We all dream to reside in our own home. You may have also planned on buying one or put off the plan owing to the lack of funds. In times of such financial emergencies, home loans help us circumvent the lack of money.

A home loan, when managed well, is the biggest realization of such dreams. One thing you are unaware of such loans is that it can help you in various other ways as well. There are some hidden features with these loans that can be availed by home loan customers.

Here are some extra features that the home loans can provide to you other than buying a property.

Access to Top-up loans

If you are a home loan customer, you got an added advantage. Home loans give you access to top-up loans. You can utilize the fund of this loan to fulfill any of your financial needs. Top-up loans are similar to personal loans, but with a lower interest rate.

This way, you can also avail a sum of up to 50 lakhs! To be eligible for a top-up loan, you need to have availed a home loan from a bank.

Tax Relief

Housing loans are one of the best ways to save taxes. Aside from helping you to buy your dream home, these loans can also help you with minimizing the tax deductions. If you have any co-borrowers, they can also avail the benefit!

The sections 24 & 80C of Indian Income Tax Act highlights that you can claim deductions of Rs. 3,50,000 against the interest & principal amount repaid in a year.

Home Renovation

To cover the funds for the home renovation, people choose personal loans. But, opting housing loans for the home improvements can save you from a higher interest rate of personal finance solutions.

The banks usually charge the same rates as their housing loan products for this. The interest rates are much cheaper ranging from 8.30 to 10 per cent.

Boosting the Credit Score

Paying the loan dues on time can tremendously improve your credit score. A good to excellent credit score can help you to qualify for the credit cards with the best rewards.

This score is pivotal for you to get better financial solutions. If you don’t delay or skip paying loan repayments, your credit score will improve.

If you are planning to avail a home loan, being well-informed about these features that it offers you can be extremely helpful. Plan well with the above-mentioned points before applying for a housing loan to completely utilize the features of the loan.

Are you an extremely conservative equity investor who is looking to grow their investment without too much volatility over a long period? If yes, you might want to consider investing in aggressive hybrid schemes.

But, before we delve into aggressive hybrid funds, let’s understand what a hybrid fund is.

What is hybrid fund?

Hybrid funds are a type of mutual funds which is an amalgamation of equity and debt securities which is designed to meet the investment objective of the scheme. These funds achieve diversification across asset classes while avoiding concentrated risk. A perfect blend of two asset classes, these funds aim at giving returns similar to equity funds while trying to mitigate the risk like debt funds.

What is an aggressive hybrid mutual fund?

An aggressive fund is a type of hybrid fund. It is a balanced fund that primarily invests in stocks with a small proportion of allocation to fixed-deposits. As per the Securities and Exchange Board of India [SEBI], aggressive mutual funds have to invest a minimum of 65 to 80% of their assets in equity securities and the rest in debt instruments.

How do aggressive funds work?

Since the aggressive hybrid funds have a portion of a debt instrument, they are relatively less volatile and less risky than pure equity mutual funds. Therefore, an investor who can tolerate some level of risk in the investment can consider investing in aggressive hybrid funds. Since the fund’s concentrated allocation is of equity instruments, it can also be called as a hybrid equity fund.

Who should invest in aggressive hybrid funds?

Aggressive hybrid funds aim at generating current income along with wealth generation over a long duration of time through a hybrid portfolio composition. These funds have the of yielding higher returns at a relatively higher risk than regular balanced hybrid funds. The fund manager tries to offer consistent returns by investing primarily in equity securities and a small portion in debt and money market instruments.

Hence, aggressive hybrid funds are best suited for investors who have a moderate risk appetite and medium-term investment horizon, say at least 5 to 7 years. Also, an investor who wishes to invest in equities, but at the same time yearns to take a safer route can consider investing in these hybrid funds.

Budding investors who are new to the investing world can give these funds a try. Even within the same category, the level of risk among aggressive funds could vary depending on the existence of small-cap and mid-cap stocks.

While picking funds for investing in hybrid mutual funds, the qualitative and the quantitative aspects of the fund should be analysed. Opting for hybrid mutual funds can act as a gateway towards mutual fund investments. Happy investing!

When you first think of getting a personal loan you approach a bank or NBFC for the same. During the loan process, the lenders run a check through your credit history and CIBIL score, subsequent to which a decision on loan approval will be taken. Hence, it is advisable to manage your credit and ensure that your financial decisions do not have a negative impact on your score.

A good credit score will get you competitive interest rates on your loan. So, here are a few ways to get a personal loan without hurting your credit score.

Avoid applying for a loan with multiple lenders or DSAs

The financial market has a lot to offer when it comes to loans. Many lenders claim to offer the best rates on loans. Whilst you’re promised the best rates, your interest rate will, however, be dependent on your score, and repayment history. Along with a good credit score, other factors like your income and age are also considered. Approaching DSAs [Direct Sales Agents] for your loan might be risky as DSAs send your application to multiple lenders.

This will lead to multiple credit checks which are symbolic for credit hungry behaviour. Hence, it is best to avoid approaching too many lenders to get better interest rates and simply risk your credit score.

Familiarize yourself with the available deals on loans

It is always a good idea to do research and look at all the options available to you. This will help you decide whether the lender you are applying for will be able to offer good deals.  Ideally, you would want a lender that offers lower interest rates on a personal loan. So, have a look at the financial market, search through various lenders and make your decision wisely.

Choose a lender based on your credit profile

If your score is high, you will be eligible for low-interest rates on loans from reputed, private lenders. On the other hand, if you have a low credit score with multiple instances of late payments in the past you will be seen as someone who is not creditworthy and find it hard to avail a personal loan.

However, you can still avail a loan with a low CIBIL score, simply opt for a lender with easy eligibility criteria. There are many fintech companies that offer loans to individuals with low scores. The idea here is to choose a lender that will approve your application based on your current credit profile making it easier for you to avail a personal loan.

Opt for pre-approved loans

This is one good option to avail a personal loan with ease. If you are an existing customer and have a savings account with a particular bank for over 5 years, the bank does not resort to performing a hard credit check while processing a loan application. Based on your current financial track record, a pre-approved loan offer is made.

This will help you in avoiding any uninvited hiccups in your credit profile while availing loans in the future. The interest rates on pre-approved loans are generally less, this a plus point for the customers who’ve had long-term relationships with their respective banks.

Having a good credit score is important as far as getting your loan application approved mainly because personal loans are unsecured loans which mean no collateral or security is asked for. Your credit score is perhaps the most basic factor that helps a lender decide whether or not you are worthy for a loan.

The economic growth of India had started moving at a slower pace even before the outbreak of the COVID-19 pandemic leading to a rise in salary cuts and job losses. Owing to this situation, people are more concerned about meeting their daily expenses. This has led to a rise in demand for consumer lending products. Indeed, reports show that there has been a spike in the outstanding balance on credit cards and personal loans.

A report from the India Retail Credit Trends by TransUnion CIBIL highlights that the consumer credit grew in Q3 of CY 2019 with a spike in demand for categories such as personal loans and credit cards. The new account volumes of personal loans have also recorded a tremendous growth of 133.9% in Q3 2019 as consumer demand for the credit product continued to accelerate.

The new accounts increased by 48 per cent between the third quarter of the calendar year 2019 and 2018. The consumption lending categories of credit cards and personal loans recorded growth rates of 40.7% and 28.0%, respectively in the third quarter of 2019.

Amid this economic slowdown, the personal loan balances managed to grow in Q3 2019 compared to the previous year by 28.0%. Not only that but also balances in semi-urban/rural locations and metro/urban locations has been increased by 31.5% and 25.8% respectively. Another interesting fact is that, of all the personal loan acquisitions, 42.6% were from individuals under the belonging to the age group of 18-30 years.

The spike in personal loans and credit cards may be due to salary delays due to the economic slowdown which forces people to borrow from their credit cards or loan lenders to make ends meet. The origin volumes of the loan accounts have doubled have more than doubled over the third quarter of 2018. This has increased by 2.9 times in Q3 2019 over Q3 2018.

Consumer inquiry volumes for personal loans and credit cards increased significantly over the period, though the enquiries for the other loans remained unchanged or the same.

The minimum personal loan rate in India stands at 10.50%. Most of the banks offer personal loans to their customers with minimum paperwork and documentation processes. To apply for a personal loan, all you need is a basic identity proof and the income certificate along with a photograph, bank account details, and residence proof.

A Demat Account allows you to keep share certificates and other securities that you own in an electronic format. If you want to invest in the stock market, a Demat Account or Dematerialisation Account is a primary requirement that you must fulfill.

A Demat account is where all your stocks are held and the process of opening the account includes signing a couple of agreement papers that include a ‘specific’ Power of Attorney [PoA] to the broker. In this article, we will discuss 4 things that you should consider doing before opening a Demat Account.

1. Choose the right type of Broker – To be able to buy and sell shares, you need to choose a broker or a brokerage firm, through whom you will be carrying out transactions. A brokerage firm can be of two types, discount broker or a full-service broker. A discount broker lets you trade in stocks, futures, and options.

Whereas, a full-service broker gives you the option to invest in personal finance products like mutual funds and Initial Public Offerings (IPOs) in addition to the services mentioned above.

2. Review the Charges on the Account – The decision of selecting a broker while opening a Demat Account is usually influenced by the fees that are charged by the brokerage firm. You should be careful about the one-time and recurring charges while opening a brokerage account.

Also, look for the charges that are charged on trading/investing in different segments. It is advised to select the broker who charges a flat fee on all types of transactions.

3. Nomination – In case of your demise, all the investments you own are transferred to a nominee that you choose at the time of opening the account. You need to give a thorough thought while choosing a nominee as this will set the finances of your family. The person you nominate ought to know about it to carry forward your investments and meet the objectives.

4. Online access and support – Another factor that you should look into before opening a Demat account is the trading software. You should confirm whether the software is user friendly or not, as unnecessarily complicated software can make trading difficult for you.

Choose a simple software and user interface to make investing easy. Also, despite the advancement in technology, things can go awry while trading. In such cases, you need efficient tech support. Check the broker and the back-end support before you make a decision.

These are the things that you need to consider before opening a Demat account. And now that you know these things, it is time to move on to the next question. And that is, how to open Demat account?

Opening a Demat account is very simple. You just need to follow a few easy steps to open an account.

Step 1 – Do thorough research and select the place you want to open a Demat Account with once that is done choose the Depository Participant to open a Demat account.

Step 2 – Fill the form and submit it on time along with all the necessary papers and a photograph. You will also require your PAN Card to complete the process.

Step 3 – A document with the rules and regulations, the terms of the agreement, and the charges that you will have to pay will be given to you. Go through the details properly.

Step 4 – A personal validation is an important part of the process. A associate of the Depository Participant’s staff will get in touch with you to verify the details you mentioned while filling form.

Step 5 – Once the authentication is complete and the application is processed, you will be provided with a Demat Account number and a client ID. With the help of the account number and ID provided to you, you can access your Demat account online anytime and anywhere.

Opening a Demat Account is one of the best decisions you could make as it will allow you to trade in the equity market and fetch high returns. Services to open a Demat account are commonly available at most brokerages and monetary institutions. Do proper research before making your choice.

Savings accounts are a common type of offering provided by banks. They allow you to deposit your saving funds while you reap an interest rate on your money. The concept of a savings account is simple, but what is a ‘dormant’ savings account?

Well, an account that has not been operated for a period of 15 years and more is categorized as a dormant savings account. Despite attempts on part of the bank to contact the account owner, there may be no avail.

When does the account become dormant?

The account becomes dormant when there is absolutely no activity. This includes absence of any withdrawals, deposits or any kind of transaction. The bank may send out statements or communications to the holder, if they continue to be returned without reply, the bank assumes that holder is unavailable. The bank tries different means of communication such as mail or phone before the account is declared dormant.

Time period before the account becomes dormant

Typically, an account is classified as dormant when it has not been in operation for anywhere from 3 to 15 years. The period of time is decided upon by the savings account provider or bank. When the bank account has not seen any transaction for an extended period, the bank tries to contact the account owner. If there is no response from the account holder for up to 4 months, the bank may reach an assumption.

When opening a savings bank account, you must inquire with your bank of the cut-off period. In the case that you savings account becomes a dormant, it can still be operated when you contact the bank again.

However, there are a few things that you must follow:

Reclaiming a hold on the account

If your account becomes dormant, you can conveniently get in touch with the bank and start operations again. However, you will be asked to provide essential details before the account can be accessed. The details that must be provided include the name of the account holder, the account number, the account balance and any old bank statements if available.

Essentially, you must try and provide as much available information about your savings account. This makes it easier for the banking officials to source your information and track your account. Therefore, being able to give you quicker access to your funds and account.

The Coronavirus pandemic has shut down the world. This pandemic was first reported in Wuhan, China on New Year’s Eve of 2020. As a precautionary measure, the government of several countries have implemented lockdown. The Indian government also implemented lockdown on its people from 25th March 2020 to 14th April 2020, which was further extended to 3rd May 2020, due to the increase in the cases of the infected patients.

In all the bad news that is circulating across the nation, a notification issued by the Ministry of Finance on 15th April 2020, might work as a ray of light in the time of darkness. The notification brings the good news for the policyholders whose health or car insurance cover renewal dates fall between 25th March 2020, and 3rd May 2020. The notification stated that the renewal of car insurance and health insurance has been further extended till 15th May 2020 due to the countrywide lockdown.

Ministry Of Finance On Third Party Motor Insurance Policy

On 15th April 2020, a notification was issued by the Ministry of Finance that says, policyholders whose motor vehicle third party insurance policy’s renewal date falls during the period of lockdown [i.e. between 25th March and 3rd May 2020], and who are not able to make payment of their renewal premium due to lockdown, are allowed to make payment for renewal of their policies to their insurers on or before the 15th May 2020.

This will ensure the continuity of the statutory motor vehicle third party insurance cover from the date on which the policy falls due for renewal so that any valid claim prompted during the grace period can be paid.

One should know that this extension to renew car insurance is only for the customers with third party policy. So, it is not applicable to the comprehensive car insurance policy and is only restricted to third party policies. The policyholder of a comprehensive two-wheeler or car insurance should renew on the due date to ensure nothing hinders their coverage.

You should know that earlier 21st April 2020, was the last date of renewal of motor insurance and health insurance, but due to the extension in the lockdown period, the ministry decided to extend it to 15th May 2020. So, keep yourself updated with the Ministry of Finance, as this renewal date might further get extended, depending on the situation in the country. Give below is the importance of this extension on policyholders.

Importance Of The Extension

Normally, third-party motor insurance lapses if it is not renewed on the renewal date, and the vehicle owner might become liable to pay penalty and third-party damage compensation under the Motor Vehicles Act from his/her own pocket.

If policyholders can’t pay on time, it might lead to a higher premium, loss of No-Claim Bonus [NCB], and will also need an inspection of the vehicle. This extension of renewal date will help enormously in these hard times as policyholders can pay renewal premium on or before 15th May 2020.

Systematic Investment Plan, commonly known as SIP, is a godsend investment avenue to those who wish to multiply their wealth efficiently without parking too much of their money in a single asset class at a given time.

Thanks to demonetization, many individuals have discovered the charm of SIPs and mutual fund investment. This, in turn, has increased the popularity of SIP investments and led to its growth spurt over the years. Today, as per the latest Association of Mutual Funds of India [AMFI] data, there are about 3.09 crore SIP accounts in the country.

For starters, SIPs are a way of investing in mutual funds. To elaborate, various asset management companies [AMCs] offer SIPs as a method to invest in mutual funds in a disciplined manner.

Under the SIP investment method, an investor chooses a mutual fund scheme according to his/her investment needs and regularly invests a fixed amount in these schemes. The periodicity can be daily, weekly, monthly, quarterly, semi-annual, or annual. An investor can invest in SIPs with an amount as low as Rs 500.

Let’s understand how SIP works with the help of an example.

Let’s say your monthly salary is Rs 50,000 and you set aside 10% for your monthly SIP mutual fund investment.

Meticulous research on the most significant mutual funds in the country will aid you to perceive how a few funds have continuously outperformed the overall market over a considerable period.

Suppose you first started investing Rs 5,000 per month in XYZ fund from March 2010. Under this investment, Rs. 5000 will be automatically invested in XYZ fund every month. One of the major advantages of SIP investment is the power of compounding it offers.

The Rs 5,000 that you periodically invest in mutual funds online accumulates over the years to form a substantial corpus. Between March 2010 and March 2020, you would have made 120 investments of Rs 5,000 each into the fund. Today, the total of the principal invested would be Rs 6 lakh [120*Rs 5,000].

If you calculate the return on this at 12%, the investment would have grown to Rs 11.6 lakh, almost double your original investment.

Even if you adjust this against an assumed inflation rate of 6%, your wealth would grow to Rs 8.24 lakh in this period, i.e. a nearly 50% appreciation of the capital invested.

How to invest in SIP?

1. Know the investment objective and your risk tolerance
   You should first apprehend your risk appetite before investing. After you have assessed your risk appetite, it is important to understand why you want to invest and define your financial goals. It is vital to know the objective for your investment to get the right portfolio mix of debt and equity.
2. Choose the apt mutual fund for your investment
   The selection of your mutual funds should be entirely based on your risk appetite, financial goal, and investment horizon. While choosing the fund, you should also consider its past performance. Once you have chosen the mutual fund company, follow these steps:

• Fill up the application form
• Duly fill the KYC form
• If you opt for the offline mode, fill up a cancelled cheque of the monthly SIP amount. However, if you plan to opt for the online mode, fill up the ECS [Electronic Clearing Service] mandate form to be given your bank.
• Provide requisite identity proofs

3. Select the date of SIP investment
   Choose a date as per your convenience. You can also choose multiple dates for multiple SIP investments in a month.

SIPs are a perfect way to utilize your investments to their maximum. Mutual fund experts often advise individuals to stay invested in mutual funds until the end of their investment period to reap the most from their SIP investments.

Have you started your SIP yet? Happy Investing!