Debit card: features and benefits

A debit card is a type of card that is connected to the holder’s bank account. This means whatever transaction is done with the debit card, the amount directly and instantly gets debited from the bank account. A debit card also functions as an ATM card. It can be used to withdraw funds from an ATM. A debit card is a very useful card to have since it is an instant way to pay for your purchases. However, since the amount directly gets debited from the bank account, it is risky in case it is stolen.

Features of a Debit card:

1. Debit cards allows you access to your savings account. You have no limit on the amount you spend. However, it is restricted to the balance in your savings account.
2. An international debit card can be used on international websites to purchase different items. For example, if you want to buy any subscriptions or purchase software, you can safely use your international debit card.
3. A debit card also functions as an ATM card and can be used to withdraw funds from an ATM. You can withdraw funds from both your bank and an ATM of a different bank.
4. You can use your online debit card for purchases online and avail cashback offers. Cashback offers accumulate on your card and are credited to your savings bank account.
5. Debit cards come with chip encryption and PIN based authorization.
6. Banks allow you to set your own daily shopping limits on the debit card.


Benefits of a Debit card:

1. A debit card can only be used till the time there is balance in the savings account. This can effectively be used to control and check spending.
2. Debit cards are secure since they have PIN based authorization for transactions.
3. International debit cards can be used on all types of websites, making it a boon to have.
4. Debit card is a replacement for cash. There is no need to carry cash on hand since the debit card can be used to swipe at POS terminals and can also be used to withdraw funds.
5. Many banks offer free accident insurance and travel insurance coverage for debit cards. Once you get your debit card, ensure you check with your bank about the insurance coverage, the inclusions and exclusions.
6. Some special debit cards give offers on online shopping up to a particular limit while some cards help you accumulate airline miles.

Car Insurance: 5 things you must know

We take life insurance to protect our family financially. We take health insurance to protect ourselves from the rising medical costs. We even take travel insurance to cover the risks of travel. But what about insurance to protect things we own, such as our car? Our vehicles face a lot of risk of loss or damage in the form of accidents, thefts, break ins or other damages. To protect against these risks, car owners are generally advised to take car insurance.

Car insurance is a type of insurance that covers a motor vehicle against different losses. Getting vehicle insurance is mandatory and the car owner can be fined for not getting car insurance.

Here are 5 things you need to know about car insurance:

1. Yearly renewal:
Vehicle insurance is a type of general insurance. This means the policy duration is one year from the date of purchase. It needs to be renewed every year. It also means that the car owner can change the insurer from one year to the other. However, insurance companies give benefits to car owners who have been their customers in the form of no claim bonus.

2. Value of insurance policy:
The value of the insurance policy depends on the declared value of the car. This is taken as the ex showroom price. However, the insured value does not remain the same every year. Since the value of the car reduces year to year because of depreciation, the car insurance policy reflects the reduced value of the car every time it is renewed. The value of the car also includes the value of different accessories.

3. Coverage:
Vehicle insurance typically covers different losses and damages such as:

• Loss or damage due to natural calamities such as earthquake, floods, lightning, hurricane, cyclone, heavy rains etc.
• Loss or damage due to man made disasters such as theft, burglary, damage to parts of the car, riots, strikes, terror attacks
• Personal accident coverage which covers any damage to the driver of the vehicle
• Third party liability which covers any claims that a third party may make against the driver of the vehicle for any damage caused to the third party. These covers are usually more expensive and separate from regular car insurance.
• Towing fee waiver in case of accidents when the car needs to be towed

4. Exclusions:
Even though car insurance covers a wide range of losses, there are some exclusions to this policy

• Any loss or damage caused when the driver is driving under the influence of alcohol or any drugs
• Any loss or damage caused to the vehicle when it is driven by someone who is not insured i.e if any third party drives the car and causes damage, it is not covered under vehicle insurance
• Deliberate and purposeful damage to the car
• Any loss caused as a consequence of war
• Any breakdowns or mechanical faults are not covered under car insurance
• Wear and tear of the vehicle associated with the passage of time

5. Availability:
Car insurance can be purchased offline through agents or it can be purchased online. It is very convenient to buy car insurance online through the insurance company’s website or through different insurance aggregators.

Are you eligible for a business loan?

Business loan is a type of loan given out to meet the needs of a business. These loans may be given out to self employed businessmen, self employed professionals, companies, partnership firms, and any other type of business entity. There are different types of business loans which are used for specific needs of the business.

One important characteristic of business loan is that it is an unsecured loan. It can be used for any business requirement without any pre-existing conditions from the lender. However, some business loan such as those to acquire capital assets may be secured against the asset being purchased. They may also be specific equipment finance loans.

The first step to taking a bank loan for business is to check the eligibility. Most lenders clearly display their eligibility criteria for a business loan on their website. If you meet these eligibility criteria, you can apply for a business loan.

Here are the different business loan eligibility criteria:

1. Age of the applicant:
Most lenders specify the minimum and maximum age of the bank loan for business applicant. In most cases, the minimum age is 21 years and the maximum age is 65 years. The loan applicant should not cross 65 years of age when the loan is outstanding.

2. Turnover of the business:
Each lender has their own minimum turnover guidelines. The business must meet the minimum turnover guidelines to become eligible for a business loan. However, it is to be noted that not all lenders insist on a minimum turnover requirement.

3. Number of years of operation:
A lender may specify a certain minimum number of years that the business has to be in operation to become eligible for a business loan. This may range from 2 years to 5 years depending on the lender.

4. Minimum income requirements:
Lenders also look at the profit that the business has earned over the past 3 to 5 years to ensure that the business is viable. A bank loan for business is only given out to viable businesses that show a profit and have a positive net worth. This is to ensure that the loan will be repaid.

5. City of operation:
Some lenders may lend to businesses based in certain locations. Depending on the location, the loan given may differ. However, this depends from lender to lender.

If you meet the business loan eligibility, you can fill out the loan application form either online or offline and apply for a business loan.

All you need to know about two wheeler insurance

One of the most important things to do when you purchase a two wheeler is to get insurance covering the two wheeler from various risks. Two wheeler insurance is insurance that covers the risk of loss and damage to a two wheeler.

There are two types of two wheeler insurance:

• Comprehensive cover that covers all different types of losses
• Third party liability policies.

A comprehensive two wheeler insurance policy covers the loss or damage to the two wheeler such as:

• Theft or burglary
• Damage to the two wheeler due to natural calamities such as flood, earthquake, cyclone, hurricane, fires, lightning etc.
• Damage to the two wheeler due to man made calamities such as riots, terrorist attacks etc.
• Any damage during travel
• Damage to the driver during travel

A liability policy covers the risk that a third party may sue the driver for any damage in an accident.
It is possible to take either a third party liability policy or a comprehensive policy that covers all types of risks. Insurance companies provide different two wheeler insurance policy that covers these different risks.

However, a two wheeler insurance policy does not cover risks of damage due to war, nuclear attacks, depreciation or natural wear and tear etc. It also does not cover any damage in case the person driving the vehicle is not the driver or policyholder. If the driver does not have a valid license or was driving under influence, then the insurance policy also does not cover any damage.

How much premium should be paid?

The premium for a two wheeler insurance policy depends on the insured value of the vehicle. This value is calculated as the ex showroom price of the two wheeler. However, this value reduces every year because of natural wear and tear of the vehicle. This natural wear and tear or depreciation reduces the value of the vehicle every year.

The premium also depends on a few other factors such as:

• Model of the two wheeler
• Age of the two wheeler
• Place of registration (A vehiche in a remote or hilly area may have a higher premium)
• No claim bonus

Insurance companies give no claim bonus to policyholders who do not make any claims in the previous year. However, this is only given to customers who renew their policy and not to new customers who have not made any prior claims with other insurers.

Two wheeler insurance online:

It is very convenient to buy and renew a two wheeler insurance policy online. Most of the insurance companies have their policies online on their website and these policies are also available at the different insurance aggregator websites.

Insurance companies may give discounts to policyholders who are regular and repetitive customers and to those who buy two wheeler insurance online. Since buying two wheeler insurance is mandatory in India, it is better to buy a policy online to ensure your two wheeler is covered against risks and damages.

5 things you must know about three wheeler loans

Three wheelers are a common mode of transport in many cities. Seeing these black and yellow three wheelers or autos in Mumbai or yellow and green coloured autos in other metros is a very common sight. Just as banks give loans to acquire two wheelers and cars, they also lend finance to acquire three wheelers.

A person wanting to buy a three wheeler can get a 3 wheeler loan from different banks. Here are some things you need to know about three wheeler finance.

1. Loan amount:
Some lenders sanction the loan amount up to 90% of the value of the vehicle. Some non banking financial companies have different loan to value ratios for different modles of three wheelers. It is best to check the finance that a lender will give before applying for the loan.

2. Documents required:

The documents required for three wheeler loan are:

• Proof of identity (PAN card, Passport, Voter ID, Drivers license, Aadhar card, Self affidavit with photograph of customer and signature which has been notarised, Photocopy of bank passbook with name of customer and address which has been attested by the bank)
• Address proof (Passport, Voter ID, Drivers License, Aadhar Card, Electricity bill, Telephone bill, Gas bill, Ration card, Property tax documents, Home loan documents)
• Signature proof (Drivers License, PAN card, Passport)
• Income proof (Income tax returns for the previous 3 years, bank account statements for the past 6 months)
• Cancelled cheques
• Passport size photographs

3. Interest rate, other charges and flexible repayment tenure:
One important thing to note is that the repayment tenure of a 3 wheeler loan ranges between 12 months to 48 months. Depending on the financial situation of the customer, the repayment period can be decided. Some lenders do not allow any prepayment while others have prepayment charges that are specified. It is best to get these issues clarified before the loan is sanctioned.

The interest rate on such loans depends on the three wheeler that is purchased and the geography of the customer. Most non banking financial companies that offer three wheeler finance make customized loan agreements for the loan applicant. Lenders charge for overdue payments, loan processing fees and other charges just like other standard loans. It is important to get these charges clarified from the lender as well.

4. Eligibility:
The three wheeler loan is given to people between the age of 21 years to 60 years depending on the lender. These loans are also given to Indian citizens and businesses.

5. Insurance:
Most lenders insist on taking comprehensive auto insurance while the loan is being serviced. Only third party liability insurance is not enough.

What are the eligibility criteria for a home loan?

When it comes to buying homes, a home loan is the loan of choice for people. A home loan is a long term secured loan. What this means is that the property purchased is mortgaged to the bank. With many banks, financial institutions, and non banking financial companies giving out home loans in India, it has become easier than ever to access credit to buy homes.

If you’re thinking about taking a home loan, then one of the first things you need to do is examine your eligibility criteria for a loan. Even though a housing loan is a secured loan, the lender will thoroughly examine your eligibility especially with regards to servicing the loan installments.

Here are some of the common eligibility criteria for home loans in India:

1. Age:
The minimum age of the applicant for different lenders ranges between 21 years to 25 years. The maximum age of the applicant ranges between 65 years to 70 years.

2. Income:
This is the most important eligibility criteria for a home loan. Each lender wants to verify whether the loan applicant can repay the loan. This depends on the monthly income drawn by the loan applicant.

To improve eligibility in this area, many lenders jointly apply for the loan with their family members who have a higher income. Jointly applying for the loan increases the chances of the loan being repaid by either one of the joint applicants and lenders favour such loan applications.

3. Employment status:
The loan applicant must have a stable job or a stable self employed business. Some lenders specify a minimum period of employment to be sure that the loan applicant will draw in a regular salary. For self employed businessmen and professionals, the eligibility criteria is 3 to 5 years of operation of the business.

To improve eligibility in this area, it is better to have an employment history before applying for a home loan.

4. Maximum loan amount:
Most lenders lend up to 90% of the purchase price of the house. The purchase price is determined based on the loan agreement between the two parties.

Some lenders have specific conditions with regards to the type of property purchased as well i.e a new property or a resale property. They may have conditions about the age of the property so it is important to thoroughly check out these criteria before applying for a home loan. Most lenders have their eligibility criteria displayed on their websites which makes it very easy to find out whether you are eligible for the loan or not. Make sure to apply for a home loan after complete research.

How to apply for a credit card?

A credit card is one of the most important modes of payment today. A credit card can be swiped up to a particular credit limit and the amount swiped is due to be paid back to the credit card company before the due date. The due date for this is a few weeks after the end of the month in which the transaction is made. This extra period between the end of the month and the due date for payment of the credit card bill is called the grace or the buffer period. It is for this reason that people prefer spending with a credit card. Since credit card spends do not immediately become due, it allows people an additional amount of time before they need to pay for their purchases.

There are a large number of banks offering credit cards today. There are different types of credit cards with different reward systems. Banks have tied up with airlines, restaurants and other businesses to offer specific reward systems that benefit the credit card user for their spends. Regular spends on a credit card and regular repayments of credit card dues builds a favourable credit report for the user as well.

But how can one person apply for a credit card?

These days, it is very simple to apply for a credit card. There is a lot of competition between different banks to get customers for their credit cards which is why banks frequently come up with a lot of offers for their credit cards. It is not necessary to have a bank account in the bank to apply for their credit card, however, having a bank account in any bank is recommended. Most banks will pre-approve your credit card application and extend different offers like waiver of first year credit card fees, extra points etc.

One of the most convenient ways to apply for a credit card is to apply for it online on the bank’s website. Banks have separate webpages for credit cards with different offers depending upon the time of the year. By capitalizing on these offers, you can fill up the credit card form and request a call back from the bank authorities.

It is also possible to apply for a credit card in offline booths that banks set up in different companies, however, to get better offers on credit card apply online. Another way to apply for credit card is to check different companies that banks have tied up with and apply via those airlines or companies. These cards will also have some offer attached to them.

If you’re a preferred customer of your bank, you can also talk to your relationship manager and ask them for existing offers or a customized offer on your credit card. The bank may give you additional deals and offers to get you to sign up for a credit card.