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Personal Loan Or Gold Loan – How To Choose Between The Two

There are times when you may have to arrange a certain sum of money urgently. In such emergency situations, you may not have the required amount of money at your disposal, and the next paycheque might not be around the corner. For such urgent situations, certain loan products are designed to give you just the financial boost you require to meet those unforeseen expenses. Personal loans and gold loans are two of the most popular loan products.
While both of them efficiently serve the purpose of making funds accessible quickly to applicants, they have their distinct appeal concerning the requirements they cater to. Choosing between these options depends on your requirements. The following factors may help you opt for the kind of loan that you are more comfortable with –

Gold Loan

A gold loan is a short-term loan given to you against the security of your gold ornaments. It helps you raise funds by depositing your gold with the bank instead of letting it lie idle in a locker. The following advantages make it an attractive scheme:

  • Easy paperwork – Simple documents like ID proof and address proof are sufficient to avail gold loans. Unlike unsecured loans, there is no requirement to produce income statements or credit scores to determine creditworthiness.
  • Quick approval – A loan backed by security is reassuring to bankers, which increases the chances of your application being approved. Gold is a good security which enables your request to be approved at the earliest.
  • Low interest rates – Ranging between 13-14%, the interest rates charged on gold loans is markedly less than other unsecured loans.
  • Quick processing time – This is ideal for immediate cash requirements since funds are disbursed within hours.
  • Raise substantial funds – You may avail up to 60% of the value of your gold ornaments as loan.
  • Low cost – A nominal processing fee of 1% and the option of pre-payment without any charges make availing a gold loan a significantly cheaper option.

Personal Loan

Personal loans are unsecured loans which do not require you to deposit any collateral to avail funds. Not only do these loans allow you to raise substantial funds to meet your requirements like secured loans, they also come packed with the following benefits:

    • Flexible tenure – You may choose the duration over which you wish to repay the loan amount according to your resources. By subscribing to an EMI scheme that suits you, you may plan your resources optimally over that period of time. Loan tenure in Personal Loan normally ranges between 12-60 months.
    • No collateral – To avail a personal loan, you need not provide the bank with any kind of security / collateral, . You are also not required to provide any guarantor.

With a good credit score, it is quite easy to avail a personal loan at a low cost and favourable interest rates. Compared to a gold loan, the application process and disbursal of funds do take a bit longer when it comes to personal loans due to the nature of the loan being unsecured and given purely based on income documents and credit history.
Given these factors, choosing between these products depends entirely on individual requirements and the convenience of transactions associated with them.

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All You Need to Know About Fixed Deposits

Fixed deposits have long been the preferred choice among Indians looking to build substantial savings. Fixed deposits (FDs) are one of the simplest tools of investment, allowing you to deposit a lump sum amount with your bank for the tenure of your choosing. At the end of the tenure, your initial amount accrues interest thanks to the pre-determined rate of interest over the investment period, giving you a guaranteed return on investment. The continued popularity of fixed deposits is based on multiple factors that have been expanded on below.

Safe Form Of Investment

Fixed deposits are one of the safest forms of investment for the simple reason that they come under the purview of the Deposit Insurance and Credit Guarantee Corporation (DICGC). The DICGC insures all FDs with nationalized banks for up to INR 1 Lakh in each bank. By investing INR 1 lakh across various banks, you are assured of the highest safety. Additionally, the pre-determined interest rate on your FD remains constant throughout, thereby keeping your investment safe irrespective of any fluctuations in the market during your FD’s tenure.

High Rate Of Interest

Fixed deposits offer you a much higher rate of interest on your returns when compared to savings accounts. Moreover, FDs are the preferred choice among senior citizens as they receive at least 0.5% higher interest rate than regular customers.

Flexibility

Fixed deposits are quite flexible, allowing you to choose the tenure, be it as short as 7 days or as long as 10 years. Supposing you have an event 5 years from now that requires you to have a certain amount of funds. By investing in an FD for 5 years, you will have your funds right when you need them. Choosing between a simple interest and a cumulative interest FD is also a beneficial flexibility offered by fixed deposits. With simple interest, the interest is paid and credited to you every month or every three months, providing you with a steady source of income. In cumulative FDs, the compounded interest is reinvested with the principal amount, providing you with the interest upon maturity of your investment.

Tax Benefits

If you are looking to save tax , then you have the option of investing in fixed deposits that are approved under Section 80(C). This can be done by investing up to INR 1 Lakh for a lock-in period of 5 years and claiming the deduction under 80(C). However, the interest you receive on these FDs is still taxable. The interest is taxable on the basis of your tax slab. For instance, if you fall under the 10% tax slab, then your annual interest will be taxed at said 10%. You should note that annual interest earned up to INR 10,000 from FDs is exempt from tax. Your bank deducts a TDS if the annual interest exceeds this amount. However, if your total income is below the taxable limit, then submitting a Form 15 G or H will help avoid the TDS being deducted.

Loan Facility

Another great benefit of fixed deposits is that if you urgently require money for an emergency, then you can avail a loan against your fixed deposit without having to break it. Banks offer up to 90% of the principal amount of your FD. This allows you to keep your FD intact, earning interest on it even as you avail the loan.

With such lucrative advantages, it is no wonder that fixed deposits remain a popular mode of investment among Indians looking for stable and fixed returns.

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How to Choose a Personal Loan

No matter your age, you probably have a bucket list of things that you would like to accomplish. More often than not, the only thing that might prevent you from crossing the items off your list is lack of funds. Whether it’s going on an international holiday, redesigning your dream home, or even providing for your child’s education, all these wishes require a substantial amount of funds. Well, this is where a personal loan comes in.

These days, a personal loan is a smart choice when it comes to acquiring what you want. Personal loans are extremely flexible as they are unsecured loans that can be used for any legitimate purpose and require no collateral.

Due to their popularity, there is a plethora of options in the market. But how do you decide which personal loan is best suited for you? We have come up with an easy and comprehensive checklist that can help you narrow down your choices.
Take a look:

Rate of Interest

The interest rate is one of the first things you should look at when opting for a personal loan. The rate of interest for personal loans vary from one financial institution to another. So, the key is to find the lowest interest rate on offer. The interest that you pay is also dependent on the loan amount and the repayment tenure that you choose.

Fees and Charges

Apart from the rate of interest, there a few other charges that you need to keep in mind. These charges include processing fees, foreclosure charges and so on. Every bank has different fees and charges, so you can compare these amounts prior to application.

Loan Processing Time

The loan processing time also differs from bank to bank. Check the documents required during loan application. The fewer number of documents, the lesser will be the personal loan processing time. You can also check with your bank as you might get a shorter loan processing time as an existing customer.

EMI Calculator

Many banks, like IndusInd Bank, offer an online EMI calculator where you can conveniently check the number of monthly instalments you would be required to pay. You simply enter your loan amount, your loan tenure and the personal loan interest rate, and the calculator provides you with the EMI amount and interest payable. By checking your EMI online before applying for a personal loan, you can easily plan your finances accordingly.

Credit History

All banks conduct a credit history check before sanctioning any type of a loan. Your credit history determines your credit worthiness when you apply for a personal loan. The credit history includes information regarding any credit cards or loans that you have applied for, along with your repayment history and any defaulted payments. This complete information is represented in the form of a credit score, as given by Credit Bureau. Having a good credit score can bring you many benefits while applying for a personal loan, such as a higher loan amount, lower interest rates and quick loan approval. Not having any credit history is also not ideal. Here are a few ways in which you can maintain your credit score.

Armed with the points mentioned above and some careful research, you will be able to choose a personal loan that best meets your requirements.

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Travel Smart Choose Card over Cash!

Vacationing abroad and travelling to exotic international destinations is fast becoming a regular and frequent activity in India. Be it the young working professional or the urbane moneyed urbane traveler, more and more Indians are discovering the benefits of economic progress: with money in the bank and a passport which opens up a world of opportunities. Travel has become integral to our lives, and almost every family looks out for that annual vacation overseas for which they have planned carefully. Wanderlust cuts across age groups, income profiles and place of residence.

According to a forecast by The World Travel and Tourism Council, the Indian tourism sector will grow at an annual average growth rate of 7% over the next 10 years. Availability of loans, affordable tickets and the simplicity of arranging accommodation, in this digital age, are some of the primary reasons that is fueling both domestic and international travel. In an emerging focus area for travel companies, women are becoming a key focus segment for business growth, as women are increasingly travelling alone or with friends and family. While most of the most of the women-only traveler groups are from metro cities such as Bangalore, Mumbai, Gurgaon and Delhi, women are clearly key influencers within the family in selection of location and for planning the holidays

Planning a trip is no child’s play. A lot of attention needs to be paid to the entire process of planning: ranging from ensuring passport validity, seeking visas, flight tickets bookings and finding appropriate accommodation. One of the key decisions to be made is how to carry money while travelling abroad; sometimes the thought itself could weigh heavily on the mind. There are a range of options available and finding one suited to your needs is a critical step in the right direction.

One of the major concerns and questions, when traveling abroad, is how much cash you should carry; and the truth is that there is never a definite answer to that. While every need based expense (travel, food and accommodation) can be planned, there is no limit to what new and exciting souvenirs you could come across in that beautiful shop in Berne or that lovely dress in Paris that you just need to have! Being able to manage your non-discretionary expenses while accommodating your discretionary extravagances becomes key, and having the finances close at hand, to indulge yourself with the small extras, becomes critical. In the past carrying foreign currency, stashed as bundles, was the norm. The Indian traveler would constantly be worried about its safety worried sleepless, about theft or burglary.

There are many ways to access and use your money overseas. Many a seasoned traveler will advise you to wait until you get to your destination and use an ATM to withdraw money. There are others who will advise you to purchase your foreign currency in India itself, prior to your departure as you would be mentally comforted against fluctuating currency rates as your currency purchase would be at a fixed conversion rate at the time of the conversion . Until a few years ago, foreign currency exchanged at an exchange desk was the most preferred option, seemingly hassle free and trouble free as well.

As a tip from a consummate traveler, carrying cash and exchanging it at airports and hotels might not be the best idea, as foreign exchange rates at these locations would be typically higher than elsewhere. However the convenience of these locations still make it the preferred choice for many. It’s often good to get some foreign currency before you leave for the journey so that you have cash on hand for your immediate expenses such as buying a meal at the airport, or taking a cab to your hotel. In that way you carry only a very little of physical cash.

But for the major bit of your survival in a foreign locale, plastic money is an absolutely indispensable entry.

The advent of internationally accepted credit cards and debit cards has completely changed the way travelers carry money. In India the impact has been seen over the last two decades. Driven by simplicity of use, and the assurance of safety, Credit Cards have become the most extensively used payment option while traveling abroad.

Apart from credit and debit cards, there are multiple payment options available ranging from prepaid travel cards to multi-currency forex cards.

The emergence of prepaid cards has also made travel very safe and convenient. Many of these travel prepaid cards are launched in collaboration between banks and reputed travel agencies and portals. Typically you could load them with as much cash as you require and you could simply use them in the same manner as a credit or a debit card. All cards, whether debit, credit or prepaid typically protect you if you lose them on a trip. All you need to do is to report it to your bank and the card gets blocked at your instruction. This ensures that any misuse is prevented. Travel prepaid cards typically come with added benefits pertaining to travel such as discounts on airfares, hotels and restaurant bills. Leading credit card and debit card issuers also provide strong travel related benefits, typically during the holiday season and the astute traveler is able to ensure that she leverages all these offers to the maximum. Foreign exchange prepaid cards are favoured by many travelers while traveling overseas. The key reason to this that the conversion rate for the purchase of foreign exchange is already fixed prior to the journey and the traveler need not be concerned with the daily fluctuation in currency rates. Some issuers of multi –currency foreign exchange cards provide superior benefits such as no mark-up charges and ATM withdrawal charges which makes the entire experience extremely value accretive to the customer. Finding the best service provider bank for the card you select is therefore critical to maximizing the value that you got for your budget assigned for the holiday.

With the growth of the digital/plastic economy, India has made some significant strides towards becoming a “Cashless economy”. Having said that we sometimes still hear the story about a traveler who suffered as he did not have cash, as the local restaurant in the small town did not accept cards as a made of payment. The smart tip is to therefore to always ensure that you are not completely cashless while traveling either in India or overseas, especially in small towns or in rural areas. A little bit of cash in hand, still ensures peace of mind!

Cards are indeed the most convenient way of making payments. Finding a card which suits your needs, fits your temperament, and is geared to meet your spending requirements is critical. Ensuring that you maximize the value that you get from your cards is also very important. So before you begin your holiday, select a card that makes that big difference to your holiday. Have a great holiday this year!

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Adapting right marketing strategy in a digital world

India has seen an exceptional growth in adoption to the new and emerging digital world, and its emerging paradigms. Despite the oft-cited lacunae of poor infrastructure, last mile connectivity, cost of data and mobile telephony, the Indian consumer is changing, and is connecting to a new digital reality. A lot of this has to do with large investments by telecom companies and network solutions providers and their emerging business models, which have been able to create low cost solutions, facilitating online connectivity. Mobile data connectivity is becoming ubiquitous and online connectivity is no longer a preserve of the rich and the upper middle class.

More than half of the world’s population now uses the internet, with more than 3.75 billion people online today. Over the last few years organisations have made serious changes to their media budgets and marketing strategies to expand their presence to where their audience now is: online.

With the emergence of digital and online media, companies have significantly changed the scope of their marketing strategies. A strong focus is now on managing online brand presence; and no marketing team is today complete without having a strong talent base and expertise in the digital medium. The advantage of the digital medium is that it comes with the innate ability of influencing a purchase decision, managing customer experience, enhancing service delivery, creating sustained engagement, all the while providing superior effectiveness measurement metrics, which is so critical for any marketer. As the online world moves increasingly into the mobile phone, customer stickiness becomes all the more pertinent. It becomes increasing difficult to have a new adoption for a similar service, for example when the customer is already highly engaged with an app!

As with the entire digital space, digital marketing, too, has been moving at an incredible pace. New and innovative methods keep emerging as to how brands convert fans to customers, and how it transitions customers to endorsers and influencers. As in any marketing journey the process of discovering what works best, is driven as always by research; and then to a large extent, by a structured process of iteration. The smallest of things, such as the colour of your creative, the tone of your advertisement, how online responses are worded on an online query etc. goes a long way in establishing a strong brand identity online.

We have become dependent on the internet in both our personal and professional lives. This evolutionary change that has fostered the development of an entire industry that did not exist prior to the internet. Some marketers still continue to grapple with this rapidly changing world. At the end of the day digital marketing is nothing but the means of promoting business objectives online. The message remains the same, but the medium and how the message is conveyed changes significantly. Technology therefore becomes a means of reaching a target audience.

Digital terms, simplified

At the forefront of internet integration in everyday life are search engines. Not only have they become the driving force in internet innovations, but also in digital marketing. The terms Search Engine Optimization (SEO) and Search Engine Marketing (SEM) are the original foundations of digital marketing. Typically, the higher a business ranks on search results and the more frequently it appears in searches, the more traffic that site will receive. Driving ranking on search engines is both an art and a science, and clever deployment of investments towards this is critical.

Social media is an integral part of digital marketing. It is, however, critical to have a judicious mix of social media, and this involves having a well thought through social media strategy. Content marketing is another strategic marketing approach, focused on creating and distributing valuable, relevant, and consistent content to attract and retain a clearly-defined audience — and, ultimately, to drive profitable customer action and behaviour. Design, navigation and layout of a website is extremely critical and ensuring compatibility on mobile devices, to provide the user with a seamless experience, is key .While this may sound simplistic, examples still abound of sites which are poor on navigation, or which have not yet adapted to mobile compatibility.

We are seeing a series of emerging trends in the digital space. In recent times virtual reality is a growing trend seen in the video gaming industry. Live streaming allows you to engage with your audience instantaneously. Product placement in these areas are creating new marketing opportunities. Influencer marketing has become digital marketing’s “word of mouth” strategy. In real life, if a friend raves about an incredible restaurant she recently visited, her opinion would have an influence on you your next restaurant visit. In the digital world, if a popular travel blogger eulogises and recommends a travel destination that would significantly influence the purchase behaviour of the readers. This provides, for example, a travel company an opportunity to leverage off the influencer and create packages and market them accordingly.

Digital Marketing has changed the marketing landscape simply because it’s the one means of communicating with consumers that is always “right there;” on smartphones and tablets that go with consumers literally everywhere.

In order to sustain growth in any business, you will need to focus on building your brand. While this may seem like an impossible task, with the right digital marketing strategies you will be able to enhance the recognition and reputation your brand has to offer.

The work that you put in regarding the building of your brand is worth it considering just how beneficial it can be when trying to retain loyal customers.
Creating and managing content online is essential to promoting a brand and having a content strategy is vital for the astute marketer. The key is to create content that is interesting and different. Smart marketers are able to take (at times!) mundane information and turn it into an interesting narrative, gripping for the consumer and culminating in a desired call-to-action. Almost everyone loves a good story. A well-constructed digital story manages to connect and engage the audience by using a message that is empowering and inspiring.

Creative content can be used to chat, connect and answer questions. This is not only a great way to understand client needs and concerns, but also promotes an image of a caring organisation, which is willing to listen.

Some things never change. The good old time-tested practice of taking feedback from salespeople and understanding from them as to what customers are thinking, remains as critical today: What do they talk about? How can you help them? Research will help, but sometimes it’s the salespeople who feel the real pulse from the field. Companies that put their customers first when creating content are bound to win, because they will produce something of real value. And that’s the secret behind content marketing.

A few thoughts that could be of use while devising your digital communication strategy which feeds into your marketing plan:

– Diversify: It is unlikely that your entire customer base and target audience are all on the same social network. Age as a simple variable can sometimes segregate social media platform adoption. Diversify your company’s engagement efforts by participating in multiple platforms. Aside from your blog, Twitter and Facebook, connect via Pinterest, Tumblr and LinkedIn and other platforms. Not only will these different platforms allow you to reach out to a larger audience, your brand can experiment with different types of content for each platform. Remember, one size does not fit all when it comes to social channels. It is critical to be nimble and fleet footed to adapt to content consumption patterns and tastes.

– Creativity of content is key: If your brand is already well established and is already considered a thought leader in the industry, it isn’t necessary for every tweet, post and article to be about your company. General interest content works well for creating and sustaining brand interest and patronage. Share connected stories or news related to your business, or even ask your customers what they think the next blog post should be about! Customer-focused content will sometimes will work much better than tom-tomming your products directly.

The digital medium provides for an end to end delivery, from a customer life-cycle perspective. Right from igniting customer interest to the influence on the purchase decision through to servicing and renewal/replacement decisions, the digital media can be used to drive customer preference and engagement. The role of the marketer starts blurring in a digital world. A digital marketer plays an important role not just in influencing the purchase decision but in the entire lifecycle. How customers interact with the brand, the digital tonality, the look and feel of the digital engagement screens, the digital engagement devices, driving influencer behaviour etc. all come in within the marketer’s purview.

Even in a fast-moving digital age, some things have remained the same. An obsessive focus on the customer, and keeping the customer in the forefront is still the key to a successful marketing and business strategy.

The medium may have changed. The messages remain the same, though communicated in a different manner and perhaps, more effectively!
The author is Head -Head of Marketing and Corporate Communication, IndusInd Bank

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