Author: SMFG India Credit

SMFG India Credit http://financenews.wordpress.com SMFG India Credit Co. Ltd. (Formerly Fullerton India Credit Co. Ltd.), is registered as an NBFC - Investment and Credit Company (NBFC-ICC) with the Reserve Bank of India, and is a member of SMBC Group. SMFG India Credit started its India operations in 2007, and is today a leading NBFC with a pan India presence. Working together with over 16,500 employees, we reach our market by connecting with around 3.2 million customers, be it in cities, towns or villages, right at their doorstep. We penetrate deep inside the market through more than 729 branches, covering 600 towns and approximately 65,000 villages.

Here’s Different Types of Business Loans Available in India

Business loans are required for starting a new business, expanding an existing business, upgrade plants and machines, maintain capitals or to manage the cash crunch. Several bank and NBFCs offer business loans in India for finance your business expanses for small and medium enterprises if the borrower meets the eligibility criteria and has a good credit score.

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Different types of business loans offered in India:

Professional Business Loans

Professional business loans are sanctioned to professionals like doctors, chartered accountants, and lawyers who have a good credit history. It is at the discretion of the bank and NBFC how much loan it wants to extend to such borrowers and in many cases, some kind of collateral security is taken in the form of property, government bonds, life insurance policies, etc. The professional business loans usually have tenure of 5-7 years.

Overdraft loans

Overdraft loans are normally sanctioned by pledging fixed deposits of the bank and NBFC. Depending upon the credit history of the borrower, cash flows, tenure of bank and NBFCing relationship and the repayment history of the business or individual promoter, the bank and NBFC approves a certain fixed overdraft limit. Based on the limit, the overdraft amount can be utilized and interest is charged by the bank and NBFC only on the utilized amount. This loan can be utilized in any manner as long as the principal and the interest are being repaid on time.

Working capital loan

In a working capital loan, the bank and NBFCs sets a limit for the business to take a loan and the amount can be utilized in a specific purpose only, i.e. the working of the business and cannot be utilized in any other manner. This type of loan is sanctioned against the defined purpose and the plan of the business.

There are multiple other options when it comes to business loans. These vary from one institution to another, it would be really helpful if you talk to a few of them before deciding upon a particular one to get the arrangement according to your parameters.

Additional Read: What Are The Types Of SME Loans Available In India?

What Are The Best Ways To Get A Personal Loan At Low Interest Rate?

Personal loans have seen exponential growth in the past two decades in India and are availed by millions of customers for various needs. They require minimum documentation and disbursal is faster as compared to other types of loans. A personal loan has become the preferred instrument for public and private banks in India who earn handsome interest by disbursing these loans at a short notice.
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At the time of applying for a personal loan one should take into consideration the following points to avail a low-interest rate:

If you have maintained a good credit score for your previous loans, chances are the bank will offer you a slightly better rate of interest on a fresh personal loan considering your clean credit history.
If you have maintained a good repayment track record without defaulting on the previous loan EMIs, you can negotiate a better rate of interest with the bank for a personal loan.
Applying for a personal loan during festive season increases your chances of availing a reduced rate of interest as banks come up with special loan offers during the festive season.
Your relationship with the bank over the years can also be a factor in getting a better interest rate on a personal loan. if you are an existing customer of the bank with an excellent payment track record, you can expect to get a discounted rate of interest on a personal loan.
Employer’s credibility and a stable job can also play an important role in getting a better rate of interest on a personal loan.

In summary, you must take stock of the available lending institutions offers and choose the one which suits your needs the best.

Must Read: Golden Rules You Should Follow While Taking A Personal Loan

Factors to Consider while Taking a Personal Loan Online

Applying for a personal loan has become quite simple by using the online option. All you have to do is visit the bank or NBFC’s website, fill up the online application form for an instant personal loan and upload the scanned copies of the required documents. Once you submit the personal loan application online, you will get approval for the loan in no time barring your credit score is good and all the documents are in order.

You must have to know how to Calculate Personal Loan EMI. You can also check the interest rate and EMIs on your personal loan by using the personal loan EMI calculator available on the bank or NBFC’s website.

Before applying for a personal loan online, you need to meet the personal loan eligibility criteria by fulfilling some basic conditions laid down by the bank or NBFC. You need to disclose your monthly income and submit your PAN number, credit score and KYC documents. If you don’t know your credit score, your bank or NBFC will check it for you. To get your loan approved swiftly, do not conceal any information and do not submit any false documents as it can hamper your chances of getting a personal loan. Make sure to check processing fees, foreclosure charges, and part pre-payment charges before applying for a personal loan online.

Must Read: How We Can Get Instant Personal Loan Online?

Additional Read: 7 Simple Tips to avail a Personal Loan in India

What are the Eligibility Criteria & Documentation for Commercial Vehicles Loans?

Basically Commercial Vehicles are the transports used for commercial purposes. Buses, trucks, tippers, tankers, heavy Vehicles, light commercial vehicles come under this category. A large number of people involved in this transport business. Hence, financial institutions offer Commercial vehicle loan to the people who want to buy this vehicle but not having enough money for purchasing. On can get the loan at the lower interest rate, flexible EMI with minimum documentation.

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The Eligibility Conditions For commercial vehicle loan:

Job stability of 2 years for salaried & business stability of 2 years for self-employed applicants.
Limited companies (public & private), partnerships, trusts, etc. need to show audited financial records of the last 2 years.
The applicant must have residence stability of at least 2 years.

Documentary Requirements For commercial vehicle loan:

Correctly Filled-up application form
Identity proof
Address proof
Income proof – salary slip for the last 3 months/ITR for last 2 years
Bank statement of last 6 months
Repayment track record

Thus, there are several points that you need to remember when you decide to apply for a commercial vehicle loan. Keep your documents in order & shop around for available options from the financial institutions. Once you are aware of the relevant information, select the lender.

Must Read: Things to Consider while Availing of a Commercial Vehicle Loan

What are the Factors Affecting Two Wheeler Loan Interest Rates?

The Loan interest rates offered by different financial institutions vary. However, there are other factors too that affect two-wheeler or bike loan interest rates. Before availing the two wheeler loan must check and compare the interest rates of different financial institutions offers.

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Understanding these factors can help you benefit from the best two-wheeler loan rates. These are:

Loan amount: The amount of loan you seek is one of the crucial aspects of determining the interest amount. A higher loan begets greater interest rate while the requirement of a lower loan amount means that the interest rates would be considerably lower.

Loan tenure: This has more to do with the time you need to repay your entire loan inclusive of the interest charges. While choosing an increased loan tenure means repaying the loan at lower interest rates, it also means paying way more than what you had envisaged due to the increased number of instalments involved. A smaller tenure means increased instalment amount, thus, necessitating a lesser number of payments and therefore lower interest rate in the long run.
Credit Score: For those who do not pay attention to their CIBIL scores, remember that their credit history matters. Having defaulted on a loan in the past means that either your next loan application would be rejected or you might be asked to pay higher interest on your loan.
Income matters: Lenders would like to know your annual income to gauge your ability to repay the loan amount. If your salary slips of the past three months do not portray you as someone with enough income level, you may be asked to pay higher interest or rejected outrightly.
Vehicle type: Your choice of two-wheeler will have a determining effect on the interest rate. The interest rates are different for each kind of vehicle you want to buy be it a moped, motorcycle, scooter or any other.
Additional Read: Use Two Wheeler Loan EMI Calculator to Calculate Your Bike EMI

What is Personal Loan EMI Calculator & How to Use it?

Whenever you apply for a loan from any financial institution you have to pay the loan in the form of EMI ( Equated Monthly Installment) which may be a monthly or yearly basis. It is a monthly installment amount that you have to pay until your loan is repaid fully. Personal Loan EMI Calculator is a tool used to calculate the EMI amount of the loan.
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Before applying for a personal loan you should know how much EMI amount you will have to pay for the loan. There are 2 methods by which you can calculate EMI:-

1. By manually with mathematical formula- EMI is calculated through these factors- Principal Amount, tenure and rate of interest. The mathematical formula used for this calculation is:
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
here,
P is the stands for the principal amount,
R is for the applicable rate of interest, and
N is for the loan duration.

2. Personal Loan EMI calculator- You can calculate EMI by using a Personal Loan calculator, an online tool to calculate the EMI amount. Use of online calculators fewer chances of errors. It is fast and it is easy to use. It saves your time and gives an accurate result. The tool is available on the lenders’ official website. You only need to fill the details of the principal amount ( loan amount), Interest Rate, Tenure and submit it. It will show your EMI amount.

Additional Read: How Is Personal Loan EMI Calculated in India?

What is a Business Loan & Who can Avail it?

Do you have an idea but not the funds? Looking to expand your existing retail store but short of money? Then there is a tailor-made solution for you. A business loan can help in uplifting your business while providing better liquidity for your business needs at the same time.

A business loan can be the only step separating you from your goal. Technology has made availing and planning a business loan much easier. With the help of a business loan calculator, you can calculate monthly instalments depending on the amount and tenure.

Who can avail Business Loan?

Salaried and Self-employed professionals

Salaried self-employed professionals like Freelancers, Chartered Accountants, Company Secretaries, etc. fall into this category.

Private and Proprietorship firms
Private limited companies
Enterprises-the minimum turnover 10 lakhs or minimal annual income of 2 lakhs per annum)
Individuals over the age of 22.

Final Thought

Before applying for a business loan, it is a good practice to check your requirements. Make a list of profit and expenditures, thorough analysis about loans is advisable and try not to put all of your eggs in one basket. Pay the loan amount as soon as possible. Keep a track of the market and refinance, and finally maintain a good credit score.

Must Read: Important Things You Must Have While Applying for a Business Loan

What is Personal Loan & Its Advantages?

A personal loan is an unsecured loan. It is offered based on important criteria such as income, credit history, employment history, ability to repay etc. A personal loan is termed as an unsecured loan as it isn’t secured against any asset. Hence personal loan interest rates are higher as compared to home or car loans.

Personal loans have become tremendously popular over the years. The entire unsecured loan category which includes personal loans as well as credit card loans, grew by more than 30% in the fourth quarter of 2018. Usually, people apply personal loan for buying gadgets, travel, medical emergencies etc. Thanks to personal loans one doesn’t need to redeem one’s investments.

Personal loan is popular because:

Minimal documentation
Simple procedure and Quick approval
Regular income is enough to avail the loan
It can be applied multiple times depending on previous repayments
EMI repayment option
The borrower can use it for any purpose
It can be availed for the consolidation of debts

Personal loans charge interest rates beginning from 10% onward.

Additional Read: Reasons Why You Should Apply for a Personal Loan Online

Difference Between Business & Personal Loan

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Loans are a great way to get cash liquidity in times of need. They come in handy when in need of urgent capital, may it be for your business or any other personal reason. Borrowers usually get perplexed about whether to go for a business or a personal loan. Both are avail for different purposes. yet people get confused while opting for it.

Business Loan is apply when you require a large amount of money for funding your business. The business may be partnership firms, pvt. Ltd, private etc.

Personal loans are unsecured loans avail by individual to fulfil their personal needs. It may be for education, wedding, buying expensive gadgets, travel, holiday, medical emergency and much more.

Hence, before opting for the loan analyse your situation wisely and go for the option that best suits your needs.

Must Read: How to Expand Your Small Scale Business into Large one?

A Complete Guidelines About Loan Against Shares

Loan Against Shares is the loan where you can pledge the securities you have invested in the form of collaterals like Bonds, Mutual Funds, shares. One can get the overdraft (OD) and line of credit (LOC) Facility under this loan.

It provides liquidity against investments which makes it more popular than others. The procedure for availing the Loan Against Shares is simple and easy.

Advantages:

No Payment charges.
No Foreclosure charges.
Minimum Documentation.
Fast Process.
No hidden charges.
Lower interest rates.
Use the amount for any use.

Eligibility Criteria:

India citizenship.
Age must be 21 years.
Must be salaried or self-employed.

Documents Required:

Identity Proof.
Address Proof.
IT returns
Signature Proof.
2 recent photographs.

Additional Read: Everything You Need To Know About Loan Against Shares

How to Renovate Your Home with Personal Loan?

Home improvement involves considerable expenses, thus, mandating application of a personal loan to fund the renovations. Also, personal loans are cheaper than payday loans and involve no submission of collateral, thereby, making it affordable. Flexibility in choice of the loan tenure means that you do not have to be stressed about repaying the entire amount at one go and can refund the entire loan in equated monthly instalments (EMIs) depending on your financial status.

Also, since you get to choose the loan amount and spend a part of it on renovations while using the rest to repay the bills spent on repairs. Many financial institutions offers personal loan for home improvement for renovation.

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Why to Choose personal loan for home improvement:
1. Simple and easy.
2. Choice of the loan amount.
3. Flexibility of repayment.
4. Choice of loan tenure.
5. Quick disbursal.
6. Easily approve.
7. Debt consolidation.

Additional Read: Should You Finance Home Improvement Expenses with Personal Loan?

What is Personal Loan for Women & Its Benefits?

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In today’s times, it is not difficult for women to get a personal loan approved from a financial institution. The rules regarding the loan facility, albeit with greater benefits in terms of lower interest rates and flexibility of repayment. Basic documentation is mandatory, and the entire loan application process can be done online. Hence, various financial institutions provides schemes i.e, personal Loan for Women to help them.

The eligibility of the loan amount can be determined with the use of a Personal Loan Eligibility Calculator available on the lender’s site. Estimation of interest payments to be made every month can be had with a personal loan interest calculator available online. Just fill in the loan amount desired along with the predetermined loan tenure and gauge the interests to be paid for a specified interest rate.

The concept of granting personal loans for women is gathering steam as it enables greater financial independence to women looking to create a niche for themselves in society. Financial freedom is a prerequisite to every other kind of freedom that women wish to enjoy.

Additional Read: How Women Can Get A Personal Loan?

Use Personal Loan Calculator to Calculate Your EMI

While home loans and car loans are to be used for specific purposes, personal loans can be used for any reason. The choice is up to the borrower. It could be a wedding ,a vacation, home renovation, etc. In addition, getting a Personal Loan issued is hassle-free and quick. The Personal Loan, like all other loans, are repaid back using EMI. Equated monthly instalments depend on three key factors (i.e.) Principal, Interest Rate and Tenure. The principal is the amount of money required to be borrowed. Rate of interest is charged annually. Hence it is to advice to calculate the EMI with personal loan calculator an online tool to calculate the monthly EMI.

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Tenure is the duration for which the EMI is to be paid in order to repay the loan. Understanding these three factors helps increase awareness among borrowers. They can calculate persona loan EMI in advance and determine the amount to borrow so that they can plan their finances accordingly.

Personal loan calculator are convenient and easy tool to calculate the payble EMI. It requires the following details:

1. Loan Amount
2. Loan Tenure
3. Interest Rate

Must Read: How Is Personal Loan EMI Calculated in India?

What is Personal Loan Calculator & How is Interest Calculated?

When you apply for a personal loan, the monthly instalment amount that you will be paying becomes a key factor in deciding the loan amount and tenure. You can either use a personal loan EMI calculator or the below formula to calculate your pay-outs. This helps you in planning the loan amount and repayment schedule better.
Ideally, the interest rate on a personal loan is calculated by considering several factors. Your credit history, monthly income, the amount being borrowed are a few among them.

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Factors Affecting the Personal Loan EMI

The following are the factors that affect your loan EMI.

Loan Amount: The higher the loan amount, the higher the EMI payable. The maximum loan amount you can avail is decided by the lender based on your repayment capacity, relationship with the bank, and other factors.
Rate of Interest: The rate of interest is also directly proportional to your EMI. Your loan’s interest rate is based on several factors, such as your income, your credit history, repayment capacity, etc.
Loan Tenure: The loan tenure is inversely proportional to your EMI. The longer the tenure, the lower the EMI.

Calculating the Personal Loan EMI

Have a look at the below method that explains how you can calculate the interest amount on the total loan amount.

The interest amount is not the same for each month. The interest amount is higher at the beginning, which reduces gradually in the following months.

Calculate Interest for the First Month

Convert your annual interest rate into a monthly interest rate. To do this, you will need to divide the annual interest rate by 12, i.e. if the interest rate is 20% per annum, then divide 20/12, which yields 1.66%. This is your monthly interest rate.
Multiply the interest rate with the total personal loan amount, i.e. if you are taking a personal loan for 30000 at a monthly interest rate of 1.66%, then [(1.66/100)*30000 = 498] is the interest amount for the first month.
Calculate the total

Calculate Interest for the Following Months

Since, you have started to pay off your principal, use the below calculation to find out the interest amount for the following months.

Subtract the interest amount of the first month from the amount you repaid. This gives you the amount that you have paid against the total personal loan principal.
Now, subtract this amount from the original principal to find the new balance of your loan.

New balance = principal – (EMI – interest)

Additional Read: How We Can Get Instant Personal Loan Online?

Why You Should Get a Personal Loan Online!

The best part of taking a personal loan is that the loan amount can be sought for whatever purpose required. You may consider taking the loan for a marriage ceremony, paying for a vacation, higher studies, home renovation, house reconstruction or making a down payment for a new house. You may even take a personal loan to consolidate your debt by paying all your different loans and bills with just a single loan amount.

The internet allows people to apply for personal loans online though they may also choose to visit the lender’s branch to know more before filling up the loan application form. Being unsecured, personal loans come at high rates. However, that should not deter today’s generation that is looking for instant gratification by making purchases with the loan amount and repaying the amount over a period.

Must Read: 5 Easy Tips to Get Your Personal Loan Approved

Additional Read: Top Factors That Determine Your Mortgage Interest Rate

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