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CIBIL Score: Importance of Credit Rating and How to Check

Understanding the importance of credit rating is the first step towards being smart in your credit journey. For any type of credit, financial institutions will check your credit score to evaluate your application.

This is because it gives them accurate information about your credit behaviour and ability to handle different types of credit. This, in turn, gives insights into your repayment capability. India has four reliable bureaus for generating credit scores, among which TransUnion CIBIL is the most popular.

Read on to know why CIBIL score is important, its benefits, how to check it and more.

What is the CIBIL Score?

Before assessing the importance of credit score, know these crucial pointers:

A CIBIL score is a 3-digit numerical summary of your creditworthiness
The number varies between 300 and 900
The institution collects credit data from lenders periodically and analyses your credit profile

See the table below to understand the credit score range:

Score	Approval Probability
900-750	Highest
749-700	High
699-650	Average
649-600	Low
<600	Difficult

Your CIBIL score is calculated based on the following factors:

30% of Payment history
25% of Credit exposure
25% of Credit type and duration
20% of other factors

Importance of CIBIL Score

Here are the factors that best describe the importance of credit rating when applying for any type of loan.

Creditworthiness

Most lenders depend on this three-digit metric to evaluate your financial standing. An optimal score of 750 or above enables you to get quick loan approvals. Remember, the score parameter varies from one lender to another. The higher the score, the easier the loan approval!

Approval Speed

A healthy score ensures lower chances of defaulting on the loan. On the contrary, a lower score of less than 700 may take some time for lenders to approve your application. Hence, it’s ideal to maintain a good score for quick loan disbursement.

Loan Amount

Lenders avoid giving higher loan amounts to borrowers with lower credit scores, as the risk of losing funds increases if they default. With an optimal score, you can get ample funding, provided you meet the required eligibility parameter.

Tenure

A long-term loan has a relatively higher risk for the lender. So, you must showcase a spotless credit history to opt for a tenure of your choice.

Interest Rate

This is inversely proportional to your credit score. Simply put, the higher the score, the lower the loan rate and vice versa. If your interest rate is less, your overall borrowing costs will also be lower.

Negotiation Power

Having a high score also guarantees that you get the loan on favourable terms. So, you can always negotiate for a longer tenure, better interest rates or a sizeable loan amount with a good score.

Numerous Credit Card Offers

You can enjoy better discounts, cashback, higher credit limits and many other benefits with an optimal score.

How to Check Your CIBIL Score

While you are familiar with the importance of credit rating, checking your score regularly is crucial. If it is on the lower side, you can take the required steps to improve it.

Here’s how you can check your free score on the CIBIL website:

Step 1: Visit the CIBIL website
Step 2: Click on ‘GET FREE CIBIL SCORE & REPORT’
Step 3: Enter your personal details, such as email address, first name, date of birth, ID, mobile number etc.
Step 4: Click on ‘Accept and Continue’ to view your CIBIL report

Following the steps, you can easily check your free CIBIL score. Alternatively, you can subscribe to a paid plan to review your reports regularly. The importance of credit score in getting a loan on favourable terms is paramount, as most lenders prefer a score above 750. You can use the Fibe CIR (Credit Information Report) tool, which instantly gives you an updated report for decoding your financial health.

Fibe Credit Score Analyser helps you to compare your credit score against Fibe’s best borrowers and understand where you stand. You can get to know the impact of your credit behaviour easily and tips on actions that can help you boost your score.

Head to the Fibe App today and begin your journey for better credit health!

You can opt for the Fibe Instant Personal Loan to bridge monetary gaps. When you apply with Fibe, we assess your creditworthiness based on an alternative credit score mechanism. This allows us to approve applicants with lower CIBIL scores as well. Download the Personal Loan App or visit our website to apply now.

FAQs on CIBIL Score Importance

What is CIBIL and its importance?

CIBIL stands for Credit Information Bureau (India) Limited. Here is why it is important:

This is the oldest credit bureau to get a licence from the RBI
This collects your credit information to generate the score
The institution helps lenders analyse their credit status
Lenders rely on the CIBIL score before approving a loan

Is it necessary to have a CIBIL score?

Yes. A CIBIL score helps lenders assess your repayment ability by gauging your financial standing. However, lenders like Fibe, use alternate scoring metrics to evaluate the eligibility of applicants.

What are the advantages of having a good CIBIL score?

Having a 750+ credit score allows you to enjoy many advantages when applying for credit, such as:

Lower interest rates
Higher loan amount
Longer tenure
Better credit card offers
Quick approval

A Comprehensive Guide on Peer2Peer Lending and How It Works

Leveraging the limits of the traditional credit system, Peer2Peer lending has become popular across the country in recent times. It is a system where:

People borrow within the communities to meet their financial requirements
There is no involvement of an official financial institution

To know more about this new lending system, how it works, the risks involved and more, read on.

What is P2P Lending?

This is a credit system that connects potential lenders with people who require funds. Here are some key features of P2P lending:

Borrowers pay interest on the loan amount, which helps lenders earn returns
There is no financial institution involved as the transactions take place between two parties
By looking beyond traditional sources, Peer-to-Peer credit systems have the potential to drive financial inclusion
You can get funds for various purposes, including education, debt financing or working capital requirements
It is an easy and convenient option as you can secure funds through an online P2P lending platform

How Peer-to-Peer Lending Works?

Here is how this credit system functions:

It takes place through a website or online portal that directly connects borrowers with lenders
Potential lenders and borrowers can create an account on this platform
The platform reviews the borrower’s profile on various aspects, including their credit scores, repayment history, income, employment, social media activities and more
Based on the assessment, the platform decides their creditworthiness and assigns risk buckets to them
Lenders can check this assessment and choose to extend their loans
The borrower pays interest on loans, which lenders earn as returns
The interest is determined based on the risk bucket assigned to the borrower
The Peer2Peer lending platform doesn’t levy a margin on the monthly instalments but charges a fee from both parties

Who Can Lend through Peer2Peer Lending?

Any individual with a valid PAN card can lend through a P2P credit platform. The following tax-paying entities can participate in Peer2Peer lending:

Individuals
Hindu Undivided Families (HUFs)
Firms
Societies
Companies

Risks Involved in P2P Lending

While there are no market-linked risks involved in this credit system, there is a risk of default. This means that there is a possibility of the borrower not repaying the principal and interest. However, in such instances, lenders can issue a legal notice and the lending platform may assist with recovery.

You can mitigate the non-repayment risk by offering loans to borrowers in different risk buckets. You should also thoroughly assess the risk profile of the borrower before extending the loan.

Taxation on Peer-to-Peer Lending

Here’s what you need to know about the tax rules for interest earned in Peer2Peer Lending:

The amount falls under the ‘Income from Other Sources’ category
The amount is added to income and taxed as per the slab rate you fall under

Peer-to-peer lending loan is a great credit option to access funds quickly. However, you can also secure quick funding of up to ₹5 lakhs on Fibe. Our Instant Personal Loan has a simple application process and provides quick sanctions at affordable rates. We also have basic eligibility and documentation requirements and levy zero foreclosure charges. Download the Fibe Personal Loan App to get a loan in just a few clicks.

FAQs on How Peer-To-Peer (P2P) Lending Works

How does peer-to-peer lending work?

Here’s how this credit system works:

It allows individuals and businesses to take loans directly from potential lenders
No financial institution participates in the process as an intermediary

Is peer-to-peer lending legal in India?

Yes. As per the RBI guidelines, the following tax-paying entities can participate in this lending system:

Individuals
Hindu Undivided Families (HUFs)
Firms
Societies
Companies

What are the advantages of P2P lending?

The following are some of the benefits of this lending system:

It allows investors to access credit quickly and at lower rates than traditional sources
Lenders can diversify their lending portfolio by providing loans to persons with different risk ratings

What is the limit of a Peer-to-Peer loan?

An individual can lend a maximum of ₹50 lacs across all Peer-to-Peer loan platforms. However, you can only extend a loan of up to ₹50,000 to a single borrower.

Getting a Personal Loan with a Credit Score of 650

If you are planning to apply for a personal loan for CIBIL score of 650, you may wonder whether lenders will approve your request. The good news is that a score of 650 is still considered fair. Your income, employment stability and overall repayment capacity also play a major role in the decision.

While a 750+ score gets you better loan offers, you can still qualify with a 650 score if you meet the lender’s criteria and follow a few smart steps. Read on to know how to improve your chances.

Can I Get a Personal Loan With a 650 Credit Score?

Yes, getting a personal loan for CIBIL score of 650 is possible. Here’s what you need to know:

A 650 score is considered fair. It is neither great nor poor
Approval depends on other factors like income, employment and existing debt
You may need to accept a higher interest rate or a lower loan amount
Applying through NBFCs or digital lenders can improve your chances
Adding a co-applicant or guarantor can also help with approval

Now, let’s look at how you can boost your chances of getting approved.

Tips to Get a Loan With a Credit Score of 650

If you are applying for a personal loan for CIBIL score of 650, these simple steps can improve your chances:

Show strong income: Share clear proof of steady earnings. A healthy salary reassures lenders that you can repay your EMIs on time.
Explain NA or NH status: If your report shows NA or NH, explain to your lender why there’s no recent credit history. Lenders may evaluate you as a fresh borrower.
Add a co-borrower: Applying with a parent, spouse or another eligible family member strengthens your profile. If they have a better credit score, it significantly reduces the lender’s risk.
Choose a smaller loan amount: With a 650 score, lenders may prefer approving lower amounts first. Once you repay on time, your eligibility improves.
Check lender criteria: NBFCs and trusted digital lenders like Fibe have simpler and more flexible rules for moderate credit profiles.
Be open to slightly higher rates: A lower score can mean a higher interest rate. If the loan is urgent, accept the rate and repay consistently to rebuild your score.

CIBIL Score Range for a Personal Loan

Your credit score plays a key role in whether your loan gets approved and on what terms. Here’s how different CIBIL score ranges impact your personal loan eligibility:

CIBIL Score Range	Rating	What It Means for Your Loan
NA/NH (No History)	No Credit History	You’ve never taken a loan or a credit card. Some lenders may treat you as a new borrower.
750 – 900	Excellent	High chances of quick approval. You can also get better loan offers with lower interest rates.
700 – 749	Good	Good chance of approval with reasonable loan terms. You may also get better rates.
550 – 699	Fair	Some lenders may approve. But you can expect higher interest rates or a lower loan amount.
300 – 549	Poor	Very low chances of approval. This shows missed EMIs or defaults in the past.

A higher score shows strong credit behaviour and gives you better control over your borrowing options.

Factors Affecting Personal Loan CIBIL Score and Ways to Improve It

Your CIBIL score reflects your credit habits. Here’s what can affect it and how you can improve it over time.

Factors That Affect Your Score

Payment delays: Missing EMIs or credit card payments can lower your score
High credit usage: Using more than 30% of your credit limit regularly shows poor credit discipline
Multiple loan enquiries: Applying for loans too often in a short time reduces your score
Loan defaults: Not repaying loans as agreed seriously damages your credit profile
Short credit history: Having limited credit activity might affect your overall score

6 Ways to Improve Your Score

Pay EMIs on time: Use auto-pay or reminders to never miss a due date
Lower your credit use: Keep utilisation under 30% of your total credit limit
Avoid frequent loan applications: Apply only when really required to prevent multiple hard inquiries on your report
Check your credit report: Monitor it regularly and raise a request if you spot any errors
Limit unsecured loans: Try to maintain a healthy mix of secured and unsecured credit
Close old dues quickly: Clear any pending credit card bills or small outstanding loans. Settling old balances gives your score an immediate boost.

With these practices, you can gradually improve your 650 CIBIL score and get easy access to funds. Remember, building your score is not something you can do overnight. To keep an eye on it, check your Credit Score for free on Fibe. If you need funds during an emergency, you can rely on Fibe to get quick and affordable Instant Cash Loan.

We use alternative scoring mechanisms to measure your repayment capacity and creditworthiness. As such, even to those who are new to credit or have a low score can get access to funds.

Moreover, we have quick approval and flexible repayment options, along with zero foreclosure charges and a 100% digital application. Download our Personal Loan App or visit our website now to get funding of up to ₹5 lakhs!

FAQs on Personal Loan for 650 CIBIL Score

Can I get a loan if my credit score is 650?

Yes, you can. Your approval would depend on factors like income stability, job profile and existing debt. You can always add a co-borrower or choose NBFCs as well. This can improve your chances of getting a personal loan for CIBIL score of 650.

Is 650 a bad CIBIL score?

No. A 650 score is fair. It may not get you the best interest rates, but many NBFCs and digital lenders still approve loans at this score.

Can I get a loan with a 680 CIBIL score?

Yes, you can. A 680 score has stronger approval chances and more comfortable loan terms, especially with NBFCs.

What is IMPS? How to transfer money using IMPS

Knowing what is IMPS (Immediate Payment Service) beforehand makes it easier to execute hassle-free fund transfers from the comfort of your home. With the rising popularity of electronic banking, IMPS stands out due to its real-time transfer capabilities. In addition, you can use this option to execute interbank transactions through multiple channels.

Read on to learn more about IMPS transfer, its features, benefits, limitations and more.

What is IMPS transfer?

This facility is offered by most banks and here are some facts:

Allows you to send and receive money from one account to another
IMPS services are available 24X7 via net banking, mobile banking, SMS, ATM, etc.

The main reasons for the introduction of this fund transfer facility are as follows:

To make electronic money transfers convenient and easy for customers
To contribute towards the RBI’s aim of electronification of retail transactions

Features of IMPS

Here are some key features of IMPS that you must make note of when choosing this facility.

24/7 Available: You can use IMPS to make transfers outside of banking hours and even on bank holidays
Transaction Limit: You can initiate inter-bank transactions of up to ₹5 lacs daily
Fast Payment: You can choose this to make real-time fund transfers, which makes it convenient to execute merchant payments
Secure Option: With encryption and authentication protocols, your details are secure when initiating payments
Availability: You can use it for any purpose, such as online shopping, bill payments, sending money to family and friends, etc.
Nominal Charges: You have to pay up to ₹5 as a minimum cost for your transaction, which can vary depending on the total transfer amount
Streamlined Solution: You simply need the beneficiary’s mobile number and MMID to execute fund transfers

Also Read: Difference Between NEFT and RTGS

Benefits of IMPS

Here are some advantages you can enjoy with IMPS:

Instant and hassle-free paying options, ensuring secure money transfer
Allows transactions outside of banking hours
Simplified fund-transfer process that can be carried out without the receiver’s bank details
Send and receive quick notifications upon process completion
Minimal charges levied per transaction, making it an economical option

Charges for IMPS

Check out the table for a brief overview of the costs involved when initiating IMPS transactions:

Transfer Amount	Transaction Charges
Up to ₹10,000	₹2.5 + GST
₹10,001 – ₹1 lacs	₹5 + GST
₹1 lacs – ₹2 lacs	₹15 + GST

These charges may vary as per your bank’s internal policies and regulations. Hence, kindly contact the respective bank for the exact charges levied.

How to Initiate IMPS Money Transfer?

Before executing the process, you need the following details:

Receiver’s MMID (Mobile Money Identifier) or Account number
Mobile number of the receiver
Name of the receiver
IFSC

Once you get these details, follow this process:

Step 1: Choose a channel and log in with your credentials
Step 2: Go to the fund transfer option
Step 3: Choose ‘IMPS’
Step 4: Click on ‘Add beneficiary’
Step 5: Enter the beneficiary details and amount
Step 6: Authenticate the transfer with OTP

What is the IMPS wallet number?

IMPS wallet number or MMID is a 7-digit number generated by the bank that allows you to receive payment into your bank account. To create this ID, banks use a combination of your account number and your mobile number linked to the account.

To know what is the IMPS number for your transaction, log into your bank’s net banking portal or mobile banking application. This is a unique reference number generated after every successful transaction.

Using these steps, you can make an IMPS transfer and enjoy instant payment transfer facilities within the limit decided by your bank. However, if you need instant funds to manage immediate requirements, then opting for a Fibe Online Personal Loan is a great choice.

Get up to ₹5 lakhs online with quick disbursal, minimum documentation, quick sanction and flexible tenure options. In addition, we allow you to prepay the outstanding loan without levying any additional charges. Download the Personal Loan App or go to our website and register to get started today.

FAQs on IMPS

What is the difference between IMPS and NEFT?

Among a number of functional differences between the two options, the key difference lies in their process, as given below:

IMPS allows real-time transactions
NEFT transfers funds within half-hourly batches

Is IMPS the same as UPI?

While both modes allow quick and secure money transfer options, they are two digital fund transfer options with distinctive features.

Is IMPS safe to use?

Yes, IMPS uses robust security measures such as encryption technology to ensure secure end-to-end fund transfers.

Which is safer: IMPS or NEFT?

Both options are equally safe as they follow all RBI norms for electronic payment transfers.

Punishment for Non-payment of Personal Loans in India

Taking a personal loan can ease your financial burdens, but defaulting on repayment can be a serious issue. Many borrowers wonder: ‘Can I go to jail for not paying online loans’ in India?

Let’s explore the legal consequences of non-payment, understand the rules and rights of both lenders and borrowers and learn how to navigate financial distress without risking imprisonment.

What Happens When You Can’t Repay Your Loan?

Financial companies will seek to collect the amount due to them in a methodical process as outlined by the RBI.

First, they will send you notifications and reminders through email and SMS.

Next, they will offer you an extension on the repayment duration and the option for loan restructuring.

If you are still unable to repay a personal loan in its entirety, lenders are at liberty to take legal action.

You must pay penalties and the lender may also seize your assets.

You may also need to submit a post-dated cheque for repayment.

All this can strain your finances and peace of mind, apart from having other outcomes. These are as follows:

You are credit score may go down 50–70 points with every default.

You can lose your assets pledged as collateral, if any.

Your co-signer or guarantor will have to pay on your behalf.

Your lender will charge additional late fees and default charges.

You will have to pay higher interest for your outstanding EMIs.

Legal Action and Punishment for Non-payment of Loans

Lenders initially send reminders and try to negotiate with the borrower in case of missed EMIs.

If the borrower misses 3 personal loan EMIs or 90 days pass from the first unpaid EMI, the loan is classified as a Non-Performing Asset (NPA).

After 180 days or six consecutive missed EMIs, the lender can escalate the matter to a civil court.

The case is taken up under Section 138 of the Negotiable Instruments Act, 1881.

The court reviews the borrower’s reason for non-payment and other relevant factors before announcing a final verdict.

The verdict given by the court is binding on all parties involved.

Rights of a Borrower

Here are the legal rights entitled to you by RBI during the loan recovery process:

Rights to Notice: You have the right to get a 60-day notice when the lender is putting up your asset for sale.

Rights to Fair Value: Lender must maintain transparency about the value of the asset.

Rights to be Heard: You can legally raise objections during the 60-day notice period to regain your possession by paying the due amount.

Rights to Human Treatment: Lender must maintain the dignity of the borrower and not pressurise you for payment during the recovery process.

Rights to Claim the Balance: If the asset sells for a higher value than the due amount, the residual funds legally belong to you as the borrower.

While these rights are available for your protection, it is best to avoid facing legal action. Maintaining a good repayment history allows you to get better terms on your loan and repay comfortably and without missing EMIs. You can check your credit score for free on Fibe to ensure your score enables you to borrow affordably.

A competitive rate of interest and proper repayment planning can help you pay your dues on time and also build a better score for the future. This will also help you boost your financial wellness today and tomorrow.

FAQs on Non-Payment of a Personal Loan

What is a legal notice for non-payment of a personal loan?

Legal notice for non-payment of loan is a document the bank or NBFC sends to the borrower when they default. It contains the following:

Reminder of the loan agreement terms

Defaulted payment amount

Deadline for payment

If you do not pay within the mentioned period, the lender can take the matter to court.

How do I settle an unpaid personal loan?

Generally, loan settlement is the last option lenders give after considering your financial situation and other factors. You can pay the final amount to close the loan by choosing this option. This amount is lower than your outstanding balance and is subject to the lender’s discretion.

How long does an unpaid loan last?

Old unpaid dues are only valid for seven years. After this period, the lender can’t act if they have not maintained contact. Further, after this period, the adverse effects of the default will not be visible on your credit report.

Personal Loan for Corporate Employees: A Quick Guide

A personal loan for corporate employees is an easily accessible and popular credit option. This unsecured loan is customised for employees of large organisations so that you can get it quickly and affordably.

Whether you are a government employee or working at an MNC, you can manage sudden and planned expenses without burdening your budget with this loan. Before you apply, understand its features and requirements to ensure a hassle-free borrowing experience.

Features & Benefits of Personal Loans for Salaried Professionals

Many characteristics make personal loan a good option for an employee. Take a look at some of these.

Limitless Funding

Since there are no end-use restrictions, these loans are a great way of meeting several needs, such as:

Debt consolidation
Home improvement
Emergency medical expenses
Cost of travelling
Wedding expenses
Funds for moving houses
Vehicle purchase
Home renovation
Large purchases
Education financing

Higher Loan Amount

You can leverage your steady employment and high income to get a significant amount and meet your goals. At Fibe, you can get up to ₹5 lakhs in just a few minutes.

Easy Financing

These loans are an easy way of getting additional funds as applications are generally approved in hours. So, you can easily get the funds you need during emergencies.

Competitive Interest Rate

Most financial institutions today offer attractive rates that make these loans a pocket-friendly option. Remember, the interest depends on your eligibility and loan terms as well as the lender’s policies.

Flexible Tenure Options

You can repay these loans in up to 3-5 years. This allows you to choose a repayment timeline that works for you and remain stress-free all through.

Unsecured in Nature

Since no security is needed, liquidating or risking your assets is not required.

Also Read: Personal Loans for Salaried Employees

Eligibility Criteria for Personal Loans for Corporate Professionals

Most lenders require you to meet general criteria as follows:

Age: You should be between 21 and 60 years
Nationality: You must be an Indian resident
Income: You should have a minimum income as per the lender’s policies
Credit Score: Most lenders accept 750 as a minimum credit score
Employment: Employees drawing salary from public or private limited companies can apply
Work Experience: At least 1 year of experience with the current employer

These criteria may vary as per the financial company you apply with. Make sure you qualify before you apply for the best results.

Paperwork Needed For a Loan For Corporate Professionals

Keep the following on hand to ensure a seamless verification process.

Documents	Description
Proof of identity	Aadhaar cardPassport Voter ID cardDriving licensePAN card
Proof of address	Aadhaar cardVoter ID cardPassport Driving licenseRent agreement Utility bills
Proof of income	Last 3 months’ bank statementsSalary slips as requiredForm 16Last 2 years’ Income Tax Return (ITR)
Other documents	Recent passport-size photographs, not older than 6 monthsFilled and signed application form

By submitting these documents, you can easily avail a personal loan from your chosen lender. In the financial marketplace filled with options, you can rely on Fibe to get quick and hassle-free funding. By applying for an Instantl Loan Online, you can get an affordable credit of up to ₹5 lakhs through an entirely digital application process.

You can also enjoy attractive interest rates, minimum paperwork and a quick sanction. That’s not all. You can also close your loan before the tenure ends without any penalty charges. Download the Fibe Personal Loan App from the Google Play Store or App Store, or apply online on our website.

FAQs on Personal Loans for Corporate Employees

Can a person apply for a loan?

Yes. With Fibe, you can apply for a personal loan if you are:

An Indian citizen
Between the age of 21-55 years
Have a minimum income of ₹15,000 if living in non-metro city and ₹18,000 if living in metro city

Can employees get loans from companies?

If a company offers a loan, it is usually in the form of a salary advance. This allows you to borrow a portion of your future monthly income as a loan before it is due to be credited.

Are loans for employees taxable?

Yes. While this is true in most cases, some loans are eligible for tax benefits. These include

home loans, which allow you can claim interest payment of up to ₹2 lakhs as an income tax deduction.

Best 10 Tax-saving Investments You Can Choose in 2024

Choosing tax-saving investments has dual benefits:

They help reduce your tax liabilities
They enable you to build a better financial future

You can choose from various government and private options, which allow you to invest as per your goals and availability.

However, before you decide on any investment option, there are two important strategies you must consider:

Analyse different schemes properly
Make a well-informed decision after extensive research

Read on to learn about top investment options, how much investment is needed to save tax and more.

Tax-Saving Investments in India in 2024

To decide which scheme is the best for you, here’s a quick overview of their return rates, lock-in period and tax benefits sections.

Scheme	Return Rate (per annum)	Lock-in Period	Tax Benefits
Employee Provident Fund	8.15%	5 years	Section 80C
ELSS Mutual Fund	As per the asset performance	3 years	Section 80C Section 10(D)
Life Insurance Policy	Depends on the plan	Varies as per the scheme	Section 80C (Premium) Section 10(D) (Claim)
National Pension Scheme	9% – 12%	5 years	Section 80CCD
National Savings Certificate	7.7%	5 years	Section 80C
Public Provident Fund	7.1%	15 years	Section 80C
Senior Citizen Savings Scheme	8.2%	5 years	Section 80C
Sukanya Samriddhi Yojana	8%	21 years	Section 80C and Section 10(D)
Tax-Saver Fixed Deposit Scheme	5.5% – 7.75%	5 years	Section 80C
Unit Linked Insurance Plan	11% – 20%	5 years	Section 80C and Section 10(D)

Note that returns can vary according to revisions in government policies or market conditions in the case of mutual funds.

Also Read: Tax saving investment options in India

Now, dive deeper into the key features of these tax-saving investments.

Employee Provident Fund (EPF)

Interest earned is completely tax-free
Can opt for withdrawal after a 5-year lock-in period without paying any tax
Employers also contribute to the funds, which is not included in the taxable income

Equity-Linked Savings Scheme (ELSS) Mutual Fund

ELSS allows an annual deduction of ₹1.5 lakhs from your taxable income
The returns after the 3-year lock-in period are long-term capital gains and are taxable
One way to save tax on the dividend is to reinvest the amount

Life Insurance Policy

The scheme is for the protection of the nominees against unfortunate circumstances
Eligible for deduction up to ₹1.5 lakhs from the net income
Maturity proceeds of 5 lakhs are eligible for taxation

National Pension Scheme (NPS)

You can claim 10% of your salary as a tax deduction
The deduction allows up to ₹1.5 lakhs within a fiscal year
This is one of the government-backed tax-saving investment options for retirement

National Savings Certificate (NSC)

You can claim a deduction of ₹1.5 lakhs on the investment amount per year
Earning within the first 4 years is tax-free; after that, it’s taxable as per the income tax slab
This scheme deducts TDS from the source

Public Provident Fund (PPF)

Ideal for long-term investment with a 15-year lock-in period
100% tax-free investment option
Maximum deduction of ₹1.5 lakhs per annum allowed

Senior Citizen Savings Scheme (SCSS)

Tax deduction allowed up to ₹1.5 lakhs per financial year
No TDS on interest up to ₹50,000
Interest earned after maturity is completely tax-free

Sukanya Samriddhi Yojana (SSY)

This tax-saving investment aims for the welfare of the girl child as part of the ‘Beti Bachao Beti Padhao’ campaign
It’s eligible for an annual deduction of up to ₹1.5 lakhs
Interest earned is also exempt from taxation

Tax-Saver Fixed Deposit Scheme

The maximum deduction allowed is ₹1.5 lakhs in a fiscal year
Interest earned is taxable

Unit Linked Insurance Plan (ULIP)

Premiums paid toward this scheme are eligible for deductions of up to ₹1.5 lakhs annually
In case of untimely demise of the investor, the claim amount is 100% tax-free
Maturity benefits are also tax-free if the total premium doesn’t exceed ₹2.5 lakhs

In conclusion, these schemes offer two of these most crucial benefits:

Help you to save on taxes
Enable you to build a financially strong future through excellent returns on investment

However, if you need funds for immediate financial needs, apply for an Instant Personal Loan instead of liquidating your investment or other assets. You can get up to ₹5 lakhs with quick disbursal and interest rates starting at 2% monthly, making it a comfortable and pocket-friendly option. So, visit our website or download our Cash Loan App to apply now!

FAQs on Tax-Saving Investments

Which investment is 100% tax-free?

Here are a few top tax-saving investment options in India.

Equity Linked Saving Scheme (ELSS)
National Savings Certificate (NSC)
Public Provident Fund (PPF)
Senior Citizens Saving Scheme (SCSS)
Unit Linked Insurance Plan (ULIP)

Is SIP tax-free?

Yes. Here’s what you need to know:

Systematic Investment Plans (SIPs) are tax-saving investments under the Exempt-Exempt-Exempt or EEE scheme
All earnings and withdrawals under this are exempt from taxation

Is LIC maturity tax-free?

According to the Budget 2023 guidelines, this is what you need to know:

The maturity amount is tax-free
The above condition applies only if you have paid a premium of more than ₹5 lakhs annually

Is it compulsory to file an ITR?

You must file an ITR:

If your income crosses the basic exemption limit
The first one holds true if your taxable income exceeds ₹5 lakhs

Here are 8 easy financial planning tips for young professionals

Smart financial planning is crucial for all young professionals because of fluctuating financial standing and inflation rates. Doing so enables you to:

Save for financially demanding times
Build a fund for retirement
Grow your wealth
Saving from your income
Invest additional funds regularly
Build better saving habits
Provide security against inflation and more

With these benefits in mind, here are some easy-to-follow tips you can rely on.

Tips for Financial Planning for Young Professionals in India

Before you incorporate the suggestions given below, map out your short-, mid- and long-term goals. This way, you can effectively use the steps based on your goals and current financial standing.

Tip 1: Focus on Financial Literacy

Before driving into planning, you must know the basics. You can read a few books on personal finance or do basic research online. Understanding factors that affect your finances and how to grow your wealth can help you build a solid foundation for inculcating good habits.

Tip 2: Avoid Overusing Credit Card

While it is a great tool to help you bridge gaps, at the end of the day, it is a loan that attracts interest. Overusing it can lead to a debt trap, which may negatively affect your finances and credit score. So, it is important to exercise self-control and use it responsibly.

Tip 3: Learn Budgeting

Budgeting is another wise step towards financial planning for young professionals. It allows you to manage the monthly cash flow. With this, you can avoid unnecessary expenses and save more, even with a limited income.

The most common practice is using the 50/30/20 rule of budgeting, but you must customise your budget per your requirements.

Tip 4: Start an Emergency Fund

This simple practice is the key to overcoming unforeseeable financial troubles. Be it a savings account or money market Investments, this will be helpful in times of uncertainty, such as unexpected job loss. During this time, you can rely on your emergency reserves for essential bills and loan repayments to avoid added financial burden from penalties or additional loans.

Tip 5: Align Investment with Goals & Risk

When you don’t invest as per your requirements and tolerance, you run the risk of making hasty or ill-informed decisions that harm your future finances. So, it is crucial to keep your goals and risks in mind. Once you have that, here are some investment options you can choose from:

Stocks
Gold (physical or bonds)
Real estate
Mutual funds
Fixed deposits
PPF and EPF
Government policy and saving schemes

Also Read: Budget planning tips to follow

Before choosing, compare the pros and cons to make an informed decision that suits your needs. Moreover, remember to diversify your portfolio to counter uncertain market conditions.

Tip 6: Plan Your Retirement Early

Saving for retirement in your 20s will help you get better interest on your principal deposits. In addition, investing in such goal-specific schemes early on can result in lower monthly premiums, which benefits in the long run.

Tip 7: Optimise Your Tax Planning

You must leverage the deductions and exemptions offered by the government to lower your tax liability. This can help you save significant amounts that you can invest in other schemes and secure your growth.

Tip 8: Maintain a Healthy Credit Score

With good creditworthiness, you get better and more affordable access to financial services and products, which can be beneficial in the long run. As such, one of the most underrated yet smart financial planning tips is to build and maintain a good score. Here are some ways in which you can do that:

Pay your EMI and credit card bills on time
Maintain a healthy mix of secured and secured credit
Check your credit score periodically
Get one loan at a time
Keep your credit utilisation ratio under 30%

Following all these tips will help you boost your current financial health and build a stable and strong future. You can also apply for a Personal Loan to get up to ₹5 lakhs with no end-use restrictions and kick-start your financial planning.

Moreover, you can enjoy interest rates starting at 2% p.m., flexible repayment options, zero foreclosure charges and many more benefits. Download our Personal Loan App or go to our website to apply online.

FAQs on Financial Planning

What is the 50-30-20 rule?

This is a rule of budgeting where your income is allocated as follows:

50% for your needs, such as utility bills, EMIs, groceries, insurance, etc.
30% for your wants, which includes your dining, gym, shopping, etc.
20% for savings and investments

How do I financially prepare in my 20s?

Here are a few things you must do:

Prepare a budget and stick to it
Keep savings for emergencies
Start investing for your retirement at a lower premium
Pay off your debts
Maintain good financial habits
Plan your finances towards owning a home
Cover yourself and your family with insurance

How do you budget money?

This is a personalised process, so you must remember your financial goals and aim to save more. You can use any other rule that suits your needs and plan accordingly.

What is the 70-20-10 rule?

This is an alternative budgeting strategy which distributes your monthly income into three categories:

70% for essentials and necessities
20% for savings and investments
10% for debt repayment

What is Merchant Banking: All you need to know

Merchant banking is a crucial aspect of the financial ecosystem. Currently, there are over 200 SEBI-registered merchant banks that provide a wide range of services to their clients. These banks are very different from regular banking and from other financial institutions in several ways.

They provide services to large/mid-size businesses, high-net-worth individuals (HNIs) and institutional investors. So, if you are a business owner of a growing enterprise, knowing about them is crucial. Read on to learn more about this concept, its features, functions and benefits.

Merchant Banking Meaning

It is a professional service provided by banks to their merchant customers. These banks offer professional advice to large corporations in terms of:

Conducting trade
Fundraising
Loan services
Underwriting
International financial advisory
IPO management

As such, they do not cater to the general public, as their target customers are business owners.

Examples of Merchant Banking Institutions

Here are some of India’s top examples of merchant banking institutions registered with SEBI.

Public Sectors	Private Sectors	Foreign Banks
Bank of Maharashtra	Axis Bank Ltd	Barclays Bank PLC
Canara Bank	Bajaj Capital Ltd	Deutsche Bank
Citibank N A	Edelweiss Financial Services Ltd	Goldman Sachs(India) Securities Pvt. Ltd.
DBS Bank India Ltd	Reliance Securities Ltd	J P Morgan India Pvt. Limited
HDFC Bank LTD	Tata Capital Markets Ltd	Morgan Stanley India Company Pvt Ltd
IDBI Capital Market Services Ltd	Motilal Oswal Investment Advisors Limited	Nomura Financial Advisory and Securities (India) Pvt Ltd

Services Provided by Merchant Banks

To understand their role in the business’s growth and financial health better, here are the key functions of merchant banking institutions.

Asset Management: They advise investors in selecting securities and assist them in trading and managing their portfolios
Raising Funds: They help businesses organise funds for their national and international trades and investments
Loan Syndication: They assist their clients in raising credit from banks and financial institutions if need arises
Promotional Activities: Businesses seeking government approval can get help from merchant banks to present their business idea
International Transactions: Businesses operating across borders can hire them to get advice on their operations
Underwriting Services: Businesses can get underwriting assistance when they plan to raise funds via IPO (Initial Public Offering)
Mergers and Acquisitions: They provide services for business expansion and other strategic transactions
Risk Management: They evaluate the risk of all business transactions and advise their clients on taking suitable measures

Also Read: Bank or Non-Banking Financial Company: Which is Better for Loans?

Merchant Banking Benefits

Here’s a quick overview of their advantages:

These banks are experts with extensive knowledge of financial markets
They have a large network of investors, venture capitalists, financial institutions, etc., which can benefit their clients
Analysing the situation and risk associated, they provide tailor-made solutions fitting the goals of a business
Services of these banks also extend beyond the domestic market
They make sure that merchants maintain compliance with various laws and regulations
Introducing the client to better potential investment opportunities is one of their key goals
Merchant banks also maintain long-term relationships with their clients, which aids in providing better support and advice
When it comes to complex transactions, they also guide their clients during the entire process

Considering the above, you can see how merchant banking differs from regular banking. These banks make financial planning and wealth management easy for mid and large-size corporations. Likewise, the Fibe’s Instant Personal Loan Online allows you to manage your financial emergency and urgent fund requirements without any hassles.

With an easy and 100% digital application process, you can avail up to ₹5 lakhs for your personal or business-related needs. With Fibe, you can also enjoy affordable rates, flexible tenure, no foreclosure fees and quick sanction. Download our Personal Loan App or go to our website to register online and apply now!

FAQ on Merchant Banking

What is the difference between banking and merchant banking?

The difference lies in their customer base. As the name suggests, merchant banking is designed explicitly for large merchants/ business owners. It doesn’t provide regular services offered by regular banks like opening a savings account, FD, bank deposit, etc.

What are the benefits of merchant banking?

These banks offer a wide range of services that involve offering financial advice based on market analysis. Thus, the key advantage of merchant banking is that it helps businesses grow and expand their operations.

What are the disadvantages of merchant banks?

Here are some of their disadvantages:

The services offered are very expensive
You must meet the required eligibility criteria in terms of company size
They have a risk of loss
They do not provide services to startups
They do not guarantee returns
You may not receive complete funding
You don’t have complete control of your assets

Is merchant banking similar to private equity?

Yes, but it’s a lot more than that. It also helps businesses in the following ways:

Raise capital
Manage mergers and acquisitions
Offer underwriting services
Provide financial advising
Help in fundraising

WhatsApp Banking – How to use, registration, benefits and more

WhatsApp banking is now a basic facility offered by the majority of banks. Since its launch in 2020 in India, banks have partnered with Meta-authorised Technical Service Providers to extend their services on this messaging app.

Attributing to its convenience and instant processing, it is now growing in popularity as a banking option. For instance, you don’t have to download multiple mobile banking apps for all your accounts, as you can connect with them on one platform.

Read on to learn more about the WhatsApp banking service, its features, benefits, registration process and more.

What is WhatsApp Banking?

Partnering with NPCI (National Payments Corporation of India), many banks in India introduced this e-banking facility, which allows the WhatsApp chatting app to act as a bridge for communication between banks and their customers.

Features of WhatsApp Banking

Here are the key features of WhatsApp banking in India.

GDPR Compliance: As per the General Data Protection Regulation, all messages between banks and customers are secure against archiving and pseudonymisation
Safeguard Against Threats: Banks use additional security measures to prevent any threats and vulnerabilities to your private information
Complete Encryption: The app keeps all of your private chats encrypted; this provides security to your banking-related confidential information
User Authorisation: You can opt-in and out of the banking facility as per your requirements

Why Choose WhatsApp Banking?

These are some reasons why you should opt for WhatsApp banking.

Fingertip Banking: Banking through WhatsApp makes it easy to keep track of all your account’s status anytime and anywhere
Secure: It is a secure option that has passed all the penetrative tests
Convenient: You don’t have to download additional apps and connect all your bank accounts through one app – WhatsApp
Pocket-friendly: Banking on WhatsApp does not require any charges; you only need to register for it and have stable internet access
Digital Payments: You can even send and receive funds on WhatsApp through the Unified Payments Interface (UPI)
Simple: Using WhatsApp for banking services is easy and doable by everyone, even if they aren’t tech-savvy
24/7 Availability: This facility isn’t subject to banking hours restrictions or bank holidays, so you can access it anytime

How to Register for WhatsApp Banking

The registration process may vary depending on your bank; however, here are common steps you can follow:

Step 1: Save your bank’s WhatsApp banking on your device
Step 2: Open the chat for the saved number
Step 3: Send a ‘Hi’
Step 4: Choose your preferred language

With these steps, you can successfully register. Note that your WhatsApp number must be registered with your account with the bank. Thereafter, you may get a banking menu on your chat. You can choose any of the service options and continue responding as per your requirements.

Fund Transfer via WhatsApp Banking

Here are the steps you must follow to send money via the WhatsApp UPI option.

Step 1: Click on the ‘₹’ symbol on the recipient’s chat
Step 2: Choose your bank
Step 3: Complete the registration process by following the instructions
Step 4: Enter the amount
Step 5: Confirm the payment

Other Services Available Through WhatsApp Banking

Banks provide a wide range of banking services to their customers via WhatsApp’s direct messaging. These include:

Notification for new product launch
Update regarding their savings / current account
To make inquiries for fixed deposit interest rates and other details
Information on services related to their debit card
Chequebook service detail
Request a new chequebook
Preapproved loan offers
Wealth management
Credit card billing amount and upcoming due dates
Outstanding credit card amounts
Bill payments
Fast tag services
Request mini-statement
Loan application and approval status tracking
Checking credit card application status
Update personal details
Locate your nearest bank branch and more

With these WhatsApp banking services, you can manage your accounts conveniently and without any hassles. If you need a financing solution that’s as convenient and easy, apply for Personal Loan and get up to ₹5 lakhs at affordable rates starting at 2% per month.

In addition, you can enjoy 100% digital application, minimum documentation, no pre-closure charges and many other benefits. Download the Personal Loan App or visit our website to register now and get the funds you need in just a few clicks.

FAQs on WhatsApp banking

How do I register for WhatsApp banking?

To start the registration process, you must save your bank’s WhatsApp banking number on your phone. Once saved, you must send a ‘Hi’ text on the chat to register your WhatsApp number for the facility.

What are the features of WhatsApp banking?

The key features of the Bank’s WhatsApp communication facility are as follows:

GDPR Compliance
IT threat protection
Encryption
User control

Why is WhatsApp banking important?

It allows you to enjoy real-time messaging to solve your queries. This way, you can communicate with your bank via chat and get prompt resolutions or answers to your requirements.

Is WhatsApp safe for banking?

As long as your device is password protected and the app is updated, banking through WhatsApp is a safe option.