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Planning To Take A Loan? 5 Type Of Loan You Should Know

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Nowadays, you need not keep your dreams at stake because of a lack of funds. You can simply opt for a loan, fulfill your purpose, and repay it in easy installments. But there are various loan options available in the market. That is why you have to be very careful about which one you select. The right loan will help you accomplish your goals, while the wrong loan can land you in big trouble. If you want to avoid this, you should explore all options and pick one that fits best into your requirements or purpose. Here are the five common types of loans that you must know about before making a decision.

1 Loan Against Property

If you already own a property, you can avail loan against it. Depending on your lender, you can get up to 60% market value of your property. The only condition is that there shouldn’t be any ongoing mortgage on it. The most interesting fact about the Loan against property is that you can use the borrowed funds for any of your purposes. The only difference your usage will make is on tax exemptions. Otherwise, you can avail of this loan and fulfill all your requirements.

 2 Home Loan

Buying a home is the most significant milestone in almost everyone’s life. But considering the price of houses, it would take you years to save money to buy a property. If you don’t want to wait for so long, a home loan is your solution. Depending on your financial status, you can borrow a significant amount of money. There are several variations available in the features of these loans. You can set them according to your preferences.

3 Loan Against FD

Fixed Deposits are one of the most popular methods of investing your money. They keep your money safe while providing a good percentage of interest on it. But do you know FDs can also be used to claim loan? Yes, you can keep your FD as collateral and get funds against it. This helps you avoid liquidating your saved money. So you can use the money without losing any interest on it.

4 Personal Loans

When you want funds urgently and don’t want to specify its usage in front of the lender, you can opt for personal loans. They are the most accessible loans to get. However, a few crucial factors in this are:

  • You need to have a high credit score and a low debt-to-income ratio.
  • The borrowable amount is also decided based on your financial capacity.
  • You need to show some security to the lender, like your savings or investments.
  • They are available in both secure and unsecured categories of loans.
  • Their interest rate is generally higher than loan against property interest rates or any other loans’ interest rates.

5 Auto Loans

This is a usage-specific loan as the money is borrowed to buy a new automobile. You can buy a car or any other vehicle as per your requirement. The borrowable amount is decided based on your repayment capacity. However, you carry a risk of losing the vehicle if you miss out on your EMI payments.

Apart from these, there are several other types of loans. You can opt for them as well according to your purpose.

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Finance

Reasons Why Your Chartered Accountant is Not Your Financial Planner

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CA loan

The role of a Chartered Accountant in an organisation is indispensable. Whenever, a company faces financial issues, a Chartered Accountant is approached. This idea has gradually influenced borrowers who now seek the services of CAs for domestic financial planning. This cliché has removed the thin line between the professions, namely financial planner and accountant.

Ideally, a CA’s work aims to prove his/her client’s capability to file an income tax return and offer financial advice to firms, and audit financial statements for the same. To run a successful CA firm or to scale the operations, professionals need to invest considerable funds. In this regard, a professional can avail CA loan that offers collateral-free funds against an affordable interest rate.

Starting a CA firm would again help make a brand name and remove the job role’s confusion. A professional loan for a chartered accountant would act as financial support under this scenario.

What is the job profile of a Chartered Accountant?

The CA is an expert in taxation, accounting, and auditing. An organisation ideally hires them to take advice on financial planning and investments.

Chartered Accountant’s primary purpose is to offer quality investment advice to streamline an individual’s tax payment and management, assets, etc. Many individuals seek an accountant before making a domestic investment like purchasing a property, loan borrowing advice, etc.

These queries usually exceed the expertise of an accounting professional. In this regard, owning a CA firm that specifies services can remove the cliché regarding an accountant’s job profile. However, achieving this goal requires an investment of substantial finances, which can be arranged by availing a professional loan.

For instance, potential borrowers can approach lenders like Bajaj Finserv, who offer up to Rs.32 lakh as loan for chartered accountants. Moreover, the tenor against this credit form is quite flexible that can extend up to 7 years.

The financial institution also provides pre-approved offers on their products like business loans, personal loans, etc. This feature makes the loan application quick and hassle-free. Check your pre-approved offer by entering a name and contact number today.

Hence, an individual must keep track of the top qualities that an ideal account must have to hire the right financial help. For this purpose, understanding the fundamental difference between a chartered accountant and a financial planner would be helpful.

How is the role of CA different from a financial planner?

Redefining the role of a chartered accountant is very crucial to understand the reasons for hiring a professional. Some of them are discussed below.

  1. Auditing

A Chartered Accountant’s primary work involves auditing and accountancy. This includes preparing financial statements, profit and loss balance sheets, and writing up accounts. They are also required to manage the bookkeeping and analysing the financial transaction made yearly. Under auditing, CA reviews the transactions claimed under the financial report. Moreover, the report assessed by a CA falls under the eligibility criteria of many loan variants.

This is a significant reason behind the rise in CA firms in India. To manage the cash flow, many professionals depend on hassle-free credit forms like a CA loan. This fast disbursal loan requires minimum documentation and simple eligibility criteria.

  1. Taxation

Another essential function performed by CA is taxation. They estimate the amount for tax purposes, analyse the tax returns, and offer advice on the same to clients. They identify and suggest a lucrative investment regarding tax savings based on a client’s financial capability.

  1. Financial advice

Unlike a CFA or certified financial planner who suggests financial risk management, a CA advises a client on insurance policies, mutual funds, other investment forms, etc. It is essential to know that this is a complimentary or value-added service offered by the professional. Hence, it is vital to take a second opinion from a CFA.

Hence, professional accountants can avail a CA loan to upscale their services and create a brand name. This would help attract more clients and simultaneously remove the confusion regarding a chartered accountant’s role and limitations.

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Finance

Amazing Facts You Must Know About How to Acquire your Credit Card with Instant Approval

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The way to get a credit card has become a lot easier for Indians than it was in the past. The Reserve Bank of India has come up with a number of regulations to urge people to get into the credit card culture, as a way towards “Digital India”. The aim is to work towards transparency in monetary and financial transactions and to eliminate the evils of corruption and fraud, including scamming in the banking industry, and the financial world overall. With a huge influx of credit card inquiries in June/July 2020, after lockdown rules were lifted, the Reserve Bank of India was inundated with credit card transactions from over 50 million Indians. This was happy news for the country that faced one of the most intense economic downturns, due to businesses virtually shutting down due to COVID-19 lockdown restrictions.

Indeed, this was the situation all over the world, but considering India was just trying to get on its economic feet before the lockdown, analysts predicted a slow recovery. The use of credit cards showed that people were ready to spend, and businesses were getting back on their feet. More Indians in small towns were applying for credit cards and were finding the process easy. Now, you can also apply without hassles for credit cards. Apply online, and get quick approval so your card gets processed at the earliest. This is called instant approval and makes the incentive to obtain a card all the more attractive.

The Reserve Bank of India’s new rules

Effective October 2020, the Reserve Bank of India introduced new rules and guidelines for Indian credit card users, ahead of the Diwali season. With the intention of making payments by such tools more secure, India’s head bank did this to address and detect real-time fraud in digital transactions. The directions issued fall under Section 10(2) of the “Payment and Settlement Systems Act, 2007”, the bank claimed in its order. By default, all new credit cards issued would be enabled for use only within India and not abroad, though this facility could be activated by the bank issuing the card. Also in the notice, it was announced that cards that have never been used would be disabled. Furthermore, customers would have more control over their cards by setting individual cash limits. With cards like the Bajaj Finserv RBL credit card, you can get access to such cards online, and you can even get instant approval if you apply for them. 

Instant approval

Instant approval for your credit card comes after you apply for it online. With the Reserve Bank of India’s moves to shift processes online for the sake of transparency and authentication, this system works for potential cardholders as well. Here are five things you should know about how you can acquire instant approval when you apply for your credit card online:

  1. You can submit an application online with details that are verified electronically by the bank or credit card company, and you can get quickly approved for a credit card.
  2. This is a contactless approval system.
  3. This approval system, though mostly done digitally and remotely, will require some documentation such as your Aadhaar card, PAN Card, driver’s license, or passport.
  4. You will need to be at least 21 years of age (in some cases, 25 years of age).
  5. You will need to submit proof of sound and regular cash flow into your bank account.

You can avail the advantages offered by the Bajaj Finserv RBL Bank SuperCard, which gives you control over a card with four great functions. The card can get you loans of up to 3 months. Interest charged for EMIs that let you buy items on monthly installments is a mere 1.16% per month. Get instant approval by applying online for this truly super card that gets you rewards and cashback deals of 5% on your first down payment. You get exciting rewards on spends, plus a welcome bonus. With reward points, you can potentially save up to 55,000 INR per year. Last but not least, the card can be used as an ATM cash card free of charge for 50 days!

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How Does A Demat Account Work For Earning Online?

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Thanks to the Demat account, the scale and speed of investing and trading in securities have reached a remarkable level today. The number of investors and traders is gradually increasing because Demat has made investing procedures completely online that is convenient for every individual. There are around 4 crore Demat accounts in India in 2020. This figure shows traditional investors of gold, real estate, and fixed deposits are also moving towards equities and derivatives. Let us find out how a Demat account works and helps you to earn money. 

What is Demat Account?

A demat is an online system that allows an investor to store his/her financial securities like stocks, bonds, ETFs, and other securities in electronic form with stockbrokers who are registered with any of two national depositories – NSDL and CDSL. The establishment of depositories and introduction of Demat accounts has reduced the transfer time of securities, lowered transaction fees, eliminated fraud deliveries, risk of delays, and theft, hence, attracted more investors and traders. Before the development of demat accounts, stocks and other financial securities were available in physical form only. Storing securities in physical form was highly risky and unsecured. Hence, demat accounts have made investing and trading more secure and convenient. 

How Demat Account Works?

A demat account can be said similar to a savings account where you store cash with a bank. A demat account stores the financial securities of the account holder with a depository participant (DP)/stockbroker registered with the national depository. When you buy a security, it will be credited to your demat account and, when you sell it, it will be debited from your demat account. Savings account, demat account, and trading account, these three accounts must be interlinked for investing and trading activities.

SEBI Regulations

The Securities and Exchange Board of India (SEBI) has made it mandatory to have a demat account if you intend to invest or trade in the stock market. It is mandatory to dematerialize physical securities if you have any. You can open a demat account online for free following an easy process. SEBI makes necessary changes in rules and regulations from time to time such as demat account opening charges. SEBI has mandated the brokers to submit their tariff structure every year to the Depository with which they are registered. 

Participants in the account opening process

  1. Depository

Depositories are NSDL and CSDL. They are responsible to maintain securities in the demat accounts. They hold the demat account on an investor’s behalf.

  1. Depository participant (DP) 

You can open a demat account with DP, called stockbrokers. A DP can be an NBFC, a bank or a brokerage firm, or a one-person company that is registered with the NSDL or CSDL. They act as an intermediary between the depository and the investor.

  1. Bank 

Your savings account should be linked with your demat account. The money to buy securities will be used from your bank account. Your securities will be credited to your demat account. 

Depository Participant’s Support 

Whenever an individual opens a demat account with a Depository Participant (DP), he is advised to check what services it is offering to their clients. 

  • Check how well a DP helps you secure your information.
  • Check the kind of technology the broker has to keep your account safe.
  • The type of resources it offers to beginners.
  • What types of securities you can hold in the account.
  • How well it educates its clients to earn online and with which type of educational offerings – through videos, podcasts, forums, or financial articles.

A demat account offers the facility of automatic credit of shares, arising out of split/bonus/consolidation etc. It allows you to receive non-cash corporate benefits such as bonuses, rights shares, etc. 

So, you have seen how a demat works and it is more beneficial if you open a demat account and trade with the right participant depositors.

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