consumer durable loans

Why should you take a consumer durable loan?

Timely return of a loan makes it easier to borrow a second time.

Consumer durables have instilled a sense of convenience in life. From refrigerators to high-end mobiles, we are always on the hunt to upgrade our life as per our convenience. The consumer durable loan allows the users to buy refrigerators, washing machines, TVs, high-end mobiles, and other durables at affordable EMI.

What is a consumer durable loan?

It is a financing scheme offered by financial institutions to help the customers pay for the purchase of consumer durable items.

One should consider the following things before opting for consumer durable loan:

1. Hidden cost
There are a few 0% interest rate options available in the market for the loan. But these schemes have hidden costs like processing fees that get deducted from the loan amount that you receive. Once you opt for a consumer durable loan, make sure you check for hidden costs.

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critical-illness-insurance

What is Critical Illness Plan?

Critical illnesses are diseases and conditions that include but are not limited to cancer, stroke, organ transplants, and kidney diseases, among other health conditions. Critical illnesses are expensive and disruptive.

Begin diagnosed for critical illness means completely wiping away the lifetime savings. So, then your worries regarding the financial security and dependents start haunting you. The only way to get out of this dilemma is a“Buy Critical Insurance Plan.”

Do not let unseen happenings to shatter dreams of you and your family, instead start planning for such incidents. Critical Illness Insurance Plans provides coverage against specific threatening diseases. Treating these illnesses, you may require multiple visits to the hospital over a period of time. Thus, in addition to the hospitalization cost, there will be other costs like doctor visits, medical expenses, etc.

A Critical Illness plan pays a lump sum amount that can be used to cover these high expenses. The lump-sum payout will be an addition to mediclaim or health insurance policy that you may already have.

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terminology of health insurance

Terminologies of Health Insurance

Do you feel lost when an insurance provider starts talking about health insurance? When he uses the fancy jargons involved with health insurance? It’s OK—we know that the terminologies regarding health insurance can be hard to understand. Hence we have come up with these few terms that are often used with health insurance:

1. Allowable charge: it is also known as “allowed amount,” “maximum allowable,” and “Usual, Customary, and Reasonable (UCR)” charges, this is a fee that is charged by a health insurance company to be a reasonable charge for medical services or supplies based on the area where the service is being provided.

2. Benefit – the amount payable by the insurance company to a policyholder for medical costs.

3. Benefit level – the maximum amount that a health insurance company agrees to pay to the policyholder.

4. Benefit year – the 12 months for which health insurance benefits are calculated, not necessarily coinciding with the calendar year. Health insurance companies may update plan benefits and rates at the beginning of the benefit year.

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Education loan

Education Loan

The roots of education are bitter, but the fruit is sweet.

A good education leads the path to success. Quality education is what every parent looks after their children. However, nowadays, the cost of education has risen, and the fact that the price of studying at reputed institutions is already quite high. Hence, parents who want to provide their children with the best education, invest their money in FD (fixed deposit), Insurance plans, and Equity for the long term. However, sometimes in spite of planning so well, there are chances of deficit in finance. So an Education Loan could be an ideal solution for your dreams.

Features of an education loan:

  • One can opt for an education loan if he wants to study in India or even abroad.
  • The Rate of Interest can be as low as 6.6%, to even as high as 15.2%
  • The guardian or parent of the student needs to be co-applicants for the loan application.
  • The student can apply up to a certain amount (basically 7.5 lakhs)
  • The maximum amount of loan varies from bank to bank
    • If the applicant wants to study in India, the bank can grant 10 lakh worth of loan
    • if the applicant intends to study abroad, the bank can give a loan of 20 lakh.
  • Usually, the tenure for repayment of the loan is 5 to 7 years, but flexible repayment options are available. An applicant can also opt for more extended repayment periods that can go up to 10 to 15 years.
  • The EMI of an education loan does not begin immediately or during the period. They provide one year time until the applicant gains the regular income.
  • The interest on the education loan amount is eligible for tax rebate under section 80E of the Income Tax Act.

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indemnity-plan

What are Indemnity Plans?

Like other plans, an Indemnity plan will reimburse the cost of medical expenses to the policyholder. This plan will refund the actual amount incurred as an expense during the medication, and the reimbursed amount should be within an assured medical cover.
Indemnity health plans are also known as:

  1. Traditional indemnity plan
  2. Fee- for service plan

For example, the cost of cover is Rs 5 lakhs, and a hospital billing amount is Rs 2 lakhs. The company has to pay Rs 2 lakhs to the policyholder. The balance amount is left with the company until the maturity of the policy.
And this agreement with the company will be predetermined. The best example is the “Mediclaim Insurance Plan”- a popular health product.
Generally, this plan has a predetermined deductible. The part of medical expenses will be paid to the policyholder, and the insurance company will pay the remaining amount, and this is “co-pay.” Some health insurance plans will not have any deductibles, where the insurance company will incur the entire cost.

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Invest

Key pitfalls of investment that every investor must avoid.

“The stock market is a device for transferring money from the impatient to the patient.”
-Warren Buffett

Your investment portfolio should consist of those products that match your needs and works towards your financial goals. Investment is a must these days. Because investments allow an individual to create a corpus, but they also enable us to earn a good return on the savings and can even generate regular income if done right. If you are a first-time investor or have been in the investment game for a while, you should consider these points and that will surely help you in your investment tactics and will also maximize your long term returns.

Mentioned below are the few factors that can help you find the right type of investment:

1. Understanding your financial product

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Expense Ratio - Karan Batra

What is an Expense Ratio in Mutual Funds?

An expense ratio is a ratio that measures the per unit cost of managing a fund. The figure is arrived at by dividing the fund’s total expenses by its assets under management. There are various costs the AMC incurs which forms part of the expense ratio. For example, the AMC has a fund management team which consists of highly qualified professionals who track the markets and companies in the portfolio. They make decisions to buy and sell securities to meet the objectives of the scheme. In addition, the asset management company also incurs expenses such as transfer and registrar, custodian, legal, audit fees, and fees to be paid for marketing and distribution of its products. These costs are recovered through its unitholders on a daily basis. The daily net asset values (NAVs) of a fund scheme are reported after deducting such expenses.

There are different components to Expense Ratio.

  • Management fee: A mutual fund is a professionally run scheme so you have professionals who you actually select different schemes and there’s a lot of research that goes into it so the fee which is charged by those professionals is categorized as a management fee.
  • Administrative cost: All the cost associated with customer support, record keeping as well as offices are all categorized under admin cost.
  • Sales and distribution: The cost associated with marketing mutual fund schemes and also the fee which is paid to the different broker’s or distributors are categories under sales and marketing.
NPS - Karan Batra

National Pension Scheme (NPS): Simplified

NPS stands for National Pension Scheme. NPS is a government-sponsored pension scheme which was launched in January 2004. As a subscriber, you can contribute in your pension account during the working years of your life and at the time of retirement, you have the option of taking a certain amount in form of a lump sum and the remaining you have to buy an annuity so that you get regular income post your retirement period. Any Indian citizen between the age of 18 and 60 years can contribute to the NPS account.

SIP Investments - Karan Batra

Systematic Investment Plan (SIP): 101

Systematic Investment Plan, commonly referred to as an SIP, is used by investors to invest regularly a fixed sum in your favorite mutual fund scheme(s). In SIP, a fixed amount is automatically deducted from your bank account every month & it is invested in a mutual fund of your choice. You can start with a SIP of as low as Rs. 100 or Rs. 500 per month.