5 factors you must consider before applying for a car loan

Owning a car is a major life goal for many of us. Most of us, aspire to gift ourselves a car when we start earning. Driving a car is one of the first steps we take as we enter adulthood. The best part is that buying a car today is easier than it has ever been. Car loans are processed by banks and non-banking finance companies (NBFCs) in a matter of minutes. With a few documents, a simple EMI plan and a low rate of interest, you can bring home your dream car. But before you apply for the loan, here are a few factors you must consider.

Compare the loan rates across all lenders: Depending upon the make and model of the 4 wheeler of your choosing, the interest rate on auto loans begin at 8.7% per annum. It also depends on your repayment capacity and the organization you are employed with. You should first begin by checking the interest rates offered by your existing bank since there is a high chance that as bank customers you could get special offers on the loan. You can also check with NBFC’s and dealer finance companies and then choose your lender.

Check if the EMI is affordable: Apart from the interest rate charges on the loan, your EMI depends on the loan amount and the tenure. You must check the EMI you can afford by deducting the necessary monthly expenses, insurance premiums, SIP contributions and other existing EMIs, if any. A higher EMI certainly lead to lower rate of interest charges, however it should not cost you your emergency funds or take a dip in other investments.

Consider a low loan amount: You will find many lenders who are willing to finance 100% of the car’s cost; it makes more financial sense to opt for a lower auto loan amount, if you wish to pay low interest rates. It is a good practice to first plan and come up with funds for down-payment before booking your car, but you must refrain from using your emergency fund to obtain the down-payment.

Opt for shorter tenures: Most lenders are willing to offer car loans for as many as seven years but that may not necessarily be in your best interest. Opting for a shorter tenure on the loan reduces you interest cost. While that is ideal, you should note that short tenures leads to higher EMIs so you must ensure that the loan tenure doesn’t affect your overall liquidity.

Read the fine print about processing fees: Lenders charge processing fees to cover the costs incurred when they evaluate your loan application. Opting for car finance during festive seasons is a good idea since a majority of lenders either reduce or completely waive off the processing fees. But you must check that they are not charging higher interest rate to make up for the loss incurred from reducing or waiving off the fees.

The differences between NEFT and RTGS Payments that you need to know

Internet banking is a blessing. It has brought with it, a world of convenience when it comes to conducting everyday banking transactions, from transferring and receiving funds to paying bills online. These funds can be transferred by using simple and effective payment systems like RTGS (real time gross settlement), NEFT (national electronic fund transfer) and IMPS (Immediate Payment Service).The Reserve Bank of India maintains all these systems, which are applicable for transferring money to any corner of the country. Here are some differences between NEFT and RTGS payment solutions that you should know.

Time taken to transfer funds: As the name suggests, under the RTGS system, funds are transferred on a real time basis i.e. at the time a transfer request is received. RTGS is one of the fastest modes of money transfer available through Indian banking channels, with the beneficiary receiving the fund credit within just 30 minutes. NEFT on the other hand, is also a swift mode of fund transfer but it operates on a deferred settlement basis and fund transfers are settled in batches in hourly slots, not in real time.

The need for a bank account: Both NEFT and RTGS transfer systems can be availed by customers who have a current or a savings bank account. While individuals who do not have a bank account cannot avail RTGS services, they can still deposit cash at bank branches that are NEFT-enabled. Note that such NEFT remittances are restricted to a maximum of ₹50,000 per transaction.

The minimum transaction amount: While there is no minimum amount of funds that can be sent using the NEFT payment solution, the RTGS facility is basically meant for transactions of larger values. As such, retail customers must remit a minimum of ₹2 lakhs on every RTGS transaction. Since RTGS was specially designed for large payments to and for businesses, transactions below ₹2 lakhs are not permitted.

The charges: On an average, you will be charged a small amount of ₹25, excluding the service tax on every transaction done via NEFT. However, for an RTGS transfer, you must pay approximately ₹55 with an additional service charge. Customers who use internet banking services for both NEFT and RTGS are typically charges a lower fee as compared to those individuals who carry out the NEFT transaction through the bank branches.

Option for stop payment: Both RTGS and NEFT payment solutions do not offer the option for stop payment instructions. Since the transactions in RTGS payment solutions happen on a real time basis and the settlement of funds takes place immediately in the books of the RBI, the payments made are considered irrevocable and final. While NEFT transfers are made in hourly slots, there is still no facility for the sender to giving any instructions to stop the payment, if the transaction has already been initiated by the bank.

Top 5 reasons to buy a life insurance policy

No one knows what the future holds. People lose their lives to accidental deaths and illnesses every year. If the deceased is the family’s sole breadwinner, his/her family is left to face devastating consequences. Purchasing a life insurance policy is one of the most significant financial decisions you can make, to ensure that you family remains financially secure in case of unforeseeable circumstances. However, the sad fact is that despite it being so important, only 10% of the Indian population understands its importance as almost 90% Indians refuse to see the benefits of buying this policy. Here are 5 genuine reasons why you must buy life insurance.

It provides your family with financial security long after you are gone: People, who are the sole breadwinners of the family, need to understand that their families can fall into financial difficulties in their absence. The family usually depends upon the breadwinners to provide them with financial security and in the unfortunate case of the breadwinner’s demise, the dependants of the family are left to face with several financial difficulties including loss of income and paying for children’s education. The policy provides your spouse and children a cushion of money to go on living.

It helps in achieving the family’s long term goals: Since insurance policies last over a set period of time, making the annual investment in the policies in the long term can help you achieve many of your long term goals. These could include planning your retirement, buying your home, sending children abroad for further studies and so on. Furthermore, many life insurance plans are also tied with certain investment products which pay dividends based on their performance. As such, you can opt for investment linked insurance policies.

It takes care of your business: Typically, insurance policies help you take care of yourself, your family as well as your business. If you own a business in partnership with another individual, then your business partner can buy your portion of the business without any hassles. The business partner can enter into a buy-sell agreement and the pay-out would be sent to the deceased partner’s chosen nominees. However, the nominee may lose the stake in the business.

It helps to deal with debts: A life insurance policy helps your family deal with financial crises that arise due to the loans or debt you’d have taken, but were unable to pay them off. Outstanding debts on home, car, credit-card and personal loans can be paid off from the funds your family receives from the insurance policy.

It helps you save taxes: Irrespective of which insurance policy you buy, you are eligible for tax savings with your life insurance. You are eligible for an annual tax benefit of maximum ₹ 1.5 lakhs on the premiums you pay on your insurance policy, under Section 80C as well as for tax-free proceeds on maturity/death under Section 10 (D) of the IT Act of 1961.

Planning your retirement with fixed deposit schemes – interest rates, features and benefits

For most senior citizens, the income to run their homes from their savings comes from fixed deposit schemes. All the savings made throughout the years are converted into bank and Non-Banking Financial Companies (NBFC) fixed deposits as they are regarded as the safest kinds of investments by seniors. Most investors opt to earn monthly or quarterly income from their FDs and the interest earned is dedicated towards running the household in their years as retirees. Senior citizens also receive additional benefits on their FDs.

Features of the senior citizen FD scheme

While some of the features of a senior citizen fixed deposit are the same as those of regular FDs, others may differ. Both, regular investors and senior citizens can invest in FDs ranging from a period of 7 days to 10 years. However, senior citizens have the option to close their FDs prematurely, at any time. 
Furthermore, the interest rate depends upon the chosen deposit period. For most senior citizen FDs, the interest rate is calculated on a quarterly basis. Typically, you can invest up to ₹1 crore in senior citizen FDs. Some FDs which come with a 5 year lock-in period can prove to be a tax-saving option for the investors.

Interest rates under FD schemes for senior citizens

Both banks and NBFCs provide senior citizens with special interest rates on their fixed deposit schemes. While the interest rates on FDs offered by banks are slightly lower as compared to NBFCs, banks are still the safer option. Also remember that some lenders (mostly NBFCs) usually have certain terms and conditions that the investor must follow. These terms and conditions vary from bank to bank and NBFC to NBFC, although the general principal remains the same. Also, to avail the special interest, you must invest in an FD for a period more than 1 year as short-term deposits are not eligible for senior citizen interest rates. Here are the top 5 banks of 2018 that offer the best interest rates to senior citizens on their fixed deposit in India.


Bank  Less than 1 year 1-5 years 5 years and above
ICICI Bank 4.50% to 7.00% 7.00% to 7.25% 7.00%
SBI 6.25% to 6.90% 6.90% to 7.25% 7.25%
HDFC Bank 4.00% to 6.75% 6.255 to 7.00% 6.00%
Canara Bank 4.70% to 6.85% 6.50% to 7.00% 6.50%
HSBC Bank 3.50% to 5.50% 5.50% to 6.50% -

Keys benefits
Senior citizens can avail several benefits on their fixed deposits which include
• Accumulation and steady growth of their investments
• Higher interest rates as compared to regular fixed deposits
• Interest earned on FD schemes can be turned into monthly and quarterly income schemes, which is ideal for retirees with limited cash-flow
• FDs for senior citizens can also help them save taxes and the tax deductions can be claimed under Section 80C of the Income Tax Act of 1961

Top 3 premium credit cards in India and what makes them premium

A credit card is convenient. It allows the users to borrow money from banks for large and small purchases. The borrower must pay off the money taken on credit, back in time so as to avoid paying interest. Most credit cards come with several benefits, but users can get exclusive benefits only on premium credit cards. Sure, the user has to pay substantial annual fees for the premium cards, but the benefits offered make them worthwhile. While some common benefits of premium cards include complimentary airport lounge access, travel insurance and concierge services, many other exclusive privileges differ from card to card. Let’s find out the Top 3 best credit cards in India.

Standard Chartered Bank Ultimate credit card: The SBC Ultimate card is one that matches the holder’s premium lifestyle. It offers the best reward point value along with exclusive travel and dining privileges. This card is available for an annual fee of ₹5000. Here’s what makes it premium:

• Discounts of 25% at more than 250 restaurants in India
• 5% cashback on duty-free expenses
• Free priority pass membership which allows access to over 1000 airport lounges worldwide
• 24*7 concierge service
• Free air accident travel insurance worth ₹1 crore
• 25- 35% savings on international car rental with Hertz and Avis respectively

HDFC Regalia Credit Card: HDFC Bank’s luxury card, the HDFC regalia has some of the finest privileges on offers. You pay a small annual fee of just ₹2,500, waived off on annual spending of ₹3 lakh and above. This card is ideal for people who love to travel. You can also apply credit card online for HDFC regalia. Privileges on this card include:

• Free air accident travel insurance worth ₹1 crore
• Emergency hospitalization cover worth ₹15 lakhs overseas
• Option to convert reward points into air miles
• Exclusive dining privileges at top fine-dine restaurants in India
• 12 Complimentary accesses to airport lounges per year on the lounge program and additional priority pass membership
• 24*7 travel concierge service

American Express Platinum Reserve Credit Card: One of the best credit cards in India, American Express Platinum Reserve Card is a super-premium card. Card holders must shell out ₹5,000 as annual fees for the first year, and ₹10,000 as fees from the second year onwards. It is one of the premium cards for business travellers who require air travel and hotel benefits.

Here’s what makes the AmEx Platinum card a premium card:
• Multiple benefits and savings on booking travel packages via MakeMyTrip.com
• Privileges at some of the most luxurious hotels in India and abroad, including the Taj Group of Hotels, Oberoi Hotels and resorts and several other luxury hotels
• Free access to airport lounges especially designed for AmEx card holders
• Free Priority Pass membership
• Special wellness and health benefits at health care centres like Fortis Healthcare and Max Healthcare
• Complimentary access to several premium golf courses in India
• 24*7 dedicated concierge services for round the clock assistance on the credit card

Unified payment interface – an attempt to understand this revolutionary method of banking

In 2106, India moved one more step closer towards becoming a cashless economy. It was the year when, the then RBI governor Raghuram Rajan, first launched the Unified Payment Interface, better known as UPI. This new payment method revolutionized the traditional way in which we pay money, eliminating the need for us to carry our wallets everywhere we go. With this modern method of payment, the smartphone doubles as the virtual debit card which can be used to make payments. Yet, a majority of the masses remain unaware about this revolutionary payment system. Here’s everything you need to know about UPI.

What exactly is UPI?

UPI payment is an online payments solution that facilitates the instant transfer of funds between two or more people, simply with the help of a smartphone. You can use UPI to receive as well as send funds. The UPI can be thought of like the e-mail ID for your money. It is a unique identifier, used by your bank to transfer funds and make payments using the immediate payment service or IMPS. 

How does UPI work?

You can start using UPI simply by downloading the UPI app from the Play Store, on your internet enabled smartphone. This service is offered by most Indian banks. After downloading the app, you have to register your details and create a virtual address. You must also link your mobile number to the unique mail address created. Once you have created the account, you can start sending and receiving funds up to 1 lakh, from other users who have set up the UPI payment method on their phones. The transaction can be done distantly, but to ensure your account’s safety, it is authenticated by your bank.

How is UPI different from other electronic payment methods?

While other electronic methods of banking like NEFT, IMPS and RTGS require the user to register on the bank’s website and add the beneficiary’s banking details, all this is eliminated while making payments through UPI. As we mentioned above, the only things necessary are the senders and receivers’ phone numbers and virtual mail IDs. There is no need to share each other’s bank account details to make the transaction. Furthermore, UPI payments can be made 24X7, throughout the year, whereas NEFT and IMPS payments go through only during banking hours. Plus, there are limitations on fund transfer through NEFT and IMPS. You do not have to enter other details like the bank’s branch and IFSC codes.

What is the main objective behind UPI?

The Unified Payment Interface was introduced to help the country adapt to and move towards a cashless economy in the long term. The objective was to reduce the amount of cash in the system and create transaction trails, boost revenues and decrease tax evasion by bringing peer to peer payments for even the smallest of amounts online.

4 common loans you can apply for in India

In today’s day and age, finding finance for your dream home or your dream car is no big deal. The same is true for purchasing just about anything; be it consumer durables, a vacation or for simply renovating your home. Banks and non-banking financial companies are ready to finance your needs, so long as you know where and how to look for it. All you have to do is simply find out which institutions offer the money at the lowest interest rates and apply. Here are the most common types of bank loans that you can apply for in India.

Home loan: Owing your own home is not only one of the biggest life goals; it is also one of the biggest investments that provide you and your family with financial security. And to procure a home loan, you need access to a large amount of funds. The good thing about a home loan is that you can get flexible repayment periods, along with decent interest rates. Getting a house on loan makes much more sense that investing all your life savings into purchasing/building the house.

Loan against property: Also known as close-ended secured loans, loans against property require the borrower to follow a set payment plan or schedule and the loan must be repaid over a stipulated period. To avail this loan, the borrower must mortgage his property; be it residential, commercial or even industrial. Loan against property is popularly availed by many borrowers since the interest rates on these are comparatively low and a loan can be passed for anywhere from 40% to 70% of the market value of the mortgaged property. Bank Loans against properties are ideally taken to expand business, purchase property, purchase new machinery and for personal expenses like education, home renovation, marriage etc.

Personal loan: A loan procured for personal purposes is regarded as a personal loan. Such a loan is usually taken for small or medium sized, personal expenses which include repayment of debt, wedding expenses, festive expenses, vacation, purchasing electronics and home appliances, paying for unexpected medical conditions and so on. Personal loans are offered to the borrower on the basis of his credibility and his capacity to repay the amount and are typically unsecured. You can also apply for loan online, to avail this loan from several banks like HDFC Bank, Axis Bank, ICICI bank etc.

Business loans: There are times when businesses require funds to expand and purchase new assets. Businesses can get these funds by applying for a business loan from banks and other non-banking financial institutions. A business loan can be taken by a business owner or a self-employed professional and is unsecured in nature. A term loan, a loan for women entrepreneurs and a working capital loan are the three most common types of business loans that can be availed in India.