. The net income earned by the business owner is exempted from tax. Tips to Get a Business Loan In case you are wondering how to get a business loan in India, here are some tips: Research the banks and NBFCs offering loans through their websites or by contacting them personally. Compare the interest rates and repayment tenure offered by each lender before making a choice. Check if you will get any freebies along with the loan amount, such as travel or accident insurance. Ask about these benefits before applying for a loan. Finally, remember to stay organised and track all your expenses. Keep good records so there will be clarity when tax time comes around. [B-02] Conclusion Business loans may be a game changer for you as an entrepreneur or seasoned business owner. The funds might be utilised to expand the business or to start a new firm. The tax benefit on business loans through interest payments and certain company costs such as salary or bonuses might affect your ability to get a rapid business loan. Before asking for any business loan, you should constantly assess your company’s needs in light of the current market. Business owners who take out company loans may benefit from tax breaks. This is especially since business loans are tax-deductible. To learn more about the tax benefits on business loans, do visit the website of Piramal Finance. They provide a variety of products and services and also have many informational blogs on various topics.

08-11-2023

Tax Savings

Know the Tax Benefits of a Joint Home Loan

Having your own house is a dream for many. A home is a “once-in-a-lifetime” investment that gives you. Buying a house is no cakewalk (primarily due to fluctuating market prices). With so much competition between buyers, financing a home can be difficult. Many turn to loans to help them finance a new property. A housing loan is a viable option. However, sometimes even qualifying for housing loans can be difficult. In this case, you can apply with a partner for a joint home loan. Do you want to apply for a joint home loan but are confused? You will find the correct answer to this question in this article. This article discusses all you need to know about joint home loans, their benefits, and all the tax exemptions available to applicants. What is a joint home loan, and what is its significance? A joint home loan is a form of financial assistance you take from a lender with a co-borrower to build or buy your own house. The co-applicant can be an immediate family member or your spouse. If you don’t qualify for a home loan, you partner with another person, and both can repay the loan. You and your co-borrower share the responsibility of repaying the loan at a specific interest rate. The lender gives both of you a stipulated time limit within which you have to repay the debt in instalments. What are the benefits of applying for a joint home loan? There are several benefits to choosing a joint home loan. These benefits are as follows: A larger loan can be sanctioned. Lenders allow a larger loan amount as two borrowers bear the repayment responsibility. The loan amount can go as high as Rs. 10 crore or even more in some cases. However, this depends on your and your partner’s income, CIBIL score, creditworthiness, etc. The risk is reduced. As the housing loan is taken on a joint basis, the responsibility falls on the shoulders of both borrowers. So, the level of accountability is lower, and as a result, banks are less concerned. The tenure of repayment is longer. In India, most banks allow a tenure period of 30 years for joint home loans. If you have applied for a home loan alone, you will probably not get a longer tenure for repayment. The approval process is faster. The approval period varies from bank to bank, but most loans are approved within 3-5 days. Some also provide pre-approved joint home loans. You get appealing interest rates. In India, the interest rate for joint home loans starts at 8.25% per annum. Adding your spouse as a co-applicant will give you an additional discount on the interest rates. What are some of the tax benefits of applying for a joint home loan? If you and the co-applicant are contributing together to the repayment process, there are twin tax benefits that both of you will be enjoying. First, under Section 80(c) of the Income Tax Act, 1961, you and the co-borrower can claim a tax exemption of up to Rs. 1.5 lakhs per annum on the principal amount. Second, under Section 24(b) of the Income Tax Act, 1961, each co-borrower can claim a tax deduction on the interest of the loan, which is up to Rs 2 lakh. What are the conditions to claim tax benefits on a joint home loan? Here are certain conditions that you need to fulfil to claim tax benefits for a joint home loan: You should also be mentioned as the co-owner of that property. You may not be able to claim the tax benefits if you do not have the property registered in your name. Since it is a joint home loan, you can only claim the tax benefits if you own that property. You have to be a co-borrower on the joint home loan. According to the loan documents, you must also be an applicant for the loan in addition to being a co-owner of the property. Otherwise, you cannot claim benefits under these sections. Tax benefits can be claimed only if the construction of that property is complete. You cannot claim any tax benefits if the property is incomplete or under construction. Under-construction properties are strictly prohibited from receiving any tax benefits. What are the joint home loan tax benefits? For two different categories, there are many benefits: For the borrowers who own the property: If you and the co-borrower co-own the property, each of you can claim a tax deduction of up to Rs. 2 lakh on the loan amount. The total interest paid by both is divided between the applicants in proportion to their stake in the property. For the borrowers who rent a property: If you and your co-borrower jointly claim the house, you can ask for larger tax advantages against the interest you pay on the joint house loan as a family, provided that the interest is more than Rs 2 lakh per year. [B-02] Conclusion A joint home loan is a great way to get financial backup to build a house for your family. It can help you get a larger loan amount because the risk is divided. Furthermore, the tax benefit is often shared between you and your co-applicant. The tax benefits are divided according to the percentage of the property you hold. Ownership is the fundamental requirement to get any tax benefit, and the whole system is different if you have a rented property.

08-11-2023

Business Loan

Pro Tips To Grow Your Small Business This Festival With The Best Business Loan

Growing a business is a responsibility that every entrepreneur holds and wishes to accomplish. Especially due to a lack of finance and cutthroat competition, it might get tough to stand in the battle sometimes. A business loan, however, can help you have the leverage and take your business venture to another level. Want to know how to grow your business in the festive season with the help of a business loan? Stick to this article to find out everything about business loans, the benefits of taking them, and the ways to grow your business and take it to another level. [B-01] What exactly is a business loan and why is it applied for? A business loan is a type of loan that you take from a lender to invest in your business and multiply your growth. The lender lets you borrow money to help you invest in buying raw materials, investing in equipment, spending money on advertising, etc. In return, the lender charges you a specific rate of interest on the principal amount and gives you a set period within which you have to clear the due. You can take that money and invest in it, growing your business, producing more goods and services for your businesses, and increasing your sales over time. It gives you a kick-start to your business and helps you overcome the cutthroat competition in the business world. What are the benefits of taking a business loan during the festival season? Since the festival is around the corner, you need to meet consumer demands effectively. And for that, you need to ensure that you produce more products, focus on providing quality services, and tackle the marketplace. Here are some benefits of getting an online business loan this festival: High loan amount: Banks offer you a high loan amount to help you invest more in your business venture. The loan amount can go up to as high as 50 lakhs. In some cases, if your credentials are strong and your business is profitable, then the loan amount can be stretched to even 1 crore. In addition, various government schemes also focus on providing you with high loan amounts and charging you minimal interest rates. No collateral: Since most business loans are unsecured, there is no need for collateral or any type of security deposit while applying for it. This is a benefit for you if you are a new entrepreneur and you lack collateral of any kind to make a start. Low rate of interest: The rate of interest on most business loans is quite low to make sure that your maximum money is invested in your business. You have to deposit a minimum amount of money as instalments and the rest you can use to grow your business. Mostly, the interest rate that most banks charge is between 15 per cent per annum to 20 per cent per annum. You can also look for government schemes that subsidise more so that you don’t have to pay high interest. Quick disbursal: The approval process is quite fast and you can get your money disbursed within a day Or sometimes, within two to three days. If your credentials are well and the bank has special offers for the festive season, then you can get approval in lesser time. How to scale up your small business with a business loan during the festive season? With increasing consumer demand, you have to make sure that you focus more on the quantity part along with maintaining the quality of your products. And to do all of that, it takes a good strategy and smart financing choices. Invest in equipment: Especially, to increase the production of products to meet customer demands, you need to buy more equipment. The new equipment will be more efficient than the previous ones and help you produce on a large scale. Invest in the workforce: The best way to intensify the whole process, you need to hire more workers. Hiring more workers will not only increase production but also fasten the process. You have to make your inventory full of your goods so that when the time of sale comes, all you have to do is focus on selling more products. Invest in manufacturing: Invest the money you take from the business loan in your manufacturing sector as well to produce more goods and keep it in surplus for your inventory. Make sure you have all the raw materials and other requirements to produce more goods in bulk. Invest in advertising and marketing: This is a very effective and huge step to increase your sales and take it to the roof. Advertising your product will let people know about your products and offers, and will bring more customers to you. This will amplify your sales and to even fasten the process, you need to market that effectively. Make sure that you don’t invest a lot of money in advertising, and focus more on product manufacturing. Website creation: If you have always wanted to have your business website, this is the right opportunity and the right time to do so. You can use a small part of this business loan to invest in creating a website for yourself. Make your website appealing, curate it, and add your social media handles to increase insights and traffic on your website. [B-02] Summing it up During the festive season, you have to make sure that your inventory is always in surplus and that you never run out of any raw materials. Use the business loan to curate your website as well so that you can connect with more customers who would like to purchase your goods. If you can manage home delivery services in your city, that would even help you increase your sales. If you liked this article, and you want to read more on this topic, you can visit Piramal Finance. It has ample content on personal finance, investment schemes, loan systems, stock market information, etc.

08-11-2023

How To?

How to Transfer EPF Online Through EPFO Portal?

The Indian government would pay the employer and employee contributions to employees’ EPF accounts. For an additional three months, from June to August 2020, the edge goes to businesses with fewer than 100 employees, 90% of whom make less than Rs 15000 a month in pay. Non-government organisations now only contribute 10% instead of 12% to the EPF. An individual can open a Public Provident Fund (PPF) or Employee Provident Fund (EPF) account. Both require the employer and employee to contribute a portion of their earnings. Because of their E-E-E (exempt-exempt-exempt) nature, Employee Provident Funds (EPF) are a great option for paid individuals. It was decided that making investments in EPF, earning interest through EPF, and withdrawing from EPF after five years were all privileges. This article describes the process of performing a PF transfer online. Keep reading to learn more about it. Required Form for PF Transfer Transferring PF monies across accounts necessitates the use of Form 13. To transfer their PF balance from their old account to the new one. When salaried individuals switch employers covered by the EPF Scheme, they must fill out this form. This is very vital. EPA Form 13 The EPF offers a transfer form called EPF Form 13 that can be received in person or online. Fill out the PF Form 13 and submit it to transfer the EPF account. Qualification for PF Transfer Employees are required to confirm that their registered mobile number and UAN are operational on the EPFO portal. When requesting a transfer The PF subscriber must sync any bank information that has been confirmed by the company, such as bank account information and an IFSC number. On the EPFO website, the employee must enter their Aadhaar data. The site should show the joining and departing dates of the PF participant. Additionally, the worker must give their reason for quitting. Please keep in mind that the EPFO portal only permits one PF transfer request to be submitted at a time. Now that customers are aware of how to move PF online, it’s time to identify the paperwork you’ll require to ensure that everything goes smoothly. Below is a list of the paperwork needed for the online PF move process. Alternatives for PF Transfer For PF transfer, there are primarily two approaches: PF Offline Transfer The employee must fill out the PF Form 13 with all pertinent information and submit it to the current employer to use the offline PF transfer option. Following that, the existing employer will send the application to the EPF office. The form will then be sent to the former employer by the EPF office for verification. After receiving confirmation and attestation from the prior employer, the EPF office will transfer the remaining funds from the old account to the new one. There is no need for copies of the applicant’s UAN or Aadhaar card. When a person has numerous staff IDs, the EPFO assigns each employee a UAN, which acts as a unique identification number. Online Transfer Claim Portal (OTCP) A method for transferring PF funds online. To use this helpful online portal, the PF member does not need to provide their UAN, Aadhaar, or other documentation. By attempting to submit a few financial details and employment information, you can transfer your PF. One Employee, One EPF Account: This regulation was put in place to prevent confusion brought on by having numerous PF subscriber data. All current PF accounts will be included in this endeavour, according to EPFO. The PF members’ ability to submit multiple PF transfer applications helps achieve this. Automatic EPF balance transfers are only possible when transferring a PF account from another account, and they require the subscriber’s UAN. The subscriber doesn’t have to exert much effort during this process. The PF will be allocated when their new employer enters their UAN into the system. Pension Plan for Employees The Compensation Act of 1952 specifies how an Employees Provident Fund (EPF) operates. Organisations with 20 or more employees must follow it. However, other organisations may voluntarily take part in this programme. This organization might join a government-approved project, or it might launch a retirement program to build trust. Each one of the known Provident Fund Schemes requires official approval from the Commissioner of Income Tax (CIT). Documentation Needed for an EPF Transfer Form 13 Revised, Universal Serial Number (UAN), Number of Establishment, Identity Verification (Aadhaar, PAN, or Driving License), Employer Information (must be Your Current Employer), Financial Institution Information, and PF Account Information (for both old and current accounts) How to Complete an Online EPF Transfer Form Step 1: Log in to the primary webpage of the EPFO portal using your credentials. Step 2: Once you’ve logged in, click the “Online Services” page. Then “Each Member – One EPF Account (Transfer Request)”. Step 3: Carefully go through all the data on the screen, then enter the details of the PF account to which the money will be transferred. step 4: To obtain the account details for the prior job, choose “Get Details” in. Step 5: Click on “Previous Employer,” then type the UAN and the final ID number. Step 6: Complete the online EPF Form 13 form. Step 7: To enable tracking of the application process, a tracking ID will be generated. Step 8: is to duplicate the form and sign it. After the date of procurement, the applicant has ten days to submit the aforementioned paperwork. Step 9: Both new and former employers must certify the data on the application. Step 10: Before the funds are moved to the new account, the information on the form must have the approval of both employers. [B-02] Conclusion It’s usual for workers to change jobs mid-career between PF-registered firms. But transferring PF rather than withdrawing it can help to protect it. Another key tax consideration is the fact that withdrawals from the PF done within five years of employment are taxed. Your UAN account is where all of the PF money from previous jobs is accumulated under several member IDs. The EPFO portal will save you the time it would take to look for your own money.

08-11-2023

Personal Loan

10 Useful tips to manage your car loan emi

Does your vehicle drive you up the wall regarding its EMIs? Let’s try to find a way to make this drive a smooth one. Vehicles have long since shed their luxury label and become a necessity. Financial planning before purchasing a car is critical for ensuring that the loan is properly acquired, EMIs are scheduled, and repayments are made over the loan’s duration. This will avoid hassles and debt. Digitalisation offers numerous options for managing your car loan. One such application is the car loan EMI calculator, which will guide you at the pre-purchase stage. While all this sounds easy on paper, let’s see how you can tackle your car loan EMIs. [B-01] Plan your purchase basis your lifestyle The prospect of owning a car can be both exciting and frightening. A fair assessment of your finances, savings, and spending pattern is a must. You can put together a list of all your loan commitments, and how it is impacting your monthly income. This will give you a sense of how much residual income is left for you to spend on the EMI of your dream car. Set aside a Budget Setting aside the money you are willing to allocate for this big buy helps you plan for the future. After deciding your monthly EMI commitment, you also need to decide the duration of this car loan. Here, the car loan EMI calculator assists you in determining your monthly payouts. This tool calculates an approximate EMI sum at current interest rates as well as different tenure options based on your allocated budget and car preference. The interest rate and the term of the loan are key factors that will impact your car loan journey. Research Lender options The Indian car market is booming today, with retailers offering a lot of interesting offers along with the vehicle, from easy repayment options to additional car accessories. The buyer stands to gain with multiple incentives being offered. Spend adequate time researching loans offered by several banks and NBFCs. To assist you in deciding the source of your loan, compare several offers and schemes after considering all value-adds. You can undertake this research easily through the online medium, and browse through relevant websites; most of these financial institutions have a car loan EMI calculator on their official websites to help speed up your decision. Choice of EMI scheme The EMI option you choose is directly proportional to the rate of interest and the duration of the loan. This means that a higher monthly EMI means a quicker closure of the loan, on the other hand, a longer tenure would mean paying more interest. Choose wisely, a shorter duration can help close the debt cycle faster as compared to a longer tenure. Pre-planning the loan schedule With the help of the car loan EMI calculator, you can decide your monthly payouts, and the spread of the loan duration, which helps you adjust the loan amount conveniently. The car loan EMI calculator helps you decide whether it is in your best interest to opt for a down payment along with applying for the car loan. Such planning with a car EMI calculator takes off your future worries without impacting your financial goals negatively. Timely payments You must honour your monthly payouts and try your best to avoid any defaults. This not only attracts a penalty but also impacts your creditworthiness. Multiple non-payments against your name will affect your future loan applications. Hence, always plan ahead and avoid defaulting on your EMI schedule. With a cellphone that is always handy, it is easy to set up reminders so as not to miss the EMI date. Tax Benefits You must take note that if you have taken the car loan for business purposes, you can claim a tax deduction against the interest paid. This will bring down your taxable income, thus resulting in savings. Furthermore, you can claim benefits on the depreciation of the car and other maintenance expenditures. To successfully make such claims, the car should be used for the purpose of running a business and registered in your name or the name of your enterprise. Pre-payment options When looking for a lender, always look for sources that allow you to make part payments on your car loan. This may be subject to some charges, find out what the cost of such pre-payments is. Additionally, you can also foreclose your loan before the tenure is over, this too will attract some charges from the loan provider. Make a note of all such expenses while making a decision on the car loan. Refinancing your car loan Sometimes you may be in a situation where you are unable to pay the loan as per your current agreement with your lender or lending institution. Worry not; you have the option to rework your loan terms to either rework the interest rate or extend the tenure, as may be the case. With the help of your lender, you can modify the loan agreement appropriately once you meet the eligibility criteria and get better commercial terms on the loan. Consolidating your loans Living in a day and age where we work tirelessly to fulfil most of our dreams in one lifetime, we do end up taking on several loans. In this scenario, keeping track of the EMI schedule of different loans such as personal, education, credit card, etc. becomes challenging. One way to efficiently manage your finances is to take out one major loan to pay off all the other pending loans. This loan may come with a lower interest rate and favourable payoff terms. This helps reduce your financial burden considerably. [B-02] Parting words Last but not the least, any loan is a debt until it is paid off, it is always in your best interest to try and minimize your expenses, make informed choices, and plan judiciously to avoid getting into a debt trap. To know more about car EMI calculators, loan applications, and managing your finances better, log on to https://www.piramalfinance.com.

08-11-2023

How To?

How to Buy Unlisted Shares in India

The Securities and Exchange Board of India (SEBI) constantly monitors and regulates listed shares, giving them a safety label. Unlisted shares, on the other hand, provide enormous potential for exposure and growth but come with their own set of risks. Like you, countless people in India know the value and potential of unlisted shares but need help figuring out how to buy unlisted shares in India. Many early investors in unlisted companies lost money to con artists due to a lack of awareness and scams. Today’s environment, where fraud is widespread, makes it even more challenging to distinguish between real and bogus information. This article is for you if you're wondering where to buy unlisted shares in India, how to invest in unlisted companies, and can we buy unlisted shares safely? Let's break it down. What Are Unlisted Shares? Unlisted shares are any securities or financial instruments that are not traded on a recognized stock exchange like NSE or BSE. They are often referred to as over-the-counter (OTC) securities. Companies issuing these shares are typically smaller, newer, or may not meet certain listing requirements like minimum market capitalization, profitability, or listing fees. How to Buy Unlisted Shares in India? If you're wondering how to buy unlisted shares, here are the most common ways you can invest safely: 1. Invest in Pre-IPO Companies Through Trusted Intermediaries Companies in their pre-IPO stage issue shares that are not yet publicly traded. These can be bought through intermediaries who facilitate off-record transactions. The shares are directly credited to your Demat account even though the exchange is not involved. When choosing an intermediary, ensure they are SEBI-registered to reduce counterparty risks. 2. Buy Directly from Employees (ESOP Sales) Some start-up employees holding ESOPs (Employee Stock Option Plans) may be willing to sell their shares after the lock-in period. In India, certain brokers and platforms can help you connect with such employees. Always verify the legitimacy of the platform before purchasing. 3. Purchase Directly from Promoters via Private Placement You can buy shares through private placement, which involves negotiating directly with the company’s promoters. This method is usually for high-ticket investments. It is advisable to involve a SEBI-registered wealth manager or investment banker for due diligence and smoother transactions. 4. Invest Through PMS and AIF Schemes Investing in Unlisted Shares If you're looking for a more structured way to invest in unlisted companies, Portfolio Management Services (PMS) and Alternative Investment Funds (AIF) offer professional portfolios that include unlisted shares. These are managed by SEBI-registered entities, ensuring better compliance, diversification, and risk management. Key benefits include: Risk spread across multiple investments. Professional management and due diligence. Dynamic portfolio adjustments as per market conditions. Where to Buy Unlisted Shares in India? If you are still wondering where to buy unlisted shares in India, here are some legitimate options: SEBI-registered intermediaries and brokers. Equity crowdfunding platforms (SEBI-compliant). Angel networks like Indian Angel Network, LetsVenture, etc. SEBI-registered PMS or AIF funds. Can We Buy Unlisted Shares? Is It Safe? Yes, you can buy unlisted shares, but remember: Unlisted shares are high-risk investments. Transactions must always happen through legitimate and SEBI-compliant channels. Stay away from unsolicited offers on WhatsApp, Telegram, or SMS. Always verify the intermediary's SEBI registration number. Risks of Investing in Unlisted Shares While the potential returns are high, some risks you should be aware of include: liquidity: Hard to find buyers or sellers. Capital Loss: High risk of losing your principal amount. No Dividends: Many unlisted companies do not distribute profits early. Dilution Risk: Your ownership may get diluted in future funding rounds. Key Considerations Before You Buy Unlisted Shares in India Always consult experienced investors or a SEBI-registered financial advisor. Do detailed research on the company or start-up you are investing in. Check for clean transaction history, no hidden charges, and direct Demat account transfers. Start small if you are a beginner and follow where institutional investors are investing. Key Takeaways Investing in unlisted shares is risky but rewarding if done carefully. Whether you choose to buy unlisted shares from employees, promoters, or invest via PMS/AIFs, always ensure transparency, regulatory compliance, and proper due diligence. Stay informed and continue reading such articles on Piramal Finance to learn more about how to invest in unlisted companies and buy unlisted shares safely in India.

08-11-2023

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Everything you need to know about EMI and how to calculate it

Well, what is EMI? Equated Monthly Instalments (EMIs) are monthly payments made toward a loan. The principal and the interest are the two parts of an EMI. The loan’s principal is subtracted from the amount you borrow. Lenders require interest payments because they incur expenses while making loans. The original principal and the remaining principal balance are subject to this interest charge. What is Loan EMI Calculation? Let’s start with a basic definition of EMI. Equated Monthly Installment (EMI) refers to payments equal to each month. The terms “equal in value,” “monthly,” and “instalment” all refer to the frequency at which payment is expected. The phrase “Equated Monthly Installment” (EMI) refers to the fixed monthly payment that a borrower makes to a lender over a certain period. The monthly instalment is determined by the loan amount, term, and interest rate. The number of loan EMIs and the number of payments are inversely related. [B-02] EMI Interest Rate Interest rates are another major component in determining the magnitude of EMIs. Rates of interest are variable from one creditor to the next. The market circumstances at the time of the loan are considered, along with the borrower’s ability to repay the loan based on their income, savings, and credit history. Interest rate selection is a significant factor. When it comes to the many forms of interest, there are: Reducing Rate The reducing rate decreases as the principal is repaid. Interest is computed on the total outstanding balance, and the interest rate decreases as the principal balance decreases. Floating Rates Interest rates, loan terms, and monthly instalments on “floating” loans are all subject to change based on factors like the national economy. The Reserve Bank of India (RBI) executes interest rate modifications once every three months. Using a floating rate is OK if the base rate is not altered. Of course, they can also be erratic at times. They should be avoided at all costs. Fixed Interest Rates Loans with fixed interest rates have their interest rate and term determined at the time of borrowing the money, and they do not fluctuate over the loan’s duration. Fixed interest rates often run 1-2% higher than those that are variable. This is the method of choice because it provides a ballpark estimate of the monthly instalment fee. Progressive EMI Progressive EMIs are EMIs where the payment amount rises after a certain amount of time. This facilitates a quicker payoff of the debt. No Cost EMI It’s remarkable how quickly a sale may be converted on an e-commerce website or app by mentioning no-cost EMIs. You may now use your credit or debit card to make a purchase using the No Interest EMI options. It would be a shock to hear that the RBI regulations do not allow for interest-free or zero-interest monthly payments (EMI). These EMIs often have substantially higher interest rates than the alternatives. A substantial processing charge is added to the EMIs or the reduced amount on the MRP is included. The ‘no cost’ assertion is, at best, misleading. Equated Monthly Installment (EMI): How Does It Operate? Two methods exist for determining the EMI. The items in question are: Flat Rate Method This calculation approach includes the principal and interest accrued on the principal in the final total. This figure is multiplied by 12 since that is how many months there are in a year after dividing the total by the loan’s maturity date. Payment Plan with a Flat Rate EMI Let’s pretend you’ve gotten a mortgage for 10, 00,000 (the principal loan amount) at an interest rate of 8% for 10 years. The following is the formula for determining your EMI based on the flat rate method: (₹10, 00,000 + (₹10, 00,000 x 10 x 0.08)) / (10 x 12) The monthly instalment is 15,000. Reducing Balance Method Using the reducing balance approach, EMI may be computed with the following formula: (P x I) x ((1 + r)n)/ (t x ((1 + r)n)- 1) This is an example expression using P, I, r, n, and t, where P is the loan principal, I is the yearly interest rate, r is the periodic monthly interest rate, n is the total number of monthly payments, and t is the number of months in a year. Reduced-Balance Example EMI Using the same example, the EMI may be computed using the reducing balance approach. ((₹10, 00,000 x (0.08)) x (1 + (0.08 / 12)) 120) / (12 x (1 + (0.08/12)) 120 – 1). There will be a monthly payment of 12,133. The declining balance technique of calculating EMIs results in less payment than the flat rate approach. While calculating the EMI flat rate, the loan’s principal is kept at a fixed amount for the duration of the loan. Alternatively, the declining balance technique uses the monthly principal reduction to determine the EMI. This indicates that paying down the debt can save borrowers money. Bottomline You can now say, “It’s so easy!” It would be best if you now had a firm grasp on what an EMI is, what goes into an EMI, and how to calculate an EMI for a loan using Excel and a web-based calculator. You should also be aware that the EMI amount may change even if the underlying circumstances remain the same. Possible causes include the use of a flat-rate or reducing-balance system of computation. With this information, you can confidently compare EMI plans and select the one that best suits your financial situation.

08-11-2023