What are the factors you need to consider when applying for a car loan?

In today’s day and time, owning a car is not only an imperative but also a part of one’s lifestyle. There are also plenty of options a potential car owner can consider, based on the different features of the car. However, it is these features that set the price of the car, which in turn, influences the car owner’s choice of financing the purchase. In other words, if you are looking to purchase a car, you may need to consider your financial borrowing options.

Amongst the various financial options, the car loan is one option that is the most favourable option to finance this purchase. But before you can opt for the best car loan, that can suit your needs; there are certain factors you will need to consider. These factors will go a long way to determining the loan type that will suit your need, but also ensure that you have a convenient means to repay back the borrowed funds. They include the following:

Amount to put down: The amount to put down, also known as the down payment, is one factor that not many car owners are aware of. However, it is one of the most important factors that you should consider, as in turn, it will affect the principal amount you are liable for. It also determines how much of interest you will need to pay for the principal amount. Additionally, since the value of the car depreciates the moment you sign up for it, the down payment will determine how much you owe the car, especially in terms of insurance.

Length of the tenure: Like any other loan, you would be required to pay a loan amount during a fixed tenure for the car loan. The normal duration is not more than 15 years. While a longer tenure will lead to lower monthly payments, it will also increase the interest rate. Opt a tenure that does not outlive the car itself.

Interest rates: The interest rates for the car loan may vary, but the ideal way to get the best car loan interest rates is to compare lenders. You can keep in mind that loan rates are typically high on long loans, therefore try to opt for a shorter one.

Cost of deferred payments: Plenty of lenders may be offering a ‘payment free’ limited months as a part of their offer. While this may imply that you don’t have to pay for your car during that time, chances are, you will still have to pay the interest. In other words, in addition to the principal amount along with the added interest, you will also need to pay interest for those ‘free months.'

Financial lenders dealer: When opting for loan options, you can either approach a financial institution or through a car dealer. While it may be convenient to have a dealer arrange the financing, you should be aware they will offer a mark – up on their offerings, so as to increase the overall cost of the loan. Don’t settle for such offers, until you have independent loan offers to compare them with

Why should you open a recurring deposit for your child right from birth?

In today’s day and age, you may be feeling the pinch of the financial demand. No matter what you do, or how much of an additional income you earn, you may seem to never have enough. But what if you could plan your financial future, right from the time of birth, in order to have a sufficient financial cushioning by the time of earning on one’s own two feet?

While the chance may have gone by for you, your children, on the other hand, have the perfect opportunity. But with all the financial products available in the market, how can you choose the right one? The recurring deposit is one such option that you can consider. Through this termed deposit, you only need to put in a few funds, on the designated date, on a monthly basis until the deposit has matured. On maturity, you have the choice to reconvert the initial investment amount along or along with the added interest. Here are some of the few benefits your child can earn financial with the recurring deposit.

Start small, increase later: One of the main benefits of the recurring deposit is the flexibility in the amount that can be invested. As mentioned above, you would be required to invest a small amount, on a monthly basis until the tenure is met. This amount will vary from lender to lender. For some lenders, the amount will be as small as Rs 100 to 1000. The upper limit can also be Rs. 49,000. While it may go beyond your financial limit to invest the upper limit, in this investment, you can start with the smallest amount for the first few initial years. You can then increase the investment amount, as per your financial flexibility.

Create long tenures: The recurring deposit comes with fixed tenures. These tenures can last anywhere between 6 months to 10 years. You can opt for a comfortable tenure that offers you a flexible yet optimum return on your investment. Additionally, when considering this factor, you should also remember that the interest rate will be tied to the tenure of the deposit. Therefore, the longer the tenure, the higher will be the interest rate.

Opt for compounding interest: As mentioned previously, the termed deposit comes with an interest rate. However, it also comes with two different types, namely, the simple and the compounding interest rate. The simple interest rate is calculated on the initial amount that is invested, at a fixed interest rate. With the compounding interest, the deposited interest is added to the principal amount, thus increasing the value of the principal amount, at a fixed interest rate.

Create multiple deposits: While one termed deposit may not satisfy all the financial requirements your child may require in the future, you can compensate for it, by creating multiple deposits with different tenures. In this way, you can time the maturity at the time where you can use it, or reinvest it for a higher interest rate.

Enjoy a hassle free operation of your demat account with these do’s and don’ts

When it comes to investing, it is crucial that you make and take every decision with scrutiny. No doubt, as a part of this process you will also need to keep track of all the stocks you have sold or stored in your demat account. In the long run, it will seem like a tedious process. But given below are a few do’s and don’ts you can consider to ensure operating your demat account will be hassle free:
Do’s:
• The first thing you will need to do is to ensure that your both your holding and your transactions statements are received periodically. You can instruct your depository participant of this requirements. At the same time, you should be aware that you are entitled to receive a statement of all your transactions of your online trading account at least once a quarter, even if you have made no transactions.
• Always check the statements on the receipts you receive. If you notice any unauthorised debits or credits made to your demat account, you must contact your DP for clarification.
• Inform your DP, if there are any changes in your residential or contact details, as soon as possible. Additionally, when sending your securities for your online trading account, you should keep track of the distinctive numbers of the securities that you have sent.
• You must always check the demat performance of the issuer company with your DP before you decide to send the certificates.
• Keep your delivery instruction slip book in safe custody, just like you would for a cheques book.
• Only accept the delivery instruction slip book from your DP, if only each slip has been pre – stamped with a serial number and your demat account number. 
• Mention details such as International Securities Identification Number and the number of securities accurately. If in doubt, contact your DP or your broker.
• If you have corrected a mistake, over – writing or cancellations on the instruction slips, a sign against the same to authorise it.
• Ensure that all the joint holders of the demat account sign the slip.
• If there is space left after filling instructions for furnishing security details, you must strike out the blank space.
• In the event of your death, you can transmit your securities to your heirs, by adding a nominee. This makes this transmission process easy.

Don'ts:
• Avoid leaving your instruction slip book with any individual as you increase the risk of the details of your account and transactions to the public.
• Do not sign a blank delivery instruction slip as it is almost equivalent to the bearer’s cheque.
• As far as possible avoid any overwriting, cancellations, misspellings, changes in the name and quantity of securities as it may lead to confusion.

How is the Recurring Deposit Calculator Helpful?

What is a recurring deposit account? It is a kind of special Term Deposit account provided by Indian banks for people with regular incomes, where you deposit a fixed amount every month into your account and earn an interest at a similar rate of a fixed deposit account. Generally, you can keep this account for a minimum of six months and a maximum of 10 years. A recurring deposit calculator helps you calculate the amount you save by making monthly deposits into your account. Let’s find out how this works:

- This calculator computes the maturity amount, which is the addition of the principle and the interest earned. You will get a fair idea of the lump sum amount that will come to you, once the tenure of your recurring deposit account is over.
- The calculator however does not account for Tax Deduction at Source (TDS) as various banks have different periods of deduction. TDS is applicable on all interest paid amount of all recurring deposit accounts.
- The recurring deposit calculator analyses your maturity value based on a ready-made formula. You can plan the tenure of this account as per your requirement. It can be for your wedding, children’s future or for your future car.

Choosing the Recurring Deposit Interest Rate: You have to make sure that you compare all the existing interest rates offered by various banks, before you finally choose the best rate for your recurring deposit account. Nowadays, the TDS is applicable on the interest paid amount of the RD account. The TDS rules are similar for fixed deposit accounts as well. Several banks including ICICI, HDFC, Axis, SBI, and others offer recurring deposit accounts at different interest rates. Choose the plan that suits your desired cause the best.

What to Remember before Reaching RD Maturity: Firstly, you will have to consider the monthly installments as an individual and separate deposit. The compounding generally happens every quarter of a year, so start it is a good idea to start your account at a quarter period of the year to stay in tune about your earned interests. Also, every month’s deposit has a different tenure. Therefore, every deposit will earn a different interest amount. You must also know that the total maturity amount that you will receive will be the enhanced value of every month’s investment. The recurring deposit calculator makes this process pretty simple and gives you a cumulative idea of how much you will be depositing each month and how much you will be receiving at the end of your tenure.

How a Loan EMI Calculator Helps in Your Financial Decisions

Financial decisions like buying a house, car or other investments are crucial steps in one’s life. It is essential that one weights every pro and con before taking the final call. Most of the people go for different types of loans in such cases. However, it is important that you choose the right kind of loan and check your repayment options using a loan EMI calculator. This is a digital computing system that gives you the breakup of the Equated Monthly Installment (EMI) payable for any loan that you take up. Here is more on getting the right loan and how this calculator can help you out with various financial processes.

- A loan calculator will help you gauge the amount of loan that you are capable of borrowing based on your income, interest rates and other factors. It can be quite a challenge to calculate the EMI payable manually. This is where the calculator saves your time and energy by simplifying the whole process. Once the computing is done, you can decide on a feasible amount to be borrowed for your needs.

- A calculator also provides a graphical representation of all the data regarding your monthly payments, in the form of an amortization table. This way, you can easily get a clear idea about the amount payable by the end of the loan’s tenure, the payable rate of interest, span of the loan and processing fee.

- You can also plan to customise your loan or repayment process with the help of the loan calculator. At times, you might experience an increment in your income, which might open up the option for you to prepay a part of the loan. The calculator takes such factors into consideration and gauges the amount payable in such a scenario.

- Using the loan EMI calculator for your financial decisions ensure accuracy and an error-free outcome. This will also save a lot of your time and make the process all the more quicker.

- You can also make a loan repayment plan using the calculator in advance and be ready with all the required documents and then apply for the loan. It helps you be sure of, which loan suits your needs the best.

You can make quick, smart and sorted decisions with the help of the loan EMI calculator. Whether it is a personal loan, home loan or any other kind, you can be sure of the amount you can borrow from the bank and the exact amount to be repaid per month. This is the best way to avoid complicated calculations and a messed-up plan.

Why internet banking is the future for cashless banking?

The world is rapidly moving towards the age of digitalization. It has taken over almost over all our fields in our lives, right from shopping, education, banking, groceries or even bill payments. It is also easily accessible, with your smartphone, laptop or even your desktop.

But one of the most progressive features of this digitalization is internet banking. More and more individuals are preferring to use digital cash payment methods as opposed to carrying hard cash around. But is it beneficial enough to become a cashless banking option? Here are a few factors that support this causation:

Can be used to make online purchases: When it comes to traditional purchases, you would first view the product, analyse it and then make the decision to purchase it. However, the product for purchase would be restricted by limited options and limitation in quality. For intangible products, such as services, you would have to ask around, by word of mouth, before you can get the service and then make the required purchase. But now, you can easily go online and make any purchase you want. You can even review the different available options, their prices and their qualities before making a decision. Once your choice is made, you can easily use your Net Banking facility or any of the banking cards to finalise the online purchase. This is an ideal choice for those who want to make retail purchases or even purchase services such as hiring transport.

Can be used to make online transfers: Money transfers have always been a requirement for individuals who have travelled and settled abroad. But while sending cash in the form of cheques, drafts or even physical cash, would be a risk as well as time-consuming, online money transfers have now made this process easy. Through the internet banking process, individuals can now make real-time money transfers as required without the need to withdraw funds or draw DD’s or cheques to send back home. Additionally, you can even track the transfer, which is especially beneficial for those who are living in the rural areas.

Can be used to make online termed deposit applications: Plenty of individuals are now finding themselves in a situation where their income is lower than their financial demands. In this case, they would opt for a loan to satisfy their financial requirements. But through the traditional means to apply for the loan, one would be required to submit a set of documents in order to apply for the loan. However, in recent times, as a part of the account opening process, you will need to submit a set of documents, which come under the ‘know your customer scheme’ (KYC). These documents are also the same for the loan. But through the Net Banking facility, you can easily opt for a loan, especially if you want to open a recurring or fixed deposit. Through this process, the funds from your account will be easily transferred to the required deposit without you even having to move your seat from home.

Credit utilisation ratio: How to use multiple credit cards to reduce this ratio

Credit cards are one of the ideal ways to make payments. Not only do they offer the convenience to make any transactions, but it also offers a mean to track your record. It also shows your availability of credit on tap. However, this can be optimally utilised only if you maintain a prudent use of your credit card. This is also the place where the credit utilisation ratio can be used as a parameter, to keep a tab on your credit card use.

The credit utilisation ratio (CUR) is an outstanding credit balance expressed in a percentage that is compared with the total credit limit across all your credit cards. As a card holder, it is crucial that you keep this ratio as low as possible, as most lenders and financial institutions will use this as a parameter of an individual’s credit management. Given below are some of the factors pertaining to the CUR and why should you be aware of it:

Why a high CUR is not good for you: Running up your credit card will not only lower your credit score, but it will also make your CUR look credit hungry. It will always make you look like you are in a financial crunch. When your CUR is high, lenders will assume that you are defaulting on your payments. This can affect your credit score negatively. This, in turn, will affect you especially if you are planning to apply for a loan. Therefore, as a precaution, you should keep your credit expenditure less than 30% either by using multiple cards or paying off your debt as soon as reaches its limit. Ensure that you do not overuse any of your cards, especially on a regular basis.

How can you benefit from using multiple cards?:While it is a good practice to make your expenditures through your bank cards, it is an ideal option to split your expenditures through multiple cards. This helps reduce the CUR for each credit card. As mentioned previously, this card is calculated separately and collectively on each credit card that is allotted to you. You can easily use these cards judiciously in order to maintain a healthy CUR. All you need to do is identify your monthly spending patterns and plan your expenditures accordingly to minimise your CUR or even the use of your credit cards. If you think you are spending a bit too much, opt for a higher credit limit.

When should you use these multiple cards? No doubt, it may be easy to opt for these credit cards when you are in a financial crunch. However, it is important to consider using these cards only when you need it. Opt to use the cards wisely, only to increase your purchasing power. Compare the different cash back offers and rewards for specific products, and then use the appropriate card to optimise your shopping experience.