Avoid these 4 mistakes with the education loan

Education all around the world is becoming more and more expensive. While primary and secondary education is government aided in many parts of the world, college education and higher studies is quite expensive. So much so, that many parents can only opt to send their children to college or university, if they have planned much beforehand and saved enough cash or if they can obtain a loan from a rich relative.

Today, the loan market has become quite competitive, and a number of education loans are offered by various banks to help youngsters pursue higher studies and obtain their dreams. But while getting hold of an education loan is very easy, one has to be careful when repaying the debt.

Here are 4 mistakes that one should avoid when repaying an education loan –

1. One should not borrow more than they can afford to repay- Be extremely realistic when calculating the loan amount that is required. It is quite easy to opt for an education loan, but sooner or later it has to be repaid along with interest. One may not need to pay the loan when in college, but it needs to be cleared afterwards. Keep this in mind, especially before opting for multiple student loans.

2. Do not wait to pay the interest after school is done- Most college students opt to work as well as purse their studies, there is a steady cash inflow. Thus, it is best that one starts paying the interest on the loan as soon as possible. This will reduce the pressure of re-payment later.

3. Do not be carless with monthly payments- While most individuals are aware of the total loan amount they have borrowed and the interest they need to pay, what they fail to estimate is the EMI. The monthly payment can be a great expense if not calculated beforehand. To calculate the EMI on your education loan, use a loan calculator and formulate a repayment plan carefully.

4. Do not loose contact with the loan servicer- In order to stay up-to-date with the timeline of your education loan repayment, always stay in touch with the loan servicer. Make sure that emails, letters and messages from your loan servicer reach you on time. In case of a change of address or phone number, keep the loan servicer in loop to avoid any communication gaps.

While keeping a tab on an education loan may seem overwhelming at first, it should be done in order to prevent any repayment stress in the future.

Basic facts you need to understand about GST payment

The Indian tax system has already been quite complicated. Dealing with direct as well as indirect taxes was a time consuming task for many a businesses. But with the set-up of the Goods and Services Tax (GST) this financial year, a major change has been predicted. In fact many have stated that this new tax system is going to be a ‘game changer’ for the economy of India.

Here are some basic facts which will help one understand GST payment-

Levy of GST

GST is levied anytime there is a ‘supply’. As per the GST Act, supply implies any goods and services sale. Exchange, barter, transfer, lease or rental also means supply as per the Act. Thus, businesses who undertake one or more of the above mentioned activities are entitled to goods and service tax payment. As per the Government, there are a few goods as well as services that do not come under GST payment. Thus, business should initially identity if good and services they deal with come under the GST payment bracket or not.

Application of GST

With the set-up of GST, one of the most important questions that have arisen is- which businesses should register for GST payment? It is mandatory for all businesses dealing in inter-state transactions and website sales to apply for GST registration. Those who are already registered under VAT and service tax can opt to transfer to GST registration. In case of businesses that have a turnover of about 20 lakhs, GST registration is not compulsory. In case of North East states the turn over value is 10 lakhs.

Registration with GST will help in making timely goods and service tax payment.

Process of GST payment

Under GST the payment will be primarily done electronically. Thus, it is important for most businesses to set up computer systems and methods of online payments. The challan will be electronically generated through the GSTN Common Portal. No manual challan will be available. Online payment mode has been adopted to facilitate the tax payer.

Mode of GST payment

Goods and service tax payment can either be done through the credit ledger or the cash ledger. The transfer of money into the cash ledger can be done through a credit or debit card and net banking. One can also deposit money in specified banks that have been authorized to collect GST payment.

In case of GST, payment needs to be on a monthly basis. Taxes should be cleared before the 20th of the next month. Those under the composition tax scheme need to clear taxes on a quarterly basis.

Credit card perks: Hidden perks that can save you funds

There are a number of credit card companies in the market, because of which the competition is extremely tough. There are quite a few perks that are offered to credit card users, but most of the time one is not aware of such benefits. This is primarily because such perks are not hyped by credit card companies.

Here are a few hidden perks that one can enjoy on their credit cards-

Price Protection

Very often one experiences that a purchase they made today at one store, is cheaper the next day at another store. In most cases stores do not offer the convenience of price matching, but this is where one can rely on their credit cards.

Most credit cards offer price protection, thus, one can claim a refund after filing a case and submitting proof that the same product is being sold for a less price. In some cases, price protection can also be claimed about 90 days post the purchase.

Purchase protection

Losing a phone or any other valuable item these days proves to be a great loss, especially if one does not have insurance on it. But the good news is that majority of credit cards offer purchase protection. Thus, one can claim re-imbursement for any stolen item. The facility of repair and replacement of items is also offered by credit companies under purchase protection.

Return protection

Many a times one may change their mind about a new purchase, but cannot return the product because the return period has expired. As per the return policies of most stores, a purchased item may only be replaced or returned within a span of 15 or sometimes 30 days of the purchase. In this case, one can depend upon the return protection offered by their credit card companies. Most credit card companies offer a return protection of about 60 to even 90 days. In case one does want to return their purchase, just send forth the product along with the necessary documents to the store.

Extended period of warranty

When purchasing a major electronic appliance, most individuals prefer a warranty in order to protect their investment. In this case a warranty may be purchased for a short period of time. But for an extended warranty, purchase it with a credit card. Most cards offer the benefit of extended warranty for up to a year at no cost.

To avail the benefits of the best credit card in India, choose wisely among various credit card companies. Compare the numerous offers they give before selecting one.

How much will your car loan payments be?

A car loan is a type of personal loan that allows the borrower to purchase the vehicle of his choice. The loan is then cleared through monthly payments at a particular interest rate and tenure. Many banks offer great auto loans at attractive interest rates today, making it more convenient for individuals to own their dream car!

But before opting for an auto loan, consider the loan amount and plan a budget accordingly.

A number of factors determine the final amount that needs to be paid when purchasing a car. Similarly, these factors determine the auto loan amount that one needs to apply for.

The best way to calculate the loan payments in order to purchase a car is through a car loan calculator. One can effectively use this calculation tool to accurately calculate the nature of his payments during the term of the car loan. 

The three major factors upon which the payment of a car loan depends are-

1. The price that one pays for the car after including all trade-ins
2. Rebates
3. The down payment

Once, the borrower is aware of the above three numbers, he can calculate the EMI that he needs to pay after including the interest rate on the car loan.

How to calculate car loan payments?

Any car loan calculator will ask for the below mentioned basic information. This includes-

• Price of the vehicle
• Trade-in-Value
• The amount of down payment
• Interest rate
• Tenure of loan

Car loan calculators that offer greater detail, may also ask for sales tax paid on the car. Using a car loan calculator is fairly simple and will allow one to plan his auto budget accordingly. One can get access to a car loan calculator online on various websites.

While car loans are easily available in the market, one should be extremely careful when applying for this type of a loan. Dealers are offering long term auto loans to make expensive cars more affordable for customers. There was a time when the tenure of a car loan was maximum 60 months, but today dealerships also offer a tenure of 6-7 years on car loans.

The longer the loan, more is the interest that has to be cleared. Thus, in the long run the loan turns out to be more expensive than the car purchase. Discuss all the aspects of the loan with the dealer first.

Before opting for a long term car loan, use a car loan calculator to ensure if it is feasible to pay back such a loan amount.

How to use your savings account to meet your millennial goals

While most people opt for fixed deposits and recurring deposits in order to maximise their goals, the same can be done with a savings account as well. Especially, in case of millennials who do not have a large amount of cash to invest in a fix deposit, using a savings account smartly will take one a long way!

A wide variety of different types of savings accounts are available, which help to build up cash to meet future goals. They are-

Savings accounts offering high interest- A number of savings accounts offer high interest on the money one saves. In fact, a few also come with the feature of a high introductory rate of interest that is offered for a particular period of time.

Savings accounts that offer incentives and bonuses- Investing in such a type of savings account is a great way to earn fast money. In case a customer meets particular conditions, such as limited withdrawals, a bonus is added to his account.

Savings accounts online- In case one is too busy to regularly visit their local bank branch, open a savings account online. Online savings accounts offer better interest rates and lower overhead charges.

In order to choose the savings account that best suits one’s needs, consider all the different options and decide how you would like to manage the account. In case one opts for an introductory rate, ensure that a competitive interest rate is offered in order to maximise returns. Also find out the frequency at which the interest is calculated. The more frequently it is compounded the higher will be the returns.

Most importantly, carefully consider all the terms and conditions the bank is offering before opening a savings bank account. Go through all the fees, requirements of deposits and withdrawals, overhead charges as well as any restrictions that are mentioned in the agreement, before accepting it.

Another effective way of optimizing the use of a savings account is opening more than one. This is especially beneficial for those individuals who are looking forward to accomplish multiple goals. So if one has 2 goals to meet in about 5 years, he can set up 2 savings bank accounts and segregate his savings separately. This does help prioritise and effectively plan a budget as well. In this way one knows exactly how much he needs to meet each specific goal, and money can be saved at a faster rate.

Start small by opening two or more savings bank accounts, but achieve big money goals this way!

Reduce your chances of defaulting on your business loan with these tips

One may default a business loan for a number of reasons. In case of some individuals it is merely carless miscalculation, for many others a default may be the result of bad sales, sudden financial emergency or other related factors.

A business loan default should be avoided as much as possible, because it negatively effects one’s credit score and history. Moreover, a default also adds more debt pressure and puts one’s assets at great risk.

Some amount of grace is given by banks to a borrower, generally about 2 weeks, before he is tagged a defaulter, but this is absolutely on the lender’s discretion. Here are a few helpful tips that one should keep in mind in order to avoid defaulting-

In case of delay, inform the lender

If you have taken a business loan and are going through a difficult time, it is best to contact the lender and inform him why there may be a delay in payment of the EMI. One should inform the lender that he needs some time to get things together and that repayment will be done soon.

Refinance

A common problem that many businesses face is the pressure of clearing small loans that have been taken for a short period of time. In this case, one should weigh their options and consider refinancing. Debt consolidation comes handy during this time. But the present situation should be carefully evaluated before taking another huge loan to pay current short loans.

Prioritize payment of debts

In case one has a number of short term debts, it is best to prioritize their payment. Keep in mind the payments that need to be made at the end of the month and ensure that they are promptly cleared. Do not delay small payments as they will keep piling up.

Ensure that the credit card that has a high rate of interest is cleared first. In this case one pays less interest on the whole.

Take legal help

Seek the advice of a lawyer in order to find a solution to any such problem.

Try cutting costs

In case the business is new, ensure that some cost cuts are practiced. A stringent budget should be organised and re-evaluation of the expenses should be undertaken from time to time. This will allow one to plan his debt repayment more efficiently and prevent any defaults of business loan.

In order to successfully pay back a business loan, one should carefully consider if he really needs the money and has the capacity to repay, at the time of loan application.

Demat Account: How holding this account will benefit you

Dematerialization first began in 1966 and the concept of demat, which is short for ‘dematerialization of share’ has been silently growing in the country.  It functions similarly to a bank, just as accounts can be opened in banks to save money, customers are given a passbook and online access to make transactions and check balance, the same is done in case of dematerialization. In this case, the data is kept in depositories and backed up as well depending on its importance. This service has made the trade and ownership of shares more secure and simple.

To open Demat account, first conduct a thorough research and compare which bank is offering the best Demat account features and benefits. Once the decision is made send in the application along with the necessary documents. Once the documents and application are approved and processed, the Demat account is opened at the cost of a small maintenance fee. The documents that need to be provided include identity proof and address proof. Submitting a copy of the PAN card is best. One also has to submit their photograph at the same time.

To open Demat account, a minimum balance is not essential. Although it is best to make sure that the documents provided are correct to avoid any delay. Here are a few advantages of holding a Demat account-

• Dealing with shares via a Demat account is not only convenient but extremely easy as well.
• Because all the data is securely stored, one does not have to worry about lost investment certificates or for that matter even fake certificates.
• It is quite simple to transfer securities via a Demat account.
• As compared to the cost incurred via physical purchase and sale of securities, costs incurred are much lower when such transactions are made through a Demat account.
• Bonus shares as well as share splits are stored in the account automatically.
• The banks offering the best demat account features, also manage bonds for customers. Thus, one can manage majority of their investments through a single account.
• Through a Demat account single shares can now be transacted as well. Earlier, this was not possible and shares could only be transacted when in lots.
• Thefts, faulty deliveries and the risk related to false shares will be completely eliminated for those who hold a Demat account. It also involves less paperwork and timely delivery.

One can effectively trade through a demat account, but deal with a bank that is reliable and offers the best features in share sale and purchase.