What is a two wheeler loan and how to apply it?

Two wheeler loans are those that can be borrowed from the banks or financial institutions in order to procure a two wheeler vehicle. Such a loan can be available by people only when one wants to buy a two wheeler vehicle for personal usage. These loans are easy to get with flexible and fixed interest rates which again might vary from one bank to another depending on the base rate of these banks . The repayment starts once the loan is disbursed which happens in around a week from the loan sanction date.

The main benefits of two wheeler loan is that they are affordable, they have a speedy approval procedure and are often times convenient  and hassle free. Some banks give out special discounts to those who have their accounts in the bank the loan is taken from.

The repayment options are variable and may range fr5om 1 to 4 years and sometimes these are even available at the point of purchase. The repayment can be done through post dated cheques, standing instructions and easy EMI’s.

You have to either be a salaried individual or own a self-business , the age criteria varies from bank to bank. Sometimes there is a clause with banks that the borrower has to be working for at least one year.

For the loan the documents required are your

Proof of identity: Any one of the passport copy / a photo credit card- front and reverse/ voters ID card/ Driving license/Pan card / Copy of company ID/Ration card

Address proof: Any one of the Passport copy a photo credit card- front and reverse/ voters ID card/ Driving license/Pan card / Sale deed/ property purchase agreement/ credit card billing statement (latest)LIC policy/ Letter of company or company provided accommodation/ Address proof in the same name of the applicant’s spouse or parent’s name is acceptable.

Income proof – for salaried individuals: latest salary slip for government employees; if salary slip isn’t available only salary certificate is accepted with deductions.  For Partnership/ Proprietary firms & Pvt. Ltd. Co's- Salary Certificate to be accepted with the following mitigants: Salary Certificate to clearly state the deductions, Name & Designation of the authorised signatory.

For Self-Employed: Copy of the latest I. T. return.

What are the interest rates and charges for the loan

The loan processing fees are maximum 3% of the loan amount, the documentation charges are maximum 3% of the loan amount. There are prepayment charges as well that vary from every bank, in case of late payment of the EMI the banks also charge late fee penalty that varies from bank to bank. Inc as the cheque bounces there is again a penalty to be paid but these charges vary from bank to bank.

What is a recurring deposit calculator and how to use it?

Recurring deposits are the mostly procured investment schemes in India. A recurring deposit is very popular amongst the salaried class people because it is affordable and easy to procure and art the same time it also doesn’t require a huge deposit amount.  And most of the banks in India irrespective of being private or public offer recurring deposit accounts.

And at name suggests, a recurring deposit calculator is utilised in order to get the maturity value of the recurring deposit. With the help of a simple formula the interest on a recurring deposit account can be calculated obviously with the help of a recurring deposit calculator. Having said  that there are some very important things that the customer should pay attention to before he/she calculated the interest.

Customers must be sure to take each month’s installment as a separate deposit and that compounding takes place at the very end of a financial quarter and not at the end of every month.  A different amount of interest will be earned at the end of every month. The amount that one gets during the maturity of the recurring deposit is the total of the enhanced value or every month’s deposit.

What is the formula for calculating the recurring deposit?

The compound interest on the recurring deposit amount is added only one the first quarter is completed. This si how the financial quarter in a year is determined:

April to June is the first quarter

July to September is the second quarter

October to December is the third quarter

January to March is the fourth quarter

Compounding happens after every quarter which is why until then a simple interest calculation will take place . This si the simple interest formula

I = Prt

I means interest

P means principal

R means annual rate of interest applicable

T is te tenure of the time period of the scheme

He below is the formula given by the Indian banks association to calculate recurring deposit it ne4rest

M=R [(1+i) n-1]

1-(1+i)-?

Where M means Maturity value

R means monthly installment

I means rate of interest divided by 400

And n means number of quarters

Therefore with the above formula if a person deposits Rs 1000 in January, using simple and compound interest formulas he/she will have Rs 12,801.90 as maturity amount at the year end at 12% rate of interest.

How do you calculate compound interest on a recurring deposit?

As has been already mentioned, compound interest  is calculated in every quarter and then is added up to the final amount that the customer gets, the formula is:

A = P (1 + r/n) ^ nt
A is the final amount procured
P is the principal amount
R is yearly interest rate
N is the number of times the interest has been compounded each year
T is the tenure of the recurring deposit scheme

Types of life Insurance policies

Here are the types of life insurance policies. Every single life insurance plan and policy is built around these basic insurance policies and permutations and combinations of these.

Term insurance policy

This is now available as E-term life insurance policy is a complete risk cover policy that covers anyone who is insured for a specific time period. In this the sum that is assured is paid off to the beneficiaries or the family members if in case the policy holder dies within the policy term. For example, if in case a person makes a term life insurance policy of Rs 20 lakhs for a period of 10 years and he expires within that period, the money assured i.e. the entire Rs 20 lakhs is given to his family and if he survives, the premium paid isn’t returned. The only advantage is that the premiums paid are tax-free and just because this insurance is meant to provide a 100 percent risk covers the premiums too are very low  and these insurance plans don't  have any additional or hidden charges.

Whole life insurance policy

A whole life policy covers the policyholders against death, throughout his/her life term. The validity of this kind of life insurance policy is undefined and therefore the life cover is cherished by the individual through his/her life. In this kind of insurance policy anyone who holds a whole life insurance policy pays the premiums and on his death the entire corpus is paid to the family. Until any untoward event happens in the life of the individual the policy does not expire and what’s more the premiums that are paid towards the policy are exempted from tax.

Endowment policy

The most sought after life insurance policies that are available in the market. When a person purchases an endowment life insurance policy, they benefit in two ways. The beneficiary gets the sum assured in case of death of the policyholder during the tenure of the plan and in case the policy holder survives the tenure of the endowment policy plan the premiums that he paid for the policy are given back to him with other investment returns and benefits more like a bonus. Along with the normal endowment policy there are other options like marriage endowment and education endowment  plans as well.

Money back policies

This is another favourite life insurance policy for the main reason that this policy gives  periodic payments during the term of the policy. Actually, the amounts that are paid during the periodic intervals are the portion of the sum assured. If the policy holder survives the term, he gets the balance sum assured. The beneficiaries receive the entire sum assured in case the policyholder dies during the term. The premiums paid for this money back life insurance too is exempted from tax.

What are the basic types of insurance policies available to us?

Term insurance:

These are the most elementary form of life insurance. Term insurances provide life cover with no savings or profit component. The term insurance plan is the cheapest of all other insurance plans out there because the insurance premiums too are very cheap when compared to the other kinds of insurances out in the market. The lower insurance premiums are because of the pure life coer that are given by the online term insurances. The fixed sum that is assured is given to the beneficiaries if the policy holder expires during the policy term however if the death of the insurance policy holder doesn’t happen, no money is given to the beneficiaries.

Endowment plans

The endowment plans are very different from the term insurance particularly in the maturity benefit aspect. Term plan pays out the maturity amount along with profits earned only on the occasssion of the death pf the insurance policy holder and Endowment plans pay put the sum insured in the case of the survival or the death of the policy holder. While this definitely can be taken as a benefit, the down idea of it is that these endowment plans have a greater premium, higher fees and expenses. The profits are the premiums that we invested in the asset markets as equities and debts.

Unit link insurance plans

The unit link insurance plan is a little tweak on the conventional term insurance, they pay out the assured sum or the investment portfolio only if it is higher on maturity. The performance of the unit link insurance plans are linked to the markets. The insurance policy holders can select the allocation to the stock and debts. The value of the investment portfolio happens through the net asset value.

Whole life policy

Such types of insurance policy covers the insurance holder’s whole life. The main benefit of the whole life insurance policy as the name suggest is that the value of the cover is undefined and therefore the benefit of the insurance is enjoyed by the insurance policy holder for his entire life. The policy holder pays premiums until his death and on the occasion of his death the corpus is paid to his beneficiaries or his family. The expiration of the policy happens only in case of an eventuality because there is no pre-defined tenure of the policy.

Money back policy

This kind of insurance policy is a variant of the endowment policy. It gives out periodic payment over the entire term of the policy. A part of the assured sum is paid out at regular intervals. If the policy holder lives through out the, he is entitled to the balance sum assured, in the occasion of the death of the policy holder the beneficiary gets the complete sum assured.

Do you know what a two wheeler loan EMI calculator is?

India has the highest numbers of two wheeler in the world! Yes, it is a fact! The reason behind this is the economics and the logistics of the country. For the most of the citizens of the country the most convenient way of travelling is a scooter or a bike. Biking has become a huge business in the nation. In the last few years the nation saw the advent of many international bike brands in the country. There are so many that it is no almost a clutter and one doesn’t know which one to pick. There are so many choices on the platter that it becomes difficult to pick one. However not everyone has the finance to independently own one and hence it makes absolute sense to go in for a loan and own a two wheeler for yourself. Today almost all banks of the country offer two wheeler loans.

However before picking up a bank for a two wheeler loan, it is better to weigh the pros and cons of a particular lender. Because of the rise in the trend of online banking g today picking one lender who has good financial terms is not a difficult task. Banking has become far more convenient and easy and decisions are on a roll. The banking procedures have become extremely transparent.  And for a lot more convenience and ease, some of the bank websites and other financial institutional websites offer the option of a Two wheeler loan EMI calculator in which you can actually calculate how much EMI you have to pay on the loan amount that has been sanctioned for your two-wheeler.

Did you know what an Two wheeler EMI calculator is?

The two wheeler loan EMI calculator is an online tool that is made to calculate the EMI amount that has to be paid by you on the loan amount that has been sanctioned to you for your two-wheeler.  You require to put in the details of your loan and post which you will see the monthly EMI that has to be paid by you on loan amount.

It doesn’t just end there, along with that  you will also get a lot of additional information that will help you zero in on the most appropriate terms. Then once you know the EMI you have to pay every month, it will be easy for you to fix your budget keeping that in mind as well.

Some of the main upper hand of using a two wheeler EMI calculator

Using an two wheeler EMI calculator lets you know the EMI value, it helps you know more about the terms and choose the best suited for you, it also helps you in comparing the rates of other Two wheeler loans that are being provided by other banks or other financial institutions, it helps you in negotiation of the rates of interest, it also provides a break up of costs involved int eh loan such as the charges and the processing fees, it also provides the EMI amortization table  that provides a monthly break up of the principal amount and the interest charges levied.

Three main types of bank loans available in India

There are multifarious loans that are available for people in India. From buying houses to setting up a personal business all can be done wit the aid of loans that are available in the market today.

Let us have a look at the different kinds of loans that are available today

Home loans: home loans are availed by people who want to buy homes or make any construction or perhaps renovation and extension of their houses, apartments or flats. They can also be made use of while trying to procure land or payment of stamp duties. The home loans available in India have fixed and at times adjustable rate of Interest and the payment terms are fixed and adjustable too. There are various kinds of home loans as well. They are well categorised into the following groups.

1. Home purchase loans
2. Home construction loan
3. Land purchase loans
4. Home extension loan
5. Home renovation loan
6. Loan against property
7. NRI home loan

Personal loan

The individual who wants to procure a personal loan from a bank or a financial institution has to first get his credentials verified, his credit ratings are then checked. All of this is done based on the profession they are in and what is the source of their income and whether they have a regular income or not. The personal loan can be utilised for any personal purpose. It might be used for a wedding, personal expenditure, vacation spends so on and so forth. The personal loan requires no collateral and security. This is another reason why the interest rates of the personal loans are pretty high because of the stakes. The loan processing fees amounts to two percent of the total loan amount. The disbursement takes about a week from the date of the application of the personal loan and the interest starts off only when the disbursement of the loan has been done.

Educational loan

Education loan

Educational loans are mostly utilised by students in order to fund their education. This loan is generally availed for higher education. This loan helps the students with their fees of the institution that includes, examination and library fees;travel expenses for abroad, costs of books and equipment that are required. This loan also includes any insurance for the student. The loan also includes additional expenses of thesis, project work, educational tours so on and so forth. The terms of the educational loans are different with different banks. For studying in India Rs 10 lakh is the average and for studying abroad Rs 20 lakh is the average. For an amount of around Rs 4 lakh the parents should be the joint borrowers and for an amount that is above that a tangible asset security is required.  The repayment begins between six months and two years of the completion of the course.

Car loan

It is much easier to avail a car or a vehicle loan when compared to the other loans in the market They involve lesser paperwork and around a week’s time to be processed and getting the clearance.  The interest rates vary from various banks and that depends on their base rate,. Repayment is the same old EMI’s and it also has early repayment options.

Did you know these four facts about inactive savings bank accounts?

This comes to pass exactly during your no bank transaction period that extends for more than 12 months. When there is no transaction done in the bank account, the account automatically changes into an inactive account. The bank then waits for another period of twelve months for the customer to begin another transaction on the same savings bank account that have already been classified as inactive, but still if the customer fails to make a transaction on the account, the bank account then becomes dormant.

One thing worth noting is that the word ‘transaction’ in the banking lingo pertains to any business dealing that has been started by the bank account holder or the bank customer these transactions might be a debit card transaction, a money deposit transaction or a cash withdrawal transaction or internet banking. However the transactions that are initiated by the banks for instance, if any extra charge or fee is levied on your savings bank account, they are not taken into consideration while categorising your account into an inactive or dormant account. But this doesn’t mean that in a fixed deposit account any amount of credit that is earned by the customer is not regarded, it is and also lets you keep your bank account active.

What is the main reason behind banks to categories saving bank accounts into dormant or inactive ones?

With the amount of fraud and fraudsters increasing everyday,the banks too, wants to do away with the risks of any untoward happening in your savings bank account. Once they categories the account as inactive or dormant, the banks alert their staff about a likely contigency that might materialise with your savings bank account and before any fresh transactions can happen in the same bank accounts, they make sure that a thorough diligence check is done.

There are limitations on inactive and dormant accounts – What are they?

There are various limitations put by the banks on inactive or dormant accounts and yet these limitations differ in every individual bank. There are some banks who put a lot of check on phone banking and internet banking as well, there are some banks that put a lot of constraints on cheque transactions as well. An example would be HDFC bank. It bars internet transactions, ATM or Debit card transactions and phone banking as well on dormant saving accounts. HSBC being a global bank, in India it doesn’t allow internet banking, phone banking, issuing and renewal of ATM or Debit card, cheque book requests, cheque transactions, request to change the address and telephone numbers so on and so forth.

Did you want to know the procedure to reactivate your dormant or inactive bank account?

It is a cakewalk! To activate your inactive savings bank account, you just have to make a cash deposit in your bank account. To reactivate a dormant account you have to submit a written request to the bank branch and its authorities. Please keep in mind that the bank cannot levy any charges on you to reactivate your savings account.