Are you a first-time personal loan borrower? Read this

Personal loans will act like a true friend in times of an unforeseen situation of financial crunch. Whether you have to pay off for marriage expenses, home renovation or even sponsor travel plans, a personal loan is the best option. These loans are unsecured in nature that means you don’t have to pledge any securities to get them. Hence, personal loans in India come at a higher interest rate compared to home loans.

So it is advisable for the first-time personal loan borrowers to be careful while applying for a loan to receive better offers.

1) Keep a tab on your credit score:
A credit score is an essential parameter that lenders check while issuing personal loans to the applicants. Given that these are unsecured loans, banks will favour the applicants with a higher credit score. A higher credit score indicates the repaying capacity of the applicant. To improve your credit score, make sure you pay your bills on time and use your credit card as less as possible.

2) Pick your lender carefully:
Before applying for personal loans, it is important to conduct thorough research about the lending institutions. It is wise to pick the lender who offers you a lower rate of interest with better terms and conditions. You can shop around for the personal loan by applying online using an online aggregator. Know that interest rates differ widely from lender to lender, so explore your options.

3) Check your repayment capacity:
Banks usually ask for EMI payments during repayment of personal loans. You can calculate your monthly instalments capacity using an online Personal Loan EMI calculator to assess the right amount of EMI for your corresponding loan amount. Banks also conduct the repayment capacity valuation of the borrower at the time of yielding the loan. Hence, if you request for the right loan amount in the first instance, chances of your loan sanction becomes higher.

4) Eligibility:
Most banks require you to be employed for at least two years, and at least one year with the current employer. If you change your job often, the chances of your loan getting approved will be lesser. Also, your loan will not be accepted if you are serving a notice period. Banks also require a minimum income of Rs. 15,000 per month to consider you for a personal loan.

5) Proper documentation:
Lack of appropriate documentation can lead to rejection of your personal loan application. Documents required by banks include:
• Signed application form
• Residence proof (Passport, Driving License, Election ID card)
• Income proof (last 3 months salary slips, Form 16 or IT Returns)
• Identity proof (Aadhaar card, PAN Card, Voter ID, Driving License)

An investor’s guide on demat and trading account

Introduction:

A demat and trading account is just like a bank account. However, instead of holding money in your account, demat holds your securities – such as shares, bonds, or debentures. It is essential to maintain a demat account if you are planning to trade in securities. This electronic account will hold your securities serving as an alternative to the physical certificates. To continue trading in securities of the Indian market, the investor must open a Demat and trading account with a Depository Participant (DP).

Who is a Depository Participant?

While depositories are organisations that hold your securities electronically and also facilitate transacting, a Depository Participant (DP) act as agents between depositories and investors. The two depositories registered with SEBI for demat services are National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL).

The benefits of a Demat account:

1) Physical securities are prone to risks like thefts, losses, or damage. These risks are eliminated with the opening of a demat and trading account, that allows holders to save all their investments in electronic form.
2) The transaction cost is significantly lesser compared to the physical segment since here you don't have to pay stamp duty.
3) With the elimination of the paperwork, the time required for transactions is reduced. It enables the account holder to avail more of demat services and use it with more efficiency.
4)  We know it is a tedious task to maintain physical certificates. Moreover, keeping track of their performance is an extra responsibility. Through a demat account, users can track all their investments through a single account.
5) With physical certificates, buying and selling of securities were possible only in the specified quantities. The convenience of dealing with odd lots or single security was also not available. Demat accounts help investors this issue.

How to open a demat account?

Following are the steps on how to open a demat account and trading account with a depository participant (DP) registered with SEBI.

• Choose a Depository Participant (DP). Most financial institutions and brokerages offer this service.
• Fill the demat account opening form. Submit along with copies of the required documents and a passport-sized photograph. Also, carry the original documents for verification.
• During the process, an In-Person Verification would be conducted out. A member of the Depositary Participant’s staff would contact you to verify the details containing in the account opening form.
• Once the application form is processed, the DP will deliver you with an account number or client ID. You can use this details to access your demat services online.

How to do RTGS and what are its benefits

RTGS or Real Time Gross Settlement is a mean of money transfer that allows you to transact large sums of money instantly. It is an online process where the minimum amount of transaction has to be Rs.2 lakhs. There is no upper limit to the transactions. However, both the banks paying and receiving the money must be RTGS enabled. It is among the fastest and most secure means of financial transaction in the country with more than 100,00 bank branches offering the service.

How to do RTGS?

• You should activate the internet banking facility on your bank account if it is not already activated. Check if your bank and the bank you are transferring the money to are RTGS enabled.
• Log into your account and go to the page for RTGS transfers.
• Input details of the beneficiary such as name, account number, IFSC code etc. You also have to provide data such as the bank and the branch that holds the account.
• Enter the amount you wish to transact. All RTGS transfers charge a nominal fee, between Rs.25 and Rs.55, which depends on the amount being transacted.
• After you confirm the transaction, you will receive a password that you will have to enter to proceed with the transaction. This is an added level of security.

You get notifications on the successful completion of the transaction. In case you face any difficulty with the transaction, it is best to consult a representative of your bank.

Benefits of using RTGS

• It is an instant process, which does not require your physical presence in the bank. You can also do an offline submission at your branch in case you are not comfortable with online transactions.
• The charges for a transaction are lower as compared to other instruments for large money transfers such as a demand draft.
• It is a paperless transfer. Therefore, it avoids the complications that can arise from the loss of a cheque or demand draft. In case a transfer is not successful, the entire amount is credited back to your account in no time.
• The online process ensures that there is no forgery.
• The chances of default are eliminated, unlike cheques.
• The facility of instant transfer helps businesses to go about their daily transactions smoothly without any delays.

RTGS payments is a safe and secure mode of money transaction that has become extremely popular since its introduction by the Reserve Bank of India. Since there are no delays in the transfer, it helps new businesses to build a strong supplier and buyer relation.  The risk of loss and theft of money is also minimised with several levels of security checks. If you are looking to transfer huge sums of money in a hassle-free manner, RTGS payment is the most reliable transfer mechanism you can opt for.

Features and benefits of NRO account

NRO or Non-Resident Ordinary Accounts are for Indians who reside outside India for employment, business or any other purpose. These accounts are opened in Indian banks with funds that are sent from abroad. As the Foreign Exchange Management Act (FEMA) you cannot have a savings account in India if you are an NRI. However, if you live and work abroad, an NRO account can help you track and transfer money to your home account. To open an NRO account you have to show evidence in terms of visa permitting residence in a different country.

Features of NRO bank account

• An NRO bank account allows you to have a savings account, recurring account, current account as well as fixed deposit.
• An NRO account accepts deposits of money earned in India.
• The deposits in the account can be made using foreign currencies, traveller’s cheques, cheques in any currency as well as from any legitimate form of income in India.
• You can transfer the funds from a different Non-Resident Indian account or Foreign Currency Non-Repatriable account.
• If you are depositing foreign currencies, they will be deposited into your account as Indian currency at the existing exchange rate.
• 30% Income Tax is deducted at source on the interest earned in NRO account.
• You can easily invest in mutual funds and other investments through the NRO account.
• A minimum amount must be maintained in the account for it to remain active.

Benefits of NRO account

• You can retain your income and assets in India with an NRO bank account.
• Your dependents in the home country can access your funds in the NRO account.
• You can send money to India or withdraw money at any time.
• Transfer of money to the NRO account is free.
• NRO accounts have higher rates of interest.
• Every account holder gets a free chequebook and an ATM card. An additional ATM card is issued for use by a relative or friend in the home country.
• A local representative can manage the account. However, they must have a letter allowing them to do so.
• Free e-mail statements are issued.
• There is no restriction or upper limit on the withdrawals as long as you maintain the minimum balance in your account.

NRIs can only deposit their earnings in India in an NRO account. It is illegal to deposit such money into any other account. If you have a source of income in India, despite being settled abroad, an NRO account helps you to manage and organise your finances in India better and in a more efficient manner.

Upcoming mobile payment apps of India

Mobile payments and digital money are fast gaining acceptance among users in India since its introduction. The ease of use and various benefits being offered in terms of cash backs and discounts are fast luring new users to shift to use of virtual currency. There are several companies that are providing the option of mobile payments for a variety of services from bill payments to online shopping.  Here is a list of the upcoming mobile payment apps that are available in India.

PayUMoney
This app has shown huge growth since its inception in 2017. The services are extremely customer friendly. You can use this mobile payment app for bill payment, online purchases, and services like recharging phone or DTH facilities. The refund process is simple and instant for cancelled orders.

HDFC Chillr
This payment app allows you to make payments to anyone on your contact list with a couple of clicks. For a person who is on your contact list, you do not need to add any other information before transferring the money. This app connects directly to your HDFC bank account. You can shop on e-commerce websites, pay utility bills, split expenses and even make payments to offline stores with this app.

PhonePe
This app has a lot of features that make this app lucrative as well as user-friendly. You can link several bank accounts to your virtual wallet with this app. There is various cash back offers that the users find genuinely useful. Payments of bills, mobile phone recharge, booking movie tickets, air tickets etc. become very simple with PhonePe.

Tez
Google Pay or Tez is another up and coming mobile payment app in India. The reason for its rapid success is its ease of use and rewards program. It supports transactions from all banks for online shopping and bill payments. The ‘Cash Mode’ allows you to make payments over a wireless connection when you and the beneficiary are in the same location. This makes paying at shops extremely easy.

BHIM (Bharat Interface for Money) UPI
This app is the product of the Government of India’s attempts to promote digital currency. Although there are minimum features, the app has a simple interface and is very easy to use. Through this app, you can send and receive funds in a matter of seconds. This is done using Virtual Pathway Identifier (VPI), QR codes or mobile numbers. You can also transfer money with bank account number and IFSC code.

Mobile payments are making the process of transaction easier and eliminating the need to carry cash. The mobile payments apps are over time becoming more innovative. All transactions on these apps are very secure and always have benefits associated with them to enhance user experience. If you are pondering about switching to virtual payment platforms, you should consider these upcoming mobile payment apps to reap maximum benefits.

The best investment services in India for 2018

Clever investments are the fastest and the easiest methods of getting large returns with minimum risks. However, with higher returns, more is the risk. Although the perfect investment is a myth, with proper research and planning you can minimise the risks and increase your gains. You have to assess how much risk you can take as well as the mode of investment to reap maximum rewards. Investments can be financial as well as non-financial. Here is the list of the best investment services that are available in India-

Direct Equity
You need a demat account to invest in direct equity. Stocks are considered to be volatile assets that do not always guarantee a return. Therefore, before investing in stocks you must thoroughly research the market. Over long periods, this avenue provides higher returns than any other forms of investment. Be careful to take proper precautions to curtail your losses. You can expect returns around 12.5% if all is well with the market.

Equity Mutual Funds
Limited investments in mutual funds in a large number of portfolios increases your chances of getting higher returns while limiting the risks. The best way is to resort to an expert for advice. Pooling different stocks of different companies can give you a net profit. You can actively or passively manage the equity mutual funds. Returns vary between 15% and 20%.

Debt Mutual Funds
These offer you steady returns while being safer with low-risk potential. In this case, you invest in securities that generate a fixed interest such as corporate bonds, government securities, commercial papers, treasury bills, etc. Returns vary between 6% and 8%.

National Pension Scheme
It is a long-term investment scheme that focuses on retirement. This blends mutual funds, fixed deposits, corporate bonds, liquid funds, and government funds. You can directly invest in equities through NPS if you have the appetite for risks. A tier-1 NPS account has to be maintained with annual deposits of Rs. 1000.

Public Provident Funds
This is one of the best investment options in India that attract many people due to low risks. The tenure of Public Provident Funds is 15 years and the money is exempted from taxes. The government support for this scheme makes it extremely safe.

Fixed Deposits
You can open a fixed deposit account in any bank for long and short terms. It is a lower return yielding, safe option that is subject to taxes as per your income.

Real Estate
A real estate is a lucrative form of investment that does not involve liquid finances. The returns depend on the location of the property. Capital appreciation makes real estate a viable investment in the long term.

Gold
Gold is a traditional form of non-financial investment that has been popular for a long time. The returns depend on the existing value of gold at the time of liquidation. However, the concerns for safety remain an issue.

Some investment services offer fixed income while others vary with the ups and downs of the market. The market-linked investment offers a higher return despite the high risk and volatility. A judicious mix of both while keeping the concern of taxes in mind helps you meet your long-term financial goals and helps you stretch the power of your money.

Why is it important to use car loan EMI calculator

The demand for a car in everyday lives has increased due to increased mobility, the uncertainty of public transport and concerns of road safety. A car loan is the most sought after avenue of buying a car since funds usually fall short. However, in determining the suitability of a car loan, it is important to assess the impact it has on your monthly finances. You should decide the principal and the tenure of the car loan in such a way that the equated monthly instalments in no way are above 40% of your monthly income.

You can find out this data using a car loan EMI calculator that is available on the website of all loan providers and third-party loan companies. All you need to do is input the loan amount, tenure and interest rate. There are several advantages of using the EMI calculator, which includes-

• Using an EMI calculator helps you plan your finances around the loan. It helps to make an informed decision and saves you from overshooting your monthly budget.

• It is important to select the appropriate principal amount for a suitable tenure so that you are able to afford the loan. Skipping payments of EMI has a negative impact on your credit score that can create problems in getting your future loans approved.


• The EMI calculator for car loan gives you a comprehensive idea about the entire repayment period with the help of pie charts and tables that include data such as principal, interest, processing fee and the repayment amount. You can compare the changes in EMI by adjusting the tenure and principal amount.

• You can compare the car loans being offered by various companies quickly without any extra charges and choose the car loan that is best for you.


• You can get several results by varying the principal amount and tenure with a car EMI calculator, for free and in an instant. This saves time and helps you plan your money.

The car loan EMI calculator is easily available to everyone. It is an extremely beneficial tool that helps you evaluate your affordability. You can view your monthly repayment schedule. This gives you an accurate idea of the loan you are getting into.

Therefore, with the help of an EMI calculator, you can make an informed decision about your car loan while balancing your luxuries and necessities.