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The Indian financial market has a substantial demand for long-term, secured advances like home loans and loans against property. A recent analysis carried out by ICRA showed that the loans against properties comprised of almost Rs. 85,000 Crore, accounting for almost half of all non-banking lending institutions in India. One should carefully consider the difference between the fixed vs floating interest rates and understand their benefits before selecting a particular type.

Loan Against Property – Key Highlights

  • 33%– Increase in the total number of loans against property availed in 2018.
  • 1.6 million – Total accounts created for these credits.
  • Rs. 34.93 Lakh – Average balance held by borrowers in the 3rd quarter of 2018.

These long-term credits often come with several borrower-friendly and flexible policies like the provision to choose between fixed or floating interest rate, repayment tenor, etc. Several financial institutions offer credits like loan against property with fixed or floating rates of interest.

What is a fixed or floating rate of interest?

It is necessary for every borrower to understand the difference between fixed vs floating interest rate before determining which one will be best suited as per their individual repayment capability. Let’s take a look at the different types of interest rates and understand the difference between each of them.

 

  • Fixed-rate of interest –

 

A fixed interest rate allows a borrower to pay a predetermined rate of interest throughout the loan tenor. It stays unaffected from any market fluctuation during repayment. The rate is calculated when a borrower applies for a credit to a particular financial institution. 

Fixed-rate of interest allows a certain degree of stability during the loan’s repayment tenor. An individual looking for a secured option that is independent of the market’s volatility should avail of a fixed rate of interest. 

 

  • Floating rate of interest – 

 

Floating interest rate is a better option for borrowers with a high-risk appetite. It is highly dependent on the current financial market, with the base rate being one of the factors that affect the interest rate. The rate of interest is automatically revised every time the base rate is changed, and it can increase, or decrease depending on the market condition. 

The floating rate of interest usually stays 1% to 2.5% lower than fixed rates. Non-banking financial institutions like Bajaj Finserv can offer as low as an 8.80% interest rate for their financial products.

Which one is best suited for a borrower?

Both floating and fixed rate of interest comes with its unique benefits. The fixed-rate allows a borrower to plan their finances more effectively for short and medium-term (3-10 years) loan tenors. It also offers a safer option for individuals who want to borrow at a lesser risk.

On the contrary, the floating interest rate is better suitable for longer tenors (20 to 30 years). Financial experts also recommend availing such credits when the market is relatively stable with lesser chances of increase. However, a floating rate of interest might make it difficult for an individual to create an effective budget.

It is important for every borrower to determine whether floating or fixed rate of interest will be a better option when they opt for a loan. Let’s take a look at some situations that might help determine which one will be ideal.

Why go for fixed rates?

There are several reasons why someone might prefer fixed rates over variable ones. 

  1. If a borrower is comfortable paying the current rate of interest and prefers a fixed repayment schedule, then they should avail of a fixed interest rate. However, a borrower should ensure that the monthly installment should not exceed more than 30% of their income. 
  2. Fixed-rate of interest is preferred if a borrower considers that the financial market is likely to experience a significant change in upcoming years. As the interest is independent of market fluctuations, they will not change even if the base rate increases or decreases.

Why go for floating rates?

Individuals with a higher risk tolerance can consider floating interest rates for their loans.

  1. A borrower can opt for a floating rate of interest if they think the base rate is likely to decrease in upcoming years. It will lower the payable interest and will help save a significant amount of money during repayment.
  2. Floating interest usually stays 1% to 2% lower than fixed rates. If a borrower considers that the market is unlikely to change during the loan tenor, then they can benefit from the lower rates.

Several financial institutions, including Government-backed lenders and non-banking financial institutions, offer credits at both fixed and floating rates according to a borrower’s requirements. They also provide pre-approved offers that simplify the process of availing a loan and helps save time.

These offers are available on both secured and unsecured credits, including home loans, loan against property, personal loans, business loans, etc. You can check your pre-approved offer by sharing some essential contact details online. Selecting a particular type of interest depends on an individual’s repayment capability, financial condition, and the ability to take risks.

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While net banking is a boon to several, it can be a bit overwhelming for users who are not tech-savvy.

They face challenges while doing online banking. Hence, become aware and use online banking the smart way:

Safety

One of the major fears that customers have about net banking is safety, and this is one of the prime reasons that they prefer not to use internet banking. The cases of cyber-crimes and hacking are on a rise every day. The most obvious threat to modern banking is hacking of the bank accounts. Even with the banking sector constantly working on these safety issues, hacking is not stopped completely. The hackers are able to find technological loopholes. Most banks in India have introduced anti-phishing processes to safeguard their customers and security systems from getting hacked. However, loss of data and identity theft instances stop the users digital banking. Hence, use a secure data connection and avoid using WiFi in public, if you do banking through mobile banking apps.

User-friendly apps

There are times that due to technical glitch, money does not get transferred due during an online transaction. On the other hand, even if the transaction gets processed, customers get no updates about the transaction status and which causes panic. These incidents make customers uncomfortable and anxious. The good part is today most of banks have user-friendly apps and web portal. Every bank also sends alerts and notifications concerning not to share debit/credit cards details with bank officials themselves.

Customer service support

Since customers are not actually present in banks in net banking, there is a gap in the relationship between them and the bank. It could have unfavorable effects. This has got resolved as well thanks to 24*7 chatbot to solve your queries.

Restricted services

Internet banking is appropriate for services like making fund transfers, paying utility bills and to check account balances. A customer can start an application to open a new account or apply for a loan, but he or she must visit the bank branch to submit identity documents and sign bank forms. In this online-only bank era, there are some who send representatives to collect documents or there is easy upload of them.

Transactions

Online banking works well when transactions are easy and do not need any face to face conversations. However, there are some heavy transactions which do require the assistance of manager or consent of the bank, especially after demonetisation. Hence, get them resolved before doing internet or mobile banking.

Both traditional and online banking have their pros and cons. While both have their own threats, the banking sector is always trying to bring them down. The ideal thing to do would be maintaining both traditional and net banking practices as per the convenience. The best thing is to take adequate precaution to avoid falling for unethical activities on the internet.

A credit score is a crucial factor that lenders take into account when you are applying for an advance. This is because holding a good CIBIL score indicates your creditworthiness and shows minimum chances of defaulting on a loan.

Therefore, borrowers with bad credit scores often find it challenging in procuring the best home loan in India, as lenders consider such applicants as risky.

However, although it might be pretty challenging to avail loans with poor credit rating, it is not impossible.

Here are some tips you can follow to avail a home loan in India with bad credit score –

[A] Apply for a joint home loan

In case your credit score is low, but your spouse holds a good CIBIL rating of 750 or above, make her the co-applicant for a joint home loan. Moreover, if your spouse has a steady income source – lenders will take that into consideration, and you might receive your loan sanctioned for a larger amount.

Besides, you can also avail of this advance with comparatively lower interest rates. Furthermore, the repayment burden is significantly reduced in the case of joint home loan offers.

Plus, you can also avail tax benefits on both the principal and interest components individually. Each of the applicants can claim tax benefits of up to Rs. 2 Lakh, under Section 24 (b) of the Income Tax Act on the interest pay-outs. Under Section 80C, each of the co-applicants can claim tax rebates of up to Rs. 1.5 Lakh on the principal components cumulatively every year.

[B] Approach NBFCs

NBFCs (Non-Banking Financial Companies) are one of the best sources to avail a home loan provided the applicant holds a poor CIBIL score.

Some of the leading NBFCs like Bajaj Finserv offer competitive home loan interest rates on their housing loans. Besides, you can also benefit from relaxed eligibility criteria and nominal paperwork.

The company also provides pre-approved offers, which lower the time taken to avail financing by making the procedure simplistic. These pre-approved offers are applicable on personal loans, business loans, home loans, and numerous other financial products. All you need to do is share a few necessary details and check your pre-approved offer.

Also, make sure to use an online Home Loan EMI calculator of your lender to calculate your monthly outgo and determine if the advance is affordable for you.

[C] Possess a stable source of revenue

Even if you possess a bad credit score, but have a steady source of income, you can still avail of the best home loan in India. Having healthy revenue proves your capability of repaying your loan on time. This is the reason why salaried professionals are often preferred over self-employed individuals.

For instance, if you are employed in a reputed government, private or corporate firm, lenders will take that into consideration. It indicates that you have minimum chances of defaulting even meeting your fixed monthly obligations.

So, for a home loan online apply, you could improve your chances of loan eligibility by keeping this aspect in mind. Alternatively, you must also be aware of the best credit score for a home loan and how to improve yours for hassle-free lending in the future.

Additional measures for borrowers with poor credit score

  • Keep these pointers in mind –
  • Repay your existing credit card bills or on-going EMIs on time.
  • Avoid applying for a higher loan amount, considering you are already a risky applicant.
  • Convert ‘settled’ accounts into ‘closed’ accounts.
  • Avoid closing any of the older accounts, as your credit score takes a severe hit due to this.
  • Check for inaccuracies in your CIBIL report from time to time.

Following these tips will help you to avail the best home loan in India. You can also appoint a guarantor with a healthy CIBIL score, as it will improve your chances of home loan approval.

The world of market investments is rather complex and goes beyond basic investments like buying and selling shares, mutual funds, government bonds and other similar money market investments. Advanced traders deal in several different types of futures and options contracts. Futures contracts essentially refer to a type of derivate contract under which investors and traders agree to buy or sell a predetermined quantity of an underlying asset at a predetermined price on a fixed date in future. This type of contract helps the investor evade the risks associated with the fluctuation of the price of the underlying asset. Here’s all you need to know about oil futures.

What are oil futures and how to trade in them?

As we all know, every economy needs crude oil to keep functioning smoothly. Wars are waged and countries are annexed for the sake of their oil resources. As such, oil is a rather crucial resource that can contribute to the boom or slowdown of an economy. This is the reason why entering in crude oil trade in options and futures is legitimised by governments across the world.

Crude oil futures are extensively used by countries and large corporations in order to hedge against the volatility in price. The prices of these futures can increase and decrease based on their movement in the spot markets and the demand and supply. For example, if countries supplying oil feel that the oil resources are fewer but the demand is high, the prices of oil will increase in future, which, in turn, leads to the hike in price in the spot market. On the other hand, when there are excessive oil resources and lower demands, the chances of oil pricing falling are higher in the spot market.

Why are oil futures essential?

Oil futures are typically essential because they involve large quantities of this commodity. Most countries across the globe depend on oil imports to ensure that their economy is functioning smoothly. In the event that oil prices are hiked, countries importing this resource have to pay large amounts of money to the oil exporting country, which can put a strain on the importer’s financial health. As such, countries must rely on oil commodity futures heavily in order to hedge against the rising prices of oil. Apart from hedgers, speculators also stand a chance to profit from the movements in price, while trading in different types of futures contracts, including oil.

Trading crude oil futures in India

Indian investors interested in trading in oil futures can do so, on the Multi Commodity Exchange (MCX). Trading in oil is very popular in the commodity trading community since both, margins and lot sizes of these trades are small. As an investor, you may be required to pay a very small margin; typically under 5% to trade in oil. This gives you the opportunity to exercise considerable leverage. For instance, if you wish to conduct a trade worth ₹5,000,000 you only need to deposit a margin of ₹250,000. Moreover, the crude oil market is highly liquid with trade worth ₹10,000 to ₹15,000 Crores taking place on a daily basis. As such, you will have no trouble in buying or selling futures if you choose to do so.

Final word: Apart from oil, you can also trade in various other types of futures which include commodity futures, currency futures, index futures, and stock futures. Futures contracts can be used by investors to hedge the movements of prices of the underlying assets and prevent losses from occurring, especially if the changes in prices are not in the favour of the investor.

Trading in options is vastly different than regular share trading. The stakes involved are different as are the rewards associated with this kind of trade. As any advanced trader knows, investing in options is majorly about customisation. The rewards reaped from investments can be rather high, just as the risks are. Most investors looking to trade in option start out by looking at option trading tips, but the fact is that there are a few things you should know before you begin investing in options. They are as under.

  1. Trading in options is all about customisation

As mentioned above, option trading involves a lot of customisation. Generally, option traders are also regarded as self-directed investors who typically, work directly with their financial advisors. The financial advisor helps you manage your options trading portfolio. While the financial advisor offers the guidance, it is you, the investor, who fully controls all trading decisions as well as transactions. However, you can always research about the different trading strategies and current market outlook, before you begin trading.

  1. It is better to start with stock options

One of the best option trading tips you can ever get is that you should begin with trading stock options. Options based on equities are ideal for new investors since they help you navigate the complex world of trading in options and help you understand how they stand differently as compared to stock investments. It is necessary that you understand how stock option quotes work before you advance with options investments. For instance, you need to understand things pertaining to the costs involved and the expiration of options contracts.

  1. There are 2 different types of options you can choose from while conducting your trades

An option is essentially a trading contract that gives the owner the right to purchase/sell underlying assets at a predetermined price or a predetermined period of time or duration. The duration could be as short as one day or as long as many years, depending upon the option contract type. The two types of options available to investors are ‘call’ and ‘put’ options. While the former option gives the owner the right to buy shares of a certain security at a predetermined price within a predetermined tenure, the later gives the owner the right to sell the shares of a certain security at a predetermined price within a predetermined tenure. Note that when it comes to option trading, owners are not obligated to exercise their right to buy or sell.

  1. You should be aware of the risks of option trading

Risks are inherent to all kinds of market investments and options are no exception to this rule. As an individual option trader, you should be concerned with the two main type of risks associated with trading in options – historic and implied volatility. Historical volatility signifies the past performance of the options and how the price of stock has fluctuated in the past, daily, over a period of one year. Implied volatility is about what the market place is ‘implying’ based on the NSE F&O live prices i.e. how volatile the stocks can be in future, until the contract expires.

Final word: When it comes to trading in options, you have plenty of choices. However it is not as easy to begin with these investments and the potential for making costly mistakes cannot be ignored. While it can be challenging for beginners, trading in options can be financially rewarding once you get comfortable. But, before you start investing, remember to check the F&O stock list to make informed decisions regarding your investments.

When it comes to the share market, there is no dearth of investment instruments. Investors can purchase shares, mutual funds, government bonds, and several other types of money market instruments. As your knowledge and investment appetite increases, you can consider expanding your investment horizons and begin trading in commodities. Commodity trades involve the trade of commodities and generally revolve around futures and options trading. Copper and gold futures are two types of commodities, among several others, traded in this market. But before we can understand the trade of the above mentioned commodities, let’s learn what future and options trading entails.

Futures and options explained

Futures and options are simply financial contracts that investors use to profit from their investments. Buyers and sellers enter into futures and/or options contracts to hedge or safeguard their investment. Those who invest in options have the right, but not obligation to buy/sell commodities at a predetermined price at any given time, as per the terms mentioned in the options contracts. On the other hand, those who invest in futures are obligated to buy/sell the commodity on a specific future date, at a price, predetermined in the future’s contract. The purchase/sale has to be honoured before the expiration date.

Investing in copper futures in India

Now that you know what futures trades entail, let’s understand how copper futures investing can prove to be beneficial.

Copper is one of the most popularly traded commodities in the commodity market. The demand for copper has been increasing steadily in the last two decades, making it a worthwhile and profitable commodity to invest in. In India, all kinds of metals, including gold and copper, are traded on the Multi-Commodity Exchange or MCX.

Leverage is the greatest benefit a copper futures trader can get. Since copper trade margins are significantly low, investors can easily take crucial positions by investing in this metal. Significant trading positions automatically translate into better opportunities for investors to earn a profit. That said, trading in this metal, like every other market trade, is not without its risks. If you take a large position and if the market prices move in an unfavourable direction, you stand to incur considerable losses.

Copper futures allow hedgers and speculators to hedge/ speculate against volatile market prices and take advantage of the changing prices to turn a profit.

Investing in Gold futures in India

As Indians, we love gold and consider it as a great investment option. Gold investments are done in the form of gold jewellery, biscuits, bonds and also futures. Of these the latter are basically hedging tools for users of gold as well as commercial gold producers. Gold is indeed regarded as one of the best instruments that can help diversify your investments.

Gold futures make for an excellent hedging tool since the prices of gold move in a different (mostly upward) direction as compared to most other commodities. Gold is best traded in futures because it eliminates the risks associated with holding physical gold. Physical gold is also not very convenient since you have to first bear making charges and also determine how to store it securely. Moreover, there is the risk that the physical gold purchased may not be as pure as the claim made by the commercial seller.

Final word: Whether it is gold or copper futures, investors, can hold both futures until maturity. You also have the option to take delivery of either metal if required. However, if you decide to sell the futures of either metal before the contract expiry date, you can trade the metals without taking possession.

We buy and use innumerable goods and services every day. And as a creature of habit, we tend to go back to only trusted products from branded sources. But sometimes, unfortunate things happen. The product you buy might not be entirely safe for usage. It may turn out to be faulty or even harmful. It could be as simple as faulty cream manufacturing or as severe as a defective electronic device. And to ensure that the consumers are not at threat from their product, a company needs to test their product before they hit the market repeatedly.

Tackling damage caused by a product or service

 Accidents can happen to anyone. And a faulty or defective product is no less than an accident. Think about it; you paid the full price for it, then why should you settle for something less? If you have ever faced a situation like this or are currently stuck in a similar situation, you have the right to go against the seller. They are liable for the damaged or non-functional product that you received. In addition to this, they are also responsible for any external damage caused due to their products.

Of course, you can’t just dream it, and it would happen. Going against established companies is not easy. Law enforcement is involved, and you need a decent attorney to represent your case. And you are in luck if you are looking for Products Liability Attorney in Lake Charles. There are several trusted and experienced lawyers who can help you claim product liability for the damage caused by the faulty product. The Product Liability Attorney Lake Charles addresses all your issues with the utmost professionalism. NO case is too small or too insignificant!

Not only do they agree to take up your case, but they also help you build a fail-safe case. We look for substantial proof to validate your case and, thus, help you over your losses caused due to faulty product.

Why do you need a product Liability Attorney? 

It is the responsibility of a manufacturing company to produce safe products. If the business violates the law of consumer protection, it is liable for the damages caused. And if you suffer any minor or major losses due to a defective product, you can file a product liability claim. But you won’t make it far if you don’t have a proper backup. Which means you need a lawyer to represent your case in the courtroom.

Some specialized lawyers deal with product liability and customer safety. And these are the ones whom you would want to approach for your case.

Products liability attorney Lake Charles helps you legally sue a company for manufacturing a harmful product or service. The case is stronger when there are multiple incidents of mishaps. The product liability attorney analyzes your issue and gives you legal advice to help you fight the accused business. Here are some things that a product liability attorney checks before filing a legal case against the manufacturers.

Elements to be proven for a successful product liability claim: 

  • The consumer has to provide evidence that the product or service was faulty
  • The consumer has to prove that he was injured or faced a massive loss because of the product’s defect
  • The injury, loss or damage caused by the product has to be genuine and proven in the court
  • The manufacturer has to owe a valid responsibility that the product or service was safe

Once the consumer can prove these elements, product liability attorney Lake Charles will handle the rest of the case. They gather the required evidence to represent your case against the defending company. The accusations are put forward in court based on negligence in sales.

The attorney checks that the warranty stating the product usage safety duration is also inappropriate. When the damage caused by the product is proven, the company has to compensate for the consumer’s loss.

Conclusion

There are millions of businesses selling you new products and services every day. Any product you buy could be a risk. And you wouldn’t want to lose all your savings because of defective manufacturing, would you? Hence, a product liability suit will help you claim compensation for your losses.

 

effective retirement planning - save now and enjoy later

Retirement Planning is the process of planning for a comfortable living after your earned income disappears. To avoid trouble down the road it is important to understand the various aspects concerning retirement planning.

Retirement Income planning consists of Personal planning and Financial Planning.

Personal planning involves identifying hobbies and activities that you would want to pursue after your working life is over. Wherein financial planning is used to identify the investments that will fulfil your future expenses after Retirement.

 

Foolproof Steps To Retirement Income Planning

  1. Identify & compare your income and expenses to determine any shortfalls or surpluses.
  2. Use our online Retirement Planning calculator to know how much upfront or SIP investment is required.
  3. Review & analyze the various retirement income strategies.
  4. Develop an action plan.

 

Investment Avenues To Create Your Retirement Fund

When we look across all the investment avenues available to save for your Retirement, we apply a general filter of Safety of Investment that guarantees a payout as income. We also need to beat inflation by around 3-4% only. Keeping this in mind, let us look at a few options that you can consider as avenues to create your retirement fund –

  • Public Provident Fund (PPF):

Public Provident Fund or PPF is one of the most popular age-old retirement planning strategies. However, PPF is popular with entrepreneurs for another reason. PPF was created specifically to give people incentives to save for retirement.

  • Mutual Funds:

The most sensible retirement portfolio is through the Mutual Fund route which can be created through a systematic or a lumpsum manner. This is something that most people are aware of but does not do it as systematically as they should!

You may create your retirement portfolio SIP in equity funds or lumpsum investment in liquid or debt funds and then systematic transfer or STP into equity.

  • National Pension Scheme (NPS):

You can opt for NPS along with other traditional retirement options like PPF. Thus, this option gained maximum popularity primarily because of an additional tax saving investment of upto Rs. 50,000. This investment can be done over and above the 1.5 lakh 80C limit.

This is a secured pension scheme approved by the Central Government wherein, a citizen between 18-60 years of age can contribute a minimum of 6,000 per year. This is investment option; you can choose both equity as well as debt in a chosen combination of the two.

 

Save Now & Enjoy Retirement Later

If you’ve yet to start saving for retirement, make 2019 the year you ramp up. That’s because the more time you give yourself to grow your savings, the more you’ll get to take advantage of compounding growth. That’s why with effective retirement planning, you can save now and enjoy later

Whenever you opt for a loan, proper loan planning is extremely critical. Loan planning refers to figuring out the right instalment amount that can fit into your monthly budget without you spending too much on interest payments.

With rapid digitization, there is now no need to rely on the lender to provide an amortization schedule. There is a tool available online that can help you with loan planning. This tool is an EMI calculator.

An EMI calculator is a tool that can help you calculate the monthly instalment amount on your loan. Using this loan calculator is absolutely critical if you plan to make a loan application.

Here are reasons why you should use a loan EMI calculator:

  1. Free tool:

One of the biggest reasons to use a loan EMI calculator is because this tool is available free of cost. It is available on lender websites for free. You do not have to be a customer of the bank to use the EMI calculator.

  1. Easy to use:

Using this loan calculator is extremely simple. All you need to do is to enter the principal amount, the rate of interest and the loan tenure. Once these three inputs are entered, you can submit it and the calculator will immediately display the EMI amount. You can also make changes in your inputs and the results will be displayed immediately as well. Even if you have never used an EMI calculator before, these calculators are self explanatory and do not require a lot of information.

  1. Loan comparison:

One of the best reasons to use a loan calculator is to compare different loan offerings from lenders. Since your loan amount will remain the same, you can change the rate of interest and loan tenure and see the impact on the loan instalment. It is important to have an idea of the monthly servicing required for the loan before you apply for the loan so that you can be sure that you can afford the loan.

  1. Deciding loan tenure:

It is possible to use a loan calculator to find out the loan tenure. This is because there is an inverse relationship between the loan tenure and the loan instalment amount. The longer the loan tenure, the smaller the loan instalment. The shorter the loan tenure, the higher the loan instalment. However, when the loan tenure is longer, the total interest paid on the loan is higher. When you make the decision to choose your loan tenure, you need to consider the monthly instalment amount, your monthly budgets and the total interest paid. Another factor to consider is whether there are any pre-payment or part repayment charges on the loan.

  1. Amortisation schedule:

Some loan calculator also have an amortization schedule which they give out with the Loan calculator. The amortization schedule shows the breakup of the instalment amount into principal repayment and interest payment. This schedule helps you to find out the total interest paid for a particular period of time. The loan amortization schedule can help you plan for any part repayments you want to make or figure out the loan tenure.