EMI Archives -

07 Feb

Systematic Investment Plans – SIP vs. Equated Monthly Installment – EMI

A lot of investors consider SIP as EMI’s. This creates an insight that SIP is amazing like an EMI (Equated Monthly Installment). This is incorrect. Somewhat nothing can be further from the truth. Youth of today is more interested into the EMI, be it for a smart phone or a vacation or a fancy laptop. Whereas a SIP, is the best form of asset.

EMI (Equated Monthly Installment) is consumption and at times obvious use, and SIP is an investment.

Given below is the relative study on SIP vs EMI:

Nature of the Scheme: SIP is the systematic investment of the investor’s money in the form of stocks or equity funds for a fixed period of time. Though it gives late satisfaction as the return is coming after a sure span of time, it is a great implement for wealth creation.

In case of EMI, you pay interest to a financier to finance a product you wish to own. In case of a SIP (Systematic Investment Plans) you make a periodic investment from your own money to create wealth or meet one or more of the financial objectives that may be significant to you.

EMI comes with a load in mind while SIP doesn’t.: EMI (Equated Monthly Installment) is a fixed outflow of cash for a fixed period of time. Any default or delay leads to penal interest and default may lead to harassment and anxious calls from the financier and his revival agents. This creates stress. Sometimes the expenses for an exacting month increase and it becomes hard to pay the EMI. This may reason sleepless nights. EMI can never be compromised at the cost of other expenses, no matter how important.

SIP (Systematic Investment Plans) is totally dissimilar. Even if you miss a month or 2, your investment stays whole and the mutual fund company doesn’t not incriminate you even a single rupee. You can expediently stop your SIP any time and even add to or decrease the amount.

Investment Discipline: SIP helps to create and support the asset regulation. You may complete your wishes for important financial objectives like owning a house or your child’s higher education. However, an EMI doesn’t create any long term asset quite you are able to afford a product you may like or need. Another thing is that the EMI can be disastrous if used for personal loans or for overseas vacation which may be high-priced especially in times of financial misfortune like losing a job etc.

Hence, though EMI plays an significant role when you can’t wait to purchase incredible that you may need, in SIP you can buy the same product or maybe something better but at a later date and in a more systematic manner.

02 Feb

How to Estimate EMI on Personal Loan?

Finheal
Personal Loan
Tags: EMI, finheal, finheal.com, Personal Loan, personal loan interest rate
no comments

Suppose that due to some urgent necessity, you borrow Rs 3 lacs from the bank. The personal loan interest rate in your case is 15% and you are paying an equated monthly installment (EMI) of Rs 10,400 per month for a period of 3 years. Whether this amount is correct or not, how much interest is being paid every month, how much principal is being repay every month are some questions, for which you don’t have answers.

So it is in your benefit to understand how banks estimate your loan EMIs.

Personal Loan EMI Calculator – Finheal

As you already know, equated monthly installment (EMI) is a fixed monthly amount that you require to pay every month till the loan is cleared off. The biggest benefit of EMI is that you know accurately how much you require paying every month. This helps in good planning of your personal finances in advance.

Now the EMI calculations depend on following 3 factors:
Loan Amount
Interest Rate
Loan Tenure

There are several personal loan EMI calculators available online that you can use to calculate you’re EMIs. Or you can even use a simple formula in MS Excel software.

The function that needs to be used in Excel is PMT. The formula specific to personal loan EMI calculation is as follows:

= PMT [(Annual Interest Rate)/12, Number of EMIs, Loan Amount]

So for instance, the EMI for a principal amount for Rs 3 lacs borrowed at 15% interest for 3 years (36 months) is Rs 10,400.

Now each EMI includes contributions towards both principal and interest on the loan amount. To know more about each part, what is required is a Loan Amortization Schedule. It is a tabular representation of loan repayment schedule along with all details like break up between the interest and principal component of each EMI. One quick look at the agenda tells exactly how the loan is being repaid and how much is the exact exceptional left to be paid.

In the initial stages of the loan, the interest part forms the main portion of the EMI. But as you progress along, the portion of interest repayments reduce and principal repayment increases.

Since we are talking about Personal Loan, it is significant to note that personal loans interest rates are usually fixed. So the EMI payment remains constant throughout the tenure. In case of floating rate loans, the EMI payments also differ with change in rates.

01 Feb

Is Business Loan Eligibility Still Relevant?

Drive Your Business with Finheal

Documents to be submitted while Applying for Business Loan

Firms have to gather the business loan eligibility criteria and submit the following documents to their lender:

Application Form

Applicants have to submit a duly-filled application form.

Self-Attested Know Your Customer (KYC) Forms

Passport-sized photograph of every applicant and co-applicant
Residence/address, proof of proprietors/partners/directors, whichever applicable
Residence/address, proof of guarantors and security providers
Entity proof: Shops and Establishment certificate/ Partnership deed/ Certificate of Incorporation, whichever applicable
Self-attested PAN card copy of an entity, directors/ partners/ proprietors, whichever applications as well as of guarantors and security providers

Financial Documents

Income Tax Returns of the previous year, along with computation of income and copy of acknowledgment
Profit and Loss Statement and Balance Sheet of the last two years
Tax audit reports and Statutory Audit report
Last year’s provisional and sundry creditors and debtors list
Proof of business continuity: ITR/Trade license/Establishment/Sales Tax certificate
Memorandum of Association (MOA), Articles of Association (AAO), Power of Attorney, or any other document required by the lender

Bank Statements

Primary account bank statements for the previous six months

These are the minimum documents required by lending institutions. The requirements may vary from bank to bank. In most cases, the process of submitting documents is simple. However, if you have neglected to file still a single document, getting a loan approved would be not easy. Therefore, carefully check the documents before applying for a business loan.

The firm has to also give documents connected to the reason of taking the loan. If the enterprise is borrowing a loan for a new project, the documents to be submitted include project report stating the cost of the project, sources of finance and future projections, all along with justified details. Approval letters from the government for power, pollution and building plan has to be submitted, too. If the company seeks funds to purchase assets, the related documents to be submitted are invoices of the assets to be purchased, conveyance deed/allotment letter in case of land property as well as architect certificate confirming the cost of the structure to be constructed.

Nowadays, lending institutions have modified their lending programs to suit the monetary requirements of organizations. Many lenders have an online presence, thus making the application process simpler. They also provide business loan quotes and have a business loan calculator online. This assists businesses in verdict how much they can afford and how much has to be paid in EMIs periodically. Such benefits go a long way in making loan application process simple and hassle-free.

30 Jan

Identify overhead charges while Applying for Personal Loan

Finheal
Personal Loan
Tags: EMI, foreclosure fee, loan registration, personal loan agreement, processing fees
no comments

Apply for a Personal Loan Online Even if you have Bad Credit

Personal Loans hold up your monetary needs at times when you need it most, such as, a wedding, a vacation, a medical demand or any other personal need. As personal loans are unsecured loans, they take a high rate of interest. They also engage a range of charges and fees that are charged by the bank/financial institution and are mentioned in your loan agreement, but these fees and charges are often overlooked. Here are some of the overhead charges that you must make known yourself with:

Loan Processing Fees –Processing fees or a loan application fee is a charge made to you by a bank for processing your loan application. This fee is typically charged in order to cover the administrative costs of the bank, any credit score checks done for you in relation to your loan application, in the middle of others. Processing fees are a standard fee that is charged by most banks and financial institutions. However, some banks often waive processing fees for highly entitled customers are valued clients as a goodwill gesticulation and also to attract customers. The lower the processing fee, the better benefit you have towards savings on your loan application fees.
Advance Prepayment Charges –Prepayment is when a borrower pays off full or fractional loan due before the loan closure date. Some banks allow advance prepayment though they levy a penalty on it that is charged moreover charged to you at a flat rate or a cumulative interest. The actual charges differ from each bank and are resolute according to their internal bank policies. You can also ask your bank for that information earlier or you will find that information specially mention in your personal loan agreement. Some banks offer advance prepayment only after a certain time frame to make sure they capitalize on the interest earned every month in the initial EMIs of the loan. Banks such as Standard Chartered, Citi, Kotak, ICICI, Tata Capital, HDFC, AXIS, IndusInd, SBI, etc. offer advance part payment facility.
Foreclosure Charges –Some banks allow foreclosure of a loan, provided the full payment is made. However, they charge a foreclosure fee for approving a foreclosure. While some banks allow no penalty on foreclosure, it is best to make sure with your bank on their loan foreclosure policy. Some banks and independent financial institutions also offer a foreclosure calculator that you can use to estimate the total amount you will have to pay if you choose to foreclose a loan.
Defaulter Charges –In case you miss any EMI or pay the EMI late, the bank charges a penalty for that which is also known as defaulter charges. Default charges often contain the EMI amount, additional interest and collection costs to avoid any penalty. Such charges are subject to the bank’s internal policy and you will find this information in your loan agreement or at the bank’s website.
Document Charges – Document charges are stamp duty and loan registration fees that are charged by banks to process and disburse your personal loan application. Document charges keep changing according to the loan amount and are strong-minded independently as applicable to the individual. Some banks often waive off document charges to attract borrowers.
Hidden Charges – It often happens that you have provided exact loan details such as loan amount, tenure and rate of interest. However, to make you alert of any hidden fees and charges is also crucial. If the bank upfront has not disclosed any hidden charges, look for them in your personal loan agreement as that is a binding legal agreement between you and the bank and will have the full charge disclosure. This is the reason why you must always read the loan agreement and its terms and conditions thoroughly before you sign.

Finheal is a financial website that allows you to not only check your personal loan eligibility, but also apply for personal loan directly at their website. So go ahead and find the best personal loan deals, all at one place, only at Finheal!

20 Jan

3 Easy steps to get your finances on way in 2017

Finheal
Finheal
Tags: EMI, retirement plan, Systematic Investment Plan
no comments

Strengthen Your Finances

Resolutions are out-of-date, say some. Resolutions changed my life, believe a few. Resolutions are meant to be broken, grin others. Whichever group you fit into, there are a small number of resolutions that ought to be a part of your life – financial resolutions. And trust us; these are not the ones to be broken. We have put jointly a list of the top 3 resolutions that should preferably form an essential part of anyone’s financial plan. If you are by now following a few of these, then more authority to you! For others, now is as good a time as any to take a hardly any of these resolutions and exchange them to behavior that safe your financial future.

#1. Budget, and never stray – If there is one golden rule for managing your personal finance, it’s this. If you want a prospect that is not debt-ridden, then you have to be accountable about your currency. The easiest way to generate a budget is to mark down every single thing that you spend in a month – right from the rent you compensate, down to the biscuit you bought. Write everything down, and at the end of the month you will be surprised to see where your money went. Then use that in order to weed out the playful from the necessary expenses.

#2. Create a financial plan – If you haven’t done so by now, now is a good time to start planning your financial goals in life. Identify your long and short term goals; holidaying in Europe, for instance, could be a short-term goal, while funding your child’s education or buying your own house is a long-term goal. One of the obligatory long-term goals that should be a division of your portfolio is your retirement plan. Calculate how much you need to save up to attain each of your goals (don’t forget to factor in inflation as you calculate this).

Take stock of where your current investments stand (if any) and what are the returns you are getting from them. See how much more you need to build and in what time frame, to overpass the gap between where you are now and your goals. Start a Systematic Investment Plan (SIP) for each of your goals. If you’ve just conventional your annual bonus, or have some inactive money in your account, move it to a high soft mutual fund, best right for your profile and requirement. Depending on the time frame you have for each goal, you could opt for equity (long term) or debt (short term) funds. Every day that you haven’t invested, is a day where money, that could have been made, is lost.

#3. Limits your loans and start a SIP – If you can’t altogether wipe off your debts, strive to limit them to absolute basics. It can be quite attractive to indulge in frequent shopping sprees on exorbitantly priced products, through credit cards and EMIs. But be careful, that if you aren’t prudent about your spends, you could soon see yourself burdened with a heap of debt, and spend the better part of your high-earning years paying them off. Appreciate the beauty of compounding, and how investing early can work wonders for you in achieving your dreams, with little or no loans. Get an obvious understanding of what your total, essential expenses are, versus what you want on an impulse.

Chalk out a plan to see if you can achieve your goals, like buying a house for example, without loans, or at smallest amount with less of it. Investing elegantly in a SIP, for the same number of years that you would be paying off an EMI, can help you get what you require without a loan, and even better, sometimes with extra cash to spare. At Finheal, we offer guided recommendation on how to plan your investments to attain your goals systematically.

Persnal Loans in Cities

Home Loans in Cities

Business Loans in Cities

Car Loans in Cities

LAP in Cities

Mutual Fund in Cities

Credit Card in Cities