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While shopping at the mall with his family, Sudhir and his wife saw a 55-inch television on display and couldn’t resist asking for the price and details. They really needed a new television for their home, and what better occasion than Diwali to make this much-desired purchase. What made it more attractive was a discounted price and a no-cost EMI offer. Sudhir was holding an ICICI Bank Rubyx credit card and could not resist making an instant purchase. He decided that there could be no better time than now to buy it and fulfil his family’s wishes.
The convenience of a credit card in India is unmatched for spending on personal and household items, as well as emergencies. A personal loan is also available as unsecured funding for personal use and Diwali expenses, which is a better choice than a credit card. Let us explore the functionalities and benefits.
Avail the limit of multiple cards: You can hold various credit cards issued by different lenders. Each card has a designated credit limit, and banks typically permit cash withdrawals of 20% to 30% of the approved limit. You can plan your spending according to the credit card limit and the offers available on each card.
Easy to carry: Credit cards enable instant spending and are an excellent option to carrying cash. They can be used at most merchant outlets for shopping, dining, and purchasing movie tickets. Activate your credit card for online use and ensure it is used safely for your transactions.
Reward points: Reward points from all-year-round credit card spending can be redeemed at this time for festive essentials. Banks have tie-ups with member outlets where customers can redeem credit card points for various goods, including household items, clothing, and electronics. Enjoy online shopping festival offers with the HDFC credit card smart EMI feature.
Discounts, Sales, and No Cost EMI Credit Card Offers: Vendors expecting peak sales during this time go all out to offer discounts on goods and partner with banks to provide easy repayment options, such as no-cost EMI credit card offers. Banks offer discounts and cash back on credit card usage.
As you prepare to celebrate the upcoming festivities, plan your budget and ensure you have the necessary funds to make the occasion truly memorable. The Diwali bonus is expected, and your savings should ideally cover your expenses; however, if you’re short, consider applying for a personal loan to cover any additional costs.
Secure the necessary funds: You can apply for the amount you need in advance to start painting and redoing the upholstery, giving your home a fresh look for the upcoming season. Loan amounts are approved based on personal loan eligibility criteria and transferred to your account, making them easily accessible for paying your expenses.
Suitable terms: A personal loan is available at a reasonable interest rate. ICICI Bank personal loan offers starting from 9.99% onwards for loan amounts of ₹ 15 lakhs and above. If you have an existing HDFC Bank personal loan, you can avail a top-up on the existing loan within 72 hours with minimum documents.
Easy repayment options: Funds as a personal loan can be repaid easily via monthly EMI. Check for a suitable EMI using an EMI calculator to ensure the EMI is affordable; otherwise, request an extended tenure. Let not the worry for repayment affect your Diwali celebrations, as the EMI will be deducted after your next salary credit.
A Credit Card and a personal loan are both unsecured, issued without collateral, and provide funds available for short-term individual usage. Situations that can help decide the better option include the following:
Personal Loans:
Diwali is the time we’ve been waiting for all year to celebrate and give the gifts our family has been eagerly anticipating. It is an occasion to fulfil aspirations and shop to your heart’s content. Buying a new vehicle, the latest mobile phone, or jewellery for your spouse – all plans are postponed until Diwali, when promises are to be kept.
Retail lending in India has emerged as the new-age mantra, with the availability of credit for building assets or lifestyle expenses. The concept of buy now, pay later is gaining widespread popularity, with Banks and NBFCs offering secured and unsecured credit to salaried and self-employed individuals.
Credit cards and personal loans have become essential parts of daily life, and they are being used more frequently due to their convenience and quick processing. Merchant navy officers also appreciate the benefits of using credit cards and personal loans.
A credit card is easy to carry and fits into your wallet, making it ideal for seafarers who are always on the go. There’s no need to carry large amounts of bulky cash that can attract unwanted attention. Feel free to go on a shopping spree or enjoy an exclusive dinner and cover your expenses with a simple swipe of your credit card.
Multiple usages: A Credit card, such as the ICICI Bank Coral credit card, can be used at all merchant outlets, such as department stores, retail outlets, and restaurants, as well as for travel purposes, including airline bookings and hotel stays. It is helpful in emergencies for medical treatment, paying hospital bills, and purchasing medicines. You can pay your utility bills with your credit card and also draw cash.
Rewards and Bonus Points: Banks issuing credit cards add special features to attract customers, such as reward points for spending that can be redeemed at partner outlets and cash back offers. Discounts are applicable for using your credit card for dining, and Banks also tie up with department stores to encourage spending on credit cards, offering interest-free EMI and discounts on purchases.
Domestic and International Usage: Merchant navy officers travel worldwide, and when the ship docks, they are allowed ashore to take a break. This gives them the chance to visit exotic locations that might not be easily accessible otherwise, allowing them to shop, sightsee, and enjoy local cuisine. Most credit cards, including the ICICI Bank Rubyx credit card, support international use, enabling Merchant Navy officers to use their cards and avoid the hassle of dealing with foreign currencies.
Carrying a credit card as a backup is a valuable asset that offers financial security in situations where cash might not be accessible, such as during travel. Merchant navy personnel can use their credit cards to cover unexpected expenses that may occur when funds are hard to access. An additional card can also be issued and given to the spouse or parents for emergencies.
A personal loan is available without security or guarantees. Personal loan requests are processed efficiently, allowing applicants to receive funds quickly. Merchant navy officers can apply for an ICICI Bank personal loan or an HDFC Bank personal loan, both of which are among the top providers of personal loans. Applicants can apply for a personal loan online if they have the required documents for a merchant navy personal loan.
Can be used as needed: The funds approved for a personal loan are released once by the Bank, allowing the applicant to utilise the funds according to their requirements. A personal loan is intended for individual needs, such as home renovation, purchasing the latest gadgets and appliances, travel, children’s education expenses, family celebrations, or emergency requirements.
Secure the necessary funds: A merchant navy employee can borrow a personal loan of up to ₹35 lakhs. The salary received during employment is spread over 12 months, so the monthly income must meet the minimum requirement of ₹80,000 per month. If the applicant is paid in a foreign currency, their total annual earnings must exceed ₹96 lakhs.
Repay via an affordable EMI: A personal loan can be repaid over affordable instalments over a tenure best suited to the customer. The tenure for repaying a personal loan is determined based on the loan amount and other existing obligations. An applicant can use the personal loan EMI calculator to check the applicable instalment for the required loan amount.
Reasonable rate of interest: The interest rate charged for a Personal loan begins at 10.5% with a reducing balance. The personal loan interest rate remains fixed and does not change for the entire tenure. The interest rate varies from lender to lender, depending on the loan amount required and the CIBIL score.
What would work better, a personal loan or a credit card? Both have their advantage and drawbacks. Listed below is a comparison:
Convenient to use
Interest-free period
Prepayment penalty
Interest Rate
A credit card is issued based on an account with the Bank, offering greater freedom of use, but payments must be made on or before the due date to avoid an escalation of debt. Funds secured as a personal loan require documentary proof, and the merchant navy applicant must meet the bank’s personal loan eligibility criteria. Merchant navy applicants require a CIBIL score of 750 or higher to secure a credit card and a personal loan. Both of which are unsecured funds provided for personal use.
Both a credit card and a personal loan share similar basic functions and can help build a healthy credit score quickly. With online banking facilities available via Wi-Fi on most merchant navy ships, account holders can monitor their credit card bills and ensure their personal loan EMI payments are made on time.
Should a merchant navy employee apply for a personal loan, a credit card, or maybe both, the decision depends upon the individual’s financial requirements.
The auspicious Navaratri heralds the arrival of the festive season; Dussehra follows the nine-day puja, and soon comes the much-awaited festival of Diwali!
It’s a special time of year to celebrate with your family and share the joy of giving. Plans are made for renovating and decorating your home, buying a new car, the latest mobile phone your children want, or household gadgets that would make life easier.
Vendors also offer attractive sales and discounted goods because they know this is the peak shopping season. Attractive advertisements are displayed, and whether you are looking to buy goods online or browse through choices in person, you can be sure to enjoy the experience.
Making the celebrations memorable for your family requires extensive planning and arranging adequate finances so that there are no holds barred in making the Diwali celebrations the best!
Planning and securing funds ahead of time is the best way to ensure a stress-free experience. Saving beforehand is a wise choice, allowing you to make payments smoothly and on time. Diwali is the season for receiving the year-end bonus for hard work, which adds to the available funds.
You always want to buy the best for your loved ones and fulfil every wish, but everything comes at a price. This is where the principle of ‘cut your coat according to the cloth you have ‘comes in. It means making an affordable budget and keeping spending within the available funds. This will help you avoid last-minute shortages and ensure a stress-free festive season.
Doing research in advance for your requirements will stand you in good stead, especially for high-value commodities. Checking the availability and prices offered in advance will enable you to negotiate the best price and make the most suitable choice according to your requirements.
Emergencies always come unannounced; having surplus funds available to handle the situation is a wise policy. Having enough money in your bank account to cover your planned shopping spree, plus an extra amount if needed, reflects sound financial planning.
While the festive season may bring additional fees, it’s essential to remember that your regular monthly payments will remain unchanged. EMI will be automatically deducted on the due date, even during the holiday season. Ensure you keep enough funds in your account to cover your regular payments. The additional expenses for Diwali should not impact your monthly budget. This financial discipline is crucial for effective budgeting and managing your finances during the festive season.
Festivities and celebrations can likely deplete your budget. Using your credit card to cover excess expenses is a viable option. Pay off your credit dues beforehand and keep the available credit limit for last-minute expenses. If you have pending dues on your card, additional costs will accrue a finance charge of 36% to 40%, and overusing credit can lead to a debt trap.
A CIBIL score of 750 points and above is required for an ICICI bank credit card or a Personal loan. Keeping a tab on your credit score is crucial to ensure you are eligible to apply for an online personal loan from HDFC Bank, as it helps ensure that funds are readily available to you if needed.
You can easily apply for an HDFC Bank personal loan online using the documents you have available. If you are employed by a company listed in HDFC Bank’s approved category and meet the eligibility criteria, you can receive the loan within 48 to 72 hours. The personal loan is offered at a reasonable interest rate and can be repaid in convenient instalments. It can be used for any personal needs, so go ahead and cover any shortfalls with a personal loan.
There are festivities in the air, and the upcoming month will bring reasons to take a break from work and enjoy the festival of lights with your loved ones, with the financial needs covered you can look forward to joyfull celebrations ahead!
The TransUnion CIBIL Ltd is one of the leading credit rating agencies licensed by the RBI (Reserve Bank of India) to record and maintain customer borrowing and payment information. This information is also used to assess risk and facilitate lending.
In 2007, the CIBIL score was introduced, a three-digit number that classified customers based on their creditworthiness from previous credit usage. The CIBIL score, which ranges from 300 to 900, reflects your credit behaviour.
Over the years, your CIBIL score has become the benchmark for Banks and NBFCs to assess customers’ behaviour and credit transactions. A high CIBIL score also establishes the individual as a person of integrity who repays dues responsibly and manages finances well.
Your CIBIL score significantly impacts your credit prospects. For first-time credit users, it takes 6 to 8 months of consistent credit activity to generate a minimum CIBIL score for a personal loan.
After receiving their first salary, the bank will offer the new employee a credit card based on their salary account, helping them to build a credit score. While gaining exposure to easy credit, it is essential to realise that funds accessed through credit must be repaid at some point.
Enjoying the benefits of their newfound financial freedom, one credit card often leads to another, and perhaps a personal loan is also taken out for an overseas holiday. Suddenly, they realise that their current income does not cover the repayment of the borrowed money. This subsequently results in delayed repayments and mounting credit card debts. Additional credit is denied as the CIBIL score has declined due to irresponsible credit use.
This is the point when the young professional must recognise the importance of financial discipline and understand that the CIBIL history acts as a watchdog that monitors credit use and influences future credit opportunities.
When applying for a home loan or an Auto loan, the interest rates will be affected by the CIBIL score; therefore, there is much to gain by maintaining a healthy CIBIL score.
A 0 or -1 CIBIL score indicates that you have not yet started using credit, or the loans or credit cards you have obtained are recent; it takes 6 to 8 months to generate a CIBIL score. Banks typically consider your repayment track record for a year before extending additional credit. A credit card or a personal loan, which are unsecured and issued without collateral, can help boost your credit score quickly. The short-term repayment cycle of an HDFC personal loan or an ICICI Bank credit card is effective in demonstrating your credit management skills to lenders.
CIBIL score of 650 to 700 points: If your CIBIL score is above 650, your credit usage hasn’t been exemplary; this is the score range where most credit users find themselves due to the following repayment issues;
Obtaining further credit in such scenarios can be a challenge, and it is advisable to wait and work on your CIBIL score. Making impulsive decisions and taking on credit at a higher interest rate can lead to further debt. If there is an urgent need, consider securing funds through a gold loan or against a security, or a personal loan for those with a low CIBIL score. As we advance, every timely payment will be a step towards redeeming your credit score.
A CIBIL score of 750 points and above is regarded as ideal, reflecting your financial discipline and overall stability. Leading banks and NBFCs readily extend further credit to applicants with a CIBIL score of 750. Personal loans are typically processed at the lowest interest rates, as banks are eager to lend unsecured funds to customers who have demonstrated a consistent repayment history and responsible credit usage. ICICI Bank offers the privileges of its premier ICICI Bank Rubyx credit card to applicants with a CIBIL score of 750 or higher.
The CIBIL score has become essential nowadays, not just for securing a loan or credit card. Someone with an excellent CIBIL score and no missed payments or defaults is considered a trustworthy individual who is financially responsible. Conversely, a person burdened with debts is a stressed individual, which can affect efficiency at work and a restful atmosphere at home. Therefore, the CIBIL of an individual is checked before he is offered employment at a higher designation.
To ensure that your tenant who is taking your premises on rent will be paying the rent on time, landlords check the CIBIL of the hopeful tenant to ensure that they pay their dues on time. Business deals also hinge on the CIBIL scores of the directors and the company to check the financial standing.
On a lighter note, a bride-to-be requests a CIBIL check of her fiancé to ensure he is not in debt and is financially dependable for a secure future ahead.
Is too much importance being given to the CIBIL score? This debate has also been raised in Parliament by an honourable Minister who believed that lenders have started to place undue emphasis on the CIBIL score, and banks should look beyond it. As a result, banks have been advised not to reject applicants solely based on their CIBIL record and to process a personal loan for low CIBIL score.
On the other hand, with the digitalisation of identity documents such as the Aadhaar card and PAN card that are linked to an individual’s bank account, all records of dues and payments become transparent. In the future, the payment of your utility bills may also be linked to your credit history.
Getting credit is not impossible without a CIBIL score; an applicant can apply online for an instant HDFC Bank personal loan even without a credit history. ICICI Bank also grants personal loans to applicants lacking a CIBIL score if their employer is listed in the approved company category of the bank. Although the Banks are apprehensive due to the absence of a CIBIL score, they may also do additional enquiries to ensure the applicant has not tampered with the KYC details.
However, with the rise of digital banking and online payment facilities, reporting credit repayments to CIBIL has become increasingly transparent. Keep updated about your CIBIL score and try to pay your credit dues on time, as the CIBIL score may catch up with you sooner than you think!
With the quick swap of cash for credit cards, or commonly known as plastic money, monetary transactions have become relatively easy. Whether you’re trying to buy a trendy outfit or booking a flight ticket with lounge access, you get it all with a credit card. ICICI has been one of the prominent players in the field and offers you a variety of credit cards that come bearing different advantages.
ICICI Bank offers its customers the privileges of the ICICI Bank Credit cards as Visa, Master, Rupay and American Express Cards.
Before directly diving into the types of ICICI Credit cards or how you can maximise the benefits, it’s essential to understand why you should consider applying for an ICICI Bank Credit card.
Now that we have explained why you should consider an ICICI Credit card, it’s time to explore the different types of ICICI credit cards to help you make an informed decision when choosing one.
The ICICI Bank Emeralde Card is the most premium green-black gradient pattern credit card that ICICI Bank offers. This ICICI bank credit card eliminates every cap benefit provided by the bank, with a higher monthly plan membership fee of ₹1,000, which is waived if you spend more than ₹1,00,000 in the previous month. You get premium welcome vouchers, dining discounts, huge savings on entertainment or golf lessons, complimentary lounge access and much more. This card truly stands out with the saying- the more the merrier.
You can earn unlimited bonus reward points and use them at any time, in any way you prefer. For your information, ICICI Sapphiro Credit is the bank’s second-highest-end product and comes with gifts like:
One thing that this card ensures is that you receive upstream benefits, which could include significant discounts on fuel refills or premium offers on culinary delights.
ICICI Bank has designed Coral Credit card for your comfort and convenience, whether it’s offering significant savings on fuel refills or maximising the use of its reward features. With a minimum joining fee of ₹500+GST, you can enjoy these benefits:
This ICICI Credit Card comes in three different variations, wherein American Express offers twice as many reward points as Coral or Master Card. All these cards can be fully used for fuel refill transactions, among other uses, with a minimum joining fee of ₹199+GST.
Do not confuse this ICICI Rupay Credit Card with your regular debit Rupay Card. It is an exclusive offering from ICICI Bank, providing additional benefits. The ICICI Bank Rupay Card is one of the cards designed for anyone with an income above ₹ 30k per month.
ICICI Bank and its distinctive credit cards offer excellent benefits. You can select from a range of cards to find the one that best matches your needs. Whether it’s your monthly fuel expenses or travel preferences, you can save significantly on these areas with an ICICI Credit card. The decision to apply for an ICICI Bank Credit card guarantees substantial savings.
| Card Type | Monthly Interest Rate | Annual Interest Rate |
| ICICI Bank Instant Platinum Credit Card | 2.49% | 29.88% |
| ICICI Bank Sapphiro Credit Card | 3.40% | 40.80% |
| ICICI Bank Rubyx Credit Card | 3.40% | 40.80% |
| ICICI Bank Coral Credit Card | 3.40% | 40.80% |
| ICICI Bank Expressions Credit Card | 3.40% | 40.80% |
| ICICI Bank HPCL Coral Credit Card | 3.40% | 40.80% |
| ICICI Bank HPCL Super Saver Credit Card | 3.50% | 42.00% |
| MakeMyTrip ICICI Bank Platinum Credit Card | 3.50% | 42.00% |
| MakeMyTrip ICICI Bank Signature Credit Card | 3.50% | 42.00% |
| ICICI Bank Manchester United Signature Credit Card | 3.67% | 44.00% |
| ICICI Bank Manchester United Platinum Credit Card | 3.67% | 44.00% |
When you reach a point in life where your finances are stable and you can support yourself comfortably, earning enough to meet your needs and responsibilities, you may wish to consider taking out another personal loan to renovate your home.
The convenience of a personal loan is unmatched, as funds are quickly accessible online for personal use as needed. Alternatively, if you face a situation that demands immediate funds, you might consider applying for a second personal loan to get through this challenging period. But is a personal loan only a one-time facility, or can we get multiple personal loans? Banks and NBFCS issue personal loans as per the individual policy.
Customers who are actively repaying a HDFC Bank personal loan can apply for a second instant personal loan or switch to an alternative lender, such as ICICI Bank, for a new loan. The new loan will be granted independently of the existing one and will run in parallel with the existing one. Let us examine the eligibility criteria for obtaining an additional personal loan.
Vintage of the existing loan: If you have recently been granted a personal loan, allow some time before applying for a second loan. Banks generally do not grant two loans in quick succession, as they require time to track how the applicant manages the existing loan. Usually, Banks require the smooth repayment of 3 to 6 EMIs before granting a second personal loan.
Timely repayment track: Applying for a second personal loan from the same or an alternative bank? The repayment of your active personal loan must be made promptly, with no delays or bounced payments. Banks and NBFCs will consider granting you a second personal loan only if you can demonstrate that you are capable of managing the repayment of the credit taken.
The CIBIL score and repayment history of the existing loan: The applicant’s CIBIL score should be above the necessary benchmark. Each time an applicant applies for credit, their CIBIL score will be reviewed in relation to their CIBIL history. There must be no recent credit taken, and the number of CIBIL inquiries should be limited; otherwise, the applicant may be labelled as credit hungry.
The company category of the employer: If the applicant has changed jobs or is applying to an alternative lender for a second personal loan, a personal loan eligibility check must be carried out. The company where the applicant is currently employed must be listed on the Bank’s approved list of companies for the process to begin.
If the company is listed as a Category A or B, the personal loan lowest interest rate will be offered.
Existing Obligations: The existing obligations of the applicant, including credit card dues, are taken into account before approving a further amount as a second loan. It is a good idea to check the EMI applicable for the additional loan amount required. Use the personal loan EMI calculator to calculate the additional Emi for repayment of the second loan amount before applying. The total of all credit obligations should not exceed the allowed FOIR as per the HDFC Bank eligibility Criteria. In case your existing credit dues exceed the permitted percentage of your income, you have the option of going for a Personal loan Top Up.
An individual with an existing loan can apply for funds when required as an addition or “Top Up”. A Top Up loan is an option to apply for a second or a new personal loan; both loan types serve the purpose of giving an applicant the surplus funds when required.
Choice of lender: A personal loan holder can apply for a new loan with an alternate lender, which offers better terms. However, a Top-up is processed on the existing personal loan with the same lender.
A single Emi versus 2 Emi: With a personal loan top-up, the existing loan is merged with the additional amount approved. The repayment for the new loan is done via a single EMI. With a new loan, the applicant will pay an extra EMI based on the loan amount and applicable tenure.
Documentation: As the applicant has an existing relationship with the Bank, the documentation for funds issued as a personal loan top-up is minimal. In contrast, an applicant applying for a new personal loan has to submit their complete income and KYC documentation.
Interest Rates: Applicants can compare the offers of different lenders and negotiate for the lowest interest rates when applying for a second personal loan, but a top-up to the existing loan is issued at the current interest rate of the parent bank.
The decision to apply for a new personal loan or opt for a top-up to an existing personal loan depends on the individual’s specific situation and requirements. Listed below are the circumstances that can influence the decision.
Urgent requirement for finance: If there is an emergency for funds, apply for instant personal loan online as a top-up. As the bank has an active personal loan account and the details of the applicant are verified, a top-up is a quicker solution for an urgent need.
Need for the maximum loan amount: A top-up personal loan is more effective for applicants who already have multiple credit lines and do not have sufficient financial eligibility for the required loan amount. With a top-up, the principal amount of the existing loan that has been repaid is deducted from the new personal loan. Thus, the eligibility for the top-up loan increases.
Foreclosure clause. Suppose funds are required for a limited period of time. In that case, a second loan works better, as the applicant can apply for a limited tenure for repayment or foreclose the loan after the minimum EMI have been paid.
Existing relationship with the lender: If the existing loan has a delayed repayment schedule, it is a good idea to apply for a second loan with an alternative lender to mitigate this.
| Existing Personal Loan | ₹ 4 lakhs | Existing Personal Loan | ₹ 4 lakhs | ||||||
| EMI paid | 14 | Interest rate | 10.50% | ||||||
| Principal balance | 280338 | Tenure | 36 months | ||||||
| Interest rate | 10.50% | Total amount repaid: | 468035.19 | ||||||
| Top-up amount: | ₹ 2 lakhs | ||||||||
| New tenure applicable: | 36 months | Second Loan | ₹ 2 lakhs | ||||||
| Total amount repaid: | 718049.72 | Tenure | 12 months | ||||||
| Interest rate: | 10.50% | ||||||||
| Tenure | 12 months | ||||||||
| Total amount repaid: | 211556.15 | ||||||||
As per RBI guidelines, it is mandatory to complete the KYC (Know Your Customer) process before opening a bank account and operating it. The completion of the KYC safeguards banking and other financial services from being misused for unlawful activities.
According to this process, customers must provide valid documents required for KYC, such as proof of identity (PAN card, Voter ID, Aadhaar card, or Passport) and proof of address (Rental agreement, Utility bills, or driving license). You also need to provide a recent passport-sized photograph.
The purpose of the KYC verification process is to ensure the financial system is safe and secure. Proper verification of customers helps banks and other financial institutions protect their systems against fraud and illegal financing. Maintaining transparency from both ends builds trust between the bank and its customers.
Physical KYC – For a physical KYC, customers are required to submit hard copies of documents, and verification is conducted in person at the office and residence address. The applicant must show the originals for a successful verification.l
eKYC – Also known as online KYC registration. In this process, a digital approach is adopted by utilising Aadhaar authentication on a video call with the customer, thus making it quick and paperless.
The KYC process is not just a regulatory formality, but a crucial step that ensures authenticity and safety for both the bank and the customer.
Improved security and risk control – KYC helps banks thoroughly verify customers’ identities, which in turn lowers the risk of fraud, identity theft, and other illicit financing.
Here are some points to consider: ‘Why KYC is mandatory for banks’
KYC, short for “Know Your Customer” or “Know Your Client,” is not just a standard regulatory procedure mandated by the Reserve Bank of India for Banks and Financial institutions. It’s a crucial step in maintaining the integrity of the financial system.
In simple terms, to complete the KYC process, the bank or financial institution must verify the customer’s identity and address to confirm that the submitted details are genuine.
Each time a new customer is acquired, the KYC process must be completed to verify the customer’s identity and address as a compulsory compliance measure. The KYC details of individuals should also be updated periodically by the financier.
The KYC process began in 2002 to verify that customers and entities with which banks and financial institutions deal are legitimate and not involved in illegal activities, such as fraud, money laundering, and terrorist financing. The primary objectives of the KYC include:
Before opening any new bank account, the bank must complete the KYC process. The required KYC documents must be submitted, and the institution must carry out the necessary due diligence. The account will be operative only after a successful KYC process is conducted. Failure to complete the KYC process may result in the account not being opened or being frozen, hindering your financial transactions.
The KYC process is not only necessary for opening a new Bank account, savings or current account and a fixed deposit, but also for:
To complete the KYC process, you must submit vital documents to verify your identity and address.
Government-issued documents with a photograph affixed are required as an Identity proof for the KYC process. The evidence of identity also gives the Name and the date of birth details of the customer.
The list of documents approved as an Identity proof includes:
Other documents approved as proof of identity include government-issued identity cards and identity cards issued by educational institutions.
Your address proof must reflect the location where you currently reside. The approved documents include;
Providing valid documents with clear copies will help expedite the KYC process.
The KYC process undergoes the following key stages:
Due diligence is conducted to understand the customer’s background and business activities.
Banks and financial institutions conduct verification to confirm the customer’s residence and employment details.
If a customer is classified as high-risk, a thorough investigation is conducted into the customer’s background.
This may include requesting additional documents and thoroughly analysing your sources of income and financial activities.
The manual verification of the KYC documents involved:
With the transformation to the e-KYC process;
Benefits of the e-KYC process.
Non-resident Indians (NRIs), whether they are Indian or foreign passport holders, must complete the KYC process when opening a Bank account or conducting any other financial transactions.
A permanent account number issued by the Indian Income Tax authorities is mandatory for conducting all financial transactions.
Copies of the first two and last two pages of your Indian passport or a passport issued by a foreign country.
NRIs with an Indian residence address must submit an Indian address proof, such as a driving licence, Aadhaar card, Voter ID card, or utility bill.
A recent colour passport-size photograph is required for identification.
Additional requirements include:
Provide your OCI (Overseas Citizen of India) or PIO (Person of Indian Origin Card), if available.
A declaration under the Foreign Account Tax Compliance Act or Common Reporting Standard is needed.
A self-signed proof of signature on white background paper is required as proof of signature.
An updated KYC is required for any new financial transaction, and if you need to revalidate your KYC. You will need to submit an updated proof of Identity and Address. If there are any changes in your existing identity or Address proof due to the following reasons
Yes, in India, the KYC process is necessary and standard for all credit approvals. It is mandated by RBI and PMLA (Prevention of Money Laundering Act, 2002). Furthermore, the KYC details of customers are stored with the Central Know Your Customer (CKYC), which enables a one-time KYC to be stored and made available to Banks and financial institutions for customer verification.
However, the Bank might perform a KYC recheck for a new relationship or for a suspicious account.
In the past, vacations were synonymous with visiting family or exploring local hill stations and seaside resorts. Travel was a carefully planned, budget-conscious affair. However, the travel landscape has undergone significant evolution.
In comparison, today, with advancements in infrastructure and technology, the world is open to everyone, and curiosity and the desire for new experiences are steadily increasing.
Tourism generates revenue, and governments are spending lavishly to promote tourist attractions to visitors based on historical sites, cultural experiences, leisure activities, sports, or even retail opportunities.
Connectivity has increased, and travelling halfway across the globe is no longer a challenge. Bookings can be made online, covering everything from travel tickets to room reservations, with packages available for exploring the destination.
Instead of saving, it is now about spending on holidays to enjoy new experiences. Travel loans in India have become the new mantra, offering easy affordability with a healthy bank balance or by supplementing expenses with a personal loan in India or a credit card.
Planning your holiday is crucial: Choose a travel date that aligns with school holidays or your work schedule. Select a destination and create an itinerary that ensures a memorable vacation. Remember, a well-planned trip is a financially responsible trip.
Create a Budget: As they say, when you are travelling, pack light and spend wisely. While travelling, aim to be comfortable and plan your funds for transport, accommodation, food, and leisure activities. Set aside money for emergencies and unforeseen changes that may arise unexpectedly.
Arrange for funds: Ensure you have sufficient funds available before embarking on your vacation. If you have been saving in advance for a holiday, it will serve you well. However, if you do not have sufficient funds, consider applying for a personal loan for travel to cover any shortfalls.
Banks and NBFCs offer personal loans for travel and holiday expenses. Salaried individuals can apply for a personal loan to enjoy a well-earned holiday after enduring continuous work pressures. Personal loans for travel in India are typically dependent on the lender’s eligibility criteria. Key points to note before applying for a personal loan for travel are as follows:
Identify a suitable Lender: To apply for a personal loan, you must check if you fulfil the eligibility criteria of the lender. Essential criteria to be noted are:
Negotiate for the best terms: Survey the market offerings for the lowest interest rate and other charges. If you want to repay your loan soon, the prepayment charges will significantly impact the cost of your loan.
Apply for the loan amount required: Determine your budget and then apply for the loan amount you need. Remember, the loan amount you borrow is a form of credit that needs to be repaid responsibly.
Confirm the EMI applicable: Use the EMI calculator to check the EMI you will need to pay for the borrowed loan amount. The EMI should fit comfortably into your monthly budget; if it does not, apply for a lower amount or a longer tenure.
Most lenders offer a convenience to personal apply online, the online process for personal loans, allowing you to apply from the comfort of your home or office with minimal documents easily at hand. This hassle-free process ensures you can focus on planning your trip without added stress.
Unsecured loan: Banks offer personal loans for travel without requiring any collateral. Applicants can apply for a personal loan for travel, holidays, and vacations without providing security or guarantees.
Repayable via EMI: The personal loan amount is repaid through suitable EMI over a tenure of 24 to 72 months. Customers can opt for an EMI according to the amount they can allot towards repayment after accounting for monthly expenses.
Multiple usage allowed: A personal loan for travel is disbursed once and can be used as desired for travel expenses, such as ticket payments, hotel expenses, and other ancillary costs.
Today, a credit card is in the possession of most individuals earning a regular income; some have the benefit of holding multiple credit cards, which can be used to pay for various expenses, including travel. When planning a vacation, a credit card can be used for:
In Conclusion, having a good lifestyle and going on pleasure trips is the new normal. Still, it is a good idea to be conservative and plan your finances so that you can make pleasant memories without compromising your financial health.
To make your personal loan journey successful, it is a good idea to seek complete clarity about the details and make an informed decision. This is particularly true if you are a first-time loan seeker or have been unaware of the terms of your previous loan and the costs applicable. Given below are the significant questions you need to ask before securing the best personal loan Deal.
Understanding the purpose of a personal loan is crucial. It’s an unsecured, easily accessible fund that should be used for legitimate financial needs. Having a specific goal and a well-planned repayment strategy not only ensures responsible fund management but also helps improve your credit rating.
The eligibility criteria for personal loans differ between Banks and NBFCs. You should verify which bank considers you eligible to apply before submitting your request. The key criteria include:
Survey the offering and check personal loan interest rates online before applying for a personal loan. The HDFC Bank personal loan interest rates are from 10.25% to 22% and are charged at a monthly reducing rate. The personal loan interest rate, once issued, remains constant for the entire tenure. Looking for the lowest rate is a priority, but it is also essential to check the other costs applicable that will affect your cost of funds.
Though the interest rate is the primary charge, there are other charges you need to be aware of, including:
If you have taken the funds for a short-term need and repay the loan before the term ends, or have funds that you need to contribute towards your principal loan amount, you need to check the costs involved before applying.
The repayment from the following month after a Personal Loan is disbursed and the tenure is fixed from 12 months to 72 months according to the;
A longer tenure reduces your EMI but increases the cost of your loan. You can request a suitable tenure, but the credit team finalises the same upon disbursal of the personal loan.
Before applying for a personal loan, it’s essential to check the affordability of the EMI for repayment. Use the EMI calculator to determine your EMI for the required loan amount. If the EMI seems unaffordable, it’s better to apply for a lower loan amount or opt for a longer tenure. A stretched budget can lead to delayed repayments, so it’s essential to ensure that the EMI is comfortably within your financial reach.
Documents are the foundation for processing your loan. It’s crucial to provide complete and valid documents to expedite the process. As you can personal loan apply online it’s even more critical to ensure that your documents are clear and legible. Being proactive in providing the necessary documents can significantly speed up the loan approval process.
KYC and Income documents accepted for the personal loan process include the following:
A passport-sized photograph.
Income Documents;
Identity proof.
Address proof:
When you apply for a personal loan, the bank sends an inquiry to CIBIL to check your score and history. Each enquiry can reduce your CIBIL score by 10 to 15 points. It is crucial to choose the right lender to process your personal loan application, as applying to multiple lenders can harm your CIBIL score. The best CIBIL score for loan is 750 points.
You can apply for instant personal loan online for quick disbursal. Banks aim to approve and disburse funds as a personal loan within 72 hours, but this requires cooperation from both the Bank and the customer to ensure a smooth process. The customer must provide the Bank with all necessary documents and be available to answer any queries. The Bank’s systems must support the applicant’s submissions and complete the required process steps within the TAT period.
It is always advantageous to apply for a personal loan from a lender with whom you already have a bank account or a prior loan relationship. An HDFC Bank personal loan top-up is a convenient option for urgent funds. Do not be influenced by offers such as those from apps advertising immediate funding but providing funds through a third-party lender; their terms, including the charges, are often unclear.
A personal loan is a suitable choice in an emergency or for personal use, as it is quick and issued without any collateral. Also, do a personal loan eligibility check and check your CIBIL score before applying to ensure you meet the necessary thresholds. You should be able to afford the repayment comfortably, and the EMI must fit within your budget.
If you don’t have a CIBIL score or don’t meet the personal loan eligibility criteria, you can ask for a loan against your fixed deposit to get the funds you need. Taking out a gold loan is also a good option, as you can get funds at a reasonable rate, giving your ornaments as security. A used car loan can also help you get the required funding.
In Conclusion, the terms for a personal loan, which include the interest rate, other fees, and the EMI, are finalised at the time of disbursal and do not change; therefore, you must be satisfied with your decision that you are applying to the right lender and will be able to complete your financial obligations comfortably.
Before approving a personal loan request, the credit officer of the personal loan lenders, such as ICICI and HDFC Bank, will make a telephone call to verify information based on the application form and submitted documents. This might seem like a pre-functionary call to correlate the details given, but the importance of the call should not be underestimated; it could turn the tables for or against your favour.
To avoid facing a decline, let us explore further the questions asked to make your personal loan journey smooth and successful.
One of the essential questions asked by a bank’s underwriter when granting a personal loan is, “What is the amount required and the end usage of the personal loan requirement?” as the timely repayment of EMI is the primary focus of the lender.
Valid reasons for applying for a personal loan include: Home renovation, weddings, family functions, travel and holidays, education expenses, payment of hospital bills, and other medical emergencies.
Expenditures for investment or business usage could lead to misappropriation of funds. Similarly, you cannot use a personal loan for purchasing land or to start a new venture, where there is a monetary risk factor involved.
Let us check out this example to understand this further:
Profile of the customer applying for a personal loan: Aman Sharma, an IT executive at a prominent software firm, applied for a personal loan of ₹ 8 lakhs from HDFC Bank. He maintained a salary account with HDFC Bank, earning a monthly income of ₹ 80,000/-. His CIBIL score was excellent, and he was paying a home loan EMI of ₹ 15000/-. His company is classified under category B of the HDFC Bank company list, and with no outstanding credit card dues, he remains hopeful of securing the loan.
The primary need for funds was for the renovation of his new home, and he had applied for a surplus amount to cover any shortfalls.
Aman was a bit preoccupied at the time of the call and explained that the amount was needed for the renovation of his new home, and he had applied for additional funds, which he would invest in mutual funds if not used. Soon after, he received a message that his loan request had been declined. Although investing in mutual funds was not the actual end use, a mention alerted the Credit officer, who was not convinced about the appropriate usage of funds, which led to the decline.
When you apply for instant personal loan online to ICICI Bank, you need to fill in the application form and submit supporting income and KYC documents. The information filled in the form must match the documents given. You will be asked to verify the same.
The amount granted as a personal loan is based on your monthly income. The net income should easily cover your monthly expenses.
The credit officer will ask you to confirm your income for a personal loan eligibility check, as the EMI for repayment of the loan is calculated with the regular income credits in your Bank account. If you have an alternate source of income, proof of the same must be submitted.
The salary depicted in your salary slip must match the credit in the Bank statement. If there are any discrepancies, for example, if the salary is deducted for a particular month, you will be asked to provide a reason for this with the documentary proof.
Apply for a loan amount that can be repaid conveniently. Suppose the credit manager feels that your income is insufficient or that the balance maintained in your bank account is not enough to support the EMI, you may not receive the loan amount required, or you may be asked for an alternate account if available with a sufficient balance.
Equally important is work stability, which ensures your income is consistent and allows you to pay your personal loan instalment regularly. The credit officer will ask you about your employment history to understand your track record.
Employment with a Category A company, according to the HDFC Bank company category list, reassures the credit manager that you have steady employment and your salary will be credited on the due date, enabling the EMI to be cleared. Whereas if you are employed with a private limited company, you will be questioned about your work history.
The salary slip usually displays the date you joined the company; if the joining date is missing, you will be queried about it and required to provide the appointment letter or Form 16.
The total work experience required for a personal loan is at least 12 months. If you have been in the present organisation for less than a year, you may be asked to provide documentary proof of the previous organisation.
Completion of the KYC details is a necessary mandate issued by the Reserve Bank of India. Your KYC documents must be updated, with clear copies available for the personal loan application online. With the online KYC process becoming popular, your Aadhaar card and PAN card must be legible during the video KYC process.
A personal loan is unsecured funding issued for a limited tenure, without any security or guarantees; therefore, the customer must be easily reachable.
The information given regarding your residence address must be authentic, as there will be a physical verification conducted at the residence.
A self-owned or family-owned residence adds bonus points to your application as it ensures the applicant can be easily contacted, whereas an applicant shifting from rented residences may be harder to contact and so will not be issued a higher loan amount. Applicants living in rented accommodation will be asked for permanent address details, and if need be, documentary evidence will be required.
The applicant must be living at the current address. For instance, an applicant residing in office-provided accommodation and giving his Parents’ home is not acceptable as his current address, and this will be clarified during verification.
Our family is an integral part of our system; an applicant living with a family has the security and support of the family, as compared to a bachelor and the personal loan request is considered more favourably.
The number of members in your family will also affect the monthly budget; on the other hand, other earning family members will contribute to your financial standing. The credit manager will account for your financial responsibilities versus your income when issuing the amount required as a personal loan.
Suppose you specify in the form that you are married, and upon verification of your residence address, it is proven that you are residing in a bachelor’s accommodation. In that case, your application may be withheld until you provide the relevant proof.
The credit officer of the Bank will study your credit history retrieved from the Transunion CIBIL (Credit Bureau of India Ltd) to check your past credit dealings and the secured and unsecured credit availed, including home loans, credit cards, personal loans, and auto loans. By viewing your credit history, the officer of the Bank will have a keen understanding of how you manage credit. Significant questions asked regarding credit include:
As per the new Reserve Bank of India ruling, your credit inquiries are immediately reported to the Credit Bureau. The number of recent credit inquiries must not exceed 5, according to the ICICI Bank eligibility check, as excessive inquiries give the impression that the applicant may be applying for multiple credits in the form of credit cards or personal loans from other lenders, which may be challenging to repay.
The existing EMI you are paying and the credit cards being used are displayed in your credit information report. If there are any defaults in the history or pending accounts, you may have to explain the cause for the same. Any bounces in the past three months of repayment for credit will lead to a decline in the request.
The credit history will reflect the balances of loans and credit cards you are using. If there are any pending credit card bills, you will be asked to clear them before the fresh loan amount is approved. The loans with six or fewer EMI payments pending will not be considered when calculating your personal loan eligibility.
An applicant with a high CIBIL score of 750 or above is the best CIBIL score for loan. Applicants with an on-time repayment history of credit taken will be provided the lowest personal loan interest rates.
You also have the opportunity to explain to the credit officer if there have been any wrong entries in your credit history and the action being taken to verify the same.
The CIBIL of the spouse and the parents is also checked by the HDFC Bank credit team, particularly when disbursing large loan amounts. If there is a default on credit taken, this will affect the applicant’s personal loan approval status.
Finally, you will be asked about the amount of funds required as a personal loan. It is a good idea to check your EMI in advance using the personal loan EMI calculator and apply for the amount you need and can easily repay.
The personal loan amount is sanctioned, taking into account your income, profile, the existing EMI, and your credit card dues. Although the formula applicable is as per the lender’s policy, the underwriter decides the amount approved as a personal loan after reviewing the application, assessing the profile as satisfactory and speaking to the applicant.
With all the documentary evidence of your financial history and credit transactions readily available online, it is in your best interest to provide accurate information, as any discrepancy can raise suspicion and mistrust.
For example, the underwriter asked Ganesh to forward his credit card statement as the bills seemed unusually high. Upon reviewing the statement, the officer denied his loan request as he noticed that Ganesh had made numerous purchases on Gaming Apps.
There is no manual for the questions you will be asked when applying for a personal loan, and it will depend on your individual case history. As the credit officer is experienced in asking the required questions before issuing a personal loan, answer transparently and attentively to get your personal loan approved.