A Guide to Monthly Income Plan

Diversifying one's investment portfolio is one of the most important factors to assure steady growth and accretion of profits. No single financial instrument is enough for an investor to allocate his funds.

MIP's, also known as Monthly Income Plans are hybrid instruments which invest one's funds (a small portion) in equities, while the remaining is invested in money market and debt instruments.

Many investors are under the assumption that a term insurance plan would be the best option; (if some misfortune was to occur) to help a person, in case their regular source of income suffers. However, this is not true. A term insurance plan will pay a lump sum in case of any disability or death of the person, which is most often quickly exhausted as it is used to meet the immediate family expenses.

There will be no future funds available for the family once this amount is exhausted. However, for MIP’s they involve the payment of funds to the family member/nominee as a 'fixed, monthly' income for a much longer period of time. This period can even go up to as many as 25 years. Thus, MIP's are most suitable for those people who want to rest assured with an alternative source of income (as a backup) for their regular income. It also works well for those people who retire and are seeking a guaranteed source of monthly income.

So, how do MIP's actually work?

Well, the policyholder will have to pay the premium amount on a regular basis to the company, throughout the premium payment term. At the end of this period, if the policyholder is yet alive, he will get a regular monthly income amount that is payable to him/her until the end of the policy tenure.  As soon as the policy tenure ends, then the insured will get a terminal bonus as well as simple reversionary bonus. The monthly income stops with the payment of these bonuses.

On the other hand, if the policy holder dies during the policy term than his/her nominee will be entitled to receive the regular, monthly income and premiums paid by the insured till his/her death. Once the tenure has ended, the nominee will receive the terminal bonus and simple reversionary bonus.

By opting for MIP's gives a person, a win-win situation. The insured will either get the survival benefit or the death benefit (as the situation may be).

Car Insurance: An Important Component of General Insurance

Ensuring one's financial security is one of the most important things that any person needs to do in their lifetime. Whether it is for their life or for the various items that they possess, financial security is an absolutely essential component of protecting one's future. Other than life insurance plans which are available, many other types of policies are also bought on a large scale.

They fall under the category of general insurance, protection for all the non-life items in one's life. This may include health, car, travel, two-wheeler, car and home insurance. Purchasing one's vehicle is one of the biggest investments that can be made during one’s life. It may be a first, or a second or even a third vehicle. It doesn't matter, how many vehicles you have, you will always need to financially protect yourself from any sort of accident that may occur or inevitable event from occurring leaving behind a vast financial liability on the person.

Car insurance, also known as vehicle insurance is one of the best ways by which you can not only protect yourself from incurring any sort of financial loss in case an accident occurs, but also to provide third party coverage (liability) as well. There are different car insurance plans that are available in India to choose from at various prices. They may be simple and third party plus theft policies, comprehensive plans or even third party plans. They may be available for commercial vehicles or private cars (passenger carrying vehicles).

They provide coverage for various accidents such as outbreak of fire or burglary. It is easy to read about the features of commercial motor vehicle insurance policies and private car package (insurance) policies online via the websites of bank or Non-Banking Financial Corporations (NFBCs). One can contact the company, providing their email address and mobile number so that a representative can contact them in future.

In addition to this, other key information that may be requested, include the city where one resides is also required when applying for the policy online. Once one has finalized on the policy, they have to enter certain additional details and vital information about the make of the car, its model, whether it runs on petrol or diesel and year of manufacture.

Home Loan Products: Available at Just a Click!

Loans are available for a wide variety of purposes. It could be to finance your new car, for educational purposes, for purchasing a new home, for purchasing commercial vehicles, etc. There are many banking institutes and Non-bank financial companies (NBFCs) which are known to offer various types of financing options for people to make use of.

Usually, purchasing your first house is often one of the biggest investment decisions that you will make in your life. However, you may not have sufficient funds, at such a time and may often depend on various financial options for such purposes. Here, is where banks and other non-bank financial companies come into the picture.

Housing loans or home loans are the most ideal financing option for people who want to buy a new house or renovate it. There are many different home loan products that are available in the market. Some of the popular ones include 'home purchase loans', 'home construction loans', 'home extension loans' and 'home improvement loans'. All of these products are available to meet the various requirements of people.

Most of the banks and NBFCs which offer these loans have a pan India branch network. They offer a robust service delivery model, i.e. they offer door to door services thereby ensuring easy and quick approval of the loans. Besides this, they are known to offer a variety of repayment options, which are also known to be flexible.

It is very easy to apply for these loans online, where people can download the application forms from the bank's or NBFC's website. Here, they can read about the features of the various home loan products.

Moreover, there are plenty of portals that are available online where people can compare the products offered by these banks and NBFCs, where they can compare their interest rates. This way, they get a deeper insight as to what is available in the market and can make a far more informed decision.

 Many of the websites belonging to these banks and NBFCs have a set of frequently asked questions, which people can read through so as to understand the loan process. Besides this, they can also find out the essential documents that are required, terms and conditions and the various options which are available for NRIs residing in the country.

While NBFCs are regulated by the NHB (National Housing Bank), they are exempted from the requirement of registration by the Reserve Bank of India (RBI). On the contrary, the RBI serves as the primary regulatory and supervisory body for all the banks in India.

Gold Loan: The Perfect Solution for the Informal & Unorganised Sector

Recently, the Reserve Bank of India (RBI) had finally given a level playing field to financial companies to offer loans against gold. These include the different banks in the country as well as NFBCs – Non-Banking Financial Companies.

In fact, it has been estimated that 10 percent of the country’s gold stock is pledged as collateral for loans. Out of this, 75 percent is in the unorganized market (pawn broker, money lenders, etc.) and the remaining 25 percent in the organised market. This is inclusive of specialized Non-Banking Finance Companies (NBFCs), other NBFCs, commercial and cooperative banks, etc. 

Many people who seek this financing option often face the doubt of opting either for banks or for an NFBC. To make this comparison easier, it is important to consider certain key factors such as interest rates and processing fees.  

Opted only if a person requires emergency funds, there are plenty of gold loan products that are available in the market.  One of these, a term loan is easy to avail by simply pledging the gold and borrowing the money. There is also the overdraft facility which is also offered.  These loans are especially common amongst the people who live in the rural, agrarian society where there are fluctuations in their levels of income. The bulk of their earnings usually come only during the two harvest seasons. Therefore, these loans become of high importance to these people.

These are extremely useful financing options for people residing in urban areas, in case they urgently require funds; or want to make use of the gold ornaments which are lying idle in their house. While the interest rate for banks usually is within the range of 12-16%; for NFBCs it is between the ranges of 14-26%.  The additional costs, such as the processing fees are often between the ranges of 0.025-1.5% of the loan amount. It is very easy to apply for these loans online or by visiting the bank branch to manually apply for the same.     

This year, at the end of January, 2014 the Central Bank of India had issued a circular which stated that it had decided to prescribe a loan-to-value (LTV) ratio that would not exceed 75 percent for the banks which lent loan against gold jewellery. The formalities that are associated with obtaining a gold loan are minimal and the procedure for the same is very simple. The underlying asset in gold loans is not subject to any form of depreciation.

In short, they are extremely suitable for those people who are employed in the unorganized and informal sector.

Move into A New Shelter with an Instant Home Loan

Prior to this day, home loans may have appeared tedious and lengthy. For availing a home loan, you were required to keep your house as collateral. In addition to this, you were required to submit credit check documents, income statements, and several other documents to the bank.

It was only after careful examination of bank's employees, your loan amount would get sanctioned. The entire process would take around month or two, and would surely include lot of time and travel. But the entire scenario seems to be reversed, when banks have started introducing online loan facilities. 

Many public sectors have now come up with a provision of instant home loan, which can be availed by any individual, who aspires to own a new house. Initially, the loan lending process was tedious as many resources would get wasted on bank’s as well as borrower’s side. Secondly, the demand for home loan is rising at a rapid rate. So, after taking into consideration the evolution of online technology, several banks decided to simplify the loan process by taking it online.

The process for application for home loans is almost the same as offline process, and you are required to abide every single rule and regulation. However, the web portal does give you a choice to choose among different loans, which was not available early. You can easily calculate your home loan EMI by using home loan EMI calculator, which is provided by websites of different banks.

Moreover, this service is available on 24x7 bases, and you need not take a day off at work to apply for a loan. The online executives readily help in solving all the loan related queries easily. So, why follow the stringent old loan application process, when you can easily avail a better one online?

A Business Loan for Every Entrepreneurs Rescue

Are you a young, budding entrepreneur set out to make a mark for yourself in the world of business? If yes, you have a lot to look forward to! However, one of the main concerns that every young entrepreneur has is whether they will be able to afford the venture or not. There are plenty of expenses that are involved and many banks as well as financial institutions are known to relate to this need of theirs.

This is where the whole concept of business loan has come into being. It is nothing different than the regular loan you tend to fetch from the banks or financial institutions. However the major purpose of loans taken for business is to fulfill the various needs as an entrepreneur. It could be from paying salary to the employees, to paying the utility bills of your workplace or for that matter financing your plans to expand your great going business. 

There are different types of loans available in the market based on the need of the business. As it isn't always necessary that a new business or a small venture will fall in need of a loan, but there are times when giant corporate houses also carry a lot of their business expansion plans by fetching a loan for their company. 

Let's make you well versed with some common types of loans taken by people for their businesses.

SBA loan is usually taken to invest into the instruments for the work place for instance the required equipment's, furniture etc. Line-of-credit loans are the kind where one is granted with a certain amount in their bank account for work related purpose which is usually a current account. This money can be used for the business purpose as and when there is a need with the due interest paid for the amount borrowed from the bank.

There are many avenues to borrow loans one has to however defined their goal and need for a loan.

Are You Planning to Buy a Car?

A motorbike has always been my commute tool. There are many reasons to it, majorly being the city traffic especially during the peak work hours. It can simply ruin a lot of your day. And the reason being the sense of freedom the whole speed gives you.

My family however decided to buy a car wherein we can roam around together for our dinner plans or some relative’s marriage. The moment this decision was made we all began our little own research, taking advice from friends, family and at times even neighbors.

Car is probably the most expensive investment we tend to make after a house. So it is very important to give all the aspects a good thought before you come down to any conclusion. We happen to take some financial advice from my friends who are into this field for a real long time and doing great for themselves.

One of my friends happened to introduce me to a car loan EMI calculator as we had decided to fetch a vehicle loan to buy our car. It is a tool that will help me give a better idea about the loan that I shall borrow in every aspect, for instance my eligibility, the rate of interest, the EMI I may end up paying every month.

All of these agendas were given keen thought over and we eventually decided over the amount that we shall manage on our own and the amount we shall borrow from a financial institution. With the loan amount and the amount saved a hatchback was completely fitting our bill. And we began our search over it as well.

But then somewhere out of the blue one of my friend suggested investing in a second hand car as we all in my family were car learners. And it shall prove to be a very bad investment plan of buying a new car. The whole idea sounded quite convincing and there I was trying to fit in two cars in my budget, not together though. But soon shall have my own car parked down my place.