When it comes to repaying the home loan, every borrower’s capacity is different than others. Your personal responsibilities towards your family and yourself have a more significant impact on your repayment capacity. Therefore, you must consider different methods in order to avoid financial stress.

Here are six repayment methods that can help you plan home loan repayment.

Choosing the Right Home Loan

Repayment plans are not like ‘one-size fits all’. As you are the person who will be paying the loan, you should select the plan based on your preferences. You need to be a lot careful while selecting the tenure of home loan. Remember, as you reduce the tenure, the EMIs increase, but the total payable interest goes down. This does not mean, selecting the shortest tenure is the smart choice. A home loan EMIs shouldn’t be more than 43% of your income. Therefore, choose on the basis of your financial capacities.

Determining Your Loan Repayment Capacity

It is the difference between your total income and expenses. Once, you start evaluating your financial condition, you can roughly dedicate your income towards paying the EMIs. Moreover, you also need to consider your future expenses like a child’s education, vehicle purchase, etc. while deciding your repayment strategy.

Accelerated Repayment Plan

Here, you can increase the EMI amount when you get a bonus which increases your disposable income. In addition, you can pay a lump-sum amount to repay your loan. Both of these ways increase the pace of loan repayment and saves your taxes.

Balloon Payment

This method is mostly suggested for business people who have higher financial needs. By using this method, you would be able to repay around one-third of your home loan amount in the last few instalments. Basically, a balloon payment is nothing but a lump sum payment made to repay the home loan in some prearranged intervals say 5 yearly or at the last stages of a long-term loan.

Step-Up Repayment Loan

This is another fantastic method that can suit your repayment capacity when you have taken a home loan during the initial stages of your career. Step-up repayment method perfectly links your repaying capacities with the growth in income. Your income increases with your progress in your career. So by using the step-up method, you will be paying lower EMIs at the beginning, which will gradually increase with time. This method will enable you to the same tax benefit even if the EMIs increases. Besides, by using this home loan repayment method, you would be able to avail a higher loan compared to a conventional housing loan.

Step-Down Repayment Loan

This method is precisely the contrast of the method described above. Here, the home loan EMIs are higher in the initial years of tenure and decrease over time. Therefore, this method is suitable for people who have taken a home loan in older ages.

You can choose the combination of any of the above methods to repay your home loan.

Commercial vehicle insurance provides cover to commercial vehicles in case of physical damage and liability coverages for amounts, situations, and usage not covered by a personal auto policy. There is a difference between a personal vehicle insurance policy and a commercial vehicle insurance policy.

It covers a variety of vehicles from automobiles used for business, including company cars, to a wide variety of commercial trucks. Like the personal motor insurance policy, commercial vehicle insurance provides similar coverages such as liability, collision, comprehensive, medical payments and uninsured motorist coverage.

Operating business with commercial vehicles in India is quite risky on Indian roads. In order to safeguard your business, an insurance policy for your commercial vehicle is essential as it will give you financial support in tough times. In addition, Indian roads and traffic conditions are quite famous for their notorious nature. Hence, taking your chances without a proper policy for claim benefits is going to give you even more burden.

Below is the list of benefits of commercial vehicle insurance

Coverage Benefits

The primary benefit and the main reason for purchasing commercial motor insurance is the coverage it provides. Motor insurance offers coverage privileges that help you and your employees driving the commercial vehicle.

Many types of benefits are included in such policies that may cover damage expenses for not just the driver and the vehicle, but also for any third party victims involved in the mishap. Commercial vehicle accidents are more hazardous to not only you but your company as well. Victims can file cases against your company for which you may have to pay heavy sums if you do not own a liable insurance policy to back you up.

Provides protection to Business Material

Commercial vehicles are mostly used for carrying company equipment from one place to another. All those pieces of equipment could be damaged due to an unfortunate accident.

However, a commercial vehicle insurance policy covers all these expenses and helps you in replacing all those valuable business components and materials without any financial burden. On the other hand, personal motor insurance may not be able to cover such benefits, so better choose wisely. Choose the policy that satisfies your requirements. Use the motor insurance calculator online to get estimated premium payments.

Larger Limits

Another big reason for purchasing commercial vehicle insurance is the benefit of getting higher limits on them. Any accident due to the commercial vehicle can cost a lot of money and insurance agencies try to give you larger limits on the covered expenses for helping you out as much as possible.

Protection of Employees

It also protects the drivers who are employed by you for driving your commercial vehicles because they are also subjected to risks on the road. Commercial vehicle insurance will tend to any mishaps that may occur to your employee drivers. Covering any expenses related to their medical fees, etc. is easier if you get one of such policies.

Using commercial vehicle insurance for protecting your valuable assets gives you a sense of relief while running your hectic businesses. Choosing the right one is also very important so that it will help you get the best benefits and ensure a healthy and prosperous business in the long run.

NCB or No Claim Bonus is a benefit that accrues for the insured in the event where no claims are made during the period of the previous policy. According to the current rules in India, the NCB increases up to 50%, which is the maximum amount of bonus possible. The NCB is lost in the subsequent period of a car insurance policy if the insured lodges a claim during the current policy period.

How to Transfer NCB?

As per the IRDAI, the NCB belongs to the person insured and not the vehicle. It means that when a vehicle is transferred to another person, it is possible to transfer only the insurance policy but not the No Claim Bonus.

The person buying/ receiving the vehicle would need to pay the differential amount for the NCB for the remaining period of the policy. If the original owner buys a new vehicle, she or he can retain the NCB for the new vehicle.

In order to make a transfer of two wheeler or car insurance plan, the original vehicle owner must submit the necessary forms and documents, with a letter stating the request to transfer the NCB from the existing insuring company.

The insurer would need to issue an NCB certificate, which is valid for a period of 3 years. This certificate must be submitted to the new company insuring your vehicle. When buying car insurance online, the certificate would not be required, just a declaration from the insured would suffice. Under no circumstance, the insured hide any facts such as claims made on the insurance policy – the new insurer is sure to verify the details from the previous insurer.

How to get the Most Out of the NCB?

When buying a vehicle, people negotiate extensively with the dealer on freebies and financing options. However, the motor insurance portion seems to take a backseat and is often overlooked. It is possible to save some amount on the premium you pay for your vehicle insurance using the NCB.

• When transferring your old vehicle, ensure that ownership is what you transfer and keep a copy of the new entry.
• Upon receiving the delivery note, send a copy to the insurer, based on which they would send the NCB certificate or a holding letter. The letter would be valid for 3 years.
• This NCB must then be sent to the dealer from whom you have bought your new car. This transfers the NCB to the new policy.
• Remember to check the various options for vehicle insurance You can save a lot of money and get the best deals by making online comparisons.
• Try not to switch insurers before the duration of the policy since you would have to give up the NCB for the year.

At the end of the term of the motor insurance, the current insurer should provide proof of no claims, which the insured must then provide to the new insurer.

The best motor insurance policy is not only the one that is offered by a reputed company or with the lowest premium but one that offers the best coverage for the widest variety of eventualities and saves you from out-of-pocket expenditure when things go wrong.

To ensure that a claim you make will be honored by the insurance company, it is important to know exactly what you as a policyholder are paying for. Understanding motor insurance terms and what they actually mean can be very helpful.

Below is the list of common motor insurance terms you must be aware of

Comprehensive car insurance

Comprehensive car insurance offers third-party insurance and also offers coverage for theft or damage of the policyholder’s vehicle. A policyholder can also choose add-ons to make the policy even more comprehensive.

Personal accident cover

This is one of the most important motor insurance terms to understand. While comprehensive policies protect the vehicle, personal accident covers the policyholder for physical injuries or disability due to a car accident. You can avail personal accident cover for the driver and all passengers depending upon a car’s seating capacity.

Third party insurance

This type of insurance is compulsory, and it provides compensation only to the third party (not the policyholder or insurance company) who may be involved in an accident with the vehicle of the policyholder.

Grace period

Car insurance should be renewed before the expiry of an existing policy to prevent the policy from lapsing and to receive benefits like a no-claims bonus. Sometimes, a policy does not get renewed on time due to unavailability of finances. Hence, insurance companies offer a 90-days grace period for a policyholder to renew the policy and maintain the accumulated NCB beyond the date of expiry.

No claims bonus

When it comes to car insurance renewal, this is one of the motor insurance terms you will come across. A no claims bonus is offered on policies where a policyholder has made no claim during the previous year. It is a type of reward over your premium.

Riders

In order to provide more services to policyholders, companies give the choice to the policyholders to buy the amount and type of coverage they require. These optional add-on features can be added to a basic or a comprehensive policy. The premium cost goes up, but the protection also increases.

Zero depreciation cover/ depreciation

Depreciation is the term used to indicate the decrease in the perceived value of a vehicle each year after purchase. Typically, commercial vehicle insurance premiums will go down over the years because of daily wear and tear and age will render a vehicle less valuable than at the point of sale. Zero depreciation cover is an optional rider that offers full compensation for replaced parts of a vehicle after an accident.

Cubic capacity

This is the volumetric capacity or what we commonly refer to as CC of a vehicle. This is relevant because it determines the amount of premium payable. Higher the CC, more the premium payable.

Lag or time gap

This is the period that may have elapsed between the time of the accident and the time a claim is made. Hence, it is important to make a claim as soon as possible. It can also refer to the time lag between making a claim and receiving payment or reimbursement for it.

Network Garages

This refers to garages and workshops that have a tie-up with the insurance company. The company encourages policyholders to use services of these garages that may also offer cashless facilities.

There might be many other terms in a motor insurance policy but the above ones are the most common and important ones to know so that you can lower your chances of an unsuccessful claim.