How to Reduce Credit Card Interest Rate - Credit Card Interest Rate

mymoneykarma is here to provide you with all the tips necessary to reduce your credit card interest rates.

Let's now look at the different ways to do so:
1. Evaluate Your Current Situation

Before jumping the gun, it is essential to review and thoroughly evaluate your prevailing financial situation. Specific information, like knowing your current credit card terms, grace period, statement due date, credit balance, and outstanding, will help you to evaluate your situation better.

Most importantly, don't forget to check your credit score. A good credit score will propel the willingness of credit card companies to attend to your requests.
2. First, Build Your Credit Score

A healthy credit score will help establish your credibility to the credit card company. Therefore, if your credit score is less than optimal, you would have to build your credit health to look more creditworthy.

Keeping your credit utilization rate at 30% or less, or even keeping a positive payment history will boost your chances of getting a lower interest rate.

Note that recurring late payments will also ruin your credit score and increase the chance of denial or cancellation of credit card or loan applications in the future. Reviewing your credit report at least once a year for accuracy would help you to identify errors,giving you a chance to correct them promptly.
3. Venture out for Competitors and Their Rates

Credit card companies and banks are continually hustling to acquire more customers, which gives you the leverage to venture out to find competitive interest rates. Before venturing out, do your research to make an informed decision.

Over the internet, there are quite many tools which can help you compare rates across different lenders to take a better choice. After comparing, you can approach your credit card company to lower your credit card interest rates.

Alternatively, you can also contact mymoneykarma to help you out with finding the right credit card interest rates for you.
4. Call, Greet, and Meet to Lower Rates

Getting your interest rates lowered will definitely help you deal with your financial debt in a better way. Once you have made up your mind, you can negotiate with the bank customer executive to lower your rates.

Calling, greeting, and meeting your bank customer executive can help you to achieve lower credit card interest rates. Besides, a good credit score will always act as an anchor, establishing yourself as a calculated person and diminishing their doubts.
5. Stress on the Solution

Let the representative of your bank know about your issue, be it temporary or permanent. This should help you sort out your credit issues by laying them out in the clear.

However, you would also have to assure the bank executives that you are willing to improve your financial situation, and that lowering the credit card interest rates would help you to deal with the debt quickly.
6.  Speak with the Supervisor

Generally, customer service representatives don't have the power to modify an account or reduce interest rates. However, their direct supervisor will ideally have authority. If you have a solid reason to back your demand, it won't be that difficult to get yourself a lower credit card interest rate.
7. 2Ps - Politeness and Patience

While engaging in discussions to lower your interest rates, try keeping your stress and impatience at bay. Asking questions is not wrong, but keeping your cool and being polite and courteous is key to sealing the deal. On the other hand, being a nasty customer will surely rid you of your chances of lowering the  interest rates.

8 Benefits of Opening Multiple Bank Accounts - Multiple Bank Accounts

 Nowadays, many people are opening multiple bank accounts due to various reasons, be it a job switch or for business purposes. However, the fundamental benefits of having multiple savings accounts are still in question. So, let's delve deep into the matter and discover some of the advantages that opening multiple bank accounts can have.

Save Money for Various Short-Term Goals

Often, when all you have is a salary account, it gets difficult to actually save money. Having an additional account can be of real help in this regard.  You can assign a goal to each account that you have and deposit money in them accordingly. Let’s discuss this with an instance - Say you are a travel enthusiast and wish to go on a foreign trip every year. So, you can open an account dedicated to that purpose and save a certain amount of money in it every month. Multiple bank accounts can thus help you save money diligently for short-term goals; however, make sure that you use the second account only for storing money, and keep yourself from withdrawing it unless entirely unavoidable.
Open Multiple Need-Based Accounts to Track Your Money

Nowadays, the government offers several services to different sections of people, under which you could get a subsidy in your account. For example - Under the Direct Benefit Transfer (DBT) scheme, the government transfers money as subsidies for LPG gas directly into your savings bank account if you come under a certain bracket, and there are around 400 more such schemes. Hence, it is beneficial to have a separate account for these subsidies. Likewise, you can have a separate account linked with your income tax returns, where you can receive refunds as and when applicable for you. If you are a pensioner, then it is better if you receive your pension in a dedicated account, as it makes tracking the funds easy.

Thus, it can be advantageous for you to maintain multiple bank accounts based on your different needs.
Keep Your Options Open

Having multiple bank accounts could also help you get through certain unforeseen circumstances. In case you face technical difficulties during a transaction from one of your bank accounts, you can always fall back on another account of yours to get it done. This can prove to be helpful especially in case of emergencies, and you will not be left without any options when you hit an unexpected roadblock.
Create an Emergency Fund

Dedicate an account exclusively to saving for an emergency. At the start of every month, transfer a specific amount of money to this account through a standing instruction to your salary account. An emergency fund will help you sail through tough times by providing you with a financial cushion at times of need.
Avail Different Perks from Multiple Banks

Different banks in India offer distinct interest rates and perks. Having multiple bank accounts gives you access to the best of such benefits. Holding a savings account in one bank and maintaining a good relationship with it could help you in availing a home loan with relative ease. Whereas, some other banks may offer higher interest rates on savings accounts. You may be eligible for rewards, exclusive facilities, and bonuses at other banks. Thus, the sheer variety of benefits offered by different banks makes it a good idea for you to hold accounts in many of them.
Avoid ATM Transaction Charges

Banks allow five free transactions from their own ATMs and three from ATMs of other banks. After these eight transactions, the bank starts charging you if you use an ATM with the same debit card. However, if you hold debit cards of two bank accounts, then, you can make up to 16 free transactions in a month.  
Avail Free Cheque Books

Usually, a bank offers only one free checkbook in a year. If you request for another checkbook in that financial year, the bank will charge you. However, If you have two bank accounts, then you can avail of two free checkbooks in a year.
Increase Your Credit Card Limit

Nowadays, banks often offer a credit card when you open an account with them. So, if you have two different bank accounts and credit cards issued from both of them, then the amount of credit that you can use will increase.

7 Dangers of Owning Multiple Bank Accounts - Disadvantages of Multiple Bank

 Many people have multiple bank accounts nowadays, owing to one reason or another. It may be a good idea in some cases - if you are a businessman and your transactions are enormous, or if you have need-based accounts. However, there are certain cons of multiple bank accounts which you should consider before opening a new one.

Disadvantages of Multiple Bank Accounts
1. Service Charges

Are you aware that savings accounts are not free?  This means that you need to pay a few minimal charges for availing services such as debit cards, SMS alerts, ATM use, etc. Moreover, service charges for non-maintenance of monthly average balance alone can go up to Rs. 600 in banks like HDFC. Therefore, if you have multiple bank accounts, you will end up paying more service fees.
2. User ID and Password

If you have multiple bank accounts, then you will have to keep different user IDs and passwords for each bank's internet banking.  Imagine a situation where after every six months banks ask you to change your password for security reasons, and you have to do it for 3-4 accounts. Wouldn’t that be cumbersome for you? Even if you were to maintain a diary for jotting down the passwords or save them in a phone, is it really safe to do so? What if you lose your diary or mobile? These questions do a good job of reminding us that it is difficult to handle multiple bank accounts.
3. PIN

Holding multiple bank accounts means that you would have numerous debit cards. For each debit card, you require a different PIN. Now, imagine a situation where you lose your wallet, and you had four debit cards and two credit cards in it, which means that you are supposed to call at least four banks to block your debit cards. Even if you were to take the effort of keeping all your cards safe, It is also hard to keep track of many PINs at once. Therefore, to avoid such predicaments, it is better to not have multiple bank accounts.
4. Minimum Balance Maintenance

If you fail to maintain the average minimum balance in any of the accounts that you have, you will face penalties. The minimum balance starts from Rs.2000 and could be as high as Rs 1.5 lakh for some banks in urban areas. For others, it usually remains in the range of Rs 5,000-Rs 10,000. Hence, the more accounts you have, the more cash you would have to maintain a minimum balance in them. Let's discuss this with an instance - if you have an account each in PNB, SBI, and HDFC Bank, then you will be required to keep at least Rs 17,500 as minimum balance unless these are zero balance accounts. Your zero-balance salary accounts automatically get converted into regular savings accounts once you switch your job and get a new salary account. Then these accounts will also require minimum average balance maintenance.
5. Ineffective Use of Money

Maintaining a minimum balance in several accounts means that you lose the opportunity to use the same amount in lucrative investment instruments - FDs, mutual funds, and recurring deposits - where you could get higher returns as compared to the interest rates of savings accounts.
6. Misuse of Inactive Accounts

If you are not able to keep tabs on your accounts, you could possibly have a dormant savings account. Unscrupulous people may notice the dormancy of your account and find ways to misuse it, mainly if the savings account carries a balance. Also, you earn low-interest rates on inactive accounts.
7. Difficulty in Tax Filing

Having too many interests and income-generating accounts means that your paperwork will increase during tax filing. Gathering information and statements from multiple bank accounts at the time of filing IT returns is a cumbersome job; you may commit mistakes due to heavy paperwork, and it could cost you a considerable amount of money. However, consolidating your finances into one or two accounts can help in this regard.

Understanding your Personal Finances - Plan forward with an emergency fund

A lot of people think that personal finance is tough to learn and understand that that it is all about the numbers. However, we at mymoneykarma think that personal finance is just common sense! If you are stuck in a rut, remember that there are several tools online that can help you with number crunching. These help you with both simple and complex problems related to personal finance numbers.

If you really are stuck in a rut, or in confusion, remember that the goal of personal finances is to find out your financial goals, and where you want to go in the future. For instance, how much do you want to save? When you pen these thoughts down, you get a direction.

So, first of all, let us see how to get started.
How do you get started on your personal finance journey?

So how do you start on your personal finance journey? The very first thing to do is to learn about personal finance, of course! There’s a ton of resources available free on Google. However, you are likely to find information that is both confusing and contradicting. If that happens, reach out to professionals in this field.

One personal finance and financial planning mistake that people make is that they invest first, and learn by trial and error. It is all right getting the knowledge, but losing money in the process is not recommended. You can make mistakes that are irreversible and costly. Such mistakes such as delaying in good investment schemes can make you miss out on prime compound interest rates.

So here’s what you need to do: take out a pen and paper. Write down your assets on one side, and expenses and liabilities on the other. It’ll help you to plan ahead and budget.
Planning is almost all it takes

When you note down your assets, income, liabilities and expenses, you get a rough estimate on your money management and financial situation. Now, let’s say you want to buy something or invest in something, or even get a new loan. All of these depend on your unique circumstance. It depends on your state of finances, your life goals like marriage, aging parents, education of your kids, starting a business, and saving for your own retirement,

See the points above? Now, plot those according to the time and money needed. For instance, saving money for retirement is a long-term thing yet you do need to start saving money for that. So, how much are you saving for that? Also, remember that the more your income is, the more your lifestyle expenses tend to get.
Get realistic

So, how does all this information help you? It does, in many ways!

First of all, it gives you a real idea  of what you need to do, and what to plan for.

Secondly, it helps you to divide your life phases, and makes them more based on reality.
Think about inflation

Are you a homemaker, an employer, a company owner or an employee? When it comes to inflation, all that does not matter. Everyone gets affected. Taking care of inflation is one of the most important parts of anyone’s personal finance.

News media says that inflation is growing at 5% each year, but in reality it is much more than that. For instance, healthcare costs are growing by 15% to 20% each year while education costs are growing by 10% to 15% annually.
Plan forward with an emergency fund

Right now with the Covid-19 pandemic, a lot of financial experts are saying that it is so important to have an emergency fund. The problem is, it’s too late for that for many people. They did not keep an emergency fund and are now worried. Ideally, an emergency fund should be fed regularly. It can save you from a lot of things like a business loss, health problems, and even from problems related to your work. It’ll help you to sustain your family. Ideally, you should have a 6-month or 1-year’s worth of emergency fund. If you are an entrepreneur, this piggy bank needs to be larger.

Liabilities - What Are Liabilities?

Liability is really a fancy word or debt, or for something you owe. When you know the total liabilities you have, you can subtract your assets from this amount to find out your net worth. Finding out, and keeping track of your net worth is not just a one-time thing. You need to keep a tab on it throughout your life to have a healthy personal financial situation.

Know that liabilities are a part of your personal finance. Besides, these are not harmful as long as you keep them in check. Here is what you should know about liabilities.

What are the different types of liabilities?

As said above, liabilities are money you owe. This can be to a bank or to an individual lender. Liabilities take the form of loans. These can be short-term or long-term. Here are the examples of liabilities.

• Student loans
• Car loans or auto loans
• Mortgage
• Credit card balance
• Payday loans
• Unsecured loans
• Secured loans

As you can see, these can be of many types. Another popular type of loan which is doing the rounds right now is gold loan. This is very popular right now, and in high demand. Taking a gold loan is being encouraged right now, during the pandemic period.

Why do liabilities matter?

Liabilities matter because they tell how good or bad you are in money management. These tell about your financial missteps, and even stop you from growing or building assets. Having these in your life does not necessarily mean that you’re in an emergency situation financially. To understand these, you’ll need to look at the context.

The type of debt you have is important. There are some liabilities which can actually increase your net worth over a period of time. For instance, student loans may lead to a good education and a high paying job. On the other hand, buying things frequently with your credit card won’t have any effect on your net worth.

Liabilities only become a problem when they become more than your assets. What happens then is that you keep on losing money till your assets exceed liabilities once more. When liability is more, you get a negative net worth. It stops you from pursuing financial goals freely, and restricts you from saving for retirement, and building emergency funds.

What you need to pay attention to is both sides of the balance sheet, as well as to subtle changes. Don’t let your debts exceed assets. Ensure there is a plan in place as soon as possible. Also, start building assets.

Keep liabilities under control

If you are not happy with your liabilities, there are some things you can do. These include debt consolidation and tackling debts with highest interest rates first.

What is a Personal Loan ? - Apply for Instant Personal Loan

 Personal loans are quite a flexible form of loans, and can be taken for myriad reasons;  from meeting emergency expenses to meeting the expenses of your wedding to paying for a dream vacation. You can also use the money for buying a home or fueling your growing business.

In case of personal loans, lenders won’t ask many questions apart from your credit health, income, and some other details. So as long as your credit score is high, you have a good record of being creditworthy, and can provide proof of income to match the loan repayment plan, you should be able to get a personal loan easily.

Personal loans are unsecured loans, which means that you don’t need to provide any collaterals as security.

That might be all well and good, but you still need to have a good credit score.

Additionally, since it is an unsecured loan, your interest rate will be higher in comparison to other types of loans.
Types of Personal Loan

So, since you can get a personal loan, you can do anything you want with it, right?

The short answer: yes and no.

The long answer: you can do anything you want as long as it is legal.

When you apply for personal loans, the bank will still ask you for what purpose you’ll be using the money. If you say that you’ll use the funds for buying a new car, go on a vacation or pay for a marriage, it’ll be granted happily. But if you tell them that you want to use it to send suspicious items to a friend in the neighboring state, your loan will be denied.

Not all personal loan providers will ask you the reason though. But certain lenders do, just so you know.

Various types of personal loans can be availed from the lenders, such as:

1) Personal loans for weddings: Have a wedding round the corner but don’t have the funds to meet it? Is your would-be spouse adamant that you spend lavishly for her wedding? Maybe its time to take a personal loan for the wedding.

2) Personal loans for home renovation: Is your home in desperate need for a renovation? The years just flew and you never noticed. Or maybe it's for a special occasion round the corner? Whatever your need, a personal loan for home renovations is what you should look for.

3) Personal loan for vacations: Many people want to enjoy their life fully, right now. They don’t want to wait for tomorrow, or when they get too old. Makes sense, sort of. Anyways, for all that, they do need loans when their dream vacation is expensive. People nowadays don’t shirk from taking such loans to enjoy life to the full. Planning to take a vacation on an Euro trip?Ask for a personal loan for vacations.

4) Personal loan for pensioners: Pensioners need personal loans too. Fortunately for them, the interest rates are lower to make repayment easier with their limited savings and income.

5) Personal loan for festivals: Just like vacations and home renovation, this one is  becoming common too. Need to entertain guests with a huge party on Christmas? Ask for a personal loan for festivals!

But remember: personal loans come with an interest rate bigger than normal loans. Before applying, make sure that you are eligible for it. You don’t want to get rejected and see your credit score fall.
mymoneykarma makes pre-qualification easy! Just fill up this form on our website. We’ll show you all the personal loans you qualify for depending on your credit score and other details.

5 Tips To Know Before Getting Loans In 2020

 

One may need a loan for just about anything. It can be for children’s education, debt consolidation, marriage, car purchase, property purchase, equipment purchase, and more. It can be anything, and yet the fact remains that there is a great demand for loan right now. You may need money urgently, but lenders may not want to give you anything, for any reason.

To increase your chances of getting loans, here are a few tips:

Check the loan eligibility before applying: Here’s a big mistake many people make. They don’t see the lender’s eligibility criteria and apply for the loan. Some understand that they are not eligible, but apply anyway just to get a chance, which never comes by the way. It is simple. If you do not meet the criteria, you don’t get the money. Worse, it can harm your credit score too due to a loan enquiry and denial.

Check your credit score before applying: Lenders want your credit score beyond a certain level, without which your loan application stands to be denied. Your credit score is a measure of your credit worthiness and how trustworthy you are in repaying credit. Your credit is important as it is based on previous loans, income, assets, repayment behaviors, and more. The score needs to be at least 700 to be considered.

Don’t apply for too many loans at once: This is another big mistake people make in their desperation to get emergency money. They apply at too many places at the same time. This, however, lowers your credit score, and banks can even deny you loans if they come to know you are asking at multiple places.

Multiple applications mean multiple rejections, since it signifies lack of ability to repay the loan and lack of confidence. The best thing to do is to research about a few lenders and pick the one who suits you most.

Correct errors in your credit report: You can see your credit report free once a year, and the cost afterwards is negligible. Studying the report will let you come across any mistakes. Mistakes and misstatements affect your credit score, and therefore many things in your life. Therefore, take your time to study the report. If you find mistakes, inform the concerned credit bureau. It’ll correct your report.

In case of rejection, don’t apply before 6 months: This is a common mistake as well. Right after a loan application rejection, people apply for another. The problem? It lowers your credit score, which in turn makes it harder for you to get credit later on.

Top 6 Best Types of Loans you can Opt for during Hard Times

 Banks and other lenders do not wish to give out new loans right now. It is too risky for them. Thus, they are acting conservatively right now, and targeting only a limited segment of the population as their preferred customer segment. However, if you are in need of an emergency fund, help is at hand.
Loan against property

These loans are sanctioned against collaterals of residential, commercial and interest property. The interest rates of LAP starts from 8.95% on an average. But it does depend on the lender, the amount of loan, the lender’s credit profile and other things. The maximum tenure is 20 years. Amount of loan depends on property valuation and the borrower’s repayment capacity.
Gold Loan

Bank’s may not want to give traditional loans like personal loans right now, but they are very eager to give gold loans. Why? That’s because gold loans are secured loans. You can get gold loans within a few hours after you apply. The amount you get as a loan can be 75% of the gold value and the interest rate starts from 9%.
Digital top-up home loans

If you have existing home loans, you can choose digital top-up loans. These do not have any end use restriction. Another good thing is that interest rates are quite lower than other loan alternatives which you can get as an existing home loan customer. These are, additionally, available for a longer tenure depending on the tenure of residual loan of the borrower.
Loan against credit card

If you do have a credit card already, you can get pre-approved loans depending on the card type, repayments and spending pattern. When you take the loan, the credit limit will go down.
Covid-19 personal loans

Some banks are offering personal loans specifically for the Covid-19 situation. However, these are only for their existing customers only, those who have their salary accounts with it or have home loans or personal loans. They also need to have a strong repayment history. These loans have lower interest rates and do not have any processing fees either. While most loans have 3 year tenures, some banks do give 5 year tenures. Additionally, banks give a moratorium till 3 to 6 months, though customers need to pay the interest during the moratorium.
Pre-approved personal loans

Most, if not all, banks offer pre-approved personal loans to a few customers only, especially those who have been their customers for a long time. For such customers, loans are given fast, and there are no collateral requirements either.

5 Ways to Guarantee Loan Approval in these Tough Times

 Other loan products such as home loans have the same story. Try asking for a home loan now. Chances are getting one will be tough.

However, all this does not mean that you won’t get any form of loans.

Gold loans are doing quite well right now. Gold loan as a product is seeing its resurgence during this pandemic when all other forms of loans and lines of credit are not performing as before. During this time, the demand for gold loans has increased manifold. Another good news is that their interest rates are notably lower than other personal loans.

However, many people are still reluctant to give their gold to get a loan. In this article, we are going to tell you why despite RBI’s push, banks are still quite reluctant in lending out money, and what you can do to avoid a lender’s rejections.
Why are banks turning down loan applications?
Norms are more stringent now

From the beginning of this year, the RBI cut the repo rate several times. After such actions from the RBI, banks are now much more cautious of discounting higher NPAs.

Generally, loans are sanctioned based on income, age, secondary income sources, credit score and even location of employment. However, in this economic situation, banks have a higher level of scrutiny when choosing borrowers. There are now more stringent policies on income sources and repayment capacity. Right now, banks can’t afford bad loans and non-repayments. The same is true even in case of loans where there is collateral. Instead, banks are preferring employees of large companies, in the light of which self-employed individuals are finding it hard to get loans.

Even if you get the loan with security, the Loan to Value ratio will be moderate.
 

If you are a new borrower who has no credit history, you can bet your application will be rejected. After all, banks cannot yet trust your capacity to repay. Others who’ll suffer in this situation are those from industries like aviation, tourism and hospitality, and those who availed the RBI’s moratorium.
 
How to avoid loan application rejection

1. Pre-pay current loans ending in a few months: Banks are now more cautious, as we have seen. Under these circumstances, the best thing you can do is to pre-pay the last EMIs of current loans. Banks are now paying more heed to the FOIR parameter, or fixed obligation to income ratio. This means those loans which are about to close soon.

2. Importance of keeping an eye on your credit score and credit utilization rate: As before taking any loan, you need to keep your eyes more on these parameters now. You need a credit score of 700 and above if it’s a private bank. Your credit utilization rate needs to be around 30%. These shall help in clearing away all your credit card obligations.

3. Consider step-up loan: If you have just started your career, you know that down the line your income will increase, just like your EMI installment against the loan over a fixed tenure. This is what happens in case of a step-up loan.

4. Take a joint loan to increase loan eligibility: If the second applicant is a working professional, you have more chances of getting accepted.

5. Don’t apply for loans at too many lenders: Try secured loans like home loans instead. These have tie ups with mortgage guarantee companies. Applying at too many lenders makes your credit score go down.

If you use these 5 tips, you have more chances of getting your loan application accepted.

Bought A New Home? Here's How To Budget After That

 However, a new journey awaits you right after you pay the new property’s closing costs and have tipped the movers. As the new owner, you need to budget for it as well.
Basics of budgeting as a new homeowner

If you don’t know how to create a budget, we’ll help you out. Start with the 50/30/20 budgeting approach. It gives a good foundation. In this budget plan, 50% of your income goes to meeting your needs, 30% towards meeting your wants, and 20% towards repaying your debts and savings. Perhaps it’ll help to use a budget calculator and a budgeting app.

If you are not new to all this, start with the following.
Plan to meet the new regular expenses

You are already covering household expenses like water and power bills at your old home. However, there are other additional costs which come with being a new homeowner. These are beyond the mortgage payment and are exclusive to homeowners.

    Homeowners insurance and real estate taxes: These are generally included in your monthly mortgage payments. Even if you have a fixed-interest mortgage, it can fluctuate from one year to the next because of tax changes and homeowners insurance premium changes.

    Homeowners association: This is something that is becoming increasingly common as people buy properties in a planned neighborhood. These can cost quite a bit per year, so it’s important to save up for it.

    Home upkeep and maintenance: Repairs and upgrades at your new home can get expensive. Whether you are planning to stay here forever or to sell it at a higher price after some time, you need to keep spending on maintenance till then. Homeowners should keep aside 2% of their salaries per year to meet this. If the property is older, the charges shall be more.

Plan and save for big projects

It can be tough to plan for home maintenance expenses down the line. However, for this purpose, 1% to 2% of your annual salary and/or savings shall be enough. However, do remember, the more high value the repairs and upgrades are, the more you’ll have to pay. When you do your annual expense planning, think about the home renovation projects which are upcoming.
Revisit your LIC and savings

You may have a strong emergency fund already, along with a sound LIC and retirement account all in one place. But it is useful to review these from time to time, especially after buying the new home.

Travel Insurance - Why Should You Buy Travel Insurance?

 What is Travel Insurance?

Travel insurances are meant to protect people during trips. They typically cover medical expenses, trip cancellation costs, lost luggage, accidents and other losses incurred while traveling. They also provide coverage for legal liabilities and corresponding expenses. Usually, travel insurance can be purchased while booking a trip to cover the exact duration of that trip. Most travel insurance plans offer coverage for the following:

• Unexpected flight cancellation
• Loss of luggage
• A sudden need for prescribed medication
• Theft of wallet and passport
• Cancellation of the trip due to sickness
• Medical emergency in a foreign country
• Sudden evacuation due to natural calamities
• Personal Accident cover
• Trip cancellation due to terrorist activities at the destination

Travel insurances can be personalized to fit your specific purpose, but its main purpose is to give you the essential peace of mind required while you are out of your comfort zone and exploring the world. Let's look into why travel insurance is very often woth the cost.
Benefits of Travel Insurance

Medical Emergencies

During my trip to Singapore, I was overwhelmed by the spread of cuisines available there. Being a big foodie, I indulged in uncountable delicacies. I particularly overindulged in seafood. I woke up next morning in a terrible state - with severe diarrhea, high fever and feeling extremely nauseous. Self-medication didn't work, and my condition rapidly deteriorated. I had to be hospitalized and treated for food poisoning.

Apparently, the crab meat was the culprit. This little stint with crab meat cost me more than SG$1000, which converted to a whopping Rs.40,000 in Indian currency. My Indian health insurance didn't cover it. However, travel insurance could have spared me the horror of such a hefty expense. Sadly, I hadn't purchased one.

Best Health Insurance Policy For Parents - Challenges while Buying a Medi-claim Policy

 The Indian market is currently flooded with many options for senior citizens. There are several family floater healthcare plans specifically designed for senior citizens as well. So, which one should you choose? mymoneykarma provides you with a list of the best health insurance policies for parents.
Challenges while Buying a Medi-claim Policy

Just like getting a credit card when your credit score is low, purchasing a medi-claim policy for your parents can be tough. The options tend to be limited once your parents cross a certain age. You might also end up paying higher premiums and not get good deals from the insurance companies. Of course, you can avail further benefits by charging the premiums on your credit card, but that comes with issues of its own.

There is a silver lining, however. Many insurance providers are now coming up with attractive health insurance policies for people of ages 55 to 60. Many reputed companies such as Star Health and Bajaj Allianz have rolled out several plans, such as the Senior Citizen Red Carpet plan, that are customized for senior citizens. You can compare the features of different policies here and make a proper decision.
8 Best Health Insurance Policies for Your Parents
1. Star Health Red Carpet Plan

This policy covers citizens of up to 69 years of age. The sum that can be availed is from Rs. 1 lakh to Rs. 5 lakhs. The policy excludes diseases that have been treated 12 months before the inception of the plan, pre-existing diseases (within a waiting period of four months), and diseases occurring within a 30-day waiting period after the creation of the policy. The policy covers only 50% of the costs for a pre-existing illness. However, precursory medical tests are not a requirement.
2. Bajaj Allianz Silver Plan

This policy covers citizens of up to 75 years of age but can be renewed until they turn 80. The amount that can be availed is from Rs. 50,000 to Rs. 5 lakhs. The policy excludes pre-existing diseases that occur within a waiting period of four months, and any disease occurring within a 30-day waiting period  since the inception of the plan. It requires 10% copayment for treatment in non-network hospitals, 20% copayment if the person is 56 years old or above, and 20% copayment for the first treatment under the plan.
3. Apollo Munich Easy Health

This policy covers citizens of up to 60 years of age. The amount that can be availed is from Rs. 1 lakh to Rs. 10 lakhs. The policy excludes any critical illness diagnosed within 30 days of inception of the policy and pre-existing illnesses that occur before a waiting period of 3 years. However, it provides cashless coverage for the treatment of diseases that are not excluded as per the conditions mentioned above.
4. Maxbupa Heartbeat

This policy covers people of ages up to 50 years. The policy covers accidental injuries but excludes any illness diagnosed within 90 days of inception of the insurance plan. There is a waiting period of two years for some conditions to be covered under the plan. People above 65 years of age need to make a copayment of 20%. The policy also requires medical tests to be taken after the insured person reaches the age of 45.
5. Oriental Insurance Hope

This plan does not have any upper age limit. The amount covered under the plan is from Rs. 1 lakh to Rs. 5 lakhs. The policy excludes pre-existing ailments up until 2 years and has a 30-day waiting period for covering any disease. People need to make a copayment of 20% for every claim, and the premiums are adjusted accordingly.
6. Chola Insurance Individual Cover

This policy covers citizens in the age group of 55-65 years. The sum that can be availed is from Rs. 10 lakhs to Rs. 50 lakhs. The policy excludes pre-existing diseases for  a 4-year waiting period, and has a 30-day waiting period for all ailments. The policy provides cashless coverage for specified conditions and does not require medical tests.
7. Religare Health Insurance Care Freedom Senior Citizen Health Insurance Plan

This policy covers all citizens aged at least 45 years, with no upper limit on age. The amount that can be availed is from Rs. 3 lakhs to Rs. 10 lakhs. The policy excludes pre-existing diseases that occur within a 2-year waiting period, and a 30-day waiting period is applicable for all ailments. It also doesn't cover OPD treatments, congenital illnesses, self-inflicted injuries, injuries from substance abuse, HIV-AIDS treatments, infertility treatments, and treatments arising from pregnancy and childbirth, miscarriage, abortion, and its consequences. Insured people are expected to make copayments of up to 30% for each claim. The policy does not require medical tests.
8. Royal Sundaram RSA Lifeline Elite

This policy does not have an upper age limit. The sum that can be availed is from Rs. 25 lakhs to Rs. 1.5 crores. The policy excludes pre-existing diseases for a 2-year waiting period, critical illnesses before a 90-day waiting period, and has a 30-day waiting period for all diseases. It also doesn't cover conditions like cataract, hypertrophy, benign prostatic, chronic renal failure/end-stage renal failure, knee/hip replacement, etc. Insured individuals are expected to make copayments up to 30% for each claim. The policy does not require medical tests.

80C Investment Options - What More?

 Most of you are aware of Section 80C and the investments you can make under the section. mymoneykarma now gives you eight tax-saving investments above 80C. This will free up your hard earned money for fulfilling your wishes.
What is Section 80C?

Section 80C is the most renowned section of the Indian Income Tax Act. There are numerous tax saving options under 80C, such as ELSS and PPF. While investing under 80C is very popular, we bring you tax-hacks other than Section 80C.
NPS

The National Pension System was launched by the Indian government in 2009. The NPS offers a tax deduction for investments made up to Rs. 50,000, in addition to the deduction of 1.5 lakh rupees available under Section 80C. Your returns, however, depend on the asset class you have chosen. Usually, it is advisable to select a high-risk instrument like government debt.
Rajiv Gandhi Equity Savings Scheme (Section 80CG)

This is another scheme available for tax-saving. Under this, you can invest up to Rs 50,000 in approved stocks.  But this scheme is available for you only if you are a first-time investor. This scheme was introduced under the UPA regime and has not been promoted aggressively. A supposed overhaul of the project hasn't come through yet.
Interest on Education Loan (Section 80E)

You can claim the interests you pay on the active education loans you possess, if you have any. The deduction can be only on the interest repayment part, not on the principal of the education loan. That means only the interest repayment is available for a tax deduction while filing an income tax return.

This deduction is available for saving above Rs. 1,50,000, and there is no maximum limit on claiming deduction under 80E. Parents can take up this tax-saving option on behalf of their children, as children are not taxed. It is not a popular scheme, and not many are aware of it.

House Rent Allowance (Section 80GG)

If you are staying in a rented apartment or house and paying rent, you can claim the amount as a tax deduction under Sec 80GG of the Income Tax Act. The amount of the deduction is based on the city that you are residing in. In case you have queries, it is best to talk to the HR department on the exact tax benefits that you would get. This is a significant tax hack that you should take note of.
Home Loans (Section 80EEE)

An additional deduction of Rs 50,000 on home loan interest can be claimed under
Sec 80EE of the Income Tax Act. This option is however not a very popular one.

Health Insurance (Section 80D)

You should take a health insurance policy, which would not only take care of your medical expenses but also enable you to save tax. The current IT norms allow a deduction of up to Rs 25,000 in the case of ordinary citizens and Rs 30,000 in case of senior citizens. So, you can go ahead and take a good health insurance policy.

This is a tax hack that you can utilize apart from the usual 80C benefits. The Sec 80D benefits also include the gains on expenses incurred towards preventive health check-ups.

Donations (Section 80G)

Section 80G of the income tax law provides tax benefits on the amount donated to NGOs. So, you can be generous to the causes you believe in, to your heart's content. However, the deductions can be made if you are donating by cash or draft only. The limit of the deduction can be either 50% or 100%.

You have to claim this deduction when you file your tax returns and quote your PAN to the institution you donated. If you are unsure about the cause you want to support, there is an exhaustive list of institutions and establishments that you can donate to.

Medical Treatment (Section 80DDB)
For certain specific diseases, Income Tax Act offers tax benefits to you under section 80DDB from expenses incurred by you for the treatment of said diseases or ailments. This tax-saving option is not only for the people filing tax returns but also for dependents of such people. However, this tax benefit is not available for Non-Resident Indians.

What is an SME Loan? - FAQs on SME loans

 What do you mean by SME?

SME is a term to denote Small and Medium Enterprises. The term is useful for segmenting companies and organizations of different sizes. It is to segment businesses, companies and organizations based on their size. According to the European Union, an SME is one that is legally independent as a company and has less that or just 500 employees. Of course, only a medium sized company will have anything close to 500 employees, but fortunately, it also benefits from SME loans.

A small company is one that has investments of more than Rs. 10 lakhs but less than Rs. 2 crores. A medium company is one where the investment is more than Rs. 5 crores but is less than Rs. 10 crores.
Why are SME loans important?

SME loans are very important for the economy, especially right now. These play a significant role in creation of new job roles in any economy. By helping to create capital for companies, it indirectly aids in job creation. Studies have in fact shown than a considerable portion of job creation around the world is due to SME loans. Likewise, these loans contribute to a country’s GDP and ensure money flow across the economy.

One of the features of these loans is that these charge lower interest rates to clients than large banks. This enables clients to benefit from cheaper loan deals.
What are the benefits of SME loans?

There are several benefits in getting these loans, such as:
1) Identification and investing in specific and unique niches
2) It is able to react faster to market and economy changes due to smaller size of companies
3) SMEs help in building better relationship with employees and customers
4) It helps the economy by creating jobs, lowering poverty and raising the GDP of a country

Gold Loan Vs Personal Loan - Which is Better?

 With gold prices sharing such mixed market signals,  it has to be said that now could be the best time to avail a loan against gold. It is generally seen that getting a gold loan fares way better than getting the other alternative to it - personal loan. Sceptical? Well, Let’s see how a loan against gold works better than a personal loan, taking into consideration all their pros and cons.

Paperwork for personal loans is not very elaborate, as long as basic eligibility parameters are met and KYC documents are furnished. While it is true that there are few financial products that can match the  versatility and flexibility of  personal loans, the emergence of secured gold loans bodes well for the loan scape, especially under the current circumstances that warrant an unstable employment scene.

That being said, both forms of loans have a number of pros and cons to be taken into consideration in some detail before coming to a verdict on which one might be better. Read on to learn more on how the gold loan product differs from a personal loan, with all their drawbacks and advantages accounted for.
Personal Loans

A personal loan is unsecured, which means that it does not need you to pledge any asset/property (business or personal) in order to get the amount. One can get a personal loan and utilise it for a number of personal or professional requirements - to fund a wedding, getting household appliances, tackling a medical emergency, funding children’s higher education, consolidating past debts, or even going on a trip abroad!

The eligibility criteria, which is often what makes or makes or breaks the deal in case of personal loans,  incorporates numerous factors. This can include a good credit history (generally with a credit score of 700 or higher), the applicant’s age and employment status, regular monthly income, etc.

In further detail, let’s take a look for pros and cons of what a personal loan brings to the table:
The Pros of Personal Loans

- Collateral Free: If someone wants to take out a personal loan, they wouldn't have to lay down any of their personal or business assets as collateral. This makes personal loans more accessible to those who have no security to offer, but do have a regular source of income.

- Versatile: The scope of personal loans is really helpful to borrowers, as it can be used for any kind of fiscal need at an individual level. This can include consolidating past debts, paying for weddings or other big-ticket expenditure, and more.

- Simple documentation: The paperwork for availing a personal loan is quite easy, needing you to furnish your KYC documents and meet basic eligibility parameters.

- Funds Quickly Disbursed : Funds are approved and disbursal quite quickly, with many lenders crediting the amount to your account within 24-48 hours.
The Cons of Personal Loans

- Strict prerequisites (credit score and credit history): Since personal loans are not secured by collateral, banks need to be thoroughly assured of the borrower’s repayment capacity before approving a loan. For this reason, banks undertake stringent perusal of your credit management history  and present credit score to deduce your financial capability.

- Higher interest rates: As they are unsecured, lenders assess personal loans to be riskier options as against loans with security. So, personal loans draw comparatively higher rates of interest.

- Processing Fees: Since personal loans are provided without collateral security, banks are required to invest in scrutinising your income and credit history. Hence, they will charge you an additional processing fee, which can be upto 1% of the loan amount.

Family Vacation - How to Save for Your Family Vacation

 Here’s what you got to do!
Make a travel budget and stick to it

Let’s face it. Buying a travel plan, going on a vacation, through a travel site or a travel agent can be expensive nowadays. They don’t just sell you trips, they sell experiences. And that is why a trip to Switzerland is more expensive than a trip to your local hill station. This is why it is important to have a budget, and to stick to it.

There are so many ways to cut down costs.

First of all, you can stay closer to home than leaving the state altogether. In case you really do want to take a trip abroad, take a vacation where it shall be more worthwhile.

One thing to keep in mind is the international exchange rate. And here’s how to capitalize on the exchange rate. Check where your budget shall take you the furthest based on the exchange rate, and then pick the places where you want to go. It is prudent to research this rate before booking, instead of the other way around.
Make short term sacrifices

No matter where you are planning to go, you need the budget to go there. Since you don’t suddenly plan for a huge family vacation, you’ll still have a bit of time to save up. You can quickly build up your vacation savings. You may have to sacrifice some current luxuries and short-term desires for that, but such sacrifices will be well worth it.
Spend on priorities but save for the rest

The last thing to keep in mind is that there is no right or wrong when you are taking a trip or vacation. If there is something you care about, do splurge on it, but also remember to cut back on other things to make up for this splurge. You can save money by renting a home instead of staying at an expensive hotel, as well as by waiting for plane tickets instead of buying suddenly.

What is a Moratorium? - How does Moratorium Work?

 While in the case of normal loans, borrowers need to start repaying after the principal amount is given, there are some loans in which this is not the case, such as education loans. In education loans, students start repayments after they get a job.
How does Moratorium Work?

Sometimes, a moratorium is made by banks in response to circumstances that disrupt the normal banking routine. The current economic climate created by the coronavirus pandemic has prompted many banks to adopt the moratorium system. This is done to reduce the pressure on existing and future borrowers till a certain time limit.
What is Moratorium Interest?

To get the moratorium facility on your personal loans or other loans, you need to pay an interest. It is called a Moratorium interest. It depends on one bank to another, but basically it is charged at the original loan rate for the time remaining for repayment of outstanding EMIs.
Is Interest Paid during the Moratorium Period?

Interest on the loan is not paid during this time. Think of it as an “interest-holiday” time. There’s no need to pay anything at this time. Rather, it is the best time to strengthen your savings and finances. Thus, once the moratorium period is over, you can be ready to repay it.
Moratorium Period for Business Loans

Moratorium periods can be found not just with educational loans, but also in mortgages and in some business loans. Here’s an example of a moratorium period for a business loan.

Let’s say that a company, who is a customer of a bank, is facing financial problems at the moment. It is unable to repay EMIs currently. It approaches the bank and asks for more time till they can make their financial situation strong. The bank, who only wants its money back with interest, agrees to give the moratorium period.

5 Expenses You Should Not have on Your Credit Card

 Here are 5 expenses that you should never have on your credit card.

Mortgage or rent: You can of course choose to pay these by your credit card, but this is seriously not recommended. At the least, you need to keep a close attention while paying these. You may see that it is a fantastic way to get extra rewards when you pay these expenses by the credit card, but you should also remember that there is a 2% to 3% processing fee. This fee negates all other benefits. Before paying with your credit card, be sure to know the fees and additional cost. If you are a home-owner, it is a strict no-no for you. Paying mortgage by credit card tells that you do not earn enough or have enough income.

The only time you should use your credit card for charging mortgage or rent is when you want to meet the minimum amount to get a welcome bonus. This can be the case only if benefits are more than the processing fees, and that you have money to repay the loan before being charged interest.

Buying something big: When it comes to a credit card, we seem to think we have unlimited money. However, this is not your money. It belongs to the bank, and you need to repay it soon. So avoid buying big with it, and certainly not something you cannot repay before being charged interest. However, even that is not the only problem. Your credit limit will be affected too, and by extension, your credit score.

Taxes: Generally, you should not be doing this. Credit card payments, unlike bank account transfers, are not free. You’ll be charged a percentage of tax payment. While it depends on your tax processor, this charge can be between 1.87% and 3.93%.

Medical Bills: It may seem like a good idea to charge medical expenses on a credit card, but it may not be most of the time. It can cost you a lot if you are unable to repay fully before the interest is charged. And the interest in this case can be pretty high. If you are not able to repay a credit card loan with interest, there are always Zero balance transfers.

Sudden small splurges: Small purchases can affect you as well. Small purchases accumulate and are not easy to keep track of individually. In their case as well, you need to repay before getting charged interest. Too many of these purchases as you can get a pretty high interest rate.

5 Best Debt Consolidation Funds in India in 2020

 All you need to do is to take one single loan to consolidate all the rest. When you take a single debt consolidation loan, you make it simple and easy on yourself to make all monthly payments. It also gets easier to pay off the interest faster since the interest rate of all the debts together is lower. In other words, you lose less money and save more, especially when you can pay back faster. By debt consolidation, you may get the chance to make one simple monthly payment for all debts in one place. How cool is that?

Another great thing about this is that debt consolidation allows you to repay any loan type. Thus, it is flexible as well. Because of this, it pays to choose your personal loan for consolidation. Doing so saves you money which you would otherwise have to pay on interest. Early payoff fees, finance charges, and minimum credit score.

In this article, you will see some of the best loans for debt consolidation.

But first, we have to learn about…
Benefits of debt consolidation

    For many people, this is one of the ways to save considerable money on monthly payments, loan interest and other charges. Since these are charged separately for all different debts, the overall money you need to pay is more. But when debt consolidation comes, all these debts are consolidated in one single fund, and so all charges are comparatively less. Debts therefore are easier to pay off, which helps to improve your credit score as well.

    If you have several debts with a high interest rate, you can easily save on this interest by getting a lower rate at a debt consolidation fund. Credit card tariffs are considerably lower as well, so you can save money here as well.

    If you choose a longer term or tenure for the debt consolidation loan repayment, you won’t miss payments.  You will be paying more overall, or in total, by you’ll find the monthly payments will be easier to make. This is because such funds reduce your monthly payments. However, it does not change the interest.

    With a debt consolidation fund, your credit score will soar, when you pay back on time. This can un-do past damage as well.

7 Financial Tips for Working Women

 Let us now look at some of the most important decisions which working women need to take to ensure their financial well-being.

Protection cover: If you’re a working woman and if there are family members dependent on you, you need to make sure there is enough coverage in terms of LIC and disability. It is important to protect the family financially in case something happens to you. The thumb rule says that you need to have total disability and LIC plans equal to 10x your annual income.

Retirement planning: working women have to plan for retirement in advance as well. In fact, they need to plan for it even sooner than men. Retirement depends on profession, and therefore celebrities, sportswomen and air hostesses have a short career. They do not get much time to plan or invest for retirement, and thus the sooner they start the better. They need special planning, and it is best if they take the help of financial planning professionals. They can plan for retirement by investing in real estate, debt and equity.

Gold: Women have always loved this yellow metal. If you wish to invest in gold, then it needs be an investment amounting to more than 10% of your financial portfolio. This can be either in the form of digital gold or physical gold.

Asset allocation: Working women needs to have some exposure to mutual funds through SIPs, or Systematic Investment Plans. These are ideal for creating long-term wealth. The same is needed for achieving life’s financial goals, ranging from foreign trips, marriage, education and marriage of children, and retirement. For best results, 10% of your investments should be on gold, and the rest on EPF, PPF, bonds and bank FDs.

Documenting their financial plan: It is also important for working women to convert their financial plan into a hard copy document. It is important because it is worth reviewing it from time to time.

Making their Will: People still think that they should make a Will only in their old age. That is a wrong concept. The truth is that you should make a Will as soon as possible. It needs to address their total investments and savings, and in what proportion should they be divided.

Limiting their expenses: It is equally essential to limit expenses, and to spend beyond their means. At the same time, one should do their best not to resort to loans, excessive credit card spending and debts.