FLAME Newsletter - 08 May 2013

QUOTE OF THE WEEK:

“If the US can regulate and cover by deposit insurance more than 7,000 banks, India can surely manage at least a few hundreds.” — Nirmal Jain, Chairman, India Infoline Group

YOUR FINANCE DEMYSTIFIED:

Missed your home loan EMI: How to get back on track?

Buying a home is not an easy task. Most people have to avail of a bank loan to fund part of their purchase as banks – as a rule – do not sanction loans over 70% of the loan amount. Hence, one needs to save enough to down pay a part of the total proceeds.

A home loan is often the only financially viable method for a person to fund major purchases like a house. It also offers significant tax benefits to borrowers. For many buyers, home loan equated monthly instalments (EMIs) constitute a significant portion of regular outgoings. So, what happens if you find yourself in a position where you can’t meet your EMIs on a regular basis? This may be on account of a family emergency or a loss of job, among others… Read more

Understanding various loan terms

Are young consumers the target of payday loans?

Payday loans are short-term cash loans or advance loans. The average loan term is about two weeks. These loans are given to the borrower on the basis of his personal cheque held for future deposit or on electronic access to his bank account. Borrowers write a personal cheque for the amount borrowed and the finance charge and receive cash in return. In some cases, borrowers sign to get electronic access to their bank accounts to receive and repay payday loans.

Lenders hold the cheque until the next payday when loans and the finance charges must be repaid in lump sum. To repay a loan, borrowers can redeem the cheque by paying the loan with cash, allow the cheque to be deposited in the bank, or just pay the finance charge to roll the loan over for another pay period… Read more

Choose the best personal loan

Auto loans: Understand the total cost

The Indian market, in present times, is filled with banks and other financial institutions offering auto loans, making cars much more accessible to the common man. Auto loans can be availed for all types of vehicles, whether they are new or used ones. It is, therefore, helpful if a buyer understands the total costs involved while buying a car with a loan.

An auto loan payment consists of three parts; the principal, interest and term. The principal is the price of the car being purchased. The interest is the percentage of the loan a borrower pays to the financing agency. The term of a loan is the amount of time that the borrower agrees to pay back the loan… Read more

DID YOU KNOW?

What is advance tax & who is liable to pay?

As the name suggests, advance tax refers to paying a part of your taxes before the end of the financial year. Also called ‘pay-as-you-earn’ scheme, advance tax is the income tax payable if your tax liability is more than Rs. 10,000 in a financial year. It should be paid in the year in which the income is received… Read more 

TERM OF THE WEEK

First year premiums

Regular premiums received during the year for all modes of payments chosen by the customer which are still in the first year. For instance: For a monthly mode policy sold in March 2012, the first installment would fall into first year premiums for 2011-12 and the remaining 11 installments in the first year would be first year premiums in 2012-13.

IN THE NEWS THIS WEEK

General insurers, reinsurer to set up TPA by Sept

Life insurers’ new business premiums fall 6.3% in FY13

IRDA probes money laundering allegations against insurers

Cobrapost: 23 Banks, insurance firms in money laundering

MFs report net inflows of Rs. 765 billion in FY13: SEBI

MF folios decline 4.5% to 2 million in six months: AMFI

MFs offload equities worth Rs. 16.14 billion in March

FIIs invest Rs. 91 billion in equity in March

ABOUT FLAME

FLAME (Financial Literacy Agenda for Mass Empowerment) is an IIFL initiative to promote financial literacy amongst the masses in order to make them an integral part of India’s spectacular growth story.

In an era of accelerating GDP and rising per capita growth, financial literacy has become more critical than ever before such that we all reap the tangible benefits of the nation’s economic prosperity. Financial inclusion has been quite high on the governmental agenda, given its emphasis on widening the Banking & Financial services network across the country. IIFL’s FLAME initiative stands committed to complement this effort by helping common people gain financial growth and security though better awareness and education on the variety of financial products while avoiding the lure of and loss from unrealistic claims made by unscrupulous agents and ponzi schemes.

Our objective is to light a FLAME, as the name suggests, which will set ablaze a chain of FLAMEs across the country. The new-found light of knowledge will undoubtedly dispel the dark clouds of financial illiteracy and ensure the bright sunshine of financial growth and prosperity.

This portal is but one of the various IIFL initiatives that would be part of FLAME.