6 advantages of cashless payment solutions

Introduction of demonetisation called for the urgency of transferring funds. Whether you are comfortable or no, online payment has become part of everyone’s life since. As a part of ‘Digital India’ campaign, the Indian government are constantly upgrading the way a consumer can transact. Mobile payment app is one such medium.

What do these mobile payment apps do?

Also known as a digital wallet, a mobile payment app is similar to a bank account where you load money and conduct transactions as and when required. Unlike bank accounts, these online payment solutions do not offer any interest. You can transfer funds with ease.

The other payment modes include SMS and NFC payment. However, it is the mobile payment mode that has widely gained recognition. Following are the benefits offered by digital wallets:

1) Accessibility: The payment process has become simple and less complicated. You can transact anywhere, anytime with the help of a secure data connection on your smartphone. Customers can purchase products from around the country without swiping the card or paying hard cash. This has simplified the online shopping experience as well.

2) Easy load of money: With the help of credit, debit or net banking, you can add money to your mobile payment app. It is also safe as details need to be entered only once. When you have to reload the amount, there is no need to re-enter the bank details.

3) Varied usage: Right from recharge of your smartphone to DTH to paying utility bills, all can be done via these digital wallets. The reach of digital wallet has gone far and wide as you can also purchase groceries from the Kirana shop today.

4) Spilt bill facility: Just like we split the bill with friends at a restaurant, you can split the bill in a digital wallet as well. This feature is particularly useful for those staying as paying-guest or in a rented apartment. You can divide the bill by merely entering the amount and the number of people who are expected to pay the share.

5) Timely payment: The online payment solutions come with auto pay facility as well. In case you miss the payment date, the app automatically debits the amount from your account.

6) Incentives: Digital wallets also go light on your pocket. These apps run various cashback offers, deals, discounts, etc. that reduce the bill amount at the time of payment. Ensure to make optimum use of the promo codes in the offer section.

Mobile payment app benefits both customers as well as businesses. Precisely why even banks are introducing their apps. They have also started targeting smartwatch users by launching banking apps like Wear.

All you need to know about FASTag – the electronic toll collection system

Driving on the highway or moving from one district to another is not as hunky-dory as we all imagine it to be. You have to face a herculean task called the ‘toll plaza' to proceed to your destination. Paying toll has its set of challenges. The receiver will not have cash handy, or the cashier and receiver might indulge in a tiff. For solving these minute issues, the National Highway Authority of India (NHAI) launched FASTag in 2016.

What is NHAI’s electronic toll collection system FASTag all about? 

FASTag is a radio-frequency identification (RFID) card that can be availed through banks, authorised dealers and common centres near the toll plaza. These are affixed on the front screen of your vehicle. It is a pre-paid card through which users can pay toll. You can load around INR 100 to up to INR 1 lakh amount in the card. For every toll transaction, users receive an SMS alert. The card comes with 5 years validity period. Users can reload the card as per their requirement. In fact, the NHAI has introduced FASTag lanes in 370 toll centres across India.

Some of the benefits of using FASTag include:

1) Saves times, especially while paying highway toll, when you are heading to or returning from a holiday. It is a cashless transaction.
2) Cashless transaction means faster movement of vehicles. Less waiting time also means lower fuel cost.
3) One of the best advantages of FASTag is that it can be recharged through credit/debit/net banking. You can also reload the card via NEFT/RTGS payment methods.
4) You can obtain a periodic statement of your account on the issuer’s website once registered for the card.

Documents required for FASTag:

To get the account created, you have to visit the toll centre. You can also call on the issuer's customer care number to get the account done. Some of the documents you need to carry for creating an account in the electronic toll collection system are:

1) Vehicle’s registered certificate
2) Your passport sized photograph
3) Your KYC documents
4) ID and address proof
5) PAN and Aadhaar card
6) Voter ID
7) Passport

Note: A single FASTag can be used for multiple cars. In case of transfer, inform the issuer.

The NHAI have also launched mobile applications My FASTag and FASTag Partner for Android and iOS users in 2017. This has further eased the process as users can pay toll or recharge their FASTag accounts at the click of the button.

What is car loan EMI calculator? Its features and benefits

Having a car has become a necessity today. Investing your entire money in one go for a vehicle is not possible, especially for someone who falls under low-level to mid-level income range. In such cases, many opt for car loans. Affording a car loan is easy as minimal documentation is required. Car loans are applied only to purchase a vehicle. They generally come with shorter tenure in comparison to a home or business loan. The loan amount is also smaller than the other investments.

What is a car loan EMI calculator?

One of the best ways to decide on a suitable car loan amount is the car loan EMI calculator. This way your monthly finances are well managed as you can plan out your EMIs. An applicant can find this tool on their banks' website, financial and third-party loan comparing websites.

Determinants included in EMI calculator for car loan:

1) Principal amount: It is one of the crucial aspects while calculating your monthly EMI. If the amount is high, your EMI will also increase. Have a fixed budget in mind before applying for the loan.

2) Tenure: The tenure for car loans are anywhere between 1-7 years. If you choose a longer tenure, your monthly payment would be reduced. That will, in turn, increase the interest rate. Go for a balanced scheme that suits your requirements.

3) The rate of Interest: Unlike home loans, car loans have a fixed interest rate. The market fluctuations will not affect the interest rate throughout the tenure. Choose a loan with lower interest rate, which will in the process keep your EMI under check.

Benefits of using car loan EMI calculator:

1) It assists you in finding a scheme that is affordable and falls under your budget

2) An EMI calculator for car loan shows you a comprehensive view of the repayment of the loan. By opting for iconographic, which include pie chart or a table, the calculator displays the proportion of interest rate, principal amount, and the processing fee you will have to repay

Features of EMI calculator for car loan:

1) You achieve quick results by entering the determinants. Also, you can check EMIs for multiple car loans. This way you can receive the data with ease.
2) You receive the value of all above factors without any errors. Hence, it is entirely reliable.
3) You can enter the details as many times as possible. You can check the EMI with as many variations you want.
4) You can also conduct a comparative study as you are allowed to include multiple variations.
5) The interest rate on car loans plays an important role, especially when it comes to EMIs. The interest rate percentage might not be high when offered by banks and financial institutions. When it is calculated in the EMI tool, the value turns out to be massive. For these reasons, the EMI calculator comes in handy, especially for the first-time users.

5 reasons why a gold loan is better than a personal loan

People are always in need of funds. It could be to finance your child’s education or wedding, to meet the medical expenses, etc. One of the standard methods that people opt for in such scenario is personal loans. Although it does fulfil all kind of human needs, it involves lengthy procedures. In such cases, your gold obsession can take a backseat for a while and be put to use to get some money. Loan against gold is the second-best tool to resort to meet quick financial needs. Since your gold serves as collateral, you can easily procure the loan.

Banks sanction the loan based on its purity, its form (biscuit, coin, jewellery, etc.) Often, people are caught in a fix as to which is a better investment tool: personal loans or loan against gold? We give you 5 reasons why the latter stands out:

1) Interest rate: Gold loans are secured. You receive instant finance as your gold acts as security. The interest rate of a gold loan in India is competitive falling under the range of 10 to 16 per cent. Personal loans, on the other hand, begin at 12 per cent.

2) Pre-payment charges: Banks levy a 5 per cent pre-payment penalty on the outstanding loan amount. As for a gold loan, you can pre-pay the amount anytime, and there will be no penalty. However, the banks will return your gold only after you have paid the entire loan amount.

3) Eligibility criteria: Personal loans require you to fulfil specific eligibility criteria such as income level, repayment capability, etc. Often, self-employed and salaried employees face the flack if their credit scores, income levels and job security are not within the safe zone. The sole and major criteria for a loan against gold is that you should provide gold as collateral and its value should be 10-15 per cent higher than the amount you seek.

4) Minimal documents: Personal loans involve plenty of paperwork as it is an unsecured loan. Documents related to your identity, date of birth and address proof need to be produced, which makes the procedure lengthy as well. In case of a gold loan, all you need to furnish are your ID and address proofs. If your gold is of higher value, little paperwork is involved.

5) Quick sanction: Personal loans are meant to be quickly disbursed. However, that is not the actual case. As each of the documents needs to be verified, personal loans can take anywhere between 3 to 10 working days to get sanctioned. Meanwhile, a gold loan in India gets processed in either 4 hours or 24 hours. It serves as your best comrade at the time of emergencies.

Although loan against gold scores higher than personal loans in many factors, it is necessary to ensure the safety of your gold. It is recommended to opt for reputed banks and financial institutions where your gold will be secure.

5 myths about car loans

Imagine, after a long day at work you stand in sweaty buses or wait in long queues at the ticket counter to later get crushed by local train commuters. Not the ideal way to end your day, right? People want luxury in whatever activity they indulge in. Come on, who does not want the comfort of cushioned seats and air-conditioned cars? And since you are looking for these features, it is best to invest in such vehicles by paying monthly instalments instead of spending a large chunk of your savings. 

A car loan allows you to do so. Choosing the right kind of loan is pretty daunting. Dealers assure you of best rates, SMS offers, etc. making you all the more confused. Those who earn mid-level to high-level income can opt for a car loan. However, many lenders receive finance add-on options from their dealers once the application is made.
Here are 6 misconceptions regarding car finance that should be avoided at the time of purchasing one:

1) The 100 per cent financing factor: Dealers generally assure 100 per cent financing. It means the loan will cover the entire cost of the automobile. That is usually not the case. If dealers make such assurances, that will incur a higher rate of interest. At the most, financial institutions provide 80-85 per cent financing. This happens for those who share a good bond with their banks and finance companies.

2) The 0 per cent interest rate claim: Most of the car dealers these days offer 0 per cent interest rate. However, an interest-free loan has its share of issues. The interest-free loan comes with a minimum tenure of 3 years, which does not provide sufficient financial flexibility. In the process, down payment may also increase. In case the dealer does offer 0 per cent interest rate, ensure he/she does not apply extra charges on other aspects of the loan.


3) Buy a new car to obtain car loan: If a new car brings more benefits to the dealer, he will try to sell it at any cost. However, used cars which is not driven for more than 1-2 years, may work out as well while costing a less. Many banks such as HDFC, SBI offer loan for a used car. Just ensure the manufacturing date coincides with the lender’s pre-parameters.

4) Get loan via dealer or face rejection due to poor credit score: Another myth with regards to car finance is credit score. No, your credit score does not get affected due to a car dealer. In fact, these loans hardly get rejected as they are secured, where your car acts as your collateral. The dealer might consider additional factors such as level of income, employment history, etc.

5) Apply via car dealer for lower interest rates: When you apply for a car loan via the dealer, you are directly in touch with the seller and not the financial provider. To get the best deal, you will have to take some effort and do a comparative study. Another best way to get a suitable loan is to look out for a financial websites that provide offers from different banks under one roof.

These myths sound shocking, isn’t it? Debunk them and understand the reality which will help you make smarter financial decisions in the future.

IMPS: how it works and its benefits

Your best friend calls you at 3 am asking for a lump sum of money. His father needs to get hospitalised immediately. Of course, you would not have so much of cash at home. You will have to resort to some online payment method. Over the years, Indian banks have adapted to the latest technology and have introduced online payment methods such as NEFT, RTGS, UPI and another frequently used medium is Immediate Payment Service (IMPS).

What is IMPS transfer and how does it function?

It is a 24*7 service that is widely used over smartphones. It helps customers to keep a check on their bank accounts and give/take funds from accounts. IMPS was introduced by National Payments Corporation in India (NPCI) in 2010. It is an instant mode of payment as funds get transferred within seconds. Here the funds get moved to the beneficiary’s mobile number, unlike RTGS and NEFT where you can transfer funds via net banking.

Here is how IMPS fund transfer function:

1) Ensure you have a bank account with the related bank
2) Enrol for the IMPS service for using the service via mobile
3) Once registered, you will receive Mobile Money Identifier (MMID). It is a 7-digit number of which the last three digits is your account and the first four digits unique identification number provided by the bank
4) You will have to provide the payee’s MMID and mobile number to conduct the transaction
5) You will be charged a fee for the operation that varies from bank to bank 

What are the services offered by IMPS?

1) Fund transfer using mobile number
2) Fund transfer using Aadhaar card
3) Fund transfer using IFSC and account number
4) Make merchant payments using MMID
5) USSD banking to for fund transfer through the feature phone
6) QSAM feature where you have to dial *99*99# and know the link status of your Aadhaar and bank account

What benefits do the users derive from IMPS transfer?

1) You can send money in real time. With 24*7 service, the money gets credited to the payee's account in few seconds
2) IMPS is safe and secure. You can conduct the transaction conveniently
3) There is no cap on cash to be transferred. You can move money as low as INR 1
4) You can conduct inter as well as intrabank payment
5) The IMPS fund transfer service can be done via mobile phones, net banking and ATM
6) The payee’s bank details are not required here. Knowing the MMID and mobile number is sufficient
7) You get the debit as well as credit information on your mobile number

8 reasons why UPI is a better system of fund transfer

Digitalisation has increased dramatically over the years. Today, smartphones are not just used to make calls or send SMS or chatting. Just a click of your finger can conduct various financial transactions. The National Payment Network Company (NPNC) has taken smartphone usage and banking transactions to a whole new level through Unified Payment Interface (UPI). The UPI launched in April 2016, assist customers to send and collect money using smartphones. Over 21 banks are linked to the UPI system. 

The UPI does not ask for bank details. Instead, it follows the Virtual Payment Address (VPA) mode for transferring money to another account.

How do users benefit using UPI payment method?

1) Cheapest money transfer system: UPI allows low-fund transactions and charges a fee as reasonable as INR 50 paise. No wonder it is considered a more economical model for transferring money than NEFT and RTGS.

2) Free from cash: Cash transactions rarely happen nowadays. Mobile wallets, net banking and card payment are on the rise. In case of small operations, cards and net banking options are not considered. If you have to do grocery shopping or purchase vegetables, it is feasible to use the UPI payment tool to complete the purchase. In fact, visit to ATMs have lessened, thanks to UPI.

3) No requirement of bank details: One of the major concerns with regards to online financial transactions has been the misuse of bank details. Whenever you make a card payment, details have to be provided. However, through UPI one need not share any bank details. All UPI asks for is VPA which is similar to our email ids. 

4) Instant transfer: While NEFT and RTGS work on a settlement basis, IMPS and UPI are 24*7 banking services. Transactions can be conducted anytime and anywhere. It works even during public holidays and weekends.

5) One UPI app for many accounts: One of the important benefits of UPI payment system is that you can link several bank accounts to it. A single UPI can serve many bank accounts. You can set a default account for making the payment.

6) Multiple UPI apps: It is not customary to use the UPI through your banking app. You can use your UPI account via different mobile banking apps as well. However, check the interface before using an app. Remember, the moment you use UPI from another bank, you would have to apply for a new VPA.

7) Registration period: In the RTGS and NEFT systems, the waiting period after registering a payee is either half n hour or 24 hours. In case of UPI, the beneficiary gets registered instantly and transferring the amount gets simpler. 

8) Cash on Delivery facility without paying money: Most of us are addicted to online shopping. The preferred mode of payment that people go for is cash on delivery. That is because what if the distribution is delayed? What if you do not receive the product? What if the product is defunct? However, if the purchase is big and there is not enough cash at home, you might have to rush to ATM. The UPI mode ends this hassle. You can make fund transfer with UPI. Ensure the online seller uses the UPI payment mode. You would receive payment approval from the seller once the fund is transferred. Nevertheless, you can hold it till the delivery is done securely.

Funds can be needed at any moment. Accidents, health mishaps, etc. are unpredictable. In such circumstances, online fund transfers play a crucial role. With so many benefits, Unified Payment Interface system stands out amongst the rest of online payment modes.