8 Myths About Personal Loans You Shouldn’t Believe

A personal loan is the most convenient and the quickest way to deal with any financial crises as it offers many benefits like quick online approval, flexible tenure, no restriction on end- use, instant disbursal, etc. Unfortunately, with so many benefits comes several half- baked theories too that often mislead people regarding a personal loan and compels them to look out for more expensive ways to deal with the financial emergency.

#Myth1. Only banks offer personal loans

Many people tend to believe that the banks are the only financial institutions offering personal loans. Yes, all the banks offer personal loans but there are many NBFCs like Bajaj Finserv, Tata Capital, HDB Financial Services and digital lenders like EarlySalary that also offers personal loans. When a bank rejects your personal loan application, you can contact these NBFCs and digital lenders for a personal loan as their eligibility criteria is bit flexible as compared to the banks.

#Myth2. Low credit score leads to loan rejection

A credit score is one of the most important factors considered to determine your personal loan eligibility. However, a credit score do not entirely impact your loan approval chances. A credit score of 750 or above is considered healthy by the lenders but if you have a low credit score (less than 750) other factors like your income, employer, etc. can save your loan application. In such a case, the interest rate will be on the higher side but you have the chances of getting a personal loan.

#Myth3. Only salaried individuals can avail a personal loan

It is a very common misconception that only salaried professionals with steady flow of income can avail a personal loan. Self-employed individuals/professionals like businessman, CA, doctors, etc. can also apply for a personal loan and the lenders will evaluate their credit score and ITR before sanctioning the loan. Some of the banks also offer a personal loan to pensioners.

#Myth4. The processing time is long

It is believed by many that the processing of a personal loan consumes a lot of time and there are a lot of formalities involved. This is not true. These days with banks being digitalized, you can easily apply for a personal loan online and can process your loan application just by uploading minimum documents. Also, you can avail an instant approval online and the amount would be disbursed to your account within 3-5 working days.

#Myth5. Interest rates are high on a personal loan

A lot of people think that interest rates on a personal loan are high. But do you know that you can get a personal loan with interest rate as low as 10.99%. Yes, it is true and depends on your credit score, age, repayment history, employer, etc. Also, the interest rates on a personal loan are very low as compared to the interest rates of credit cards that start from 30%. Hence, it is always feasible to avail a personal loan rather than a credit card.

#Myth6. There is no prepayment option

Due to the shorter tenure of a personal loan that usually varies from 12 to 60 months, many individuals believe that there is no prepayment option offered on a personal loan. However, you can prepay the loan before the tenure ends. Some of the banks have a lock- in period of 6 to 12 EMIs and after paying these EMIs, you can foreclose the loan any time before your tenure ends.

#Myth7. Personal loan can only be used for personal reasons

Personal loans come with a flexible end use that is they can be used for any purpose. You can even invest money availed from a personal loan in a business idea or you can buy equipment for business or can pay salaries to your employees.

#Myth8. You can apply for a personal loan from various lenders at a time

Yes, you can apply for a personal loan from various lenders at a time but it is not advisable. Every time you apply for a personal loan, it gets registered to the credit bureau as hard inquiry and gets reflected on your credit report. If any lender checks on your credit report, he will be able to see this inquiry and will consider you credit hungry and hence might not approve your loan application. Therefore, you should only apply with a single lender at a time.

PERSONAL LOAN EMI CALCULATOR - URL link

Paisabazaar Personal Loan EMI Calculator helps you determine your Equated Monthly Installment (EMI) instantly. The online calculator will help you plan your loan better by telling you what would be your EMI outgos, on different interest rates, loan amounts and loan tenures.

https://www.paisabazaar.com/personal-loan-emi-calculator/

7 financial mistakes you need to avoid at all costs

Financial planning is extremely important to ensure that you handle your money properly. Just earning a good amount is not enough, you need to know how to manage it properly so as to make the most out of it. One needs to understand that money can help you make more money. However, in order to do that you need to avoid some pitfalls. 

People often make some very common financial mistakes which stops them from creating wealth. Wealth creation takes time and if you keep making mistakes with your money, you make lose the time and opportunity to help your money grow. 

Here are 7 money mistakes that you need to avoid at all costs:

1. Excessive Spending: Overspending is one of the most common mistakes that people make with their money. One must remember that great fortunes are often lost one rupee at a time. Small expenses like a Rs 10 snacks packet or Rs 50 ramen cup a day may not seem like a big deal at the time, but every little item adds up. Rs 50 ramen cup every day for a month adds up to Rs 1,500 per month and Rs 18,000 per year. Just imagine, you could have saved or invested that Rs 18,000 to get handsome returns. If you're enduring financial hardship, avoiding this mistake matters. So, sit down and take note of unnecessary expenses that you make every month and you will be surprised by the amount that you could have saved. 

2: Never-Ending Payments: With credit cards becoming increasingly popular, people nowadays buy stuff that they don't even need just because they know that they do not have to pay for the expenses immediately. Also, if you ask yourself whether you really need all the items that you keep paying for every month like cable television, music services or fancy gym memberships etc., you will find that you can do without these and it can help you stop paying unceasingly. Rather than having never-ending bills, subscription charges, it is better to save more. Creating a leaner lifestyle help you increase your savings.

3: Surviving on borrowed money: Borrowing money in times of crisis is normal. However, living and surviving on borrowed money could be the biggest mistake you make. Using credit cards to buy essentials has become somewhat normal. However,  paying interest on fuel, groceries and a host of other essential items that are gone long before the bill is paid in full, is a stupid choice. Getting personal loans for unnecessary things is something you need to avoid because while you may get the money instantly, the high interest will stop you from saving any money and, in turn, will stop you from creating wealth

4: Buying a car without need: Millions of new cars are sold each year. However, only a few buyers can afford to pay for them in cash. Most car buyers lean on car loans to finance their car purchase. A lot of people consider having a car a status symbol so they try to buy one even if they do not need it. Some people go out of their way to buy a car which is way out of their budget. 

Do not buy a car if you do not need it as the burden of car loan EMIs is not worth it. If you really have to buy one, evaluate your requirement and budget and stick to it. Also, remember that buying a car is not a one-time expense. You will have to bear other expenses that come with it like insurance cost, maintenance, fuel and repair charges etc.

5. Spending too much on your house: Note that when it comes to buying a house, bigger is not necessarily always better. A bigger house requires more maintenance, more furniture etc which increases the cost. So, unless you have a large family, choosing an extremely large house will only mean more expenses like taxes, maintenance, and utilities etc. Also, make sure to spend a reasonable amount on paint, woodwork, etc. Make a budget and stick to it so as to avoid unnecessary expenses on your house.

6. Living Paycheck to Paycheck: If you are someone who lives from paycheck to paycheck, you are in serious trouble because this means that you are not saving. If you are one of those people who no matter how much they plan their expenses, nothing is left of their previous salary by the time the next month salary comes into their account then you need to evaluate asap. Some might ask that what is so wrong about living paycheck to paycheck as long as you are living comfortably. Yes, for the time being, it might not seem like such a bad thing but when you think about the fact that you are neither saving nor investing then it should worry you. 

You receive monthly paychecks today but you will retire one day and if you have not saved anything then you will have trouble in future. Also, if you lose your job or end up in a financial crisis, you will have no funds to fall back on and this will be problematic.  

7. Not Investing: People often park their money in a savings account and leave it at that. However, savings account returns are not much and inflation will eat away your savings. If you do not get your money working for you through investment, you are making a mistake. Make sure to invest based on your financial goals, risk appetite and investment horizon. Making monthly contributions to designated retirement saving scheme is essential for a comfortable retirement. You can take advantage of the tax benefits offered to investors. Understand the time your investments will have to grow and how much risk you can tolerate.

PAN card holders alert! A single mistake may lead to a whopping Rs 10,000 penalty

Permanent Account Number or PAN Card use has become mandatory for most banking transactions. In fact, like Aadhaar Card, the 10-digit number card is mandatory for availing various welfare measures being run by the government. However, it is important to know that one should fill PAN details very carefully as giving wrong information can lead to an up to Rs 10,000 penalty. In fact, those who have more than one PAN card are also advised to surrender the one that is not in use because it also leads to heavy penalties.

As per the Income Tax Act 1962, the Section 272(B) permits the Income Tax Department to impose penalty of up to Rs 10,000 on the person who has given wrong PAN card information. The Income Tax Department may cancel PAN card for giving wrong information. Even an error in the name is not permitted. So, check each and every detail very minutely after filling your PAN Card details. So, if you are going to file your Income Tax Return (ITR), you are advised to fill your 10-digit PAN details carefully and avoid any kind of penalty.

It has been found that people apply for the PAN Card and after the completion of the whole process, it gets delayed due to the postage problems. In such a scenario, people apply for another PAN card instead of trying to find out one's PAN card status. Such incidents lead to more than one PAN card being issued to the same person. In such a scenario, the PAN card holder is advised to surrender one's PAN card to the Income Tax Department.

How to surrender a PAN Card?

One can surrender a PAN card both online and offline. For surrender of PAN card, the individual is advised to log in at the Income Tax Department official website — incometaxindiaefiling.gov.in. After logging in at the home page, one needs to click at 'Request For New PAN Card Or/ And Changes Or Correction in PAN Data' to download the form. After filling up the form, one can submit that form and the second PAN Card at any of the NSDL offices. For online, one can submit the filled form and the scan copy of the second PAN Card.

Source: https://www.zeebiz.com/personal-finance/news-pan-card-holders-alert-a-single-mistake-may-lead-to-a-whopping-rs-10000-penalty-128914

SBI Card showers benefits on credit card applicants; here are top 5, details on sbicard.com

SBI Card: Credit card is the kind of business that a majority of banks are focusing on aggressively. Being the largest Indian Commercial bank, State Bank of India (SBI) is not a laggard in this banking business.

SBI Card: Credit card is the kind of business that a majority of Indian banks are focusing on aggressively. Being the largest Indian Commercial bank, State Bank of India (SBI) is not a laggard in this banking business. During the COVID-19 lockdown, people have understood the value to be derived from delayed payment as around 25 per cent loan takers have availed the EMI moratorium offered by the Reserve Bank of India (RBI) - delaying EMI is not recommended unless there is a financial emergency as the one caused by coronavirus lokdown currently. 

Credit cards give the facility to buy today and pay later, and for those who are disciplined in their expenses, this can be a good friend in the rainy days.

Therefore, realising the huge potential of the credit card business segment during the lockdown, SBI Card has come out with various attractive offers. These offers range from 10 times reward points on payments at a particular point of sale (PoS), special reward points in the first 60 days of card issue, etc. SBI card is also offering an annual SBI credit card fee waiver provided the SBI credit card holder has done purchases up to Rs 90,000 or above in a particular financial year.

1] Reward Points: 10 times reward point on dining, movie, departmental and grocery spends. As Unlock 1.0 is implemented, people are expected to spend on movies and dining. So, this offer is eye catching.

2] Bonus Reward Points: SBI card is offering 2000 Bonus Reward Point for Rs 2000 spent in first 60 days post-issue.

3] Fuel Surcharge Waiver: An SBI credit card holder is eligible for 1 per cent fuel surcharge waiver across all petrol pumps. As digital India is gaining traction during lockdown, payments at petrol pumps through digital gateway is advisable. But, you are an SBI Credit Card holder, you are eligible for 1 per cent fuel surcharge waiver.

4] Annual Fee Waiver: SBI card is offering annual fee reversal in case the credit card users has made Rs 90,000 of above payments through the SBI credit card in one financial year.

5] e-Gift: For ELITE cards, the welcome e-gift voucher is worth Rs 5,000 on joining.