Monthly Archives: January 2015

Commercial Vehicle Finance and its Importance


First of all, what are commercial vehicles? These are vehicles, like pick-up trucks, mini-vans, three-wheelers, etc., that are specially designed to transport cargo or paid passengers. These vehicles are engineered in such a way that they are able to take on both the smooth city roads and the tough rural terrain.

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Alright, so what significance do these vehicles have for a country India? Well, our economy is booming, mostly due to small and medium scale businesses. These businesses have seen a tremendous increase in their supply needs, this requires them to have commercial vehicles. Usually, these businesses need to purchase more than one commercial vehicle, which puts a lot of financial pressure on them and to ease this pressure, commercial vehicle finance comes in.

Commercial-VehicleThere are a lot of private and nationalized financial establishments that provide commercial vehicle finance. Most of them would first try and understand the need of your business and would then tailor make their loan to best suit the growth of your business. These loans are applicable on almost all commercial vehicle brands and unlike other vehicle loans, are disbursed fairly quickly. Many financial establishments tend provide loan of about 75-100% of the price of the commercial vehicle, thus, letting business owners focus on the growth of their business and not on running around to gather funds. Interest rates too tend to be on lower side, typically ranging between 10-20%. Most establishments also require minimal documentation and provide you with various flexible repayment options.

Small and medium scale businesses are the backbone of our nation’s economy. Pick-up trucks play a major role for cargo needs, whereas mini-vans and other vehicles are used as a means to transport people. These businesses along with their commercial vehicles will play a vital role in the economic growth story of our nation. Commercial vehicle finance will simply help such businesses prosper.

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Should You Buy Life Insurance This Year?


The year 2015 has already begun and we are pretty sure that you may have made a few resolutions. Moreover, you may have even started working on these resolutions in full swing. Making New Year resolutions is a part of many people’s lives, especially for the purpose of welcoming the New Year.

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Such resolutions can start from losing weight, going for jogging, purchasing a new car, etc. There are thousands of wishes and necessities which people put forth as New Year resolution. While most of them are meant to make your life better, a few of them may be reserved for protection of life. One such resolution that will offer such protection is life insurance.

What is Life Insurance?

Life Insurance is a noble financial instrument that offers substantial financial reimbursement to the nominees of the insured. For a small amount of premium, you can easily avail extensive life cover. No other financial product offers such extensive benefit. Thus, it is said to be noble.

Why should you buy a Life Insurance plan?

There are several life insurance companies in the market that sell an assorted range of products. These products cater to the various demands of people. Based on the demands and protection offered, these products are classified as:

  1. Term Insurance Plan:
    This plan offers extensive financial reimbursement to the nominees of the insured person after any unfortunate event that causes death.
  2. Whole Life Plan:
    Whole Life Plan offers the combined benefit of death cover as well as savings advantage. The savings advantage is known to last for the entire life time of the sum insured.
  3. Family Income Benefit:
    This offer cover for the entire family. It is actually analogous to a monthly income plan as it provides periodic pay-outs to the insured individuals.

The Pros and Cons of Home Construction Loan


Building one’s own home is one of the biggest joys of life but sometimes, one has to hold back due to poor financial circumstances. In order to eradicate this particular hurdle, you can avail a home construction loan that involves the payment of the construction and mortgage of a property. A construction loan differs from a traditional mortgage. These loans have certain advantages and disadvantages for a borrower; thus, you need to be sure of all the pros and cons associated with a Home Construction Loan.

Construction-Loan

One of the main advantages of availing this home loan is that you save a lot of time and energy, since you can close it in one instance that leads to less paperwork and stress. Also, you can reduce the closure costs, which are somewhat expensive. Another advantage is the fact that you can avail a good interest rate, and can choose from a fixed or floating interest rate.

Here are some points you might need to consider before selecting a home construction loan.

Build your own house

You can avail independence to building your own house because construction loans increases your chances to borrow a large amount of money, in order to build a house. When you undertake a traditional mortgage, you are supposed to purchase an already existing/constructed property. Thus, this process helps in fulfilling al your construction needs.

Construction to permanent loan

Borrowers are allowed to receive a construction to permanent loan by home loan companies wherein a loan begins as a traditional construction loan and is eventually converted into a permanent mortgage. Also, you will have to only pay for one closing cost, rather than paying for two.

Interest rate

The interest rates vary every year if you avail a floating interest rate policy. It is extremely advantageous for you when the interest rates drop at intervals. This way, you can pay a lesser amount. Bu if the interest rates are higher, say during inflation, then it can create problems for you because you shall have to pay much more than you originally planned.

Short Term

This kind of a loan has a short tenure, therefore, you will be required to take an extension or reapply for finance. When you are in the construction phase, you will have to avail a regular mortgage if you do not have a construction to permanent loan.

Thus, you can avail a home construction loan if you wish to fulfil your dream of a home that you can your own.

Strategic Bond Fund


strategic_bond_fundStrategic Bond Funds has become one of the most popular means of investment among investors who wish to diversify their portfolio. This bond fund is more popular during a period of crisis or difficult market conditions when investors seek to hand over the allocation of their bond to an expert.  But it difficult to select the right one is not that simple because every strategic bond fund varies in its approach to market maturity and the interest-rate risk.  Also, a strategic bond shall differ in terms of the rewards for a younger investor and the stable income seeking retiree. Therefore, you need to keep certain things in mind before investing in a Strategic Bond Fund.

Bond exposure

You need to check your own bond exposure before taking a chance at the bond fund because you do not want an overlap of allocation with your current/existing bond funds. This can result in risks rather than diversification of one’s profile. By means of comparison you can check how you can decrease the risk factor rather than an increase.

Know your goals

This is required in order to know what you can achieve by investing in a Strategic Bond Fund. If your goal is to achieve a high-yield exposure, then aggressively positioned Strategic Funds are apt for you. Also, you need to be comfortable with an unpredictability that can be equivalent to an equity fund and a gilt fund. This way, you shall ensure higher returns. If you are only looking out for a Strategic Fund to diversify your portfolio, then a Strategic Fund that provides exposure to government bonds is the perfect option.

Strategize

You need to have a perfect understanding of your portfolio’s reward and risk profile. The following terms need to be kept in mind for a better strategy.

Credit Exposure: Earlier, one was required to hold a minimum of their assets in high-yield bonds but now things are a bit different. Funds nowadays are able to capitalise on opportunities and vary the credit quality.

Maturity: Strategic Bond Funds can make adjustments in the interest-rate exposure; therefore, it displays characteristics of flexibility.

Derivatives: Derivatives can increase the flexibility of the portfolio and also reduce transparency of the investment process.

Allocation

This is necessary to determine how much you’d wish to invest in your portfolio. It will all depend on the type of fund you have selected. If you think of high yield due to an aggressively positioned fund, then you need to be at a fairly modest position. Also, you need to reduce this exposure once you reach the point of retirement. If your fund is not that aggressive or as you can call it, mild mannered, then it shall be able to adapt it to the ever-changing market conditions. This shall also be helpful once you retire.

So you need to be sure the kind of investment fund you seek, so that you maximize on your gains and minimize on those risks.

Five Things That Life Insurance Agents Say


Life insurance is the noblest form of financial instrument that hedges the financial risk associated with a person’s life while reimbursing a significant sum of money after unfortunate event such as death of the insured.
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Truly, this instrument should be looked upon as a boon to people, especially breadwinners who have dependents. Yet, these products are not liked or readily bought by many. The reasons behind this shortfall is the false promises and deceiving measures adopted by Insurance agents to sell such policies.

If you have been approached by any such agent, and are facing difficulty while purchasing a policy, then here are the five insurance buying tips that you should look out for.

  1. Bonus is Guaranteed
    Well, this is an overstatement, or perhaps a pseudo promise that agents make to prospect buyers while selling life insurance. In reality, bonus is granted by the insurer to the policy holder once in a year, and its amount varies as per the sum assured. It may not be granted every year. However, agents assure such false guarantee to buyers.
  2. There is no Commission for this policy
    This line is often used by agents to lure the buyers into purchasing a policy. Truth to be disclosed, an agent earns around 10 to 15% commission on every policy sold. So, do not fall for this line. In the end, your premium will be the reason for his salary.
  3. It is home loan insurance too
    After reading numerous insurance tips, you should be aware of the difference between home loan insurance and life insurance. Then, why mix the two together and befuddle your mind with agent’s sales pitch?
  4. You need a Life Cover Always
    Be clear with the definition of life insurance. It provides financial compensation to the nominees or dependents of the insured. If you don’t have any, then avoid buying such policy.
  5. It is the Best Way to Save
    Get a better market view; insurance products do not guarantee double-digit returns. If you want to save, invest in mutual funds, bonds, fixed deposits, or capital market instruments. Life insurance offers steady returns with protection for life, do not mistake the sum assured with assured returns.

Quick Tips for First Time Credit Card Buyers


Most of us love to shop. However, the limited amount of funds in our wallets restricts us from making huge purchases. Now, what if there was sale going on in your favourite shopping outlet, and you did not have enough cash to shop?

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Such opportunities exist for a small time, and to make best out of them, banks and other financing bodies provide credit cards. These cards give you the freedom of purchasing things with just a swipe. If you have newly acquired such shopping liberty, then follow these few tips.

1> Secure Your Card:

Secure your newly acquired freedom by keeping it safe in wallet or bag packs. Do not use it at suspicious places, keep it away from strong magnets, and avoid sharing credentials and details. This way, no one will misuse this newly acquired purchasing liberty.

2> Keep a track on Credit Report:

At the end of each month or the billing cycle, Credit Card Company will send you a summary of purchases and the amount to be paid. If you are a regular shopper, then it is recommended to verify each transaction.

3> Know the Annual Fees:

Every privilege comes at a cost. For the freedom of purchasing with a swipe, credit card companies charge an annual fee. Such fees vary from company to company and cards to cards.

4> Understand the Fees:

Do not be surprised to pay unforeseen charges if you haven’t read the terms, conditions, charges, and fee structure of credit cards. Services such as SMS and mobile updates come at a cost with your card. Understand the fee structure before applying.

5> Understand the different rates:

Depending on the type of card selected, transaction rates will vary. Carefully understand the rates so that you will have a better idea of charges while making transactions.

How to Get Out Of Debt Systematically


“Rather go to bed without dinner than to rise in debt.” – Benjamin Franklin

Blessed are the people who can avail loans to realize their dreams. Loans provide an easy way of purchasing things. However, such borrowings can prove to be fatal to your economic state, especially if you are not able to repay them on time.

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Loan repayment has always being a subject of interest among borrowers. While many have the ideology of clearing the debt as soon as possible, some of them opt for long term borrowings. In each case, repayment options are fixed as per the convenience of the borrower. Yet there are many cases of credit default which will leave you surprised.

Before planning up your repayment schedule, One should go through the FAQ to clear his doubts about the loans that will help chalk out repayment plan for your loans.

So, how do you go about repaying your debt? After approaching several experts, we have managed to finalize debt repayment tips. They are listed as follows:

1> Start with Repaying your Personal Loans First:

Did you know that personal loans top the list of defaulted loans? Why, because they are unsecured; their interest rates are high, and the borrowers are easily lured by the advertisements that promote them. If you do not want your future spending to become a burden on you, then clear all your personal loans.

2> Plan your Home Loan Repayment:

Your home will be one of the largest thing that you will ever purchase in your life. This purchase will carry a debt which you can clear in long term. Do not try to clear your home loan in a few years, instead look for a longer tenure which will make your repayment convenient. Search for home loan repayment tips online before you plan that much desired foreclosure of loan.

3> Get out of Educational Loan Debt as early as possible:

Educational loans are a boon as well as a disaster, if they are not prepaid within the planned tenure. If you have availed any such loan, then make sure you clear this loan in the given tenure. Such borrowings have high interest rate and defaulting the repayment could make things quite difficult for you.

4> Clear other sundry borrowings:

Sundry borrowings include small loans such as gold loans or any other form of secure or unsecure loans. Such loans have low principal amount and are required to be cleared as soon as possible.