Q - Can I get tax benefit on two wheeler loans?
A - There are no tax benefits on two wheeler loans unless you are using the two wheeler for the purpose of your business.
Q - Is a loan for the purchase of a commercial car entitled for tax rebate in form of depreciation or interest paid on account of the loan?
A - The interest payable on the car loan can be set off against the income from leasing the car.
Q - Does car loan taken from Public Sector Units like UBI, SBI etc allow part repayment which can be greater than the monthly EMIs, just to wind off the loan earlier?
A - The clause relating to pre-payment on a car loan will have to checked in the car loan agreement. It will normally attract pre-payment charges, but you will have to check the agreement to be sure.
Q - What is the best interest rate that one can get for a car loan? What can one expect even if the tenure is for 5 years, after 2 years or so we could give a bulk amount and reduce the EMI significantly for next 3 years. Is it possible with any bank?
A - Interest rates on new cars loans vary very widely depending on the car and the model since it is usual to club manufacturer discounts into the car loan rates. Though banks look at a minimum returns of around 12-13% for themselves (net of their sourcing charges), the actual cost to the consumer can be lower depending on the manufacturer and dealer discounts available. Shop around to get a deal at the lowest interest rates.
Q - Which loan should one go for for buying a car, personal or an auto loan? Which will be beneficial?
A - To buy a car, one must apply for an auto loan as it will be cheaper than a personal loan.
Q - What type of loans can be claimed for income tax deductions?
A - Home loans, personal loans and educational loans are eligible for tax deduction benefits. However, this is subject to certain conditions.
Wednesday, January 16, 2008
Tuesday, January 8, 2008
Education Loan Queries
Q - Is education loan tax free?
A - If it is for a course which is of a kind or similar to the one mentioned in section 80E, the interest paid is eligible for tax deduction benefits.
Q - What is amortization?
A - It is the process of knowing the break-down of the EMI(Equated Monthly Installments) into principal and interest components of a loan repayment. It also lets you know how much of your loan is outstanding and how much of your EMI is towards repayment.
Q - Something about study or education loan.
A - Any person can avail a loan for his/her studies both in India as well as abroad for up to Rs. 15 lakh. Banks offer loans up to Rs. 4 lakh without security. Providing collateral or security is mandatory for loans above Rs. 4 lakh. The loan covers the cost of travel, lodging, books, tuition fee etc.
Q - What is GPA?
A - GPA or "Grade Point Average" is a long-term indicator of a student's future performance. Generally, most master's courses require a minimum of GPAs of 3.0 or 3.3, and for the Ph.D. courses require minimum GPAs of 3.3 or 3.5.
Q - Can bank officials reject an application for education loan?
A - Banks can reject loan applications if doesn't meet their eligibility criteria. Taking a loan against property or securities like jewellery, life insurance policies with high surrender value, shares, mutual fund units etc can ensure that it doesn't get rejected.
A - If it is for a course which is of a kind or similar to the one mentioned in section 80E, the interest paid is eligible for tax deduction benefits.
Q - What is amortization?
A - It is the process of knowing the break-down of the EMI(Equated Monthly Installments) into principal and interest components of a loan repayment. It also lets you know how much of your loan is outstanding and how much of your EMI is towards repayment.
Q - Something about study or education loan.
A - Any person can avail a loan for his/her studies both in India as well as abroad for up to Rs. 15 lakh. Banks offer loans up to Rs. 4 lakh without security. Providing collateral or security is mandatory for loans above Rs. 4 lakh. The loan covers the cost of travel, lodging, books, tuition fee etc.
Q - What is GPA?
A - GPA or "Grade Point Average" is a long-term indicator of a student's future performance. Generally, most master's courses require a minimum of GPAs of 3.0 or 3.3, and for the Ph.D. courses require minimum GPAs of 3.3 or 3.5.
Q - Can bank officials reject an application for education loan?
A - Banks can reject loan applications if doesn't meet their eligibility criteria. Taking a loan against property or securities like jewellery, life insurance policies with high surrender value, shares, mutual fund units etc can ensure that it doesn't get rejected.
Friday, January 4, 2008
Q/A - Credit Cards
Q - Is using a credit card a good practice for repaying after 50 days or should we use the debit card instead at wherever possible?
A - Using a credit card is useful provided you follow 2 rules:
1) Plan your spending in a balanced manner- Resist the urge to make an impulse purchase through a credit card. If you cannot resist such urges then debit card would work the best for you.
2) Pay off the full amount before the due date - Make the payment before the due date so that you do not pay any late payment interest charges which is quite a messy business.
Q - What do credit card companies or banks gain from the customers who pay their bills on time? If they don't , then why do they have reward points for paying bill on time?
A - It is incorrect to state that banks do not gain anything from consumers who pay the entire sum on / before the due date although the income from such clients is only marginal. Banks make a fee on every transaction that you make using your credit card. The reward points come from this fees. Through reward points the banks promote expenditure on the card with a view that at some point of time you may actually use the revolve payment facility and also they would make more money with more of your transaction.
Q - Could the credit cards be used for shopping online on the website outside Indian IP address or for making payment in dollars? Does the rule permit it?
A - It can be used except for gambling and lottery purposes. The spend has to be within the limit specified by RBI which is quite liberal.
Q - Some banks are charging a service tax @12.36% whereas others are not? Why is it so?
A - All banks charge the service tax @ 12.36% on interest and other fees.
Q - How is minimum amount calculated and what is it significance. Whats the advantage if I pay only minimum amount due to cash crunch?
A - Normally most card issuers allow you to pay off a minimum of 5% of the total outstanding every month. However interest is chargeable on the entire amount from the date of debit. It is not advisable to use the minimum payment facility as the credit charges are quite high (around 36% per annum). If you have a temporary cash crunch you can either get another credit card to pay for it or for longer period you can go for personal loan for paying it.
Q -Is the credit day's limit same for both cash transaction as well as the merchant transactions?
A - Some banks have different limits for cash transaction but the cash limit could be sued for purchases from merchant establishment although vice versa is not possible.
Q - Incase someone uses your credit card by stealing the card details for transactions online, how can one be secured of it and what should be done?
A - First thing to do is to immediately get your card frozen by calling the concerned bank and get the reference number for such request. You can then get a replacement credit card from the same bank which you should keep safely.
A - Using a credit card is useful provided you follow 2 rules:
1) Plan your spending in a balanced manner- Resist the urge to make an impulse purchase through a credit card. If you cannot resist such urges then debit card would work the best for you.
2) Pay off the full amount before the due date - Make the payment before the due date so that you do not pay any late payment interest charges which is quite a messy business.
Q - What do credit card companies or banks gain from the customers who pay their bills on time? If they don't , then why do they have reward points for paying bill on time?
A - It is incorrect to state that banks do not gain anything from consumers who pay the entire sum on / before the due date although the income from such clients is only marginal. Banks make a fee on every transaction that you make using your credit card. The reward points come from this fees. Through reward points the banks promote expenditure on the card with a view that at some point of time you may actually use the revolve payment facility and also they would make more money with more of your transaction.
Q - Could the credit cards be used for shopping online on the website outside Indian IP address or for making payment in dollars? Does the rule permit it?
A - It can be used except for gambling and lottery purposes. The spend has to be within the limit specified by RBI which is quite liberal.
Q - Some banks are charging a service tax @12.36% whereas others are not? Why is it so?
A - All banks charge the service tax @ 12.36% on interest and other fees.
Q - How is minimum amount calculated and what is it significance. Whats the advantage if I pay only minimum amount due to cash crunch?
A - Normally most card issuers allow you to pay off a minimum of 5% of the total outstanding every month. However interest is chargeable on the entire amount from the date of debit. It is not advisable to use the minimum payment facility as the credit charges are quite high (around 36% per annum). If you have a temporary cash crunch you can either get another credit card to pay for it or for longer period you can go for personal loan for paying it.
Q -Is the credit day's limit same for both cash transaction as well as the merchant transactions?
A - Some banks have different limits for cash transaction but the cash limit could be sued for purchases from merchant establishment although vice versa is not possible.
Q - Incase someone uses your credit card by stealing the card details for transactions online, how can one be secured of it and what should be done?
A - First thing to do is to immediately get your card frozen by calling the concerned bank and get the reference number for such request. You can then get a replacement credit card from the same bank which you should keep safely.
Thursday, December 13, 2007
Bad Credit Laon - Loan Defaulters
Borrowers with bad credit history have a low credit rating and are usually refused loans from elsewhere. As the repayment ability of the loan seeker is crucial before seeking a loan. Hence, as per the loan seeker's circumstances the loans are available in secured or unsecured options.
In order to further ensure approval on bad credit loans, the loan seeker should pledge home or any property as collateral depending on the borrowed amount. Collateral cuts lender's risks and hence the loan approval comes without credit history hurdle. But people should go for secured loans only for greater amount of loan as you the rate of interest would be very low as compared to unsecured loans. Also you can repayment duration could differ from 5 to 25 years.
In case you are tenant or living in a rented house with bad credit history, then unsecured loans are the only options left, although homeowners also are eligible for the same. Smaller amount would be approved for 5 to 15 years on high interest rates.
Tips to Remember:
1. Ensure that you have made a good comparison between the lenders/banks as each has their own interest rate.
2. Take rate quotes from them for beneficially comparing them.
3. It is advisable to take bad credit loans from online lenders for a competitive rate offer and for less costly loan.
Last but not the least, make sure to repay the loan in time so that your credit score improves substantially and loan availing in future becomes lot easier.
In order to further ensure approval on bad credit loans, the loan seeker should pledge home or any property as collateral depending on the borrowed amount. Collateral cuts lender's risks and hence the loan approval comes without credit history hurdle. But people should go for secured loans only for greater amount of loan as you the rate of interest would be very low as compared to unsecured loans. Also you can repayment duration could differ from 5 to 25 years.
In case you are tenant or living in a rented house with bad credit history, then unsecured loans are the only options left, although homeowners also are eligible for the same. Smaller amount would be approved for 5 to 15 years on high interest rates.
Tips to Remember:
1. Ensure that you have made a good comparison between the lenders/banks as each has their own interest rate.
2. Take rate quotes from them for beneficially comparing them.
3. It is advisable to take bad credit loans from online lenders for a competitive rate offer and for less costly loan.
Last but not the least, make sure to repay the loan in time so that your credit score improves substantially and loan availing in future becomes lot easier.
Monday, November 5, 2007
Glossary on Credit Cards
Below are few of the definition of different kinds of credit cards that we come across:
What is a credit card?
A credit card is plastic money which is used to pay for products and services at over 20 million locations around the world. All you need to do is produce the card and sign a charge slip to pay for your purchases. The institution, which issued the card to you, makes the payment to the outlet on your behalf and would be reimbursed at a later date by you.
What is a debit card?
Debit cards are substitutes for cash or check payments much the same way that credit cards are. However, banks only issue them to you if you hold an account with them. When a debit card is used to make a payment, the total amount charged is instantly reduced from your bank balance. A debit card is accepted only at outlets with electronic swipe-machines that can check and deduct amounts from your bank balance online.
What is a charge card?
A charge card carries all the features of credit cards. However, after using a charge card, you will have to pay off the entire amount billed by the due date. If you fail to do so, you are likely to be considered a defaulter and will usually have to pay up a steep late payment charge.
What is an Amex Card?
Amex stands for American Express and is one of the well-known charge cards. This card has its own merchant establishment tie-ups and does not depend on the network of MasterCard or Visa. This card is typically meant for high-income group categories and companies and may not be accepted at many outlets. There is a wide variety of special privileges offered to Amex card holders. For more information, please visit our card browser section.
What are MasterCard and Visa?
MasterCard and Visa are global non-profit organisations dedicated to promote the growth of the card business across the world. They have built a vast network of merchant establishments so that customers worldwide may use their respective credit cards to make various purchases. They also develop various technologies that are required for running the credit card business.
What is a smart card?
A smart card contains an electronic chip, which is used to store cash. This is most useful when you have to pay for small purchases, for example, bus fares and coffee. No identification, signature or payment authorisation is required for using this card. The exact amount of purchase is deducted from the smart card during payment and is collected by the smart card reading machine. No change is given. Currently, this product is available only in very developed countries like the United States and is used only rarely in India.
What is the Diners Club Card?
Diners Club is a branded charge card. There is a wide variety of special privileges offered to the Diners Club cardholder. For instance, as a Diners Club cardholder, you can set your own spending limit. Besides, the card has its own merchant establishment tie-ups and does not depend on the network of MasterCard or Visa. However, since this card is typically meant for high-income group categories, it may not be acceptable at many outlets. It would be a good idea to check whether a member establishment accepts the card or not in advance. For more information, please visit our card browser section.
What is a photo card?
If your photograph is imprinted on a card, then you have what is known as a photo card. This helps identify the user of the credit card and is therefore considered safer. Besides, in many cases, your photo card can function as your identity card as well.
What is a global card?
Global cards allow you the flexibility and convenience of using a credit card rather than cash or travellers' cheques while traveling abroad for business or personal reasons.
What is a co-branded card?
Co-branded cards are credit cards issued by card companies, which have tied up with a popular brand for the purpose of offering some exclusive benefits to the consumer. For example, the Citi-Times card gives you all the benefits of a Citibank credit card along with a special discount on Times Music cassettes, free entry to Times Music events, etc.
What is an affinity card?
The card issuer ties up with popular organizations/institutions which are often non-profit organizations (e.g. Citi-WWF card or the StanChart-Cricket cards) to offer an affinity card. When the card is used, a certain percentage is contributed to the organization/institution by the card issuer.
What is an add-on card?
An add-on card allows you to apply for an additional credit card within the overall credit limit in the name of family members who include parents, spouse, siblings and all children above 18 years of age. Your billing statement would reflect the details of purchases made using the add-on card. You are liable to make good all the payments for the purchases made using the add-on card(s).
How many add-on credit cards can a customer get?
Normally, an issuing bank permits two add-on cards per credit card.
Is it possible to control the spending limit on add-on cards?
Yes. Some credit card issuing companies do set a limit for each transaction as well as for the total value of transactions allowed on a particular add-on card every month.
*source: http://www.apnaloan.com/primers/credit-card-india/cardtypefaqs.html
What is a credit card?
A credit card is plastic money which is used to pay for products and services at over 20 million locations around the world. All you need to do is produce the card and sign a charge slip to pay for your purchases. The institution, which issued the card to you, makes the payment to the outlet on your behalf and would be reimbursed at a later date by you.
What is a debit card?
Debit cards are substitutes for cash or check payments much the same way that credit cards are. However, banks only issue them to you if you hold an account with them. When a debit card is used to make a payment, the total amount charged is instantly reduced from your bank balance. A debit card is accepted only at outlets with electronic swipe-machines that can check and deduct amounts from your bank balance online.
What is a charge card?
A charge card carries all the features of credit cards. However, after using a charge card, you will have to pay off the entire amount billed by the due date. If you fail to do so, you are likely to be considered a defaulter and will usually have to pay up a steep late payment charge.
What is an Amex Card?
Amex stands for American Express and is one of the well-known charge cards. This card has its own merchant establishment tie-ups and does not depend on the network of MasterCard or Visa. This card is typically meant for high-income group categories and companies and may not be accepted at many outlets. There is a wide variety of special privileges offered to Amex card holders. For more information, please visit our card browser section.
What are MasterCard and Visa?
MasterCard and Visa are global non-profit organisations dedicated to promote the growth of the card business across the world. They have built a vast network of merchant establishments so that customers worldwide may use their respective credit cards to make various purchases. They also develop various technologies that are required for running the credit card business.
What is a smart card?
A smart card contains an electronic chip, which is used to store cash. This is most useful when you have to pay for small purchases, for example, bus fares and coffee. No identification, signature or payment authorisation is required for using this card. The exact amount of purchase is deducted from the smart card during payment and is collected by the smart card reading machine. No change is given. Currently, this product is available only in very developed countries like the United States and is used only rarely in India.
What is the Diners Club Card?
Diners Club is a branded charge card. There is a wide variety of special privileges offered to the Diners Club cardholder. For instance, as a Diners Club cardholder, you can set your own spending limit. Besides, the card has its own merchant establishment tie-ups and does not depend on the network of MasterCard or Visa. However, since this card is typically meant for high-income group categories, it may not be acceptable at many outlets. It would be a good idea to check whether a member establishment accepts the card or not in advance. For more information, please visit our card browser section.
What is a photo card?
If your photograph is imprinted on a card, then you have what is known as a photo card. This helps identify the user of the credit card and is therefore considered safer. Besides, in many cases, your photo card can function as your identity card as well.
What is a global card?
Global cards allow you the flexibility and convenience of using a credit card rather than cash or travellers' cheques while traveling abroad for business or personal reasons.
What is a co-branded card?
Co-branded cards are credit cards issued by card companies, which have tied up with a popular brand for the purpose of offering some exclusive benefits to the consumer. For example, the Citi-Times card gives you all the benefits of a Citibank credit card along with a special discount on Times Music cassettes, free entry to Times Music events, etc.
What is an affinity card?
The card issuer ties up with popular organizations/institutions which are often non-profit organizations (e.g. Citi-WWF card or the StanChart-Cricket cards) to offer an affinity card. When the card is used, a certain percentage is contributed to the organization/institution by the card issuer.
What is an add-on card?
An add-on card allows you to apply for an additional credit card within the overall credit limit in the name of family members who include parents, spouse, siblings and all children above 18 years of age. Your billing statement would reflect the details of purchases made using the add-on card. You are liable to make good all the payments for the purchases made using the add-on card(s).
How many add-on credit cards can a customer get?
Normally, an issuing bank permits two add-on cards per credit card.
Is it possible to control the spending limit on add-on cards?
Yes. Some credit card issuing companies do set a limit for each transaction as well as for the total value of transactions allowed on a particular add-on card every month.
*source: http://www.apnaloan.com/primers/credit-card-india/cardtypefaqs.html
Friday, October 26, 2007
Wednesday, October 3, 2007
Education Loan's ROI offered by major banks...
Check the ROI offered by Major Banks in India
http://www.apnaloan.com/education-loan-india/rates.html
http://www.apnaloan.com/education-loan-india/rates.html
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