Growing up, we are often told to avoid loans for the sake of maintaining good financial records (e.g., credit). We are also often taught that being financially independent is important and that we should avoid, whenever possible, borrowing money even from family and friends.

But there are situations where debt is essentially inevitable. In fact, almost 50 percent of the reason many are in debt is because of medical-related expenses which, as well all know, are not cheap and are often not avoidable. Of course, there are many other origins of debt, but nevertheless, it can be difficult to get rid of without the proper help at hand.

For the latter reason, let’s talk more about debt consolidation loans and what benefits these loans can propose if you are already in debt and need quick assistance in paying it off.

What Exactly is a Debt Consolidation Loan?

It may sound ironic, but a debt consolidation loan is a loan one receives to help them manage their current debt. You may already know this, but there are other aspects of a debt consolidation loan that are important to understand.

To get down to the details, when one receives a debt consolidation loan, all of their preexisting debt from multiple accounts and payments goes into one big account. All debt is consolidated as a single payment under just one lender, making it convenient and easy for the borrower.

One can receive a debt consolidation loan from many sources including, but not excluded to: banks, credit unions, payday lenders, and more.

However, know that debt consolidation loans are not for everyone. They won’t always provide financial advantages in all scenarios. Regardless, debt consolidation loans can also be useful for many and something they do not regret getting. For that reason, let’s talk about some of the specific advantages of opting for this refinancing option.

Advantages of Debt Consolidation Loans:

1. Helps you pay off debt quicker

One of the main reasons people turn to a debt consolidation loan is because they wish to eliminate their debt as quickly as possible. People want to get rid of debt quickly for two main reasons: 1) to avoid further penalties, fees, and interest rates and 2) to eliminate the stress of having debt.

But with everything consolidated under one source, you can better focus on tackling your debt. Your monthly payment may also be smaller, meaning no more delays in paying off debt on time as you’ll better be able to keep on top of your game.

2. Makes it clearer how much debt needs to be paid off and when

When you have multiple accounts, knowing how much to pay off and when is a juggling act. If one doesn’t have everything properly organized, things can get messy quickly. This alone may be why one is drowning in debt: because they lack the structure and ability to plan ahead to keep up with bills and current debts.

But with all debts in just one account via a debt consolidation loan, you will always know the deadline and how much you still owe. This makes paying off debts significantly easier for some people.

3. Allows you to avoid higher interest rates from creditors and credit card companies

In many cases, opting for a debt consolidation loan means getting to avoid higher interest rates. In fact, interest rates are often negotiable between 0 and 11 percent with a debt consolidation loan. Yet, many credit card companies charge a whopping 20 percent interest rate, which many cannot afford.

When paying reduced interest rates with a debt consolidation loan, you can have more money in your pocket and will be on your way to better financial security.

4. May raise your credit score

Some people when they have bad credit tend to believe that it can’t get much worse yet that it can’t get much better. They feel like they are stuck in a loop. It’s understandable why some people would think this way.

But debt consolidation can potentially help you receive a better credit score, and probably much faster than you’d think. With a better credit score, there are a plethora of benefits at hand including a better chance of getting approved for a credit card and an easier time renting or buying property.

5. Helps you avoid penalties and fees

When one can’t seem to keep up on paying their debts, penalties and fees may arise as a consequence. But it doesn’t just end there. With penalties and fees comes more stress and less money in one’s pocket, and in turn, a potentially even harder time tackling future debts.

Paying off debts quicker and smoother with a debt consolidation loan can eliminate these pesky penalties and fees as monthly payments may be smaller. Plus, debt consolidation can make it easier to plan ahead exactly what you’ll need to pay by your next due date.

6. Stops unwanted collection calls

When in debt, collection calls are not uncommon as creditors turn the account over to a collection agency. Collection agencies can appear threatening at times. That said, these calls can be frightening, annoying, and stressful to receive.

But when you are paying off debt quickly through the help of a debt consolidation loan, you can in turn avoid collection calls, allowing you to regain peace.

7. Reduces financial stress

As a result of having debt paid off quickly and getting to avoid paying higher interest rates, stress related to debt and finances in general can be reduced significantly. With less stress comes a happier, calmer mind.

With less stress, one can achieve better performance at work and stronger relationships with friends and family. Having a calmer mind can also bring better health. After all, stress can practically affect every aspect of our lives, and it isn’t until stress is eliminated that we begin to feel like our true selves again.

If you are interested in seeing how you can receive a debt consolidation loan, you can find more information here.

Conclusion

For some people, managing debt can be fairly easy. However, for others, tackling debt can be a long, stressful, and seemingly impossible process that never seems to end. In the latter case, considering getting a debt consolidation loan may be a great option. While debt consolidation isn’t for everyone, it has a plethora of advantages that many can receive from it.

But before taking the next step, be sure to research the debt consolidation loan consto ensure the benefits will outweigh the potential disadvantages in your specific case.

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We all know that saving money is an art, but saving money on tax is a bigger art. Well, we all are aware of different tax rules associated with our daily life. And who doesn’t want to save money on tax? We basically evaluate all our expenses and savings and try further to save money on tax. One of the most common and highly effective tools associated with tax saving is the investment in life insurance policy. Yes, in India, life insurance is eligible for tax deductions under Section 80C. But do you really think it is simple, there are many terms and conditions associated with the same.

Tax rules you must know

1. When it comes to the tax deduction, there is a certain limit associated with the same. For all those policies which were issued on or before March 31, 2012, the maximum premium amount that will be eligible for tax deductions will be around 20% of the total sum assured. Anything in excess to this will not be liable for any deduction under Section 80C.

2. The maximum premium that is eligible for deduction for the plans that are issued on or after April 1, 2012, will get 10% of the total sum assured as the tax deduction. For example, if you invest in an insurance plan and that too which carries the sum assured of Rs 10 lakhs. Keep in mind that the annual premium which will be eligible for tax deductions would be around 1 lakh cannot be claimed for tax benefits. However, if the person is suffering from an illness that is listed under Section 80DDB or has a disability listed under Section 80U, an additional deduction in premium of around 5% is permitted. Therefore, in such cases, the maximum premium which will be eligible for deduction under Section 80C will be 15%

3. Premium amount that is paid someone else like other than children, spouse and self will not be liable for deductions.

4. In case of maturity, if an individual is fine with all the above-stated criteria, the maturity benefits stand exempted from tax. But if in the case where the annual premium exceeds the percentage limit which is mentioned above, the tax will be levied in accordance with the income tax slab

5. In case of demise of the insured person, the death benefits are not taxable.

Moreover, the good thing is that the term insurance plan which is a strong form of life insurance is not much affected with the same. And, in today’s market, there is the multiple and wide range of such plans is available in the market. Such effective plans carry a sum assured which is much higher than the annual premium. So investing in the same is not a big deal and it always comes out with a wider range of benefits.

However, it is important for you to understand that the concept can be different with single premium policies. As a part of these policies the sum assured is not high just to improve the returns. Therefore the premium amount associated with the same fall low, creating not enough percentage difference between the sum assured and the premium.

Under such policies, the sum assured will not be more than 1.5 times the premium amount. As a result single premium plans will not be liable for the tax deduction.

It is true that a life insurance plan demands a long-term commitment that may last for a couple of years. It is obvious that between the tenure policy you don’t want to discover that you made a huge mistake as your premium will not be liable for tax deductions. Then it will become quite late. Even if you want to cancel the policy then you have to pay unexpected charges.

So it is important for you to pay attention to the tax laws, study the same properly before investing in any insurance plan. Term insurance plan comparison is a great choice if you are planning to invest in the term plan. It will provide the needful financial cover to your family in your absence and will be liable for tax deductions. For making an investment in a term insurance plan, you can take help of PolicyX.com which is a great platform and assisting customers in choosing the right plan for them.

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Every individual dreams of purchasing their own home. A safe place where they might want to raise a family, or look after their parents. While the rising cost of real estate often dissuades people from the task, it’s important to remember that with the help of a home loan, your dream home is no longer just a distant hope that won’t be fulfilled.

If you’re hoping to realise your ultimate dream of owning a home, let’s take a look at a few steps that will help you along your journey.

1. Get Your Priorities in Order

Before you even start looking for a house, it’s important that you understand what you’re looking for. Do you want a home that’s in the middle of the city where you work, or do you want something that’s a bit quieter and closer to your hometown? Think about whether you want a large house with a garden or park nearby, or if you’re content with a smaller home with a good view. Figure out what is most important for you to have in your home. This makes the selection process much easier.

2. Outline Your Budget

Whether you’re funding the house by yourself or applying for a loan, it’s important that you have an estimate of how much you can afford to spend on a home. Even if you do take out a loan, you’ll have to factor in the EMIs that you will have to repay into your monthly budget. For a better understanding of what you can afford every month, you can use an online home loan EMI calculator. Once you have your budget and priorities in order, you’ll be able to find a home that meets your needs.

3. Create a Shortlist

The house-hunting process is generally quite a long-drawn one. You may see several houses before you find one that you truly identify with. If you’re lucky, you may like a home the instant you walk in and see it. However, this isn’t always the case. Once you’ve seen a wide selection of houses, you should make a list of the ones that you would definitely consider buying. Then you can list out the pros and cons of each home before making your final decision.

4. Find Financing

Unless you’ve won the lottery or you’ve been saving incredibly well over the last few years, you’ll probably require a loan to cover the cost of your new home. There are a number of loan options available to you, and you will need to find one that fits your needs. Depending on your requirements, you could find a loan that offers higher financing, better interest rates, or quicker disbursals. You could also use a home loan calculator to find out the kind of EMIs you would be required to pay based on the interest rates being offered.

5. Budget for Your EMIs

Now that you’ve found your perfect home and got a loan to finance it, it’s a good idea to come up with a repayment plan. You may have to readjust your monthly budget to factor in your EMIs and curb your expenditure a little. Of course, it goes without saying that you should also ensure you put away some amount of your savings for any financial emergencies that may come your way.

With our 5 quick tips, you could soon be on your way to finding your dream home and settling down with your family. Remember, a home loan doesn’t have to be a burden, it could be the stepping stone that helps you achieve your dreams.

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The technological revolution has been a serious point of interest for the lending industry. In the wake of mass digitisation and an increasing reliance on the Internet and connected technology for business purposes, many lenders (and borrowers) have found themselves wondering where lending will be and what the process will look like in the future.

Well, fear not: if you’re a borrower, then things are looking up for you. The future isn’t quite as rosy for traditional lenders, though; they’ll have to work harder to compete in an increasingly crowded market, and they’ll need to be able to battle online-only companies with significantly lower overheads and a more persuasive and desirable brand identity.

The first indication that the lending industry was changing as a result of an increasingly online-dominated landscape was arguably the peer-to-peer lending boom. The first P2P lending companies began appearing in the late 2000s, revolutionising the concept of money-lending by emphasising a more grassroots approach which favoured the relationship between consumers and companies rather than the transaction itself.

P2P lenders represent (in theory) a more transparent, more grounded industry with an increased focus on the consumer, which is why borrowers will be better off in the future. The Internet has already created a number of opportunities for companies to fill niches which were not previously filled by bigger companies.

These niches include more flexible student finance agreements, online-only mortgage lending which allows users to get a quote in minutes without a lengthy credit check process, and quick-turnaround lending which majorly threatens credit cards, among others. Put simply, the Internet has changed the landscape of loans and lending forever, and it’s not looking likely that this change will be reversed.

With that said, a large amount of the functionality and operation of loans looks likely to continue as normal, albeit with a decidedly more ethical spin. Let’s take payday loans as an example. Some negative press around certain payday loan lenders means that the public is more wary than ever about hidden terms and conditions; with scandal comes increased scrutiny.

Even though this is the case, the best payday loan lenders are unlikely to be fazed by this. A huge amount of payday lenders already carry out their business with near-total transparency and an emphasis on ethical treatment of their customers; problems begin when loan companies attempt to draw more money out of their customers than they have been honest about, and that’s just not something that a reputable payday loan company would ever want to do.

In a similar sense, the types of loans on offer to consumers are unlikely to change, although we’ll probably see more lending around bitcoin and cryptocurrency as the kinks in these systems are worked out and the security around them increases. Right now, the issue with lending cryptocurrency is that there’s no centralised authority, so there’s no way of absolutely guaranteeing the safety of cryptocurrency transactions. At the moment, the bitcoin lending process requires a huge amount of trust from both parties, so as these systems are refined and changed, expect to see this currency taking off in a big way in terms of lending.

Otherwise, the future of loans is, well, business as usual, as boring as it might sound (but boring is good when it comes to finance). As it stands, the vast majority of loans fall into four categories: secured loans, unsecured loans, short-term loans (payday loans) and peer-to-peer loans. There are other kinds, but these are the most common types of loan you’re likely to come across.

There’s just no reason why increasing digitization and cryptocurrency are likely to change this. Unsecured loans will still be offered to consumers, although the amounts are likely to change based on new developments in online technology and companies who are willing to trust their customers more. Secured loans will continue as long as people have property against which the loan can be secured.

Peer-to-peer lending looks like it is only going from strength to strength, although there will need to be tighter regulation and a closer eye on business practices going forward if it’s to maintain its current standing. Payday lending is unlikely to change as long as there are people who need money on a short-term basis, and with the recent rise of the gig economy, the number of people who require this service is only likely to increase. If the future of loans will change at all, it will likely be towards this more short-term lending system as people’s incomes are less certain in a majority self-employed economy (if that is indeed where we’re going as a society).

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Retirement is often considered to be the icing on the cake when it comes to enjoying different phases of life. While planning your life after retirement, you must set aside all of your current responsibilities and worries. Retirement leaves you with rare opportunities for participating in recreational activities, traveling, and nurturing certain hobbies. However, you mustn’t forget that you won’t have any regular source of income for the rest of your life. You must remember that you need funds to sustain all health issues and financial challenges after retirement. By making a few crucial investment decisions, you’ll be able to spend the rest of your life in leisure and comfort. Financial planning should be initiated now when you’re working and in good health.

It’s a truly daunting task for you to compare various pension plans and achieve an uninterrupted flow of income after you get retired. It’s certainly going to be a taxing issue for you to narrow down your choice of a pension pay-out although even after you select a beneficial pension plan. Apart from seeking professional assistance, you must also do extensive research on the factors that count for retirement planning.

Tips to acquire funds for your post-retirement years are mentioned below:

Calculate your basic living cost

You must choose a pension plan that yields a good return for covering all of your basic monthly expenses. You must assess your regular expenses just to determine your mandatory expenses in the future. In order to arrive at an accurate figure, you must include your sundry expenses, transportation cost, expenses pertaining to clothing and food, utility bills (including gas and water), and housing costs in your list of expenses.

Consider the effects of inflation

Inflation is bound to take a toll on all goods and services making the living cost dearer with each passing year. Indians are witnessing an inflation rate worth 4% of late and this is likely to rise during the coming years. This way, you’re bound to experience a rise in pension pay-out based on the rate of inflation. On the contrary, the amount that you receive won’t prove to be adequate for meeting your basic expenses. This way, you may even be compelled to seek financial assistance while you aren’t working anymore.

Avail some health coverage

You must learn to cope with the increase in health care costs. Opting for a health insurance plan can actually save you from the adverse impact of unforeseen medical expenses on the monthly budget. You must plan things up in advance and work things out in an efficient manner. Try applying for a health plan that can protect you and your loved ones from all untoward incidents.

Include the cost of recreation

Retirees are often known to enjoy their pastime by pursuing their hobbies, visiting their favorite destinations, reading their favorite books, and doing a host of other things. You’ll need to pay a cost for the perks that you enjoy; you must pay things out of your pension. You must save a portion of your pension to cover your costs more effectively.

You must consider the tips mentioned above if you really wish to enjoy your golden age with ease and comfort. It will help you achieve a firmer grip over your entire financial situation. All you need to do is to pick the right pension plan and utilize the money in an efficient manner just to secure your old age.

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