Everything you need to know about education loans

Education loans are one of the most popular types of loan in India. With the education scenario a bit dicey, many children are not allowed to pursue higher education because of their families’ poor financial background. In such cases, taking an education loan is the best way of ensuring that you get to study as far as you want. Read on know everything about the various aspects of education loans in India.

Why should you go for an education loan?

There are a couple of reasons, why you should opt for an education loan:

• Specialized help- When you choose to go for an education course, you do not just have to pay for your classes but also for other expenses that are necessary. Some of the extra expenses include library fees, caution money, laboratory fees, building deposits etc. Sometimes these expenses can prove very expensive for you. However, if you take an education loan then that will help you cover all these expenses without any fear of running out of money.

• Education can be a pricey affair- If you are considering going to one of the best colleges or universities in the country, then you will have to shell out a substantial amount of money for that. Instead of emptying your bank account altogether, it is a more practical option to go for an education loan, which you can pay for later once you get a stable job.

• Convenient- An education loan in India is one of the easiest loans to get and every bank offers one. It is because of its easy accessibility that RBI considers them as part of the priority sector lending of banks. The only thing you need to do, in order to get an education loan is to fill out a few documents and prove to the bank that you will be able to pay off the loan later.

Benefits of getting an education loan
Just like every other loan, education loans also serve many benefits such as the following:

• Easy repayment- Compared to other loans, the repayment of an education loan is much easier. This is because you will have to pay the loan on a monthly basis once you get a stable job and not necessarily before that. Moreover, certain banks also provide a considerable amount of time to pay up even after your college or university education is complete.

• Tax exemptions- By taking an education loan in India, you can be eligible for tax exemptions. This is a convenient way for both students and parents to save money, which then they can utilize for something else.


• Low-interest rates- Education loans have considerably low rates of interest, which is one of the major reasons for its popularity. Moreover, the Govt. works towards the betterment of higher education in the country by providing subsidies.

• Higher education- Higher education is something that many students dream of but fail to pursue due to lack of funds. Since higher studies can be quite expensive, taking an education loan will help you cover all the expenses and you will not have to compromise on your education.


• Helps inculcate responsibility- By taking an education loan at a young age you tend to become more responsible for your studies, finance and everything in general. This is because you know that without a sense of responsibility, you will not be able to repay your loan.

Education is an integral part of life. Education is all-important if you are looking to make something out of your life, and nothing should stand in the way of that, least of all money. Hence, get an education loan and work towards fulfilling all your dreams.

4 things to know about credit cards

Shopping with a credit card can be a delightful affair, as you can buy whatever you want, no matter the cost. However, credit cards can also be a double-edged sword as they can make you overspend and then a few days later, you will be stuck paying your credit card bills. That is why you should be aware of a couple of things before getting a credit card. They are as follows:

1. Difference between secured and unsecured credit cards- Two types of credit cards are there- unsecured and secured. If you choose to go for a secured credit card, then you will have to pay a certain amount of money as a deposit, which will act as caution money, in case you fail to pay your credit card bill. If you ensure that you will pay all your bills on time, then the company will provide you with a secured credit card and return to you, your deposit money.

Unsecured credit cards, on the other hand, are the most commonly used ones. They are not secured by collateral such as auto loans or mortgages. This means, they are not directly related to property, which the lender can seize if you fail to pay the credit card bills.

2. Rewards program- Before you apply for a credit card, make sure that you go through their rewards program thoroughly. Every credit card company offers various rewards, every time you use your credit card. From offering cash back when you purchase flight tickets to providing gifts after you accumulate certain points, buying a credit card can be quite a lucrative option for you. Hence, go through their rewards program before zeroing on a credit card.

3. Credit limit- Credit limit is the maximum amount of money that your bank will provide in your credit card. In case you cross that limit, you will not be able to purchase anything further with your credit card. However, if you are buying a credit card for the first time then your credit limit will be quite low, as you still have not proven yourself to the bank about your ability to pay the bills.


4. Consequences of not paying bills- If you fail to pay your credit card bills on time, then you will have to pay a lot more interest than usual as a kind of penalty charge. Another thing that you should keep in mind is that this will affect your credit score. Having an unimpressive credit score can spell trouble for you as it may harm your chances of getting other credit cards in the future and affect your mortgages.
Before you apply for a credit card, doing proper research about it can help you understand everything that is essential so that you can take an informed decision. After all, purchasing a credit card is a kind of investment you are going for.

5 benefits of using a debit card

Almost everyone you come across these days has a debit card in their wallet and rightfully so. More and more people are using debit cards these days because of how convenient they are and how easy it is to carry them. Listed below are five benefits of using a debit card, which you must read if you are planning to get one:

1. Peace of mind- When you own a debit card, you do not have to carry a lot of cash for making financial transactions. You can just swipe your card. Even if you are robbed by anyone, the robber will not be able to use the debit card without your ATM pin. You can also call up your bank’s customer care service and ask them to block your card in order to prevent further misuse. Hence, having a debit card ensures your peace of mind.

2. No need for applications- If you want to get a credit card, you will have to apply for it. You also have to make sure that you have a very impressive credit score. If your credit score is low, then you will not be given a credit card from the bank. However, when it comes to debit cards, no kind of application is necessary nor do you have to maintain any credit score.


3. Debt-free- If you have a credit card, you might have the tendency to buy whatever you want and whenever you want. This can result in you having massive credit card bills. However, if you own a debit card, you can spend only a limited amount depending on your debit card balance and not a dime more than that. This will help you save money and make sure that you remain debt-free.

4. Fees- Debit cards do not normally charge any sort of fees as credit cards do. Hence, by using a debit card, you can avoid paying fees such as annual fees, late fees, and interest rates.


5. Convenient than writing checks- Writing checks for monetary transactions is considered an old-fashioned and cumbersome thing now. Debit cards are mostly used these days for making transactions, as these do not take much time and are comparatively easier. Most people these days refuse to take checks as they would have to go to the bank and deposit it and it will take a considerable amount of time for the money to reflect in their bank account. That is why they prefer the usage of a debit card as they can get the money as soon as you swipe it.

Even though credit cards do serve many benefits, debit cards are a more economical option when you think about it in the long-term. Debit cards can help you stay away from debt and remain stress-free about it.

6 things to consider before taking a personal loan

Personal loans are one of the most popular kinds of loans in the market currently. It comes to your aid when you face a financial crisis, and so you must know about all the important aspects of a personal loan before you choose to buy one. Listed below are some of the things you should consider before selecting a personal loan:

1. The motive for taking the personal loan- Before taking a personal loan, you must understand why you need the loan as in, what is your intention. This is because personal loans are offered for genuine requirements such as hospitalization, marriage or education. However, if you are planning to take a personal loan because you want to invest it in shares and stocks with the motive of getting higher monetary returns, then it is strongly discouraged.

2. Penalty charges- You must know that, if you forget to pay your personal loan on time then you will have to incur a huge penalty charge. Talk to your bank manager or loan provider about this and get to know everything about the penalty cause, so that you know what you are getting into. Ensuring that your personal loan is an affordable one is of utmost importance.


3. The rate of interest- Since you do not have to maintain any asset as collateral when it comes to personal loans, the rate of interest turns out to be very high. This is one of the biggest reasons why personal loans are tougher to acquire than any other kind of loan. If you are planning to get a personal loan, you can apply either for a variable rate or for a fixed rate when it comes to choosing one.

4. Explore for the best option- Select a personal loan after substantial research, so that you end up with one that is best suited for your needs and requirements. Try to go for a loan with the lowest interest rate, so that you would have to borrow less money from your lender. In addition, choose a loan that will allow you the flexibility to pay your EMI for a longer duration.


5. Credit history- Before you decide to apply for personal loan, make sure that you have an impressive credit score, as it will determine whether you will get the loan in the first place or not. Moreover, if you have any credit card dues, then pay them off as soon as you can, as it will reflect on your credit history when your application will be processed.

6. Evaluate your ability- Getting a personal loan may seem like a convenient option sometimes. However, before actually getting one, make sure that you are able to pay it off when the time comes. If you are unable to pay off your loan on time, then you will have to pay a huge amount of money as your penalty charge and your credit score will also reflect poorly in the future. Therefore, make sure that your income is enough for you to purchase the personal loan you want.

Even though you need to keep all the above-mentioned points in mind, before you apply for personal loan, do not think that it is a huge challenge or a struggle. Keeping the above pointers in mind will just ensure that your loan is approved, and you are able to make the most of it.

Checklist to go through before buying an auto loan

Most of us aspire to get our dream car, but quite a few have the funds to make that dream come true. Car finance bridge this gap by helping you to finance your dream car by paying a fraction of its cost. As compared to earlier times, purchasing a vehicle of your choice is rather easy these days, all credit goes to the various financing schemes offered by banks and financial institutions.

If you are planning to apply for a car loan, consider this checklist to go through before buying a car loan.

1) Comparison:
Car loan interest rates vary as per your car model, repayment capacity, employer, etc.  Few banks also offer preferential interest rates to their existing customers. Hence, first check with your existing bank for such offers and then visit online lending marketplaces to compare them with the prices offered by other lenders.

2) Check your affordability:
Loan amount and the tenure of loan decides the EMI amount, in addition to the rate of interest payable. You can check your EMI affordability by deducting the necessary monthly expenses, existing EMIs, insurance premiums and SIP contribution from your monthly income. Lenders usually prefer total loan EMIs to be within 40 per cent of your net monthly income. While a higher EMI will surely lead to lower interest cost, don’t do it at the expense of your emergency fund or your investments. When you apply for a car loan online, try to calculate your EMI amount on the digital calculators.

3) Loan tenures:
The shorter loan tenure is always better for car loans. Most banks provide car loan duration for up to seven years. You can try to opt for a shorter tenure as it will reduce your interest cost. However, know that a shorter tenure will lead to higher EMIs. Before accepting the auto loan,  ensure that your tenure does not cost your overall contributions to various life goals.

4) Credit score:
Generally, lenders consider your credit score while approving your car finance application. Typically, those with credit scores of 750 and above have a greater probability of loan approval. So get your free credit report from online lending marketplaces or credit bureaus before filing a loan application. It will let you know your credit score beforehand and help you take corrective steps to improve it. Additionally, you may also receive pre-approved car loan offers based on your credit score and other eligibility parameters.

All that you must know about Mudra loans

Introduction:

Launched by Prime Minister of India in April’15, Pradhan Mantri Mudra Yojana was initiated to provide loans up to Rs.10 lakhs to the non-corporate, micro/small enterprises. Their loans are classified as MUDRA loans under the scheme.

Micro Units Development & Refinance Agency Ltd. (MUDRA) is an institution set up by the Government of India to provide funding to micro enterprises which help achieve economic success and financial stability. Mudra loans are given by commercial banks, small finance banks, cooperative banks, and NBFCs. The borrower may approach any of the lending institutions or can apply through online portals.

Under MUDRA scheme, they offer three products, i.e. 'Shishu', 'Kishore' and ‘Tarun’ as per the stage of growth and funding requirements of the beneficiary micro unit. These schemes cover loan amounts as below:

• Shishu scheme covers loans up to Rs 50,000
• Kishor scheme comprises loans above Rs 50,000 and up to Rs 5 lakh
• Tarun scheme comprises loans above Rs 5 lakh and up to Rs 10 lakh

Mudra loan eligibility:

Loans are given to all non-farm income generating enterprises in manufacturing, trading and services whose credit needs are below Rs 10 lakh.

Documents required for the Mudra loan:

• Valid photo identity proof
• Current address proof
• Proof of income - Latest ITR Financial Docs of Income
• Last six months Bank statement
• Loan application form
• Ownership proof of residence/office
• Evidence of continuity of business
• Trade references

An application form is available at the lending institutions for the scheme. It needs to be submitted along with the documents for the approval of the loan. Banks cannot ask for collateral but the repayment period for the loan is of 5 years.

Mudra Card:
Mudra loans provide working capital facility as a cash credit agreement. MUDRA card is a debit card issued against the loan account. The account holder can make use of MUDRA card in many withdrawal and credit facilities, to manage the working capital limit effectively and keep the mudra loan interest rates burden a minimum. MUDRA card will also help in digitalisation of MUDRA transactions and will create a credit history for the borrower. MUDRA card is like a RuPay card that can be functioned across the country for withdrawal of cash from any ATM/micro-ATM.

Conclusion:
MUDRA .is a government financing scheme to provide a business loan to new small businesses in India. To get a business Mudra loan under PPMY, the candidate has to contact the nearest public/ private sector bank. The interest rate will be fixed by the institutions time to time-based on guidelines from the RBI.

An FAQ summary on NRI banking

If you are an Indian employed abroad or has a business overseas, you still have the option to park money in India through safe instruments like fixed/term deposits. Most Indian banks, as well as multinational financial institutions, provide NRO and NRI banking services. This facility allows you to make safer investments and also earn revenues.

What is an NRI account?

An NRI can open two kinds of bank accounts in India- NRO & NRE accounts. The major difference between these two accounts is that in you can only credit an NRE (Non-Resident External) account in foreign currencies whereas in NRO (Non-Resident Ordinary) is for earnings in India like rent earned from a pension, property, etc.

What are the benefits of NRI banking:

• You can open a fixed deposit or recurring deposit account with any Indian bank.
• You can make investments in mutual funds in India.
• NRI’s can avail tax benefits in India on the interest earned through the account.
• Principal amount plus interest is fully repatriable. You can exchange your foreign currency into Indian rupees to make any purchases or investments in India.
• Funds from this can be shifted to another NRE account or a resident Indian account. You can also make payments for any family member living in India in Indian rupees.

What are the documents required to start an NRI account?

• Passport
• Photographs
• Valid Visa
• Address proof of India if you have a different address posted in your passport
• Overseas address proof
To avail the NRI services, you will have to get these documents attested from the Indian Consulate or overseas bank or be notarised by a foreign notary as per your chosen bank's requirements.

How to open an NRI account?

Most private, public, and foreign banks with operations in India have flexible online facilities to open an NRI account. Some private banks even send officials for a free doorstep service to pick up documents. There are also entirely paperless services provided by some of these private banks in certain jurisdictions. HDFC Bank has drop box facilities in the USA, the UK, Singapore, Canada and the UAE, where one can drop their completed downloaded forms along with required documents.

Banks in India provide a comprehensive array of NRI banking services. A secure online gateway supports their services, and this proven technology facilitates seamless banking. From opening a savings accounts to enabling premium banking services and from deposits to investments in mutual funds, insurance or portfolio management services; banks offer NRI banking solutions under one roof.