What is a car loan? What is the document required for salaried and self-employed professionals?

A four-wheeler was considered a luxury item in the olden days. It was more of unlocking a milestone as you would have to shell out lump sum money without any financial aid such as loans. Today, possessing a car has become a necessity. With different types of models being introduced by automobile companies almost every day, the costs of these four-wheelers have increased and almost inaccessible for lower as well as the middle-class segment.

You need a car for your daily work commute, duties or leisure. Therefore, considering the rise in the price and new cars, banks and other financial institutes have started offering loans for the same. You can either opt for a personal mortgage or a  car loan.
  
What are car loans?

Known as four-wheeler loan, is a secured loan where you have to keep your vehicle as collateral. Based on the type of vehicle, the lenders offer you the loan amount. In this case, the interest rates are less as you provide security to the lenders. If you do not repay the loan on time,    the lender will sell off your car to cover the loan amount.  
 
To get  the loan, you have to fulfil certain conditions. The car loan requirements are: 

1) You must be an Indian national to apply for the loan
2) You should be a salaried, self-employed or business owner to avail of a car loan
3) The minimum age to apply for the loan is 21 years. The maximum limit is 65
4) Salaried employees should be in employed in their current job for at least a year. On the other hand, self-employed professionals should be operating their existing business for minimum 2 years 
 
What car loan documents should the salaried and self-employed people produce to the lenders?

Lenders seek for various documents from the applicants mainly to gauge their credibility and repayment capacity. Most of the lenders prefer to provide loans to individuals who are creditworthy. For this purpose, lenders check the applicants' credit history and  financial profile. Some of the components could vary from borrower to borrower. The car loan documents are slightly different for salaried and self-employed professionals. They are as follows:

1) Salaried employees:
• ID proof such as Aadhaar, PAN card, driving license, passport, voter’s ID, etc.
• Address proof like Aadhaar, PAN card, passport, utility bills, life insurance policies, ration card, etc.
• Age proof comprises of  birth certificate, school certificate and likes
• Income proof should include your last 3 months payment slips, past 6 months bank statement
• Signature proof
• You will also have to show the proforma invoice that contains the price quoted by at the time of purchase of the car. The car loan amount will be based on the cost of the vehicle 
 
2) Self-employed professionals:
• ID proofs such as Aadhaar card, PAN card, driving license, passport, voter’s ID, etc.
• Address proofs like Aadhaar, PAN card, passport, utility bills, property papers, ration card, etc.
• Age proofs include birth certificate, school certificate, Aadhaar, etc.
• Your bank statement should be of past 6 months
• You have to show your previous 2 years income tax return. Besides, you also have to furnish the   documents such as audited balance sheet, profit and loss statement, etc.  
• Office proofs like maintenance bill, utility bills and business registration copy
• You will also have to show the proforma invoice based on which the loan amount would be provided

These are some of the car loan documents required to get your loan quickly. If each of these is in place, then car loans are the ideal solution.  If you are unsure about the documents, you can always call the lender's customer care number for reconfirmation

5 benefits of student forex card

Getting through the coveted university calls for celebrations. However, it is after the news is sunk in that we realise the actual work is yet to begin. From to-do list to arrangement of documents, everything has to  be settled. But we forget the foremost thing – finances. How are you going to manage food, entertainment, tuition and other such expenses?  
This is where a student forex card comes into the picture.  They offer numerous facilities that make students life easy.

What is a student travel card?

Apart from the homesickness issue, students face several financial challenges. They also have to follow a certain protocol  when studying abroad. A student travel card covers all the prerequisites. They are offered by all banks and some non-banking financial companies (NBFCs). Some lenders charge a nominal fee of INR 100-250 while some provide it for free.

These cards cover the following expenses:
- Day-to-day purchases abroad
- Flight tickets
- Accommodation
- College fees

However, countries like The United States of America (USA), The United Kingdom (UK), Canada and Australia allow limited withdrawals from their ATMs in one go. Some banks charge for withdrawals.

The benefits of carrying a student forex card along are:

1) No exchange rates: Students can get past the fluctuating exchange rates as they are fixed at the time of purchase of the card. Nevertheless, you will have to keep a tab on the prices when you   are preparing for your travel. When the currency of that concerned country is strong, you can lock your rate as that would be considered the same when you conduct transactions there. 

2) Wide acceptance: Student travel cards are widely accepted in the international online merchants. You can use the card for your stay and paying the college semester fees. You can even shop at the most luxurious mall overseas by just swiping the card, and all this include no exchange rates.

3) Reload the card: With the invention of the internet and smartphones, it is possible to reload the forex card on the move.  All you need is relevant balance in your account for seamless transaction abroad.

4) Security: Imagine a scenario where you have lost your cash, especially when you are in abroad to study? Scary, right? The reason why ISIC forex card eliminate that fear is that it is not linked to your bank account. Also, it is encrypted with a pin and chip that makes it  all the more secured means of managing finances.   

5) Replacement cards: Another crucial benefit of owning a forex card is that banks offer a replacement card in the starters kit. You need to first block and report on the stolen card.  Then you can continue using the replacement card. 

HDFC Bank offers ISIC student  forexplus card that gives you a wide range of discounts on food,   travel, accommodation, etc. You can also reload it anywhere, anytime. To enjoy a stress-free educational experience abroad, apply for a student forex card today!

What is life insurance? 6 types of insurance policies

When it comes to financial planning, you are presented with an array of options to choose from. Most of the people in India are moving to a nuclear family concept. Insuring you and your family members takes precedence over everything else. Agents offer different types of life insurance policies to their customers. Before learning in detail about each of them, let us understand what a life insurance policy is and what is its significance. 

What are life insurance plans?

It is a shield that protects your family even after your death. It provides lump sum money to the nominees of the policyholder. It also keeps the financial plans of your family on track.

What are the types of life insurance policies?

When you ask about life insurance policies to your agent, be prepared to receive an avalanche of information. As mentioned above, the primary function of life insurance is providing protection. However, some plans allow you to plan your future and helps in building your wealth. The types of life insurance plans can be classified as:  

1) Term life insurance: This plan provides a death benefit to the beneficiaries only if the policyholder dies  during a specified period. If the insured person lives on beyond the time frame, you cannot make a death claim. It acts as an income replacement for a few years and is affordable.  It is further broken down into 3 parts: 
- Level term life insurance
- Decreasing term life insurance
- Increasing term life insurance

2) Whole life insurance: It offers your coverage throughout your lifetime. But the policy should be an on-going one. It also consists of a cash value that can increase over time. You can either withdraw the cash value or take a loan out of it.

3) Endowment policy: One of the important life insurance plans is the endowment policy where the amount is payable to the insured, in case he/she is alive until the maturity date. It is a long time financial as well as a savings plan.  If the insured dies during the policy term, then the nominees get the   bonuses, participating profit, etc. 

4) Savings and investment plans: This policy assures you a lump sum money for future expenses. Apart from fulfilling your long and short-term goals in the form of savings, it also offers you an insurance cover.

5) Retirement plans: It is the means through which you receive income during retirement. It helps you build a retirement corpus. Upon maturity, these plans are invested for generating regular income that is termed as a   pension. They are further divided into: 
- With cover or without cover plans
- Immediate annuity plans
- Deferred annuity plans   

6) Child insurance policy: One of the types of life insurance plans that parents are investing upon nowdays is child insurance. It meets your child’s future financial requirements. From the time your child takes bir   th, you can start investing.  Once the child turns 18, you can withdraw the savings. Some insurance plans do not allow immediate withdrawals at specific intervals  
  
So, life insurance plans are not about fulfilling yours and your family’s day-to-day expenses. It is a way to aid your family financially after the death of the breadwinner. It is recommended to opt for two different types of life insurance plans at various phases of life.

How fixed deposits help you save money

Whether you are a salaried employee or a self-employed professional, saving some amount of money is crucial. However, saving cash is easier said than done. Most of the time you end up splurging all the money. This could pose a threat in the future, especially during emergency situations. It is always a smart decision to save some expenses. Banks and other financial institutions offer you an array of investment options such as fixed deposits, mutual funds, market share, etc.

All the above options may sound good, but for beginners a fixed deposit account proves beneficial. How? You get to save your surplus amount securely, especially if you are looking for long-term investment.

What is a fixed deposit?

It is a type of term deposit that is considered to be the safest investment option available in the market. You can invest for 7 days or 10 years. A fixed deposit investment is deemed to be superior   to  a savings account purely because you earn higher interest that is  credited on a monthly, quarterly or annual basis. However, you have to invest your entire amount in one go.  If you wish to withdraw the cash before the tenure, banks and other financial institutions charge you a penalty.    
 
How do you save money through fixed deposit account?

1) You can save money for an  extended period without having the chance to withdraw  
2) You receive guaranteed returns on your investment
3) If you incur any loss in your business, the fixed deposit investment acts as a cover. Banks offer you 70 to 90 per cent of the amount in the account as a loan
4) There is guaranteed cash flow as you earn interest at maturity or annually or on a monthly basis at discounted rates
5) You have the freedom to choose your mandate. It could be anywhere from 7 days to 10 years 
6) You can make investments in various fixed deposit account based on your life events. They will mature on the tenure date you have chosen
7) You also receive a credit card against your fixed deposit. Banks and other financial institutions offer you 70 to 90 per cent of credit towards your fixed deposit amount
8) If you get loans and credit cards against your fixed deposit account, your interest rate remains unaffected
9) As per the Income Tax Act of 1961, you are eligible for a tax deduction   if the fixed deposit investment amount is up to INR 1 lakh for 5 years under section 80 C 

If you open a fixed deposit account, you will have no access to money for a specified period.    Take a call on opening one keeping in mind your financial status and profile.

Credit cards – its features and benefits

We live in a world where people are more connected over smartphones and chat messages than maintaining human relations. From hiring a cab to purchasing groceries, everything can be done online. India could very well become the second       largest online retail market in the next few years, as per reports.  Debit cards, credit cards, digital wallets and net banking are some of the modes of payments used  on these e-commerce websites. So, which one should you go for?
 
Most of these merchants run special discounts and offer on specific credit cards on a regular basis.  Some cards also provide reward points for shopping. Before we understand the features and benefit of credit card, what and how does it work?
 
What is a credit card?

They are plastic cards that offer hosts of goodies to the customers. You can borrow money to make purchases such as ordering food, booking tickets, etc. You, however, have to ensure to repay the amount before the next billing cycle starts. If you miss out on your payment, it could dent your finance history as interest will be applied on the same. Else, credit cards are a boon for those who do not wish to carry hard cash everywhere.

What are the credit card features?

Generally, features are dependent on types of credit card offered by the banks. Some of the basic ones are:

1) Global acceptance: Indian banks issue credit cards that are international today. They can be used to remove cash from ATMs, in e-commerce websites and  other merchants overseas. 

2) Transfer of balance: One of the best credit card features is that you can transfer your outstanding balance to the credit card account of the other bank. This way you save money and have to repay low-interest rate. 


3) Instalment repayment option: In case of hefty dues, banks offer you the option of payment via instalment, i.e. EMIs. You can choose your tenure and pay the desired amount on a monthly basis. They also come with attractive interest rates.

4) Loans: Banks also provide you loans on specific credit cards at a low-interest rate .      


5) Alerts: With the help of mobile banking, you can schedule your bill payments. You will receive the alert before the due date either over SMS or on your e-mail every month.

Apart from these features, they carry certain perks as well. The top benefit of credit card is:

1) Rewards: With every credit card transaction, you receive few reward points. The points that you get on your card is fixed and varies from card to card. You can retrieve these in the form of gift card  s, discounts, cashback offers, etc.  

2) Lifestyle advantages: You can also get numerous other privileges on a credit card that includes dining,  shopping, movies, etc.


3) Travel: Frequent travellers can enjoy plenty of advantages such as air miles, discounts on duty-free shopping, travel insurance, airline offers, hotel deals, etc.

4) Offers on VISA/Mastercard/American Express credit cards: These three cards are recognised world over. Based on the  types of credit card, you can use them on e-commerce websites or ATMs abroad.     

5) Add-on cards: Some banks allow customers to apply for an add-on card for their immediate family member. They do come for free, but you can apply for limited number of cards. Add-on cards carry the same primary benefits that a regular credit card comprise of.

Credit card eligibility is based on the kind of card you are applying for. It is also dependent on the bank. However, you must have completed 18 years of age and should earn certain income monthly.

The National Pension Scheme – A Retirement Plan for All!

When it comes to investment schemes, planning for your retirement should be on your top priority list. The Government of India launched the national pension system for the monetary benefit of its citizens. It is a retirement savings plan where both, employees and employers contribute towards building wealth which is then payable to the employee at the time of retirement. The programme is mainly designed to encourage systematic savings among citizens. The scheme was initiated on 1st January 2004 with a purpose of reforming the pension system in India and is said to be the cheapest market-linked retirement plan available in India.

Who is eligible for the national pension scheme (NPS)?

All citizens and state / central government employees falling between the age brackets of 18 to 60 years are eligible for investing.

How does the NPS work?

There are three types of national pension accounts that you can opt from and even make a switch over the years if you desire:

1) Tier 1- A non-withdrawable retirement account unless the subscriber reaches the age of 60. A subscriber has to contribute at least a minimum of Rs 6000 in a financial year for a Tier 1 account to save the account being frozen.

2) Tier 2- A voluntary savings option that allows subscribers to withdraw money. It is said to be an add-on to the Tier 1 account. The minimum contribution needed in Tier II is Rs 2000 annually. One must have a Tier 1 account to have a Tier 2 account

3) Swavalamban Account- The Government of India, contributes a sum of Rs 1000 every year over the early four years.

The applicant is required to appoint a nominee before investing in the national pension scheme. One can submit 3 nominees for the account. The applicant is allowed to change the nominees for the NPS account after obtaining the PRAN (Permanent Retirement Account Number), which is a twelve digit unique number provided to the applicant for the NPS account.

Offline account opening:

Several banks act as intermediaries that help you open NPS account, do the KYC and receive contributions on your account. You will be given a registration form to fill, and once the PRAN is allotted to you, you will obtain all relevant information and passwords regarding the account. The bank will charge you Rs.125 for account opening.

How can I access the national pension scheme online?

The e-NPS process began in 2015.
Visit

https://enps.nsdl.com/eNPS/NationalPensionSystem.html and select online registration.

Through Aadhaar card:

• For this method, your aadhaar card should be linked to your mobile number.
• Your registered mobile number will receive an OTP for authentication purposes. This will complete your KYC process.
• The data along with the picture will be extracted from the Aadhaar database
• The rest of the mandatory details have to be completed online by the applicant itself
• Upload your signature in jpeg format to complete the registration process
• For initial contribution to your national pension scheme online account, you can use Internet banking methods.

A guide on loan against property in India

Meaning:

The sudden urge for cash can leave us helpless. A loan disbursed against the mortgage of the property is known as the loan against property. The loan is sanctioned as per a certain percentage of the market value of the asset. Generally, banks offer up to 50 to 60% of the value of the property. The interest rate on loan against property is lower than personal loans. As your property is held as collateral with the financial institution, it is a secured loan. Failure to repay the loan, the lender has the right to auction your property and recover the credit.

Why should you apply for a loan against property?

• Fund your child’s education abroad
• For funding any medical emergency
• Wedding of your child
• Funding the dream vacation
• Capital for business expansion

What kind of property can be set for mortgage?

For a loan against property in India, you can mortgage a self-occupied house as well as a rented residential estate, or it can be a piece of land that you own. However, it is necessary that the title of the property should be clear.

Benefits of getting a bank loan against property:

1) Lower interest rate:
Often, the interest rates for loans against property are lower than that of personal loans. The interest rates for a loan against property generally range between 12% and 15% while personal loan the interest rate ranges are 15% to 25%.

2) Easy to get:
Banks are more than willing to sanction these loans as these are secured loans. Therefore, you won’t find it difficult to get the property loan.

3) Longer tenure:
Generally, the tenure for these loans is up to 15 years while the duration of the personal loan is only up to 7 years.

4) Unlock the potential of the assets:
You can generate quick funds by unlocking the potential of your asset through a loan against property and continue to retain its ownership as well.

What is the eligibility & documentation process for a loan against property in India?

The important eligibility factors for a loan against property are as follows:
• Income of applicant
• Credit score of the applicant
• Property type
• Property value

The bank would need the income documents and regular KYC documents (Photo ID proof and address proof) of the borrower. Also, the details of property papers that will get mortgaged with the lender and shall be returned post repayment of complete loan amount.