Why Is Loan Important?
Published on October 30, 2019
You can never say anything about, the time of emergency, whether it is a mishap or anything that needs fast money of some considerable magnitude. In today’s world, with the overgrowing inflation low economy has become a global issue. It would be such a tragedy if, for money, any individual’s dream shattered. That is the time when you need to find an online loan company. Payday loan agreements are becoming popular every day. These loan pay companies have secure cash-pay procedures that are very helpful for those who need immediate cash. However, before making any final commitment, it is expected that you will consider a few things to make your experience worth remembering.
Ways to Reach Them
With the advancements of technology, it is expected that before you start anything substantial, complete research will be done. Every company now put their advertisement online, finding them is not a menial job. Pulling up a few companies which appear on the top of most used search engines, will be a good option. That gives an assurance that those companies’ websites were mostly browsed by people, and there are fewer chances of fraud. After finding the desired company, you can now try to look for their speciality. That is to say, whether or not they have any special offer to offer on loan agreements or special discounts in terms of repaying them.
Things needed to be done
You must know that the online loan paying company could be really a fraud. So it is advised to know the details as much as possible, it is also recommended to find out the most transparency of the desired company. You should know there will be nothing to fear if there will be nothing to hide.
Also, it is recommended to back off immediately with a sort of suspicion that arises, for company questioning about the unnecessary question, or too extra bank details. The loan company will provide you with some application form, to know the basic details, which may vary depending on different kinds of loan such as house loans, will be different from education loan.
However, if you are looking for investment, on easy term without any such tack procedures will be imperative.
Whether you are looking for an education loan or an online loan for certain emergencies, it is expected that you will be benefitted. Considering a few things, and doing thorough research will help you from any fraud.
Loans are not meant just to provide you financial backup in the hard times, they also help you save on taxes, and that too significantly. The income tax department of India enables you to save on taxes on the principal amount and interest expenses on the home loan. However, it is not the case with personal loans.
Tax exemption on personal loans is available in only a few circumstances, depending on what is the purpose behind availing the personal loan. Here are the cases-
- If you are applying for persona loan aiming to construct a residential property, purchase, or renovating the same, the deductions are allowed from net income from the same property. Here, exemption capping is determined as Rs.2 Lakh under Section 24 of the Income Tax Act.
- If you are availing a personal loan for business purpose, tax deductions are applicable only on the profit earned from the business before calculating tax. No certain limit is prescribed for tax exemption.
- If the personal loan is availed in order to purchase an asset, such as jewellery, non-residential property, equity shares or so, the amount of interest paid is added to the cost of acquisition of the same asset you have purchased. This ultimately reduces the tax liability towards capital gains at the time of selling the asset.
Essentials to Know About Personal Loan
Personal loan, or even any type of loan amount, depends on several factors such as how much you earn, what your existing liabilities are, and most importantly, what credit score do you possess currently. Usually, a personal loan from banks can be availed up to 60% of your annual income. However, several online loan service providers such as LazyPay, offer a personal loan of up to Rs. 1 Lakh only, which depends on the credit score.
While opting for any loan, you need to consider a few things which will help you stay away from future crisis. Firstly, you need to analyse what your monthly income is. It is said that everything can be managed, but not money. Going for another loan to settle up the previous liabilities never makes sense. Analysing the affordability thoroughly, you need to understand as how much of your income can be diverted towards instalments and how much needs to be secured for daily household expenses along with some contingency fund. If you need a loan desperately, try to cut down other costs as much as you can.
Bank and the Borrower
The bank is liable to provide information about every aspect of a loan. Not just complete, but the correct information needs to be delivered. For this, not just bank, but you are equally responsible. Always ask queries that you have in your mind, try and make a list of questions and find answers to them from all the possible sources you can. Everything you are committed to getting must be in writing from the bank. In most of the cases, assets you purchase stand as collateral for the bank. In this case, you need to understand what will be the case if you are unable to repay the loan amount or pending instalments. Sometimes, online instant personal loan providers don’t need anything as collateral. In such cases, a late fee is levied as a recurring percentage of the original interest rate. This is what makes it essential to understand what rights the bank possesses and what rights do you have.
So, if you are looking forward to acquiring an online personal loan, the essential steps for you will be to go through the loan provider thoroughly and make sure that you are choosing the right one. You can follow the guide provided above to find the perfect loan provider. Never overrate a specific provider and go for it blindly, because, a wrong decision may certainly drag you in a severe financial crisis.