Category: Blog

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

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

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: 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. 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. 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. 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. 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. 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. 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. Choosing

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- Download the KYC application form from CDSL Fill in the form with details like PAN card, identity proof and address proof along with attested photographs. 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: Fill in the KYC registration form 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. 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 KRA: One can visit the website

Why Zype’s Personal Loan is Ideal for Navratri and Dussehra Offers? Dussehra is one of India’s most vibrant celebrations, and the best part of Navratri offers is the chance to buy your favorite items or gift your loved ones their favorite gadgets or household appliances at best deals. You might not always have the money to make these purchases. This Dussehra, Zype offers a Personal Loan that might help you achieve your personal goals without worrying about your immediate financial situation. Here are some reasons why the festive season is the ideal time to take advantage of these financing alternatives and add even more special moments to your festival if you wish to finance these events. Why Opt for a Personal Loan During Dussehra It’s crucial to manage your finances when you’re planning the celebration. Here are some reasons to get a personal loan with Zype and how it might be the best option during Dussehra:   Higher Loan Amount:  You can borrow money based on your needs with a Zype personal loan. The loan amount is flexible, and you can apply for higher amounts like 50,000 to 2 lakhs, which will readily cover your larger expenses or gifts.   Collateral-Free Loan: Collateral is not needed for Zype’s loans, and you can get instant loans online right away with just a few days’ worth of paperwork.   Flexible Repayment Terms: To make repayment easy, Zype provides flexible EMI options during Dussehra. These flexible plans allow you to choose a repayment tenure that suits your financial situation, whether you prefer smaller EMIs over a longer period or want to settle the loan quickly.   Instant Loan Approvals: With quick and easy documentation processes, Zype now offers instant loan approvals during Dussehra. This ensures you can get the funds you need without delay, allowing you to cover urgent expenses or make last-minute purchases for the festival.   Also Read: Durga Puja – Empowering Women’s Financial Success Personal Loan Eligibility Criteria You have to meet your lender’s eligibility criteria to get approved for a personal loan. And Zype’s eligibility criteria is simple, this is all you need: Age: 18 years or above Work Experience: Salaried individual Citizenship: Valid PAN & Aadhaar card Monthly Salary: Monthly income of at least ₹15,000 How Zype Can Help You Finance This Dussehra Here’s how Zype’s personal loans can help you this Dussehra:   Home Renovation: Dussehra is the perfect time to upgrade your home, with Navratri special offers giving you access to the best deals of the season to enhance your living space. A personal loan will help you to invest in home improvement projects, purchase new furniture, or paint your living area without using up all of your savings.   Festive Shopping: The shopping list during festive season and Navratri offers can be big, from purchasing new clothing to updating your household appliances. You can avoid financial pressure by managing these costs with the use of a personal loan.   Wedding Expenses: Personal loans can help you cover the costs of a wedding, whether it’s for you or a loved one, and with Dussehra marking the start of the wedding season, it’s an ideal time to take advantage of Navratri special offers. From venue reservations to catering and gifts, a personal loan can effectively manage all your wedding expenses.   Debt Consolidation: If you have multiple debts to manage, a personal loan can help you consolidate them under one lower-interest loan, easing your repayment burden and simplifying your finances.   Personal loans are versatile and can be used for a variety of purposes. This Dussehra, take advantage of Navratri special offers to create lasting memories with your loved ones and get a personal loan to finance all your festive needs. How to Choose the Best Dussehra Personal Loan The best way to choose the best personal loans are as follows:   Compare Interest Rates: During Dussehra, look for lenders who are providing lower interest rates. The total amount of repayment can change significantly even if the interest rate is somewhat lowered.   Check Processing Fees and Hidden Costs: Some lenders may lower the processing fees as part of their festive offers. Always check for any hidden charges or fees that may increase the loan cost.   Consider the Repayment Tenure: Opt for a loan that offers flexible repayment options. This ensures that you can choose an EMI plan that fits your monthly budget without stretching your finances.   Eligibility Criteria: Before applying, ensure you meet the lender’s eligibility criteria for Dussehra personal loans. Most banks will look at factors like your credit score, income, and employment status.   Personal loan lending apps like Zype will help you with the best offerings and you can opt for the personal loan to fund your festive. How to Apply for a Personal Loan This Dussehra Applying for a personal loan during Dussehra is simple and quick. Here’s how you can apply for a personal loan this Dussehra with Zype: 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 eligible, you can get approved for a loan in less than 60 seconds. Complete a simple KYC process by doing a real-time selfie verification and Aadhaar-linked mobile OTP to activate your approved limit. Select the loan amount you want to transfer along with your desired repayment tenure. You will get a personal loan instant disbursal directly into your registered bank account. Also Read: 10 Things to Buy This Diwali 2023 with a Personal Loan Final Thoughts Dussehra is about celebration and memories. Personal loans during the festive season can offer a smart way to fund your purchases or financial needs with attractive terms. Whether you’re planning home renovations, looking to consolidate debt, or simply want to enjoy the festivities to the fullest, these Dussehra personal loans can help you achieve your goals

NAV in Mutual Funds – Net Asset Value Meaning, Calculation If you are investing in mutual funds, one key factor to understand is the Net Asset Value (NAV) NAV is a metric that evaluates the performance of a mutual fund and determines the value of your investment. However,investors often misinterpret its significance.  This blog aims to break down NAV, its calculation, and its importance. We also explore factors that influence NAV, compare it to market price, and address common myths to help you make more informed decisions with your investments  What is NAV in Mutual Funds? NAV or Net Asset Value of a mutual fund is the price of a single unit of a mutual fund. It is calculated by subtracting liabilities from the total asset value divided by number of shares. NAV helps the investor determine which investment to withdraw, keep or invest more into. It represents the price at which the investor buys or sells the units of the fund.  As per Securities and Exchange Board of India (SEBI) mandate, the NAV of mutual fund schemes are updated and published daily at the end of the business day.  Importance of NAV in Mutual Fund Investments For an investor, NAV (Net Asset Value) helps them track the fund’s growth and the returns earned over a period of time.    Performance: It also gives the investor an idea about the fund’s performance. The investor can also understand the fund manager’s strategy and impact on the performance of underlying assets.   Buying and Selling: The investor can keep track of a mutual fund and determine when to buy or sell a fund. For instance, if a fund’s NAV has consistently increased over time, it may indicate it has been performing well. Hence, consider buying more units.    Valuation of Investments: The NAV provides transparency to the investor by allowing them to keep track of funds’ performance over time.     Also Read: Things to Know About Loans Against Mutual Funds How is NAV Calculated? To calculate NAV, use this formula:   NAV = (Total assets – Total liabilities) / Total Shares     Let us assume we have invested in an NFO (New Fund Offering) of a mutual fund scheme, and we need to calculate the returns generated. The NAV is Rs. 20. After 4 months, the NAV may have increased to 30.5. Thus, the mutual fund scheme has generated 52.5% returns   Returns = [(30.50 – 20)/20 *100] = 52.5%    Factors Affecting NAV Calculation   The factors affecting NAV calculation includes     Market Value Asset: The NAV of the mutual fund is affected when the market value of investments changes.     Expense Ratio: When an investor invests in a fund, they employ the services of a fund manager through the fund company. The cost of this service is debited from the invested money regularly as fees. This ratio is expressed as a percentage of the fund value. The expense is debited from the fund daily and impacts on the NAV.    Expenses and Liabilities: Expenses like management fees, administrative costs, payable amounts are deducted from the assets while calculating the NAV. If the expenses and liabilities are higher, it can lower the NAV.    Dividends and Distribution When the mutual fund scheme distributes dividends or capital gain to their investors, the NAV lowers. For instance, when a fund pays out dividends, the NAV lowers by the amount distributed.     Fund Inflows and Outflows: When an investor buys shares in a fund, it increases the fund’s assets, thereby increasing the NAV and vice versa. Thus, it is important to track cash flow to understand how they impact the NAV.  NAV vs Market Price: What’s the Difference? The difference between NAV and market price is when they are calculated. Considering key factors involved, we have differentiated in the below table:  Factor  NAV (Net Asset Value)  Market Price  Definition  Net asset value (NAV) is the value of an investment fund that is determined by subtracting its liabilities from its assets.   Market price refers to the amount of money an asset can be sold in a market.  Calculation  NAV = (Assets – Liabilities) / Total Shares  Market price = Selling price + Discount    Represents  It represents the per-unit value of the fund’s assets after deducting any liabilities.  It represents the price at which a product or a service is bought or sold in the market.  Updated  NAV is updated once daily, usually at the end of the business day.  The market price is a function of demand and supply. It is constantly changing.  Impact of NAV on Mutual Fund Returns The net asset value (NAV) of a mutual fund plays a crucial role in determining the mutual fund returns for an investor. Key factors that impact mutual fund returns:      Investment Growth: The NAV increases over time reflecting the appreciation of the fund’s underlying assets. This leads to capital gains for investors. For example, if an investor purchases units at a lower NAV and sells when the NAV rises, they earn a profit.     Dividends and Distributions: When a mutual fund pays out dividends, the NAV may decrease by the amount distributed. For example, if the fund gives out dividends, the NAV will drop by that amount. However, investors gain cash while still having the chance for their remaining NAV to grow.     Market Conditions: NAVs are impacted by market fluctuations. Economic factors, interest rates, and market sentiment can cause the NAV to rise or fall, which directly impacts the returns an investor receives. Timing of Investment: At what time does an investor, sell or buy units affect the returns. Investors who purchase units when the NAV is low can maximize their gains if the NAV rises over time.    Also Read: What is Mutual Fund Return and how to Calculate it? How Often is NAV Updated?   The NAV (Net Asset Value) is updated and published daily at the end of the day. The value of mutual funds constantly fluctuates due to daily

What to Know About 7-Year Personal Loans? Personal loans are the most preferred choice among the borrowers especially for quick funds. 7 year personal loans are a great choice among the various options for borrowers who want a loan that fits their demands and is affordable. Let’s learn more about the advantages, disadvantages, and eligibility, application process in this blog post. What is a 7-Year Personal Loan? A 7-year personal loan, just like traditional personal loans, is an unsecured loan that allows borrowers to get funds for seven years. A 7-year personal loan is specifically designed for borrowers to pay back their money in monthly EMIs, including both principal and interest in seven years. The interest rates for 7-year personal loans can vary based on the lender and the borrower’s creditworthiness. Personal loans or an instant loan online can be used for various needs and a personal loan for 7 years is a good option to cover your major expenses, consolidate debt, etc. With a fixed interest rate, borrowers can enjoy predictable payments over the loan term, making budgeting easier. Who Should Consider a 7-Year Personal Loan? For individuals who need a longer repayment period to stay within their monthly budget, a personal loan for 7 years is an excellent option. This duration allows borrowers to manage their finances effectively. It’s particularly suited for those with a stable income and strong credit history. Borrowers with good credit can be a right fit for a 7-year personal loan with favourable terms and competitive interest rates. Additionally, some lenders offer flexible repayment options to further accommodate borrowers’ needs. This 7-year personal loan can be used for various purposes, including covering personal expenses, consolidating debt, or paying medical bills, making it a versatile option for managing life’s unexpected costs. Benefits of 7-Year Personal Loans The benefits of 7 year personal loans are as follows: Lower Monthly EMIs:  A 7-year personal loan has longer repayment terms for lower monthly payments. This makes it easier for borrowers to manage their budgets efficiently. Fixed Interest Rates: Many lenders offer fixed interest rates, providing stability and predictability in payment amounts throughout the loan term.” Higher Loan Amount:  Lenders usually lend borrowers a higher loan amount who get a personal loan for 7 years. A good credit score, eligibility criteria, and a higher loan tenure allow lenders to lend a higher amount to borrowers. Drawbacks of 7-Year Personal Loans A few drawbacks of 7 Year Personal Loans are as follows: Long-Term Debt Commitment: Committing to a loan for seven years may not be ideal for those who prefer shorter-term solutions or wish to minimise long-term debt.   Eligibility Challenges: Some borrowers may face challenges in qualifying for a 7-year personal loan if they have lower credit scores or unstable income.   Potential Fees: Lenders may charge origination fees or prepayment penalties, adding to the overall cost of the loan. Eligibility Criteria for 7-Year Personal Loans The common eligibility criteria for 7-Year Personal Loans are as follows: Credit Score: A good to excellent credit score is often required for favourable loan terms.   Stable Income: Lenders usually look for proof of stable income to ensure borrowers can meet monthly payments.   Debt-to-Income Ratio: A low debt-to-income ratio indicates that borrowers can handle additional debt.   Age: Borrowers must be of legal age (18 or older) in their respective country Things to Consider Before Choosing a 7-Year Loan Below are a few things to consider before choosing a 7-Year Loan: Monthly EMIs: Considering you will be paying a loan for seven years; it is important to know that monthly EMIs are affordable.   Financial Situation: Assess your financial situation and understand the requirements before choosing a 7-year personal loan.   Credit Score: Understand the eligibility and ensure a decent credit score before choosing a 7-Year Loan. This will help you get the loan on favourable terms.   Research and Compare: It is important to do good research about the lender and compare lenders to get the best deal.   Interest Rates: Compare all the lender options to get clarity on the best interest rates. Considering it’s 7 years, make sure the interest rates are affordable. How to Apply for a 7-Year Personal Loan? Research Lenders: Start by looking into different lenders, including banks, NBFCs, and online lenders which will provide you the best rates and terms.   Check Your Credit Score: If you have any past issues with your payment track, make sure that you sort it out before applying for a new loan. Maintaining a good credit score is important to get loans with favourable terms.   Documentation: Prepare necessary documents such as proof of income, employment verification, and personal identification.   Choose the Lender:  Choose a reputable lender and choose a 7-year personal loan that will suit your needs.   Submit An Application: Complete the loan application online or in person, providing all required information.   Review the Offer: If approved, carefully review the loan offer, including the interest rate and terms, before accepting. Also Read: How to Choose Best Personal Loan Lender – Top 8 Reasons Conclusion A 7-year personal loan can be an effective financial solution for those looking to fund significant expenses or consolidate debt. By understanding its benefits and drawbacks, eligibility criteria, and application process, borrowers can make informed decisions that align with their financial goals. As with any financial product, it’s crucial to assess your situation and shop around for the best options before committing to a loan. Apply Now Frequently Asked Questions What Is The Interest Rate On Personal Loans With 7 Years Of Tenure? The interest rate for personal loans can vary based on factors like the applicant’s credit profile, income, and loan amount. For example, you can check directly with Zype for the most up-to-date information on interest rates for a 7-year term. Do I Need Collateral For 7-Year Personal Loans? No, most personal loans, including those with a 7-year tenure, are unsecured loans, meaning they do not require collateral.

Why Should You Consider a Personal Loan for Business Use? Managing a business can be tough. There is always some risk involved in it, challenges to tackle, or unexpected expenses that may arise. During such a situation, maintaining funds can be a difficult aspect, especially for new businesses that demand a lot to get started. In today’s world with everything being fast and smart, we have numerous options to get money instantly. One such smart way to get funds is by getting an online personal loan. Here, in this blog, we’ll try to understand what are some convenient ways to get a personal loan that will help you for your business. Introduction to Using Personal Loans for Business If you’ve made the decision to start a business, then funding will be needed to support your strategy. Another option for some would be to seek a business loan. However, getting a business loan approved can at times be very difficult. These days, lenders grant business loans based on your company’s age, profitability potential, and a few other factors. Even though granting business loans are very common, the lenders ensure to minimise the chances of financial loss. Hence, lenders may conduct a hard credit check before granting a business loan which makes it difficult for borrowers to get such loans for their business needs. Hence, for business owners, the best alternative would be to seek a personal loan for business use. What is a Personal Loan? A personal loan is an unsecured loan with the immediate funds that can be used for a range of purposes. Personal instant loans online are not restricted in how they can be used, in comparison to business loans, which are usually available only for business purposes. You can use personal loans for both personal or business requirements and also for emergency situations. Personal loans are unsecured loans, which means they don’t require collateral. This makes applying for them simpler and more comfortable as you can obtain funds quickly without any hassles. Furthermore, personal loans often have set interest rates, making you monthly payments predictable which helps in managing finances effectively. If you’re looking for quick access to funds, consider a personal line of credit as an option. This allows you to borrow as per your requirement to a certain limit, providing even more flexibility for various financial needs.  Why Consider a Personal Loan for Business Use? If you’re looking for a quick and flexible funding option, personal loans for business use could be the perfect solution. Here are five key advantages that make them an attractive choice.   Quick Funds:  Personal loans are the quickest and easiest ones to get as compared to business loans. This means you can have access to funds quickly if you have any urgent needs without much hassle.   Flexibility: Personal loans can be used for various purposes and there are no restrictions on how you can use your personal loan. It is flexible and allows you to use it for various aspects of business.   No Need for Collateral: There is no collateral required for personal loans because they are unsecured. Small business owners who have no valuable assets to pledge can benefit from this. Easier Eligibility Requirements: The eligibility criteria for personal loans are often less stringent than those for business loans, making them accessible for business owners with limited credit history. Suitable for Small Amounts: A personal loan might be a better choice than a business loan, if you only need a small amount of money, which might have a higher minimum borrowing amount. Benefits of Using a Personal Loan for Business Using a personal loan for your business requires less paperwork and no collateral, making it a flexible option for small business owners looking to meet their financial needs efficiently.Here are few more benefits:   Quick Availability of Funds: Personal loans are the best option to get funds quickly when you need money for business. It’s easy to apply, and get the loan disbursed in your account within a few days.   Fast Processing:  Personal loans are available within days if you get approved for the loan. They often have faster approval and disbursement, which help in immediate access to capital for business. Flexible Repayment Terms:  Personal loans allow the borrower to choose a repayment period that suits their requirement.   No Collateral:  Considering, you will be starting a new business, you may not have any collateral or assets to pledge. Personal loans help you with immediate loans without any requirement of collateral.   Multiple Usage:  You can use personal loans for any purpose and there are no restrictions on usage of the loan, unlike other loans.   Smaller Funds:  Different lenders provide you with different amounts for personal loans starting from Rs.1000 up to lakh. You can avail smaller amounts too for business purposes which will be available immediately as per your needs. Drawbacks of Using a Personal Loan for Business The drawbacks of using a personal loan for business are as follows:   Poor Credit:  Small businesses need time to build a reputation and credit history. A good credit is built over time and with no credit or poor credit, personal loan lenders may hesitate to provide loans.   Risk to Personal Credit: Since a personal loan is in your name, any default or late payment will directly impact your personal credit score.   Shorter Repayment Terms: Personal loans typically have shorter repayment terms, which may lead to higher monthly payments compared to long-term business loans.   Limited Loan Amount: The loan amount for personal loans is generally smaller compared to business loans, which may not suffice for larger business needs.      When Should You Use a Personal Loan for Your Business Here are the reason why you may choose a personal loan for your business: Small Funding Needs: when you only require a small sum of money that can be paid back quickly.   Emergency Expenses: When you need immediate funding to cover

What is Co Lending & How does it Work? India still has a significant portion of its population living in rural areas, and many lack easy access to financial services. Priority sectors like agriculture, and micro, small, and medium enterprises (MSMEs) struggle to access liquidity. MSMEs alone contribute to one-third of the economy and are projected to contribute US $1 Trillion to India’s total exports by 2028. Recognizing this gap, RBI has introduced regulations for the co-lending model to support priority sectors.     In this blog, we’ll breakdown the co-lending model along with its working, features and benefits and evaluation on the future of co-lending in India.  What is Co Lending?   Co-lending is an arrangement where lenders, typically a bank and an NBFC, enter a partnership to provide loans. This arrangement aims to improve credit flow towards the underserved sectors at affordable rates. Co-lending works on the strengths of both the lenders for maximum benefit to the customer. The Non-Banking Financial Companies (NBFCs) contribute towards the technology integration and loan origination while the banks provide the majority percentage of the loan disbursed. The lenders equally share the risks and rewards earned through this partnership, while offering the best loan rates to their customers.  How Does Co-Lending Work?   Co-lending has multiple lenders who fund a single loan. This streamlines the lending process by utilizing the strengths of each lender. Due to this, the entire loan process is faster and offers affordable loan plans on the best terms. A typical co-lending model works as:   Loan Application: The borrower applies for a loan through a platform managed by both lenders. The process is streamlined for credit and risk assessment ensuring quick turnaround time.    Loan Disbursal: After the personal loan gets approved, both lenders disburse the loan amount directly into the borrower’s account. Thus, the personal loan disbursal is faster as compared to traditional banks.    Repayment Procedure: Lenders coordinate to track and manage their share of the loan. They utilise integrated systems for updates on loan status. This helps maintain transparency and efficiency in managing the repayments. What is a Co Lending Arrangement?   Co lending arrangement works under mutually agreed terms between multiple parties that share the credit risk and interest income. Typically, it is a bank partnering with an NBFC to provide loans to underserved sectors at affordable interest rates. The NBFC offers a niche customer base and technology integration while the banks provide a major portion of the funds.     Typical terms of the co-lending model include:    80-20 Split: The loan capital is split at an 80:20 ratio. 80% of the loan is funded by the bank and the remaining 20% is funded by the NBFC.    Joint Underwriting: The underwriting is done jointly since both entities are equally involved.  Risk and Return Split: The 80:20 split applies to the risk and returns as well.   Interest Rate for Borrower: Both the NBFC and banks set their own interest rate, and the blended interest rate is charged to the customer.    Roles Allocation: The NBFC, typically, is in charge of documentation, loan approval, personalized loan plans and customer support. The banks usually fund the majority portion of the loan disbursed and add credibility to the partnership. What is an Example of Co-Lending?   An example of co-lending is usually when a bank partners with a Non-Banking Financial Company (NBFC) to provide a loan. The bank and the NBFC form a co lending agreement where the bank provide the major chunk of the funds and the NBFC handles the remaining share of the funds. They may also handle customer relationships and loan processing.    For instance, a borrower applies for a personal loan of ₹5,00,000. The bank might contribute ₹3,50,000 (70% of the loan) at a lower interest rate, while the NBFC provides the remaining ₹1,50,000 (30% of the loan) at a slightly higher rate. This combination leads to lower overall interest rates for the borrower, and they also benefit from faster loan disbursal, due to efficient technology integration of the NBFCs     For example, State Bank of India (SBI) has partnered with various NBFCs like HDFC and Aditya Birla Capital for co-lending arrangements in segments like housing finance and personal loans.  Advantages of Co-Lending   Co-lending offers several benefits to banks, NBFCs and borrowers.  For Banks  By partnering with NBFC, banks can reach the underserved customer base to offer their expertise.  It allows the banks to offer loans at lower interest rates and expand their loan portfolio.  Banks get the opportunity to increase their credit share in priority sectors (agriculture, small businesses, and housing)  For NBFCs   Allows NBFCs to leverage their reach in niche sectors and offer them better loans.  NBFCs benefit from the technology and digital reach of their partner banks.   The partnership with banks allows NBFCs to offer competitive interest rates and plans to priority sectors  For Consumers   Borrowers have access to loans at lower interest rates.  Customers who have limited access to credit benefit from the co-lending model. Borrowers who may not qualify for loans in a traditional bank have access to credit in this model.  Loan approval and disbursal is faster, since the turnaround time is reduced.  Features of Co-Lending   Some of the features of co-lending are as follows:    Risk and Rewards Sharing: Co-lending allows banks and NBFCs to share the benefits and minimize their risks. Risk sharing allows lenders to offer loans to underserved or high-risk sections.    Lower Interest Rates: Banks have access to low-cost funds. Combining this with NBFCs’ reach to niche customer base, co-lending allows the borrower to get a loan at lower interest rates.    Quick Turnaround Time: Co-lending allows for bifurcation of processes. Banks usually handle large amounts of funds and NBFCs use faster technology to assess loan applications. This is streamlined leading to faster processing from application to disbursal.     More Credit Flow: NBFCs can provide more credit to sectors that struggle to get financing from traditional banks.    Banks

Direct vs Regular Mutual Fund – Which is Better? Mutual funds are a popular investment option preferred by beginners and seasoned investors alike. However, for beginners, investing in mutual funds can seem like a complex process. Learning about  market conditions and mutual fund plans may overwhelm some. To understand which mutual fund plan to invest in, as an investor you need to assess your financial goals, investment style, and risk appetite. This will help you choose a plan that aligns with your financial goals.    Mutual fund schemes have two plans: Direct and Regular. Having a clear understanding of your financial goals will help you with a choice that best suits you as an investor. This article explores direct mutual funds, regular mutual funds and their benefits & limitations. What are Direct Mutual Funds?  Direct mutual funds allow the investor to purchase mutual funds from the Asset Management Company (AMC). This removes the need to pay commission to the distributor. The investor saves on commission and fees associated with the traditional mutual fund investing.   For instance, if someone wants to book a hotel room, they might choose to use an online travel agency. In this case, the agency acts as an intermediary between the traveler and the hotel. However, if the traveler decides to book directly with the hotel, they can bypass the agency and potentially avoid the service fees charged by the agency, resulting in a better deal.  What are Regular Mutual Funds?  Regular mutual funds are mutual funds bought by third party agents like brokers or distributors. The third-party agents charge a fee to the AMC when they sell their mutual funds to any investor. The AMCs will usually recover this fee through expense ratio. This is why the expense ratio is a bit higher and the returns comparatively lower than direct mutual funds. Regular mutual funds are best suited for investors new to mutual funds who lack sufficient knowledge about the market. The AMCs monitor their portfolio and provide them with information on the market conditions, fund performance and assist in any of the investor inquiries at a nominal fee.    Also Read: A Beginner’s Guide to Investing in India Difference Between Direct and Regular Mutual Funds  Criteria  Direct Mutual Funds  Regular Mutual Funds  NAV (Net Asset Value)  Higher NAV due to lower Total Expense Ratio (TER)  Lower NAV because of higher TER  Financial Advisor’s Role  No need for financial advisors  Financial advisors assist with transactions and fund decisions  Return on Investment  Potentially higher returns (1% greater CAGR) due to lower TER  Lower returns due to higher TER affecting performance  Fund Management  Investors must research and monitor fund performance  AMC fund managers Managed by experienced fund managers for optimal results  What are the Advantages of Regular Plan over Direct plan in Mutual Funds?  Investing in mutual funds is a complex process that involves market knowledge, risk assessment and fund selection. Regular plan has many advantages over Direct plan as listed below:  Features  Regular Plan  Direct Plan  Expert Advisor  Investor gets support in terms of market conditions and personalized advice based on the investor’s goal.  No access to any advisor. Investors need to do their own research about the market and choose mutual funds independently.  Convenience  It gives the investor the convenience of investing, where the fund manager handles their portfolio.  Investors must handle the portfolio on their own and keep track of market conditions.  Portfolio Management  The fund manager helps to diversify investor portfolio and manage the portfolio regularly  Investors manage their own portfolio.  Risk Appetite  Fund managers assess the risk appetite of an investor based on age, income and life phase.  Investors must assess and figure out their risk appetite.  Time   Investors save a lot of time, since the fund manager handles fund selection and monitoring.  Investors need to give a significant portion of their time to stay updated on market trends and monitor their portfolio.  Value Added Service  Regular mutual funds offer other value-added services like investment records, documents for tax filing, investment insights and goal-based investment advice.  The investor must do these on their own, which takes up significant time.  Which is Better: Direct or Regular Mutual Fund?  Before choosing a mutual fund plan, one needs to understand their investment style and have clear financial goals. Once that is clear, the investor can choose the plan that best aligns with their financial goals.    If the investor has a thorough understanding of market conditions and regularly keeps track of them, they can likely opt for direct mutual funds. If one invests in direct mutual funds, they deal directly with the fund house. They can potentially earn higher returns than regular mutual fund, since the expense ratio is low. They also save on commission fees or brokerage that are paid to intermediaries.   If the individual is new to investing or requires professional support, they can opt for regular mutual funds. Regular mutual funds involve intermediaries like a broker. They assist the investor with paperwork, customer support and guide them on their investment. However, due to the brokerage, the expense ratio is higher and if not checked can impact on one’s returns as well.  If you are a seasoned investor, investing in direct mutual funds could be the best option for you. Alternatively, if you are a beginner in investing, and not keeping a regular track of the market, a regular mutual fund is most suitable for you.    Also Read: What Is SIP Investment – Meaning and How It Works Conclusion  As an investor, whether you are a beginner or a seasoned one, you need to determine which plan best suits you. To decide which mutual fund works for you, factor in your current age, life phase, financial goals and risk appetite. Regular mutual funds are best suited for investors who lack the time to track changing market conditions and need guidance on their mutual funds. Direct mutual funds are more suited for an investor who is tuned in to market conditions and

What is Top Up Personal Loan? A top-up personal loan is an additional loan amount offered to existing borrowers who need some extra funds over their original loan amount. It allows borrowers to access extra credit on top of their existing personal loan, usually provided by the same lender, with easier eligibility criteria and similar interest rates.   A personal loan has become a go-to for millions of Indians to finance their diverse cash needs. However, there can be instances where you may run out of these funds too. In such situations, a top-up personal loan can provide the additional financial support you need. It is a facility provided by banks and NBFCs where you can get an additional loan on your existing loan. This eliminates the need to go through the entire loan application and approval process all over again.   Considering a top-up personal loan? Here’s all you need to know about it.   Reasons Why You Should Applying for a Top Up Personal Loan The reason behind applying for a personal loan is beyond the fact that it’s easy to apply. While there are different types of loans available in the market to meet the diverse needs of people, it can get a little difficult to manage multiple credits. Usually, there’s no restriction on the end usage of a top-up personal loan. This way, you can get instant access to the cash you need without applying for too many loans. And because you’re taking a loan from an existing lender, you need not apply again and get instant access to the cash you need.   Top Up Personal Loan —Features and Benefits Before you take a top-up personal loan, it’s important to understand exactly what it is and what its features are. Here’s how it works; consider you have taken a personal loan from a lender and are currently paying your EMIs for that loan. You suddenly need an extra source of cash. If your lender has a top-up personal loan facility, you can get an additional loan while repaying your ongoing loan. Here’s how you can benefit from top-up personal loans: Unsecured Loan: Top-up personal loans are unsecured loans. This means that you don’t have to provide any security like gold, jewellery, shares, etc. to get access to the money you need. Longer Repayment Tenure: With a top-up facility, your repayment tenure increases, giving you more time to repay your total outstanding loan. Lower Interest Charge: A top-up facility means you’ve already established a relationship with your lender. If you’re a low-risk borrower and have paid all your EMIs on time, the lender may consider giving you a personal loan with a lower interest rate. No Restriction on End Use: One of the best parts about taking a top-up personal loan is that there is no restriction on the end usage of it. You can use it anywhere you like without any restrictions. Increase Credit Score: If you keep repaying your EMIs on time, it will automatically increase your credit score. A high credit score makes you a low-risk borrower which can help you unlock high-value loans at lower interest rates.  Eligibility Criteria for Top Up Personal Loan While you can avail a top-up personal loan from your existing lender, you still have to meet a certain eligibility criterion to unlock that facility.  Here’s the eligibility criteria you need to fulfil: You should have an existing relationship with a lender. Ensure you make all your EMI payments on time and have a clean repayment history with the lender. A good credit score, clean repayment history and strong credit profile increase your chances of unlocking a higher loan amount. Please note that the eligibility criteria for a top-up personal loan can be different for different lenders.  Documents Required for Top Up Personal Loan One of the best parts about taking a top-up personal loan is that you may not have to provide a lot of documents. This is because you have an existing relationship with the lender, and they might already have the required information. However, you can keep these documents and personal information handy to further expedite your loan application process. Identity Proof like your PAN card, Aadhaar card, passport, driver’s licence, etc. KYC documents like your utility bills, Aadhaar card, passport, etc. Income proof like bank statements, salary slips, etc.  Difference Between Personal Loan And Top-Up Personal Loan Reason for difference Personal Loan Top-up Personal Loan Relationship with the lender You can apply for a personal loan from any NBFC or bank.   You can get a top-up personal loan from your existing lender if they offer that facility.   Repayment Tenure Depending on your lender and type of personal loan, your repayment tenure can range from 3 months to even 10 years. Usually, your repayment tenure of a top-up personal loan is similar to your current loan. Approved Loan Limit The personal loan amount you’re approved for depends on many factors like your credit profile, income and even the limit of the lender. Based on your lender’s terms of borrowing, your top-up personal loan amount depends on the current loan limit. Apply Now Frequently Asked Questions What Does A Top-Up Loan Mean? A top-up loan is when you borrow money on top of an existing personal loan. You can avail a top loan without any lengthy documentation or paperwork as you already have an established relationship with the lender. What Is The Maximum Top-Up Loan Amount That I Can Avail? The maximum top-up loan amount that you can avail depends on your current approved loan amount with the lender. Can You Get A Personal Loan On Top Of Another Loan? Yes, taking a personal loan on top of another loan is known as a top-up personal loan. You will have to ensure that your existing lender provides a top-up facility. What Is The Rule For Top-Up Personal Loans? One of the most important rules for taking a top-up personal loan is that you make all your EMI

What is Deferred Payment? Meaning, Benefits & Examples Whether you are a student pursuing a degree or planning to buy a car, the expense of these purchases has a significant financial impact. To ease the burden, many businesses and lenders offer a deferred payment plan to ease the financial burden of such expenses. E-commerce platforms also provide options for gadgets like mobile phones, laptops, etc on deferred payment plans, making it easier for consumers.   This article explores deferred payment meaning, deferred payment plans and their benefits with examples.  What is a Deferred Payment? A deferred payment is an agreement to pay for something at a later date. The payments are divided into multiple instalments over a period of time. For instance, consider a car loan. When purchasing a car, the lender might offer a lower first-month payment, followed by equal instalments spread over several months, making the purchase much more affordable. How Deferred Payments Work? A deferred payment is an agreement between two parties, the lender and the borrower. The payment terms allow the borrower to make a purchase and pay the amount in instalments over time. This arrangement often has no interest rate and is different from a personal loan. This payment structure offers several benefits to the borrower by making the repayment spread over a few months. The lender benefits by making a sale and managing cash flows.  Deferred Payment Examples Deferred payment plans provide flexibility, allowing consumers to enjoy the purchase. Few popular examples are as follows:   Mobile Phones: Many e-commerce platforms like Amazon and Flipkart offer deferred payment in the form of no-cost EMI for mobile phones. The customer can buy and take the phone home while paying the instalments in over a few months with no EMI cost.   Credit Card Purchases: When customers buy anything via credit card, they have 30-45 days to pay back the amount, depending on the credit card’s billing cycle. This is a common form of deferred payment, where the customer can purchase and pay the instalments without any EMI cost.   Online Courses: If a person wants to learn an online course, many platforms offer a deferred payment option. This allows the person to learn the course and pay the course fees over time.   Also Read: What is a Loan Repayment Schedule and Why is it Important? What is a Deferred Payment Agreement and How it Works? A deferred payment is an agreement that is a contract between two parties where one party pays the other party at a later date. This arrangement allows the buyer to pay in instalments, easing any financial burden. The borrower gets to use their purchase and agrees to make the payments at a later date. The borrower can use the purchased item immediately while making the payment over time.   These are some common deferred credit agreements: Student Loans: This agreement allows the student to pay the course fees after graduation or when they land a job. It allows students to focus on their education without worrying about the immediate expenses.    Buy Now Pay Later: This agreement is most commonly used for product or service purchases. The buyer pays the initial instalment to purchase the product or service and the remaining amount is paid in the agreed-upon instalment period.   Credit Card: This is also a type of deferred payment where the cardholder is allowed to make a purchase and pay the remaining amount in the next billing cycle. Benefits of Deferred Payment Deferred payment has the following key benefits:   Eases Cash Flow: Deferred payments allow both the customer and business to manage their cash flow by maintaining liquidity. This allows them to allocate funds towards investments that will earn interest or returns. Flexibility: This type of payment also allows the buyer the flexibility to manage their funds by allocating them to other urgent needs like essential items or operational costs. Convenience: When making a large purchase, this payment allows the buyer to make that purchase and spread the cost over a period of time. One can easily make an expensive purchase without the immediate burden of paying the entire amount in one go.  Difference Between Deferred Payment and Installment Plans Deferred payment and instalment plans are among the few payment plans offered by businesses to offer ease in payment to the consumer. The table below points the difference between them:  Factors Deferred Payment  Installment Plans Payment Plan  Payment is made after an agreed-upon date. There is a grace period given where the buyer doesn’t have to make any payments. Payments are made in regular instalments(usually monthly) from the date of purchase Interest Rate Interest rates may or may not be charged in the deferred payment plan, depending upon the lender terms. An interest rate is charged on each instalment. Repayment structure The entire amount is paid after the deferred period. From the purchase amount, an initial deposit is made on purchase. The remaining amount is paid in instalments at fixed intervals. Common Examples Deferred plans are offered for student loans, and car loans to ease the immediate financial burden Instalment plans start with the purchase of a product or service like home loans,  How to Qualify for Deferred Payment Plans? Lenders or businesses look at certain factors when offering deferred payment plans to a customer. The key factors considered are as mentioned below:   Credit Score: Most businesses or lenders check the credit score of the individual before offering a deferred payment plan. A good credit score indicates a stable credit history and a high likelihood of repayment.   Income Source: A steady income source ensures that the customer will be capable of making the instalments on time.   Financial Circumstances: Certain loans like student loans or home loans, offer terms that allow the borrower deferred payment during financial hardships like job loss or medical emergencies.   Also Read: What is Personal Loan Repayment and Types of Loan Repayment Methods? Conclusion A deferred payment plan allows