Benefits of purchasing an insurance policy in your early 20’s

Today’s 20 year olds have realized or fortunately have been made to realize the importance of saving and investing. Life insurance, is an important investment and statistics prove that many mid to late 20 year olds have shown interest in purchasing it. To prepare ourselves for life’s “what if” moments, the knowledge of financial tools is essential and life insurance is one of the most important such.

Additionally starting an insurance cover in your early twenties will eventually pay off in the future. Some benefits include:-Lower premium - when you start an insurance policy you are expected to cover an amount which you pay off, usually by means of an annual premium. This amount paid annually as a premium will be significantly lower, the earlier you start an insurance cover.

Example
For instance, a person aged 24 will have a premium of Rs.7,000 and that particular plan will make a person aged 30 pay Rs. 9,000 as premium for an insurance cover of INR 1 crore.

Why so early?

Support - many 20 year olds have to support their family or a few of their folks along with themselves. In those scenarios, investing money in an insurance plan would prove beneficial in the long run and very helpful in unfortunate circumstances. It will provide those who rely on you with money after and if you are not there. A number of insurance policies offer lower premiums on beginning annually renewable policies. The premium rates do go higher every year but they also include invaluable benefits.

Stronger cash-value - regular payments of premium increases your cash value. This places you in a stronger financial position and enables you to access personal and other loans with flexible terms and conditions.

Exploration and Analysis - if you invest in purchasing an insurance plan during your 20s then you are bound to learn a great deal on the subject. As you keep getting older and observe lifestyle changes, you start evaluating the different types of insurance policies and based on your past purchasing experiences as well as your current lifestyle you could ideally settle for the one that proves to be the most beneficial.
Buying an insurance policy sooner than you plan to will reap you benefits sooner than you expect. Being a policyholder from an early age would coerce you to spend less and earn more, thereby getting into the habit of saving. In today’s world anyone can access information easily and this minimizes the risks of those purchasing insurance policies without prior knowledge.

Car loan vs. personal loan: Which is the ideal solution to purchase your dream car?

Need a loan to purchase your dream car? If yes, then you can either opt for a car loan or a personal loan. These are the two most common loans available in the market today. The entire process of obtaining a loan is very easy once you meet the requirements of the lender.

Now that you can opt for a personal loan as well as a car loan for purchasing a car. It is important to differentiate between the two, and then make an informed decision.

Personal loan

A personal loan allows you to borrow funds from an institution for various purposes. A personal loan is an unsecured loan which means it has high interest rates. Unlike a car loan in India, a personal loan is not restricted to motor vehicles. You can also use a personal loan for renovating your home, debt consolidation or taking a holiday.

Car loan

A car loan, as the name suggests, can only be availed to purchase a car. A car loan is secured, where the vehicle serves as the collateral. When you apply for a car loan, you should do a thorough research of all the interest rates and pick the best rate as per your requirement.

Which is better?

A car loan outscores a personal loan on a number of factors. From the perspective of interest rates, a car loan being secured, has a lower interest rate. Your credit score is important when you apply for a personal loan, so a bad credit score may act as a deterrent. Personal loans also carry high processing charges.

The credit score and higher interest rates are factors that tilt the scales in favor of the car loan. The car loan is also easier to obtain, as the dealer whom you purchase your car from can set you up. They usually have tie ups with banks or other NBFCs who offer car loans. A car loan may also require you to pay an upfront amount as down payment for the loan. A personal may also have variable interest rates as it is an unsecured loan.

Irrespective of what you pick, it is important that you carry out a thorough research and make an informed decision with respect to which loan would be more suitable.

Why a personal loan EMI calculator is essential for a strategic loan application

Personal loans are a great resource for small expenses that need to be handled in a rush. Personal loans of small amounts such as a few thousand rupees are often available from banks at interest rates as low as 2-6% per annum and can be taken out against small fixed or recurring deposits.

More conventional personal loans of Rs.50, 000 and above are available at 10-12% per annum interest rates. Most people can be eligible to apply for a personal loan as long as they are salaried employees of government or other reputed establishments or can show proof of income.

When you decide a loan scheme, your EMI is determined by several factors such as your interest rate, your loan amount, etc. It is crucial to know your EMI options beforehand and choose a payment plan that is suitable to your needs. If you end up with a payment plan that takes too large of a chunk out of your monthly income, it might disconcert the point of taking out a loan. Which is why, before you take out a loan, you should use an EMI calculator for personal loans to figure out your possible monthly payment plan.

Purpose of an EMI calculator

When you’re planning on taking out any sort of loan, you should have a rough idea of how you are going to be paying it back and how long of a commitment you are willing to undertake in terms of a payment plan. A personal loan calculator will help you ascertain these specifics and let you plan ahead accordingly. It will let you calculate the EMI on different loan schemes that you are considering as well as different loan amounts that you might need to consider, giving you a well-rounded idea about the situation.

A personal loan EMI calculator can make your job much easier by taking into account various factors instead of letting yourself account for them. Often while taking out a loan, people do not take into consideration, factors such as the time before they have to start paying back the loan and the interest it accumulates. This can lead to people getting frustrated over a longer span of EMI payments.
Strategizing beforehand using an EMI calculator can eliminate such hassles and let you take out your personal loans without worry.

Why the best time to opt for a personal loan is now!

Demonetization and Personal loan

The demonetization of the Rs.500 and Rs.1000 currency notes witnessed uproar in the country. Citizens of the whole nation deposited their cash in banks. There were many banks that slashed the deposit rates, which bought down the lending rates as well. At present, prevailing interest rate is at a six year low. With such low rate of interests, your monthly EMI will also tend to come down. As such, this is the perfect time to opt for a personal loan if you need one.

Benefits of a personal loan

There are several advantages of taking a personal loan now:

I) The interest rate being the lowest since the last six years.

II) You will be able to get loans with less than 12% interest rates.

III) There is little documentation required for acquiring a personal loan.

IV) It takes very little time to apply and as such you receive your loan within 72 hours.

V) It is possible for you to avail the additional tax benefits on the personal loan.

VI) The repayment options are flexible, allowing you to repay the loan as per your convenience.

Applying for a personal loan

1) Firstly, you need to check the interest rates that are available. You can look them up online to compare and get the most suited deal for you. At the same time, you can also look up the additional fees and charges that are levied.

2) You have to decide on the loan requirements and select the amount. You can select the amount up to 25 lakhs. You have to repay it in a span of 12 to 60 months.

3) Once you provide your financial details to the bank or NBFC, you will receive a customized offer. If you want, you can ask for a loan offer that is pre-approved.

4) A CIBIL score will measure your ability of repaying the loan. If you score well, there is a possibility that you will get a good deal.

5) You can either apply for the personal loan online or at the bank branch. You only need to submit all the necessary documents and pay a small processing fee. You need to submit your identity proof, address proof, your latest salary slip and form 16 (Income Tax). The amount will reach your account within 72 hours.

It would be wise to take advantage of the current prevailing market scenario and apply for the personal loan. The easy application process is sure to remove your doubts and fears of debt, allowing you to reach your financial goals.

All you need to know about the FCNR account and loan benefits

What is an FCNR account?

An FCNR (Foreign currency Non- Resident account) is a type of deposit account which can be used by NRIs and PIOs. As the name suggests, you can only deposit foreign currency in this type of account. Only certain foreign currencies are eligible for deposit in the FCNR accounts. The currencies that are allowed are the –
1. US dollar
2. Euro
3. British pound
4. Australian dollar
5. Canadian dollar
6. Japanese Yen

The FCNR account eliminates the risk of fluctuations in currency conversion, and earn a fixed rate of interest.

Features of a FCNR account

1. FCNR accounts can be only opened by NRIs and PIOs.
2. A regular interest amount is paid on the deposit.
3. You can only deposit foreign currency in the account.
4. The deposit should have a maturity period between 1 - 5 years.
5. It offers nomination facilities.
6. You can convert your deposits into a different currency against an implied cost.
7. This scheme does not permit recurring deposits schemes.
8. You can avail loan facility against an FCNR account.
9. The interest earned on this account is not taxable in India.

Requirements for opening a FCNR account are

1. A copy of Visa
2. A copy of passport
3. An updated bank statement of the foreign country
In case of a premature withdrawal from a FCNR account, a penalty charge of 1% is levied on the account.

FCNR loan

A FCNR loan is usually issued to corporates as per the guidelines issued by RBI. Corporates sometimes prefer FCNR loans as they have lower interest costs. This also does not require the borrower to go to international market for raising funds.

Advantages of FCNR loan –

1. FCNR loans come with very low interest rates.
2. You can use it to hedge currency exposure risk.
3. FCNR loans are easy to obtain.

Eligibility for an FCNR loan

These loans are generally only provided to well-established businesses that operate as a limited or a private limited company. The company should have a good track record of loan payment i.e. a good credit score. This loan can be availed for purposes like purchase of capital equipment or working capital requirement. Most banks usually have a minimum loan requirement amount of USD 100,000 for a loan application.

Are you aware of these features of the current account after demonetization?

What is a current bank account?

A current bank account is that type of an account in which a bank states no limit on the number of transactions per day. Most banks do not provide an interest on your balance in this account, in fact some charge a certain fee for the services. Account holders do not use this account for investment purposes. Usually such an account benefits a businessmen as it is a flexible account providing no transaction limits thereby assisting the business with supply of liquid cash. It might be a prerequisite in certain banks to hold a minimum quarterly balance which can range between Rs5000 - Rs10, 000.

Demonetization and Current Account scheme

However, adhering to all the norms specified by the bank and providing them with the prescribed documents is all you need to become a current bank account holder in India. On November 8th the Modi government announced the demonetization of Rs.500 and Rs.1000 notes. In an attempt to curb black money off the economy Indians were dumbstruck by this move as the news was not leaked by anyone to the public before the date. The people were coerced into following new rules which were temporary withdrawal and deposit limits. However, burden on businessmen were reduced as the withdrawal and depositing limit was considerably moderated for all current bank accounts. While there was a sudden cash crunch and people throughout the country felt short of currency notes, the government tried to promote the concept of a digital economy.

Within a week of post-demonetization, the government in an attempt to help the businessmen in the country raised the withdrawal limit to Rs.50, 000 a week. However, it remained Rs.10, 000 a week for savings bank account holders, which was later increased to Rs.13, 500. Between the 10th of November and the 31st of December all cash deposits in a current account of up to Rs.2, 50,000 were not the subject of any questioning from the Indian Income Tax Department, however, any amount above that was. Shaktikanta Das, the secretary of economic affairs, informed the press that the RBI had enough cash and a plan to distribute the notes throughout the country within 3 months. The government would make use of this period to detect unusual activity and at the same time try to help the public, either by easing the cash rules (spending old notes and increasing withdrawal and depositing limits) or by improving flexibility and scope of digital transactions.

How can you benefit from high interest rate savings account?

Why do you need to dishoard liquid cash?

We all must know the dangers of keeping money idle. It may evaporate quickly owing to surging inflation or on days when you feel spendthrift. You can instead invest the idle money in a bank account where you would earn interest on it. Banks offer you various investing schemes like a savings account, a fixed deposit and a recurring deposit to keep your money.
Features of a savings account

A savings account is generally opened by people who have a fixed income. The aim of this scheme is to inculcate a habit of saving money. Some banks even allow you to open a savings account with a minimal deposit of Rs100 with current savings interest rates in India varying from 4% to 6%.

A savings account can be divided into a regular savings account and a high interest savings account. A high interest rate savings account is a variation of the regular savings account that banks offer. Quite naturally, a high interest account earns a higher rate of interest than a regular savings account, in return of which the bank may ask you for a large minimum opening deposit. You may also be charged if your balance falls below the threshold amount required by the bank. The account may also be subject to other conditions depending upon the bank.

The recent launch of differentiated banks in India, has seen interest rates on saving accounts experience aggressive pricing. The newly formed payment banks that only offer savings account schemes offer high interest rates in the range of 6% - 7%.
Currently, the fixed deposit rates are seeing a decline, thus making high interest rate savings schemes more attractive.

Advantages of having a savings account

1. Encourages a habit of saving - For people earning fixed salaries, it encourages a habit of saving money.

2. Earning interest- You earn interest on the amount you have deposited.

3. Making payments - You can make payments or transfer money from your savings account via cheques or online banking.

4. Liquidity- Unlike fixed deposits, savings account schemes ensures that you can access your funds whenever you need.

5. Proof of identity - The savings account passbook gives you a proof of identity.

6. Low risk instrument- Savings account are very low risk instruments, where you do not have to worry about losing your money.