Benefits of buying two-wheeler insurance

A two-wheeler is a particular part of the rider's life. Given the often-poor road conditions in India, and the number of risky drivers, there is a high chance of any damage to the two-wheeler. One of the ways to protect the two-wheeler and to prolong its life is to cover it with two-wheeler insurance.

Two-wheeler insurance is insurance that covers the risk of damage to the vehicle, as well as the loss to the rider due to any unforeseen event. It usually includes the risk of injury in case of:

• Accidents
• Bike theft
• Natural or human-made disasters

Two-wheeler insurance also covers third party liability, which is the risk that the rider of the two-wheeler will cause any damage to a third party. In India, having a two-wheeler insurance policy is mandatory. 

There are two types of two-wheeler insurance:

• A comprehensive policy that covers wear and tear to the vehicle and riders
• Third party liability insurance

Some insurers provide both risks of damage and third-party liability in one insurance policy. A two-wheeler insurance policy is a general insurance policy which means it lapses after one year and has to be renewed.

Benefits of buying a two-wheeler insurance policy:

1. Covers the cost of damage:
A two-wheeler insurance policy covers the cost of damage due to theft, natural disasters, accidents, human-made disasters. This reduces the financial hit to the insured.

2. Cashless claim service:
Like health insurance policies, two-wheeler insurance companies have tie-ups with garages. Getting your two-wheeler repaired in such garages will lead to a cashless claim service. The insurance company will directly pay the bill to the garage which reduces any hassles that the insured would face. However, the insured has to bear any expenses to get the damaged two-wheeler to the garage.

3. No claim bonus:
In case the insured does not raise any claim in the previous year, the insurer will reward him with a no claim bonus. This no claim bonus can be in the form of an increase in the sum assured any additional coverage or a discount in premium. However, this bonus is at the discretion of the insurance company. It is possible to transfer the existing no claim bonus from one insurance policy to the next insurance policy on renewal.

4. Convenient online renewal:
Two-Wheeler insurance can be conveniently renewed online either through an insurance aggregator or through the insurance company's website. Before buying two-wheeler insurance online, it is best to do research and find out the best plan that suits you. Since two-wheeler insurance is general insurance, the policy needs to be renewed every year which means switching from one insurer to the other is very easy.

5. Discounts to customers:
Insurers extend cuts to customers who have already purchased other types of insurance from them. They also provide other add ones and other benefits for good customers.

What are different types of insurance?

We all know that life is unpredictable. An emergency can arise at any point, and such a crisis can lead to losses, not all of which may be monetary. One of the ways of mitigating this is insurance.

The main goal of taking insurance is to protect us from different risks and losses. Getting adequate coverage in various aspects is quite important to ensure protection in all areas of life.

When it comes to an insurance policy, it is not just life insurance that we need to focus on. There are different types of insurance, which is essential to ensure we have all round protection.

Here are the different types of insurance policy:

1. Life insurance:
A life insurance policy covers the risk of the policyholder's death. The sum assured is paid on the death of the policyholder or in some cases on the maturity of the policy. Life insurance policies can also be taken to fund a child's education. Some plans include critical illness, accident, disability riders which provide additional coverage in case of such scenarios.

2. Health insurance:
In a health insurance policy, the insured is protected against the cost of hospitalisation. Depending on the policy coverage, it may include pre-hospitalization, post hospitalisation expenses and other treatment-related expenses. This can be taken for the entire family at once as well. Health insurance can either be cashless where bills are settled directly with the hospital, or reimburse the policyholder against submitted invoices.

3. Motor insurance:
Motor insurance covers the risk of theft, damage, or accident to a motor car, the driver, and the passengers. A third party liability coverage also covers against the risk of loss or damage caused to third parties by the driver of the vehicle.

4. Two wheeler insurance:
A two-wheeler insurance policy is similar to a motor insurance policy, except it covers against loss, damage, theft to a two-wheeler. Both motor and two-wheeler insurance policies include repairs at network garages.

5. Travel insurance:
This insurance policy covers a whole range of risks that a traveller may incur while travelling either domestically or abroad. Travel insurance is mandatory while travelling abroad.

6. Home insurance:
A home insurance policy covers the risk of burglary, damage to the house due to natural disasters, theft, and other threats. It can either be a comprehensive home insurance policy or include only some of the risks.

With the advent of insurance aggregators and the digital age, it is possible to get online insurance within a matter of minutes. In some cases, online coverage may turn out to be cheaper than the protection offered by agents. Checking different aggregators for the rates and terms is the best way of choosing the right insurance.

What is a gold loan?

A gold loan has become a trendy way for people to raise funds for their requirements, especially in smaller towns and cities. A gold loan is a type of personal loan where the gold acts as collateral for the loan. This loan is given out for a short duration. However, unlike personal loans, gold loans can be structured so that the interest is paid during the tenure and principal is repaid at the end of the mandate. 

Features of a gold loan:

• The amount of the loan depends on the value of the gold. Each lender generally has in house verification facilities to arrive at the value of the gold. The cost depends on the market prices for gold. Lenders verify the weight and the purity of the gold typically.
• Generally, most lenders have a loan to value ratio (LTV) of around 65% to 75% for a loan against gold. This means 65% to 75% of the value of the gold will be given out as a loan. Some lenders may offer a higher LTV but charge a higher rate of interest.
• The gold has to be hypothecated, which means it will be kept under lock and key by the lender.
• The lender usually appraises the gold in front of the customer. It is essential to ensure this process happens in front of the customer to provide complete transparency.
• Like a personal loan, a loan against gold does not have any conditions on the end use of funds. Also, a gold loan can be prepaid before the due date without incurring any charges for the same.
• It is important to check the repayment schedule and the charges before taking the gold loan. Each gold loan lender has a different repayment schedule, which is why it is best to check the type of repayment, i.e. principal at the end of the tenure with regular interest payments or regular interest and principal payments.
• A gold loan is a secured loan. This means in case of default; the lender can dispose of the gold to recover the unpaid interest and principal amount. However, this disposal will happen only after giving sufficient notice to the defaulting borrower. 
• The gold loan interest rate varies from lender to lender, but an indicative range for gold loans is between 9.5% to 18.5% depending on the lender. Lenders may charge a higher rate of interest for borrowers who want a higher LTV.
• To take a gold loan, lenders only require basic KYC documents such as identity proof and address proof for availing the gold loan.

A gold loan is an excellent way to raise funds quickly, especially in case of emergencies. Lenders disburse loans rapidly which makes it especially well suited when funds are required in a hurry.

Two-wheeler loan: How to use EMI calculator?

Buying a two-wheeler can get quite expensive depending on the model and the company. However, with several banks and financial institutions giving out two-wheeler loans, it is easy to take a loan to finance the purchase of your dream two-wheeler.

However, before taking a two wheeler loan, it is best to use a two-wheeler loan EMI calculator to find out the financial commitment. An EMI calculator tells you the monthly instalment amount for your loan of choice. A two-wheeler loan eligibility calculator will also show you the amount of loan you are eligible for. Most lenders do not finance the entire amount of the vehicle. The LTV or loan to value ratio for two-wheeler loans is generally around 70% to 80% of the value of the car. This means you will need to finance the remaining out of your savings. The two-wheeler loan eligibility calculator will calculate the EMI based on the amount of loan you are eligible for.

The two wheeler 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 investment in years

Some two wheeler loan EMI calculators calculate the LTV and accordingly the EMI whereas others ask you to input the principal amount and calculate the EMI. However, remember that the bank or financial institution will not fund the entire loan amount. So, the adjust the principal amount accordingly.

How to use a two-wheeler loan EMI calculator?

1. The first step is to decide the company and the model of the two-wheeler you are looking to purchase. The price of the two-wheeler will depend on the company and the model. The EMI calculator will require the on road price of the model on which the LTV (loan to value) will be decided.

2. Input the details that the two-wheeler loan EMI calculator requires. Some of the information that these calculator needs are:
• Principal outstanding
• Rate of interest
• City of residence
• Date of birth
• Type of residence, i.e. rented or owned
• Name of company
• Model number
• On road price
• Type of employment
• Annual income
• Whether you have an account with the bank
• Any other information

3. Submit the information. The calculator will decide the principal amount and accordingly calculate the EMI. Depending on the EMI from different lenders, you can determine the lender who is giving you the best deal on your two-wheeler loan.

How to use an EMI calculator?

An EMI calculator is an excellent tool to help find out the monthly instalment amount and the total interest paid on loan. There are EMI calculators for different types of loans:

• Car loans
• Credit card loans
• Personal loans
• Home loans
• Two-wheeler loans

EMI or equated monthly instalment is a sum that comprises of both interest payment for outstanding principal and principal repayment. The EMI amount remains the same for the entire loan duration unless the borrower opts for schemes that restructure the EMI amount based on the tenure.

The easiest way to find out the EMI for your loan is to use a loan EMI calculator. A loan EMI calculator will help you find out the monthly instalment amount and help you plan your budget. Most calculators allow you to adjust all the variables, which enables you to arrive at the EMI amount for different combinations of principal, interest, and loan tenure.

An EMI calculator requires three inputs:

• Principal amount
• Rate of interest
• Loan repayment tenure

For some types of loans such as two-wheeler loans or car loans that are dependent on the value of the item purchased, the EMI calculator also requires additional details, for example, the brand or model of the car/two-wheeler, the cost etc. In such calculators, the principal

The 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

How to use an EMI calculator:

1. Input the three details: principal amount, the rate of interest, loan repayment tenure
2. If you're applying for consumer durable loan or a vehicle purchase loan, input details such as the company and the model number along with the showroom cost of the product.
3. Press calculate
4. The EMI calculator will give you the monthly EMI. Some calculators also provide a breakup of the EMI into principal repayment and interest payment. This helps you calculate the total interest paid throughout the loan tenure.

For some types of loans, there is a loan eligibility calculator. This calculates your eligibility based on your loan requirements as well as your income. Based on your eligibility, the calculator fixes a principal and calculates the EMI. Using such calculators helps you find out the amount of loan you can avail as well as the fixed monthly commitment. Planning better for your loan can help you get the right loan from the right lender.

Mobile banking: 5 reasons to use your phone for banking

With the advent of digital banking, one trend that has caught on is the use of mobile phones for banking. Each bank now has their mobile banking application which provides all the facilities that are available on Net Banking. This has enabled people to bank on their mobile phones at any time of the day without even needing to resort to net banking or visiting their branch.

 Indian mobile banking includes a whole range of services:

• Checking account balance
• Paying utility and other bills
• Transferring funds using NEFT, UPI, IMPS, RTGS
• Opening a fixed deposit
• Checking fixed deposit balance
• Reviewing historical statements, etc.

These mobile banking services form the bulk of the facilities that people usually want to get done with

Here are 5 reasons to use your phone for banking:

1. Convenience:
The first and foremost reason for using mobile banking services is the convenience. There is no need to visit the bank branch for updating your passbook when you can access your account statement in a matter of a few clicks. With mobile banking, there is no need to even log in to your net banking portal. Most of the services available on net banking are also available on mobile banking. This makes it highly convenient.

2. One-click payments:
Whether it is utility bill payments, credit card payments, or third-party transfers, the whole process can be done in a matter of a few clicks. This has highly simplified banking. There is no need to depend on bank hours since these transfers can be done in real time by using IMPS or the bank's UPI app.

3. Secure banking:
Most banks have security procedures in place for mobile banking. This ensures using the app is safe. To use the app, the customer needs to login using either an ID or the customer care number and the password. Each transaction is verified before being executed. These built-in safeguards improve the security of mobile banking.

4. Offers and discounts:
To make mobile banking more attractive to customers, banks roll out various offers and discounts. Using mobile banking can help you take advantage of these different offers.

5. A wide range of services:
Mobile banking is so efficient because of the wide range of services that it offers to its customers. Now, it is even possible to open a fixed deposit using mobile banking services. With user-friendly interfaces, mobile banking is fast replacing the need for human interaction in a bank branch. Mobile banking ensures the customer has ultimate convenience and banking at his fingertips.

How to use a recurring deposit calculator?

A recurring deposit is a type of deposit where a fixed instalment amount is invested every month, the catch being all these instalments mature at the same time. It is like opening a new fixed deposit every month with each fixed deposit having the same maturity date. Recurring deposit means one deposits fixed sum of money at a recurring period till maturity.

A recurring deposit is an excellent way of saving small sums of money for a particular purpose. Since all the funds mature at the same time, it can be used to collect funds for a specific purpose, especially for people who can’t take out too many funds all at once to invest in a fixed deposit.

One need not deposit in an RD scheme to find out the final maturity value. Most of the banking operations have completely shifted online which makes it very convenient to find out the rates of interest charged by different banks on their recurring deposits. Using a recurring deposit calculator, it is possible to find out the maturity value of the recurring deposit, and consequently, one can earn the interest on the recurring deposit.

Using an RD calculator is very simple. It requires a few inputs:

• Instalment amount:
This instalment amount can be any amount higher than Rs. 500. Most lenders set their minimum deposit amount at Rs. 500, however, it is advisable to recheck this amount with the bank. The recurring deposit instalment remains fixed for the entire duration of the deposit, so make sure that the instalment amount is something that can be easily set aside every month.

• The term of the recurring deposit:
Banks offer several different options for recurring deposits ranging from 6 months to 120 months. The rate of interest depends on the tenure of the recurring deposit.

• Date of commencement of deposit:
This date means from when the recurring deposit will start. The maturity date of the recurring deposit depends on when the deposit will start.

• Whether the investor is a senior citizen or not:
Senior citizens earn higher interest as compared to other depositors. Most lenders offer 0.5% higher interest on recurring deposits to senior citizens.

Steps to use an RD interest calculator:

• Input the details that a standard RD calculator requires.
• Submit the details
• The calculator will calculate the maturity value and also the interest earned on the recurring deposit.

An RD interest calculator helps to find out which recurring deposit combination can give maximum yield. This can help you plan your investments in the best possible way.