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In a bid to support meritorious and deserving Indian students to pursue their higher education without having to worry about funds, the government today announced the <keyword id="23831216" type="General" weightage="100" keywordseo="PM-Vidyalaxmi-scheme" source="keywords">PM-Vidyalaxmi scheme</keyword>. Here's all you need to know about it: The scheme will cover students who secure admission to one of the top 860 higher educational institutions in the country. In effect, this is set to benefit over 22 lakh students annually. You can apply for this loan via a soon-to-be launched consolidated PM-Vidyalaxmi portal. The loan application will be entirely digital and will not require collateral or assets to be pledged in place of a loan or even a guarantor. For loans up to Rs 7.5 lakh, the government will provide a 75% credit guarantee. If your family's annual income is up to Rs 8 lakh, you are eligible for receiving loans up to Rs 10 lakh at an interest rate of up to 3% lower rates. This support will be offered to around 1 lakh students every year, and those who opt for technical or professional courses from government-run institutions will be given preference for the same. The government has already set aside Rs 3,600 crore for the same, to be utilized between 2024 and 2031, benefiting 7 lakh students in this period. All eligible students whose family's annual income falls below the Rs 4.5 lakh threshold will receive a full subsidy on interest payable. As for which higher education institutions (HEIs) will qualify, it will depend on recent NIRF (National Institutional Ranking Framework) rankings. This will include: <ul><li>All centrally governed institutions</li><li>Public and private institutions that have made it to NIRF's top 100 rankings in the overall, category, and domain-specific categories</li><li>All state government HEIs that are ranked between 101 and 200 in <keyword id="22759868" type="General" weightage="20" keywordseo="NIRF-rankings" source="keywords">NIRF rankings</keyword> will also be eligible.</li></ul> <h2>Rising cost of education</h2> Data from NSSO (National Sample Survey Office) highlights that the average expenditure on education in India has doubled in the last decade. Per the All India Survey on Higher Education 2020-21, the tuition fees for engineering courses in most private institutions have already risen by 50% over the past 10 years. Education inflation currently stands high, at about 11–12%. The demand for educational loans is also inching up steadily. Per RBI data, as of September 20, 2024, the total quantum of outstanding education loans stood at Rs 62,389 crore, up 2.8% from Rs 60,715 crore in September 2023. India's largest lender, the State Bank of India, leads the education loan bandwagon, with disbursals worth Rs 10,860 crore in FY24.

Lack of funds stopping you from pursuing higher education? The government can come to rescue

The government will provide financial support for <keyword id="19936324" type="General" weightage="20" keywordseo="loans" source="keywords">loans</keyword> up to Rs 10 lakh for <keyword id="19896809" type="General" weightage="20" keywordseo="higher-education" source="keywords">higher education</keyword> in domestic institutions, <keyword id="20385790" type="General" weightage="20" keywordseo="Union-Finance-Minister" source="keywords" meta.keywordsubtype="org" meta.entityname="Union Finance Minister" meta.hostid="261" meta.entityid="Union Finance Minister">Union Finance Minister</keyword> <keyword id="19916618" type="General" weightage="20" keywordseo="Nirmala-Sitharaman" source="keywords" meta.keywordsubtype="org" meta.entityname="Nirmala Sitharaman" meta.hostid="261" meta.entityid="Nirmala Sitharaman">Nirmala Sitharaman</keyword> announced on Tuesday. Presenting the <keyword id="19936553" type="General" weightage="20" keywordseo="budget" source="keywords">budget</keyword> for 2024-25, she said e-vouchers for this purpose will be given directly to one lakh students every year with interest subvention of 3 per cent of the loan amount. Upgrading 1,000 Industrial Training Institutes (ITIs) in hub and spoke model, aligning course content with skill needs of industry and revision of model skill loan scheme, are among the measures announced by the Finance Minister for Skill Development sector. "For helping our youth who have not been eligible for any benefit under govt schemes and policies government will provide financial support for loans up to Rs 10 lakh for higher education in domestic institutions. E-vouchers for this purpose will be given directly to one lakh students every year with interest subvention of 3 per cent of the loan amount," Sitharaman said. The Union Budget for 2024-25 will provide Rs 1.48 lakh crore for education, employment and skilling in the country. She said, "1,000 ITIs will be upgraded in hub and spoke model, course content and design will be aligned to the skill needs of industry and new courses will be introduced for emerging needs. I am happy to announce a new centrally sponsored scheme for skill development in which 20 lakh youth will be skilled over period of 5 years". "The model skill loan scheme will be revised to facilitate loans up to RS 7.5 lakh with a guarantee from government promoted fund..this measure is expected to help 25,000 students every year," she added. SEE ALSO:<a href="https://www.businessinsider.in/budget/news/union-budget-2024-live-updates-finance-minister-nirmala-sitharaman-key-announcements-23-july/liveblog/111942008.cms" target="_blank"></a> <a href="https://www.businessinsider.in/budget/news/union-budget-2024-live-updates-finance-minister-nirmala-sitharaman-key-announcements-23-july/liveblog/111942008.cms" target="_blank">Union Budget 2024 Live Updates: Finance Minister Nirmala Sitharaman to present her record seventh consecutive Budget today</a><a href="https://www.businessinsider.in/business/news/expectations-from-union-budget-2024-25-how-will-this-budget-impact-you/articleshow/111946291.cms" target="_blank"></a> <a href="https://www.businessinsider.in/business/news/expectations-from-union-budget-2024-25-how-will-this-budget-impact-you/articleshow/111946291.cms" target="_blank">Union Budget 2024-25: How will this budget impact you?</a><a href="https://www.businessinsider.in/budget/news/heres-a-quick-overview-of-pm-modi-3-0-governments-first-budget-to-be-presented-by-fm-nirmala-sitharaman-today/articleshow/111944393.cms" target="_blank"></a> <a href="https://www.businessinsider.in/budget/news/heres-a-quick-overview-of-pm-modi-3-0-governments-first-budget-to-be-presented-by-fm-nirmala-sitharaman-today/articleshow/111944393.cms" target="_blank">Here's a quick overview of PM Modi 3.0 government's first budget, to be presented by FM Nirmala Sitharaman today</a>

Budget 2024-25: Govt announces loans up to ₹10 lakh for higher education in domestic institutions

<ul><li>Indian companies will likely have to contend with the fact that <keyword id="1384155" type="General" weightage="100" keywordseo="wfh" source="Orion">WFH</keyword> is here to stay. </li><li>A new report by <keyword id="13222" type="General" weightage="80" keywordseo="sbi" source="Orion">SBI</keyword> has revealed that thanks to WFH’s popularity, Indians are increasingly obtaining home loans in Tier 3 and Tier 4 districts. </li><li>As a result, housing demand and prices have also increased at a faster pace when compared to Tier 1 and Tier 2 districts. </li><li>Women home loan borrowers also account for half of fresh disbursals in the top 20 districts in T3 and T4 districts. </li></ul>The boom in Work from Home in the post-pandemic era is now reflecting in home loan growth, according to a report by State Bank of India. While companies in India and around the world are increasingly demanding their employees to return to offices, it looks like at least some of them have decided to set up offices in their homes. “Working from Home is redefining the priorities as households are shifting into digital offices within their own homes in Tier 3 and Tier 4 districts,” the report by SBI said. The report further adds that this has not only led to the growth in loans being faster in T3 and T4 districts, even the average loan sizes have increased much more when compared to Tier 1 and 2 districts between FY19 and FY22. Overall, home loans have grown at a compounded annual growth rate (CAGR) of 11% since FY19, but T3 and T4 districts have grown at a faster pace of 12-13%. “As the pandemic forced buyers to reassess the work-life balance, cities having better infrastructure connect have found renewed interests from new-gen buyers whose digital lifestyle enables them to connect to work from anywhere,” the report adds. <div type="Article" hostid="261" msid="94220904" title="For every ₹100 pulled out by foreign investors from the Indian equity markets, domestic investors have ploughed back ₹89 this year" mstype="2" mssubtype="0"></div> <cmsannotation type="cmsannotation" annotationid="Housing demand and prices are increasing at a much faster rate, too" comment="subhead" text="Housing demand and prices are increasing at a much faster rate, too">Housing demand and prices are increasing at a much faster rate, too</cmsannotation> T3 and T4 districts are shining in other areas, too – according to the report, both housing demand and prices are growing at a much faster rate. “Many tier-2 cities including Visakhapatnam, Guwahati, Raipur, Surat, Vadodara, Jaipur, Lucknow, Dehradun and tier-3 city Coimbatore have witnessed higher growth in housing prices,” the report said. It attributes this growth to an increasing trend of WFH and freelance jobs. Women account for nearly half of the loans in the top 20 districts. In fact, two districts – Dang in Gujarat, and Arwal in Bihar stand out where 86% and 75% of fresh loans were sanctioned to women, respectively. A couple of reasons for this could be the additional subsidies of up to 0.1% on interest and the simpler eligibility criteria, making home loans an attractive proposition for women. <cmsannotation type="cmsannotation" annotationid="Fresh disbursals to T3 and T4 districts also register growth" comment="subhead" text="Fresh disbursals to T3 and T4 districts also register growth">Fresh disbursals to T3 and T4 districts also register growth</cmsannotation> The share of T3 and T4 districts in fresh disbursals has also registered growth between FY19 and FY22, the report says – together, T3 and T4 districts account for 36% of fresh disbursals in FY22, up from 32% in FY19. More specifically, Uttar Pradesh, Karnataka and Punjab top the list when it comes to growth in fresh disbursals – 6 districts of UP, and 5 districts of Karnataka and Punjab each figure amongst the top 20 in T3 and T4 categories. One of the reasons for the growth in UP, specifically, is the launch of the SVAMITVA scheme by the Indian government wherein rural people are given the right to document their residential properties so that they can use their property for economic purposes. Essentially, this scheme enables rural people to document their properties and then use them for obtaining loans and other financial benefits. So far, 20.8% of villages in UP have been covered, and that seems to have had an impact on fresh loan disbursals already. <div type="Article" hostid="261" msid="94388449" title="Reliance New Energy picks up 20% stake in Caelux to shore up its position in advanced solar tech" mstype="2" mssubtype="0"><payload><![CDATA[seealso]]></payload></div> <div type="Article" hostid="261" msid="94366341" title="The Adani effect: Ambuja Cements rallies 40% in one month – analysts suggest good days ahead for the cement industry" mstype="2" mssubtype="0"><payload><![CDATA[seealso]]></payload></div> <div type="Article" hostid="261" msid="94304653" title="Story in charts: How Indian equity, gold and debt investments have performed over the past two decades" mstype="2" mssubtype="0"><payload><![CDATA[seealso]]></payload></div>

Home loans growing at a faster rate in Tier 3 and 4 districts, thanks to WFH: SBI report

<ul><li>For self occupied property, <keyword id="6397939" type="General" weightage="20" keywordseo="interest" source="Orion">interest</keyword> deduction is restricted to ₹2 lakhs per annum </li><li>For a rented property, the entire interest amount is a deductible expense. </li><li>You can begin claiming your <keyword id="6354730" type="General" weightage="20" keywordseo="home-loan" source="Orion">home loan</keyword> benefits only once you have received possession. </li></ul>Buying a home is undoubtedly one of the biggest financial commitments in one’s life. And since it is a big ticket purchase, one more often than not needs to take a loan to purchase. <keyword id="35547" type="General" weightage="20" keywordseo="tax-deductions" source="Orion">Tax deductions</keyword> on home loans provide an incentive to people to purchase their own home. We take a look at how home loan tax deductions work in different situations and other rules. <cmsannotation type="cmsannotation" annotationid="Home loan tax deduction for self-occupied and rented properties" comment="Subhead" text="Home loan tax deduction for self-occupied and rented properties">Home loan tax deduction for self-occupied and rented properties</cmsannotation> The <keyword id="6370810" type="General" weightage="20" keywordseo="income-tax-act" source="Orion">Income Tax Act</keyword> provides for deduction of interest on home loan as well as for repayment of principal loan borrowed for acquiring house property. “For self occupied property, interest deduction is restricted to ₹2 lakhs per annum whereas for a rented property, the entire interest amount is a deductible expense,” says Shabala Shinde, Partner, Grant Thornton Bharat. Section 80EEA gives additional exemption of ₹1,50,000 on the payment of interest on home loan. This deduction is available if the loan is taken under the affordable housing scheme. “Interest paid on loans taken before April 1 2022 are eligible to be claimed under Section 80EEA,” says Suneel Dasari, founder and CEO, Eztax.in, a tax filing portal. For repayment of principal amount, the deduction is available against total income and is restricted to ₹1.5 lakhs annually irrespective of the property being let out or self-occupied, under section 80C. However, since section 80C also includes investments like public provident fund (PPF), equity linked savings scheme (ELSS), provident fund contributions and payments like life insurance premiums, you may not be able to utilise the full deduction of ₹1.5 for home loan principal payment. You can also claim a tax deduction on registration and stamp duty paid on the property under section 80C. <cmsannotation type="cmsannotation" annotationid="Tax rules to remember" comment="Subhead" text="Tax rules to remember">Tax rules to remember</cmsannotation> <cmsannotation type="cmsannotation" annotationid="Condition to fulfil for claiming maximum tax deduction on interest paid" comment="Subhead" text="Condition to fulfil for claiming maximum tax deduction on interest paid">Condition to fulfil for claiming maximum tax deduction on interest paid</cmsannotation> Here are a few tax rules one should keep in mind regarding tax deduction on home loans. To qualify for the maximum allowable deduction on loan interest, you must complete the purchase or construction of the house within three years of obtaining the loan. If the acquisition or construction takes longer than three years, your deduction is limited to ₹30,000 instead of the full ₹2 lakhs. <cmsannotation type="cmsannotation" annotationid="Home loan tax benefits can be availed only after possession" comment="Subhead" text="Home loan tax benefits can be availed only after possession">Home loan tax benefits can be availed only after possession</cmsannotation> One can begin claiming your home loan benefits only once the construction of the home is complete, and possession has been handed over by the builder. However, what about the instalments you paid during the construction phase or before you received the keys to your house? According to the rules, you cannot claim a deduction for principal repayment during this period. Still, the interest paid can be accumulated and claimed after you take possession of the property. The law allows for a deferred deduction on the interest paid during the pre-construction period. This deduction on such interest can be availed equally over a span of 5 years, starting from the year in which you take possession of the property. <cmsannotation type="cmsannotation" annotationid="Deduction of interest available on accrual basis" comment="Subhead" text="Deduction of interest available on accrual basis">Deduction of interest available on accrual basis</cmsannotation> You can claim interest deduction on your home loan even if you have missed some EMIs, subject to certain conditions. The Income Tax Act allows for the accrual of interest benefits, meaning that you can accumulate the interest paid during the financial year, including any missed EMIs, and claim it as a deduction in your income tax return. However, it's crucial to ensure that you have proper documentation to prove the interest payments made. However, the deduction of property taxes and interest paid on a home loan are available only on a ‘paid’ basis. <cmsannotation type="cmsannotation" annotationid="Home loan deduction applicable only under old tax regime" comment="Subhead" text="Home loan deduction applicable only under old tax regime">Home loan deduction applicable only under old tax regime</cmsannotation> Home loan tax deduction is available only if you opt for the old tax regime. “Note that in case you opt for the new tax regime for FY 2023- FY2024, you will not be eligible for the deduction under section 24 on interest on home loan as well as 80C deduction for repayment of the principal amount of loan,” says says Adhil Shetty, CEO, BankBazaar.com. Also, in that case, you cannot set off the house property loss against any other head of income.

Home loan tax deductions: Self-occupied vs rented, the differences

<ul class="summary-list"><li>Biden has implemented targeted student-loan forgiveness efforts over the past few years.</li><li>BI spoke to some millennials who received relief through different programs.</li></ul>Scott M. Smith, 40, wasn't expecting <a target="_blank" href="https://www.businessinsider.com/new-student-loan-forgiveness-borrowers-save-plan-pslf-debt-cancellation-2024-4">student-loan forgiveness</a>.After receiving his master's in education administration in 2015 — preceded by his undergraduate education degree in 2008 — Smith held a student-loan balance of about $30,000 from both degrees. Since his work has been in public service, currently as a teacher, Smith decided to apply for the <a target="_blank" href="https://www.businessinsider.com/student-loan-forgiveness-who-qualifies-for-latest-debt-relief-idr-2023-12">Public Service Loan Forgiveness program</a>, which forgives student debt for government and nonprofit workers after 10 years of qualifying payments.But despite working full time for a qualifying employer, Smith said, he wasn't hopeful for forgiveness because his student-loan servicer told him in 2022 he hadn't met his qualifying payments.That all changed with a letter from his servicer — reviewed by Business Insider — on February 15, 2023, stating: "We determined you have successfully met the requirements of the PSLF Progam and your loans listed below have been forgiven. Thank you for your public service!"With that letter, Smith's remaining $23,086 student-debt balance was officially gone."I was shouting it from the rooftops and walking around my school like, 'Hey, everybody who's been out of school for 10 years or so,' advertising that," Smith told BI. "So then I was helping a lot of my colleagues to get that information, as well."<div type="image" title="Scott M. Smith" height="315" width="420" msid="112523207" hostid="261" sizebytes="11892"></div>Since the Supreme Court <a target="_blank" class="" href="https://www.businessinsider.com/student-loan-forgiveness-blocked-supreme-court-strikes-down-debt-cancellation-2023-5">blocked President Joe Biden's broad student-loan forgiveness plan</a> last summer, the Education Department has erased debt piecemeal by focusing on existing programs like PSLF. Many of these previously did not work as intended due to administrative hurdles and paperwork errors that left borrowers paying off more than they might've owed.Such <a target="_blank" href="https://www.businessinsider.com/student-loan-debt-cancellation-payment-pause-borrowers-disabilities-defrauded-2021-6">programs have provided relief to millions of borrowers over the past few years, including </a>borrowers <a target="_blank" href="https://www.businessinsider.com/biden-education-department-cancels-student-debt-borrowers-disabilities-paperwork-cardona-2021-3">with a total and permanent disability</a>, those <a target="_blank" href="https://www.businessinsider.com/biden-wiped-out-student-debt-education-department-corinthian-college-2022-6">defrauded by the schools they attended</a>, and those who had <a target="_blank" href="https://www.businessinsider.com/student-loan-forgiveness-debt-cancellation-save-income-driven-payment-plan-2024-2">made at least 20 years of qualifying payments</a> on income-driven repayment plans but had yet to receive the relief they were eligible for.The relief is a particular bright spot for people of Smith's age.Millennials who've gotten their loans wiped out told BI that they're now able to celebrate by investing in their futures and pursuing other life goals, such as buying a home, that their generation has famously lagged in pursuing.In the $1.7 trillion student-debt crisis, which affects over 40 million Americans, <a target="_blank" href="https://www.businessinsider.com/typical-student-loan-borrower-balance-millennial-woman-debt-relief-biden-2023-11">millennials, who are roughly 28 to 43, today </a>hold a significant portion of the load. According to recent Federal Student Aid <a target="_blank" href="https://studentaid.gov/data-center/student/portfolio">data</a> for the third quarter of 2023, 14.8 million student-loan borrowers ages 25 to 34 — older Gen Zers and younger millennials — hold $483 billion outstanding in student debt. That same data shows that 12.2 million borrowers ages 35 to 49 — older millennials and younger Gen Xers — hold $534 billion outstanding in student debt.<a target="_blank" href="https://www.federalreserve.gov/publications/files/2023-report-economic-well-being-us-households-202405.pdf">According</a> to the Federal Reserve, the median amount of student debt borrowers held in 2023 was between $20,000 and $24,999, and borrowers with higher levels of education were more likely to carry larger student debt loads.This relief could not have come at a better time for Smith. He said that he and his wife were hoping to grow their family with a second child but that his nearly $600 student-loan payments being deducted from his bank account each month strained their budget, making it difficult to plan for baby No. 2. The loan forgiveness has freed up their budgets to buy a larger car for their family — and he and his wife are now expecting."We have another thousand dollars every two months that we could put into something else," Smith said.Knowing how many borrowers have student debt, Smith said he's grateful for this relief, which allows him to move forward in life and grow his family without that financial burden weighing him down."It was huge. It really started things to be as great as they are right now," Smith said. "I'm the happiest that I've ever been, and that was a definitive point. February of 2023 was when things started to get better again."<h2 id="10129122-48c9-4ef3-a0e4-36323175654d">The freedom to go back to school</h2>For Paul Smylie, 39, student-loan forgiveness means something else.After graduating with an undergraduate degree in geography in 2007, Smylie had a student-debt balance of just over $36,000. He began repaying those loans on an <a target="_blank" href="https://www.businessinsider.com/how-to-get-idr-student-debt-relief-account-adjustment-biden-2023-7">income-driven repayment plan</a>, which promises debt relief after at least 20 years of qualifying payments. As of 2024, Smylie was able to get his balance down to $9,811 — but that was after paying about $46,000 because of interest.Given that Smylie had not yet completed his 20 years of payments, he didn't qualify for relief through his income-driven repayment plan. However, <a target="_blank" href="https://www.businessinsider.com/save-plan-student-loan-borrowers-new-debt-relief-save-income-driven-plan-2024-2">Biden's new SAVE income-driven repayment plan</a> offered a glimpse of hope — a provision within the plan allowed for student-loan forgiveness on loans with an original balance of $12,000 or less after as few as 10 years of payments.After SAVE was implemented in July 2023, Smylie enrolled in the plan and had four loans remaining to pay off — each of which was under $12,000. On February 21, the Education Department announced it would be implementing the new forgiveness provision ahead of schedule, announcing <a target="_blank" href="https://www.businessinsider.com/student-loan-forgiveness-debt-cancellation-save-income-driven-payment-plan-2024-2">$1.2 billion in relief for 153,000 borrowers</a>. To Smylie's surprise, he was one of them.As of August 9, the 8th Circuit Court of Appeals has <a target="_blank" class="" href="https://www.businessinsider.com/save-plan-blocked-cheaper-student-loan-payments-relief-new-ruling-2024-8">blocked SAVE</a>. Students with loans enrolled in the program have been placed into forbearance pending the results of continued legal battles over whether the lower payments and forgiveness measures in the payment plan can continue.While some experts have suggested a complete reversal of the SAVE plan could result in forgiveness being rolled back and loans being reinstated, the <a target="_blank" class="" href="https://apnews.com/article/student-loan-cancellation-debt-college-forgiveness-c3ec59d4c1d89e77bc1afc6c8ded1615">Associated Press</a> reported that reinstating loans on such a large scale would be unreasonably costly and politically fraught, making such an outcome unlikely. However, it will be up to the courts to determine what to do with previously forgiven loans if the SAVE plan is ended entirely.For Smylie, the forgiveness granted by SAVE has been a godsend."It was a total shock," Smylie told BI."I teach yoga, and so it was 20 minutes before I was supposed to start to teach a class and I see this email, and I'm like, 'Wait a minute, is this serious?' And I just couldn't process it," he said. "I remember having a hard time teaching. I was just in this fun little cloud of joy. But it's one of those moments you just never think would ever come true, and then it did."<div type="image" title="Paul Smylie" height="2069" width="2758" msid="112523208" hostid="261" sizebytes="330684"></div>This relief is allowing Smylie the freedom to "have real true financial goals" with his retirement — and it's even opening the door for him to consider furthering his education. The idea of returning to school or seeking higher education in the first place has brought diverging views across generations.As BI has previously reported, many <a target="_blank" href="https://www.businessinsider.com/gen-z-value-of-college-higher-education-student-debt-tuition-2023-12">Gen Zers have chosen to forego college</a> due to high student debt loads and the availability of jobs that don't require college degrees. But for some millennials, Gen Xers, and even boomers, <a target="_blank" href="https://www.businessinsider.com/gen-xer-why-going-back-school-50s-was-worth-it-2024-5">going back to school</a> is an opportunity to advance their careers, earn more money, and give themselves a chance at trying something new — an opportunity they might not have had when they were younger. For example, a <a target="_blank" href="https://www.gallup.com/analytics/644939/state-of-higher-education.aspx">report</a> from Gallup and the Lumina Foundation found that "adults' interest in pursuing some form of higher education is at the highest level" the organizations ever recorded.Smylie's student-loan forgiveness is giving him the financial freedom to consider doing just that."It's taken a weight off of me, but it also inspired me to go back to a master's program that I had my eye on for a bit," he said.BI spoke with five financial advisors who primarily work with millennials. Each indicated that student debt remains among the top financial concerns their clients report having."There's not a lot of wiggle room in some cases as they're paying off student loans, to prioritize other short-term things or really save aggressively outside that debt," Chloe Moore, a certified financial planner who founded Financial Staples, told BI. "So having those student loans paid off really makes a difference."The advisors said most of their clients who have student loans carry between $20,000 to $100,000 in student debt, with those who pursued master's degrees and other advanced education tending to hold more than $50,000. Regardless of the degree, the advisors said their clients with student loans tend to put off other major investments — like buying a house, saving for retirement, or starting a family — until their education debt feels more manageable, which they described as a subjective measure that varies by person."The hardest thing, I think, for millennials that have any range of debt is making those tough choices between saving, paying down debt, and investing because the loans can be pretty burdening on cash flow," said Keenan Casey, a certified financial planner for Facet Wealth. "It can mean that you're making some really, really tough choices with the other aspects of your life."CiCora Leigh, 34, is all too familiar with the tough choices her student debt presented her. Leigh's educational path was unconventional — after graduating from high school in 2008, she fully funded her community-college education in Mississippi through scholarships and federal grants. However, after the death of a family member, she took a break from her education and decided to enlist in the Army with the hope that it would pay for her to eventually earn her law degree. Things didn't work out as she intended, though, and she ended up taking out about $70,000 in student loans to complete her degree at the University of Mississippi in business administration.As a single mom, Leigh felt significantly weighed down by the debt. "It was really making things tight for me and my son," she said, adding that the debt was sinking her credit score.<div type="image" title="Cicora Leigh" height="867" width="694" msid="112523206" hostid="261" sizebytes="31614"></div>All of that changed when she received a <a target="_blank" href="https://www.businessinsider.com/what-disabilities-qualify-for-student-loan-forgiveness-from-department-education-2021-3">total and permanent disability determination</a> from Veterans Affairs. In a rule first established under President Barack Obama, any student-loan borrower who can prove they are totally and permanently disabled is eligible for student-loan forgiveness. This determination can be made by the VA or a physician and includes any physical or mental impairment that inhibits employment.The VA informed Leigh of her disability status in February 2023, and just five months later, the Education Department had wiped out her $72,000 student-loan balance."It was truly a relief," Leigh said. "I was able to use those funds to start putting toward my son's college fund, and then I was able to publish my second book. That was such a relief to receive the letter. I was so happy."<h2 id="c131ac21-94ee-48b1-b9f0-49d058417940">Saving for retirement</h2>The monthly student-loan payments of nearly $500 that Beverley, 38, has been making since 2014 took a heavy toll on her finances.Beverley — who requested her last name be withheld for privacy — told BI that when she first started her career in the nonprofit sector, she was paid a very low wage and struggled to afford her monthly student-loan payments from both her undergraduate and graduate degrees on top of her other basic expenses. This led her to go into forbearance for a year to allow her to afford her everyday needs."It was really hard," Beverley said. "Paying rent, paying for monthly bills and food and everything, that basically left $100 in my bank account for anything else. It was impossible to save money."Beverley now works in the government and has been in the public sector her whole career, making her eligible for PSLF. But since she didn't start making payments until 2014, she thought she wouldn't see any student-loan forgiveness until 2024 at the earliest, assuming everything went perfectly with her paperwork.<a target="_blank" href="https://www.businessinsider.com/public-service-loan-forgiveness-program-major-overhaul-student-debt-biden-2021-10">A limited-time</a> change implemented by the Education Department in October 2021 changed that. Using a waiver that expired in October 2022, the department allowed borrowers to count payments that were previously deemed ineligible for PSLF toward forgiveness progress, including some periods in which borrowers' loans were in deferment or forbearance. That was great news for Beverley — her loans were on forbearance for a year after she graduated while she was working at the nonprofit, meaning the waiver brought her to the payment threshold for forgiveness a year ahead of schedule.On December 13 of last year, she finally received confirmation that her nearly $54,000 student-loan balance was wiped out. "Congratulations!" the letter from her servicer, reviewed by BI, said. "You have successfully met the requirements of the Public Service Loan Forgiveness (PSLF) Program and all or a portion of your loans listed below have been forgiven. Thank you for your public service."This relief not only opened up hundreds more dollars each month to make payments toward her mortgage — it finally allowed her the freedom <a target="_blank" href="https://www.businessinsider.com/student-loans-retirement-savings-employers-match-debt-payment-contributions-401k-2024-1">to put money toward retirement</a> for the first time."The thing that I'm most excited about is saving for retirement," Beverley said. "I have a lot of money that I was putting towards loans that can now go towards my future. I feel like I'm starting really late for retirement stuff, but it's better than having to pay for however many more years if I didn't get the forgiveness."Grayson Hofferber, a financial advisor and president of Millennial Wealth Management, says the cash-flow burden created by student-loan debt means many of the clients he counsels have to play catch-up for years to get on track for retirement or set up an education fund for their own children."I would say the vast amount of folks will focus on maximizing their retirement savings, whether through their 401(k) or their IRA, after paying off their student debt," Hofferber said. "For the majority of our clients, they generally will take that same kind of repayment dollar amount that they're putting toward student loans, and they'll reinvest that for their future. So they'll put that into an investment account, whether that's to buy a home or to pursue an early retirement."Though some financial advisors noted that once borrowers unlock the money earmarked to pay down debt, they also often want to celebrate."Whether it be student loans, credit-card debt, auto-loan debt, any form of debt that someone's paid off that has felt like a burden for a prolonged period of time, there is the propensity to feel like they have been sacrificing and that they want and deserve to spend the money after that point," Casey said.The financial advisors who talked to BI said that while their clients tended to be financially savvy and prone to prioritizing long-term investments, the post-student-loan splurge is a common phenomenon they see among millennials. And the splurge can take many forms — whether music festival tickets, or buying a Tesla, or taking an international vacation.While retirement is still a ways away for Beverley, she said she's grateful for Biden's changes to PSLF — and the freedom it opened up for her to make larger investments down the road."The limited waiver opportunity basically saved me a year of payments that I would still be making now," Beverley said. "So, for me, it's like keeping a promise that was made a long time ago that if we work in public service, we can have this opportunity."

Meet the millennials who got student-loan forgiveness and now have the freedom to save for retirement, grow their families, and consider going back to school

<ul><li>In <keyword id="43945" type="General" weightage="80" keywordseo="chhattisgarh" source="Orion">Chhattisgarh</keyword>, all the 100% eligible farmers have received the loan waiver. </li><li>In Telangana, a mere 5% of the 9 lakh intended beneficiaries have received, the report says. </li><li>Claim rejection by state governments, limited or low fiscal space, and change in government could be reasons for low payout. </li></ul><keyword id="59510" type="General" weightage="20" keywordseo="indian-farmers" source="Orion">Indian farmers</keyword> have been granted ten <keyword id="604781" type="General" weightage="20" keywordseo="loan-waivers" source="Orion">loan waivers</keyword> in the last eight years, but only half of the intended beneficiaries – at 37 million farmers – have received it. But like many distribution schemes, it’s not uniform across states, according to an SBI special report on agriculture. In Chhattisgarh, all the 100% beneficiaries have received the waiver, and the state which failed the most is Telangana, where a mere 5% of the 9 lakh intended beneficiaries have received, the report says. Jharkhand and Madhya Pradesh too rank among the lowest but at 13% and 12% respectively – but the payout is twice over Telangana. Status of <keyword id="6407657" type="General" weightage="20" keywordseo="farm-loan-waivers" source="Orion">farm loan waivers</keyword> since 2014 <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">State </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Year of loan waiver </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">% of farmers who received loan waiver (Mar 2022) </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Uttar Pradesh </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2017 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">52% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Maharashtra </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2017 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">68% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2020 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">91% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Andhra Pradesh </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2014 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">92% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Karnataka </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2018 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">38% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Punjab </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2018 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">24% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Madhya Pradesh </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2018 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">12% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Chhattisgarh </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2018 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">100% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Telangana </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2014 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">5% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Jharkhand </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2020 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">13% </td></tr></tbody></table> Source: SBI Research Maharashtra however is an aberration. There were two instances of <keyword id="45987" type="General" weightage="20" keywordseo="farm-loan" source="Orion">farm loan</keyword> waivers, one in 2017 and one in 2020. While the payout for the former is at 68%, the second one is at 92%. Since the waivers were announced by the state governments, political will plays a major role in distribution. “Possible reasons for low percentage could be rejection of claims by state governments, limited or low fiscal space, and change in government in subsequent years,” the report which analyzed the performance of ten farm loan waivers based on SBI &amp; ASCB data. This surge in loan waivers is entirely driven by state governments - states have announced loan waivers aggregating ₹2.5 lakh crore since 2014. Farm waivers – to accounts which have been paying on time While most farm waivers don’t reach the beneficiaries, the report also raises questions like what kind of beneficiaries it serves. For one, in seven of the nine states in the list, most of these loans waived were standard accounts – which are bank accounts in good standing and not turned into NPAs or non-performing assets. It takes three months of nonpayment to turn a loan account into an NPA, which means standard accounts are on time with their payments. In Jharkhand, Uttar Pradesh and Andhra Pradesh – farm loan waivers aided over 90% of standard accounts. Only in two states, it was lower than 50% – 46% in Karnataka and 43% in Maharashtra in its 2020 edition. “Loan waivers destroy the credit culture which may harm the farmers’ interest in the medium to long term and also squeeze the fiscal space of governments to increase productive investment in agriculture infrastructure. This indicates that farm loan waivers essentially and ultimately serve a self goal,” the report. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/cryptocurrency/news/crypto-exchange-gemini-lays-off-more-employees-in-2nd-round/articleshow/92971874.cms">Crypto exchange Gemini lays off more employees in 2nd round</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/corporates/news/hul-q1-earnings-preview-watch-out-for-volume-growth-in-q1-and-commentary-on-demand-across-rural-and-urban/slidelist/92971164.cms">HUL Q1 earnings preview – watch out for volume growth in Q1 and commentary on demand across rural and urban</a>

₹2.5 lakh crore farm loan waivers announced – half received and 80% didn't even need them

New Delhi, The government on Monday informed Parliament that <keyword id="6355629" type="General" weightage="20" keywordseo="Google" source="Orion">Google</keyword> has suspended or removed over 2,500 fraudulent <keyword id="6095737" type="General" weightage="20" keywordseo="loan-apps" source="Orion">loan apps</keyword> from its Play Store between April 2021 and July 2022. The government is constantly engaged with the Reserve Bank of India (RBI) and other regulators and stakeholders concerned to control fraudulent loan apps, Finance Minister Nirmala Sitharaman said in a written reply to the Lok Sabha. The matter is also regularly discussed and monitored in the meetings of the Financial Stability and Development Council (FSDC), an inter-regulatory forum under the chairpersonship of the Finance Minister. The objective is to remain proactive, maintain cyber security preparedness with constant vigilance, and take appropriate and timely action to mitigate any such vulnerabilities in the Indian financial system, she said. As part of steps taken to control fraudulent loan apps, she said, the RBI has shared a 'whitelist' of legal apps with the government of India, and this list was shared by the Ministry of Electronics and Information Technology (Meity) with Google, whose app store is the primary source of distribution of digital lending apps. Google has updated its policy regarding enforcement of loan lending apps on the Play Store and has also deployed additional policy requirements with strict enforcement actions for lending apps in India, she added. As per their revised policy, only those apps are allowed on the Play Store which are published by Regulated Entities (REs) or those working in partnership with REs. "Between April 2021 and July 2022, Google also reviewed approximately 3,500 to 4,000 loan lending apps and suspended or removed over 2,500 fraudulent loan apps from its Play Store," she said. The Indian Cyber Crime Coordination Centre (I4C), Ministry of Home Affairs (MHA), has been regularly analysing the digital lending apps proactively. Based on its analysis and complaints reported on the National Cyber Crime Reporting Portal, the I4C team analyses apps on various parameters and reports to Meity apps found suspicious for blocking, she said. To spread awareness against cybercrimes and to safeguard interests of citizens, several steps have been taken by the government, the RBI, and banks, she said. The RBI has formulated conducting of electronic-Banking Awareness And Training (e-BAAT) which has largely focussed on awareness about fraud and risk mitigation, while a Nation-wide Intensive Awareness Programme (NIAP) was carried out in collaboration with the REs. In a separate response, Sitharaman said more than 44.46 crore loans amounting to Rs 26.12 lakh crore (as of November 24, 2023) have been sanctioned to the borrowers under the Pradhan Mantri Mudra Yojana (PMMY) since its inception. Under PMMY, collateral-free institutional credit up to Rs 10 lakh is provided by Member Lending Institutions (MLIs), i.e., Scheduled Commercial Banks (SCBs), Regional Rural Banks (RRBs), Non-Banking Financial Companies (NBFCs), and Micro Finance Institutions (MFIs). Any individual who is otherwise eligible to take a loan and has a business plan for a small business enterprise can avail of a loan under the scheme. Loans can be availed for income-generating activities in the manufacturing, trading, and services sectors, and also for activities allied to agriculture, under three categories, -- Shishu (loans up to Rs 50,000), Kishor (loans above Rs 50,000 and up to Rs 5 lakh) and Tarun (loans above Rs 5 lakh and up to Rs 10 lakh).

Google has removed 2,500 fraudulent loan apps from its Play Store, says FM

<ul class="summary-list"><li>Homebuyers seeking lower mortgage rates are snapping up a rare type of loan.</li><li>Assumable mortgages allow buyers to take over a seller's original mortgage.</li></ul>A type of mortgage that can offer ultra-low rates is becoming more popular among homebuyers — but they're rare and difficult to come across, real estate experts say.Buyers have been increasingly turning to <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/mortgages/assumable-mortgage">assumable mortgages</a>, or home-lending schemes where a buyer takes over a seller's mortgage, at the rate it was originally financed.That's likely to lead to a good deal for buyers sifting through homes on the market today. Borrowing costs on the <a target="_blank" href="https://www.freddiemac.com/pmms">30-year-fixed mortgage</a>, the most popular type of mortgage in the US, ticked higher to 6.7% last week, according to Freddie Mac data. Meanwhile, 85% of existing homeowners have a <a target="_blank" class="" href="https://www.realtor.com/news/trends/states-with-highest-number-of-assumable-mortgages/">mortgage rate under 6%</a>, per an analysis from Realtor.com.Assumable mortgages make up just a small portion of the housing market, though their share of the overall market is quickly rising. 3,825 mortgages financed through the Federal Housing Administration were assumed by a new buyer in 2023, up 72% from the prior year. 2,244 mortgages financed through Veterans Affairs Housing Assistance were also assumed in 2023, up 628% from the prior year.The number of assumable mortgages looks on track to more than double in 2024. 3,477 FHA mortgages were assumed through May of this year, while 1,457 VA mortgages were assumed through March, according to government data cited by the <a target="_blank" class="" href="https://www.washingtonpost.com/business/2024/07/27/assumable-mortgages-cheap-rates/">Washington Post</a>."An assumable mortgage may be especially appealing to buyers as these loans effectively pass a homeowner's current low-rate mortgage to the buyer," Hannah Jones, a senior analyst at Realtor.com, said in a statement.The loans, though, come with a few caveats.For one, only government-sponsored mortgages are eligible to be assumed, such as a mortgage within the <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/mortgages/fha-loan">FHA</a> or <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/mortgages/current-va-mortgage-rates#:~:text=VA%20mortgages%20generally%20have%20lower,a%20different%20type%20of%20mortgage.">VA</a> program. Roughly only a quarter of mortgages in the US are assumable, Realtor.com estimated.Second, buyers assuming a mortgage will typically need to put down a higher down payment, which is typically the difference between the sales price of the home and the remaining balance on the pre-existing mortgage. Usually, that payment will be made in cash, unless the buyer can secure another loan financed under today's mortgage rates, Jones said.Third, since assumable mortgages don't offer much upside for lenders, they're often reluctant to offer them in the first place, Realtor.com says. They also note that many lenders don't understand how they work, so they stay away.Real estate experts expect rates on conventional mortgages to stay elevated for the near-future. Rates on the 30-year fixed mortgage are expected to end the year above 6.5%, Realtor.com previously <a target="_blank" class="" href="https://www.realtor.com/research/2024-national-housing-forecast/#:~:text=Although%20mortgage%20rates%20are%20expected%20to%20begin%20to%20ease%2C%20they,mortgage%2C%20will%20remain%20a%20factor.">forecast</a>, influenced by elevated interest rates in the economy.

Homebuyers are flocking to a type of loan that offers a lower mortgage rate. But they often require bigger down payments, and lenders don't like to give them.

Chennai, Tamil Nadu's ruling <keyword id="19897149" type="General" weightage="20" keywordseo="dmk" source="keywords">DMK</keyword>, a key constituent of the INDIA bloc, in its manifesto released on Wednesday promised to repeal the Citizenship Amendment Act, 2019 if the opposition alliance wins the <keyword id="19895394" type="General" weightage="20" keywordseo="lok-sabha" source="keywords">Lok Sabha</keyword> polls. Restoration of statehood to Jammu and Kashmir and holding polls there, scrapping the New Education Policy 2020, slashing fuel prices, annulling Article 361 of the Constitution that provides protection to governors from legal action and appointment of Governors following consultation with Chief Ministers, were among the key promises made by the DMK. The recommendations of the M S Swaminathan committee will be adopted to ensure that MSP for agricultural products "is set at total production cost plus 50 per cent," the DMK said. Also, it announced that if voted to power, the INDIA bloc will withdraw the Agnipath scheme and reintroduce "permanent recruitment service" in the Indian Armed forces. "From now on, population census, including caste-wise census and census concerning people below the poverty line, will be conducted by the Union government once every five years simultaneously." The DMK will firmly insist on the removal of Article 356, which allows the dismissal of duly elected state governments and imposition of President's rule. The Congress party's ally in Tamil Nadu said that "new constraints" on States' borrowing capacity, imposed by the union government beyond the limits in each state's FRBM-equivalent Act will be eliminated. "A recommendation to share cess revenues with states will be made. It will be proposed that the Finance Commission increase the horizontal devolution of tax revenue (to all States together) from 42 per cent to 50 per cent." The Union government's financial contributions to states will be based on the income tax and GST collected in those states. Thus, financial contributions will be assured based on the taxes collected within each state. The finance provided to states will be permanently determined based on the 1971 population. A 33 per cent reservation for women in Parliament and legislative assemblies will be implemented immediately. "DMK will insist that the Union government enact a law providing menstrual leave to women, emphasizing the journey towards gender equality." Petrol and diesel prices "will be set at Rs 75, Rs 65 (per litre)" and cooking gas cylinders shall be made available at Rs 500 (per cylinder). "The introduction of the Uniform Civil Code will be strictly prevented" to preserve India's secular nature as stated in the Constitution's preamble. "The 2019 CAA law will be repealed, and all minorities will be treated equally without any discrimination. The recommendations of the Sachar Committee for the improvement of the lives of Muslims and other minority communities will be implemented." Facilitation will be provided for <keyword id="21027983" type="General" weightage="20" keywordseo="sri-lankan-tamil" source="keywords">Sri Lankan Tamil</keyword> refugees to get Indian citizenship. Assistance will be provided to those who wish to return to Sri Lanka. Also, the manifesto said efforts will be made to implement reservation for minorities at the all-India level, similar to Tamil Nadu. "The financial assistance previously provided to minority educational institutions has now been stopped. Action will be taken to resume this assistance." For "political" reasons, funding from foreign countries to non-governmental organisations (NGOs) has currently been stopped. "The Foreign Exchange Regulation Act will be properly amended, and measures will be taken to ensure these financial aids continue to reach NGOs without any problems." The proposal of 'One Nation, One Election' will be abandoned, and for the allocation of Lok Sabha seats to states, the current practice, based on the 1971 census will continue. All "people-unfriendly" laws introduced by the BJP government over the last 10 years will be reviewed immediately by the INDIA alliance government. The "labour-hostile laws" introduced by the BJP government will be "reformed." Through the Employees' Provident Fund (EPF), the Union government will ensure a minimum pension of Rs 5,000 per month. The number of working days under the Mahatma Gandhi National Rural Employment Guarantee Act will be increased from 100 to 150 days. "A wage of Rs 400 will be provided across states/ union territories nationwide." Disbanding the current NITI Aayog, set up by the BJP regime and establishing again the Planning Commission to draft plans based on the requests of state governments is another assurance the DMK has made. "Measures will be taken to reclaim Kachchatheevu to ensure India's security and to protect the welfare of the fishermen." A mandatory "cooling-off period" of 2 years will be introduced for retired judges and secretaries before they could join private companies or political parties, the manifesto said. Waiving loans and interests for farmers in nationalised and scheduled banks, waiver of educational loans for students, monthly entitlement of Rs 1,000 for all women in every state and formation of <keyword id="21027984" type="General" weightage="20" keywordseo="state-development-council" source="keywords">State Development Council</keyword> by including Chief Ministers were among the promises made by the DMK. Exemption for Tamil Nadu from the NEET exam and complete removal of toll booths on national highways, forms part of poll promises of the Dravidian party. Further, the DMK said amendments will be made to relevant laws to ensure that state governments, elected by the people, appoint Vice-Chancellors to state-run universities, rather than Governors. Stopping government's divestment from public sector enterprises, implementing the Sethusamudram project, law to ban online gambling, setting up a <keyword id="19895345" type="General" weightage="20" keywordseo="supreme-court" source="keywords">Supreme Court</keyword> branch in Chennai, providing statehood for <keyword id="19901639" type="General" weightage="20" keywordseo="puducherry" source="keywords">Puducherry</keyword>, equal funding for all state languages including Tamil, were among the host of other promises made by the DMK. Establishment of Tamil departments in varsities and stopping construction of <keyword id="19950851" type="General" weightage="20" keywordseo="mekedatu" source="keywords">Mekedatu</keyword> dam were also promised by the DMK. "The <keyword id="19996334" type="General" weightage="20" keywordseo="vishwakarma-scheme" source="keywords">Vishwakarma Scheme</keyword>, introduced by the BJP government to encourage caste-based occupations, will be restructured on the basis of social justice."

DMK vows to repeal CAA if INDIA bloc is voted to power

<ul><li>RBI tightens capital norms for lenders disbursing unsecured loans like <keyword id="35520" type="General" weightage="20" keywordseo="personal-loans" source="Orion">personal loans</keyword>, credit card receivables.</li><li>Experts say that the central bank aims to stem unsecured loan growth which has been growing at 26% for the last five years.</li><li>The move might also have a spillover effect on fintechs who aggressively push <keyword id="9522245" type="General" weightage="20" keywordseo="bnpl" source="Orion">BNPL</keyword> schemes.</li></ul>The Reserve Bank of India tightened capital norms for lenders disbursing unsecured loans to unsuspecting borrowers on Thursday evening and there is a rationale behind this move. Given the slowdown in corporate loans, banks have been chasing retail customers for loans. Such has been the rush to offer loans that top-ups are being offered even on auto loans which is just a camouflaged unsecured credit. For example, Suresh Chandra (name changed) had a ₹15 lakh car loan that had to be paid off in 12 months. Before he could repay his existing auto loan, he was being inundated by banks and NBFCs luring him into taking more loans. A large private bank offered him a top-up loan that’s akin to the value of his car, and another wanted to offer a loan that was 150% of the part of the loan that had already been paid off. “Sometimes I get tempted to take up on these offers. Also because technically auto loan interest is lower and they’re offering the top-ups at the same rate. If I need money, I will surely take this up instead of a new personal loan,” Chandra told Business Insider India. Giving a top-up loan is a good way for banks and NBFCs to push across new loans to borrowers. A top-up loan is an additional credit that’s given over and above an existing loan and when opting for a balance transfer. It doesn’t come with end-use restrictions and requires minimum documentation. Now, India’s central bank has cracked down on lenders to stall this aggressive loan push to consumers on Thursday by tightening capital norms. Not only has it classified top-up loans as unsecured loans, it also increased risk weight on unsecured loans like personal loans, credit card receivables, consumer credit and more such. It will make it tougher for them to give out loans as easily and freely to consumers. RBI puts up a ‘STOP’ sign Banks and NBFCs have been giving out too many unsecured loans. Unsecured retail loans have been growing at a 26% compounded annual growth rate (CAGR) between FY18 to FY23, as per Nomura. In FY18, unsecured retail loans were 7.8% of bank credit and now they’re as high as 10.6%. All this has happened by chasing after consumers for loans. “We view this as a clear signal from the regulator that it wants to bring down the strong growth in these segments, which is being brought into effect by bringing about an increase in the effective cost of capital for lending to these segments,” says a report by Nomura. Experts say that RBI’s move will control the increasing delinquencies and high risks associated with lending in the unsecured loan segment. Due to increased risk weightage, lenders should have to cover for more credit risk in the unsecured loan segment and it will make lending more expensive. The loans will also turn more expensive for borrowers. “RBI has been cognizant of the high increase in unsecured lending and initial delinquency trends seen in the unsecured loan segment. While this might look like a small piece in the overall picture, the RBI is cautious enough to take an early step in controlling the same,” says Ameet Venkeshwar, chief business officer at LoanTap. The credit standards will also get tighter, experts hope. Most top banks offer personal loans at interest rates ranging between 10-26% depending on creditworthiness. These loans can go as high as ₹20 lakh and the minimum income limit has to be ₹30,000 to become eligible for such loans. Personal loan interest rates and processing fees <table style="border-width: initial; border-style: none;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Lender </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Interest Rate p.a. </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Processing Fee </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Loan tenure </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">HDFC BANK </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">10.5-21% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Up to 2.5% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">12-60 months </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">ICICI BANK </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">10.5-16% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Up to 2.5% + GST </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Up to 60 months </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">HOME CREDIT CASH LOAN </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">24-34% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2.5-5% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Up to 48 months </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">ADITYA BIRLA CAPITAL </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">14-26% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Up to 2% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">12-72 months </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">AXIS BANK </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">10.49-22% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Up to 2% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Up to 60 months </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">SBI </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">11.05-14.05% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Up to 1.5% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Up to 72 months </td></tr></tbody><tbody></tbody><tbody></tbody></table>Source: Bank websites and Bankbazaar Thou shall not tempt The free flow of personal loans has been pushing credit culture in the country. Preeti Mishra, a professional from Mumbai has a similar story. “I swiped as much as ₹50,000 on my debit card to pay my child’s school fees. Immediately, I got a call from my bank offering to convert that payment into a loan which can be paid off in installments. Why would I want to take a loan which I can afford to pay?” she says. Like Chandra, she also says that it’s fairly tempting. “Even if I was in a tad bit of a money crunch, I would have taken up the loan. And, in the long run, it would have made it tougher for me,” she worries that one bad day she might actually fall into a trap. Sumanto Roy is one such who has fallen into it, and now swimming at the deep end. The 27-year-old earns ₹60,000 per month. He already has a car loan that takes away ₹10,000 per month, another ₹8,000 as EMI for his phone and another ₹12,000 goes off his bank account every month as his laptop EMI. If Roy wasn’t living with his parents, he would have found it very tough to get by with this loan burden. “It’s difficult to pay off my credit card bill every month. I roll it over by making the minimum payment. Now, I am saving and trying to pay off my dues as fast as possible,” he tells Business Insider India adding that the loan burden is distressing him personally. Will BNPL hold on? However, banks and NBFCs are one side of the aggressive loan push story. There is a rising number of Buy Now Pay Later startups, companies that integrate EMIs while checking out of e-commerce websites, and VC-funded startups that loan for people who borrow to go on a holiday or a date. Experts believe that RBI’s move might change the dynamics of some of these fintechs to some extent. Jefferies expects PayTm’s consumer loan disbursal growth to normalize from around 90% in FY24 to 40% in FY25 and 35% in FY26. “For Paytm's lending partners, higher funding costs and increased capital requirements will affect product profitability in BNPL/PL. They may respond by tightening credit standards and/or moderating growth from elevated levels right now,” Jefferies says. Giving loans is a good business in today’s world where GenZs, especially are focussed more on ‘experiences’, want to live the good life. On the other hand, the new-age apps advertise in a buzzing manner day in and day out with taglines like — ‘Download, pay your credit card bills and earn rewards’. The lure of loan was always there. At the end of the day, lenders are different when you take the loan, and when it’s the time to pay up. Sooner or later, they would want their pound of flesh right at the heart. SEE ALSO <a href="https://www.businessinsider.in/business/news/wine-vs-tea-indias-consumption-trends-show-a-sharp-divergence/articleshow/104810168.cms">Wine vs Tea: India’s consumption trends show a sharp divergence</a> <a href="https://www.businessinsider.in/business/news/bitten-by-inflation-indians-buying-fewer-clothes-this-season/articleshow/105179140.cms">Bitten by inflation, Indians buying fewer clothes this season</a>

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