Financial Intelligence is the Need of the Hour!

While taking a stroll in his neighborhood park one quiet evening, Rohit and I happened to bump into a very old college friend Virat. Rohit, a financial planner working for a reputed mutual fund house, and Virat, a manager at a factory of a reputed FMCG company, used to debate on various regional, national and global issues that got the pair well-known during college debate competitions. After reminiscing the good old days of ‘who delivered the best speech’, the two old buddies sat down to enjoy the sun-set when Rohit caught the attention of a mutual fund ad placed strategically outside of the park railings. “Mutual funds are a good way to invest your money in!” says Rohit. “No! Never!” said an alarmed Virat. “I would never dream of putting my money into such an investment channel. Do you know that it’s all a gamble? A sham? My wife once tried investing in such a scheme but lost all what she invested in after constantly reminding her of the consequences.” Virat continued to disagreed and insisted that they were unreliable which surprised Rohit and I a lot. He left in a hurry shortly after.

How can this dear friend think like this? Clearly he seemed to be quite against the idea of investing in mutual funds. Why so? Is there any reason for this kind of dislike towards mutual funds? Rohit and I wondered, and came up with 5 possible reasons for Virat’s reaction.

Inadequate awareness: There are various reasons contributing to his dislike towards mutual funds and why a vast majority of people believe them to be unsafe and unsecure. A huge mistake that anyone would make is to not ask or question the reason behind investing in mutual funds closely followed by believing strongly in what others think about mutual funds. According to popular perception, and added to it by the standard disclaimer : people are led to believe that mutual funds are risky.
The fact is that all investment products carry their own inherent risks, some more than others. Equities are a higher risk instruments than fixed income instruments like Bonds, but both carry risks. Since mutual funds are vehicles with these underlying assets, they too carry that risk. What this means is that while mutual funds are risky, all financial products carry their own level of risk, hence mutual funds are not riskier than others, it is the underlying asset class that carries most of the risk. If people take away that mental block that mutual funds are risky avenues of investing your hard earned money, then they will continue to be hesitant about ever venturing into such instruments. Association of Mutual Funds in India (AMFI), the trade association of mutual funds in India, launched a media and communication campaign – “Mutual Funds Sahi Hai”, as a part of the investor awareness outreach program. The campaign aims to position mutual funds as a preferred investment option for potential investors.

Too much of a headache!: Take for instance the scenario where Virat disagrees with Rohit regarding investing in mutual funds. To educate Virat about investing in mutual funds will be a big daunting task for him. He would find it too complicated and difficult to understand how to go about it and would rather give it a miss. For Virat, investing in other avenues like bank fixed deposits or insurance policies seem to be much simpler and easy to understand. In fact, opening a mutual fund account has become just as simple as any other financial institution by submitting information through an online KYC (Know Your Customer) facility. As a fund house, we pride ourselves on a completely paperless investing process and e-KYC.
No assurance on returns: Many a times, investors want guaranteed returns when investing in mutual funds. But that is not the case. There is no guarantee in this world but when investors start to invest, they want assured returns without giving importance to achieving their goals.
No faith in the markets: Investors tend to have very little or no faith in the stock market. As an investor, one needs to understand that mutual funds are not only about stocks but also debt funds like bonds, treasury bills etc. which can be safer avenues than equities.
Once bitten, twice shy: Investors who have invested heavily in mutual funds tend to back out due to losses attained by market fluctuations, or other investors known to them have faced similar situations. Reasons could be that they might have picked in a mutual fund that didn’t perform well or may have chosen a fund that didn’t match their risk appetite. This all boils down to the first point i.e. lack of awareness. It is always advisable to consult a financial expert when it comes to making any financial decisions.
To conclude, Virat needs to understand mutual funds a little bit more before arriving at the fact that they are bad avenues. If he invests in a few funds, he would gain some confidence, and then eventually he would be able to choose those funds that match his risk appetite as per the goals he sets along with periodic reviews as and when required. Rohit and I are planning to call him soon and convert him! Let us know when we can call you and make you a mutual fund evangelist by writing to us on [email protected]!

Disclaimer, Statutory Details & Risk Factors:

The views expressed here in this article are for general information and reading purpose only and do not constitute any guidelines and recommendations on any course of action to be followed by the reader. Quantum AMC / Quantum Mutual Fund is not guaranteeing / offering / communicating any indicative yield on investments made in the scheme(s). The views are not meant to serve as a professional guide / investment advice / intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or mutual fund units for the reader. The article has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate and views given are fair and reasonable as on date. Readers of this article should rely on information/data arising out of their own investigations and advised to seek independent professional advice and arrive at an informed decision before making any investments.

What is a Mutual Fund Benchmark?

Back in the days, if you recall going home to break your exam results to your parents, it wasn’t an easy thing to do. After scoring 60% in one of the papers which was rather tough, you come up with a range of explanations making your parents understand how difficult the paper was. You then go on to claim that most of your classmates scored lower marks or that the class topper scored 68% which wasn’t too far from your own score. But, after giving all the valid reasons to convince them that the paper was a tough nut to crack, you are however reprimanded for not performing well. Surely, you would be disappointed that they are not trying to reason with you as to how tough the paper was.

Now take for instance a mutual fund’s performance for the past one-year period. It came down 7.5% during that period. In this case would it be right to say that the fund performed badly? It would be fair to compare the fund’s performance to a standard as you compared your performance to that of your classmates. A standard is thus the fund’s benchmark that helps to facilitate the understanding of any performance.

What is a Benchmark? It is but a common thing that an investor would notice in his/her inbox on a regular basis, the various marketing communication emails and mutual fund advertisements declared by fund houses that particular funds have earned XX% returns and that if invested in such funds, investors would earn such returns. It is important to understand the significance of using a benchmark for the purpose of effective comparison which sadly many investors fail to understand. Since 2012, for the sake of standardization, SEBI (Securities and Exchange Board of India) has made it mandatory for fund houses to declare a similar return in INR and by way of CAGR in addition to the scheme benchmark performance.

A scheme’s benchmark is an index that is decided by its fund house to serve as a standard for the scheme’s returns. The BSE Sensex and Nifty are the most generally used benchmarks in India for mutual fund investments. Other benchmarks are Nifty 500, Nifty 100, CNX Midcap, CNX Smallcap, S&P BSE 200 etc. Investors are given an opportunity to compare the performance of their investments with that of the broader market. Take for instance you are investing in a diversified equity fund that is benchmarked against the BSE Sensex. Its returns are thus compared with that of BSE Sensex. Hence a large-cap fund’s performance needs to be compared against a large-cap benchmark and vice-versa. Once you know the performance, you can decide whether to enter or exit a mutual fund.

Mutual Fund Performance with respect to the Benchmark This is always the case that a mutual fund gets hit with force whenever the market scales new heights or comes crashing down. Let’s take for instance a diversified equity fund – Fund A is benchmarked against the Sensex. Its returns are hence compared with that of the Sensex. Now suppose the fund achieved 40% returns though the Sensex earned 50% returns, it would mean that Fund A underperformed its benchmark. While on the other hand, if the fund achieved 50% returns and the Sensex generated only 30%, it would mean that Fund A outperformed its benchmark. There are some situations where a fund generates similar returns as that of its benchmark. Such cases are said to be considered as fund underperformances as the main intent of actively managed equity mutual fund investing is to perform better than the benchmark.

Outperformed or Underperformed

Mutual Fund Performance with respect to the Benchmark

If returns are greater than its benchmark returns Fund has outperformed

If returns are lesser than its benchmark returns Fund has underperformed

A benchmark is an important tool that helps to measure a fund’s performance. To avoid any misunderstandings, an appropriate benchmark needs to be selected. Keep in mind that a benchmark performance is not the only criterion to select a mutual fund to invest in. Therefore, consult your financial advisor, understand your own risk appetite and assess your needs before taking any investment decisions.

Navigating the Sydney Mortgage Broker Landscape: A Comprehensive Guide

Understanding the Role of a Mortgage Broker
A mortgage broker’s primary role is to help you navigate the complex world of home loans. They can offer a variety of mortgage products from different lenders and assist you in finding a loan that aligns with your financial goals. According to a report by the Mortgage & Finance Association of Australia (MFAA), mortgage brokers settled 59.1% of all residential home loans in Australia during the September 2020 quarter, highlighting their significant role in the mortgage industry.

Research and Preparation
Before engaging a broker, it’s essential to have a clear understanding of your financial situation and the type of loan you’re seeking. Research potential loans online and familiarize yourself with current market rates. This preparation will enable you to critically assess a broker’s recommendations.

Broker Compensation: Commissions and Implications
Mortgage brokers typically earn money through commissions paid by lenders, which can influence the products they recommend. There are two main types of commissions:

Upfront Commission: A percentage of the loan amount, which could incentivize brokers to recommend larger loans.
Trail Commission: A recurring percentage paid over the life of the loan, which may not require the broker to provide ongoing services.
Understanding how your broker is compensated is crucial to ensure their advice is not biased towards higher commissions.

Qualifications, Experience, and Professionalism
Verify that your broker is licensed and inquire about their qualifications and experience. Brokers in Australia are required to have at least a Certificate IV in Finance and Mortgage Broking, but those with additional qualifications, such as a diploma or membership with the MFAA, may offer a higher level of expertise.

Ensuring Your Best Interest
Choose a broker who receives the same commission rate regardless of the lender or product to minimize conflicts of interest. A reputable broker will be transparent about their compensation and referral fees.

Lender Panel Diversity
A broker’s lender panel is the selection of banks and lenders they can access. A diverse panel suggests a broader range of loan options. However, it’s not just the size of the panel that matters; it’s how the broker utilizes it to find the best fit for your needs.

Clear Loan Choices and Explanations
A good broker will present you with multiple loan options and explain the pros and cons of each. Be wary of brokers pushing interest-only loans without fully explaining the long-term implications.

Documentation and Legal Obligations
Request a written copy of the Credit Guide and Credit Assessment, which outline your financial situation, the broker’s commission, and contact information for complaints. Brokers are legally required to provide these documents and adhere to responsible lending laws.

The Impact of Renegotiating and Switching Lenders
Renegotiating your interest rates or switching lenders can lead to significant savings. The Australian Competition and Consumer Commission (ACCC) found that borrowers who renegotiate or refinance can save on average $850 annually on their mortgage, with potential savings increasing for larger loans.

In conclusion, selecting the best mortgage broker in Sydney requires due diligence, understanding of industry practices, and a clear assessment of your financial needs. By following these guidelines, you can find a broker who will help you secure a mortgage that is both affordable and suitable for your long-term financial health.

Words of Wisdom for your Financial Journey

Today, we share with you 5 priceless thoughts by these investment experts. We are sure this will inspire your financial journey forever.

“I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.” – Warren Buffett Okay, so this comes from one of the richest men in the history of investment. But haven’t you also read something similar in our communications :. Dear investor, if you wish to turn your investment into wealth then you must know that one needs to invest when the markets are down, so you could find good value and not when the index hits high and makes everything expensive.
“The individual investor should act consistently as an investor and not as a speculator.” – Ben Graham Been there, said that – didn’t we. A disciplined investor will never speculate. Speculation is akin to gambling and that’s the last thing we want you to do with your hard earned savings. Meet your investment objective with careful planning and selecting the right fund that will help you get there. Ignore market noise and focus on completion of your financial goal.
“It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.” – Robert Kiyosaki We have always emphasized on the fact that one needs to start investing from the time they get their first pay cheque. It doesn’t matter how much you earn, but how much to invest. Remember, investing your hard earned money helps it grow. Also a small start could potentially have a grand finale. Remember it should be Salary – Investments = Spends and not Salary – Spends = Investments
“Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.” – Paul Samuelson How much ever boring it might sound, that ‘boring’ stuff is exactly what would work for you in the long run. Long term investing in equity mutual fundsWill help you reach your financial goals better.
“Our favorite holding period is forever.” – Warren Buffett Markets are volatile in nature. The tendency of reading and reacting to short term market conditions in investing is detrimental to the health of one’s investing life! Not only does it end up robbing investors of returns but tends to discourage investors from making further investments. Investors who have burned their fingers are likely to distance themselves from stock markets forever and convince others too, if it were possible. Instead a good investor follows the Law of the Farm. For a great harvest a farmer must carefully plan, work consistently and diligently over a long period of time. This quote is valid especially in today’s day and age when the markets are running up and everyone seems to be making a beeline to invest in stocks. Don’t be hasty, check your risk appetite, do your homework and invest accordingly. The India growth story is decades long and the markets will see many bull (and bear) runs during this time. So invest for the long term. Invest wisely.

Disclaimer, Statutory Details & Risk Factors:

The views expressed here in this article are for general information and reading purpose only and do not constitute any guidelines and recommendations on any course of action to be followed by the reader. Quantum AMC / Quantum Mutual Fund is not guaranteeing / offering / communicating any indicative yield on investments made in the scheme(s). The views are not meant to serve as a professional guide / investment advice / intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or mutual fund units for the reader. The article has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate and views given are fair and reasonable as on date. Readers of this article should rely on information/data arising out of their own investigations and advised to seek independent professional advice and arrive at an informed decision before making any investments.

Why Should I Get 3-year Bike Insurance?

The only solution to his issue is long term insurance policies. Now you can directly get a 3-year bike insurance policy instead of renewing your policy every year. The best part being that these long term insurance policies are approved by the Insurance Regulatory Development Authority (IRDA). You will not have to keep track of your insurance expiry date every year.

Advantages of getting 3-year bike insurance:

Pay less save more:

When you purchase bike insurance for three years, you save more. You can save on the premium for third-party liability that gets frozen at the start of the first year. When inflation strikes, the price of the premiums also increases by a minimum of 20% annually. So if you have long term insurance, you will end up paying less premium even after inflation strikes. The calculation of the premium is also based on the IDV(insured declared value) of the vehicle. This value is calculated based on the selling price of the brand and model as listed by the manufacturer at the time of the inception of the policy or renewal. As the automobile gets older, the IDV also depreciates. The payable amount remains stable when you get long term motor insurance.


Purchasing three-year bike insurance is very convenient as you will be released from the stress of renewing your motor insurance every year in time. You can relax and not worry about the expiry of your motor insurance for at least three years.

No Claim Bonus:

No Claim Bonus is the discount provided by the insurer if you as a policyholder have not made any claims during the duration of the policy. So when you are eligible to claim 20% during the renewal of a long term policy, then a 20% discount will be applicable for all three years.

Apart from these advantages, there are also some disadvantages to purchasing three-year bike insurance.

You as a policyholder will not be able to take advantage if there is deflation. The premium amount is frozen right at the start of the policy, so if you have long term insurance, the premium will not drop even if there is deflation. Also, you can face a minor loss if you want to sell your automobile. If you decide to sell your car within the three years of your insurance, then it is you who is bearing the cost of the insurance.

But overall, buying three-year bike insurance will be a very wise decision as the chances of deflation are very less. Also, a long term two-wheeler insurance has more benefits.

You can now purchase long-term bike insurance from Future Generali. Gone are those days when you needed an agent to purchase a motor insurance policy. You can directly visit our website and purchase a long-term bike insurance policy.

Enter the alcohol business with the knowledge of alcohol license courses

With the fastest growing economy in the field of business & e-commerce, there has been frenzied craze to enter into the marketing sector that targets both in profitable & non-profitable commercial development. One of the most sought sectors in the business industry is the import & export of the alcoholic beverages, which gains an immense demand especially in certain events & occasions, where the clients expect a large influx from a local network. For this very particular reason, young businessmen are trying to obtain a professional certificate & business license from recognized organizations which would permeate them to create a new edifice for a business. Often ostracized upon, sales & supply of alcoholic beverages involves multiple risk factors, which can be sometimes very dangerous, & hence, the foreign authorities are very much strict with the rules & regulations.

For this very reason, any applicant who wishes to partake into the bar industry & get involved into the alcoholic beverages sales & supply should hold a personal license as well as, if possible should acquire a alcohol license courses which would broaden their understanding about the skills of marketing as well as the regulated usage of the alcoholic substances, which would help to regulate the increased number of addicts.

One of the bright aspects of participating into the alcoholic learning courses is that the applicants would get a better insight about the bar business which includes the effects of various alcohols on different people & also how to prioritize & make people drink safely without exceeding their threshold limit of intake. Applicants who are interested in bartending in the pubs needs to exercise a quality control over their clients & ensure that excessive alcohol intake don’t harm their client’s integrity, which in turn would reduce the rash driving consequences & accidents.

Interested applicants are guaranteed with a top quality training, which would be often tailored to fit their work, and it would give them a chance to explore & enter into business schemes that would benefit them by making them eligible for business not only in the local level, but also for the national circle.

There are certain regulations enforced by the government bodies who would govern on the applicant’s license including their time of exercise of the duties. Any deviation from the normal norm would result in termination of the license & suspension of the applicant’s work for some months. Any fraud cases during the tenure of 10yrs would give the governing officers to terminate the licensable chance of renewal or maybe a reduction in the selling hours for alcohol or reduction of the premise, which could affect your impression & limits your market.

Obtaining a personal license or a premise license can be cumbersome, but obtaining a permit & registering for an alph or alcohol license course is relatively easy & hence the influx of candidates have significantly improved in the last few years. In the era of technology, the content is much more widespread & hence, all the necessary risk factors involved are clearly defined, thereby helping the applicants to proceed for defined choices.

We Bet You Don’t Know These Facts About Gratuity

Having good knowledge about gratuity is very important, especially if you are an HR manager. Although gratuity is a well-known employee benefit, there are still many people who do not have a clear understanding of it. Taking this into account, we have included some critical facts about gratuity that every working individual should know. From it’s meaning to its significance, we will help you learn a host of things in this blog. So, let’s dive in.

Understanding Gratuity

For people who do not know, it is derived from the word ‘gratuitous’ that typically means ‘complimentary’. Every employer in India is bound to pay this employee benefit to his or her employees. It is given as a token of appreciation for an individual’s hard work, dedication, and time invested in an organization.

How Can One Calculate It?

Most of you may think that calculating gratuity is a complicated process; however, it is not true.

If known the trick, anyone and everyone can calculate it without any challenge. So, if you want to calculate your gratuity, you should know that the whole calculation depends on two major factors, which are-

Your total employment period
Your last drawn salary

Now, here is the Formulae- last drawn salary X no. of the employment period

If you do not have enough time to do the whole calculation manually, you can also rely on an online gratuity calculator.

Using a gratuity calculator, you can know your total gratuity amount in just a fraction of time. It is one of the easiest ways to calculate one’s gratuity.


According to the Income-tax Act, 1961, the gratuity amount is exempted from tax up to a specified limit.

Who is Eligible For It?

To get gratuity, there is only one condition that should be met by a person. He or she is supposed to complete 5 five years employment period in the firm.

Furthermore, you even request this amount even before completed 5 years but there are a few conditions for the same, which are mentioned below:

If the person dies
If the individual becomes disabled
In both the aforementioned cases, the payment can be made before the specified time period.

Also, every employer out there holds the right to forfeit this payment both entirely or partially. This can happen only if an employee was fired after any wrong or unprofessional actions or when he/she tried to physically harm another worker during his employment period.

Key Notes For Employers

The Payment of Gratuity Act applies to every company and business in India that has 10 or more headcounts. In India, it is considered one of the important forms of social security in which a part of the salary is acquired by an employee from his or her employer in return for their valuable services for the growth of the firm.

Employers should know that gratuity payment is a statutory requirement and failure to pay this amount to an employee is subjected to several serious punishments such as fines, and imprisonment of six months that can extend to two years. So, it is the responsibility of employers to know the importance of this payment.

That is it, these are some vital information about gratuity everyone should be clear about.

Now, HR professionals may find it a time-consuming process to calculate each employee’s gratuity amount amid managing other HR operations. This is when HRMS software comes into play. Such systems are automated software tools that allow HRs to calculate gratuity in just a few clicks. The right software can handle gratuity and look after all necessitating needs of an employee’s settlements during his or her resignation. So, it is highly recommended to every company leave behind manual methods and consider an HRMS login as soon as possible. Now that we have helped you to understand gratuity, gratuity calculator, and even suggested a digital solution for your business, help your employees and educate them as well.

Car loan application and disbursal process

These car loans have been introduced in the whole market to enhance the possibilities of all the people purchasing their own new car. Most of the time a new car is seen as very luxurious or a symbol of social status, but for all the individuals, this could be a very basic need more than very much more luxurious.

All the borrowers who are looking to buy a new car with the help of the car loan have to fall under the eligibility criteria set by the particular institution as well as provide the lender with some of the essential documents. But whenever applying for a car loan one should select the car model that he or she might want to purchase as the bank will always provide the credit based on this price. Then the car has to be insured as well as hypothecated for future security. After these total procedures are over, then all the lenders, as well as the borrowers, decide the tenure of the total repayment and EMI procedures. Further one has to keep on paying the installments along with the rate of interest until the debt is over.

Further, we are going to take a look at the most important aspects that should focus on whenever applying for a car loan. A car loan is accepted in both cases where the manufacturer may be national or international. Though the total prices of the models might vary between all the Indian brands as well as the international brands, the car loans can be sanctioned on any approved car model, although the total funding is under the bank’s discretion.

The rate of interest offered under the scheme of a new car loan often varies between a very good range. Then again the interest rate is decided after the specific model as well as brand is decided and also depends on one’s loan total tenure, credibility profile, creditworthiness, and other things. Whenever repayment of the total credit the facility of the EMI installation is provided, where all the borrowers have to deposit their monthly EMI amount within the due date. This total EMI amount varies from one of the borrowers to another based on their car loan tenure, loan amount, and rate of interest. Whichever, there are options to pay in a ransom, in that way one of them reduces the rate of interest to be paid.

The total repayment tenure offered by car loan interest rate schemes is quite flexible and this also very good ranges between periods of one to seven years. One has to repay the car loan that had been credited to all the individuals within this tenure. Failing to do so might have serious consequences as all the lenders can trace you with the help of all the certified documents.

Under this facility, all the borrowers are allowed to pay the car loan as a ransom. This method of repayment might be preferred by all the people who want to abstain from paying high-interest rates. Bandhan Bank car loan interest rate. Once the loan is paid in a wholesome down payment, this cuts down a portion of the interests charged and thereby saves some of the amounts on the borrower’s part. Except for the total principal amount and the added rate of interest rates, some other minimal charges are to be paid whenever availing of the car loan. Some of the charges may also include processing fees, pre-closure of account, stamp duty charges, and more things.


These were some of the most important criteria which should be remembered whenever availing of a car loan. Also, one must not forget all the procedures of the repayment as this can affect an individual’s credit score. Whichever, constant delay of the total EMI deposits can even have serious consequences in some of the cases. Thus one should look into the best options of total repayment and select a very suitable tenure. Also, while in the confusion regarding the policies of the institution, also consult someone or very simply ask for guidance.

How to get Auto Loan that is not Terrible for your Financials?

Did you know one of the rites of passage that every American goes through is buying a car? Having an automobile in your name is much more than a buying decision. Emotions and feelings are attached to your first vehicle. Additionally, an automobile has the potential to make or break your future financial stability. So, you must take every step with caution and due diligence.

Car Buying Tips: Do not become one of these Buyers

If you are unable to make timely payments or you end up in an upside-down car loan situation, it will affect your credit report. To make sure you do not fall down the rabbit hole of a bad credit score and crushing debt, you must make prudent decisions. Do not be like any of the following car buyers and avoid a terrible auto loan:

1. The Show Off

You may be excited about buying a car. An expensive automobile is a big step up the social ladder. However, you should not be the Show-Off car buyer because they end up with terrible auto loans. Focus on buying a car that is within your means. Choosing a car beyond your budget puts you at risk of repossession. There is nothing good about repossession because it will stay on your credit report for years.

Having the blemish of repossession or bankruptcy on your credit score will put you at a disadvantage. It will prevent you from getting lower interest rates for a long time. So, do not be a Show-Off. Learn what kind of car you require. Find out who all be driving your vehicle, and then shortlist a few models that match your budget. Be the Prudent Guy!

2. The Payments Guy

When you are only worried about the monthly payments on an auto loan, you stop looking at the big picture. The Payments Guy is only concerned about the lowest monthly payment amount. But a small payment amount does not translate to better savings.

Lenders often attract customers by offering smaller monthly payments over extended loan terms. It means the car buyers end up paying more money in the form of interest rates. Additionally, you also run the risk of an upside-down car loan situation. For example, the total loan amount after deducting the down payment is $20,000. You opt for a loan term of 60-months with an interest rate of 8%. The monthly payment amount will come to $405.53, and you will pay an interest amount of $4,331.67%. Now, if you request the lender for a lower amount of $350, your loan term will extend to 72-months, and you will have to pay a total interest of $5247.87.

Do not focus only on the monthly payment. Instead, discuss the loan term and APR as well. Find out if there is any pre-payment penalty involved or not.

3. The Lone Warrior

The Lone Warrior is a car buyer who sets out to buy a car on his/her own. The car buying process is a complex one. It can be overwhelming, especially when you are making it on your own. Emotions can come in the way of making prudent decisions. It always best to bring a friend when shopping for a car. It helps to have a third set of eyes so that he/she can be objective in your process and ensure that you make the right financial decision.

Often, the Lone Warrior believes in taking care of the financing process of their own. However, it is a fact that having a co-signer helps in getting quick auto loan approval and better interest rates. So, convince your colleague, friend, or family to become a co-signer for your auto loan and enjoy faster pre-approval.

4. The No-Savings Buyer

The auto financing industry is built on the truth that car buyers do not have sufficient money to fund the vehicle. However, it is a wrong move to opt to buy a car with zero savings. Even if you do not have money to make a down payment of 20%, it is wise to save up money for car-related emergencies such as fuel-change, repairs, and maintenance. It will ensure that you do not seek out exorbitant personal loans to take care of your car.

When you decide to buy a new car, consider the amount of monthly payment that is comfortable for you. Set aside the payment amount of at least three months so that you can make regular payments even if your income source is affected due to any reason. When you do not have money for a down payment, you can always apply for zero down payment auto loans, but when you do not have savings to fall back on in times of emergencies, it will affect your credit score terribly.

Say No Terrible Auto Loans and Bad Credit Score

As discussed earlier, your car buying decision has the potential to build your credit score. If you make cautious and practical choices, you will enjoy the best interest rates for years to come. But, if you choose the emotional option, it may affect your financial situation severely. Say no terrible auto loans and avoid the troubles of a bad credit score by becoming a prudent car buyer.

An Introduction to the SMSF Loan Scheme

The SMSF is an abbreviation of ‘Self-managed Super Funds’. SMSF home loan is a type of loan that is used to buy investment property. The returns on investment- whether that’s rental income or capital gains, are funneled back into the super fund which in turn, increases the retirement savings of the borrower.

Who can borrow the SMSF loan?
The SMSF loans are used to buy both residential or commercial property. The Australian Taxation Office (ATO) controls this type of loan and allows membership of up to four people where all members should be trustees. The SMSF member and trustees borrow this loan with an intent of making an investment that can help grow the members’ retirement savings.

What are the advantages of investing in SMSF loan?
The SMSF Home loans are considered a good home loan option as well as the best powerful way of saving for retirement. This is because it provides the borrowers with several useful advantages. Some of these advantages are listed below:

Increased flexibility among the members to acquire and sell properties.
Access to a variety of investment options
Helps in increasing savings and reducing tax payments
Drawbacks of SMSF Loans
While there are some important benefits of SMSF commercial property loan, there are also a few drawbacks of this loan, about which every member of the SMSF should be aware of. These drawbacks include:

No tax loss offsets: Under the SMSF loan scheme, any tax losses from the member’s commercial property can’t be offset against their personal income tax. The member must rent his/her property at the market rate. Simply put, this means that if the member owns the property and lease it to his own business, then he can’t apply any discounts to the rental price.

Strict rental conditions: It is mandatory to pay all rental fees on time, and in full.
Regular valuations: It is important for the borrowers to get their property independently valued on a regular basis.
Showing intent: When a member purchases a commercial property within his SMSF, he must be able to prove it’s solely for the purpose of providing him with a retirement benefit.
Renovations and repair funding: With SMSF, any significant changes which are required to be made into the member’s property, such as repairs or renovations, must be funded by cash directly available in the member’s SMSF. He/she can’t borrow money or take out a loan.
What are the terms and conditions related to SMSF Loans?
There are certain essential rules which the borrowers must follow while applying to SMSF home loans in Australia. These rules state that the property for which the loan is taken must:

meet the ‘sole purpose test’ of solely providing retirement benefits to fund members
not be acquired from any related party of a member
not be lived in by a fund member or any fund members’ related parties
not be rented by a fund member or any fund members’ related parties
What are the requirements of applying to SMSF loan?
Lenders and all other types of financial institutions offering SMSF home loans in Australia look for the following requirements in their borrowers while lending the loan:

Deposit: A deposit of at least 30% of the property value is expected to be made by the borrower
Rental income: The income expected from the property is factored into the borrower’s ability to make future repayments of the loan
Patterns of contribution: Lenders also analyze the pattern which shows how frequently and consistently the loan members make contributions to the fund, as these will also be relied on to meet repayment obligations.
Structure of the SMSF: The structure of borrower’s self-managed super fund must be compliant with Australian Taxation Office (ATO) and Australian Securities and Investments Commission (ASIC) rules.
Speak with a home loan broker
Applying to a SMSF home loan can be quite a tricky and lengthy process. That is why, it is best to take help from a home loan broker while applying to the SMSF loan.

Your Finance Adviser is a leading group of best home loan brokers in Australia. We are a finance advising company that works with a team of home loan experts including first time buyer mortgage brokers who specialize in providing a variety of home loan advice to a variety of customers located across all types of industries in Australia.

Shailendra Wadhwa, our passionate and committed home loan broker of the Kellyville Ridge , is ready to assist the customers in making the right financial decisions while applying to a home loan in Australia.