How to calculate personal loan EMI using EMI calculator?

A personal loan is one of the most popular loan options today. This type of loan is unsecured which means the borrower does not need to put up any security to avail this loan. The second most popular feature of this loan is that the lender does not put any conditions with regards to the use of funds. This means the borrower can use it for any purpose such as:

• Medical expenses
• Wedding expenses
• Travel expenses
• Home improvement expenses
• Business expansion expenses

Like all types of loans, you have to repay personal loans in EMIs. EMIs areis a fixed sum of money that you repay to the lender over the loan tenure. The EMI consists of two parts: the interest on outstanding principal and the principal repayment. Banks calculate the rate of interest on the outstanding principal, and the balance amount of the EMI is the principal repayment. The formula is:

EMI = Interest payment + Principal repayment

Over the tenure of the loan, the interest payment reduces you repay the principal outstanding. Thus, the initial EMIs have a higher interest component and vice versa in the last few instalments.

While some lenders provide a complete loan repayment schedule broken down into principal and interest payments, as a borrower, it is worthwhile to do your due diligence before you apply for a personal loan. This can be done by using a personal loan EMI calculator. A personal loan EMI calculator uses:

• Principal amount
• The rate of interest on the loan
• Repayment tenure

Using these three items, the personal loan calculator tells you the exact amount of EMI that a particular combination of interest rate and tenure will get you. By calculating the EMI based on interest rates from different lenders, you can decide on which lender to apply to.

Using a personal loan EMI calculator is very simple.  To use this calculator, you need three items, i.e. the principal amount, the rate of interest, and the repayment tenure. The personal loan EMI calculator uses a formula to arrive at the EMI amount:

P x R x [ (1+ R)^ N] / [ (1+ R) ^ N-1]

Where:

P= Principal or loan amount
R= Rate of Interest on loan
N=Tenure of the loan in years

On entering these different parameters, the calculator gives you the EMI amount. Some personal loan interest calculators also tell you the total interest that you pay over the loan tenure. The longer the repayment tenure, the more is the total interest outgo, even if the EMI amount is not large.

Using a personal loan calculator can help greatly to make the right decision and save money on interest.

What is Atal Pension Yojana?

One of the main problems in India has always been the lack of a Government-backed pension scheme making pensions available to all strata of the society. However, the Atal Pension Yojana (APY) looks to change that.

What is the Atal Pension Yojana?

The Atal Pension Yojana is a Central Government sponsored affordable pension scheme. A scheme is a form of universal social security for all Indians, especially for the underprivileged. The nature of the Atal Pension Yojana is a defined benefit plan where contributions will lead to a defined pension per month after the subscriber reaches 60 years of age.

The pension under Atal Pension Yojana will be between Rs. 1,000 to Rs. 4,000 per month. This pension amount will depend on the contribution that each subscriber makes to the scheme. The input to the APY scheme depends on:

• The age of the subscriber
• The targeted monthly pension post retirement

The Government has released a contribution chart with differing contributions for pensions from Rs. 1,000 to Rs. 4,000. The inputs for each slab of pension increase with age. For example, the contribution for Rs. 2,000 pension at 28 years of age is Rs. 194 monthly, Rs. 578 quarterly and Rs. 1,145 half yearly. Similarly, the contribution to a premium of Rs. 5,000 per month at 22 years of age is Rs. 292 monthly, Rs. 870 quarterly and Rs. 1,723 half yearly.

The minimum age to enter the APY is 18 years and contributions can be made until the subscriber reaches 40 years of age. All bank account holders can join the APY by activating the auto debit facility.

The APY account can be opened at the bank branch where the individual's savings account is maintained. Information about the scheme and auto-debit will be given via mobile. It can also be opened online.

Benefits of APY:

The APY is a scheme primarily based for the unorganised sector to receive fixed monthly pensions after reaching 60 years of age. As such, it provides a source of fixed monthly income to them.

To make the APY more attractive, contributions made to the scheme get an income tax deduction under Section 80CCD.

One of the Atal Pension Yojana benefits is that the pension becomes immediately payable to either of the spouse in case of death of the subscriber. 

The scheme is hassle-free for the subscriber since contributions are made via auto debit facility. The only caution that the subscriber has to take is to maintain an adequate balance in the savings account.

How to take a loan on credit card?

A credit card is one of the most popular modes of payment today. It is a plastic card that enables the holder to shop up to the particular credit limit of the card. The bank allows you to borrow interest-free up to the credit limit each month for different transactions done both online and offline.

However, that is not all that a credit card can be used for. It is also possible to get instant loans on credit card in case of emergencies when quick cash infusion is required. This cash can then be repaid over time. A loan on credit card is also called a loan against credit card. This is not the same thing as cash withdrawal from the credit card. Cash withdrawal on credit card results in a reduction in available credit limit whereas a credit card loan is an actual loan against the credit card.

Features of a credit card loan:

• These loans are quick loans on credit cards. Once applied for, they are instantly approved and the cash gets transferred to the bank account of the applicant.
• The repayment of a credit card loan is in the form of EMI which is billed in the regular credit card statements from the month it is borrowed. Interest is charged on the amount outstanding.
• There are no documents required for instant loans on credit card. As such, each cardholder is automatically approved for a credit card loan depending on a good credit relationship.
• Some bankers offer a system where the loan instalment amount is debited from the bank account of the cardholder instead of reducing the credit limit.

How to apply for instant loans on credit card?

• Internet or Mobile Banking:
You can apply for instant loans on credit card via Net Banking of the respective bank. You can also apply via the mobile banking application of the bank

• Customer care:
Another way to apply for a credit card loan is to call up the customer care centre of the bank. Alternatively, you can also talk to your relationship manager to get it processed.

• Visit the bank branch:
Visiting the bank branch and filling out a form is another way to apply for quick loans on credit card. The bank branch will process the loan, and the funds will get credited to your account.

A credit card loan is like a personal loan, without the need for documents. However, before applying for such a loan, it is better to inquire about the rates of interest from your bank and only apply for this in case of extreme emergency when funds are quickly required.

Life insurance: Types, benefits and features

One of the primary goals of investing and building a corpus is to ensure the financial safety of the family. The logic behind this is that having a significant corpus built up means the family will not have to struggle to meet expenses after the death of a loved one. To achieve this goal, one of the tools used is life insurance.

Features of life insurance:

Life insurance insures a person against death. A certain decided sum is paid out to his dependents at the end of the policy period or if the policyholder dies.

Life insurance plans require an absolute premium to be paid to the insurance companies. You can pay the premium at regular intervals, i.e. monthly, quarterly, half-yearly or yearly. This premium is paid every year till the end of the policy term.

A life insurance policy does not need to be renewed every year. However, these policies can be surrendered during the policy term if the policyholder wishes to change insurers.

It is effortless to buy life insurance online through an aggregator or the company’s website directly. This may turn out to be cheaper than buying offline.


Types of life insurance:

There are different types of life insurance policies that people take to serve different needs:

1. Term insurance plans:
A term insurance plan is a plan where there is no benefit on maturity. This means the sum assured is paid out only in case of death of the assured. It is a pure insurance policy. There is no investment component of the premium. This reduces the incentive on such policies.

2. Endowment or money back insurance plans:
In these life insurance plans, there is a certain sum of money that the policyholder gets on maturity as well. These plans involve a small amount of investment, which gets returned to the policyholder at the end of the policy term.

3. Unit-linked insurance plans (ULIP):
A ULIP is a plan where a portion of the premium is invested in a fund that is linked to the stock market. On maturity, the fund value is paid out to the policyholder. On death, the higher of the sum assured or the fund value is paid out to the family.

4. Child education plans:
These are special ULIP plans that pay out the sum assured in case of death of the policyholder and continue making investments in the decided fund till maturity. The fund value is paid out on maturity thus helping meet the education costs for the child.

5. Life insurance plans insuring health:
Several insurers have specific plans that cover critical illnesses, cancer etc. A certain sum is paid on the diagnosis or for treatment.

6. Pension plans:
Pension plans collect a premium to build a corpus and pay the policyholder or his family a monthly pension after retirement.

Benefits of life insurance:

• It provides a safety net for the family after the death of the policyholder
• Can help with specific life goals such as retirement or child's education
• Life insurance policies get a tax benefit under Section 80C of the Income Tax Act
• Life insurance plans are used as collateral for taking loans
• Term insurance policies come with riders or add-ons which provide additional safety

How to apply for a business loan in India

A business loan is a loan that can be used for growing and expanding the business. These type of loans may be secured or unsecured. Several banks and financial institutions give out different types of business loans which are completely unsecured. These loans are like a personal loan in the sense the lender does not dictate where they should be used. Business loan in India is a popular way to fund business expansion.

Types of business loans:

• Equipment finance loans
• Line of credit
• Working capital loans
• Invoice discounting
• Short term loans
• Cash credit facility

Steps to apply for a business loan:

Step 1: Assess your fund requirement

The lender is going to require details about the fund requirement, which is why it is important to calculate this. Preparing a thorough fund estimate will help the lender assess the loan application faster which in turn will improve the business receive funds more quickly. 

Step 2: Check business loan eligibility

While each lender has different loan eligibility, it is best to do thorough research and pick a few lenders whose eligibility criteria the business meets. This will help simplify the loan application.

Step 3: Fill out the loan application

You can apply for an online business loan or visit the branch of the lender. If you’re looking for speedy approvals for business loans, apply online through the lender’s website. Several lenders have quick online approvals and fund disbursements.

Step 4: Submit documents:

Once the lender approves the loan application, you need to submit the documents. Some of the documents required for a business loan application are:

• Identity proof of the applicant (Voter ID/PAN card/ Driving License/ Passport/ Aadhar card)
• Address proof (Aadhar card/ Voter ID/ Driving license/ Passport)
• Bank statement for the previous 6 months
• Income tax returns are showing the computation of income. Some lenders insist on Balance Sheet and Profit and Loss account as well. These financial statements should be audited or certified by a chartered accountant
• Proof of establishment (Business registration documents)
• Copy of partnership deed where applicable
• Memorandum and Articles of Association where applicable

Step 5: Completion of loan formalities

Once the loan is approved and the documents submitted, the loan agreement is signed. It is essential to go over the different terms and conditions outlined in the loan agreement before signing. This will ensure there are no issues in the future.

What is a forex card?

A forex card is one of the best products available when you’re considering a tour abroad. A forex card is a full debit card cum ATM card where the card is preloaded with foreign currency. It can be used in ATMs to withdraw cash as well as swiped directly at merchants. Both these transactions will reduce the balance in the card. A forex card is a safe way for people to carry cash while travelling abroad.

Features of a forex card:

1. A forex card can be either a single currency or a multi-currency forex card. A multi-currency forex card can load several different currencies. Some of the popular currencies that banks charge on forex cards are US dollar, Euro, British Pound, Canadian dollar, Australian dollar, Japanese Yen.
2. The currency to be loaded in the forex card is usually sold by the bank itself.
3. The forex card India works like a debit card. The user has to set a PIN for the card which is then used to authenticate both merchant transactions as well as ATM withdrawals.
4. Most banks send an email confirmation of the transaction as well as the outstanding balance.
5. The card automatically switches between different currencies. The user does not have to do anything unique.
6. The foreign currency loaded in the forex card is entirely prepaid. This protects the money against any risk of foreign exchange fluctuation.
7. A forex card can be recharged or refilled using net banking conveniently.
8. Most banks provide a backup forex card in case the primary card is stolen or lost. This feature ensures the forex cardholder is not left stranded in case of theft or loss of card.
9. Banks provide other value-added services at a discount to forex card holders.

How to buy forex card?

A forex card can be purchased over the counter in any bank branch. It can also be applied for online on the bank’s website. However, the account holder must have enough cash in his account to cover the cost of the foreign exchange to be purchased.

Apart from that, forex card India can be purchased online. There are different websites which provide forex cards and foreign exchange from different banks. It is best to check the rates of foreign exchange provided by these different aggregators and pick the one that offers the foreign exchange at the best possible prices. 

Types of forex cards:

• Single currency card
• Multi-currency card
• Hajj Umrah card
• ISIC Student card

What is an education loan?

Education at all levels has become quite a costly affair in India. Whether it is studying for a postgraduate degree or meeting the cost of expensive courses, good quality education has seen spiralling costs. While saving prudently for education is one of the ways to ensure you can afford a good quality education, another way of enrolling yourself for your dream course is to take an education loan.

What is an education loan?

An education loan is a loan that meets the cost of education. The student is the primary applicant of the student loan. The parent or the spouse of the student is the co-applicant in most cases. Most banks give out these type of education loans:

• Education loan for Indian education:
This loan is given for education from primary to post-graduate studies in any educational institution in India. The loan amount that the bank grants will vary from bank to bank. The loan amount depends on the cost of the course. Some banks may also consider the cost of accommodation, examination fees, and other course-related expenses as well. Loans up to a particular amount (usually Rs. 5 lakhs) are given without any collateral.

• Central Government Interest Subsidy Scheme:
The Central Government has given an interest subsidy on education loans to students whose parents do not have an income above Rs. 4.5 lakhs. However, the courses that get this benefit are restricted. To get a benefit under this section, you need to provide a certificate from the State Government that proves your income levels.

• Education loan for foreign education:
This loan is given out to students who are looking at studying abroad. The bank may finance either the whole course fee or part of the course fee.

An education loan is also called a student loan.  Student loans usually do not start with repayment immediately after disbursement. These loans begin repayment a few months after the completion of the course. This period is known as loan moratorium.

One of the advantages of taking an education loan is that there is a deduction available under the Income Tax Act. As per the Income Tax Act of 1961, interest on loan taken for education is allowed as a deduction. There are no restrictions on the amount of deduction that you can claim. It can only be claimed by the person paying interest for himself, spouse, or children up to 8 years.

To avail of the education loan, the student needs to be enrolled, i.e. accepted into the course. The acceptance letter is an important document that banks require. Banks also insist on collaterals for the loan. Generally, the collateral for a loan for foreign education is higher, since the loan amount is high.

A study loan is one of the best options to fund higher education, especially for education abroad.