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While checking her Bank statement, Sonia was delighted to read, “You have a Personal Loan offer for ₹ 2 Lakhs“. It was precisely the stroke of luck she needed, as she was planning an overseas vacation with her friends and required additional funds.
She contacted her Bank and requested the credit of the loan amount on account of the pre-approved offer surprisingly, the Bank asked for her documents and application to initiate the process.
In another instance, Mohit was offered a paperless, instant loan of ₹ 5 Lakhs on behalf of his payment App; on pursuing the offer, he was asked to submit documents before obtaining the Loan.
Are these offers for real? What does the fine print say about these funding techniques? Let’s find out.
In today’s sales world, Data is the key, and targeting the appropriate audience is crucial for achieving a successful sale.
Financial institutions such as Banks and NBFC have extensive data on customers using their services: as submitting KYC details for opening a Bank account or securing credit has become mandatory.
Therefore, financers can easily reach out to customers via SMS, send emails and messages, or display the details of a Pre-approval on a mobile app screen.
Banks and NBFC also employ Tele callers to call customers for a pre-approved loan or display the message on the online banking platform.
A pre-approval for a Personal Loan is not randomly forwarded it is a system-generated offer. Leading Banks such as HDFC Bank, ICICI Bank, YES Bank, and AXIS Bank deliver offers to candidates holding a Bank Account and having the following qualifications:
After receiving the pre-approval offer, you can decide whether to accept it. Remember that a pre-approval is not a guarantee of funding but rather an indication that you are likely to be approved for a loan based on the information available at the time. Listed below are considerations for making a decision:
Receiving the funds without an objective is of no use. The financer has forwarded you the offer but accepting funds without any active need serves no purpose.
How are you currently placed financially, will the repayment of the loan burden you? Use our EMI Calculator to determine your monthly instalment. Once the Bank disburses the amount, you must pay the EMI on time.
The financer extends a pre-approved loan offer based on preliminary checks and a customer’s creditworthiness. On applying for the Loan, the Bank processes the request per the regular norms. It only accepts the application that meets the Eligibility Criteria. Check the terms on our link before applying.
Suppose you have received credit recently from other financers. In that case, the Lender can deny the request even if it is pre-approved. The CIBIL Score and history review should not reflect any delays or settlements. Rejection will always show in your history, so be sure before applying.
Financial Apps are indirect sourcing platforms for some lenders the App redirects the loan offer to the financer advertising on the App. The financer further processes the request per individual norms, terms and conditions. So, applying through an App is not the best deal.
On the other hand, a Pre-approval the Bank issues is with a check on the essential criteria. Furthering the Personal Loan has its benefits.
Here are the stages involved in getting a pre-approved personal loan:
Unsecured credit, such as a Personal Loan, is a good investment that helps to build a credit score speedily and inculcates discipline for the management of credit.
Before accepting a Pre-Approved Personal Loan, review other Lenders’ offerings for their terms. Finally, if the offer is approved once you have received the Loan, remember to pay the EMI on time.
Throughout our journey in life, distinct phases call for varied strategies and responses. Often, these strategies revolve around financial matters. The necessity for funds can be divided into three categories long-term goals, short-term needs and unforeseen financial emergencies. Your long-term and short-term needs are based on your financial goals, but a financial emergency comes up unexpectedly.
Long-term financial planning includes objectives like purchasing a house or saving for retirement. On the other hand, short-term planning is necessary for things like vacations or funding a business. However, in unforeseen emergencies, such as sudden illness, we might need cash urgently. In these different scenarios, there might be a need to borrow money, leading us to apply for a loan.
Considering the numerous options available, the loan that aligns with your goals and requirements is the most suitable one. When it comes to meeting your financing needs, you can either opt for fresh loans or consider a Top-Up Loan. However, before making this significant decision, it’s imperative to be familiar with the various options and comprehend the distinctions.
When you borrow money from a lender for the first time to meet a specific financial need, it is considered a fresh loan. It can be either secured, like a home loan, or unsecured, like a personal loan. Let’s say you applied for a home loan from XYZ Bank, and you don’t have any previous association with the bank; in this case, it’s referred to as a fresh loan.
Similarly, even if the lender remains the same (XYZ Bank), but the loan type changes (for example, you already have an XYZ Bank car loan and now you need a home loan), it is still considered a new or fresh loan. Therefore, a new or fresh loan can be described as-
A Top-Up Loan is an additional loan taken on top of an existing loan, which could be a Home Loan, a Personal Loan, or any other type. Lenders offer the Top-Up Loan as an additional benefit to their current customers. However, it is not mandatory for lenders to offer this service to existing customers. The eligibility for a Top-Up Loan is usually determined based on your repayment history and track record.
Suppose, you already have a personal loan from XYZ Bank, and you find yourself in need of additional funds. In this situation, you can Apply For a Top-Up Loan on your existing personal loan. Alternatively, XYZ Bank might offer you additional financing based on your good repayment record
Fresh Loans – Fresh loans generally have relatively higher interest rates, which can vary between individual borrowers and lenders. Those with lower credit scores may secure loans at higher interest rates compared to individuals with good credit scores.
Top-up Loans – Top-Up Loans often come with a lower rate of interest compared to the existing loan since the applicant already has a relationship with the lender. Moreover, many lenders provide discounts on processing fees for top-up loans in comparison to new loans.
After the disbursement of a top-up loan, utilizing the funds for pre-defined purposes such as home renovations or house expansion may allow you to avail of tax benefits up to a certain limit. However, if you choose a Fresh Personal Loan for a house renovation, you might not be eligible for the same benefits. It’s essential to inquire with your bank about the tax benefits you qualify for before opting for any loan.
Top-up Loan tenures are typically flexible, often allowing for longer repayment periods compared to fresh loans. Numerous banks provide the remaining tenure on your existing loan as the tenure for your Top-up Loan, making it a fantastic alternative to fresh loans.
Fresh Loans – The processing of a Fresh Loan is time-consuming as the lender conducts a comprehensive background check, which includes verifying Loan documents, Credit Score, past loan repayment history, income source stability, age, and more. Lenders typically prefer borrowers with no history of defaults when approving a Fresh Loan.
Top-up Loans – The processing time for a Top-up Loan is shorter since the lender already possesses the borrower’s history and verified documents. Banks typically prefer borrowers who regularly pay EMIs when offering a top-up loan.
Fresh Loans – When applying for a fresh loan you need to fill out numerous forms and provide various documents such as:
Top-up Loans – When applying for a Top-up Loan, the bank would already possess all the necessary documents as you would have submitted them when availing of the initial fresh loan. As a result, the documentation process is straightforward and less time-consuming when opting for a Top-Up Loan.
Whether you are considering a Fresh Loan or a Loan Top-up, it’s crucial to conduct thorough research and negotiate for the best possible terms and conditions. To get a better understanding, let’s assume you require additional financing for a home loan.
The verification and disbursal process for a Top-Up Loan is relatively faster as you already have a primary home loan with the lender. Additionally, this process requires only minimal documentation.
Before making a decision, compare the interest rate of a new home loan from a different lender with your existing one. If your current lender offers a lower rate, consider applying for additional funding with them to secure the best Home Loan Interest Rate.
The tenure of a top-up loan aligns with the remaining tenure of the original loan. In contrast, a fresh loan will have a new tenure, which is typically twenty years for the best home loans. Choosing a longer or shorter tenure can directly impact your EMIs.
Top-ups are typically pre-approved offers extended by lenders to their existing customers and are based on their current loan and sanctioned limit. In contrast, for a fresh loan, the sanctioned amount would be determined solely by your credit profile and other eligibility criteria.
If you have a solid repayment track record and a good Credit Score, you have the option to negotiate with your current lender for a top-up loan at the best home loan rate possible, subject to their approval.
When opting for a loan top-up, it is mandatory to obtain it from the existing lender. On the other hand, for a new loan, you have the flexibility to explore various offers and terms based on your needs. You can compare factors like loan amount, interest rate, duration, and EMI burden before deciding on a new lender
It’s crucial to keep in mind that even with a Top-up Loan, additional charges like processing fees still apply. Nevertheless, you have the option to negotiate the terms with your existing lender.
Deciding between a Fresh Loan and a Top-Up Loan relies on your specific needs, current and future circumstances, repayment ability, and personal preferences. Gaining a clear understanding of the differences and advantages of each loan type is crucial for making an informed and prudent decision.
The growing figures prove that credit usage is increasing dependency on loans and credit cards for lifestyle needs and growth is now the norm.
Did you know that the value of loans in India rose by 16.20 % year-on-year in the fortnight ending 30th June 2023?
Individuals with a Personal or Home Loan can borrow additional funds as a Top Up. A Top Up is quick and convenient, but Applicants should not take approval for granted and must consider the policy criteria of the Lender.
Banks do their due diligence when awarding an extra amount as Top Up Loan Requirements. The process may vary slightly depending on the specific Lender and their policies, but generally, here are the policy and the steps for the processing of a Personal Loan Top-up.
Appropriate Gap: Banks offer a Top Up Loan within 3 to 6 months after issuing the primary loan. This interval allows the Bank to evaluate the customer’s behaviour.
Financial Eligibility: The customer’s earnings should support the mandatory expenses and obligations, such as Credit card bills and loan instalments. With surplus funds to afford an additional EMI for the Top Up. Customers can check the same with the Top Up Loan EMI Calculator.
Existing Personal Loan Track: The payments of the existing Personal Loan must be on time. Lenders are more than willing to give an additional loan to applicants repaying their EMI on the due date.
Credit Score and History: The applicant’s CIBIL Score must be above 720 points. The Bank will view the CIBIL of the applicant to ensure there are no recent defaults or excess credit appended recently.
Employment Status: The current employer should feature in the company category list of the Bank. The Bank evaluates the Top Personal Loan Top-up.
Up request according to the present job profile of the customer. Having a consistent employment history can be beneficial in obtaining a Personal Loan.
Need funds and ready to Apply for a Top Up Personal Loan? The process stages are listed below:
Before Applying for a Top Up to the Bank, determines your requirement and the financial bandwidth to pay the instalment. Remember, the total loan amount (original loan + top-up) cannot exceed the maximum loan amount allowed by the Lender.
Documentation: The Bank requires fresh documents to Process a Top Up Loan. The documentation is similar to a new loan, such as the proof of income, identification documents, bank statements, and any other documents the Lender specifies. The request for a Top-up is considered based on the latest records.
Application: To apply, a customer may complete the necessary information in the form online or manually and submit the same with copies of the documents required. The data filled in the application must match the documentation.
The Lender will acknowledge the request and issue a control number the processing of a Top Up Loan is similar to a new loan and includes the following steps:
The Top Up to the existing loan begins after the request for an additional loan amount is approved.
The Lender constructs a new Personal Loan with the principal balance of the existing loan and the Top Up amount approved and presents a fresh instalment. The new instalment will replace the previous EMI for the appointed tenure.
The Bank follows a formal process and only accepts a request if the application fulfils the eligibility for a Top Up Loan. Therefore, comparing the terms offered by other lenders before taking a Top Up is advisable.
A Top Up Personal Loan has its advantages if the customer has a successful Personal Loan existing with the Bank additional amounts are granted timely. Banks would like to retain good Customers by offering better terms for the loan.
All is not hunky dowry. A Top Up has its drawbacks. The nature of the existing loan changes and a new repayment schedule for the fresh loan is instated. The Bank disregards the interest paid previously for the principal balance. Work out the complete costs for the loan.
The foreclosure and part payments are allowed after 12 instalments; Banks renew this period with the new loan. Customers wanting to repay their loans should look at other options.
The applicant has a choice and must consider other options, such as a Parallel Loan from the same Bank or a new loan with another lender.
Apply For Top up Personal Loan
How To Check Your Eligibility For a Top up Loan
When Can a Personal Loan Top Up Cost More and What are The Options
In situations of unexpected financial emergencies, depending solely on your savings might not always be enough, thus leading you to consider a Personal Loan as a means to overcome the circumstances. In this scenario, the last thing you want to experience is having your loan application rejected. So, ensure your loan application is not rejected for the following reasons.
The applicant’s ability to manage credit efficiently is the primary requirement for acquiring credit A significant factor that could result in the rejection of a Personal Loan is having a low credit score. There are several factors that contribute to a low credit score, including delayed repayment of existing debts and neglecting mandatory dues. No lender will entertain requests from Customers who have overdue loans or settlements.
Building a strong credit history can help in improving a low or poor credit score. An individual must have a credit score of at least 750 to qualify for any type of loan. Also, by consistently paying credit card dues on time and ensuring timely repayment of existing loans, individuals can improve their credit scores.
The lender’s primary concern when approving a Personal Loan is to confirm that the borrower can repay the loan. As part of the eligibility assessment, the applicant’s income is thoroughly reviewed. Having a stable income indicates your ability to make timely EMI repayments.
This is why obtaining a Personal Loan is typically easier for salaried employees compared to self-employed individuals, as salaried employees have a stable income with fixed amounts and sources. Lenders usually have minimum income criteria for both salaried and self-employed individuals, and if you apply for a personal loan amount that exceeds your eligibility, your loan application is likely to be rejected.
If you feel that your application might be rejected based on this criterion, it is advised to have a conversation with the lender before proceeding with the application. However, before initiating the loan application process, it is better to thoroughly check the eligibility criteria to ensure they are eligible, thereby minimizing the risk of rejection. Thus, once the individual fulfills the minimum criteria, they should initiate the loan application process.
If any inaccurate information is found in the individual’s application, it will result in the loan approval being declined. For instance, inaccurate details such as your name, residence, phone number, and other account information make it challenging to gather the necessary information about you. Thus, inaccurate information leads to loan rejection.
Prior to applying for the loan, the applicant should conduct a comprehensive review and ensure that the required information is accurate and in accordance with the lender’s requirements. It’s important to note that each lender may have different information requirements for loan approval.
If you already have a significant amount of debt, the online approval process for your Personal Loan might be rejected. This is because the existence of multiple loans might lead the prospective lender to believe that you are carrying a significant credit burden. Consequently, you will appear to be a risky candidate, potentially leading to the rejection of your loan application. Therefore, it is crucial to only borrow within your repayment capacity and avoid going overboard.
By consolidating existing loans into a single loan, the applicant can pay them off more effectively. The lowest interest rates associated with this option can be advantageous. However, the lender must approve the pending multiple loans. Therefore, the applicant should check their eligibility before applying for the loan.
When it comes to granting loans, financial stability is of utmost importance. Lenders need to verify that you possess a reliable source of income, that would enable you to make timely loan repayments. Therefore, job instability can pose a significant challenge during the loan approval process. So people who switch jobs too frequently may face issues with loan approval.
Before initiating the loan application, the applicant should ensure they provide the lender with income certificates and bank documents that verify the stability and continuity of their income based on their financial track record. For instance, if you have other sources of income like rental income or interest payout you can give the proof to lenders ensuring that it will help you to make EMI payments regularly.
While you have the option to Apply For a Personal Loan from multiple lenders, there is a catch. Each lender will assess your credit report before approving your loan. When the Credit Bureau report reveals multiple loan applications to different lenders, it can give the impression of financial strain, raise doubts about your financial credibility, and possibly result in the rejection of your application. Hence, it is wise to apply and inquire for a Personal Loan from only one lender at a time.
In case of an urgent requirement, it is advisable for individuals not to apply with multiple vendors. Instead, they should carefully review the requirements of a single lender and make an effort to meet those criteria. This approach helps portray the individual as creditworthy rather than appearing excessively eager for credit.
To be eligible for a loan, the applicant must meet the specific age requirement and be of legal age. Failure to meet the age requirements, either by being below the minimum age of 23 years or exceeding the maximum age limit, can lead to the rejection of the loan application. Typically, the maximum age limit is set around 60 since individuals tend to have lower risk-taking capacities beyond this age. Additionally, in certain areas, higher default rates can result in the rejection of loan applications for individuals.
Before applying for a loan, it is advisable for the person to verify the age limit. Additionally, if the individual is applying from an area with high default rates, providing additional evidence of income stability and other necessary information is recommended.
After receiving the documents, the lender takes a few days to analyze them before forwarding them to the verification department. Typically, lenders maintain their own verification team, which includes representatives. One of these team members is sent to the borrower’s residence to personally verify the provided address. Additionally, they conduct a visit to the borrower’s workplace to verify their employment status with the organization.
For instance, the documents you submit for KYC (Know Your Customer) serve the purpose of establishing your Residential Stability, providing the bank with evidence of your permanent address that confirms your residency in the city. In the case of renting, banks might require additional information. And if during the visit to your provided address, the representative is unable to verify your residential stability, your loan application may be rejected.
The verification of other essential documents such as PAN Card, Aadhaar, or Passport is carried out online through different portals.
At this stage, once the Personal Loan is declined due to a verification issue the lender will clearly communicate the reason for disapproval. So now if the verification is declined due to your residential address where your residing was not confirmed, you can connect with your neighbors to ensure that the next time when a lender’s representative visits the place they can confirm that you reside at this place.
After the thorough verification of documents, the Personal Loan Application is approved. Failure to submit the appropriate documents that validate your Eligibility For a Personal Loan can result in rejection. It is therefore important to thoroughly review the loan application guidelines and ensure that you submit the correct documents accordingly.
Follow the prescribed list of documents that you must submit and maintain a handy checklist to ensure that none are overlooked. This will help you to process the loan application smoothly.
It may come as a lesser-known fact that individuals typically Apply For Personal Loans to finance various expenses such as weddings, vacations, home renovations, or purchasing new gadgets. However, if you are seeking a Personal Loan with the intention of using the funds to establish a business, it may contradict the concept of income security. It is essential to bear in mind that lenders grant loans based on your current salary rather than the projected growth of your business. Well, there are numerous such scenarios where a Personal Loan is declined like if you are willing to take the loan for investment and so on.
The employment history and occupation of the applicant significantly influence the Approval of Personal Loans. Lenders prefer granting loans to individuals employed in recognized and stable organizations. Therefore, if your company is not listed or registered, there is a possibility of your loan application being rejected.
Apply to lenders who give loans to non-listed companies or if the lender is willing to list the company.
As you may be aware, banks, non-banking financial institutions, and credit information companies collect and consolidate your payment and credit-related information. This information includes personal details like your name, age, address, current employment, and other identifying information. If any of these details match those of a credit/loan defaulter, there is a possibility that your loan application could be rejected, even if you have a good CIBIL Score.
For instance, if any of your family members have defaulted on a loan previously and you share the same address, in such a situation your home address can become an obstacle as it is associated with a defaulter. In such cases, when the lender identifies a red flag like this, they may choose to reject the loan application to prevent approving a fraudulent loan request
If you can pay the balance of the previous loan and remove the flag of defaulter then the lenders can consider your loan application.
While a Personal Loan can provide financial security in times of need, being able to secure the loan is equally important. A rejected Personal Loan Application is documented in your credit report, making it harder to borrow funds in the future. Thus it’s essential to keep the mentioned factors in mind and apply only when you are confident about the approval of your loan application. If you identify any gaps in meeting the necessary requirements, it’s best to work on enhancing them before applying.
Research says In India, 67% of people have taken a Personal Loan at some stage to meet their financial needs. A Personal Loan can fulfil immediate needs by providing timely financial assistance, helping individuals satisfy their requirements without relying solely on their close circle.
Like many others, Satish took a Personal Loan to meet his financial needs. He first checked his Personal Loan Eligibility, applied for the loan and got the loan instantly, and used the money for what he needed. Every month, he started paying back the loan through fixed payments called EMIs.
But after a few months, he unexpectedly received a large sum of money from his family’s property division. Now he wants to know how he can use the funds to make a complete or partial payment of his loan that money to repay or even finish paying off the loan. Unaware of the procedures, he contacted Your Loan Advisors, Personal Loan Consultants in New Delhi.
After checking his details, our consultant gave him the good news: “Hey, Satish! You have two choices for loan repayment. You can pay partial to cover a portion of your loan or opt for foreclosure to pay off the loan completely.” Satish asked eagerly, “But how?”
If you have the same question, keep reading to learn about these two ways of repaying a Personal Loan when you have a large amount of money. Let’s get started!
When you have some extra money but not enough to pay off your entire loan, you can make a partial payment. It involves depositing that amount into your loan account, which reduces the remaining balance of the principal loan amount.
As a result, your monthly instalments (EMIs) decrease, and you pay less interest overall.
It is important to remember that part payment is most effective when you contribute a significant lump sum of money. By reducing the principal amount, part-payment lowers the total obligation. Though the personal loan interest rate and your EMI amount remain the same, the number of instalments reduces. Whenever you have surplus funds, consider making part-payments on your loan.
Terms and Conditions: Apply to a partial payment differ as per the individual lender’s policy. Leading Banks permit a part payment as per the following
Personal Loan part payment is made by transferring the amount electronically or via a banker’s instrument to the Loan account number, with specific instructions for adjustment towards the Loan Principal.
Follow up with instructions to the Bank for rescheduling the loan. It is important to note that even after making a part payment, you must continue repaying the remaining EMIs as per the schedule shared by the Bank.
Here are some essential points to consider when making a partial payment.
Personal Loan Foreclosure means repaying the remaining loan amount in one lump sum instead of multiple EMIs. You can choose foreclosure if you have extra funds and want to repay your ongoing Personal Loan.
A lock-in period is an essential aspect of Personal Loan Foreclosures. It is a duration during which borrowers cannot fully or partially prepay their loans. The lock-in period can range from six months to a year or more. You must complete this period before settling the loan account and repaying the outstanding amount in full.
There are charges associated with Personal Loan Foreclosure. Lenders impose these charges to compensate for the interest lost due to early repayment. The fees typically range from 3% to 7% of the outstanding principal loan amount and applicable taxes. Consider these charges before deciding on loan foreclosure to understand the impact on your financial situation.
Closing a loan earlier than expected can positively impact your credit score. It demonstrates that you are responsible with your repayments, which can improve your overall creditworthiness.
Follow these steps to Foreclose your Loan before completing the tenure:
An Instant Personal Loan to fulfil immediate needs is a good option, and it is prudent to check the terms for repayment when acquiring the loan knowledge of the rules for partial payment and foreclosure will help to make informed decisions.
Satish was happy to receive all the necessary information. We provided him with a clear understanding of the procedure and the additional charges he needs to consider, to help him decide.
Experience similar satisfaction as Satish by receiving the proper support and guidance. If you have any doubts or concerns regarding the partial payment Process or Foreclosure of a Personal Loan, don’t hesitate to get in touch with the team at Your Loan Advisors today!
Are you dreaming of exploring the globe or envisioning your perfect wedding? Choose a Personal Loan and transform your dreams into reality.
Whether you need assistance to overcome a financial challenge, manage unexpected expenses, or pay off debt faster, a Personal Loan can provide the necessary support.
Regarding Personal Loans, there’s no need to worry about collateral or security since they are usually unsecured loans designed to provide financial assistance.
Banks focus solely on the eligibility and creditworthiness of the borrower for issuing an unsecured Personal Loan as for the borrower receiving funding via a Personal Loan is a quick and seamless experience, more so with the convenience of online processing.
Typically, the borrower should fall within the age bracket of 18-21 to 60-65 years to meet the eligibility criteria.
Banks offer Personal Loans to salaried individuals employed in Government entities, recognised multinational corporations (MNCs), and public or private companies. Banks also offer Personal Loan facilities to self-employed applicants who can provide proof of business existence, income tax returns (ITRs), and other essential financial documents.
The applicants should provide the necessary KYC (Know Your Customer) and Income proof per the documents list.
The applicant’s income must be above the minimum required benchmark to meet the eligibility criteria required for a Personal Loan.
It is mandatory to have a specific duration of employment or business existence.
The CIBIL rating of the applicant is an essential criterion for Personal Loan approval a minimum score of 720 points is required by most lenders, with an on-time repayment record for all credit taken.
So when you apply for a Personal Loan, you must consider the above points to get the loan approved quickly.
Asses as to what is your loan requirement and repayment capacity?
The primary objective for both you and lenders is to ensure that you do not find yourself in a position where you obtain a personal loan and face the inability to meet the financial obligations for its repayment.
To steer clear of this situation, begin by assessing the amount of funds you will need while keeping in mind that specific lenders may also levy an origination fee.
Now, with the help of a Personal Loan Eligibility Calculator, determine the monthly payment amount for your loan. It can be challenging if you are not aware of the rates and repayment terms the lenders will provide. However, you can experiment with the numbers to estimate the potential cost of the loan and determine whether your budget can accommodate it.
Before Applying For a Personal Loan, inquire about any origination fee or upfront costs imposed by the lender to help determine the monthly payment you can comfortably afford.
Before deciding on any lender, you should thoroughly research to find the best per your need. To know more, Please Check Details of Primary Lenders.
For immediate financial needs, a Personal Loan provides swift access to funds. Personal Loans come with flexible payment options for up to 72 months. The terms and conditions may vary according to the profile of the customer and the loan amount approved. Here is a guide to understand how to Apply For a Personal Loan.
Documentation forms the basis for processing a Personal Loan. Therefore, the applicant must provide complete, valid, and clear copies. Before the commencement of the application process, an Applicant should ensure the availability of the required documents to expedite the Personal Loan Process. Primary documents are standard for most lenders, which include the following.
Proof of Identity can be either: an Aadhaar card/Pan Car/ Driving License/Passport with a Passport size photograph.
Proof of the Residential Address where you reside: An Aadhaar card copy with the applicant’s current or permanent address has become mandatory for most lenders.
If the Aadhaar card reflects a permanent address, the applicant has to submit a current address proof valid document for the same, including Passport/ Driving License/ Voter ID or any other government-recognized document.
Signature Proof: A Pan Card or a Bankers’ verified proof is required to authenticate the applicant’s signature.
Income Documents: That will confirm the applicant’s monthly income to calculate the eligibility for the loan amount; valid income proof is to be submitted. These Include:
Salary slips for the last two months to know the monthly remuneration of the applicant and a Form 16 for proof of continuity.
A self-employed customer needs to submit the Income Tax Returns filed for the last three years
A Bank statement for the previous three months for the salary account of a salaried applicant and a self-employed applicant has to submit six months’ Banking of all Company and personal Bank accounts and proof of Business vintage. Most lenders demand own
hip proof for self-employed persons. It could be either the office or the residence.
Once the documentation is in hand, you must fill out an application form for a personal loan. You can fill out the form online or offline by visiting the nearest branch of the Bank. However, when you apply for an Instant Personal Loan Online, you simplify the process and effectively save time. The details filled in the form must be accurate and match the documentation further, apply along with the documents for further processing.
On receipt of the application, the Bank verifies the Documents and customer details and initiates a reference number. The applicant is informed of the file number via a Mobile SMS.
The Bank will next review your Credit Score and evaluate factors such as your repayment history, The CIBIL Score allotted must be above the required benchmark. There should be no delays or defaults in the applicant’s credit history.
A bank representative may conduct a home visit to verify the address provided in your application. Furthermore, suppose the applicant is unavailable at the home address. In that case, a neighbour check is done, or if the residence is rented, the landlord is asked to confirm the applicant resides at the given contact address.
Ownership proof is required if the residence is self-owned, which will expedite the verification processing.
The employer verification is waived if the applicant provides an email contact from the company domain. If not, a representative will visit the office premises to confirm the customer’s employment details.
The verification is more detailed for self-employed persons, with a Bank officer physically visiting the office premises to verify details and check the profile.
If you hold an account with the Bank, getting access to instant personal loan approval within seconds is quite convenient. This digital solution ensures a seamless and effortless borrowing experience, assisting customers in fulfilling their urgent financial requirements.
It is paperless and In1stant Online Personal Loan disbursal for saving account holders, so if you have an account with the Bank, you can visit the website and apply for a loan once it is approved, the amount will be disbursed in no time.
With all the above checks conducted positively, the Underwriter can check if the applicant meets the Personal Loan Eligibility Criteria Requirements. A financial calculation confirms the existing credit and obligations and whether the applicant can comfortably pay the monthly instalment for the loan amount requested.
On completion of the process, the essential terms and conditions of the Personal Loan are tabulated and communicated to the applicant. These include:
The customer accepts the lender’s Loan terms by signing an agreement all other charges are notified to the applicant, such as the Foreclosure and Part payment terms and additional fees. At this stage, the customer must be aware of the notifications and forward queries, if any. The Personal Loan terms, once decided, remain fixed for the entire tenure.
The Loan amount is transferred to the applicant’s account by ECS (electronic clearing services). Subsequently, the installment is presented to the customer’s account on a designated date per the fixed term.
A loan schedule is dispatched with the number of EMI and the break up therein.
The Bank transfers the funds approved via a Personal Loan to the customer’s account within 72 hours of the application. Most Banks have adapted to digital processes where feasible and are streamlining processing further to make a Personal readily available when needed!
An understanding of the know-how of the Personal Loan process will help our esteemed clients to receive funds without any delays or glitches.
What do you do when a financial emergency knocks at your door? If you have enough money for the expenditure, any urgent financial situation sways away. However, loans feel like the only viable situation if you fall short of money. While conventional loans are sought by many individuals, ICICI Personal Loan Top-Ups also serve as a more flexible and convenient alternative. Wondering what is a Top-Up Loan and how it works? Grab your reading glasses, sit back, and delve into this guide to discover more!
As its name suggests, the top-up loan allows you to borrow additional funds on top of your existing loan. If you have an existing loan, a Top-Up Loan offers a hassle-free and quick way to access additional funds while eliminating the need for extra paperwork. It also has lower interest rates as compared to Personal Loans. For instance, if a borrower needs funds for home renovation, education, or medical expenses, a top-up loan can be more cost-effective than applying for a fresh loan with higher interest rates.
Borrowers who Apply For ICICI Bank Top Up Personal Loans can use funds as per their requirements and the documentation is simple. In addition, timely repayment of a Top-Up Loan can also positively impact the borrower’s credit score by demonstrating their financial discipline. To be eligible for a Top-Up Loan, the applicant must meet the following criteria:
Before you get a Top-Up Loan on paper, here are some cost components associated with it:
Calculating the total costs involved in a Personal Loan Top-Up can help borrowers understand the financial implications and make informed decisions. Here’s a summary of the key factors to consider:
Several factors affect the cost of a top-up loan, but you can consider these two:
While a Top-Up Loan can be a cost-effective and convenient way to access additional funds when you have an existing loan, different banks have different terms and conditions. Navigating through the financial ecosystem of Personal Top-Up Loans can be daunting. Whether you Apply For a Top-up Loan at ICICI or any other financial institution, ensure to work with professionals to make well-informed financial decisions.
Need more help with the ICICI Personal Loan Top-Up Procedure? Contact the professionals at Your Loan Advisors now!
Everyone has dreams, and many of them are difficult to achieve. Among the many reasons, you are not able to fulfill your wishes is the lack of sufficient financial means.
Now being short on cash shouldn’t hold you back from pursuing your desires any longer. You can easily go for a Personal Loan and make your dream come true as numerous Banks and NBFCs offer quick and convenient funding.
But before taking on a Personal Loan it is imperative to consider reading fine print such as repayment tenure, interest rate, and miscellaneous charges, as it has a considerable impact on your borrowing cost and EMI.
Before making a big purchase or engaging in a financial transaction, it’s wise to do your research properly. The more you understand the borrowing cost, the more beneficial it will be for you in the long term.
For instance, along with the principal amount, you’ll also be paying the cost of borrowing (interest) which depends on the repayment term you’re offered.
However, understanding the terms and conditions along with the fine print associated with them can be quite challenging thus after gathering all the relevant information, you can conveniently calculate your monthly payment using a Loan Calculator or a simple equation.
To calculate your payments, it’s imperative to understand the ins and outs of how the payment systems work. Besides the principal amount of your loan, you are responsible for paying interest and any additional fees linked to a Personal Loan.
When figuring out the affordability, focus on the loan’s principal amount, the annual percentage rate (APR), and the applicable fees.
In the majority of Personal Loans, your monthly payments remain consistent throughout the duration of the loan. Interest rates, including APRs, are determined based on your credit score and history. A higher credit score typically results in a lower interest rate.
To understand how the actual total interest is calculated, it’s important to know concepts such as APR and the various types of interest rates.
Let’s understand APR and how it affects your interest rate.
Lenders apply interest charges when providing you with a loan amount. The interest calculated annually on such a loan is referred to as the Annual Percentage Rate (APR).
The APR applied to your loan enables you to calculate the actual cost of borrowing over a specific period. It signifies the annual cost of a loan and is expressed in percentage.
Annual Percentage Rate (APR) refers to the interest rate and financing fee associated with a loan and its repayments. The APR is influenced by numerous factors such as your loan amount, repayment duration, and credit history.
The Annual Percentage Rate takes into consideration the nominal interest rate along with other fees associated with availing and servicing a loan. The fees comprise administrative costs, insurance expenses, processing fees, and similar expenditures.
However, an APR does not consider the compounding aspect when calculating the actual borrowing cost of a loan.
When determining the true cost of borrowing, relying solely on the Annual Interest Rate (AIR) would not reveal the loan’s actual cost. Lenders promote this interest rate as a means to attract customers to their services.
Numerous lenders intentionally maintain a low Annual Interest Rate while simultaneously keeping the other charges. Consequently, customers often remain unaware of the actual cost of the loan.
Now, the Annual Percentage Rate (APR) is essential for you as it has the potential to determine whether your loan is affordable or expensive. Therefore, you must evaluate your loan’s APR before proceeding with the decision to move forward.
When availing of a loan, it is imperative to thoroughly examine the repayment terms and conditions. Hefty repayments have the potential to disrupt your monthly budget.
Therefore, it is essential to carefully consider every aspect of your loan and repayment. The Annual Percentage Rate (APR) is one such aspect that requires your thoughtful deliberation.
Here is The Formula to Calculate APR:
APR = [(Total interest + other Fees)/Principal amount/Tenure of Loan)
For instance, Amit is seeking a personal loan of ₹ 500000/- that he would pay off in a tenure of 3 years. The processing fee is 1% and the interest rate is 12% at a reducing balance (6.5% flat per year) Let’s assume the insurance cost is Rs 6000. Subsequently, the APR of the loan will be calculated as follows:
Hence, the actual cost of the loan amounts to 108,693.00 for a 3-year tenure, the loan amount of ₹ 500000 borrowed.
The amount of your monthly payment is determined by the debt amount and the chosen repayment term.
For instance, a loan amount of ₹ 500000 paid over 5 years of tenure will have a lower monthly payment compared to a ₹ 500000 loan paid over 3 years of tenure because the payments are distributed over an extended duration, allowing for a longer repayment period.
Gaining a thorough understanding of the APR is crucial to ensure that you can comfortably afford the loan repayments. Considering the loan type is one of the best ways to save money on interest rates.
There are 2 types of loans secured loans and unsecured loans thus, the type of loan you choose affects your repayment. To understand the impact of APR on your interest, let us first learn about secured and unsecured Personal Loans.
In Secured loans, collateral is required as a means to secure the loan amount. Although finding collateral may not be easy. Opting for a secured loan can significantly lower your APR. Therefore, repayment becomes less burdensome when opting for secured loans.
With unsecured loans, you don’t need any collateral to secure the loan, when you choose to go for unsecured loans, your APR and repayments are comparatively higher.
You should always consider all the factors before choosing any loan as it can affect your repayments. This is a good way to avoid defaulting on repayments thus, maintaining a good credit score.
The initial step to reduce your EMIs is to steer clear of overly hyped interest rates and be aware of the APR associated with the loan.
Now, let’s talk about the second step – understanding the type of interest rates.
While opting for a personal loan you should be aware of the type of interest application. Here are two ways to calculate the interest rate.
Explore all the essential information about the two methods of calculating interest rates below. Also, get a clear understanding of the difference between the two types of loans.
Traditionally, this method of interest calculation has been applied to Personal Loans. It is also known as a fixed interest rate, and the technique is pretty simple to understand.
When considering a flat interest rate, the interest is calculated based on the entire loan amount, which is commonly referred to as the principal.
Initially, the total interest on your loan is calculated, followed by its addition to the principal amount. The total amount is then divided equally across your repayment tenure.
When a flat interest rate is implemented, your monthly deductions remain the same throughout the tenure. Regardless of whether you’re paying your first EMI or the second-last EMI when opting for a fixed interest rate.
In the reducing interest method, your obligation reduces every month. The interest rate is determined based on the remaining principal amount, which decreases every month.
In this method, as you make your monthly EMIs, a fraction is allocated towards interest payment, while the remaining portion is utilized to gradually reduce your principal amount.
Thus, your principal amount steadily reduces month on month. Hence, the interest amount calculated on the principal also decreases accordingly. Therefore, your interest amount progressively decreases with each EMI.
Once you are thorough with the various methods of calculation employed by lenders to calculate the interest on your loan, it’s natural for the question to arise in your mind “Which interest calculation method is most transparent?
Among the available interest calculation methods, the reducing interest rate method works best Most Banks and NBFCs apply the reducing interest rate, for a constant EMI and which indicates clearly month on month the amount paid as interest and the principal balance of the loan.
However, before going for any Personal Loan, you should have a clear understanding of your loan terms and the employed interest calculation method.
A Personal Loan Calculator can provide you with an estimation of your monthly payment, total interest paid, and the overall amount paid based on a specific loan amount. After completing all the necessary calculations, you can take the next step and:
When securing a Personal Loan, the primary concern revolves around: “What will be the total cost and monthly repayment?
Your Repayment amount will be greater than the borrowed sum, given that your EMI covers both the principal and the interest.
It is imperative to understand that the borrowing cost of your loan is influenced by numerous factors such as loan type, loan amount, repayment tenure, creditworthiness, and other relevant considerations. What you must ensure is that you possess sufficient repayment capacity to effectively repay the loan and avoid a default.
No matter, whether It’s for a luxury purchase or an emergency expense, just with a minimum hassle a Personal Loan can provide you with financial support. In India, with the passing years Personal Loans have gained immense popularity. The advent of online lending platforms has transformed the process of Applying For Personal Loans, making it more convenient than ever to obtain fast funds.
So now if you wish to travel to your dream destination or fulfill some of your lifestyle needs you don’t have to worry much, as the best Personal Loan can help you achieve all this in no time. But there are numerous things that one should consider prior to going for a Personal Loan. Let’s walk you through some of the points to consider that would help you to avail of the best Personal Loan.
ICICI Bank is offering an attractive interest rate of as little as 10.50% p.a. depending upon certain criteria. The interest rate is calculated on the outstanding loan amount every month besides getting levied on a diminishing balance.
Here are Some of the Key Characteristics of ICICI Bank Personal Loans.
| Rate of Interest | 10.50% to 18.49% p.a. |
| Age | Salaried – 23 to 58 Years, Self-employed – 25 to 65 Years |
| Loan Amount | Up to 20 Lacs |
| Processing Fees | Up to 2.25% p.a. of loan amount + GST |
| Prepayment charges | 5% p.a. of principal outstanding + GST |
| Tenure | From 12 to 60 months |
HDFC Bank is known as one of the leading private-sector banks. It offers a range of various banking products at a competitive interest rate. You can check your eligibility for HDFC Bank in just 1 minute online besides at some of the selected branches you can check through its Personal Loan Eligibility Calculator Tool.
Why Should You Consider HDFC Bank Personal Loan?
Below are Some of The Key Characteristics of HDFC Bank Personal Loans.
| Age | From 21 to 60 Years |
| Interest Rate | Range from 10.50% to 21.50 %p.a. |
| Minimum income requirement | Rs. 15,000 per month |
| Loan amount | Up to Rs. 15 Lac |
| Processing fee | Up to 2.5% of the loan amount with a minimum of Rs. 1,999 |
| Tenure | From 12 months to 60 months |
Axis Bank Personal Loan comes with a super fast and efficient process besides offering outstanding features and numerous advantages including minimal processing fees, flexible payback, and competitive interest rates.
Why Should You Go For Axis Bank Personal Loan?
Here are a few key characteristics of Axis Bank Personal Loan
| Interest Rate | From 12% – 24% p.a. |
| Processing Charges | 1.5% to 2% + GST as applicable |
| Foreclosure charges | 5% |
| Age | 21 to 60 years |
| Minimum income requirement | Rs. 15,000 |
| Loan amount | Rs, 50,000 to 15 Lacs |
| Tenure | Up to 60 months |
YES Bank offers collateral-free personal loans of up to Rs 40 lacs at an attractive interest rate.
Why Should You Consider YES Bank Personal Loan?
| Loan Amount | Rs. 1 Lakh – Rs. 40 Lakhs |
| Tenure | 1-5 years |
| Interest Rate | 10.99% p.a. onwards |
| Processing Fees | Up to Rs. 4,999 or up to 2.5% of the loan amount |
| Minimum Monthly Income | Rs. 18,000 or Rs. 25,000 |
Here, we present a comprehensive list of the best Personal Loan plans available in India. In addition to the ones already mentioned here, there are numerous other loan plans in India that provide quick Personal Loans.
Listed below is some common eligibility criteria of leading Personal Loan providers in India.
Minimum Age: For salaried applicants, the minimum age should be 21 years when applying for a loan, whereas for self-employed the age required is 25 years.
Maximum Age: At the time of loan maturity salaried persons should not be above 60 years. Whereas the maximum age of a self-employed person should be less than 65 years at the time of loan maturity.
Occupation: A salaried individual should be working with a reputed government or private company. Self-employed non-professional, self-employed professionals such as doctors, architects, chartered accountants, and so on.
Nationality: One should have Indian nationality to be eligible.
CIBIL Score: To avail of the best personal loan in India your CIBIL Score should be above 750 or above.
Minimum Income: Your monthly income should be Rs 25,000 or above.
Minimum Work Experience: To get a Personal Loan you should have an experience of at least 2 years and should be serving for at least 1 year with the current employer.
Prior to going for a Personal Loan, you should check for the eligibility criteria to get a better understanding.
Now let’s talk about the factors affecting the Personal Loan Interest Rate
Banks and other financial institutions have established specific criteria for personal loans, based upon which they determine and offer interest rates.
Loan Amount: The most essential factor that usually banks consider is the loan amount that a borrower requires. The loan amount is considered depending on the borrower’s income and occupation. With the increase in loan amount, the interest rate of Personal Loans decreases.
Tenure: The tenure of the loan directly influences the interest rate. Thus, with the increase in tenure interest rate decrease.
Income of the Borrower: The interest rate of your loan directly depends on your income. If you have a higher income and steady revenue stream the lenders will be convinced that you will be able to make loan payments on time. Thus, if you have a higher income you can be benefited with a cheaper interest rate.
Repayment Capacity: One of the key factors that are determined to consider interest rate is the ability of an individual to repay debt. Usually, lenders believe that if a borrower doesn’t have too many financial obligations he/she can repay the loan on time.
Credit Score: Depending upon your credit score lenders determine the loan amount and the interest rate. If you have a credit score of 750 and above then the interest rate might be considerably low.
These are some of the key factors that are considered by lenders while finalizing the interest rate for your Personal Loan.
Here are some of the crucial points to consider to avail of a Personal Loan with a low-interest rate.
There are numerous things to keep in mind to choose the Best Personal Loan.
With a few simple steps, you can Apply for a Personal Loan and get it disbursed in a few days.
It’s important to know the pros and cons of Personal Loans when you’re looking for a lender and deciding whether to Apply for a Personal Loan. Let’s walk you through the pros and cons of Personal Loans to get a better understanding.
A Personal Loan can be a wise choice when you are facing financial need, but it’s important to consider the pros and cons associated with it in order to achieve the best outcomes.
Prior to deciding on a Personal Loan it is crucial to have an understanding of the benefits and risks associated with it. No matter Personal Loans can provide quick access to funds but on the other hand, high-interest rates can pose financial risks. Nevertheless, when used responsibly and with thoughtful consideration, Personal Loans can serve as a beneficial tool for accomplishing short-term financial objectives.
Personal Loans are unsecured funding marketed by leading banks and NBFC as short terms loans for individual usage and emergency needs, such as spending on holidays or for educational and medical expenses.
Financers issue Loan amounts starting from ₹ 1 Lakh to 35 Lakhs to salaried persons without a guarantee or security therefore, timely repayment is a priority. Processing Personal Loans is done speedily so that applicants receive the funds within the shortest time frame.
All leading Banks, HDFC Bank, ICICI Bank, AXIS Bank, and YES Bank track growth, verify companies’ financials and prospects and enable a company list to facilitate the funding of Personal Loans.
Individuals with a secure income can manage their obligations successfully therefore, banks look to fund employees of profitable entities with a progressive growth track.
Banks and NBFCs publish an individual list compiled per the Lender’s policies and preferred segments. Most lenders approve loans for applicants employed with companies that feature in their approved list.
Banks construct an approved list of organizations that include private and public limited companies, reputed as the top Employers to work for. Significant inclusions in company lists are from the following sources.
Premier organizations in this list are the ET 500 companies at the end of every year, the ‘Economic Times, a leading business-based daily publication, releases a list of investable companies with good fundamentals. The list also includes similar companies listed as Fortune India 500, compiled based on the latest sales and gross revenue figures.
Companies listed with India’s two major stock exchanges- BSE, the Bombay stock exchange, and NSE- the National stock exchange of India- feature prominently in the Approved Company Lists of Banks. Entities with rising share prices are listed as Category A or Super A other companies are classified as per their performance. Banks closely monitor share values and upgrade or negate companies accordingly.
A Government job ensures stability and a regular income. Therefore, candidates employed in the Government sector are an eligible segment for a Personal Loan. Central and State Government entities feature in the company list for most Banks, with bureaucrats, high ranking government officials in preferred categories.
Banks List Public Ltd, and Private Ltd Companies registered with MCA having a vintage of 5 years and above, with an increasing turnover and profitability Banks, Airlines, Hotels, and corporates with a multinational relationship with high turnovers and a significant workforce feature in the company category list.
Banks encourage applications from listed companies with a salary account in the concerned Bank as details of the financial history are easily accessible.
The hierarchy of the company governs the terms awarded to a customer. The grading remains the same though Banks may name categories individually. For example, a super A company with HDFC Bank is known as the Diamond category with ICICI. Major categorization is as follows.
· Category A or Super A
· Category B
· Category C
· Category D
Banks have individual policies for providing loan terms per the Employer details though the thumb rule remains the same. Given below are details of Personal Loan offerings for companies as per their grading.
Category A/ Super A, or the Top Category/ premier Category, included in this section are elite companies employees of companies included in this Category are a primary focus for marketing a Personal Loan. Therefore, the lowest interest rate with beneficial terms attracts applicants from this Category.
Companies listed in this Category hire the cream from top institutes like IIT and IIM, and the yearly package offered is handsome. Therefore, Banks waive the 3-month vintage rule required to process a Personal Loan.
The highest multiplier is applied to calculate the eligibility for the loan amount to be issued. The requirement for a CIBIL Score is optional, and Banks waive stringent procedures to speedily process a Personal Loan request from a client working with a Top Company.
Category B Companies come a close second in preference. Banks process a request as per the norms and criteria. The stability and continuity of the job is the critical factor. Most established vintage companies feature in this Category.
The multiplier for the Personal Loan amount is lower than that of Category A inclusions. In addition, a review of the CIBIL Score and history physical verification is conducted at the office and residence of the client to confirm contact ability.
Applications from Employees listed with Categories C and D are processed conservatively. The monthly income required by most Banks for this Category is above ₹40 k per month compared to ₹ 25k for a Category A applicant. An application from an employee of this category is viewed on its own strength, a healthy CIBIL Score above 720 basis points and above is required.
There is also a restriction on the maximum loan amount issued.
Government and Public sector entities form a distinct category for funding Personal Loans. A Government employee has the security of an assured income, so applicants are eligible for a maximum loan amount with a discounted interest rate and attractive terms High-ranking bureaucrats get exalted packages, so they are treated similarly to Super A category applicants. The HDFC Bank Processes Applications from all strata of applicants from the Government sector, including blue-collar personnel.
The YES Bank and ICICI Bank Provide Personal loans to seekers working with Non-Listed Companies the criteria applied are as per the norms of the particular Bank. The basic income required by YES Bank to process applications from individuals is a salary of ₹25k and above. In contrast, the compensation needed in ICICI Bank for a non-listed company aspirant is a minimum of ₹ 40k.
A CIBIL Score of 700 points or above is mandatory and customers having a self-owned or living in a family-owned residence are preferred. The loan amount appended depends on the eligibility calculations of the Bank and the customer’s current behaviour with credit.
Banks construct their list of approved Companies per individual policies and targeted profiles. As a result, the terms offered may vary from Bank to Bank for example, an applicant working in the Delhi police can get the best deal from Axis Bank, which holds salaried accounts.
Before applying for a Personal Loan, an applicant should check if the current employer features in the Lender’s approved list to avoid a delay or denial.
Contact our Loan experts at Yourloanadvisors for immediate know-how about your company category. With years of experience, our advisors will help identify the Lender which serves your needs best.
An employee lives a lifestyle affordable as per the salary given, assured that the compensation is received at the end of the month, so they can honour the obligations and pay the EMI on time for all credits taken.
That is precisely what the Banks look for the loan amount given repaid as per schedule. Hence an employer becomes all-important for the Financer when issuing a Personal Loan.
How to check a listed company for a personal loan?
Major Banks publish a list of approved companies; employees of these companies are eligible to apply for a personal loan and a credit card. These include:
To check if your employer is included in the approved list of banks, you can go to the website of the Bank or contact us at www.yourloanadvisors.com. Our advisors will check the details as to which Banks' approved company category list your company features in.
How do you know if your company is listed in a bank?
It is advisable to check if your company is on the approved list to confirm your personal loan eligibility and avoid delays and rejections. Your company will feature in the approved company category list based on the following criteria:
How to check the company category in HDFC Bank?
HDFC Bank is the leading provider of personal loans. To meet the eligibility criteria for a personal loan from HDFC Bank, your company must be listed in the HDFC Bank-approved company category list. The companies are categorized with privileges as follows.
Are employees of private limited companies eligible for a personal loan?
A private limited company is a privately owned entity by a few shareholders; it is not publicly listed on the stock exchange. Multinational companies having subsidiaries in India also come under the private limited companies.
A private limited company is listed in the HDFC Bank company category list and the ICICI Bank approved list of companies if it fulfils the required eligibility criteria. The category under which the company is listed depends on the
What are cat C companies in personal loans?
If your company is included in category C of the approved company list of the Bank, it denotes the following:
What are cat A companies?
A company listed as category A in the bank's approved list benefits from being classified in the preferred category for issuing credit cards and personal loans. Applicants employed in a Cat A company of the HDFC Bank company category list are offered the following privileges:
What is the category of ICICI Bank?
The ICICI Bank company category list for personal loans and credit cards includes entities that have been verified and approved as strong organisations. It comprises the top companies listed on the stock exchange, those featured in the Economic Times, government organisations, and public limited companies. Also included are well-performing firms with increased turnover.
Companies are listed as:
ICICI Bank allows sourcing from open market companies not featured in any category if the applicant's salary exceeds 1 lakh.
Which companies are included in the negative list of the Bank?
Banks also maintain a negative company list. If a company is on this list, the application for a credit card or personal loan will not be approved. Banks regularly review this list, and companies are added or removed based on the bank's criteria. The following companies are included in this list:
For example, travel and hospitality companies during COVID-19 were added to the “Do not source” lists of lenders as companies suffered huge losses due to restrictions in functionality.
How can I improve my loan chances if my company category is low?
Lenders are willing to extend credit to customers with a good CIBIL score and a good repayment history. If your company category is low, you can improve your personal loan prospects by adopting the following:
Does company category affect my loan interest rate?
Your company category is an essential factor in the loan amount you are approved for as a personal loan. The company category, along with the monthly income, will decide the loan amount you are eligible for and the interest rate applicable to your personal loan.
What documents are needed to verify the company category?
An applicant's salary slip is an essential part of the personal loan documentation. The company category can be verified using the employer details on the salary slip. An appointment letter or a Form 16 also contains the company credentials.
The Bank will, if need be, check the company details on the MCA portal to verify the category of the company for which an applicant is employed.
Can NBFCs approve loans for low-category companies?
An NBFC (Non-Banking Financial Company) usually issues a personal loan to all applicants, regardless of the company they work for. The company must fulfil the basic norms required by the organisation for the NBFC to issue a personal loan, even if it is allotted a lower category.
Why do banks categorize companies for salaried employees?
Salaried employees depend on their monthly income from employers for sustenance and to cover mandatory expenses. Thus, employers running profitable organisations can pay their staff regularly.
A salaried person plans all monthly expenses, keeping in mind the amount of salary drawn. In the event of unexpected expenditures, they can easily obtain an unsecured personal loan to be repaid via monthly instalments on a fixed date.
Customers who receive their salary on time can repay their personal loans EMI on the due date. Banks look to fund the employees of companies that offer stability and the surety of a regular salary.
The preferred companies for Banks are the prestigious organisations with increasing turnover and a top listing. Banks categorise companies by their financial status and profitability, which further helps to ensure the timely repayment of loan dues.
The further categories are allotted to companies based on their financial standing, and if a company is in losses, it will be downgraded in the company category list.