Get personal loans up to ₹5 Lakhs in 5 minutes.

Use Coupon code 'FESTIV75' to get flat ₹75 OFF on processing fee

Use Coupon code 'FESTIV75' to get
flat ₹75 OFF on processing fee

How to Get a 700 Credit Score in 6 Months?
How to Get a 700 Credit Score in 6 Months?

How to Get a 700 Credit Score in 6 Months? Getting a 700-credit score depends on your current credit score and the measures you take to improve it. While it may seem challenging to build your credit score, it is possible to improve it by being financially disciplined. If you manage to maintain a high credit score, it gives you the option to avail a wide variety of personal loan options at affordable interest rates, giving you more financial freedom. This article explores the measures one can take to get a 700-credit score and its benefits. Why Aim for a 700 Credit Score? A credit score of 700 is considered “good” by most lenders in India. If you have a lower credit score than 700, it is ideal to build your credit score at least to 700, to avail loan at favourable terms. Lenders view the individual as reliable as their credit history indicates a fair credit repayment history. Key factors of having a 700-credit score include: More access to credit products: You have access to a wide range of credit products like credit cards, personal loans and mortgages. Lower interest rates: It is easier to get a loan at a lower interest rate with a flexible repayment structure. Better terms on Credit cards: If you want to apply for a credit card, with a 700 credit score you get access to a high credit limit with other rewards & cashback offers. Understanding Your Current Credit Score A credit score is a 3-digit number that ranges between 300 – 900. It is a quick way for lenders to assess the creditworthiness of a borrower by knowing their credit score.  A higher credit score implies financial stability and good credit history. It implies the individual is more likely to repay the loan. If we consider CIBIL credit score for reference, the credit scores are categorized as: CIBIL Score Range Rating 300 – 499 Poor 500 – 649 Average 650 – 749 Good 750 – 900 Excellent Steps to Achieve a 700 Credit Score in 6 Months? If you want to achieve a 700-credit score in 6 months, you need to factor in your current credit score and financial situation. Depending on that, it can take anywhere between 12- 24 months to improve your credit score. However, if you have a credit score between 500-600, you can improve this credit score to 700 in 6 months by improving these factors: Pay Bills on Time: Make sure you make timely credit card and loan payments to build a good credit repayment history. Lenders check the credit history of an individual, to ensure they repay the loan on time. Clear Existing Debt: If you have any existing loan or credit, clear them off to improve your credit score. If you have any outstanding credit balances on your credit card, try to lower your credit utilization ratio. It is ideal to keep the credit utilization ration below 30%. Keep Old Credit Accounts Open: Maintain old credit card accounts, to have a long credit repayment history. Having a credit account since a long time, helps with building good credit score Maintain a Credit Mix (if possible): It helps build good credit score if one has different types of credit, like mortgage, personal loan, credit card and they manage them effectively. These are some of the effective strategies to build a credit score of 700. However, you also need to consider the time required to build a good credit score after any adverse credit event. Below is a table that mentions the credit event and average recovery time: Event Average credit score recovery time Applying for new credit 3 months Maxing out a credit card   3 months Closing an account 3 months Missing a payment   1-2 years Late mortgage payment (30 to 90 days) 9 months Home foreclosure   3 years Bankruptcy   7-10 years Is 700 Considered to Be a Good Credit Score? A 700 credit score is considered a good credit score by most lenders. It implies a good credit history and financial stability. One is likely to get a loan on favorable terms with this credit score. However, there is still scope for improvement. The higher the credit score, the faster the loan approval is. With a high credit score, you also can apply for a high loan amount at affordable interest rates. If we consider CIBIL score, it ranges between 300 to 900. A CIBIL score of 700 is considered “good” and lenders are likely to offer loan at favorable terms. Some lenders may offer loans but on certain conditions. Like the loan may get approved but One may get approved for a lower amount Get loan at high interest rate, increasing financial load Get loan on shorter tenure. This increases the burden on the borrower. Get loan while pledging any asset as a collateral Thus, while one may get their loan approved the terms might be slightly stricter. It is advisable to have a high or “excellent” credit score before you apply for a loan, to improve your chances of getting a loan on the best terms. What are the Benefits of a 700 Credit Score? Having a 700 credit score has the following benefits: Favorable Interest Rate: You may get loan at relatively lower interest rates for personal loan, home loan or credit cards. Better Loan Options: You have access to a wide range of loan products with beneficial terms and flexible repayment structure. Higher Credit Limit: You can get approved for a credit card with a relatively higher credit limit. Access to Premium Cards: You also may be eligible to get premium credit cards that offer many benefits like travel perks (airport lounge access), rewards and cashback. Quick Loan Approval: With a 700-credit score, it is easier to get loan approved in a short time. This makes it convenient for the individual to apply for a loan and have access to funds. More Negotiating Power: A high

Personal Loans for Diwali Shopping
Diwali Shopping Made Easy: Why Personal Loans Are the Smart Choice?

Diwali Shopping Made Easy: Why Personal Loans Are the Smart Choice These are the times when you don’t want to miss out on offers that you’ve been eyeing for since long. This festive season of Diwali is a perfect time to bring joy, celebration, and the excitement of shopping for gifts, clothes, home décor and more. Well, this might sound easy but managing all these expenses can be overwhelming. Here’s how you can take a personal loan. Personal loans are the easiest way to get funds if you want to shop stress-free and make the most out of this festive season without burdening your savings. Why Personal Loans Are the Best Choice for Diwali Purchases?  Personal Loans can be a perfect option for Deepavali online shopping and offers. A personal loan can be used for various purposes. It is a versatile and easiest way to get funds. Here’s why it can be the best choice for Diwali shopping online: Festive Season: Diwali season is here, and many companies will offer discounts and offers on their products. During this festive season, you may not want to miss out on this opportunity to get your favorite items at the best deals. Hence, a personal loan is the quickest option to cover all these grand expenses and shopping, whether it’s home renovation or buying gifts. Collateral-Free Loans: Unlike gold loans or mortgages, personal loans do not require you to pledge assets. This makes it easy for you to get instant access to funds in your account without many formalities. Instant access to funds: Personal loans are easy to apply, and it takes very little time to access funds that you wish for.  When you have funds instantly in your account, you won’t be missing any Deepavali online shopping and will enjoy diwali loan offers at affordable rates. Flexible Repayment Options: You can choose a tenure that fits your budget. You can enjoy the festival without having to worry about instant repayment. Competitive Interest Rates: During the festive season, many companies offer discounts and offers on personal loans. These offers on personal loan shopping will help you get the best deal which will be affordable and manageable. Why Use Personal Loans to Make Big Purchases This Diwali?  A big purchase may demand a lot of funds. Big purchases may not necessarily include buying expensive items or gifts, it can also mean making a big change to your lifestyle like renovating your house.  Here are a few reasons why you should shop personal loans to make big purchases this Diwali: Upgrade your lifestyle: Festivals are the perfect time to explore the best deals such as home appliances, electronics, or even new vehicles. You can also consider upgrading your living space, travel, etc. For everything, you may need a bigger amount with you. Personal loans shopping are the best option to get a higher amount as a loan instantly without any complications. Avoid using credit cards: Comparatively, personal loans offer lower interest rates compared to credit cards which may help you cover large expenses better. Here you can avoid using credit cards with higher interest rates which is a good option to manage your expenses and EMIs better. Consolidating festive expenses: You don’t have to handle multiple credit bills. You can handle all of your purchases under one manageable loan. Shop stress-free:  Enjoy the festive season without worrying about liquidity issues.  Also Read: 10 Things to Buy This Diwali 2024 with a Personal Loan Factors to Consider Before Taking a Personal Loan This Diwali  There are a few factors to consider before taking a personal loan this Diwali: Interest Rates: Before taking any personal loan, consider interest rates that will help you get the best deal. EMI affordability:  Always check for the EMI amount, if it is affordable for you, and choose a tenure that suits your budget. You can use Zype’s EMI calculator to check the affordability. Understand Fees & Charges:  Always check for hidden fees or any charges that are associated with the loan amount. Be aware of prepayment penalties or personal loan processing fees. Make sure you’ve read the fine print before choosing a personal loan. Loan tenure: Choose a loan period that aligns with your budget and repayment capacity.  How Personal Loans Help You Manage Diwali Expenses Efficiently  Personal Loans helps you manage Diwali expenses efficiently by: Track your spending:  With a fixed loan amount, it’s easier to control your spending and track your expenses. You can maintain your budget accordingly. Emergency Funds:  Diwali needs to be grand, and you may come across festive expenses anytime. Reserve your savings for emergencies while covering festive expenses with a loan. Planned Repayment:  Repay the loan through EMIs without disrupting your monthly budget. Discounts/Offers:  Many lenders offer cashback and festive discounts on personal loans. Tips for Getting the Best Personal Loan for Diwali Here are a few tips before getting a personal loan for Diwali: Apply Early:  Avoid applying last minute by applying for loans before Diwali. Offers/Discounts:  You can look for offers and look for banks that provide lower interest rates during festive seasons for customers. Choose the right lender:  Compare all the offers from different lenders and choose the best deal on interest rates and processing fees. Check your credit score:  Always review your credit score and try to maintain an above 700+ score to get the loan offers on favorable terms. A high score can get you better loan terms. Also Read: Why You Should Consider an Instant Personal Loan for Diwali 2024 Celebrations? How Can I Apply for a Personal Loan for Diwali Purchases?  There are very few steps if you are applying for a personal loan. For example,  you can apply for an instant loan on Zype in just a few steps: Click on the ‘Apply Now’ to start your application process or download the Zype app from PlayStore/AppStore. Fill out some basic details like your name, email address, PAN, employment details, etc. to complete your application. If you’re

Personal Loan Verification Process
Personal Loan Verification Process – How Does It Work?

Personal Loan Verification Process – How Does It Work? Applying for a personal instant loan online is an easy process when you need quick access to funds. However, before the funds get disbursed to your bank account, your loan application must go through a formal personal loan verification process. For a smooth approval, understanding this verification process is important. In this blog, let’s understand the personal loan verification process and how to navigate it effectively. What is the Personal Loan Verification Process? The most common type of loan is an instant personal loan, and before applying, it’s crucial to understand how lenders verify applicants’ information to ensure its accuracy and determine their creditworthiness. Verifying documents involves confirming identity, address, income, and other financial details. This procedure guarantees that the borrower can repay the loan and assists lenders in assessing the risk of providing a loan. Before the loan money is disbursed, the usual process involves document submission, verification, credit checks, and final approval. While many borrowers seek a personal loan without verification, such options are rare, as verification is essential for a safe lending process. 5-Step Verification Process for a Personal Loan 1. Loan Enquiry: If you’re considering taking a personal loan, submitting an inquiry is the initial step. This allows you to explore different loan options that fit your needs. However, it’s essential to carefully read all terms and conditions and assess repayment terms before making a decision. A personal loan without verification is a higher risk. Hence, choosing a lender who is ethical and follows personal loan verification as a part of the process is important. Selecting the right loan solution for your financial situation requires understanding all loan details. Take your time to make an informed choice to manage your loan effectively and avoid surprises in the future. 2. Loan Application: To prevent delays or rejection, make sure all the details such as income, employment, and identity information are accurate. Complete all fields on the application form to guarantee a smooth processing experience and prevent needless follow-ups. 3. Submission of Documents: The submission of the required paperwork is the first stage in the verification procedure. These documents include identification proof (passports or PAN cards), proof of address (utility bills), and proof of income (pay stubs or bank statements). This aids the lender in verifying your identity and evaluating your creditworthiness. 4. Verification Process: All information submitted is verified to ensure the accuracy and authenticity of the documents. The loan verify process aids in determining whether the application satisfies the eligibility criteria for loan approval. Accurate information helps speed up the loan verification process, while inconsistencies might cause delays in approval. 5. Approval of Personal Loan:  The lender looks over the application one last time after finishing the verification process before reaching a final decision. The lender approves the loan if all the paperwork is accurate and the credit check results are satisfactory. The loan amount is deposited into your bank account upon approval. Also Read: Personal Loan Rejection: Top 5 Reasons & Recovery Tips Common Issues in Personal Loan Verification The few common issues in Personal Loan Verification that can cause delay or rejection are as follows: 1. Low Income: If your income is less than the eligibility criteria, then you might find it hard to complete the verification process as the lower income may lead to rejection of the loan application. 2. Low Credit Score: It is very common that lenders ask for a good credit score if you are applying for a personal loan. Having a low CIBIL score can cause problems during the personal loan verification process, ultimately leading to the rejection of the application. 3. High Debt-to-Income Ratio: Another common reason most of the applicants face rejection is due to the high debt-to-income ratio. Make sure you convince lenders that you can repay the loan on time with the necessary documents. 4. Incomplete Documents: Missing or incorrect documents can lead to delays in the verification process. 5. Incorrect Information: Providing inaccurate details can cause rejection or additional verification steps. 6. Employment Verification Issues: Problems in confirming employment details can delay or impact approval. Importance of Personal Loan Verification The personal loan Verification process is important for every lender for the following reasons: Prevents Fraud: Verification helps in identifying fraudulent applications and reducing risks. Ensures Repayment Capacity: It helps lenders assess whether you can repay the loan without defaulting. Builds Trust: A thorough verification process builds trust between the lender and borrower, ensuring a safe lending experience. How to Prepare for Personal Loan Verification Gather All Necessary Documents: Ensure that you have all required documents for personal loan ready and properly filled out.  Provide Accurate Information: Double-check all the information you provide in the application form.  Maintain a Good Credit Score: Paying bills on time and reducing debts can improve your credit score.  Respond to your lender quickly: If your lender asks for any urgent requirement to verify the process, avoid delaying and be in touch with them to ensure smooth processing. Conclusion Verifying a personal loan applicant’s eligibility and ability to repay the loan is a crucial first step in the loan application process. You can improve your chances of approval by being prepared and knowing the procedures like document submission, verification, interviews, credit checks, and final approval. A verification process highly  depends on careful planning and correct information provision.  Apply Now Frequently Asked Questions What Is The Verification Stage Of A Loan? The verification stage mainly involves checking documents and eligibility. What Is The Next Step After Verification In Personal Loan? After verification, the lender reviews the application for final approval. How Do I Know If My Personal Loan Is Approved? You can check the status of your loan application mostly through the lender’s official website/ app. You can also check through internet/mobile application app. You may also receive a confirmation via email or SMS if approved. How Many Days Of Personal Loan Approval? The approval usually takes 1-7 days. However,

Credit Score vs CIBIL Score: What is the Difference?
Credit Score vs CIBIL Score: What is the Difference?

Credit Score vs CIBIL Score: What is the Difference? In India, credit scores are often addressed as CIBIL score (Credit Information Bureau (India) Limited) but they are not the same. A credit score is a term used to define creditworthiness of a borrower, while a CIBIL score is a type of credit score.    This article explores the difference between these terms and their significance   What is a Credit Score?   A credit score is a three-digit number that ranges between 300 to 900. It is usually used by lenders to understand the creditworthiness of the borrower. This score is calculated by factoring in the borrower’s credit history, number of credit accounts, repayment history, total debt and other such factors. If one has a high credit score, it improves their chances of getting loan approval on favorable terms. A low credit score, on the other hand, will make it difficult to get credit. Credit scores are commonly categorized into different ranges as poor, fair, good, very good and excellent.    What is a CIBIL Score?   A CIBIL score is a three-digit credit score given by Credit Information Bureau (India) Limited (CIBIL). CIBIL is the oldest credit rating bureau in India and has the license to operate from RBI (Reserve Bank of India). It partnered with US-based TransUnion in 2000 and thereafter goes by TransUnion CIBIL Ltd.     CIBIL Score rating and meaning of each range for personal loan, can be better understood with the below table:   CIBIL Score Range  Rating  Impact on Personal Loan  800 and above  Excellent  Easier to get loans at favorable terms. Borrowers are considered low-risk due to high credit scores.   750 – 799  Very Good  Good credit score. It is easy to get loans and credit.  701 – 749  Good   This is a good score to get loan and credit. However, there is scope for improvement as well.  651 – 700  Fair   Borrowers are considered subprime, meaning they are a high-risk borrower for the lender.   300 – 650  Low  Borrowers will find it difficult to get loan approval due to low credit scores. It is advisable to improve the credit score before applying for new credit.  Also Read: The Complete Guide to Interpreting Your CIBIL Score Range Key Differences Between Credit Score and CIBIL Score   Credit score is the numerical representation of an individual’s credit report while CIBIL score one type of credit score. The difference between CIBIL score and credit score is as mentioned:   Parameters  Credit Score   CIBIL Score  Meaning  Credit score is creditworthiness of an individual based on their credit history.  CIBIL score is the creditworthiness of an individual given by the CIBIL (Credit Information Bureau (India) Limited) based on their credit history.  Provider  It is provided by any of the credit bureaus in India namely, CIBIL, Experian, Equifax, and CRIF High Mark  The CIBIL score is provided by only CIBIL (Credit Information Bureau (India) Limited)  Usage  Credit score by the mentioned credit bureaus is widely used in India, especially by lenders  CIBIL score is the most preferred score for lenders in India.  Authority  Credit bureaus are regulated by different bureaus.  CIBIL bureau is regulated by the Reserve Bank of India.  Calculation Method  Each bureau has their own algorithm and methodology to calculate the credit score.  The score is calculated by CIBIL’s algorithm, and the credit reports they maintain.  Factors Affecting Credit Score    Credit score is affected by the following factors, including:    Payment History (35%): Your payment history has the biggest impact on your credit score, since it represents your repayment history. Lenders want to know if you make payments on time. If you have a history of late or missed payments, it reflects badly on the credit score.    Amount Owed (30%): Another factor that impacts your credit score is the amount of loan owed or credit utilization ratio. Lenders check how much amount you have used up from the available credit limit. It is advisable to keep the credit utilization ratio below 30%.   Length of Credit History (15%): A long credit history can positively impact your credit score. Lenders view you as reliable if you have a longer credit history. Keep old credit accounts open to build a good credit score.  Credit Mix (10%): Credit mix refers to the different types of credit one owns such as credit card, home loan, education loan and so forth. It shows the individual’s ability to manage different types of credit and impacts their credit score.   New Credit (10%): New credit also raises an inquiry from lenders. It is observed that borrowers who apply for multiple new credits like credit card, personal loan are either experiencing shortage cash flow or have too much debt.   While these components impact credit score, it is not necessary to increase credit mix or to take new credit, just to improve credit score.    Factors Affecting CIBIL Score  CIBIL score is a type of credit score, affected by factors like credit utilization, payment history, credit applications and credit mix. The other factors that affect the CIBIL Score include the following factors:   Depth of Credit: It is the duration of your existing credit history as calculated from the date when your oldest credit account was opened.  Long Term Trend of Outstanding Balances: If you have a long pattern of having outstanding balances, that can impact your credit score.  Transaction history on credit cards  Ratio of actual repayment amount to total amount due  Number of new accounts opened, and number of accounts closed  The absolute values as well as qualitative characteristics of these factors in your credit report can either have a positive or negative impact on the new CIBIL Score.   Also Read: Which factors affect my credit score?   Credit Score vs CIBIL Score: Which is More Important?    Credit score and CIBIL score are slightly different concepts.   Credit score: Credit score is a bread term used to determine creditworthiness of an individual. It can be measured by any credit bureaus that operate in India, like Equifax, CIBIL, Experian.    CIBIL score: CIBIL score is

Tips to Choose the Right Personal Loan Tenure
10 Smart Tips to Choose the Right Personal Loan Tenure

10 Smart Tips to Choose the Right Personal Loan Tenure If you plan to take a personal loan, one of the key factors to consider is loan tenure. Choosing the right loan tenure that fits your financial situation and supports your future goals is important. In India, most lenders offer instant personal loan for 1-5 years with some extending it to 7 years. A long loan tenure results in lower EMI amount while a shorter loan tenure results in high EMI amount.  Besides this, there are a number of factors that one should consider when deciding on loan tenure. This blog guides you on all the factors to consider when deciding on loan tenure.    What is Personal Loan Tenure?   Personal loan tenure means the agreed-upon duration between a lender and a borrower for loan repayment. Loan tenure impacts the interest rate and EMI amount. Lenders provide flexible repayment structures to ease borrower’s repayment, keeping their current income and financial situation in mind. Most lenders offer personal loan tenure between 1 – 5 years, with some extending for 7 years. Longer loan duration is beneficial for borrowers with limited monthly income, helping them manage their finances. Many lenders offer loans for duration as short as 3 months. This is ideal for borrowers with a high monthly income as it allows them to clear off their loan earlier.   Common Mistakes to Avoid When Choosing Loan Tenure   When choosing a loan tenure, it is important to consider several factors that affect loan tenure. Here are some common mistakes that borrowers make:   Focusing only on EMI amount: Many times, borrowers only focus on affordable EMI amount. However, it is equally important to focus on interest rates that one would end up paying for the entire loan tenure.    Opting for Longest Tenure: It might seem like an easier option to opt for the longer tenure, but it also increases the total interest paid overtime.   Opting for a High EMI Amount: While short tenure will allow you to clear off your loan quickly, you will also need to pay a higher EMI amount. This could potentially impact on your other expenses and make it difficult to manage your finances.   Ignoring Future Financial Situation: Not taking into account future financial conditions. Income sources and future may change and might impact EMI payment.  Not Considering Monthly Budget: You need to take into consideration your monthly expenses and any other EMIs that you need to pay. If you ignore these factors, it may lead to a high EMI amount making it difficult to manage other expenses.   Thus, before you select a loan tenure, consider the mentioned factors and decide on the right loan tenure that fits your financial situation.   Also Read: How is the repayment tenure decided?  Benefits of Choosing the Right Loan Tenure   Selecting the right loan tenure that fits your financial situation will help you save money in the long run. We have mentioned few key benefits of choosing the right loan tenure:   Efficient Financial Planning: You can efficiently allocate funds to EMI, daily expenses and other expenditures, for the loan tenure period. This can help you plan your monthly budget without any financial burden.   Balance Existing Liabilities: When you select the right loan tenure keeping in mind your existing liabilities, you can plan your finances better.    Compare Loan Options: Once you decide on the right loan tenure, you can compare various loan options available. With the help of an online Personal loan EMI calculator available, you can understand interest rate and EMI amount for each loan option.   10 Smart Tips to Choose the Right Personal Loan Tenure   If you are planning to take a loan, consider these tips that will help you choose the right personal loan tenure:   1. Assess Your Financial Situation : Before you decide on your loan tenure, assess your financial situation. Factor in your monthly income, other sources of income, existing liabilities, expenses and future goals. This will help you determine the loan tenure and efficiently manage your finances.   2. Evaluate Your Repayment Capacity : By considering your current financial situation, you can determine your repayment structure. This will allow you to set an EMI amount that you can easily pay each month without impacting other essential expenses.   3. Consider Your Loan Amount : Loan tenure impacts the loan amount and the total interest rate; you’ll end up paying. If you choose a short tenure, you will end up paying a high EMI amount but will clear off the loan earlier. If you choose a long tenure, you will pay a lower EMI amount but will have to keep in mind the interest rate. Opting for a loan amount and tenure that fits your current financial situation, and future goals will help you choose the right loan tenure that best suits you.  4. Compare Interest Rates for Different Tenures : By utilizing EMI calculators online, you can easily compare interest rates with different tenures. These EMI calculators provide you with the option to input the different loan amounts, tenure and interest rates for easy comparison.  5. Check Prepayment and Foreclosure Terms : Check if the lender is providing a pre-payment or foreclosure option, without any penalties. This option allows the borrower to reduce personal loan tenure. If you are expecting to receive any additional income or funds in the future, you can clear off your loan earlier.   6. Understand EMI Implications : The loan tenure has a direct impact on the EMI amount. If you choose a longer tenure, you have to pay lower EMI. However, do consider the total interest rate you will have to pay. If you choose a shorter loan tenure, you will end up paying a high EMI amount each month. Choose a tenure and EMI, that you can easily repay without any financial burden. 7. Look at Your Long-Term Financial Goals : When you choose a loan tenure, consider your future plans and financial goals. If you anticipate a job change, higher education, starting a family or relocating to a new location, evaluate the financial implications for these situations.

How to do KYC for Mutual Funds?
How to do KYC for Mutual Funds? Step By Step Guide

How to do KYC for Mutual Funds? Step By Step Guide As per SEBI, there is a new rule for mutual fund investors. As of April 1, 2024, mutual fund investors are required to validat e their Aadhaar and PAN for Know Your Customer (KYC). If one fails to do so, their account will be on hold, and they won’t be able to make new investments. This article explains the importance of KYC for mutual funds and a guide on how to do KYC offline and online along with a list of documents required.   What is KYC for Mutual Funds? KYC stands for “Know Your Customer” is a mandatory process for anyone who wants to invest in mutual funds in India. It is a system utilized by financial institutions to verify the customer’s identity. KYC ensures the transactions are secure and protects both the investor and financial institutions from any financial crimes. This system prevents money laundering or fraud, since the investor’s financial history is maintained and can be monitored in case of any discrepancy.  Importance of Mutual Fund KYC KYC for mutual fund is important for the following reasons:  Compliance: It is a mandatory requirement set by SEBI (Securities and Exchange Board of India) to link KYC for mutual funds. Non-compliance can lead to legal consequences for both investors and institutions. Investor Safety: KYC protects investor information and prevents any unauthorized access or misuse of funds.  Prevents Financial Frauds: KYC prevents financial frauds like money laundering since it requires identification and financial history. It ensures only registered users execute mutual fund transactions. This makes it difficult to execute frauds like unauthorized investing, money laundering etc., and further safeguards the mutual fund industry.  Risk Prevention: KYC allows the fund companies to evaluate the investor and offer them investment plans that best suit them. This ensures that the investor successfully fulfils their financial goals.   Streamlining Transactions: With KYC in place, investors can easily conduct online transactions, switch schemes or redeem investments, making the process convenient and efficient.  Also Read: Things to Know About Loans Against Mutual Funds The Compulsory Nature of Mutual Fund KYC It is mandatory for anyone who invests in mutual funds to complete their KYC. It is done verify identity and address of the investor. Following are important factors for doing a Mutual Fund KYC: Protects Investor: KYC maintains transparency and accountability for the investor. It ensures that the investor understands the financial investments they undertake. Their identity and personal information are protected against misuse or identity theft.  Combats financial crimes: Mutual fund companies require the financial history of the investors. This prevents any cases of money laundering or fraud since there is transparency, and all financial records are maintained. Regulatory Compliance: SEBI has mandated KYC for mutual funds to protect investors and maintain transparency in the industry. Risk Evaluation: KYC allows mutual fund companies to assess the risk for an investor and suggest investment options that best suit their requirements and financial goals.    Also Read: Types of Mutual Funds by Categories Steps to Do KYC for Mutual Funds To complete KYC for mutual funds, here is our step-by-step guide:  Step 1: Documentation Get all the required documents ready. This includes Proof of Identity (PAN card, Aadhar Card or any government issues proof of identity), Proof of Address (Aadhar card, driving license, passport or electricity bill) This document should clearly include your, Passport size photo, PAN Card and Aadhaar Card.  Step 2: Select KYC Registration Agency (KRA) Choose a KYC Registration Agency. Popular ones include NDML KRA, CAMS KRA or Karvy KRA. These are registered under SEBI (Securities and Exchange Board of India) and maintain KYC records of investors.  Step 3: Fill Out the KYC Form Provide basic details like your name, address, date of birth, PAN number, email, and phone number in the mutual fund KYC Form. Make sure that you give accurate and verified information.  Step 4: Submit the Form You can submit the form along with the required documents online. Or you can submit it offline by sending them via courier or visiting the KRA agency. Make sure to attach self-attested documents along with the form.   Step 5: In-person Verification (IPV) In-person verification (IPV) is done at the mutual fund house or the KRA office. It is done by an authorized person to verify the information given. In some instances, it can also be done via video verification, where the verification is done by a video call.  Step 6: KYC Confirmation Once the IPV is completed and the documents are verified, the KRA processes the application. This process takes a few days for approval. When the KYC is approved, you get “KYC Approved” status. In case of any issue, your status will be shown as ‘KYC On Hold’ or ‘KYC Rejected’. You must contact the KRA to get it resolved.  Offline KYC for Mutual Funds To do offline KYC for mutual funds, here are the options: Offline KYC with KRA: Individuals can get the form from CDSL’s website. Here are the steps for offline KYC with KRA-  1. Download the KYC application form from CDSL.  2. Fill in the form with details like PAN card, identity proof and address proof along with attested photographs.  3. After completion, submit the form to the mutual fund house or intermediary at their office. The individual has to go to the KRA location and submit the form along with any other documentation.  Offline KYC with Intermediary platform: If one plans to invest through a specific fund company or a mutual fund platform, they will guide you with the KYC process. These are the steps to apply:  1. Fill in the KYC registration form. 2. The intermediary platform is registered with a KYC Registered Agency. After the form is submitted, the intermediary co-ordinates with the KRA to complete the process.  3. The company creates KYC with the given PAN number.  Online KYC for Mutual Funds For online KYC for mutual funds, these are the options available: Online KYC with

Download Zype App​

Categories

Archives