Applying for car loans? Here is what you need to know

In India everyone wants to build their own home first and then invest in a car. One can definitely make this purchase faster and easier with car finance options. A number of banks and non-financial institutions not only offer goof homes loans, but excellent car loans as well. 

Car loans today, come with low interest rates, feasible tenures and affordable EMI payments. Thus, with a number a car finance options many are able to enjoy the comforts of their very own car while effectively balancing their monthly budget.

Here are a few facts that one should know when opting for car loans-

Availability of car loans

Car loans can be availed when buying a brand new car and even on a car that is pre-owned. In both cases the rate of interest varies. The rate of interest on a new car loan varies from 9.25% to 13.75%, while on a car that is pre-owned, one may get an interest rate ranging from 12.5% to 17.5%.

Eligibility criteria

An eligibility criteria exists for all kinds of loans, and car loans are no exception. One needs to fulfil some conditions in order to avail an auto loan. Some factors that influence eligibility are age of the borrower, monthly salary, and type of employment as well as resident address.

Here is a list of some of the documents that a borrower will have to produce at the time of loan application-

• Identity proof, for instance a copy of your PAN card, driving license or passport
• Proof of address
• Proof of age
• Photographs
• Documents of the car
• Proof of income which may include salary slips of minimum 3 months, or a recent income tax statement

Some banks or lenders even require a copy of the car insurance at the time of submitting the loan application.

Approval of loan amount and interest rate offered

The amount of loan that may be approved, and the interest rate offered on the loa.n generally depends on the age as well as income of an individual. Most lenders give around 80% to 90% of the loan amount that has been applied for. A few may also be ready to offer 100% of the amount that is applied for.

The rate if interest charged on car loans is mostly fixed. Some individuals also opt for a floating rate of interest with the hope that the interest rate may fall soon. In case of car loans, some lenders also offer discounts on the rate of interest to women. Thus, go through the details when considering various car finance options

How can your international travelling benefit from multi – currency cards?

Multi – currency cards are known to be pre-paid cards that one can opt for when travelling to various countries at the same time. Banks generally allow one to load major world currencies like the US or the Canadian dollar etc. These cards do not work in India, Bhutan and Nepal.

Multi – currency cards can be extremely beneficial for business travel and even holidaying at various exotic destinations. Here are a few uses of such cards that one should be aware of-

Easy access to various currencies

One can load Multi – currency cards with a number of foreign currencies depending on the various currencies that their respective banks allow. For example, 16 currencies are allowed to be loaded in Multi – currency cards offered by Axis Bank Ltd, while ICICI Bank Ltd allows about 15 currencies and HDFC bank allows 20 currencies. These currency cards can be used at outlets to make payments or at the ATM for cash withdrawal.

Transactions are straightforward and simple

While international credit cards involve transactions fees as well as high maintenance fees that is generally paid on a yearly basis, there is no such hassle involved with Multi – currency cards.  With Multi – currency cards, one will only have to pay the expenses that they clear with the help of the card.

Fixed rate of exchange on purchase

While the rate of exchange keeps changing on a day to day basis, it will remain fixed in your case at the time of purchase of the card. Thus, one may enjoy a cheaper rate of exchange even if it has increased substantially.

Thorough protection

Multi – currency cards are well protected, thus they offer security of money. In case of card loss, just inform the bank and the card will be blocked immediately. Moreover, a replacement card will be issued in the next 48 hours.

Avail great deals

There are a number of Multi – currency cards that also offer great discounts and benefits on flight travel and holiday packages. Most cards also offer travel insurance, which include situations like a lost card or insurance on delayed baggage.

Minimal paperwork

One can easily avail Multi – currency cards through their bank. Just submit a copy of the flight ticket, an A2 form, PAN card information and a valid passport. On the basis on these documents the travel card will be issued in a short period of time.

Multi – currency cards have made it extremely convenient for business men and corporate companies to undertake exchange and payment in foreign countries. All details should be read and understood before availing a travel card.

Guidelines to investing in NRI accounts

The full form of NRI is Non-Resident Indian, that is, a person who has Indian citizenship but lives overseas. All banks have certain benefits and features that aid NRIs in maintaining various types of accounts in the country, so that they can control their funds effectively. But there are certain rules and conditions when opening NRI accounts in the country.

Essentially an NRI can hold 3 types of accounts with Indian banks. They are-

1. Non-Resident (External) Rupee (NRE) Account
2. Foreign Currency (Non-resident) Bank Scheme (FCNR (B) Account)
3. Non-Resident Ordinary Rupee (NRO) Account

Here are a few facts that you should know when opting for the above mentioned NRI accounts-

• Eligibility to open NRI accounts
In case of NRE and FCNR (B) accounts, a NRI or PIO (person of Indian origin) is allowed to open such accounts. Pakistani and Bangladeshi residents have to first get approval from the Reserve bank of India (RBI) before they are allowed to open such accounts.
In case of NRO accounts, Pakistani and Bangladeshi residents have to first get approval from the Reserve bank of India (RBI) before they are allowed to open such accounts. While NRIs dealing in bonafide Rupee transactions can open this type of an account.

• Eligibility to hold joint NRI accounts
All the three accounts can be held jointly by 2 or more PIOs or NRIs. An NRI can also hold a joint account with a relative who is a resident in India.

• Currency that can be deposited
In case of NRE and NRO accounts, deposits can be made in Indian Rupees only. In case of a FCNR (B) account, any type of foreign currency that can be easily converted is allowed.

• Various types of accounts that one can hold
In case of NRE and NRO accounts, you are allowed to open a savings account, current account, fixed deposit account and even a recurring deposit account. In case of a FCNR (B) account, you can only hold a term deposit account.

• Term for Fixed deposits
When it comes to a NRE account, one can maintain a fixed deposit account for a period of 1-3 years. The bank may allow a fixed deposit for more than 3 years depending on the asset-liability of the customer.
In case of a FCNR (B) account the period of a fixed deposit is always more than a year but should not exceed above 5 years.

A NRO fixed deposit account can hold any term depending on the resident account.

These are the few basic guidelines when it comes to holding NRI accounts, for more details one should consult the bank he wants to open an account in.

Know these smart facts about the NRO account

In case of NRIs (non-residential Indians) the easiest way to handle their earnings and funds in the country is via a NRO account. Thus, the Non-resident Ordinary (NRO) account may be opened either as a savings bank account or a current account. Just like the NRI account, the NRO is an Indian Rupee account.

In order to open an NRO account, one initially needs to provide documentation proof that they have gained NRI status. The documents that banks generally ask for include identity proof, proof of NRI status, foreign address papers and a couple of photographs.

The resident proof that is generally offered to banks are employment papers, student status, details of dependent visa, or a print out of the overseas resident permit. The proof that you provide should be attested either by the embassy of India, notary or a bank with a branch that operates overseas.

For smooth and fast transfer of account, one can also provide an Indian address proof along with the other documents. Once the application along with the documentation is submitted, it is reviewed by the authorities and if all is in place, the savings bank account will be transferred into a NRO account.
While opening an NRO account there are certain other facts that should be kept in mind. They are-

1. An NRO account is not only meant for NRIs. Persons of Indian origin (PIO) as well as overseas citizens of India (OCI) can open this account and enjoy its benefits.

2. In order to maintain an NRO account or for that matter even a NRE account, you have to have a minimum of Rs75, 000 in it.

3. Restricted repatriability has been initiated in case of the NRO account, this means that only 1 million $ can be remitted from the account annually.

4. While one does not have to pay taxes on the amount saved in the NRE account, the NRO account is subject to tax payment. Thus, the interest earned on the amount deposited in the NRO account and the credit balance too are subject to income tax clearance.

5. One can hold a NRO account with another resident Indian as per Section 6 under the Companies Act 1956.

Thus, opting for a NRO account will be beneficial in order to save funds in the form of dividends or rent coming from the country itself. A number of benefits are also offered to customers who hold this account. In case of a NRO joint account with an Indian resident, one can also hold it as a fixed deposit account, thus keeping his savings safe and sound.

Why should you opt for the fastest option to send money to India?

There was a time when many struggled to send money to India while living across the seas. It entailed high exchange rates, long wait and risk. But today, it has become very easy to send money to India to one’s parents, family, friends as well as business partners. One does not have to wait in never ending lines at the bank in order to transfer money overseas. These days the internet has become a rage, and things have become quite easy, from shopping online to even transferring money to India.

When one is considering ways to send money to India, they look for options that are fast, cheap as well as reliable. While the exchange rate and reliability of the online transfer service, bank or Transfer Company are important factors that should definitely be considered, always make sure you choose the fastest method of sending money. This is primarily because one can stay assured that they will be able to transfer money anytime or at the time of any emergency without worrying that it will not reach on time.

Thus, when choosing a transfer company or bank, or even an online method to send money to India, here are a few factors that should be carefully considered-

1. Time taken to transfer- This is quite an important factor that should be considered. If the transfer needs to be done quickly choose a service that does it in just a matter of minutes. There are services that complete the transfer in a span of 2-5 business days as well.

2. Exchange rates offered- exchange rates vary from bank to bank and services to services. Find out the exchange rates that are offered by various services, tally them properly and choose the deal that suits you best.

3. Transfer fees- In most cases transfer services do not charge any fees. But banks and some online services do. In case of online services the transfer fee is very low, but banks do tend to charge high fees. For example, in case one has to transfer money from U.S.A to India, some banks charge as high as 25$ for every transfer.

4. Minimum amount that can be transferred- The minimum amount that can be transferred also varies from service to service. While some transfer services in the U.S allow one to send money to India as low as 10$, there are others that only allow transfers that are 200$ or more.

5. Customer service and reputation- Choose a service that offers good customer care. This is because if there is any problem with the transfer one can follow up with questions.

How to transfer funds from an NRO account to an NRE account

Sometime back, Non-resident Indians, that is, NRI’s could transfer cash from their NRE to their NRO account, but vice versa transfer was not allowed until the year 2012, when the government made such types of cash transactions possible. 

A NRE account stands for- Non-resident external account, whereas the full form of a NRO account is Non-resident ordinary account.

While it is quite simple to transfer cash from NRE to NRO account, some norms have to be adhered to while transacting cash vice versa. Currently, only about 1 million dollars can be transferred from a NRO account to a NRE account. The following steps should be kept in mind when transferring cash-

1. A FEMA declaration has to be made

The document essentially declares your eligibility to transfer money from a NRO account to a NRE account. If one does not produce this document the bank can refuse the transfer of the cash.

2. Fill the form 15CA

Filling the form can prove to be a bit tedious, but patience is the key. Log on to the website of the income tax department, using your pan card and login credentials. Read the instructions regarding the form 15CA and fill up accordingly. Once the form is filled submit it and get hold of a print out which you have to present to the bank.

3. Get hold of form 15CB from your chartered accountant

One also needs to submit the form 15CB and can avail the help of a chartered account to do so.

4. Submit all documents to the bank

Once the forms are filled and submitted, ready the various documents that have to be submitted to the bank. Make sure you have a copy of-
• Form 15CA and form 15CB
• Demand draft or a cheque with the amount that needs to be transferred
• Request letter for transfer, or a form depending on the requirements of the bank
• Other documents that the bank has asked for

5. Transfer of amount

Once the bank verifies all the documents that have been submitted, it will proceed with the transfer of money from your NRO account to your NRE account.

When endeavouring to transfer cash from NRO account to a NRE account make sure to find out relevant information from the bank. This is because the steps of transfer and documents required may vary from bank to bank. Also make sure that no mistakes are made while filing both the forms. Any error may prolong the entire process of transaction.

Transfer of funds from NRO account to a NRE account should be done fast to reduce tax payments and enjoy other benefits.

Precautions to take in order to avoid a personal loan debt trap

Known to be an unsecured loan, a personal loan helps one during a financial emergency. One does not require to place any security or collateral to avail the loan. Moreover the loan can be flexibly used to serve one’s purpose, be it paying medical bills, travelling, clearing educational fees of children or even getting them married.

Personal loan in India is quite sought after because it can be easily availed and is quite flexible. One may opt for a personal loan, especially if they need the money for a short period of time. But a personal loan in India as well as other countries, generally comes with a high rate of interest, thus certain precautions have to be taken while opting for this loan. Any type of default in the repayment of a personal loan can lead to major outgo and in many cases heavy debt as well.

Thus, certain precautions should be kept in mind while opting for a personal loan in order to ensure timely repayment of the amount-

1. Do not opt for multiple loans

Sometimes, a desperate need to acquire funds because of a financial crisis may compel borrowers to apply for multiple loans from various banks. This action, will greatly reduce chances of loan approval and sanction. When an application for a loan is made, the banks first go through the entire credit history of the borrower. If you have availed more than one loan, it may adversely affect the credit score. A person who does not have a very high credit score is generally charged a higher rate of interest, as compared to a person who has a good score.

2. Only borrow the amount that can be repaid

One can avail an instant personal loan from a number of banks today. Many borrowers take a hasty decision and avail the personal loan without considering if they have the potential to repay the loan in time. To ensure timely payment of the EMI, see that it does not surpass about 35% to 40% of the monthly income.

3. Loan tenure should be chosen after considerable thought

In order to reduce the burden of personal loan repayment, choose a short loan term. More the tenure of the loan, higher will be the total cost of repaying the loan. This is primarily because a higher tenure means a higher interest amount to be paid on the whole. Also keep in mind that you choose a loan tenure according to your capacity to repay the loan.

Apart from the above mentioned points, also make sure that EMI’s are paid on time and defaults should not occur. Moreover, the documents should be thoroughly read and considered before availing the loan so that no hidden costs are missed.