Paisa Bazaar https://www.paisabazaar.com/learn Compare & Apply Fri, 23 Jun 2017 13:29:35 +0000 en-US hourly 1 https://wordpress.org/?v=4.7.2 Government Launches The Official GST Council’s Website https://www.paisabazaar.com/financial-planning/news/15219-government-launches-the-official-gst-councils-website/ https://www.paisabazaar.com/financial-planning/news/15219-government-launches-the-official-gst-councils-website/#respond Wed, 21 Jun 2017 12:39:16 +0000 https://www.paisabazaar.com///15219-/ With the much-awaited Goods & Services Tax to be rolled out from July 1, the government has launched GST Council's official website (http://www.gstcouncil.gov.in) that contains the complete details of the new tax regime that will absorb all other central and state taxes. The Additional Secretary in GST Council made this announcement on Twitter. With this […]

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With the much-awaited Goods & Services Tax to be rolled out from July 1, the government has launched GST Council's official website (http://www.gstcouncil.gov.in) that contains the complete details of the new tax regime that will absorb all other central and state taxes. The Additional Secretary in GST Council made this announcement on Twitter.


With this website, the government aims to build a single platform which will have clean and clear details of GST tax implementation, tax rates, compensation details, IGST, UTSGT and more. They have also added a section ‘GST Help' that contains downloadable files of the ‘Constitution Of Standing Committees And Working Groups’ and ‘Sectoral Working Groups Contact Details’. This website is available in Hindi and English. Other than this information, one can get state-specific GST details, answers to frequently asked questions in English/Hindi and details of all the GST meetings held till date. Information regarding tenders can also be accessed from the GST council's official website.


Meanwhile, the government will be hosting a midnight function on 30th June midnight to launch the new taxation system – GST for the first time that is aimed to reshape the Indian economy.

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Now use your Credit Cards to Pay for Rent https://www.paisabazaar.com/credit-card/news/15222-now-use-your-credit-cards-to-pay-for-rent/ https://www.paisabazaar.com/credit-card/news/15222-now-use-your-credit-cards-to-pay-for-rent/#respond Wed, 21 Jun 2017 12:17:05 +0000 https://www.paisabazaar.com///15222-/ With the transition from cash to digital payments gaining traction, the next expense area being targeted is rent. RentPay, a London-based company RedGirraffe’s fintech platform, can now be used for paying rent through credit cards. Currently, individuals with credit cards from HDFC, SBI Cards, IndusInd Bank, Axis Bank, ICICI Bank and Kotak Mahindra Bank can […]

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With the transition from cash to digital payments gaining traction, the next expense area being targeted is rent. RentPay, a London-based company RedGirraffe’s fintech platform, can now be used for paying rent through credit cards. Currently, individuals with credit cards from HDFC, SBI Cards, IndusInd Bank, Axis Bank, ICICI Bank and Kotak Mahindra Bank can avail this facility.
 

How to Pay Rent Through Your Credit Card?

  • You would need to register yourself on RentPay via RedGirraffe’s website.
  • Fill your details along with your landlords’ details with a rent agreement.
  • After the completion of the process, a RedGiraffe ID (RG-ID) will be issued, which will be registered with your credit card issuer.
  • Rent payments will get automatically credited from your account to your landlord’s bank account on a stipulated date of every month.

RentPay charges a transaction fee of 0.39% including taxes for every transaction. A minimum amount of Rs.39 is charged for all the banks except SBI Cards. For instance, if a cardholder pays a rent of Rs.10,000 using RentPay, then they would have to pay Rs.39 extra as transaction fee which is very less as compared to other online portals which charges high convenience fees.
 

Cardholders that will avail this facility stand to benefit a lot from this as they would earn high reward points given the large transactions.

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Bank Accounts not linked with Aadhaar to be closed in 2018 https://www.paisabazaar.com/savings-account/news/15218-bank-accounts-not-linked-with-aadhaar-to-be-closed-in-2018/ https://www.paisabazaar.com/savings-account/news/15218-bank-accounts-not-linked-with-aadhaar-to-be-closed-in-2018/#respond Wed, 21 Jun 2017 12:04:44 +0000 https://www.paisabazaar.com///15218-/ As per new government rules, bank accounts not linked with Aadhaar will be closed after December 31st, 2017. Applicants would also need to provide their Aadhaar to get new accounts opened in both private and public sector banks. The regulation that was issued by the revenue department on June 1st has been amended under the […]

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As per new government rules, bank accounts not linked with Aadhaar will be closed after December 31st, 2017. Applicants would also need to provide their Aadhaar to get new accounts opened in both private and public sector banks. The regulation that was issued by the revenue department on June 1st has been amended under the anti-money laundering law which would help in fighting black money and terrorism funding in India.


However, these accounts would not be frozen permanently. The money in the account would be safe and only daily operations of the bank account would be blocked. Account holders can furnish their Aadhaar and get their bank accounts linked to reactivate it instantly.


These rules apply to all bank accounts and individuals would have to furnish their Aadhaar card if they have not got their bank accounts linked to it. In case of company or business accounts, the authorised signatory will have to provide the Aadhaar card. The central government is of the opinion that the linking of Aadhaar would help in plugging the leakage in subsidy distribution and the money would reach targeted accounts efficiently.


The Government has already issued one billion Aadhaar cards till April 2016. Only 65% of the estimated 70 crore savings accounts have been linked with Aadhaar. With this regulation, the government is aiming to monitor small accounts which are alternatively used for funding terrorism and money laundering.


For all transactions above Rs 50,000, people will have to provide their Aadhaar along with PAN (Permanent Account Number). For those people who are outside the taxation umbrella will have to provide Form 60. People who do not have above mentioned documents will have to prove that they have applied for those documents.

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GST Impact on Mutual Fund Investments Decoded https://www.paisabazaar.com/mutual-funds/news/15215-gst-impact-on-mutual-fund-investments-decoded/ https://www.paisabazaar.com/mutual-funds/news/15215-gst-impact-on-mutual-fund-investments-decoded/#respond Wed, 21 Jun 2017 11:42:09 +0000 https://www.paisabazaar.com///15215-/ With less than 2 weeks remaining before the Goods and Services Tax (GST) comes into force.  Some mutual fund investors are understandably worried how their investments might be impacted after this much awaited tax regime is implemented. As per available data, from July 1st onwards, all financial services including banking and mutual fund transactions will […]

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With less than 2 weeks remaining before the Goods and Services Tax (GST) comes into force.  Some mutual fund investors are understandably worried how their investments might be impacted after this much awaited tax regime is implemented. As per available data, from July 1st onwards, all financial services including banking and mutual fund transactions will feature an 18% GST. Experts however are upbeat that the impact will definitely be marginal as the current tax rate is already 15% in the form of service tax on these transactions.


This optimistic assumption stems from the fact that the 3% increase would just get reflected in a slightly higher expense ratio for existing mutual fund investments. This would decrease the returns at the time of redemption or switching in a proportionate and marginal manner only. The other thing to note is that the burden of GST will primarily be a liability for the distributors and not all distributors are liable to pay GST either.


The reason for this is that the government has fixed a minimum earning limit of Rs. 20 lakhs annually for distributors to pay GST. Thus GST on mutual fund transactions needs to be paid only if a distributor earns over this amount in a year, which definitely provides much needed relief for the smaller distributors who operate from a single office within a local area. However to avail this benefit, all distributors irrespective of size will have to be mandatorily registered for GST.

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How To Prepare Yourself Financially From Emergency Situations https://www.paisabazaar.com/financial-planning/articles/15193-how-to-prepare-yourself-financially-from-emergency-situations/ https://www.paisabazaar.com/financial-planning/articles/15193-how-to-prepare-yourself-financially-from-emergency-situations/#respond Tue, 20 Jun 2017 13:29:14 +0000 https://www.paisabazaar.com///15193-/ What would you do if you are hit with a big medical emergency in the family or you are suddenly out of work? Are you financially prepared to handle such situations? If the answer is no, this article is for you.   While strong financial planners financially prepare for their future goals like buying a […]

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What would you do if you are hit with a big medical emergency in the family or you are suddenly out of work? Are you financially prepared to handle such situations? If the answer is no, this article is for you.
 

While strong financial planners financially prepare for their future goals like buying a house, education for their child, retirement etc., they are equally equipped to handle any unplanned financial emergency that may suddenly spring on them.
 

Get Prepared For Emergencies

The best way to cope up with any kind of financial emergency is to prepare for it beforehand. Here’s what to do to safeguard yourself from financial emergencies:


Start An Emergency Fund Now !


At the time of emergencies, you should be able to count on your emergency savings. Usually, these savings should be able to cover six months of your expenses.


Here's how you can start preparing for your emergency fund.
 

  • Decide on the amount you want in your emergency fund. Remember it should be at least four to six months of your monthly expenses
  • Set aside a certain part of your monthly income every month to build this emergency fund. Put these funds in a separate bank account, with a high rate of interest.
  • Over the next few months, keep on saving. Steadily increase the monthly amount. The more you save, the less you have to borrow in case of emergencies.
  • Use this emergency fund only in case of financial emergencies. And no, 70% off on your favorite brand does not count as "emergency"

Insure. Insure. Insure.


One of the best ways to cope up with financial emergency is let somebody else take up the responsibility. And by 'somebody' we mean the insurance company. Here are the types of basic insurance you need right now!
 

  • Get a pure term insurance plan to protect the future of your family
  • Get proper health insurance for yourself and your family members. We suggest you get both a medi-claim and a critical illness plan to ensure you are adequately covered against the rising cost of healthcare
  • Also insure your home and car against the loss from fire, theft or accidents.

What To Do In Case Of Financial Emergency?


Cut Your Expenses


Shrink down your expenses to the minimum. Draw a tight budget for you and your household. Roughly calculate the necessary costs like mortgage, rent, electricity, loan repayments, etc. Prioritize them and bury the unnecessary expenses.


It's Time For Emergency Fund


Believe us, your emergency fund will be the ultimate savior when it comes such emergencies. It is recommended not to take out and spend the entire account. Take out money in small amounts and use them appropriately.


Phone A Friend/Relative


In case your emergency fund is not enough for you, then take help from your friends or family.


Go For Quick Loan


Sometimes the need of money is beyond our means. In such cases, personal loans can come to your rescue. Contact your primary bank and try to find out the best deal you can get. Then, compare it with other offers available for you on a financial marketplace website to ensure you get to choose the best loan offer.

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Savings Accounts with International Debit Cards https://www.paisabazaar.com/savings-account/articles/15164-savings-accounts-with-international-debit-cards/ https://www.paisabazaar.com/savings-account/articles/15164-savings-accounts-with-international-debit-cards/#respond Tue, 20 Jun 2017 08:08:11 +0000 https://www.paisabazaar.com///15164-/ A debit card enables you to access funds in your savings account whether you want to withdraw cash from an ATM, pay utility bills, shop at the mall, or purchase something on the internet. You can spend money as long as you have sufficient balance in your savings account.   However, things change when you […]

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A debit card enables you to access funds in your savings account whether you want to withdraw cash from an ATM, pay utility bills, shop at the mall, or purchase something on the internet. You can spend money as long as you have sufficient balance in your savings account.
 
However, things change when you travel abroad and use your debit card for transactions. This is because the Reserve Bank of India introduced strict measures to protect the accounts held in banks based in India from possible fraud. However, the new chip-based (EMV) debit cards from Visa and MasterCard can be used internationally to access funds.
 
However, if you want to buy something from a foreign website, pay for an app, or sign up for Netflix, your options are limited. Only a handful of the international debit cards actually work on any foreign payment gateway, such as SBI, ICICI, HDFC, Axis, Yes Bank, IndusInd, Kotak Mahindra, CitiBank, and Indian Overseas Bank.
 
Here’s a list of international debit cards that you can use when travelling overseas or making a transaction on an international portal:
 
SBI: Starting January 2017, all SBI international debit cards can now work abroad as well as online. This is a significant move since these cards are now issued to all customers who hold a savings account in the bank. There are no issuance charges. International usage is activated using SMS. There are four different types of international debit cards offered by SBI to its customers, namely:
 

  • State Bank Silver International Debit Card
  • State Bank Global International Debit Card
  • State Bank Gold International Debit Card
  • State Bank Platinum International Debit Card

ICICI: ICICI Bank offers International Debit Cards to customers that hold a savings bank account in the bank. This debit card can be used to make online transactions or to withdraw cash when the cardholder is in India or abroad. The activation is done using an SMS. However, if you do not get a confirmation within 3-4 days, you can call customer service to get the card activated for international usage.


There are plenty of international debit cards from ICICI Bank to choose from since every debit card issued by the bank is now an international card. The customer may have to pay a one-time joining fee and an annual fee charged from the second year onwards.


HDFC: HDFC Bank provides a chip-based international debit card to its customers holding a salary account, savings account, current account, and Super Saver account with the bank. Customers can activate international usage by logging into their net banking website or by calling customer care. The joining and annual fees for HDFC Bank international debit cards vary depending on the customer’s account, debit card type, etc.


IDFC Bank: IDFC bank offers Visa Signature and Visa Platinum debit cards for its customers. Both these cards can be used at all ATMs worldwide. Apart from ATMs, these can be used for making online transactions at retail and e-commerce websites as well. These cards come with EMV chips and allow users to set their own limit.
 

Yes Bank: Yes Bank offers a range of debit card options that can be used for making international transactions. Users can withdraw up to Rs 1 lakh from ATMs worldwide and make online transactions worth Rs 2 lakhs for both domestic and international purchases. These limits are, however, different for different cards. The international debit cards offered by Yes Bank are as follows:Yes Prosperity Titanium Debit Card
 
  • Yes Prosperity Titanium Plus Debit Card
  • EMV Platinum Debit Card
  •  Yes Prosperity Platinum Debit Card

DBS Bank: DBS Bank provides international debit cards to customers when they open savings accounts online. Users get special privileges when they use these cards across various partner outlets in Asia and facilities like airport lounge access and others. These cards have higher spending and cash withdrawal limits. The bank offers highly competitive rates on foreign exchange as well making it ideal for foreign travel. DBS Treasure Visa Infinite and DBS International Platinum Debit Cards are among some of the best international debit cards in India.


IndusInd Bank: IndusInd Bank provides International Gold and International Classic Visa Debit Cards to its customers who want to have a debit card that can be used for transactions when they are on an international trip. The withdrawal limit on these cards per day is from Rs 25,000 to Rs 50,000. These cards can be used for online shopping, e-payments and bill-payments. The user can also enjoy fuel surcharge waiver of up to Rs 125/- every month.


Kotak Mahindra Bank: Kotak Mahindra Bank offers a wide range of debit cards that can be used in ATMs all over the world. Some of these cards come with a range of insurance cover like lost card liability, purchase protection limit, lost baggage insurance, air accident insurance. Users also get exclusive deals on fine dining, apparels, health, lifestyle and other purchases. There are a number of international debit cards that are offered by the Kotak Mahindra Bank. Some of these are:
 

  • Infinite Wealth Management Debit Card
  • Privy League Signature Debit Card
  • Privy League Platinum Debit Card
  • World Debit Card
  • Jifi Platinum Debit Card

Deutsche Bank: A wide range of debit cards offered by Deutsche Bank can be used at all ATMs across the globe for free. The user gets the flexibility to set the daily withdrawal limit of his international debit card. These cards come with the facility of fuel surcharge waiver. The user can avail exciting offers and deals on his purchases. Here is the list of international debit cards offered by Deutsche Bank:
 

  • Signature Debit Card
  • Platinum Debit Card,
  • Platinum Business Debit Card
  • Gold Debit Card
  • Classic Debit Card
Bank Debit Cards Features and Offers
SBI State Bank Silver International Debit Card, State Bank Global International Debit Card, State Bank Gold International Debit Card, State Bank Platinum International Debit Card
 
Equipped with EMV chip, State Bank Loyalty reward programs, and special offers on online purchases.
ICICI Bank All debit cards issued after 1st December 2013 can be used for international transactions 10X reward points on International spend, exclusive lounge access and other offers.
HDFC Bank Times Points Debit Card, HDFC Bank Rewards Debit Card, EasyShop Imperia Platinum Chip Debit Card, JetPrivilege HDFC Bank World Debit Card
 
 
Personal Accidental Insurance Cover on select cards, card limits can be changed via netbanking, cashbacks on shopping at select merchants and other privileges.
IDFC Bank Visa Signature and Visa Platinum Debit Card Easy to set your own limits, shopping and dining offers.
Yes Bank Yes Prosperity Titanium Debit Card, Yes Prosperity Titanium Plus Debit Card, EMV Platinum Debit Card, Yes Prosperity Platinum Debit Card
 
The user can set his own limit, EMV chips make the transactions safe and secure, special privileges and rewards.
DBS DBS Treasures Visa Infinite, DBS International Platinum Premium cards with special privileges and offers across Asia, higher spending and cash withdrawal limit, cashbacks, airport lounge access and more.
IndusInd Bank International Gold and International Classic Visa Debit Cards Daily withdrawal limit of up to Rs 50,000, fuel surcharge waiver of up to Rs 125, exclusive offers on apparel, dining, travel, hotel bookings, etc.
Kotak Mahindra Bank Infinite Wealth Management Debit Card, Privy League Signature Debit Card, Privy League Platinum Debit Card, World Debit Card, Jifi Platinum Debit Card
 
Access to VIP lounges across India and abroad, higher daily limits, exclusive deals and discounts on online purchases and more.
Deutsche Bank Signature Debit Card, Platinum Debit Card, Platinum Business Debit Card, Gold Debit Card, Classic Debit Card
 
1 Express Reward point for every spending of Rs 100, fuel surcharge waiver at all petrol pumps across India, global concierge services and more.

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Benefits of Fixed Deposits (FDs) in India https://www.paisabazaar.com/financial-planning/articles/15159-benefits-of-fixed-deposits-in-india/ https://www.paisabazaar.com/financial-planning/articles/15159-benefits-of-fixed-deposits-in-india/#respond Tue, 20 Jun 2017 07:56:09 +0000 https://www.paisabazaar.com///15159-/ When you make a deposit in a bank for a predetermined tenure at a fixed rate of interest, it is known as a Fixed Deposit or FD. As a financial instrument, Fixed Deposits have been tried and tested for a significant period of time and have consistently delivered good returns. This makes them one of […]

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When you make a deposit in a bank for a predetermined tenure at a fixed rate of interest, it is known as a Fixed Deposit or FD. As a financial instrument, Fixed Deposits have been tried and tested for a significant period of time and have consistently delivered good returns. This makes them one of the safest options when it comes to investments. Also, FDs are a good starting point for someone who is investing for the very first time.
 

Benefits of Fixed Deposits (FDs) in India

There are plenty of reasons why Fixed Deposits are one of the most popular financial products in India. Here are some of the major benefits of Fixed Deposits in India:
 

  • Get Guaranteed Returns. The return on investment is guaranteed. Irrespective of the amount you have deposited in an FD, it will earn you interest at the interest rate prevailing at the time of making the deposit. Market fluctuations are not going to impact the returns on your investment. This is probably the reason why most experienced investors still like to keep a part of their investment in Fixed Deposits
     
  • Determine Your Tenure. The tenure for Fixed Deposits is very flexible. It ranges from 7 days to 10 years, depending on the customer’s requirements. You can have multiple Fixed Deposits in the same bank at the same time for same or different tenures. You will receive a separate receipt for each and every FD.
     
  • Make More Profit. The rate of return on fixed deposits is much higher when compared with a savings account. The interest rates change based on the tenure of the Fixed Deposit. Most of the times, the interest rate is higher for FDs of a longer tenure. There are a few exceptions since the banks set the Fixed Deposit interest rate based on their anticipation of the repo rate (the interest rate at which RBI lends money to the banks). If a bank feels that the repo rate will rise after 5 years, the FDs with tenure of over 5 years will have a lower interest rate than one with a 3-year tenure.
     
  • Choose the Mode of Interest Payment. The customer can choose the frequency of interest they wish to receive, be it on a monthly, quarterly, or yearly basis. This will end up as another source of income for the customer. Alternatively, they can opt for a Cumulative FD in which the interest is reinvested into the FD delivering even better returns.
     
  • Better Interest Rates for Senior Citizens. One of the primary reasons why Fixed Deposits are so popular among senior citizens is because of the higher interest rates. The rate is generally better for FDs as compared to savings accounts and the rate of interest for senior citizens is higher (at least 0.50%) as compared to other customers.
     
  • Avail a Loan Against Fixed Deposit. If you need money urgently, it is easy to take a loan against your Fixed Deposit. The customer can borrow up to 90% of the principal amount of the fixed deposit. The customer keeps on earning interests even if he avails a loan against the FD. This interest can help you repay your loan much more easily.
     
  • Deal with Urgent Cash Crunch Situations. During the time of emergency, the fixed deposit can be broken and the money can be withdrawn. Banks charge a small amount as a penalty for breaking a Fixed Deposit prematurely. However, it is not a smart option to go for. It is advisable to opt for a loan against Fixed Deposit instead of breaking the FD prematurely. The interest earned on the FD reduces the interest outgo on the loan. In addition, customers do not have to pay any penalty, among others expenses that come up.
     
  • Joint Fixed Deposits: Many people do not know that they can have a Fixed Deposit along with their spouse, children or parents. However, it must be remembered that in case of premature withdrawal or application for a loan against Fixed Deposit, all FD holders need to sign the application form.

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5 Smart Ways to Pre-Pay Your Home Loan https://www.paisabazaar.com/home-loan/articles/15153-5-smart-ways-to-pre-pay-your-home-loan/ https://www.paisabazaar.com/home-loan/articles/15153-5-smart-ways-to-pre-pay-your-home-loan/#respond Tue, 20 Jun 2017 07:31:46 +0000 https://www.paisabazaar.com///15153-/ A house adds directly to your assets and at the same time gives you a feeling of contentment. Taking home loan to buy a house for residential purpose is always a wise choice as it ends the dreadful cycle of heavy rent payment when giving you a place you can call your own. Yet it […]

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A house adds directly to your assets and at the same time gives you a feeling of contentment. Taking home loan to buy a house for residential purpose is always a wise choice as it ends the dreadful cycle of heavy rent payment when giving you a place you can call your own. Yet it is extremely important to choose the right type of home loan with a suitable tenure and competitive interest rate. You have to plan all your expenses beforehand in order to pay the EMIs on time. In fact, just paying the EMIs is not enough, you should think of pre-paying your home loan partially or in full so as to reduce the financial burden earlier than expected.


Pre-closure of a home loan indeed saves you a big amount. Let us understand this with an example.


Suppose you take home loan at 8.5% for 20 years to purchase a house worth Rs 62 Lakhs; the loan amount is Rs 50 Lakhs. In this case, the total interest paid by you will amount close to Rs 54 lakhs. But if the same loan is taken for only 10 years, the total interest will be approximately Rs 24 lakhs. As you can see, there is a huge difference between interest payments (Rs 30 lakhs!) when you reduce the tenure by only 10 years. But if you have already taken loan for a longer period, you have the option of pre-closing it by making the payment in full. The sooner you close your home loan, the lesser interest you will have to pay.


Here are a few smart ways to help you reduce your overall home loan burden-
 

  1. Don’t Fall Trap to Pre-EMI Plans
Banks as well as builders offer the pre-EMI plan along with particular projects. Under this, you will have to pay only the interest component as long as the project is under-construction; once you shift to the new home after completion, the regular EMIs i.e., interest + principal repayment will start. You should opt for the pre-EMI plan if and only if you have fund-flow issues because in this case your actual loan (principal amount) does not even reduce by a penny. Paying regular EMIs since the beginning will reduce principal amount also which is beneficial in the long run. It will also control unnecessary expenditure during the initial stages.
 
  1. Make Good Use of Increased Disposable Income
It is advised by the experts to maintain your income-to-debt ratio in case your disposable income increases. This means if your income increases, you should also increase your EMI in that proportion in order to pay-off the debt early. This will also rein in your extra expenses when the salary increases. Any decrease in EMI only affects the interest component while keeping the principal unchanged. Hence, if the interest rates are falling, opt for reducing the tenure instead of the EMIs as it will also reduce the principal component.
 
  1. Channel your Windfall Gains
In order to pre-close your home loan, you should channel your windfall gains and one-time payments towards the loan prepayment. One-time payments may include yearly bonuses, incentives, etc. Windfall gains may come in the form of winning a lottery, unforeseen profits, etc. These funds help you make partial bulk payment thus significantly reducing the debt.
 
  1. Save to Achieve Pre-payment Target
Adopt regular monthly saving for making some bulk pre-payment of your home loan. For example, if you plan to prepay Rs 60,000 next year, start saving Rs 5,000 every month. Recurring deposit is a great option for such savings. This strategic payment plan will help you mobilize your monthly savings towards an annual prepayment which reduces the tenure as well as the EMI payments.
 
  1. Use Loan overdraft facility
A number of innovative financial services are available in the market which could help you prepay your home loan. One such scheme is home loan overdraft. If you think you have surplus income after making monthly EMI payments, you can opt for a home loan overdraft facility wherein you can deposit the amount in your loan account with the liberty of withdrawing it whenever required.

 

 

The bottom line is- if you can afford to make early payments towards the home loan and close it before the said tenure, you must. For any individual, reducing his/her liabilities should be the top priority. Home loan, being the biggest financial commitment, should be paid off as soon as possible. However, you must also consider the prepayment charges and weigh the choices.

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How to Resolve Aadhaar-PAN Name Mismatch Issue Using Aadhar OTP https://www.paisabazaar.com/financial-planning/infographics/15144-how-to-resolve-aadhaar-pan-name-mismatch-issue-using-aadhar-otp/ https://www.paisabazaar.com/financial-planning/infographics/15144-how-to-resolve-aadhaar-pan-name-mismatch-issue-using-aadhar-otp/#respond Tue, 20 Jun 2017 06:48:24 +0000 https://www.paisabazaar.com///15144-/ The Aadhaar Card has become one of the most important identity proofs available to an Indian citizen and recently it was made mandatory to link the IT Department's Permanent Account Number (PAN) card with the Aadhaar card. Subsequent to this announcement, many individuals initiated the process only to find that small differences in the spellings […]

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The Aadhaar Card has become one of the most important identity proofs available to an Indian citizen and recently it was made mandatory to link the IT Department's Permanent Account Number (PAN) card with the Aadhaar card. Subsequent to this announcement, many individuals initiated the process only to find that small differences in the spellings of their name on the two cards made it impossible to successfully complete the linkage. Recently a process was rolled out to ensure that the linking of the Aadhaar and PAN could be completed online with minimal effort even in such cases. The following is a step by step guide on how the Aadhar-PAN name mismatch issue can be resolved with ease.

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Buying a House Post Retirement? Here is How You Can Get a Home Loan https://www.paisabazaar.com/home-loan/articles/15063-buying-a-house-post-retirement-here-is-how-you-can-get-a-home-loan/ https://www.paisabazaar.com/home-loan/articles/15063-buying-a-house-post-retirement-here-is-how-you-can-get-a-home-loan/#respond Thu, 15 Jun 2017 11:43:17 +0000 https://www.paisabazaar.com///15063-/ Home loan is a major financial commitment for homebuyers but, at the same time, it also entails huge risks for the bank. This is the reason why banks are very apprehensive about extending home loan to people who are close to retirement, regardless of their financial standing. People who are on the last leg of […]

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Home loan is a major financial commitment for homebuyers but, at the same time, it also entails huge risks for the bank. This is the reason why banks are very apprehensive about extending home loan to people who are close to retirement, regardless of their financial standing. People who are on the last leg of their career have an insecure income situation which could make repayment difficult for them adding to the risk of the bank. Mr. Subramanian faced a similar situation when trying to buy a house in his elderly years. He was shocked and disappointed to know that no bank was ready to offer him a home loan. He approached Paisabazaar for finding a way forward.


Before we reveal the advice of our in-house experts, let’s dwell on who Mr. Subramanian is.


Mr. Gopala Subramanian is a 58 years old government official with only 2 more years remaining in his service tenure. His job was transferable which meant he traveled and stayed in various locations across India with his family. As he was always allotted a government-sponsored residence, he focused on spending on his children’s education instead of buying a house. Though he is financially sound — steady government pension, a seven-figure gratuity amount, robust investment in bonds and FDs — he is faced with the prospect of not having a house of his own for his post-retirement days.


Banks avoid giving home loans to applicants at the verge of retirement as the repayment cycle is 20 years long and the only regular source of income for the borrower is his pension. [Also read: 7-point Checklist for Home Loan Borrowers Aged 50+] Moreover, due to old age he would require more medical attention which is again a big financial outgo along with other usual spends. So it is hard for Mr Subramanian to convince the bank about his repayment capacity.


Paisabazaar Advice on How to Get a Home Loan at the Age of 60


Our in-house expert suggested joint loan application. Having a co-applicant who earns well and still has 8-10 years left to retire increases one’s home loan eligibility. In Mr. Subramanian’s case, his wife can be added as a co-applicant. His son could also be a perfect co-applicant as his age will work as a positive factor allowing a longer tenure and subsequently reducing the EMI.


Option 1: Joint home loan application with his wife


Lenders would club the incomes of both the applicants to arrive at the loan amount and repayment tenure. Also, in such cases, banks would ensure that the potential EMI does not account for more than 60% of the applicants’ net monthly income.


While the current home loan interest rates are considerably low (8.30% onwards), a shorter tenure will lead to higher EMIs. Mr. Subramanian’s investments in the form of bonds and FDs will also work in favor of him as he can pledge these for the home loan sanction. Also, at the time of retirement, he will get a hefty amount as gratuity which can also be pledged or used for part pre-payment of the home loan. Since he does not have many outstanding debts, he will also be eligible to apply for home loan overdraft facility which will facilitate faster repayment.


Since Mr Subramanian will be working for two more years, his income till retirement will be taken into account for calculating the Net Monthly Income (NMI). And post that, his pension amount will be considered to arrive at the NMI. For example, if Mr Subramanian’s and his wife’s monthly salary is Rs 40,000 and Rs 35,000, respectively, then for the first two years the total income of the family will be considered as Rs 75,000. Post retirement, if he gets a monthly pension of Rs 10,000, the net monthly income will be Rs 45,000 only.


Even with a joint home loan, Mr. Subramanian might not get a longer tenure as the banks try to service the loan before the retirement of the working co-applicant.


Option 2: Joint home loan application with son


The other option is that Mr. Subramanian applies for a joint loan with his son. In some rare situations, one can also be granted a home loan with the spouse as well as the son. The combined income of all three will be considered for deciding the loan amount. However, only the son can be the primary applicant. Other terms may also differ from bank to bank.


Another breather for elderly applicants is that some lenders, such as SBI and Canara Bank, are coming up with specific home loan schemes to cater to them.
 

Joint home loans offer several benefits to borrowers, in terms of eligibility for higher loan amount and income tax relief. Read our article What No One Tells You About Joint Loan to know more about the benefits of availing joint home loan.

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