Wednesday, November 26, 2008

Pvt Banks increased margin money on four wheeler

For many of us buying a first car is always has a great emotional value. The interest rates have hiked so much that it has become difficult to buy a car but this is just one side of the story. If we see the other side which is adding up to the high cost of the four wheeler is the margin money which needs to be brought in upfront. Private sector banks without announcing have hiked the margin requirement by 10 percentage points in the past few weeks.

According to few dealers hike in margin money has made it difficult to get a car loan through. For a compact car (B Segment), lenders are demanding 10% to 15% as margin money while earlier it was only 5% or so. For a mid sized sedan (C-Segment car), the margin money requirement has been hiked to 20% from 10% and for a utility vehicle 25% is being demanded from the earlier 15%.

However the commercial banks are lending up to 85% of on road price (dealer price plus road tax and insurance). "The problem here is paper work consumes a week to 10 days," dealers said.

Thus this means a car buyer has to shell out Rs 60,000 upfront for a compact car as against Rs 20,000 earlier and increases correspondingly for bigger cars. Up till now car financiers used to finance up to 100% of on road price of car.

"This is not all. In most cases, car financiers have brought in tighter disbursal norms, making a purchase a Herculean task. I know of a case in Coimbatore, where a buyer was asked to show property in his name to avail of a loan for a small car. And more so, after all paper work, the lender disbursed only 85% of the car value," sources said. But a section of market thinks that rising interest rates in fact don't hurt sales that much. They say that a 50 basis points or half per cent increase on a one lakh rupee car loan for a time of three years will translate into a monthly of a mere Rs 36.

"For a first time buyer, there is a lot of emotional accomplishment of owning a car, therefore he will try and stretch himself. But, where he is getting stumped now is on margin payments," an official with private bank said. "Car financiers are hiking interest rates and increasing margin payments which are affecting the already damp sentiment. We hope to see drop in domestic sales, because of this situation," Arvind Saxena, senior vice-president, marketing, Hyundai, said.

Wednesday, November 12, 2008

Dental Insurance – Some basic ideas

Dental insurance is one of the most popular forms of insurance nowadays. First of all, we should know the concept of dental insurance. Dental insurance is a form of insurance where an individual purchases a dental insurance plan through payment of a yearly or monthly premium to a dental insurance provider. Subsequently, the dental insurance provider offers dental insurance coverage for dental expenses. In simple words, if the insured person bears any dental expenses within the insurance term, those expenses would be reimbursed by the dental insurance provider.

The majority of health insurance programs offered at the present time are inclusive of dental insurance. Therefore, there is normally no requirement to purchase a dental insurance policy separately. When your health insurance or medical insurance does not offer dental insurance, you may receive dental insurance as a component of your medical insurance by means of raising your premium by a nominal value. In this kind of a dental insurance program, you can also avail tax benefits. In the U.S., the health insurance premium paid by you is immediately deducted from your taxable earnings. In this manner, you finish up paying lower taxes.

Family dental insurance offers dental insurance to the whole family. This is a more beneficial form of dental insurance than individual dental insurance because family dental insurance is relatively low-priced in comparison to individual dental insurance. In a family dental insurance program, if the number of heads goes up, then the premium per individual goes down since the risk becomes distributed.

When your company is offering dental insurance, in that case there is nothing better than that. You must opt for this form of insurance when your company is offering it because your employer pays the greater portion of the premium and you pay the rest.

Researches have also demonstrated that people carrying dental insurance plans have the trend of having improved dental health since they prefer precautionary dental checkup. This is advantageous because poor dental health might spoil your appearance and add to your expenses.

Monday, November 10, 2008

PSU banks to cut PLR by 75 basis points, interest rate to soften by 25-50%

After having a meeting with Finance Minister P Chidambaram all the PSU banks have decided to cut their prime lending rates by 75 basis points. Therefore interests rates are likely to get soften as the cut can be between 25-50%. Moreover credit guarantee on loans would be extended to Rs one lakh crore and deposit rates will be reduced by 50 basis points.

Earlier, Finance Minister P Chidambaram had held a meeting with top executives of PSU banks to review the liquidity situation and performance of lenders. The meeting was organized after the leaders of the Indian industry had met Prime Minister Dr. Manmohan Singh and demanded for steps to improve liquidity and move to create environment favorable for lowering of interest rates.

The meeting was attended by the SBI Chairman O P Bhatt, PNB chief K C Chakrabarty, Bank of Baroda Chairman M D Mallya, Canara Bank head A C Mahajan, UCO Bank CMD S K Goel and top officials of the Finance Ministry and Reserve Bank of India (RBI).

Earlier on Sunday, Chidambaram said that he would ask the public sector banks to think about lowering lending rates to ease the liquidity crunch in the country.

While expressing RBI's latest policy package as right step to instill more liquidity in the system, Chidambaram said, "I am happy with the policy package announced by the RBI. When it announced its (peak season) policy on October 24, the RBI had promised swift action in case it is necessary to infuse more liquidity."

Previously on Saturday, the RBI had announced a slew of measures to instill liquidity in the system.

The apex bank had slashed the repo rate by 50 basis points to 7.5 per cent and the cash reserve ratio (CRR) by 100 basis points to 5.5 per cent and the statutory liquidity ratio (SLR) by 100 basis points to instill an additional Rs 85,000 crore into the system.

Before in October, the RBI had infused an additional liquidity of Rs.1, 85,000 crore in the view of global financial crisis.