What is UPI ? | What are the benefits of UPI System ?

Finance

The full form of UPI  is Unified Payments Interface . This interface is initiated by NPCI (National Payments Corporation of India) and regulated by RBI (Reserve Bank of India) & IBA(Indian Bank Association) . This is the crucial step taken by government to enhance digital economy & cashless economy . This interface is safe & secure . Using this system anyone can do online shopping , transfer money , pay mobile bill , electricity bill etc. e.g. BHIM App , Paytm , Google pay and many more .

#1.Things require for transferring money :

For transferring money via UPI  :

  • One should have a Smart Phone
  • One should have Active Bank Account & also your mobile number linked with this Account .
  • Internet Connection with your Smart Phone

#2. How to Register ?

    • One should download the UPI App from Play Store or Bank website
    • One should create his/her profile by entering details : such as Name , virtual ID , Password etc.
    • Now to go to “Add/Link/Manage Bank Account” option and link your Bank Account Number with virtual ID .

#3. How to generate PIN ?

  • You have to select bank Account from which you want to start transaction .
  • You will receive an OTP (One Time Password ) from the selected bank on your registered mobile number .
  • You have to enter the last 6 digit of your Debit Card Number & expiry date .
  • You have to enter OTP and your preferred UPI PIN that you would like to set & Click on Submit .
  • After Clicking on Submit you will get a successful notification .

#4. Benefits of UPI :

  • Immediate money transfer through your mobile .
  • You can link Single Application with your multiple Account .
  • Fast payments : Money can be transferred in real time & anytime .
  • Security : This system uses Push and Pull technique . You have not to fill any details such as : Bank name , Bank Account Number , IFSC etc.
  • Utility : By using this system you can pay your mobile bill , electricity bill , online shopping , money transfer & many more things .
  • Single Click two factor Authentication : After completion of payment , confirmation has to sent to your mobile number .
  • No need to carry cash due to instant money transfer .
  • You can transfer up to Rs.1 lacs per day .

What is CIBIL  Score ? | How to Improve CIBIL Score ?

Credit card

What is CIBIL  Score ?

It is  a credit score issued by credit rating agency CIBIL (Credit Information Bureau India Limited). All the banks & NBFCs are their member . This will help its member to give loan and credit card to people with better credit score .

CIBIL  Score is a three digit number between 300 to 900 . Higher is the number better is the CIBIL Score . Anyone having CIBIL  Score greater than 700 will be considered good .

When anyone apply for loan or credit card , the loan provider check his credit score before approving any loan . If one has low CIBIL Score then you may improve it .

Let me tell you how to improve your CIBIL  Score :   

#1. Never delayed your Payments:

As delayed payments damages you CIBIL  Score much more so never delayed your credit card payments , loan EMI etc. Always pay on time to maintain your CIBIL Score . If you are using credit card or you have taken any loan e.g. home loan , car loan etc. always ensure that you pay loan EMIs , credit card bill on time , otherwise  this will hamper your credit score – so don’t miss it .

#2. Don’t borrow if no need :

As now a days , getting loan is much easier than before so you should not take borrow more than your paying capability . As higher will be the borrowed amount higher will be EMIs . So never borrow the amount more than you need . If you are going to take loan you should select loan tenure such that you may easily pay your monthly instalments . This is the best way to improve your CIBIL Score .

#3. Be careful about your credit card :

If you are using any credit card then you should be careful about using it . Don’t misuse this type of financial tools . You should only use your credit card when you have actually needed . Needless to say , ultimately you have to pay your credit card bill which you have already spent . Be aware that interest rate of credit card is very high and if you do not pay it on time it will damage your CIBIL Score .

#4. Don’t be credit hungry :

As you should know that CIBIL agency maintain your credit information , bank & credit card providers see that how many times your report has been accessed . You should avoid multiple applications within short span of time . Credit hungry behaviour will damage your CIBIL Score , so you have to avoid it .

#5. Check your CIBIL Score :

To check your CIBIL Score you may visit on CIBIL website and on follow the instructions given there & you may check your CIBIL Score . If there are any error in your CIBIL  Score you may fill a dispute resolution form on this website to resolve the issue .

How to get Education Loan ?

Education Loan

As we all know that quality education plays very important role in creating a successful life . But due to sky rocketing fee of college/Institution every year , it is very difficult for a student to take a quality education from a premier college/Institution . If a student qualify the entrance examination for taking admission in premier college/Institution but due to high tuition fee  it is very difficult to study in such colleges/Institutions . Therefore education loan is a hopeful way for those students who can not afford such a hefty amount . On the basis of education loan facility provided by banks and NBFC student can fulfil his dream to study in premium college/Institution .

Now let me tell you how to get education loan :

#1. Eligibility Criteria :

  • Application should be Indian resident having age lie between 16 years to 35 years .
  • Should have confirmed admission in college , university recognised by UGC , AICTE
  • Mostly available for Graduate , Post-graduate & diploma courses .

For education loan approval of applicants , co-applicant is mandatory .

#2. What is covered by Education Loan:

  • Tuition fee of college/University
  • Accomodation Charges of college
  • Examination fee , Library fee
  • Books & Equipments

If any applicant going to study abroad then travelling expenses are also covered .

Amount Sanctioned : The amount sanctioned if applicant study in India will be up to Rs. 15 lacs

For abroad , the sanctioned amount will be up to Rs. 75 lacs . But it all depends upon course , colleges & banks .

#3. Collateral / Security Required :

  • Up to Rs. 4 lacs : No security is required .
  • More than Rs. 4 lacs : parent to be joint borrower + Tangible collateral security . e.g Property , Fixed deposits , Life Insurance etc.

Moratorium Period: After how much time borrower will have to start paying loan . Moratorium Period will be Course period + Max. 1 year after course completion .

e.g. If a student doing B.Tech (4 year degree courses) then up to 4 years he has not to pay any amount because he is not able to pay during this period . One extra year is given to him so that so that during this period he will get the job and start repaying the loan amount .

#4. How much Margin Money :

  • Up to Rs. 4 lacs – No margin money is required .
  • More than Rs. 4 lacs –   5% will be margin money for studying in India

e.g. If college fee is Rs. 5 lacs then applicant would have to pay Rs. 25000/ and rest amount Rs. 475000/ would be paid by banks .

For study in abroad : 15% will be margin money

#5. Interest Rate :

As interest rate is not constant whereas it is variable and depends upon colleges , Courses etc.

(i) For Premier Institutions/Colleges , Interest rate is low . e.g. For IIMs/IITs/IISc interest rate is 8.25 % to 8.65 % .

(ii)For other Institutions / Colleges : Interest rate is 9.15% to 10.15%

(iii) For girls applicant there is a rebate of 0.5% on interest rate .

Note that Interest rate varies from bank to bank so please compare it before getting loan from any banks or NBFC.

#6. Tax Rebate & Disbursement :

  • Avail Tax rebate up to 8 years under Income Tax Act .
  • Applicant should know that loan is disbursed directly to college/Institutions .

#7. Documents Required :

  • Application Form
  • Admission Letter along with fee details of college / Institutions
  • Aadhaar Card
  • PAN Card
  • Residence Proof
  • Income Proof of Parent/Guarantor
  • Passport / Visa if applicants are going to study abroad

What is an index fund ? | How does Index fund Work ?

Index Fund : Index fund is a type of passive mutual fund that imitates the portfolio of an index . Index ia a group of securities that defines a market segment . e.g. BSE Sensex is an index in which 30 companies to be tracked , Nifty 50 is an index in which 50 companies to be tracked . here are several types of indices may occurs e.g. sectorial indices . In sectorial index a particular sector index has to be tracked such as pharma , finance etc.

We have generally heard that Sensex goes higher   and lower means valuation of these companies increases and decreases respectively .

Functions of Index fund ?

An index fund is not an actively managed fund by fund manager , it follows the market indices like BSE Sensex , NSE Nifty etc. But in traditional mutual fund asset management company is actively involved and hence they changes the portfolio composition as they think . As fund manager actively involved in managing the fund that’s why they charges 1 % to 2 % as their service charge . Due to actively management of investor’s fund service charge is higher as AMC (Asset management company) has to hire an expert to manage this .

But index fund is a passive fund , hence there is no active fund manager is required for fund management that’s why in index fund service charge is very low  as compared to traditional mutual fund . In index fund charges varies from 0.1 % to 0.2 % .

If you want to invest in equity market without taking a lot of risk , you may enter through index funds . You should invest in index funds via any Asset Management Company (AMC) and earns higher returns on your investment . Therefore if you have no knowledge about equity or minimal knowledge and want to invest then index funds are good option for you .

When market goes up index fund generate good returns but when market slump returns goes down . Hence it is advised that you should chose a mixture of index fund and actively managed mutual fund in your portfolio .

The returns of index fund and actively managed mutual fund  may be equal in short term but in long run actively managed fund will tend to give higher returns .

How to create Wealth | 5 steps for Wealth Creation

Hello friends ,

Have you ever thought ? Why some people are successful in their life ? Why some people are rich ? The reason behind this is : This is all about mindset . Hence you should always educate and cultivate your mind about money . You should always track your cashflow .

What is Cashflow ?

Cashflow is the difference between your monthly income & your monthly expenses .

Cashflow = Monthly Income – Monthly Expenses

There are three cases :

Case(i) : If cashflow is negative : It means your monthly Income is less than monthly expenses .

Monthly Income <  Monthly Expenses

Be aware ! Take action and control this situation as early as possible , otherwise day by day your liability will be increases and you would be under heavy debt .

Case(ii): If Cashflow is Zero : It means your monthly Income is equal to your monthly expenses .

Monthly Income =  Monthly Expenses

This situation is also not good but better than previous one , because if you are in need some extra money which you have never thought then how can you manage ? You would have to take debt from your friends , relatives etc. for fulfilling you need .

Case(iii): If cashflow is Positive : It means your monthly Income is greater than your your monthly expenses .

Monthly Income >  Monthly Expenses

This is the best situation . In this situation at the end of every month you have some extra money in your account & you can use this money for investment , doing some other work or any other future planning .

Now we are discussing about some simple steps for Wealth creation :

1. Educate & Cultivate Mindset :

You should always educate your mind about money & money management , discussing about money . You should ask question in your mind : how to start secondary income ? how to earn more money ? because single income can not make you rich ? . Hence educate yourself about personal finances & money management .

2. Decide your Destination :

Sit properly on your bed , be calm and close your eyes for sometime , when your mind became cool & calm think deeply what do you want to achieve in your life ? what is you financial goal . If you got the answer of this question then set your goal . Now big question is that how this goal can be achieved ? Don’t worry , come to next steps .

3. Saving & Investing :

As you know you have already set your financial goal . I suppose that your cashflow is positive i.e. case(iii) which I have already discussed . In every month you should follow this Rule :

Monthly Income – Saving = Expenditure

Now starts Investing your saved money in SIP (Systematic Investing Plan) . If you have invested few hundred dollar in a month , then at the end of year you have invested few thousand dollar & this process is going on . This investing habit will make you millionaire .

4. Control your greed / emotions in investing

You should always control on your greed and emotions in investing your money . If you have no knowledge about money management you should acquire knowledge or take advice from expert so that you could manage your money effectively .

5. Money Management :

Since you have invested your hard earned money & the process is going on ….. so it is necessary that you should track your money . For this you should learn about money management system . Learning is a great thing this will educate you & make you aware so you could take better decision to achieve your financial goal .  By educating yourself about money  & money management system that how the system works ? how several people earn lots of money ? all the answer will come from money management system .