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HOW TO GET GREAT TAX BENEFITS ON THESE LOANS?

Posted on Wednesday November 11th, 2020

Loans can be a savior during an emergency and they don’t have to trap you in debt over a period of time, if you manage your finances well. Even, you can get tax benefits from certain kind of loans. It is true that you could get some great tax deals on your loans. As per the income tax, 1961, government has levied some tax benefits that have been provided been provided to the borrowers to reduce the burden of tax repayment. Let’s have a look on some common loan options that offer tax benefits.

Home Loan: It is one of the biggest loan liabilities that a borrower can avail. The loan quantum and tenure can be high on Home Loan but the tax benefits that a customer reaps on it are pretty good too. It can benefit an individual in two ways. Firstly, the amount paid towards the principal qualifies a tax deduction under Section 80C of the Income Tax Act while another benefit comes from a deduction in the amount paid as interest on the loan. If one has his/her spouse as co-borrower, the deduction can be claimed by each of you. The tax benefits on home loan can only be availed after the construction is completed.If you are planning to sell your home within five years from the date of taking loan then say goodbye to tax benefits.

Study Loan: The government has put various measures to promote higher education in youth and people have become aware to venture out of the country to study. Nowadays, the cost of professional courses such as medical and engineering is still sky-rocketing in India as well as abroad. This is when study loans come in handy as they pave the way to your future. To enjoy the perks of tax benefits on your Study Loan, the loan should be borrowed from scheduled financial institution. The tax benefits to the borrower availing an education loan for pursuing the higher studies come under the Section 80E of the Income Tax Act. This advantage can be availed for maximum of eight years or on the tenure, whichever is applicable.

Personal Loan: It is a type of unsecured loan that offers a plethora of requirements. This loan is a lot easier to obtain without stating the purpose of borrowing it. The most common reason behind applying a Personal Loan is medical emergency, debt consolidation, travelling, higher education and many more. Most of the people tend to miss out the tax advantages on it as not many know this benefit of loan. Generally, the principal amount and charges of interest paid towards loan cannot be deducted for tax exemptions but you can claim the benefits if you are using the borrowed amount for home renovation.

Now you have a guide that if the loans are handled responsibly, they can help you plan your finances in a better way. The tax benefits are the fantastic offers provided on Home Loan, Study Loan and Personal Loan. If you are looking for a loan from above mentioned categories, just give them a shot.


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IN WHAT CIRCUMSTANCES YOU NEED TO BORROW MONEY?

Posted on Wednesday October 7th, 2020

Every person has different notion of borrowing, some might consider it ok to borrow money for short term as well as long term goals whereas some might be strictly against any sort of borrowing. However, in certain situations of life, we have no other option than to avail a loan. The misconception about taking a loan is not good for your finances couldn’t be ignored. The loans can help you in number of ways such a growing your business, get your child higher education; help you to buy your dream home or to invest in attractive business opportunity. However, if loan is not used correctly, it could trap you in vicious debt cycle. So here are some points listed in what circumstances you need to borrow money and there is no harm in it.

→ Medical Emergencies: An emergency can arise uncertainly, therefore, it is tough to be prepared if you are caught off-guard. If you don’t have any medical insurance to cover your emergency, then borrowing money is inevitable. Several lending institutions offer personal loans to help you take care of medical emergencies without worrying about huge bills of the hospital. However, do check the terms and conditions of the loan before borrowing it.

→ Higher Education: If you are worried about child’s future education, a loan against education could be an excellent option if you don’t have adequate savings. Most of the banks and NBFCs in India provide education loan to help the children fulfill their dreams. The financial institutions not only offer the lower interest rate when you Apply For Loan but also have longer repayment period.

→ Expanding Your Business: If someone wishes to grow their existing business, borrowing money might be a best option, if you are short of funds in account to fuel your expansion. With the easy cash flow in operational units, you can grow your business by leaps and bounds which can lead to increased sales and higher profits. Therefore, have a robust business plan to reflect the lender that how you want to use the loan money to expand your business with minimal risk.

→ Consolidating existing loan: You have taken multiple loans in past years and unable to manage them, then gold loan might be a good idea to avail a loan with high amount to pay the existing loan. The gold loans are offered on lowest possible interest rate that can save you money if you are paying higher interest rates. It not only helps to consolidate the loans but also helps to manage your debts better.

Now we have touched upon few circumstances why people might borrow money. Before you Apply For Loan Online do your homework by comparing the different lenders on internet and keeping in mind the different aspects of loan that how much money you really need and how much money can you comfortable repay in a decided tenure. A loan can turn into messy financial challenge if you mismanage it, so beware of your deeds.


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A COMPLETE GUIDE TO LOAN AGREEMENT

Posted on Monday July 6th, 2020

Have you ever thought what protects the rights of borrower and lender when a loan is sanctioned or what kind of issues they might face after lending or borrowing money without a contract? The loan agreement is a contract that binds people into some kind of restrictions and regulations to formalize a loan process. It is necessary before lending as well as borrowing money. There are so many types of loan agreements depending upon the type of loan by following the state and federal laws. In this article, ShubhBank gives you a complete guide to loan agreement and its working.

The agreement contains all the details regarding how much quantum has been loaned and the time by which the borrower have to pay back the secured money. Once the papers are signed, the borrower is obliged to pay the borrowed amount to the lender. It also prevents illegal or excessive repayment of interest rate, thus safeguarding the borrower’s right when they Apply For Loan. It mutually benefits both the lender and borrower as it assures the lender with guaranteed payback as well as assures the borrower with no hidden charges levied on the loan money. The agreement allows people to take legal action and save you in case of any discrepancy. It is always advisable to draft an agreement to stay at safe side while lending or borrowing the money. There are various sections penned in agreement and enlist as following:

BASIC INFORMATION: Each loan agreement has a section that enlists the details of borrower and lender. The details are listed about the person’s full address, salaried or self-employed, its designation and the numbers of lenders and borrowers with a specified guarantor details in a separate section. At last, a section is included that specifies date and location of signing the loan agreement documents.

LOAN DETAILS: After listing the details of people involved in loan process, one must outline the specific details about transaction and payment information, the interest rate levied on the loan amount etc. In payment section, the details about EMI frequency are listed and also include the acceptable payment mode such as cash, net banking, credit card payment etc. In interest section, information regarding the type of interest rate is listed whether it’s fixed or variable and the date from which the interest will accrue.

DEALING WITH A VIOLATION: If a lender has sanctioned the loan by taking collateral as a security against any Loans In India then make sure to mention the terms related to collateral in the loan agreement. Generally, secured loans have such section in the loan agreements mentioning details of the security agreement where for unsecured loans; one can omit this section from their documents. There is an additional provision in agreement which prevents the violation of the agreed norms. It can help the lender to recover the borrowed amount through legal action or by taking possession of assets in case the borrower defaults on loan payments.