How to manage your education loan EMI’s?

Education loans are essential for students who wish to pursue higher studies or go abroad to complete their education. Most banks now provide these loans to students, but also charge a substantial interest when it comes to paying back the sum. While taking a loan itself may be easy, paying off the debt may prove to be difficult for some students.

The bank usually allows the student some time after he/she has completed their education before asking for the EMI repayment. This period of time is known as repayment holiday. Usually the bank allows a period of one year from the time of completion of education to the time of the first EMI payment. However, this period may be shorter if the student manages to get a job within six months of the degree completion.

Here is a look at some of the guidelines to follow if you want to manage the repayment of your education loan in India.

Ways to reduce burden
For education loans above Rs.4 Lacs, the student has to pay a certain percentage of the expense, while the rest is lent out by the bank. For studying in India, the student has to pay 5% of the loan while for education overseas the student has to furnish 15% of the expense. However, if you are a good student, some banks may relax these rates.

It is also better to take the loan amount through small payments over time instead of taking the entire amount at once. This reduces the interest that you will have to pay once the repayment period starts.

Start saving prior to repayment
If you have taken out an education loan, it is highly advisable that you start saving money during your education. You can opt for a part-time employment in order to start saving early. The repayment holiday can also be utilized to save up enough money so that there is no issue while repayment of the debt.

Keep an eye on the rate of interest
Education loan in India is given out on a floating rate of interest. This means that the rate of interest may change over time. So, it is highly recommended that you keep a backup savings for emergencies if the rate of interest suddenly escalates. However, to do this, you need to earn enough to save some money after paying EMI and meeting monthly expenses.

These are some of the easiest ways of ensuring that education loan EMI does not get too difficult to manage. Keeping expenses in check during the loan repayment tenure is the best way to handle the burden of the loan.

Gold Loan: Why it is a popular option in India?

India is a country that loves gold. Indians are the largest importers of gold in the whole wide world. This precious metal is not only useful as an ornament to be worn at festivals but a good gift option as well. These days banks and non-banking financial institutions are offering loan against gold.

Gold loan is granted by a lender against the gold that is kept as mortgage and hence, this loan is a secured loan. The gold needs to be deposited with lenders before the loan is availed. The lenders will conduct a few checks and may offer loans for as high as 80% of the metal’s value. Most households in India have at least some gold at their home or in a bank. They can utilize this loan to meet emergency requirement of funds such as expanding a business, a medical emergency, child education or even for down payment to purchase a vehicle.

The various benefits of applying for a gold loan are:

• As the gold loan is a secured loan, banks are generally non-hesitant in granting it. Banks or other financial institutions always have the option of selling off the gold in case of any default on the payment.

• Banks or financial institutions may even allow a person to only pay the interest for the loan. The person can pay back the principal amount at the end of the tenure.

• Gold loan interest rates are generally lower in comparison to the interest rate that is charged by a bank or a financial institution on any unsecured loan. Thus, this provides some relief to the borrower.

• As the gold is kept as collateral, a person is eligible for a loan against gold even if his/her credit history is not so commendable. A person’s repayment capacity is also not considered. Thus, it is often easier for a person to avail a gold loan to meet his/her urgent requirement of money.

• Lenders also generally do not ask for an income proof to be submitted by the borrower. This is because the physical gold is kept with them.

• A person availing such a loan does not generally lose ownership of the gold that he/she is mortgaging. He/she will get it back after repaying the loan.

• Many banks and non-banking financial companies charge less or no penalty for prepayment of the loan. Sometimes, they do not even charge processing fees. Thus a borrower is not overburdened with the task of paying more money.

In India, the government has also made it easier for women and agriculturists to get gold loan by announcing special goal loan schemes. Gold assets usually increase in value and hence, it is easier for lenders to trust a person who wants a loan against gold. These are the reasons why gold loan is a popular option in India.

The ideal guide to choosing the best insurance policy

A person always needs a back-up plan to deal with any contingencies in his/her life. There may be a sudden death in the family or there might also be some medical emergency. A death of a working member of a family may result in the family being plunged into a world of plight. This is where a life insurance policy can prove to be extremely beneficial. Such a policy entails that that an insurance company will provide death benefits to the beneficiary of a policy in exchange for some payments that are to be made on a regular basis.

There are a number of life insurance policy plans that a person can choose from in accordance with his/her needs.

There are a number of factors that a person should consider before deciding which plan should work best for him/her.

• A person who does not want a complicated plan can opt for a simple plan. Such a plan normally comes with single premium options and guarantees a beneficiary that is assured a lump sum after the death of the policy holder. The assured sum is normally 15-20 times the present annual income of the policy holder.

• A person should insure himself/herself or any other member of his/her family who is suffering from any critical illness. Health insurance may not suffice in such cases as such a policy only pays for the hospitalization costs. However, a person suffering from a critical illness will generally require a lot of other funds as well. Thus, it is of vital importance for such a person to get a financial shield in the form of critical illness clause when he/she is applying for an insurance policy.

• A person can also avail accident cover with his/her life insurance policy. This will be hugely beneficial for a person as it can provide security in a number of uncertain situations like road accidents. This cover only costs a little extra and offers extra benefits to the family of the deceased in addition to the one-time payment.

• A life insurance will also enable your family to earn a monthly income even after your death.

• Different insurers even allow a person to choose how that person wants to receive the pay-out.
He/she can choose from multiple pay-out options to suit his/her different financial requirements.

• Do not always opt for the life insurance policy plan that requires the payment of the lowest premium. This may result in the loss of various benefits and also cause you to adopt a policy that does not meet your requirements.

• Choosing a proper insurance provider is also a key facet.

A life insurance policy lets a person provide financial security to his/her family and also enables the person to live a peaceful life.

How to qualify for the best business loan?

Business loans are extremely useful when one is investing in a new business. These loans may help set up the business, so that one can easily repay the debt as the business starts generating profits. However, as with any kind of loans, not everyone is qualified to receive a business loan. Most lenders have a list of stringent eligibility criteria that the borrower needs to fulfill in order to get a loan sanctioned. Here are some steps through which one can easily qualify for the best bank loan for business.

High credit scores
Credit scores are a form of measurement, which assesses how good you are at repaying loans. There are two kinds of credit score that the bank may check, prior to sanctioning a business loan. The personal credit score keeps track of the past loan repayments of the loan applicant. For instance, if you pay your credit card bills and other loan EMIs on time, your personal credit score will be higher.

The bank may also checks the business credit score. This is the credit score of an established business and includes the past repayment of business loans for such an organization. However, in case you are applying for the loan for a new business, the banks will not check the business credit score.

Meeting the eligibility criteria of the lender
Each lender will have their own requirements and minimum qualification criteria for a business loan. Ensure that you are aware of these criteria and also fulfill each of them. This will allow you to get your loan sanctioned easily and without any added hassle. In some cases, the lender may be flexible if you have high performance in certain sections and are under the eligibility limit in another.

Financial and legal documents
Before applying for the business loan, ensure that you have all of the financial and legal documents ready with you. Some of the paperwork which might be needed include personal income tax returns as well as business income tax returns, balance sheet along with income statement and personal/business bank statement, photocopies of personal identification, financial projections for your business and other documents. Check with your bank or lender prior to application regarding the documents that need to be provided.

Collateral
Most banks will demand a collateral in case of bank loans for business. Collaterals are financial assets that you possess. For instance, you may put up your house as a collateral for the business loan that you are applying for. The bank may then take possession of this house in case you are unable to repay the business loan.

The above factors should be kept in mind in order to qualify and easily get a business loan.

RTGS vs NEFT: All you need to know about the difference

Interbank transfers are form of money transfers that occur between two banks. One may want to transfer a certain amount of money from an account in one bank to another account in a different bank. This will count as an interbank exchange. There are two main modes of interbank transfers in India, namely National Electronic Fund Transfer or NEFT and Real Time Gross Settlement or RTGS.

However, one must understand the essential differences between these two modes of money transfer to take advantage of them. Both are useful in their own ways and are used in case of retail banking as well as corporate banking. Listed below are some of the main differences between the two.

Minimum transfer limit
For NEFT transfers there are no minimum limits, as people can transfer very low amounts of money with the same as well. However, For RTGS, the transfer amount should be at least Rs. 2 Lacs. The RTGS limit ensures that smaller sums of money cannot be transferred using this procedure.

However, there is no upper limit for either NEFT or RTGS, which indicates that you can transfer as much money as you like using these methods.

Settlement
Since RTGS refers to real-time settlement, the fund transferred through this method is debited into the receiver’s account instantaneously. There is no waiting involved for the banks to clear the transaction. However, in case of NEFT, the funds are settled throughout the day in batches. This is why if a NEFT transfer is initiated toward the end of the day; there is a high possibility that the settlement will be completed the next day.

Timings
For NEFT, the timings are 8 am to 6.30 pm Monday to Friday, while on Saturday, the timing ranges from 8 am to 12.30 pm. On the other hand, for RTGS the timings are 9 am to 4.30 pm between Monday and Friday. On Saturday, the RTGS transfers can be initiated between 9 am and 1.30 pm.

Suitability
NEFT has no minimum limit and is thus more suitable for transfer of small amounts of money. The RTGS limit signifies that this kind of interbank transfer is more suited for greater sums of money. Mostly corporate transfers are completed using RTGS. This may involve a large-scale business or a transaction between two banks. For such organizations, instant settlement of the funds is very vital, which is why RTGS offers real-time transfers.

In any case, both of these modes of interbank exchanges are useful, even though they cater to different clients.

What are the recent updates on GST?

The entire country has been figuring out how GST works since its implementation about 6 months back. The concept of GST, which stands for Good and Service Tax was first introduced by the government in the year 2000. This new idea on tax implementation finally came into function on the 1st of July 2017. Since then, GST has undergone several changes as the nation slowly accepts this new system of taxation.
  
The last council meeting with respect to GST was held on the 16th of December 2017, and a number of changes have been made regarding GST payment.

Some of the fresh updates include-

• The E-way bill with respect to GST online payment, will be introduced for trial on the 16th of January 2018. The rule of the bill will come into implementation from the 1st of February 2018, and the states of the country will have to start following this bill system before the 1st of June 2018.

• The council has brought down the list of goods and products in the 28% tax slab from 228 items to about 50 items only. Among the 50 items in the list most are luxury goods and products. Items which are used daily have been shifted to the 18% tax slab.

• The high GST rates on restaurants and hotels has been lowered. Now a GST of only 5% minus the input tax credit benefits will be charged. Although in case of starred hotels that have rooms costing more than Rs7, 500, the GST levied will be 18% along with input tax credit benefits.

• The GST rate on about 12 items has been brought down to 12% from its former 18%.

• The council after the meeting has even extended the due date for some related forms.

• The council has also reduced late fees in case there is a delay while filing NIL returns. The late fee has been brought down to Rs200/day to Rs20/day.

• Small and medium sized businesses that have a turnover of less than Rs1.5crore, can now file their taxes quarterly instead of monthly. Thus, they can now make their GST payment quarterly. This switchover will begin from October, the taxes for the months of July, August as well as September will have to be done on a monthly basis.

• Provisions for TDS/TCS have now been postponed till the 31st of March 2018.

GST payment is quite new, and the government is making a great effort in bringing about changes so as to make this new tax system business and consumer friendly. GST online payment is also a feature that has simplified the method of clearing taxes.

What are the best options to remit to India?

NRIs who stays and work abroad, are generally quite familiar with the term ‘remittance’. This refers to the transfer of money from an overseas account into an account located in India. This transfer of funds usually involves a certain amount of the money being deducted as processing fee for the transaction. However, one can remit to India through several valid methods such as Bank wire transfer, online money transfer and transfer of money through agencies. They have been further elaborated below-

Bank wire transfer

This is perhaps the most direct form of remittance. In this form of money transfer to India, you can directly transfer the funds from your foreign bank account into an Indian account. It usually involves the usage of SWIFT or Society for Worldwide Interbank Financial Telecommunication code. In such a form of remittance, processing fees may be levied on the transaction. A limit to the amount of fund transferred may also be present for bank wire transfers.

Online money transfer

With the evolution of the internet, several websites and portals have also come into existence, which offer the users a safe and reliable way of transferring funds from overseas. These online transactions can include the transfer of money directly from the account of a foreign bank into the account of Indian counterpart. Users can also transfer funds directly from their credit cards.

Money transfer through agencies

You can approach any remittance agency abroad to have your money transferred to India. An agent needs to be given the details of the transaction as well as the details of the receiver. After handing out the money to the agent, he/she will provide a special code to you. This code needs to be revealed to the receiver of the money.

A representative of the agency in India will hand over the funds to your contact, given that this contact is able to recall the code given out to the sender. This form of money transfer to India usually involves a small fee, which must be paid by the sender. This fee varies from one bank to the next.

These are some of the most common and most reliable ways through which an NRI can remit money to India while living overseas. However, one must be careful to check the processing fee that their bank deducts on each of these transactions. Try to save money and send greater sums at once. Some banks also offer free remittance in case of higher amounts of money. Furthermore, ensure that the method of transfer is secure, reliable and free of scam attempts.