IDFC First Bank - Types of loans

Types of Deposits you can get at IDFC First Bank

• Fixed deposit
• Recurring deposit
• Add funds to your account
• Tax saver deposit
  

Their benefits:

• Competitive interest rates
• Flexibility
• No penalties for senior citizens on early withdrawal
  

Types of loans

Personal loan

• Loan amount ranging from 1 Lakh to 40 Lakhs
• Paperless digital sanctions
• Loan tenure from 12 months to 84 months*
• Flexibility to make up to 40%* part payment
• ROI starting as low as 10.75%*
  

Consumer Durable Loan

• Flexible EMI
• Competitive interest rates
  

Home Loan

• Simple and hassle free loan processing with minimum turnaround time
• Loans up to 90% of cost of property based on eligibility
• Pre-approved loans available as per requirement with no hidden charges
• Term Loan secured against residential properties
  

Loan against property

• Flexible EMI
• Competitive interest rates
  

Pre-owned car loan

• Flexible EMI
• Competitive interest rates
  

Two-wheeler loan

• Flexible EMI
• Competitive interest rates
  

Commercial vehicle loan

• Flexible EMI
• Competitive interest rates
  

Equipment hypothecation loans

• Flexible EMI
• Competitive interest rates
  

Micro-enterprise loan

• Flexible EMI
• Competitive interest rates
  

Business loan

• Loan amount from Rs 3 Lakhs to Rs 75 Lakhs
• Loan Tenures from 1 to 5 years
• Facility to top-up existing loans
  

Loan for women

• Flexible EMI
• Competitive interest rates
  

Investments

Here are the investment options which you can get at IDFC First Bank:

• Mutual funds
• Gold bonds
• Investment linked insurance
• IDFC FIRST ZERODHA 3-in-1
  

Insurance

Here are the insurance options which you can get at IDFC First Bank:

• Travel insurance
• Home insurance
• Term insurance
• Health insurance
• Motor insurance
• Investment Linked Insurance
• Pradhan Mantri Insurance
  

FOREX Services

• Transfer Funds abroad from branch
• Transfer Funds abroad with Net Banking branch
• Transfer Funds to India

IDFC First Bank - Savings accounts up to 7% p.a

IDFC First Bank is a public Indian Banking company. It was formerly known as IDFC Bank before its merger with First Bank. The bank’s headquarters are in Mumbai. IDFC First Bank is a part of the IDFC group, which is an integrated infrastructure finance company. It began its operations on the 1st of October 2015. IDFC First got its universal banking license from the RBI in July 2015 and on 6th November it was listed on BSE and NSE.

Savings Accounts

Savings accounts up to 7% p.a

Savings accounts with Signature Card Benefits: Minimum balance Rs. 25000

• Rs. 250 voucher on account opening
• Rs. 500 voucher on adding beneficiary and fund transfer
• Rs. 250 voucher on registering on WhatsApp
• Cashback of Rs. 250 for first online or offline debit card transaction
• Voucher of Rs. 250 for booking FD of a minimum of Rs. 25000 and RD of minimum Rs. 5000
• Voucher of Rs. 250 for first UPI payment for a minimum of Rs. 1000
• Voucher of Rs. 250 for first bill payment using mobile app or net banking for a minimum of Rs. 100
• Voucher of Rs. 1000 for spending Rs. 20000 or more with debit card

Savings accounts with Classic Card Benefits: Minimum balance Rs. 10000

• Rs. 250 voucher for account successfully opening
• Rs. 250 voucher for booking FD of Rs. 25000 minimum and RD of Rs. 5000 minimum
• Rs. 500 voucher after adding beneficiary and fund transfer of Rs. 2000 minimum
• Rs. 250 voucher after first bill payment using mobile app or net banking of minimum Rs. 1000
• Rs. 250 voucher after first UPI payment of Rs. 1000 minimum
  

Features:

Savings Account With VISA Signature Card

• Free, unlimited ATM withdrawal
• Higher Personal accident coverage of 35 lakh
• Purchase protection of 1 lakh
• Higher lost card liability of 4 lakh
• Air accident cover of 1 Crore
• BookMyShow cashback of 250 per month
• Airport lounge access Twice in a quarter
• Higher daily cash withdrawal limit of 2 lakh, domestic ATM
• Higher daily purchase limit of 6 lakh, domestic

Savings Account With VISA Classic Card

• 5 Free ATM transactions per month at own and non-Bank ATMs
• Personal accident cover of 2 lakh
• Lost card liability of 50,000
• Daily cash withdrawal limit of 1 lakh from domestic ATM
• Daily purchase limit of 1.5 lakh domestic
  

Senior citizens Savings Account

Savings Account with signature card benefits- minimum balance Rs. 25000

Benefits:

• Get voucher of Rs.250 after Account Successfully Opened
• Get voucher of Rs.500 after Adding Beneficiary & do a Fund Transfer
• Get voucher of Rs.250 after Registering on WhatsApp Banking
• Get cashback of Upto Rs.250 for your First online/offline Debit Card transaction
• Get voucher of Rs.250 for Booking FD of min. Rs.25,000/
• Get voucher of Rs.250 for First UPI payment
• Get voucher of Rs.250 after your First Bill payment using Mobile app or Net banking
• Get voucher of Rs.1000 after Spend Rs. 20,000 or more with your Debit Card

Savings Account with classic card benefits- minimum balance Rs. 10000

Benefits:

• Rs. 250 voucher for account successfully opening
• Rs. 250 voucher for booking FD of Rs. 25000 minimum and RD of Rs. 5000 minimum
• Rs. 500 voucher after adding beneficiary and fund transfer of Rs. 2000 minimum
• Rs. 250 voucher after first bill payment using mobile app or net banking of minimum Rs. 1000
• Rs. 250 voucher after first UPI payment of Rs. 1000 minimum
  

Features:

Savings Account With VISA Signature Card

• Free, unlimited ATM withdrawal
• Higher Personal accident coverage of Rs.35 lakh
• Purchase protection of Rs.1 lakh
• Higher lost card liability of Rs.4 lakh
• Air accident cover of Rs.1 Crore
• BookMyShow cashback of Rs.250 per month
• Airport lounge access Twice in a quarter
• Higher daily cash withdrawal limit of Rs.2 lakh, domestic ATM
• Higher daily purchase limit of Rs.6 lakh, domestic

Savings Account With VISA Classic Card

• 5 Free ATM transactions per month at own and non-Bank ATMs
• Personal accident cover of Rs.2 lakh
• Lost card liability of Rs.50,000
• Daily cash withdrawal limit of Rs.1 lakh from domestic ATM
• Daily purchase limit of Rs.1.5 lakh domestic
  

NRI Savings Account upto 7% p.a

Features:

• Net banking and Mobile App access from anywhere around the world
• Attractive exchange rates on inward remittances
• Dedicated relationship manager
• All transactions possible from any geography
• Benefits-rich visa signature debit card on request
• Easy access mandate to account for family in India
  

Corporate Salary account

Get a corporate salary account for yourself or as a salary product of your company

IDFC First Bank - Apply for IDFC First Bank Credit Cards

IDFC First Bank is a public Indian Banking company. It was formerly known as

IDFC Bank before its merger with First Bank. The bank’s headquarters are in Mumbai. IDFC First Bank is a part of the IDFC group, which is an integrated infrastructure finance company. It began its operations on the 1st of October 2015. IDFC First got its universal banking license from the RBI in July 2015 and on 6th November it was listed on BSE and NSE.

Company information

Company details:

Founding date: October 2015
Headquarters: Mumbai
Products: Consumer banking, Home loans, Loans against property, Personal loans, Consumer Durable loans, Vehicle loans, Business loans, Micro Enterprise loans, Private banking, Wealth management, Investment banking, Corporate banking, Wholesale banking
Revenue: $46.79 billion as on Q3 FY20
Operating income: $6.82 billion as on Q3 FY20
Parent company: Infrastructure Development Finance Company

In 2014, the RBI gave IDFC Ltd. an in-principle approval to enter in the private sector. After this, IDFC Ltd. divested its assets and liabilities to form a new entity: the IDFC Bank. The bank was launched in November 2015. The bank began its operations on 19th October 2015 with a total of 23 branches in Madhya Pradesh, Mumbai, Delhi, Hyderabad, Kolkata, Bangalore, Chennai, Pune, and Ahmedabad. 15 branches were opened in areas having less than 10000 population.

IDFC Bank and Capital First merged in January 2018.

The bank’s business focus

IDFC First serves private and corporate customers in the country, including the infrastructure sector which IDFC has a specialization in since its very beginning. The bank aims to give services to the rural areas of the country too, as well as to the growing numbers of self-employed people. The bank’s operations are only within India.

Products

Credit Cards

FIRST Millennial Credit Card

• 10X Reward Points on all Spends above Rs.20,000
• 6X Reward Points on Online Spends
• 3X Reward Points on all Offline Spends
• Your reward points are not capped and they don’t expire, ever!
• 10X Rewards on all spends done on your Birthday
• 1X = 1 Reward Point per Rs. 100 spent | 1 Reward Point = 0.25
  

FIRST Classic Credit Card

• 10X Reward Points on all Spends above Rs.20,000
• 6X Reward Points on Online Spends
• 3X Reward Points on all Offline Spends
• Your reward points are not capped and they don’t expire, ever!
• 10X Rewards on all spends done on your Birthday
• 1X = 1 Reward Point per Rs. 100 spent | 1 Reward Point = 0.25
  

FIRST Select Card

• 10X Reward Points on all Spends above Rs.20,000
• 6X Reward Points on Online Spends
• 3X Reward Points on all Offline Spends
• Your reward points are not capped and they don’t expire, ever!
• 10X Rewards on all spends done on your Birthday
• 1X = 1 Reward Point per Rs. 100 spent | 1 Reward Point = 0.25
  

FIRST Wealth Card

• 10X Reward Points on all Spends above Rs. 20,000
• 6X Reward Points on Online Spends
• 3X Reward Points on all Offline Spends
• 10X Rewards on all spends done on your Birthday
• 1X = 1 Reward Point per Rs. 100 spent | 1 Reward Point = Rs. 0.25

IDFC First Personal Loans - Credit Score For Personal Loan

IDFC Bank Personal Loans

Personal loan details

• Interest rate- 12.5% to 18%
• Processing fees: Till 3.5% of the total loan amount plus GST
• Loan tenure: 1-4 years
• Loan amount: Till Rs. 2.5 lakhs
  

Main features of IDFC First Personal Loans

• Competitive interest rates
• Repayment flexibility
• Transfer current personal loan to get benefits
  

IDFC First Personal Loan Eligibility Criteria

For self-employed people

• Minimum age needs to be 28 and maximum 68 by the time of loan maturity
• Business should have existed for at least 3 years
• The company’s PAT or Profit After Tax needs to be positive
  

Salaried people

Minimum age needs to be 23 and maximum age 58 by the time of loan maturity

IDFC Bank personal loan required documents

1. ID proof like Aadhaar Card, Passport, PAN Card, etc.
2. Address proof like Aadhaar Card, utility bills, Passport, bank account statement, etc.
3. Proof of income
4. Documents For salaried individuals: Bank statement for the last 3 months/6 months, latest salary slip
5. Documents For self-employed individuals: Income Tax Returns for the last 2 years, balance sheet for the last 2 years, bank statement for the last 6 months
6. Proof of business applicable for self-employed individuals such as Qualification Certificate/Certificate of Practice (COP), Shop Act License/ MOA & AOA/ Sales Tax/ Vat registration/ Partnership Deed

What are the benefits of IDFC First Credit Card? - IDFC First Bank Credit Cards

Most people know that IDFC First offers only loans of various types. However, it is recently providing credit cards as well, credit cards which you can apply for only and receive at home! With IDFC First credit cards, you can get 10x reward points. As you know, the more reward points you accumulate, the more you can save up later, apart from buying things with the points. One of the best things about these cards, which is already making people excited over it, is that these credit cards have an interest rate of just 9% a year.

As if that’s not enough, you also get interest-free withdrawals from all ATM machines and no annual/joining fee for the card.

Interested in knowing more about IDFC First credit cards?

In this article, we shall learn about the features and benefits of these credit cards from IDFC First Bank.
 
What are the benefits of IDFC First Credit Card?

• They are lifetime free
• They have no annual fee and renewal fees
• Interest rate starts from 0.75% a month to a maximum of 9% a month.
• The foreign markup fee is 3.5% on all the cards
• There are no charges for redeeming reward points
• There is no Over Limit Fee
• There is no expiry date for your reward points earned from the credit cards
• There are no limits to earning reward points
• These credit cards give you free visit to railway lounges
  

Types of IDFC First Credit Cards

There are 4 types of IDFC First Credit cards. It’s better to learn about all of these first before picking or finalizing one. After all, you don’t want to go home happily with a new credit card only to learn later that another choice would have been better, do you?

The 4 types of IDFC First credit cards are:

1. IDFC First Millennia Credit Card
2. IDFC First Classic Credit Card
3. IDFC First Select Credit Card
4. IDFC First Wealth Credit Card
   

Features of IDFC First credit cards

IDFC First Millennia Credit Card

• Get a Gift Voucher of Rs.500 on spending Rs.15000 within 90 days from card issuance.
• Get 5% Cashback on your first EMI transaction done within 90 days from card set-up.
• Earn 10x Reward Points on all the transactions that are above Rs.20000.
• Spend online through this credit card and earn 6X Reward Points.
• Have a blast on your birthdays because you can earn 10X Reward Points on that day.
• Enjoy 25% Discount on Movie Tickets with a Maximum of Rs.100.
• Enjoy a 20% Discount at more than 1500 restaurants in India.
• Get a Discount of 15% at above 3000 Health and Wellness Outlets.
• Enjoy 4 Complimentary Visits to the Railway Lounges per quarter.
• Get a Cover of Rs.2 Lacs and Rs.25000 for Personal Accident and Lost Card Liability respectively.
• IDFC First Classic Credit Card
• Get a Gift Voucher of Rs.500 as a welcome benefit on spending Rs.15000 within 90 days from card set-up.
• Get a Cashback of 5% on your first EMI transaction done within 90 days from card issuance.
• Earn 10X Reward Points on all the transactions that are above Rs.20000 and on your Birthday.
• Spend online and earn 6X Reward Points and Spend offline and earn 3X reward points through this card.
• Get 4 Free Visits per quarter to the Railway Lounges through the IDFC First Bank Credit Card.
• Get free roadside assistance of Rs.1399.
• Enjoy Personal Accident Cover of Rs.2 Lacs and Lost Card Liability Cover of Rs.25000.
• Get a Fuel Surcharge Waiver of up to Rs.200 every month.

IDFC First Select Credit Card

• This card gives you a welcome give of a Voucher worth Rs.500 after you spend Rs.15000 in the first 90 days.
• Get a Cashback of 5% on your first EMI converted within 90 days from the card set-up date.
• Multiply your Reward Point 10 Times on your birthday and while spending Rs.20000 and above.
• Earn 6X and 3X reward points on online and offline spend respectively.
• Enjoy the Buy One Get One Free offer on movie tickets of up to Rs.250 per ticket twice a month.
• You can enjoy a fuel surcharge waiver of up to Rs.300 per month.
• Get Personal Accident Cover of Rs.5 Lacs and Lost Card Liability Cover of Rs.50000.
• Have free roadside assistance of Rs.1399.
• Get 4 Complimentary Visits per quarter to the Railway Lounges and Domestic Airport Lounges.
• Enjoy a 20% Discount at 1500+ Restaurants and 15% discount at over 3000 health and wellness outlets.
• Get a comprehensive Travel Insurance Cover of Rs.22500.

IDFC First Wealth Credit Card

• Enjoy a welcome give of a Voucher worth Rs.500 once you spend Rs.15000 in the first 90 days from the card issuance date.
• Get 5% Cashback on your first EMI converted within 90 days from the card set-up date.
• Enjoy 10X Reward Points on your birthday and on every spending of Rs.20000 and above.
• Earn 6X and 3X reward points on online and offline transactions respectively.
• Enjoy Complimentary Golf Rounds through the IDFC First Credit Card.
• Get the Buy One Get One Free offer on movie tickets of up to Rs.500 per ticket twice a month.
• Get a fuel surcharge waiver of up to Rs.400 per month.
• Have a Discount of 20% at 1500+ Restaurants and a discount of 15% at over 3000 health and wellness outlets.
• Enjoy 4 Complimentary Access to Domestic and International Airport Lounges and Spas every quarter.
• Get 4 Free Visits to the Railway Lounges per quarter.
• Get a Comprehensive Travel Insurance Cover of $1200.
• Have an Air Accident Cover of up to Rs.1 Crore and Lost Card Liability Cover of Rs.50000.
• Get a Personal Accident Cover of Rs.10 Lacs.
  

Documents needed to get IDFC First Bank Credit Cards

• Identity Proof:- Any one of the following- PAN Card, Aadhar Card, Voter I.D. Card, Passport, Driving License.
• Address Proof:- Any one of the following: Ration Card, Electricity Bill, Telephone Bill, Driving License, Passport, Voter I.D. Card, Last 2 Months Bank Statement.
• Income Proof:- Any one of the following: Form 16, Latest Salary Slips, Income Tax Return Documents, Audited Financial Document, Business Continuity Proof.
• Age Proof:- Any one of the following: Pass Certificate of 10th Standard, Passport, Birth Certificate, Voter I.D. Card.
  

Fees and other charges

• Joining fee: Lifetime free
• Renewal fee: Lifetime free
• Minimum interest rate: 0.75% per month or 9% per annum
• Maximum interest rate: 2.99% per month or 35.88% per annum
• Foreign markup fee: 3.5%
• Late payment fee: 15% of total amount due. Minimum of 100 and maximum of 1000
• International cash advance fee: Rs. 250
• Domestic cash advance fee: Rs. 250
• Fee for redemption of reward points: No fee
• Validity of reward points: Unlimited

IDFC First Education Loans - Apply OnLine IDFC First Education Loans

Education is an integral part of our lives. However, education is not becoming more and more expensive. The higher studies your child goes for, the more you have to plan to save, and pay up. This creates a huge problem, especially for the middle class onward who cannot afford to save that much and pays out of their own pocket. Thankfully, there are education loans to help you out. Banks like IDFC First offer education loans to help your kids pursue their dreams.

What is an education loan?

An education loan sponsors one’s education. Whether you want to study abroad or within the country, an education loan can make that possible. The main motive behind this type of credit is to allow people to follow their creams and careers, so that they do not have to sacrifice all of those just because of the want of money.

Education loans are of 4 types in India:

• Undergraduate education loan: These are for students who have done their secondary education and are now looking to take on higher studies to the undergraduate level.  
• Post graduate education loan: This is for those who wish to take PG or Post Graduate courses after taking their graduation course.
• Parents availing education loan: These are loans taken by parents for the education of their children. These are unsecured loans. These are not just for graduate and PG courses, but also for elementary and higher secondary courses.
• Career growth education loan: These are for those which wish to take training, certifications and courses to boost their career.

IDFC Bank Eligibility for education loans

Applicant’s age needs to be 35 years maximum (for non-employed) and 45 years maximum (for working people).

Repayment period-

• Tenure of loan includes duration of study, grace period or moratorium after study and the repayment period
• For courses within India, the repayment tenure is 15 years maximum after the start of repayment period
• For courses abroad, the repayment tenure is 15 years maximum after the start of repayment period
  

Maximum loan amount is: 80 lakhs to 1.5 crore for courses in India, aboard, at IIMs, IITs and ISBs.

Who can apply?

• An Indian National having secured admission to professional/technical courses in recognized institutions.
• Permanent employees who are employed for not less than three years with any organization and who intend to acquire higher professional qualifications and have secured admissions in a reputed institute.
• Frequency of repayment
• Repayment starts generally 1 year after the end of the course/ 6 months after getting a job, whichever comes earlier.
• Interest repayment starts after disbursement of the loan’s first installment
  

Get IDFC First Education Loan in easy 4 stages

• Search of the appropriate bank
• Complete documentation and application form filing
• Start of the loan process
• Loan is disbursed
  

Education loan depends on:

• Academic record
• Co-borrower’s credit score
• Collateral provided
• College/Institute
  

Documents you’ll need

• ID proof: Aadhaar card, passport, driver’s license, and etc.
• Residential proof: copies of utility bills, gas bills etc.
• Mortgage document
• Last 6 months bank account statement of all banks where applicant has account
• Guarantor form
• Institution detail including admission letter from the institution of study, fees structure, mark sheet or passing certificate of SSC, HSC and other degree courses
  

Benefits of taking IDFC First Education loans

• Get up to 90% of the education cost covered
• Tuition fees as well as hostel expenses
• Exam, library, and lab fees if applicable
• Any refundable fees paid to the Institute
• Cost of uniforms, books and other essentials
• Travelling expenses
• 0.5% additional discount for female students
• Possibility of getting 1% interest rate cut if you decide to start paying during moratorium

IDFC First Bank Home Loan - IDFC First Bank Home Loan Eligibility

Looking for a home loan but none of what the other lenders are giving is suiting you? Or maybe IDFC First is your first choice which you’re starting your search with? Either way, you will find all the information about the bank’s Home Loan here.

IDFC First Bank Home Loan Features

• Hassle-free and simple loan processing and minimum loan turnaround time
• Get home loans till 90% of your property’s value
• Get pre-approved loans for faster disbursal and acceptance
• Get term loans against residential properties
• Get loans between 5 lakh and 5 crore
• The maximum tenure for salaried people is 360 months and for self-employed people it is 300 months
• Get subsidy of 2.67 lakh under the PMAY Credit Linked Subsidy Scheme

Properties you can pledge are:

• Ready property
• Balance transfer
• Home extension and renovation
• Under construction property
• Plot purchase
• Composite Loan
• Self-construction
• Top-up
  

IDFC First Bank Home Loan Eligibility

• Sole proprietors
• Partnership firms
• Salaried people
• Self-employed people
• Micro, small and medium sized enterprises
• Good credit ratings as given by a credit bureau
• Minimum age is 23 when taking the loan and 70 during time of loan maturity or during retirement
• Clear credit history
• If self employed, experience needs to be 3 years. For salaried individuals, this is 3 years as well

IDFC First Bank Home Loan Documents

General documents for all:

• Photo Id (any one): Passport, Driver license, Voter ID, PAN Card, Aadhar card
• Address proof (any one self-attested): Drivers license, Ration card, passport, electricity bill, bank account statement, telephone bill, Aadhar card, Property purchase agreement
• Income proof (any one self-attested): 2 month’s salary slip, Last 6 month’s bank statement showing salary credit, Last year ITR showing income or Form 16
  

For salaried individual

• Repayment track with loan sanction
• Last 2 month’s salary certificate or salary slip
• Latest IRT with income calculation
• Last 6 month’s bank statement showing salary amounts withdrawn
  

For self-employed individual

• IT returns with income computation
• Balance sheet with profit and loss account and schedule
• Sales tax or VAT return for months not covered
• Last 6 month’s credit card statement
• Copy of contract border as well as form 16A
• Last 6 month’s bank statements of company’s business account and of individual’s saving account
• Repayment track
  

Business proof

• Shop establishment certificate
• Paid electricity bill not older than 90 days from time of loan application
• VAT return
• Property allotment letter
• Property registered deed
• Trade license
• Telephone bill not 90 days before loan application
• Registered rent deed
• Property papers
• Updated bank passbook or bank statements

Property proof

• NOC from the concerned society and related documents
• Possession letter
• Copy of original sale deed
  

How to apply for IDFC First Bank Home Loan

• Fill up the online form at the bank’s site and expect a call back. You can visit the nearest branch as well
• Submit your documents
• Wait for property application verification process
• Get loan disbursed

IDFC First Bank Loan Against Property - Loan Against Property

IDFC First Bank gives you attractive Loan against property deals. There are many benefits in taking this service from them.

Benefits

• Get loan ranging from Rs. 5 lakh to Rs. 10 crore against your property
• Get as much as 90% of your property’s value
• Get loan tenure of as long as 20 years
  

Loan against property features

• Get a loan for all your needs: Use this loan for anything from boosting your business or for personal needs.
• Consideration is given to your property’s market value: Get maximum value for your property, of as much as 90%
• Enjoy flexible repayment options: You’ll never be under pressure of paying EMIs as you can repay according to your cash flow. There are flexible part payment options.
  

IDFC Loan against property options

• Loan against property to SMEs: These are against residential and commercial properties and are aimed at small to medium enterprises.
• Loans for property: Use this to buy residential and commercial properties.
• Loan against plots: These are for buying solely residential plots.
• Lease Rental Discounting: You can utilize rental income to get the loan against property.
  

IDFC First Bank Loan against property

• Salaried and Self
• Employed Professionals
• Sole Proprietors
• Partnership Firms
• LLP and Private Limited Co.
• Minimum age requirement is 23 years at the time of taking the loan and maximum 70 years or retirement at the time of maturity Good credit rating score in credit bureau
• Minimum 2 years in business in an industry with a positive net worth (for Self-employed) or 5 years’ work experience (for salaried individuals)
• Micro, Small and Medium Enterprises
• Clean record in terms of past loans and statutory payments.

Process of getting IDFC First Loan against property

• Apply for the loan online at the bank’s website
• Speak to their Relationship Manager
• Application verification by the bank
• Loan amount disbursed to your account
  

Documents you’ll need for getting IDFC First Loan against property

General documents for all:

• Photo Id (any one): Passport, Driver license, Voter ID, PAN Card, Aadhar card
• Address proof (any one self-attested): Driver’s license, Ration card, passport, electricity bill, bank account statement, telephone bill, Aadhar card, Property purchase agreement
• Income proof (any one self-attested): 2 month’s salary slip, Last 6 month’s bank statement showing salary credit, Last year ITR showing income or Form 16

Property proof

• NOC from the concerned society and related documents
• Possession letter
• Copy of original sale deed

Types of Mortgage Loans - 6 Types of Mortgages in India

In India, you get as many as 6 types of mortgages. Under the Section 58a of Transfer of Property Act of 1882, definition of a mortgage stands as an immovable property transfer of ownership to secure the payment of funds against it, creating a mortgage loan line of credit.

Without further ado, here are the various types of mortgages you can get in India.
6 types of mortgages in India

Simple mortgage

In this mortgage type, you keep an immovable property as a house as security in order to get a loan. The bank or lender retains all rights to sell off the property if you can’t repay.

Usufructuary mortgage

In this type of mortgage loan, the lender is transferred the immovable property without creating a personal liability on you, the borrower.

English mortgage

In this type, the borrower has to shoulder a personal liability. The mortgaged property is transferred on the condition that you can recover the property after successful repayment.

Mortgage by conditional sale

In this type, the borrower sells off the property with the legal terms that the sale becomes effective if he or she cannot repay the loan. However, if the repayment is successful, the sale becomes void.

Mortgage by title deed deposit

In this type, you deposit the property’s title deed as security and mortgage against the loan.

Anomalous mortgage

Any mortgage that does not come within the divisions above fall under Anomalous mortgage.

Mortgage loans generally include all of the following:

• Home loan
• Loan against residential property
• Loan against commercial property
• Land purchase loan
• Lease rental discounting
• Loan to buy another commercial property
  

How do Credit Card Companies Make Money?

Ever wondered how credit card companies made their money? If you have and yet have not found the answer, you’re going to love this article.

Credit card companies make most of their money from credit card interest, transaction fees from merchant businesses, and the annual fees paid by cardholders. Even though there is a huge growth of Mobile Wallet apps and Fintech star-ups, many people still wonder if credit card companies still make enough money. Why are some credit cards interest-free while others hand an annual interest?

Which parties are involved in a Credit Card transaction?

• Credit card holder and the card merchant: Both of these parties are a source of revenue.
• Card issuing bank: This is the entity which issues the card in the first place. It gives a loan or a line of credit to the customer. The acquiring bank and the issuing bank share all liabilities in case of non-payment of loan.
• Acquiring bank: It focuses on making payments to the concerned merchant. Acquiring banks keep in contact with merchants and request them to accept the concerned card.
• Payment network: These include payment networks and payment gateways like Visa, MasterCard, American Express, and etc. The link is both acquiring and issuing banks. Such banks have a relationship with the payment networks, and not with one another.

So what happens when you use your credit card?

On using your credit card, the money is moved automatically and electronically through the card’s network to the merchant’s bank. The payment network ensures that the transaction is from the actual cardholder in order for you to be billed.
Sources of revenue for the card issuer bank

• Interchange fees: Each time you use a credit card, the merchant gives a processing fee which is equal to the transaction’s percentage. Interchange is that part of the fee which is sent to the issuer bank through the payment network. This is around 1% and 4% of the actual transaction.
• Late payment fees and revolving interest charges: You’ll be surprised to know how many users do not pay their credit card bills on time each month. Where do you thing the late fees and penalties go to? The bank that issues the card, of course! Late payment interest is from 1.75% to 4% per month.
• Annual and renewal charges: Some cards have these charges, and they go to the issuer bank.
• Foreign transaction fees: This goes to the issuer bank as well.

The Issuer bank also gets Cash Advance fees, Balance transfer fees, conversion of Outstanding EMIs to easy EMIs, revenue from reward points redemption, commission from 3rd party product sale, various marketing revenues, card replacement fees, additional card issuance fees, and more!
Revenue sources enjoyed by the Acquiring Bank

These are:

• Acquirer fees: This is the commission taken from the MDR for the bank’s role in the payment settlement.
• PoS terminals: These are given to merchants by banks at a cost. In India, the cost is between Rs. 8000 and Rs. 12000 for one terminal. This is the only one-time fee. After that, the merchant is charged for every transaction.
• Merchant Settlement Cycle Interest: All the transactions carried out at a merchant PoS are settled by the Acquiring Bank. The money which remains with the bank is invested in bonds and short term investment funds for interest.
  

Revenue sources for the payment network

The payment network gets revenue when you make transactions too.

It earns from its:

• Service revenues: This is earned from giving support services to financial institution clients for delivering Visa-branded payment solutions and products.
• Data processing revenues: Payment networks get revenue for authorizing, settlements, clearing, and network access and for giving support services to facilitate information and transaction processing.
• International transaction: Payment networks get revenue from here as well.

What is the Difference Between Index Funds and Mutual Funds?

If you are confused between mutual funds and index funds, don’t be. You’re not alone in making this mistake. In fact, a lot of people make this mistake. Some know there is a difference, but cannot pinpoint it out. To others, the two terms are synonymous. Yet others think mutual funds are a fund’s structure and an index fund is the fund’s investment strategy.

The truth is that many index funds are actually structured just like mutual funds, but not all index funds are structured like this. There are many mutual funds that are actually index funds. While an index fund points to a fund that follows a specific market index, a mutual fund refers to a much broader class of investments that have to follow a wider range of strategies.

Sounds confusing? Well, it is. We’re not going to blame you!

In this article, we will show you the differences and similarities between index and mutual funds.

What is a mutual fund?

When you hear of a mutual fund, know that the name refers to the fund’s structure more than the strategy of investment. Mutual funds combine the funds of its investors who pool their money mutually to buy and sell various market securities.

Investing in this type of fund is not about trading shares of companies held by mutual funds. Rather it is about buying and selling shares of the mutual fund company itself. The mutual fund investors buy and sell their stakes at prices set at the very end of the trading session. Value of these funds do not fluctuate over the trading session.

What is an index fund?

Index funds refer to a fund’s investment strategy and not the structure. Such funds aim to match a market index’s performance. Index funds are not managed by a fund manager. This fund seeks not to beat the market but to match the market’s performance.

These funds can be structured like a mutual fund or even as an Exchange Traded Fund. Unlike mutual funds though, ETF values fluctuate over a trading session. While mutual fund investors do business with the fund company itself, investors of the ETF do business with other investors in buying and selling shares of the ETF.
What are its differences?

Apart from the differences mentioned above, there are three other more important differences between index and mutual funds. These are the differences that determine all essential decisions about goals, holdings and cost of investing of each fund.

Active and Passive

Most mutual funds are actively managed, but not all. Active management involves the fund manager taking daily and even hourly trading decisions.

Index Funds take a passive approach. These are not managed by a manager since these follow a market index automatically. The aim of index funds is to buy and hold securities which coincide with the following index. Thus, there is no need to buy and sell such securities on a regular basis.

As there is no fund manager for an Index Fund, its performance is based on the price movement of its own shares. In an active mutual fund however the fund managers take all the decisions. They are free to pick securities that meet the objectives and character of the fund.

People debate which is better: the passive approach or the active management approach. However, according to the SP indices, active funds do not necessarily give better results.

Goals

The second difference has to do with the goals of these funds. In Index funds, it is easier to mirror the performance of a market Index. In mutual funds, the main objective is to perform better than the market. These select investments which have a high likelihood of bringing a higher return than the market.

Costs

The cost of running an actively managed mutual fund, or any fund for that matter, is higher. There are many expenses like a fund manager’s salary, office space, bonuses, operating and marketing expenses, and more. These costs are shared and absorbed by shareholders in the Mutual Fund Expense Ratio fee.

There are fees in an index fund too although the cost of running is much lower.

The lower a fund’s management fees is, the more you can get in return in return.

Wealth Management vs Portfolio Management

Wealth management, consulting services, advisory services, and portfolio management are sometimes, wrongly, thought to be different words for the same thing. However, these are considerably different once you get to know them.

If you want to get such a service, it is important to know about all of these so you don’t end up getting the wrong service! For instance, a wealth management service won’t help you in managing your financial portfolio.

So, let us now look at these three separately.

Wealth management

You many have heard that 50-60% of the world’s wealth is held by the top 1-5%. That’s very true. The problem is that even the rich cannot handle all their wealth by themselves. There is just so much to handle! Thus, they need the help of a wealth manager.

Wealth manager caters to all your financial requirements. These services are typically taken by high net-worth people, small businesses, and family businesses. Wealth managers therefore determine your financial needs, your risk appetite, and then develop a suitable plan. The focus is to maximize your current wealth.

Wealth managers work with bankers, lawyers and attorneys to fulfil those tasks given by their clients. They study various financial products, pick the best and allocate their client’s wealth accordingly.

Wealth managers...

• Buy, keep and sell off investments depending on market performance and activities
• Undertake fund hedging activities
• Focus on real estate related activities and new investment ventures
• Handle client’s international assets
• Address long and short term requirements of the client
• Planning the client’s will
• Planning philanthropic and retirement planning for client
• Manage client’s taxes

Portfolio management

Portfolio management has a much narrower scope than wealth management. It is concerned with helping you pick the best financial product and creating a strong portfolio. In short, it caters to caring for your investments and protecting them. Factors that are important in portfolio management are your objectives, your age, your risk appetite, and other factors. Your designated funds are allocated over various investment avenues. Portfolio management services aid in diversifying and rebalancing your investments when you so need.

Consultancy and advisory services

These are specialist services. When you have problems with business such as those involving expansion, mergers and acquisitions, you need this type of service.

What about the risk factor?

There is risk in all of these services. Some less than in others, but there is always a risk. But now, you do know which service to go for when the appropriate problem arises.

6 Best Tips To Managing Your Money in a Career Transition - mymoneykarma

It is never a good thing to be stuck in a job or career stream you no longer love. Maybe your professional growth is stalled or maybe you just want to change into another career stream of your choice. At such points of time, changing your career may seem like a no-brainer, and yet you still need to get your finances your order before doing so.

For instance, this will be a grave mistake if you make such a huge transition without having an emergency fund on hand. A career change can easily disrupt your finances. If you’re not careful, you may have to settle for a low-paying job in an industry sector you loathe while having considerable expenses on top of that.

In this article, we are going to show you that it is easy to make such a transition.

Here’s how to do it!

1. Set a realistic but ambitious expectation about your next paycheck: Most people change careers for the money or paycheck. Yes, you do want your dream job in a fantastic company, but keep it realistic. For instance, you want your dream job, but do you have any plans for achieving it? Making castles in the air can be very harmful, especially when changing jobs.
   
   Know what salary you’ll be asking for in your next job interview. What is the existing salary level for the position you are applying for? Do you have the skill the position asks for? At this point, you also have to think whether you’ll be able to handle making the transition. You may not find a job for a couple months. Can you financially handle that?
   
   
2. Start living according to your new salary: If your new salary is less than what you were making, it means you have to readjust your finances. Thus, right from day one, you need to make small steps right from day one. For instance, you have to make a budget based on the new salary. You might not be able to make the same expenses you are used to.
   
   
3. Make a career change a part time job: Making a career change is not just a big decision, but it takes considerable time. It does not happen overnight, but that’s a good thing. You get enough time to prepare for a new role. You can make the transition easier by knowing which certifications and training you need for the new role.
   
   You can pursue these after your current job or over the weekend, whatever works for you. If the new position requires some experience, you can gain that with part-time gigs and internships.
   
   
4. You may miss a few month’s salary: You may miss a few cheques so be ready for that. So before you actually quit your current job, find out how much savings you really have. If you can’t find a job even after a couple of months, can your savings carry you through this transition phase? You have to plan this ahead. You don’t want to be caught by surprise, end up spending all your money and having to take a high-interest loan.
   
   
5. Make sure you have your own health insurance: When you quit your current job, you may also be forfeiting employer-given benefits like health insurance. This is why you need to get your own health insurance, no matter if your new employer gives you one or not. It will be of much use in case there is a sudden medical emergency.
   
   
6. Build a strong network: While waiting to make the switch, why not use the time to build a professional network of people who can help you in making the transition. Connect with industry leaders for their advice.

Compound Interest and Its Benefits - 3 ways to get the most out of Compound Interest

What is Compounding or Compound Interest? What’s so great about it such that even one of the greatest minds on the planet sang its praises?

Don’t worry. It is not rocket science, and once you understand it, you'll know how it helps you save and even earn passive income. That’s right, passive income: the income you make while you sleep.

Compounding means getting an increase on the value of your investment due to interest earned as well as on the accumulated interest.

Compound interest actually means earning interest on interest. What happens is this: each time you get interest on the principal amount, this interest is added back to the original existing amount. This in turn becomes your principal. This goes on and on, and thus, you keep on earning more every time. In a way, it is passive income.

Consider a snowball rolling down the side of a mountain. At first, the snowball is nothing to worry about. But as it rolls down, it accumulates additional snow and ice. It gets bigger and bigger the more it rolls down. Compound interest is like that.

In compound interest, the interest is earned on both the interest and on the principal previously accumulated. This repeats itself, which enables you to get much more value at investment’s maturity.

Now that you know and understand the basics, it is time to learn about…
3 ways to get the most out of Compound Interest

You know the basics of how compounding works. Great!

It is now time to learn about how to use it to your best advantage.

The three rules are:
Understanding compound interest smartly

It is important to understand how it works because it can backfire pretty easily. If you don’t understand how your savings grow, it can make your credit or loans grow in the same way. That means unless you are careful, your loans and credit card debt can accumulate compound interest, which means you’ll have to pay a huge amount to close such loans and credits.

For example, you borrow Rs. 1000. In time, the amount increases, which means you’ll have to pay more than the original amount to close your loan.

This is why it’s so important to control all your credits, loans and borrowings. The best thing to do is to pay back as soon as you can.
Longer is better

When it comes to compound interest, longer is better.

This means the longer your investment is, the more your returns you’ll get. A lot of people start withdrawing money as soon as the first batch of interest comes down. Had they understood the concept of compound interest, they would not have done that. If you are still tempted to take out money from your account, we do advise that you keep your investments for the longest period of time possible.

Additionally, you should start saving as early as you can. For instance, if you start investing from the age of 20, and if a friend of yours started investing at 30, you have more time to benefit from.

Education Loan Against Property - What is Education Loan Against Property

If you have graduated recently and want to study abroad, you may already be thinking about getting an education loan. Education loans take care of all or most of your studies abroad. However, with more and more people each year asking for such loans every year, banks may not be able to give you an education loan on time. You may not meet all the lender’s criteria either, which may deter you as well.

So, if you are unable to get a traditional education loan, is that the end of your dreams of studying abroad?

Not at all!

You can now get an education against your property. This is a loan against a property, and is thus a secured loan. And that means a comparatively lower interest rate too!

If this is the first time you are hearing about education loans against property, or if you want to know more about it, then this article is for you.

Collateral education loans

Collateral education loan is the broad umbrella term under which we have several types such as education loan against property. Under collateral education loans, you can keep various forms of properties as security.

Which banks offer Collateral Education Loan?

You can get collateral education loans from various government banks like Bank of Baroda and SBI. You can also pick NBFC, but we advise this only if the collateral is of a lower value compared to the actual amount of loan needed.

How much Collateral Education Loan amount can you get?

You can get anywhere between Rs. 10 lakhs to Rs. 1.5 crore. As for the interest rate, it is between 9.4% and 10.3%.

Types of collateral

There are several types of collateral which you can mortgage to get an education loan for foreign education.

Immovable property

If you have an independent house, land or flat, you can keep those as security. You may also give non-agricultural land which has a clear and defined boundary. However, you can’t use agricultural lands. For all of these, you need to submit copies of the required property documents. Remember that there shall be a collateral margin, which means that the loan’s value won’t be the same as the property’s value.

Liquid securities

These include your LICs or Life Insurance Policies, your FDs or Fixed Deposits, Securities, and Government Bonds. These can be easily converted into cash when needed, and the good news is that these require no collateral margin. You can take education loans on your current FD and even make a new FD just for this need. The only thing you should ensure is that the education loan should be with the same bank where you have the FD.

Third-party collateral education loan

In this type, the collateral can be anyone’s property. It can be of your family, friends and others. However, most lenders may deny this type.

Why should you start getting an education loan process early on?

It is preferable to begin your loan application process before you get an admission letter. Firstly, the property valuation and legal report can be done early and that will increase your chances of getting the loan. The valuation report has a 3 months to 3 years validity period.

There will be lots of time to arrange documents for the concerned property or land. This boosts your chances of getting your loan sanctioned ahead of the visa interview date.

Should You Get Home Warranty? - What are Home Warranties ?

One of the biggest changes in life comes when you transition from renting a home to owning a home. When you own a home, your responsibilities increase manifold. For instance, if your dishwasher needs repair, or if there is a steep power bill for the month, only you will have to take care of it all.

One way to get out of this mess and tension is through a home warranty service.

Basically, you pay a home warranty services company a monthly fee, and if something breaks, the company shall fix it at no extra charge. There are several such companies in India now.

But the question remains: is the service really worth the money?

Well, it depends on the company you end up going to. If you do your research, then the service can be totally worth it.

What really is a Home Warranty Service?

This is a type of service which pays to cover the cost of repairs at your home. If an appliance stops working or if a system breaks down, they will be repaired.

However, this is a subscription service. You pay them a certain amount each month and if something goes wrong at home, they repair it at no extra cost.

Many such companies have a number of subscription plans or tiers. Thus, if you want more services or choices, you get a higher subscription plan. Some items these companies can repair are:

• Fridge
• Dishwasher
• Dryer and washer
• Electrical system
• Plumbing systems
• HVAC
  

If you do want to get a home warranty, you have a monthly or yearly premium. If the above-mentioned items need repairing, the company will do so. They shall give the service no matter how many times a month they need repairing, just as there can be months there shall no need for their service. However, there can be times when an appliance cannot be repaired at all. At such times, a replacement shall be recommended. Another thing to know that how many instances of service you can get depends on your subscription.

How much does a home warranty cost?

This depends on the size of your home, on the company home warranty service company, on your subscription plan, on your appliances, and etc. There shall be monthly and yearly plans, and these shall depend from company to company.

Are they worth it?

Lots of people take this service because of the added security cover and peace of mind. Indeed, one remains at peace if you know that in case of system or device malfunction, help shall be at hand. Without such a service, one may have to give many thousands to repair or replacement. A home warranty typically pays for itself if even just one major appliance breaks down.

However, it is important to take the service of the right company. There are instances of people paying premium or months and years, only to not get the service when time comes for repairing. That is when they find out that the company’s terms are different from what they thought.

If you are still interested in getting a home warranty, be sure to do your homework. Contact different companies. Ask about their plans and premiums before picking one. Also check their online reviews from both their own websites and on independent sites.

How to Increase Home Loan Eligibility?

Thinking about buying the dream home for your family? If you are, then this article will be of much use to you.

Buying a property involves a lot of money, and thus it is an important decision in anyone’s life. There are so many arrangements to be made. There are just as many contacts to get in touch with and adjustments to be made in the final deal.

Most of the time it does happen that the dream home one desires is in reality out of one’s reach. It is at such junctures that you have to make an important decision. Do you want to go ahead and still make that expensive purchase, or opt out to save money for something else?

Before you begin the application process, assess your eligibility factor. By now, you may have already finalized on a lender. If so, you also know the eligibility factors. If so, do you meet those factors? If yes, great! If not, don’t apply yet. Instead take the time to increase your eligibility criteria.

When you apply, the lender shall assess your ability to repay the loan within a stipulated time frame.

What is home loan eligibility?

This is defined as the maximum money you can get as a loan, and it is based on several criteria like your current level and sources of income, age, repayment capacity, credit score and other factors.

In this article, we will show you several ways that you can use to boost your home loan eligibility without any problem.

Clear out your current loans

If you still have existing loans, you may want to repay those first. This is because otherwise it can be harder for you to manage repayment of all the loans. Your prospective lender knows this, and that if you have multiple loans already it becomes risky for the lender if you are not able to repay.

Thus, there are increased chances of your application being rejected. It is better if you close all current loans before getting a new one. And don’t forget to get a No-Due certificate and get this updated in your credit report.

Increase the loan tenure

Increasing the loan tenure means you’ll be repaying the loan over time. This makes things easier for you, and by extension, it makes it easier for the lender. When you pay over a longer period of time, your EMI amounts go down. And that makes it easier for you to repay. If you choose to get a longer tenure, you are more likely to get the loan since it means there is less risk for the lender. However, do understand that having a longer tenure means giving more interest to the bank or lender.

Keep your Fixed Obligation to Income Ratio to below 40%

Fixed Obligation to Income Ratio or FOIR is that part of your income that goes into repaying loans. FOIR therefore is an important component for determining your eligibility.

The higher your FOIR is, the less chances you have of getting the loan. Thus, you need to keep the FOIR percentage lower than 40%. This boosts your chances of getting the home loan.

Get a strong credit report

To get most loans, you need a strong credit report, which means the credit score needs to be high enough. While most banks have a specific criteria for credit scores, it is generally agreed that you need to have a score of more than 750. The nearer it is to 900 the more are your chances of getting the loan of your choice.

Choose a joint home loan

Want to make it easier for yourself to get the home loan? Opt for a joint home loan. When you do this, another person is the co-applicant and thus the co-guarantor. In case you can’t repay for some reason, the other person will have to repay. Opting for a joint home loan makes it easier for you to get the loan since it is seen as less risky by lenders.

Consider additional income sources

Finally, you may want to get an additional source of income, or maybe boost your income level from your current sources. The more income avenues you have and the higher your income level is, the more chances you have of getting a home loan.

After applying all these tips, you have more chances of getting the home loan.

Repaying Debt with Unsteady Income

Most content on the internet on debt repayments are based on the presumption that the borrower has a constant source of income. For one who does have a constant source of income, it can be quite easy to clear of debts sooner.

But that of a person who does not have a constant source of income? Such a person can be one who depends on commissions or one who is self-employed and thus has an unsteady income. How can such a person clear all debts in time? 

Budgeting can be pretty tough when you don’t have a regular income source. You have to meet all regular expenses while having to save for the future at the same time! If you have to do these with irregular income, imagine the chaos that can follow.

However, it is not impossible. It just needs discipline and a different approach for paying off outstanding dues. 

Here are some ways to pay off dues when you have an irregular income. 

1. Build an emergency fund: The very first thing you need to do is to build an emergency fund. It may seem hard when you have limited money and irregular income, but doing so will help you in the long run. Besides, you don’t have to keep a huge portion of your income in an emergency fund. Just make it a habit and start building that fund. It will help you when you have no incoming income.
2. Manage your money closely: When you have a steady income, it is easier to manage your money. With an irregular income, you need to keep a closer eye on income and expenses. This will help you to manage your money more efficiently.
3. Be jealous when spending money: There will be times when you start getting a lot of income. But don’t splurge at this time. This is the time when you need to save the excess income, or at least spend only what you absolutely need. You can keep the excess income in your emergency fund. 
4. Get and keep a good credit score: This one’s very important. You need to maintain a good credit score in case you really need credit cards and loans. One easy way to increase the score is to take on small loans which you know you can repay easily. This increases your credit score.

Whether you have an irregular income or not, you require a long-term strategy for clearing debts and increasing your wealth.

Passive Income Streams - Best Passive Income Streams

There are several ways to create a passive income stream. You can sell your time to generate revenue in the capacity of a freelancer or consultant, you can build a training course and then sell it to enjoy passive income, invest in the share market and enjoy money coming in over the years, and etc.

As the same says, passive income is just that: passive. Ideally, it’s like a fire-and-forget missile. You invest capital into something once, and then sell it over time to get increasing revenue.

In this article, we are going to give you several income ideas which anyone can do, apart from the first two points which are not exactly “passive”. Creator of passive income ideas, just like stock market investors, count on a long-term expected return on investment.

1. Stock market: There is no shortage of ways of investing in the stock market. However, if this is completely new to you, you may not want to invest in the stock market anyways. Investing in ETFs or Exchange Traded Funds can be an easy way of getting into the stock market. Through ETFs, you can diversify your funds across several companies. You need a brokerage account to buy ETFs.
   
   
2. Bonds: With an interactive brokerage account, you can buy bonds as well. These give you a fixed passive income. Besides, these involve much less risk and give you typical yields of 2%. Investing in bonds is seen as a risk-free way of investing. However, if you factor in inflation, your actual returns can become 0.
   
   
3. Finance consumer loans: Consumer loans are quite popular now since you get an ROI of greater than 10%. There are many consumer loan platforms. The downside is that these come with much higher risks too since these involve peer-to-peer lending. Additionally, it is hard to say how market fluctuations would affect consumer loans.
   
   
4. Become a landlord: This is one of the oldest ways of generating recurring and passive revenue. If you have land or a property, you can rent it out to one or more tenants. This shall give you a steady income as rent. There is another benefit here as well. Your property’s value will only go up in time. One of the many ways to improve your ROI is to leverage a low-interest mortgage.
   
   
5. Purchase solar cells and sell electricity: This one is pretty interesting and yet viable at the same time. It does require a bit of capital investment in the beginning, and alternative investments like this are not easy to find. In this business, you can buy solar cells and then lease them to customers. The customers use its electricity and return the cells.
   
   
6. Lend to small business: One of the easiest ways is to invest or lend in small companies. These companies are always looking for capital. If you can lend to them at moderate interest rates, you can make a good living.
   
   
7. Real estate development projects: If you don’t like the idea of being a landlord, then you can lend to real estate development projects and still earn a nice passive income. However, it depends on the success of the real estate project. Know that these projects take years and have considerable risk as well.

How do Credit Card Companies Make Money?

Credit card companies make most of their money from credit card interest, transaction fees from merchant businesses, and the annual fees paid by cardholders. Even though there is a huge growth of Mobile Wallet apps and Fintech star-ups, many people still wonder if credit card companies still make enough money. Why are some credit cards interest-free while others hand an annual interest?

Which parties are involved in a Credit Card transaction?

1. Credit card holder and the card merchant: Both of these parties are a source of revenue.

2. Card issuing bank: This is the entity which issues the card in the first place. It gives a loan or a line of credit to the customer. The acquiring bank and the issuing bank share all liabilities in case of non-payment of loan.

3. Acquiring bank: It focuses on making payments to the concerned merchant. Acquiring banks keep in contact with merchants and request them to accept the concerned card. 

4. Payment network: These include payment networks and payment gateways like Visa, MasterCard, American Express, and etc. The link is both acquiring and issuing banks. Such banks have a relationship with the payment networks, and not with one another. 

So what happens when you use your credit card? 

On using your credit card, the money is moved automatically and electronically through the card’s network to the merchant’s bank. The payment network ensures that the transaction is from the actual cardholder in order for you to be billed.

Sources of revenue for the card issuer bank

1. Interchange fees: Each time you use a credit card, the merchant gives a processing fee which is equal to the transaction’s percentage. Interchange is that part of the fee which is sent to the issuer bank through the payment network. This is around 1% and 4% of the actual transaction.

2. Late payment fees and revolving interest charges: You’ll be surprised to know how many users do not pay their credit card bills on time each month. Where do you thing the late fees and penalties go to? The bank that issues the card, of course! Late payment interest is from 1.75% to 4% per month.

3. Annual and renewal charges: Some cards have these charges, and they go to the issuer bank.

4. Foreign transaction fees: This goes to the issuer bank as well.

The Issuer bank also gets Cash Advance fees, Balance transfer fees, conversion of Outstanding EMIs to easy EMIs, revenue from reward points redemption, commission from 3rd party product sale, various marketing revenues, card replacement fees, additional card issuance fees, and more!

Revenue sources enjoyed by the Acquiring Bank

These are: 

1. Acquirer fees: This is the commission taken from the MDR for the bank’s role in the payment settlement.

2. PoS terminals: These are given to merchants by banks at a cost. In India, the cost is between Rs. 8000 and Rs. 12000 for one terminal. This is the only one-time fee. After that, the merchant is charged for every transaction. 

3. Merchant Settlement Cycle Interest: All the transactions carried out at a merchant PoS are settled by the Acquiring Bank. The money which remains with the bank is invested in bonds and short term investment funds for interest.

Revenue sources for the payment network

The payment network gets revenue when you make transactions too.

It earns from its: 

1. Service revenues: This is earned from giving support services to financial institution clients for delivering Visa-branded payment solutions and products.

2. Data processing revenues: Payment networks get revenue for authorizing, settlements, clearing, and network access and for giving support services to facilitate information and transaction processing.

3. International transaction: Payment networks get revenue from here as well.