PERSONAL FINANCE PLANNING

ASSIGNMENT # 2

SUBMITTED TO:-
SIR VIKAS ANAND

SUBMITTED BY:-

KHALID ANWAR

ROLL:- R1814B29

REG :- 10805151
My financial needs would be as such:-
 To buy a own big car for me and my family.

 To buy our own house.

 To help my younger Sister in her education financially.

 To expand our contingency savings to help us get through tough times if any in
future.

All my needs are generally related to long term since in near future I don’t have any such
need for which I would like to avail credit from any credit giving institution.

Credit sources available for an individual are:-

 Instalment loans/credit

 Non-installment credit

 Mortgaged loans

 Credit cards

CAR LOAN

In order to apply for car loan I would like to opt for State Bank of India car loan because of
its certain advantages over the other bank’s car loan offers. State Bank of India car loan
would provide me with lowest interest rate of 8% which is lowest among most of the banks
offering car loans. Other than low interest rates SBI Car Loans also offer easy repayment options,
total transparency, no processing charges, finance to include vehicle registration charges, insurance
and one time road tax.

Advantage of SBI car loan for me over other loans would be:

• Lowest interest rates

• Longer repayment period of up to 84 months.
• No hidden costs or administrative charges.
• Finance for one-time road tax, registration fee, insurance premium and accessories
• No advance EMIs since some Banks/companies ask us to pay one or more EMIs
at the time of disbursement of loan, thereby effectively reducing our loan amount.
 • Complete transparency: SBI levies interest on daily reducing balance method.
When we pay one installment, the interest is automatically calculated on the
reduced balance thereafter. When we pay interest on an annual reducing balance,
as charged by many other companies/banks, the interest amount for the coming
year is determined on the amount outstanding at the beginning of the year.

HOME LOAN

In order to apply for a home loan I would opt for Kotak flexi Home loan because it offers
fixed interest rate on the loan and that too lowest from all the loan offers from other banks
who offer fixed rate home loans.

Certainty of a fixed rate generally comes at a cost while a floating rate may lead to higher
outflows in the event of an interest rate rise. Kotak Flexi Home Loan takes the middle path.
The interest remains unchanged for 3 years, at the end of which it is reset at prevailing index
rate and gets fixed for the next 3 years. This cycle continues till the end of the loan tenure.
The impact of any change in the index rate is given after the three year period.

The advantage of Kotak flexi home loan for me would be that I would get protection
against interest rate volatility during a 3 year period and also the benefit of any rate decrease
at the end of each 3 year period. So I would get the certainty of a fixed interest rate, along
with the flexibility of a floating rate. It also provides me the opportunity of lower interest rate
compared to conventional fixed rate loans. It also has some other features such as:

 Free Personal Accident Insurance Cover:- Up to Rs. 1 crore along with my loan, that
ensures that I am covered for any accidental mishaps and my family is well protected.
 Pre-Approval facility :- I could get a sanction for my loan amount based on the
income, assets and employment information I would provide during your consultation
with Kotak Mahindra Bank. I might come across a property which I need to close at a
short notice. In such a situation, this sanction can help so that I don't miss the
opportunity. The sanction is good for 6 months, giving me time to shop for the home
of my choice.
 Insurance options on your Home Loans :- You can also avail of a reducing insurance
cover at an exclusive premium, so that you are rest assured that should any
unfortunate mishap occur to you, your family is safeguarded from any repayment
burdens over the tenure of the loan.
 Simple documentation and speedy processing.
 Doorstep service in India
EDUCATION LOAN

As per my preferences I would like to opt for SBI education loan because its features tend to
attract my attention and comfortably meets my requirements. In SBI education loan whether a
student applies for a graduate, professional or postgraduate program or any other course
sanctioned by UGC, AICTE or the government, he will be considered eligible for the loan.
Therefore it covers almost all the courses a student can pursue. Lots of expense related to a
student’s education is also covered by the loan such as:-

 Fees payable to college/school/hostel

 Examination/Library/Laboratory fees
 Purchase of Books/Equipment/Instruments/Uniforms
 Caution Deposit/Building Fund/Refundable Deposit (maximum 10% tuition fees for
the entire course)
 Travel Expenses/Passage money for studies abroad
 Purchase of computers considered necessary for completion of course
 Cost of a Two-wheeler up to Rs. 50,000/-
 Any other expenses required to complete the course like study tours, project work etc.

SBI Education Loan Interest Rates

Loan Amount Rate of Interest

Loans up to Rs. 4.00 Lacs 11.25% p.a.

Loans above Rs. 4.00 Lacs and up to Rs. 7.50 12.75% p.a.
Lacs
Loans above Rs. 7.50 Lacs 11.75% p.a.

# The most important thing here is that Girl students availing education loans are allowed an
Interest Rate concession of 0.50%, which will certainly be beneficial in My Sister’s
Education Loan.

CREDIT CARDS
A credit card is a small plastic card with some numbers embossed on it and which helps to
purchase the things with no requirement of cash in pocket. It is 3-1/8 inches by 2-1/8 inches
in size and has identification information for example a signature or picture.
It permits the person named on it to charge purchases or services to his account charges for
which he will be billed periodically. This information is checked where we use it for example
by automated teller machines (ATMs), store readers, Internet computers and banks.

MY CURRENT USE OF CREDIT CARDS:- The use of credit cards makes my life much
simpler for me. Carrying cash can be cumbersome and dangerous at times. These cards also
gives me benefit of being swiped at almost any establishment around the globe. I can also
withdraw cash on my credit card. Credit cards offer me an easy way to track expenses, which
is necessary for both monitoring personal expenditures and the tracking of work-related
expenses for taxation and reimbursement purposes. Credit cards are accepted worldwide, and
are available with a large variety of credit limits, repayment arrangement, and other perks
such as rewards schemes in which points earned by purchasing goods with the card can be
redeemed for further goods and services or credit card cash back.

I currently use Citi bank gold card which is mainly a shopping card. Its main features
includes:

• High Credit and Cash Limits.

• Access to exclusive Citibank World Privileges.
• Earn 1 Rewards Point for every Rs. 150/- spent.

Card Highlights:-

Card Class:- Gold

Card Type:- Shopping

Issuer:- Citi Bank

Offered Type:- MasterCard

Rewards:- Shopping

Credit Card Rates:-

Purchases:

Intro Interest Rate 0% per month

Introductory Period 6 month
Interest Rate 3.19% per month
Balance Transfers:

Intro Interest Rate 0% per month

Introductory Period 0 month
Interest Rate 1.49% per month Min.: Rs 2500 per month
Services & Features

Fees & charges

Joining Fee Free for Life.
Annual Fee Free for Life.
Add On Card Fee Free for Life. Share all the privileges of your Citibank credit card with up
to five members of your family.
Cash Advance 2.5% (subject to a minimum of Rs. 250 and US $5 at International ATMs)
Transaction Fee
Penalty Interest Interest initially is 3.19% per month (i.e. 38.28% annualized). This can
Rate change periodically based on your spend, payback and utilization patterns.
Your rate of interest can increase up to 3.5% per month (i.e. 42.0%
annualized), in case of default. All charges are dynamic and are subject to
change based on Citibank's periodic review.
Late Payment • Rs. 300 for bills up to Rs.10000
• Rs. 600 for bills from Rs. 10001 - 25000
• Rs. 700 for bills above Rs. 25000
Free Credit Min.: 17 days Max.: 55 days
Period
Over Limit 2.5% of the amount over the Credit Limit (Subject to a minimum of Rs.
Charges 500)
Cheque Bounce Min.: Rs 250
Fee
Return of Cheque Min.: Rs 250
Fee
Outstation Rs 100
Cheque
Processing Fee
Duplicate Rs 100
Statement
Request Charges
Replacement Rs 100
Card Charges
Railway Booking 2.5%
Surcharge
Air/Railway 2.5% (subject to a minimum of Rs. 25) on railway / Air ticket purchase or
Booking cancellation fee
Comment
Fuel Surcharge 2.5%
Foreign Currency 3.5%
Transaction
Charges
Service Tax 12.36%

# If we compare CITIBANK GOLD CARD with SBI GOLD CARD, the interest rates and
charges of SBI GOLD CARD is as follows:

Credit Card Rates :-

Purchases:

Intro Interest Rate 0% per month

Introductory Period 0 month
Interest Rate 3.1% per month
Balance Transfers:

Intro Interest
0% per month
Rate
Introductory
3 month
Period
Interest Rate 3.1% per month Min.: Rs 5000 per month (The amount transferred should be
a minimum of Rs 5,000 or upto a maximum of 75% of your available credit
limit on the SBI Credit Card, whichever is higher.
You could chose between two different plans to pay back your balance.
Plan 1 offers 0% interest for 90 days.
Plan 2 offers 0.99% interest for the first 6 months.
Fee of Rs. 199 will be applicable for every Balance Transfer. Service tax
extra, if applicable.

Fees & charges

Joining Fee
Annual Fee
Add On Card Fee
Cash Advance Limit
Finance charges on cash
advances /extended credit
Late Payment
Free Credit Period
Minimum Amount Due
Up to: Rs. 1500/-
Up to: Rs. 1500/-
Up to Rs: 500/-
Up to 80% of Credit Limit (subject to a max. of 12K per day,
15K per day for Gold Cards)
Up to 2.99% per month (35.88% per annum) from the
transaction date, Up to 3.10% per month (37.2% per annum)
from the transaction date
30% of Minimum Amount Due (Min. Rs. 350 & Max. Rs. 600)
Min.: 15 days Max.: 50 days
5% of outstanding balance or Rs. 200, whichever is higher
Limited Lost Card Liability Zero lost card liability.
Over Limit Charges 2.5% of Over limit Amount (Min. Rs. 300 & Max. Rs.
500),2.5% of Over limit Amount or Rs 500 whichever is high
Cheque Pickup Fee Rs 45
Cheque Bounce Fee 2.5% of cheque amount (Min Rs 300, Max Rs 500) 2% of
Cheque Amount (Min. Rs. 300 & Max. Rs. 500
Invalid Cheque Fee 2% of Cheque Amount (Min. Rs. 250 & Max. Rs. 500),2% of
Cheque Amount (Min. Rs. 300 & Max. Rs. 500
Non-Bank ATM Access / SBI ATMs & SBI Card Cash Points - 2.5% or Rs. 200
Balance Enquiry Charges whichever is higher
Other Domestic ATMs - 2.5% or Rs. 250 whichever is higher
International ATMs - 3.0% or Rs. 250 whichever is higher
ATM Decline Fee - Rs. 20
Dial a Draft Fee Min.: Rs 199
Duplicate Statement Rs 100
Request Charges
Replacement Card Charges Rs 100
Charge Slip Request Rs. 125 per charge slip
Air/Railway Booking Rs. 30 + 2.5% of Transaction amount
Comment
Fuel Surcharge Min.: Rs 400
Foreign Currency 3.5%, Not Applicable for SBI Gold MasterCard
Transaction Charges
Service Tax 12.36%