The ‘How To’ Personal Finance Post

By | April 3, 2017

The How To Post

When it comes to money issues, we are often hesitant to ask another person for help, even if we know we need assistance desperately. But, don’t worry too much. Here are a few finance-related matters that we can help you with even if you don’t exactly know how to tackle them.

How to consolidate your Mutual Funds

Most times investors have way too many schemes in their portfolio. This makes tracking their performance quite difficult, often leaving their portfolio over-diversified while fetching very little return. If you find yourself in such a situation, then consolidation of your portfolio will certainly help. Here’s how to do it.

All Mutual Fund houses give you an option to consolidate multiple folios into one. You need to submit applications to the respective fund houses in order to do this. You can either send the application to the fund house, or to their registrar or transfer agents. You can find the application form on the fund house’s website.

Note that you can consolidate your folio only within the same fund house. If you are trying to consolidate folios of different fund houses, it might not be possible unless you choose an online platform that allows you to have all your funds in one place.

You might also want to exit some funds in case there are way too many funds in your portfolio. Be sure to check a fund’s past performance to eliminate any underperformers. Note that the information on the folio to which you want to transfer must match the information in the folio that you transfer.

This information will include the name of fund holder, mode of holding, bank details and other details that were provided by you while opening the folio. In case there is an information mismatch, you may need to rectify such information before the transfer.

Additional Reading: Tips For Ideal Portfolio Diversification

How to settle huge debts

With the increase in the reach of financial products, taking a loan is often the first option for many, rather than a last resort. Sometimes, the EMI amount becomes excessive and is not managed well due to irregular repayments.

With the advent of credit bureaus that track your repayments, your Credit Score goes for a toss.  You also need to manage the additional pressure of recovery calls. Repayment defaults can severely impact your creditworthiness and your ability to access loans in the future.

But, is there a way out of this mess? There certainly is. All it takes is a little discipline on your part. Try curbing your discretionary expenses and transfer your expensive loans to lenders that offer lower interest rates.

However, if you still find yourself unable to service the EMIs regularly even after doing this, you will definitely need to speak to your bank. Before you start defaulting on your loan, approach your bank to explain the situation. You can request them to restructure your loan. You can also check for EMI holidays and tenure increases. Remember that lenders will want to get back the money they’ve lent.  So, there’s a good chance that they will help you out in such situations.

Additional Reading: Manage Debt Wisely!

How to consolidate all your loans

It is not uncommon today to find someone who has a huge debt burden due to multiple Credit Card dues and loans. If you happen to be in a similar situation, you might want to consolidate your debt.

Ideally, you should first consider taking a secured loan such as a loan against property or gold. Using this, you can close out the high-cost debts like Credit Card dues and Personal Loans. This will bring down your total monthly outflow because secured loans come at a lower interest rate.

You can also liquidate some of your assets such as Fixed Deposits, stocks, Mutual Funds, and bonds. By doing this, you can partially prepay the loan amount so that your monthly interest outflow becomes manageable.

Even after tapping into all your resources, if you still find that your EMI outflow is beyond your control, you should talk to your bank before things get out of hand. However, this should ideally be your last option.

Additional Reading: Debt Consolidation 101: Getting The Basics Right

How to retrieve lost documents

When you lose your wallet/handbag or a pickpocket manages to get hold of it, you will probably be more worried about any important documents you might have lost rather than cash.

Here is a guide to recovering your lost documents.

PassportThe first thing that you should do when you lose your passport is to rush to the nearest police station or passport office to report it. Then, you need to apply for the reissue of your passport at your nearest Passport Seva Kendra.

It is advisable to always keep a photocopy of your passport. This way, it will be easy for you to fill up the application form when you have to get a fresh one. In case you don’t have your passport details, you need to visit the Assistant Passport Officer at the Passport Seva Kendra office.

You will need to pay the necessary fees to get a fresh passport. The re-issued passport will have a new passport number with a fresh validity of 10 years. If you happen to lose your passport when you are abroad, you must get an “Emergency Certificate” from the embassy or post of the country you are in, to travel back to India.

Additional Reading: It’s Now A Whole Lot Easier To Get A Passport

Driving Licence Getting your records from the RTO is not going to be easy. That’s why you must always have a photocopy of your driving licence with you.

To get a duplicate licence issued, you first need to file an FIR with the police. Then, you need to approach the issuing authority (the RTO that issued the license) along with the FIR. Fill up the form and pay the fees to get your duplicate license. Note that the validity of the duplicate licence will be the same as your previous licence.

Additional Reading: How To Apply For A Driving Licence Online

Debit and Credit Cards – Ever noticed the toll-free numbers available on the back of your card? That is the number you need to call when your card is lost. These numbers will be available on the relevant bank website as well. 

Call the number and report the loss of your card and they will block it for you. You can then request your bank to reissue the card.

Additional Reading: Report Loss Of Card Immediately

How to read your balance sheet

Do you run your own business? Then, you need to read this. Quite often entrepreneurs focus more on their earnings and tend to ignore the balance sheet. It is important to read your balance sheet if you want to identify signs of imminent danger to your company.

A balance sheet is like a snapshot of the present condition of your company. By taking a look at the balance sheet of your business, you can start analysing your short-term assets. These have a maturity of one year or less and will include your cash, savings account balances, accounts receivables and inventories. Then, come the long-term assets such as machinery, computers, buildings and land etc.

Liabilities are also short-term and long-term in nature. Finally, you have equity that represents what shareholders own. You need to use ratios to look at each of these items on your balance sheet. The most important ratio is your company’s debt equity ratio.

This will be determined by calculating your total debt (long-term and short-term) and dividing it by shareholders’ funds. A ratio of under 1 is considered to be safe. When this ratio is high (over 1), it indicates trouble for your company.

Another important ratio is your liquidity ratio. This ratio will give you an idea about whether the company can meet its day-to-day operating expenses comfortably. In this case, your company’s ratio needs to be more than 2. Get help from your Chartered Accountant if you feel your financial knowledge is limited.

Additional Reading: Now Choose Your Financial Advisor Without Any Hassles

How to activate a dormant bank account

If your Savings Bank Account has not been operational for over two years, it will become dormant or inactive. This will happen if there is no activity in your account.

Note that if the only activity your account shown is credit of interest or service charges for a period (as decided by the bank), then your account will still become dormant. In this case, you need to activate the account to use it.

To activate your account, you need to go to the branch where you opened the account. Your original identity and address proof will be needed to activate the account, along with an application requesting the bank to activate your dormant account.

You may be required to explain why you haven’t operated your account for so long. After verifying all the details provided by you, the bank will ask you to do a nominal transaction like depositing a small amount in your account. Once this is done, the bank will then process your activation request.

If it is an Employee Provident Fund (EPF) account that you want to re-activate, here’s how to do it. You need to go to the EPFO website and find the inoperative account’s helpdesk. Enter your details in the page provided, along with reasons stating why your account is inactive, and request for re-activation.

KYC details are mandatory to get your account re-activated. A PIN will be sent to your registered mobile number. Use it for verification and submit the request. You will then get a reference id, which can be used to track the status of your request.

Additional Reading: Aadhaar Number Mandatory For EPF

So, the next time you don’t know how to do something, you can write to us and we will help you. Want to do it now? Feel free to use the comments section below. And if you need any financial products, you know where to go.

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Category: How To

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