Blog

For a sense of security and protection, and the fear of thievery and greediness has made banks the unavoidable and necessary choice. Everything you deal with a bank is in the fine print, the common fear of losing the hard-earned money is unnecessary, which makes everyone trust them.

Types of banks:

Commercial Banks: They are the most common type of banks and have many services like depositing, withdrawing loaning, etc., They include private and public sector banks in addition to foreign sector banks. The companies in addition to serving the people are intended in making profits too. Banks like HDFC, HSBC, SBI, Axis bank..,

Development banks: Development banks generally involve economic and industrial development. They provide and act as any other bank. They involve loaning, investment, promotional activities, and underwriting services. Banks like IDBI, IFCI fall under this category.

Regional banks or Gramin banks: They are particularly and especially for the minor section of the country, like farmers, underdeveloped entrepreneurs, and day labourers. Banks like Jammu and Kashmir Gramin bank, Arunachal Pradesh bank rural banks are regional banks with fewer customers than commercial banks.

Central bank: The public sector banks that serve the government and have the very best interest of customers than other banks is the central bank. These banks are owned by central or state governments. The RBI, Indian bank, Canara Bank, and many other banks in India are central banks

Co-operative banks: Cooperative banks are primarily concerned with mobilized savings and the agriculture of India. They are classified as central-owned co-operative banks, state-owned co-operative banks, and Agricultural co-operative banks.

Exchange banks: They deal with massive exchanges of foreign currencies and transactions between countries. Exchange banks include Bank of India, Bank of Baroda, and many other banks.

Features and characteristics of Banks

All money-related services: Banks are providing every service they can find to the customers. There is the Fixed deposit service, which yields an interest amount for each month. Each individual is granted his/her own saving account that can be accessed both online and offline modes. Withdrawal, depositing money in the account can be made at any time, anywhere. Find ifsc code of the bank to make transfers from and to the bank account.

Loan availability: Banks are legitimate government authorized institutions that let people borrow money from them for a certain period of time. There are loans of various kinds that meet most of the possible needs of the common. Gold loans, personal loans, education loans, marriage loans are a few of the many other types of loans. If wanted one can calculate the EMI of the loan using EMI  calculators on the official website of the bank.

Confidentiality: Security and protection of the customer’s information are of the utmost advantage in going for a bank compared to other financial organizations and companies. Every account holder's and borrower’s information is protected with tight security. If unfortunately, the customer’s credit or debit card is stolen, the bank doesn’t hold them liable and immediately freezes the account, making sure no money is stolen.

Online services: In this 21st century in addition to reality, a virtual world exists, which anyone can make use of to make things uncomplicated and simple. And one can use it to contact banks as well for any and all assistance. In merely a few clicks of the keypad, one can create an account, close an account, apply for loans, credit cards, transact money from one account to another. Practically everything a customer can do by meeting the banker in person can be done without having to meet anyone from where he/she is sitting.

Multiple branches: It is seldom when a bank doesn’t have many branches. Most commercial and central banks in India have branches from town to town. So if the customer wishes to bank in offline modes, they can always go to the nearest bank to contact and approach regarding any financial complaints or advice. People are no more required to travel miles to visit the banks as even the most commercialized banks are opening branches in villages and small towns.
Also read this: Preparations before availing of any Loan 

It is very important to check your eligibility criteria before making any decision. The eligibility criteria usually differs from one bank to another and one loan type to another.

Your eligibility criteria mainly differs according to:-

1. Secured loan:- If you're looking to purchase a two wheeler loan as a secured loan then you'll have to make sure to check the eligibility criteria required Like age, nationality, income and employment status.
   
   
2. Unsecured loan:- If you're looking to purchase a two wheeler loan as an unsecured loan then you'll have to check all the eligibility criteria required like income, credit card, employment status, credit history and age.
   
   

Components that are included in eligibility criteria. It is very important to check all the factors that affect the eligibility criteria. So the first thing you should do is have a clear understanding of the factors and the effect of those factors on your eligibility criteria. 

We've listed some of the basic factors below:-

1. Age:- Checking your age is the most basic factor that determines whether or not your application should be approved. This factor usually differs from one bank to another, so it's important to compare all the banks and then choose the one which has an eligibility criteria according to you. A lot of banks like Oriental Bank of Commerce two wheeler loan or Axis Bank offers loans to individuals who are of age 21 or above. But there are banks that allow you to apply for a loan even if you're 18 above. So your age plays an important role in determining your eligibility.
   
   
2. Credit Score:- It is a number between 300 to 900 that determines your creditworthiness. The higher your credit score is, the more creditworthy you are. So it's important to maintain a decent credit score in order to be eligible for a two wheeler loan. Your credit score is calculated using some factors like credit history, current credit, credit mix and the total loans you've taken. So you'll have to keep a track on all these factors and make sure that you're not overdoing it, because that will negatively affect your credit score. And a bad credit score will make it really hard for you to get a loan in future.
   
   
3. Employment Status:- This factor usually depends from bank to bank and your loan type. Generally you can get a two wheeler secured loan even if you are unemployed. But a lot of banks now check your employment status to even approve a secured loan. So it's important to be employed in order to get a loan approved. And if you're applying for an unsecured loan then it'll be important for you to be employed with an experience of 2-3 years in your profession. Banks don't give unsecured loans to individuals who are fresher.
   
   
4. Income:- Your income plays an important role in determining your loan amount. If you're someone who has a low income then you won't be able to apply for a high loan amount. It's important to check your income and your repayment capacity before making any decision regarding loan amount. There are online tools like a two wheeler loan EMI calculator that can be used to check your repayment capacity according to your income.
    

Two wheeler loan eligibility. The eligibility criteria for a two wheeler loan usually differs from one bank to another.

But we've listed some basic eligibility criteria below:

1. Minimum Age: You have to be 21 or above to be eligible for a two wheeler loan.
   
   
2. Maximum Age: 58-64 years, or you can be of a retirement age.
   
   
3. Employment status: You have to be either a salaried or a self employed individual.
    
4. Work experience: You should have a minimum of 1 years of experience in your profession.
   
   
5. Income:- The minimum income required is INR 10,000.
    

Conclusion:- 

There are a lot of banks and NBFCs that provide the facility of two wheeler loan, the eligibility criteria for each bank is different. So it's important to choose a bank where you fit into the eligibility criteria perfectly. 

Also read this: Things To Follow Not To Become Defaulter of Two Wheeler Loan 

Unemployed individuals can be businessmen or freelancers. This group of people don’t have a constant monthly income debiting to their account but are earning some way or other. Employed individuals are not the only segment of people that are eligible for a car loan. A car loan is like a personal loan in which interest rates are low because there is collateral pledged against the loan in the form of the car that is to be bought. The car itself remains with the buyer and can be used as per their need. The bank on the other hand holds some important document of ownership of the car. When a person fails to pay EMI’s ( Equated Monthly Instalments ) on time even after notice and reminders in that case the bank has the authority to call back the car. The owner can pay the dues and take the car back.

For this type of loan, banks are very flexible. They provide full and even partial funding in the form of a loan for the car. Car loans help people by providing funds for their car and accepting small payments for the same. Many banks also give zero% charge on foreclosure which means if the loan is to be settled by the borrower before the maturity of tenure there won’t be any charges levied by the bank. 

Some eligibility factors for self-employed individuals and professionals are:- 

1) The turnover of the business or individual should be above the threshold limit given by the bank. The limit might vary from bank to bank and on different cars to be purchased.

2) The individual should be above the age of 21 and below the age of 65.

3) The individual should be working for at least 2 years and 1 year if employed under someone else. 

Therefore these are the only basic requirements that a financial institution might need to provide an individual with a car loan. A car loan can not only help these individuals by fulfilling their dreams but also making their dreams affordable. After the loan is provided by the bank to the individual, he is liable to pay an EMI every month. An EMI is a part payment of a loan that includes the person’s interest liability also towards the bank. This EMI can be calculated by anyone without even applying for a loan by a tool called Car Loan emi calculator. This is a tool that can calculate the EMI liability of the person every month. One has to enter three values namely Amount which is the loan value sought to be taken, Interest which is the percentage of interest that would be charged by the loan offering bank and Tenure which is the time duration for which the loan is to be sought. Once all the values are inserted by the individual in the calculator the result is shown almost instantaneously. The result is the EMI that the person has to pay to the bank in case a car loan is taken according to the input values. Therefore car loan breaks the long going tradition of cars to be exclusive for only the rich. This loan enables even a normal citizen to dream of a car. Paying in small parts enables a whole new segment of people to buy a car. No down payment or full payment needed, just the ability to pay EMI’s is needed.

A car is not only for the rich and upper class. A car is not only for the employed and constant earners. Car loans ensure any capable person irrespective of their background or a constant source of income can avail this facility and get home their dream car.

Also read this: What Is The Eligibility for Credit Cards 

Banks are financial institutions that the country’s government permits to conduct activities such as accepting deposits, issuing funds in loans, providing cheque facilities and other utility functions. They are the monetary institution that regulates the financial system of the country. They serve as an arbitrator between borrowers and depositors. There are two types of banks - central bank, the apex monetary institution, and commercial banks-either public, private, or foreign. Banks have an IFSC code that helps to know which branch of a bank the individual’s account exists.

NBFC refers to a non-banking financial company registered under the companies act, 1956. They conduct financial services such as the issue of loans and advances, securities trading, wealth management. They offer services similar to a bank but do not hold a banking license. Three categories of NBFCs are asset companies, loan companies, and investment companies. Examples of loan companies in India are Muthoot Finance Ltd., Tata Capital Financial Services Ltd. Aditya Birla Ltd., etc.

Difference between Banks and NBFCs -

1. Incorporation :
   Banks are incorporated under the Banking Regulation Act, 1949, while NBFCs are included under the Companies Act, 1956.
   
   
2. Demand Deposits :
   NBFCs do not accept demand deposits, whereas banks accept demand deposits.
   
   
3. Foreign Investment :
   In NBFCs, foreign investments upto 100%, while foreign investments upto 74% are allowed in private banks.
   
   
4. Payment and Settlement System :
   Banks are an integral part of the payment and settlement system, but NBFCs are not a part of the system.
   
   
5. Reserve Ratio :
   The maintenance of reserve ratio is not necessary for NBFCS, though Banks must maintain reserve ratios.
   
   
6. Deposit Insurance Facility :
   NBFCs do not provide deposit insurance facility; however, banks offer deposit insurance facilities.
   
   
7. Creation of Credit :
   Banks create credit; on the contrary, NBFCs do not create credit.
   
   
8. Transaction services :
   Banks offer transaction services, although NBFCs do not give transaction services.
   
   
9. Self demand drafts :
   Banks can issue self demand drafts, but NBFCs cannot give self demand drafts.
   
   
10. Self cheques :
    Banks are permitted to draw self-cheques on their own; however, NBFCs cannot draw self cheques independently.

Reasons why banks are better than NBFCs -

1. Low-interest rate :
   Banks charge a lower rate of interest than the interest rates charged by the bank.
   
   
2. Over-draft facility :
   Banks offer the overdraft facility, which allows borrowers to pay interest in advance. It takes longer to repay loans if the tenure is long and the interest charged on it is more; by availing of the overdraft facility, a borrower can cut short the loan term, hence saving money. NBFCs do not provide an overdraft facility.
   
   
3. Documentation process :
   The documentation process of banks is strict and more organised than the documentation process of NBFCs.
   
   
4. Interest rate :
   The interest rate charged by banks is lesser than the interest rate charged by NBFCs. And in banks, the interest rates are quickly cut as per the MCLR.
   
   
5. Charges :
   The prepayment charges, foreclosure and late repayment charges are much higher in NBFCs than the penalties charged by the banks. NBFCs also have a higher processing fee and charge a late fee of 10% to 20% on the EMI.

Individuals and companies trust banks because of various facilities such as cash deposits, loans and advances, cheque facilities, overdraft facilities, etc. Banks now even provide mobile and online banking, making it convenient for users to access the various banking facilities. Banks have instilled the habit of saving in people. 

People can keep according to their needs as banks provide multiple accounts such as current account, savings account, fixed deposit account, recurring deposits, etc. They also offer additional liquidity in the form of loans and advances, which be beneficial in emergencies. There are various types of loan a borrower can avail of - personal loan, education loan, home loan, gold loan, vehicle loan. 

The government also recognizes banks to offer such facilities, which increases the trust factor. Many banks provide various online facilities such as an online loan EMI calculator to Calculate EMI before applying for a loan. The transparency factor also plays a crucial role. Public banks have to maintain transparency in their dealings which increases the trust in them from the citizens. The money deposited in banks is also much safer than keeping large amounts at home without security.

Also read this: Cash-Strapped Patients With Covid-19 Infection Can Consider Loans  

If anybody thinks that he will be getting the total chance of having the independence to ride, then this is the right time one can go through to avail a two-wheeler loan. One can quickly get a two-wheeler loan up to a rate of 100% finance, but we'll have to do some sorts of research and logical comparison among the competitors in the market. 

One will not have to go here and there, which is to be done previously and used to wait for a long period to get a response from a bank employee or an official who will be giving all the details by spoken words.

Nowadays, in the online format, loans are available and can be applied. Therefore, it takes much less time to get the information from the official website of the banks and financial institutions that will be providing the loan. However, there are still some banks in which if loans are applied online and the proper checking of the eligibility criteria, there will be within 5 to 10 minutes of applying for the loan. The loan amount will be disbursed in the bank account of the loan amount of the customer.

Selection of a two-wheeler loan

• The fall in availing of a two-wheeler loan for a two-wheeler includes the first and foremost is the decision of the brand type of the two-wheeler Start the purpose should be selected first. In some cases, people like to get beyond something normal of some better quality of the bike, and if such things are in mind, then there are few banks also available who can fulfil the requirement in the form of an excellent loan deal for a two-wheeler.
• There is no need to get worried to stand in the queues of the bank to know the details as the officials will be sent to your house to complete the documentation process and will save time as well as will end up saving about 14 to 15000 rupees due to this structure of banking.
• Bank account holders of the bank are given extra privilege due to which the rate of interest is too low can go to the extent of 2%, which is very much lower than all types of loans.
• There will be flexibility in the repayment period in most of the banks where the loan tenure extends and where it is between 12 months to 60 months which is quite enough for ordinary people to get adjusted with this period.

Examining the eligibility of the loan

Loan eligibility calculators are available in the sites where one can check the loan eligibility within a period of 1-2minutes maximum. In these kinds of services, one can check the minimum income required, the person's age limit, and many other related things. Bank of Baroda Two-wheeler Loan offers good to customers. An existing customer is the non-existing customer of a bank are now allowed with an extra benefit of that one can have the chance to get a loan amount which will be equal to 5 to 6 times of the total gross annual income of an individual.

Calculating the two-wheeler loan EMI

After checking the eligibility criteria of the two-wheeler loan, one will have to move towards the EMI method. There are various eligibility calculators present in all the official websites of The Financial institutions and can be easily used to know the EMI so that everything can be prepared and managed by the information gathering when known before time in hand and things can be done accordingly.

Applying through the online way

As most things are also available in the online mode, it will be preferable to apply or proceed with any step off alone online, whichever is available in the online platform. Using a two-wheeler loan to the online platform will be a fast response and a much more secure and safer method of purchasing or two-wheeler loan. There is less involvement of middlemen, human error physical documents ok related to it is negligible in this type of loan application form.

Conclusion

The documents required to get the Two-wheeler Loan should be available before time in hand to avoid any kind of last-minute emergencies. The public documents required to avail of a two-wheeler loan are the loan application form, proforma invoice, passport size photograph of each applicant, and the KYC records, which will include income proof, age proof, bank statement and business or office proof.

Also read this: Cibil score and two-wheeler loan 

Along with the increasing trend and passing by year after year and approaching the 90s, there was more manufacturing of the two-wheelers given the growing demand for the two-wheelers among the different kinds of people of society. 

The increasing demand for the prices of the two-wheeler started coming down to a b to which the lower under people were also now got attracted and ways to have two-wheeler other to purchase at a time or to avail new loan service which started in the form of two-wheeler loan.

1st process arrangement

First of all, there is a matter of choice about the type of two-wheeler an applicant needs. Vitiate related to the color or the mileage of the two-wheeler. How much oil consumption happens, the life expectancy of a two-wheeler, and the residential value, if it is sold after a certain number of years, can get a resale value. A primary requirement that customers find in a two-wheeler is how many CC the two-wheeler is. It will be a sport good looking fancy e and competitive bike or a bike with simple requirements and basic needs. A better decision will give a better service for which it needs to be done before time in hand.

2nd process arrangement

Lender Selection-the selection of the loan provider of the lender is very much important because there is immense competition between the loan provider regarding the two-wheeler in the market. There are leading  banks in the market who are among the top leading charts to which they also offer varieties of schemes and services with value-added and gifts in case of additional services which will allow customers to get. We'll get attached to the existing loan provider as the companies don't want to lose the customers. Before availing of the two-wheeler loan, there is always a requirement of a proper comparison among all the loan providers, which are preferable in regards to the rate of interest, loan tenure, age limit, eligibility criteria and other related things.

3rd process arrangement

The next turn comes off what the evaluation of the credit score. Credit score plays a vital role as it is primarily third party credit bureaus. It will consider all the past lives provided and the way and pattern of ligaments how it is done along with the current loan already applied for also. If the previous and current record of the loan is quite good, the loan procedure approval will mostly favor your wishes. For example, Oriental Bank of commerce two wheeler loan are very much sophisticated regarding the credit score evaluation. To have an excellent affordable loan from the loan providers, there is a need to perform some actions to rebuke the credit score. If there is any discrepancy already can make changes before time in hand so that we can avail for it two-wheeler loan easily.

4th process arrangement 

The other thing that is quite impressive to know is understanding the process from where the loan provider is providing the loan. In most cases, it has been found that some paper or documents are missing at the very last moment. Generally, lenders provide a transparent and straightforward loan process. 

Conclusion

After all the things getting selected, one can apply for the loan in an online way, but one thing should be to make sure that the documents related and required must be handy within time in hand. Which of the paper related to the two-wheeler should we arrange and ready before time in writing so that the other essential things can be checked like that of the eligibilities that might get altered with the information that was earlier inform. A proper plastic will make ensure that everything is ok.

Also Read This- Can An Individual Obtain A Two-Wheeler Loan With A Poor Credit Profile?

Take advantage of exclusive rewards and deals

Most banks have agreements with bike dealers and showrooms that provide extra benefits such as free insurance, no registration costs, discounts on the next purchase, and cashbacks with the loan. Furthermore, some banks have lined up various appealing incentives with two-wheeler loans throughout the holiday season, including anything from cheaper interest rates to presents.

Rapid procedure

Isn't it challenging to wait after you've decided on a vehicle? Inquire with your investor about the Turn-Around-Time for loan distribution. After you submit all of the required documentation, the loan should be approved within ten days. Most lenders will pay the two-wheeler vendor immediately on your behalf. This also helps to save time.Finally, be sure that you just use the car for the assessment.

Rates of Interest incurred

Due to the popularity of two-wheelers, banks provide cheap financing rates to make large purchases more affordable. In any event, the rate of interest varies according to your income level of wages, the cost of a two-wheeler and market variations. Furthermore, as the supply of two-wheelers progresses, the typical interest rate offered by banks has decreased over time.

Make a re-payment plan

Debt obligations have to be completed over time, so make a wise repayment plan as per your suitability. Several flexible EMIs and other repayment arrangements are made available to the borrower to ease the debt burden. One should use a Two-wheeler Loan EMI calculator to estimate an EMI amount that has to be paid over the loan term. To determine tenure, interest rates and the total loan amount is used to stipulate the loan amount. One should wisely choose the amount as it shouldn’t be putting financial strain over the borrower’s shoulder.

 
A CIBIL Score is important in Loan Approval

Your credit report, which contains information about your previous borrowings and repayments, is issued a CIBIL or credit score on a range of 300 to 900 based on the credit report. A bad  CIBIL score or poor credit history might depict you as an untrustworthy receiver, and vice versa in front of the lender. A CIBIL Score of 700 or above is generally requested, and a poor credit profile can lead to the rejection of a loan. This score is assessed by every banks, NBFCs and lender while sanctioning any loan. A good profile is very vital in loan approval and quick disbursal of two-wheeler loan.

 
Don't take out too many loans

However, do not over-borrow merely because a loan is available. Calculate the EMI you'll have to pay each month. Overborrowing may raise your monthly EMIs and may jeopardise your entire finances and budget. This may limit your ability to obtain future credit. As credit inquiries appear on one’s credit report, it can lead to a bad impression. This can also be a potential reason for loan rejection.

 
A surplus loan amount

The loan amount is sanctioned as per the on-road value of the vehicle upto 85 to 90% of the money required to shop or purchase for your ideal two-wheeler. This gives you the freedom to manage your other financial obligations with ease. This loan amount also depends on the dealer’s credibility as well. It is always preferable to obtain a more considerable loan amount in order to meet all associated fees. To make this possible, you could consider supplying the two-on-street wheeler's cost estimate rather than the showroom pricing. If you are on a tight budget, high coverage in bicycle loans will enable you to get a two-wheeler quickly.

Thus, an HDFC Bank Two-wheeler loan is advantageous for obtaining a two-wheeler loan sanctioned within two to three working days. This has a basic KYC document that is required as verification to analyse the background of the applicant. The Income Proof required is vital for this process for loan approval as the repayment has to be done timely, and banks ensure the borrower’s repayment capability before sanctioning this loan.

Also read this: The Role of LTV in GL Approval Process 

Some information about Indian Overseas Bank

The Indian Overseas Bank (IOB) is a large government-owned bank in India. It is owned by the Ministry of Finance, Government of India, and is headquartered in Chennai, India. It has about 3,400 domestic branches, as well as six overseas branches and a representative office. It was founded in February 1937 by M. Ct. M.Chidambaram Chettiar with the twin goals of specialising in the foreign exchange market and overseas banking. It has since set several benchmarks in the Indian banking sector. By launching a personal loan programme, IOB became the first bank to foray into consumer lending. IOB was one of the 14 leading banks taken over by the Indian government after nationalisation.

Multiple factors are affecting the decisions of taking loans. Many banks are offering numerous loans at different rates. Nowadays the Home Loans are being offered at very low rates. It may lead to a debt trap sometimes. The best option is to be well versed and known to terms and conditions of the particular loans.

Indian Overseas Bank home loan is offer-able to various people in business and self-employed persons for the financial aid in home buying and renovating processes.

Features of Home Loan:

• Individuals and associations are eligible for this loan programme and groups of individuals and affiliates of cooperative societies. The age limit is set at 55 years old, but it can be raised to 60 years old if legitimate heirs are willing to apply as co-applicants.
• Loan purpose: The Indian Overseas Bank's Home Improvement loan scheme makes this loan available for various housing needs, including the purchase of a house/flat/plot and the restoration of existing houses/flats.
• A large loan amount is being offered: You may expect to receive funding for up to 90% of the expenses associated with purchasing a property, including identification and paperwork fees.
  
  

Eligibility Criteria for  Home Loans

• Individual borrowers must be under the age of 55 when payment is eligible for an Indian Overseas Bank home loan. If the claimant is a legitimate successor and joins as a co-applicant, this condition is extended to 60 years.
• Salaried employees should have at least 2-3 years of experience in a permanent position.
• Self-employed individuals should have worked in the industry for at least three years.
• The foremost vital things in Indian Overseas Bank Home loans are the home loan processing fee and the interest rates on Home Loans, which are thoroughly discussed here as following granting the home loan to its customers.
  
  

Home Loan processing fee: Indian Overseas Bank charges the processing fee while granting the loan. The processing fee may differ by the amount of the loan. Sometimes it could be 0.50% of the amount of the loan. Other times it could also rise upto 0.53%.

 Home Loan Rates: The interest offered by IOB is directly linked with the Repo rate in the country.And is actually at 7.25%. The overall interest rate on a home loan results from the RLLR and the spread multiplied by the loan  number.

Will the EMI on an IOB home loan stay the same or change in the future? 

Typically, the home loan EMI remains unchanged until the consumer demands a modification and Indian Overseas Bank approves it, according to the bank's eligibility requirements(be aware that nominal fees may also practice for effecting a customer-initiated extra in EMI). If the floating rate of interest on your home loan rises, your EMI will increase as well, according to the reset frequency of your loan. Your loan EMI will increase for each disbursement if you have a partially disbursed loan with a tranched EMI scheme. After thinking about your different commitments, the appraisal will assist you to estimate the quantity of EMI you'll quite simply spend. If you have decided the EMI you could afford, you could pick the right mortgage term.

Also  read this: How to apply for Home Loan in Pandemic?

A credit card’s purpose is unlimited. You can use it for shopping, food payments, hospital bills, utility bills and so much more. And credit card has no geographical restriction, it is a free bird, can be used anywhere at no particular time and it doesn’t have a lot of conditions and restriction on its usage, which makes it even more attractive and privileged.

Why is paying bills via credit is a good option?

Rewards and discounts: A dazzling feature of the credit card is its rewards and discounts. Every time purchase or transfer is made, certain points are added to the credit card and are extremely beneficial if your paying bills because the rewards and offers keep increasing, the more you use them.

Keeps track of your expenses: one major disadvantage of cash that takes advantage of human quality is the easy ability to forget. So more often, we don’t remember why the money you took on last Wednesday is now absent. You don’t have that problem if a direct credit card is used to pay bills. You have a record of expenses in written format, that can be looked at easily without having to whack your brain.

Automatic bill payment: Just like Netflix and Amazon prime which show you the remainder every other month to pay for it, the credit card used for paying bills can be made that way credit card without due pays the necessary money to the seller on time.

Convenience: one of the huge plus points of using and owning a credit card is its convenience, they are protected, safe and secure and are palm-sized, no need for worrying, and can be easily paid with a single swipe.

Ways you can use your credit card for bill payments

Net banking

Net banking is today’s kind offer in paying the bank or any other merchant online directly from the bank, just like withdrawing cash to pay for school or college fee, except in here you don’t need to visit the bank or withdraw money, you can just pay the fee in merely few clicking. And paying for utilities using credit cards for net banking is no different from school fee payment or transferring the amount from one account to another. The money you’ve withdrawn is just added to the amount borrowed.

Amazon

Amazon pay has reached great heights in helping its customers pay utility bills. But unlike net banking this doesn’t come with the bank., you have to register for Amazon UPI, then you can avail yourself offers on paying the gas bill, electricity bill, so on and so forth. A credit card comes in the part that where you register the card with amazon and using that card you transfer money to the agency.
Paytm/phone pe/Gpay/mobikwik The above mentioned are mobile applications that help to pay bills, money transfers, and other forms of payments. They are just like net being but only much easier, with minimum stress, and all you have to do is download the app and enter your credit card details, all that required is to scan or enter the code of your merchant and enter few passwords, voila your payment is done.

Conclusion

Allahabad bank credit card  is a fine gleaming card that can be used to pay any type of transaction in minutes. Credit cards are stress-free and flexible but a credit card requires its fair share of attention too. You have to pay the dues on time, pay the additional charges that come with it without delays, and without overspending the money. You should always maintain a low credit utilization rate (CUR) and have a good CIBIL score with a decent credit report.

Also read this: How To Decide The Down-Payment For A Car During A Car Loan 

Credits cards have several benefits if used correctly and responsibly however, the wrong usage of credit cards can lead the cardholder into a debt trap.

 The wrong usage of a credit card involves - 

1. Paying the only minimum amount due - Banks and financial institutions allow the option to cardholders of only paying the minimum amount. However, this leads to an increase in the balance to be paid, on which a high rate of interest is charged, and makes it difficult for the cardholder to repay the credit card amount.
   
   
2. Utilization rate over 30% - Cardholders are advised to maintain their spending under 30% of the credit limit. If they spend more than 30% every month it could lead them into a debt trap.
   
   
3. Using credit cards for daily use - Using a credit card for daily use can be very harmful as it increases the amount owed by an individual and it can be difficult to repay this amount in the loner amount. Allahabad Bank credit card should be only be used in emergencies.
   
   
4. Not collecting rewards - Users get rewards points for using a credit card. These rewards can be used to get cashback, vouchers, or even discounts on various goods and services. These rewards may have an expiry date and the user could lose out on these benefits.
   
   
5. Making cash withdrawals - Making cash withdrawals through credit cards leads to various additional hefty charges every day until the cardholder makes the repayment. This could lead the cardholder into debt.
   
   
6. Making late payments - Making irregular repayments of the due credit card bills could lead to a negative impact on the credit score of the cardholder which would affect their future credit limits as well eligibility to avail of loans.
   
   
7. Not using interest-free periods - Banks and financial institutions provide a grace period of 20-50 days, in which no interest is charged on the borrowed amount. Not repaying the due amount in this period could lead to high-interest rates charged on this due amount.
   
   
8. Using a credit card to pay hospital expenses - Hospital expenses and medical bills can be very expensive, even if one has medical insurance. Using a credit card to pay such large amounts could lead the borrower into debt in the longer run.
   
   
9. Ignoring bill statements - Some individuals do not open their monthly bill statements because they already owe a large amount. However, this could lead to them missing important information such as due dates, changes in credit terms, a higher rate of interest.
   
   
10. Pursuing rewards - Although availing rewards are useful for discounts and cashback, their value is much lesser than the payments one would make using a credit card. Some individuals make more payments using a credit card thinking they will avail themselves more rewards, this is not advisable at all.
    
    
11. Closing credit cards in haste - Credit cards should not be closed in haste as it has a direct negative impact on the cardholder’s credit score. It affects the utilization ratio extended and reduces the age of the accounts held by you.
    
    
12. Applying for multiple credit cards - Applying for multiple credit cards can lead to not only a reduction in credit score but it can also lead to an eventual debt trap as repayment abilities can be affected.
    
    
13. Not knowing terms and conditions - Cardholders may remain ignorant about the terms and conditions associated with their credit card. It contains important information regarding the actions taken by the banks in case of delayed repayments, etc.
    
    
14.  Carrying balance - Many credit card users are under the impression that carrying their due balance into the next billing cycle could help their credit cycle. However, it does the opposite and also leads to a higher rate of interest charged.

Also read this: Benefits of availing a Loan on a Used Car 

The credit card has proved to be a very beneficial tool for users as it has changed the game in the market. Credit card users can do payment conveniently and also avail various rewards and cash backs. It has become a very important and essential tool in today’s modern times. One with good credit history and score can avail credit card more easily. The approval of the credit card is fast when one has good credit history maintained. The repayment of the credit card can be done easily through the EMI plan as selected by the user. Various banks and non-banking financing companies allow different EMI plan which can be selected as per the convenience of the user. 

Bank of India Credit Card can be easily applied through the online website as well as offline. It offers its users additional offer on the credit card. The bank also provides fast approval of the credit card with a very reasonable interest rate. The bank provides several options for the credit card such as Indian Bank Bharat Credit Card, Indian Bank Gold Credit Card, Indian Bank Platinum Credit Card and Indian Bank Business Credit Card. One can get the additional information for applying for a credit card at the online website of the bank. 

A credit card can also be used to improve your credit score. There are various reasons to apply for a credit card because it has various advantages. One of the major advantages is that it can help in increasing the credit score of the users. 

Few steps are mentioned below for increasing your credit score:- 

• Pay the bill by the due date: For a good credit score, one should always clear credit card bill timely. Clearing all the bill is important for increasing your credit score. Convert your credit card dues into EMI for easier payment.
  
  
• Review your credit card report: One should always keep a close check on credit card report like the history of on-time payments, low balances on your credit cards, a mix of different credit card as well as loan accounts, older credit accounts and all other needed information.
  
  
• Avoid multiple credit card applications within a short span of time: Applying for various credit card can pull down your credit score by a few points. Try not to apply for multiple credit card application as it can have a negative impact on your credit history.
  
  
• Avoid taking too much debt: Use your credit card carefully and try not to take much debt on your credit card. As it can have a negative impact on your credit history. Make sure to repay one loan before taking another as it can crash your credit score.
  
  
• Customized your credit limit: Customized your credit card as per your need. This can help you save a lot of money. One should customize a credit card as per the expenses. Using your Credit Card responsibly will help you save a lot of money and can also increase your credit score and maintain a good credit history.
  
  Conclusion:-
  
  A credit card has become a very important mode of payment in today’s time. Users of credit card are also increasing day by day. The credit card has increased the purchasing power of the people in India. One needs minimal documents like identity proof, address proof, income proof, salary slip, income tax documents for applying for a credit card. One can easily apply for a credit card almost at every bank and non-banking financing companies(NBFCs). Applying for a credit card in today’s time is no big deal as it can be applied online as well as offline according to the user’s convenience. 

Also read this: Is CIBIL score impact car loan

The government has tried to bring certain reforms that make home loans easier to avail and enjoy. Since tax is mandatory to pay and home loans involve a significant amount of taxes due to such high cost of real estate, the government has introduced many benefits and subsidies on tax. These rebates help to enable home loans for tax deductions under various sections of the Income Tax Act (1961). There are special benefits for women applicants and defense personnel.

The government is inclined towards more people buying real estate and opting for home loans. By offering tax deductions, special schemes for marginalized sections, and multiple benefits for non-salaried people, they help the citizens to fulfill their goals of living in their own house. When you take a home loan , there are multiple tax benefits associated with it. The benefits can be on the home loan interest rate, the loan amount, stamp duty, or additional deductions for homebuyers.

Many banks like Canara Bank  offer home loans at low-interest rates. The loan amount can go up to Rs. 3.5 crores depending on the borrower's financial strength and credit score. There are various interest subsidies like Pradhan Mantri Awas Yojna (PMAY) that provide lower interest rates to eligible customers. The candidates for the PMAY scheme can get additional tax subsidies of up to Rs. 2.67 Lakh on the interest rate. If the borrower has a co-applicant for the loan, the eligibility criteria increases, and the interest rate is also reduced to benefit both applicants.

Section 80C: The tax benefits are availed on the principal loan amount. These deductions are permitted only on the houses after the construction is complete. The borrowers have to provide a completion certificate to the lender to avail themselves of this deduction. The maximum deduction can be up to Rs. 1.5 Lakh. The deduction is not provided while the construction is going on. When the applicant is availing of this subsidy, the property cannot be transferred or sold. There is a minimum period of five years from which the house was possessed by the borrower.

Section 80EE: The value of the house/property should be less than Rs. 50 Lakh. The LTV ratio also is considered, and the maximum loan amount should be Rs. 35 Lakh or less. This deduction applies only to the interest rate that is paid each year. The maximum tax rebate is Rs. 2 Lakh per year. The house can be purchased or constructed, as there is no restriction on its status.

Section 24(b) : This tax deduction is applied on both the interest rate and loan amount, i.e., the whole amount paid under the home loan. For self-occupied property, the maximum amount is Rs. 2 Lakh, while for Non-self-occupied property, there is no upper cap. The purpose of the loan can be for anything like purchase, construction, repair, renewal, or reconstruction of a real estate property. The person is eligible for this tax benefit if the purchase/construction of the house is completed within 5 years of taking the loan. The tax deduction takes place on an accrual basis.

There are special rebates for joint home loans. The two applicants can take the home loan together while enjoying tax benefits on interest rate and principal loan amount separately. If the person is eligible for tax benefits of Rs. 2 Lakh (interest rate) plus Rs. 1.5 Lakh (Principal amount), the same benefits can be enjoyed by the other applicants as well. The eligibility criteria also enhance for joint home loans.

Conclusion

Applicants can also avail themselves of tax deductions on a second home loan. Although the deduction does not apply to the loan amount for the second home loan, there are the same benefits as in interest rate for single home loans. To avail yourself of all tax benefits, ensure that the income tax return is filed completely on time.

Also read this: A Justification For Taking Out A Home Loan