7 Banks with Zero Processing Fees on Personal Loan & GST Impact

ShareShare on StumbleUponShare on FacebookTweet about this on TwitterShare on Google+Share on LinkedInEmail this to someonePin on Pinterest

We often hear and read about various articles about hidden charges by lenders such as processing fee, pre-payment fees, cheque bounce charges and many others. Actually these charges are not hidden as they are mentioned in the terms and conditions of the loan document. Reality is that applicants or borrowers do not pay attention to these charges and later blame lenders for not disclosing the charges.

In this article we’ll talk about the processing fee which is nothing but the fee charged by lenders for processing and completing the complete loan application. This fee is charged when you apply for home loan, personal loan, car loan etc. Other name for processing fee is administrative fees. And borrower has to pay this fees during the loan application.

However not every lender charges processing fee. And listed in the below table is the list of banks offering personal loan with zero processing charge:

  1. State Bank of India – Clean Overdraft
  2. Bank of India – Star Mitra
  3. Allahabad Bank – Loan for Pensioners
  4. Indian Overseas Bank – No fees for loan upto Rs. 25,000
  5. Punjab National Bank – For Pensioners
  6. UCO Bank – For Pensioners
  7. Vijaya Bank – Vswashakti (Only for Women)

What is the GST impact on processing fee?

Typically the personal loan processing fee is in the range of 0.4% – 2.5% in addition to the service tax of 15%. However post GST implementation; in addition to processing charge, Goods and service tax (GST) of 18% will be also levied. So the overall money going out of borrower will increase.

For e.g. if the personal loan amount is Rs. 9,00,000 (9 Lakh).

Before GST the total processing fee would’ve been Rs. 10,350 – Rs. 20,700.

After GST the fees would be in the range of Rs. 10,620 – Rs. 21,240

When should you prefer credit from such banks with no processing fee?

While taking personal loan, if the loan amount is high then it makes sense to look for lenders who charge zero processing fee. You should calculate total outflow while evaluating the lender. Processing fee should not be the only factor you should consider, as banks levy various other charges such as prepayment, partial closure, duplicate statement, cheque bounce charges etc. Check out banks charging zero foreclosure fee.

Why banks charge processing fee?

Putting time in doing activities such as verifying loan application, multiple documents, and other details involve human efforts and other operations cost. So cost of these efforts is what banks recover in the form of processing fee. Higher the loan amount, higher would be the processing fee.

If the loan application gets rejected, can you get refund?

Processing fee is refundable. You should ask banks before applying for the loan and get this confirmed in written. No verbal communication.

ShareShare on StumbleUponShare on FacebookTweet about this on TwitterShare on Google+Share on LinkedInEmail this to someonePin on Pinterest

Instant Personal Loan of 1 Lakh for Rs. 20,000 Salary: No Income Proof, Short Term

ShareShare on StumbleUponShare on FacebookTweet about this on TwitterShare on Google+Share on LinkedInEmail this to someonePin on Pinterest

Getting access to credit these days has become very difficult. Especially young working professionals or first time loaners face troubles due to lack of credit history. To make life easier for such individuals, new fintech startups have started in India offering personal loan for small amount quickly or we can say instant cash loans.

One such company is Early Salary offering instant personal loan but only through app. The minimum monthly salary required for the loan is Rs. 20, 000.

Details on Instant Loan from Early Salary

Commercial and other banks have strict eligibility criteria (CIBIL score, income, employer etc.) when it comes to personal loan. Moreover there are terms and conditions which makes the loan experience very painful such as pre-payment charges, processing charges, pre-fixed repayment tenure and many others. Most importantly the interest rate on personal loan is very high since it is an unsecured loan carrying high risk to the lenders.

Benefits of getting instant cash loan from Early Salary

This loan is ideal for foll. individuals:

  1. Who want to borrow cash instantly and salary advance is not possible.
  2. Who want money before their salary is credited
  3. Required loan amount is small
  4. Who want to save time and need instant cash for short period
  5. Who want cash on the go. Especially when you lose wallet and has no access to credit. Only thing you have is smartphone.
  6. First time loan seekers
  7. Who want to avoid cumbersome process of loan application at the banks

Eligibility:

  1. Applicant should be a salaried professional
  2. Minimum salary required is Rs. 20, 000. Check out personal loan for low salaried individuals.
  3. He/she must have a PAN card
  4. Salary account is must
  5. He/she must have Facebook/LinkedIn account
  6. Must have smartphone

Features of quick cash loan from Early Salary

  1. Loan application can be done only through their app
  2. Maximum loan offered is Rs. 1, 00,000 (1 Lakh)
  3. Interest rate is low. For Rs. 10, 000 loan; interest rate is just Rs. 9 per day.
  4. Loan is granted for only a smaller term as low as 30 days
  5. Documentation is simpler. In fact there is no paper work involved. They only require bank statement and PAN number. No salary slip or income tax related documents required.
  6. Social score is a decisive factor in getting loan
  7. Loan amount is decided on the basis of bank statement and PAN number
  8. No security or guarantor required
  9. Disbursement is extremely fast. Early Salary claims to deposit money within 10 minutes* in case of repeat loans
  10. No foreclosure penalty
  11. Flexibility in repayment terms
  12. No laptop/desktop/tablet required for personal loan application. You can apply for instant cash loan through the smartphone.
  13. The process is highly secured.

When to use instant cash loan service:

It’s tempting to get quick cash at low interest and for a short term with minimal terms and conditions. However greed is a killer and when it comes to greed for money, it can put you in debt and make you financially distressed. So such services should be used only when there is a emergency cash required.

Reasons to use such loans are:

  1. Paying-off high interest credit card or loan
  2. You are currently in debt and want to improve credit score.
  3. Salary is not on-time
  4. Pay-off house rent/utility bills if salary deposited is irregular.
  5. There is a medical or other kind emergency and due to poor credit score and insufficient money in hand, arranging money becomes difficult.
  6. If you are travelling and lost your wallet and need cash on the go.
  7. You want to buy personal stuff urgently
ShareShare on StumbleUponShare on FacebookTweet about this on TwitterShare on Google+Share on LinkedInEmail this to someonePin on Pinterest

Personal Loan for Teachers: Min. Income Rs.5000, Loan Amt. 5 Lakh

ShareShare on StumbleUponShare on FacebookTweet about this on TwitterShare on Google+Share on LinkedInEmail this to someonePin on Pinterest

Being a teacher is considered to be the most respectable job. However in India, the salary offered to the teachers is very low especially in towns/villages. Because of this, getting a credit become difficult. For a lender, individual with poor salary is more likely to default as their repayment capacity will be poor.

In order to meet personal needs, many times teachers require personal loan. So in case of any emergency, teachers have to take out money from their own savings to meet the money requirement. There are lenders who offer personal loan for teachers especially and have low salary criteria.

Here’s the list of lenders offering personal loan for teachers, along with the income required and the loan amount:

Name of Bank/LenderMaximum Loan LimitMinimum Monthly Income Required
Indian School Finance Company Private LimitedRs. 1 Lac - Rs. 5 LacRs. 5,000
Canara BankRs. 2 LacsRs. 10,000
Axis BankNARs. 15,000
State Bank of India (Xpress Credit Personal Loan)Rs. 15 LacsRs. 5,000
Allahabad BankRs. 2 LacsNA
Punjab National BankRs. 5 LakhRs. 10,000 to Rs. 15,000
HDFC BankNARs. 15,000
Bank of BarodaRs. 50, 000 - Rs. 5 LakhRs. 6,500
Bangia Gramin Vikash BankRs. 1 Lac - Rs. 3 LacRs. 12, 500 - Rs. 17, 000
Karnataka BankRs. 5 LakhRs. 10,000
Dena BankRs. 1 LakhRs. 15,000
Indian Overseas BankRs. 5 LakhRs. 5,000
UCO BankRs. 10 LakhRs. 10,000
Central Bank of IndiaRs. 5 LakhNA
Oriental Bank of CommerceRs. 3 LakhRs. 6,000

There are multiple eligibility criteria for teachers depending on the lender as follows:

  • Most of these lenders offer loan only to permanent teachers
  • Salary account with the respective bank is must
  • If retired, individual should be drawing pension from the applied bank
  • Employees of only schools, colleges, universities
  • Employees of central, local and state government only

Other cheaper options for teachers to get personal loan:

Against securities: If the teacher has LIC policy, mutual funds, NSC or any other security; then he/she can pledge these securities. Instead of prematurely exiting or selling them, teacher can get personal loan against these. Compared to normal personal loan, such type of credit is worth recommended due to low interest rate and minimum documentation and not a very strict eligibility criteria.

Against fixed deposit: Another option to get loan is against FD. This is offered by most of the banks in India. And the interest rate offered is 2%-3% more than the FD interest rate. Again this type of loan is cheaper than normal personal loan.

Against Gold Jewelry: If any individual has jewelry and is in need of personal loan then they can pledge their ornaments as security with companies like Muthoot Finance, Manappuram Finance, and others. Even banks offer gold loans. In return, these companies will offer loan, which is at a lower interest rate due to the pledged security in the form of physical gold.

ShareShare on StumbleUponShare on FacebookTweet about this on TwitterShare on Google+Share on LinkedInEmail this to someonePin on Pinterest

Low Income Personal Loan from Co-operative Banks

ShareShare on StumbleUponShare on FacebookTweet about this on TwitterShare on Google+Share on LinkedInEmail this to someonePin on Pinterest

In case of emergency e.g. medical treatment or unexpected money requirement; people normally arrange money from their own saving or ask friends or relatives for financial support. However it’s not always possible to arrange money at the time of need. And during such times, financing from bank is the best recommended solution. There are many lenders offering personal loan for such need.

However getting personal loan is not very easy. Rising interest rate and stricter eligibility criteria makes it difficult to get.

Normally when we think of getting personal loan; commercial banks such as ICICI Bank, SBI, HDFC Bank & others first come to our mind. And individuals first contact such prominent lenders for their need. However these banks have strict terms and conditions and chances of loan application rejection is high. This is because, these banks want to stay away from defaulters.

But there is another category of bank in India – co-operative bank which offers personal loan. Their income eligibility criteria is low. So even a poor income earning individual has a good chance to get personal loan.

Here are three co-operative banks offering personal loan to low income earners. Individuals who are permanent salaried and self- employed or businessman are eligible to get loan.

The table below displays minimum monthly income required and maximum loan amount granted:

Name of Co-operative BankMinimum Monthly Salary Required (in Rs.)Maximum Loan Amount
Abhyudaya Co-operative Bank80005 Lakhs
The Andaman and Nicobar State Co-operative Bank Ltd.50002 Lakhs
The West Bengal State Co-operative Bank Ltd.200010 Lakhs
City Union Bank650050000

Note: City Union is not a co-operative bank. But since their income requirement is low, it has been included in the list.

Poor salaried can easily get personal loan from these co-operative bank provided they meet other eligibility criteria as follows:

Membership: In order to get personal loan; applicant has to become member of the bank. For this, they need to buy shares. And depending on the loan amount, shares has to be bought. For e.g. In case of Abhyudaya bank, the membership fee is Rs. 100 for the loan amount of Rs. 1 Lakh. And for higher amount, the requirement is of Rs. 2000.

In addition to the membership, the required documentation has to be done.

The loan amount can be used for any purpose such as:

  • Buying electronic gadgets or appliances
  • Repairing or renovation of house
  • Medical treatment
  • Marriage related expenses and others.

More details and advantages of loan from co-operative banks:

  • Loan amount is small
  • Low interest rate compared to commercial banks
  • If membership is continued for a longer duration then medical benefits are also offered. This benefit varies for each bank.
  • Flexible terms and conditions. Not very strict.
  • Nil processing fee
  • Nil prepayment fee
ShareShare on StumbleUponShare on FacebookTweet about this on TwitterShare on Google+Share on LinkedInEmail this to someonePin on Pinterest

Personal Loan Income Required by 27 Banks in India

ShareShare on StumbleUponShare on FacebookTweet about this on TwitterShare on Google+Share on LinkedInEmail this to someonePin on Pinterest

Your income is the most important criteria checked by the lender when approving personal loan application. Every lender has minimum income requirement below which loans are straight away rejected.

Here’s the table showing income required for personal loan by over 27 banks/financial services companies in India:

Name of BankMinimum Monthly Salary Required
City Union BankRs. 6,500
Jammu and Kashmir BankRs. 6,500
Abhyudaya Co-operative BankRs. 8,000
The Andaman and Nicobar State Co-operative Bank Ltd.Rs. 5,000
The West Bengal State Co-operative Bank Ltd.Rs. 2,000
Karnataka BankRs. 10,000
Karur Vysya BankRs. 10,000
Indian Overseas BankMore than Rs. 5000
Oriental Bank of CommerceMore than Rs. 6000
State Bank of IndiaRs. 24,000 - Urban
Rs. 10,000 - Rural and semi-urban
HDFC BankRs. 20,000 - Urban
Rs. 15,000 - Rural and semi-urban
Axis BankRs. 15,000
YES BankRs. 25,000
ICICI BankRs. 20,000-25,000 - Urban
Rs. 17,500 - Rural and semi-urban
Allahabad BankRs. 20,000
Canara BankRs. 25,000
Dena BankRs. 15,000
Punjab National BankRs. 30,000
Dhanlaxmi BankRs. 35,000
Federal BankRs. 50,000
Nainital BankRs. 25,000
Ratnakar BankRs. 25,000
South Indian BankRs. 25,000
Kotak Mahindra BankRs. 25,000
IndusInd BankRs. 25,000
Deutsche BankRs. 25,000
Bajaj Finance LimitedRs. 30,000 - Rs. 40,000 (Depending on the city)

Apart from the salary; banks or financial service providers also look for following eligibility criteria:

CIBIL score: This is a score given out of 900 to every borrower depending on the credit history. A good score is typically above 750. Anything below that increases the chances of loan application rejection. In order to get high CIBIL score, few of the solutions are –

  1. You should never keep credit balance
  2. No late or missed payments
  3. Pay EMIs fully. No minimum balance to be paid.
  4. Limited loan/credit card applications
  5. Not spending above the credit limit i.e. credit utilisation should be low.

Type of income: Whether you have a regular or irregular income matters a lot. Even if you have a high income but if it is irregular, then chances of personal loan disapproval increases.

Read on getting personal loan from co-operative bank.

Company you work for: The market reputation of the company you work for carries importance.

How many years you have been in the present job? Lenders also look for the applicant’s job stability. And if the applicant is self- employed then years in the business is considered. Although this criteria is considered by very few lenders.

Age: Most lenders do not offer loan to applicants below the age of 21 years. This is because, it is assumed that such individuals will not have repayment capacity due to no income.

Qualification: If the applicant is not a graduate then getting a loan becomes difficult. However if such individuals have a steady income, then banks can consider such applications.

Other options to get personal loan, if you are denied because of low income are:

Against fixed deposit: It’s a big money saver as the rate of interest charged by the bank is low compared to traditional personal loan. Moreover banks typically skip criteria such as monthly salary, CIBIL score etc. as mentioned above.

You can also get personal loan against LIC policy, securities such as mutual funds, shares, gold. Peer to peer lending is another good option to get loan.

So for a low income earning person, there are multiple options to get personal loan. But always remember to pay-off your EMIs before every due date.

ShareShare on StumbleUponShare on FacebookTweet about this on TwitterShare on Google+Share on LinkedInEmail this to someonePin on Pinterest

Personal Loan of Rs. 50000 – EMI of 4418 @10.99% Interest Rate

ShareShare on StumbleUponShare on FacebookTweet about this on TwitterShare on Google+Share on LinkedInEmail this to someonePin on Pinterest

Ramesh from small town recently got an excellent job from a leading IT company in India’s IT hub – Bengaluru. The salary too was above Rs. 10, 00,000 per annum. He was supposed to receive his first salary in 15 days. However emergency arise and he badly needed Rs. 50000 for medical treatment for one of his family member within 7 days. Being from a poor family and no one to support in such short span of time, he was largely worried.

In this situation, he contacted the company HR and requested the bank in which salary account was opened to offer personal loan. But since the account was with the foreign bank, the loan was denied due to no credit history. However he was advised by the HR to research and apply at other banks. Since his salary met the income eligibility criteria, chances of approval were high.

Read more on personal loan for individuals with no CIBIL score.

Here’s the table showing monthly EMI and the total amount Ramesh will end up paying along with the interest for tenure of 1 year. Current rates (as on May 2017) from different banks in India are listed. The loan amount was Rs. 50, 000. EMI is calculated using lower range of interest rate.

Name of BankInterest RateMonthly EMITotal amount to be paid
ICICI Bank11.70 – 18.85%443553225
Axis Bank15.50 - 24%452554297
State Bank of India11.95 - 16.55%444153295
HDFC Bank15.75% to 20%453154368
Bank of Baroda11.60%  to 16.60%443353197
UCO Bank15.35%452154254
Syndicate Bank14.2%449453929
Punjab National Bank11.55 – 14.55%443253183
IndusInd Bank12.99 - 20.00%446553587
Union Bank of India14.40%449953985
Oriental Bank of Commerce10.85% to 11.85%441652987
Bajaj Finserv11.99% onwards444053281
Standard Chartered10.99 - 14.49%441853026
Kotak Mahindra11.50 - 19.65%443052169
Citibank11.49%443053166

To Ramesh’s luck, he selected bank offering cheapest interest rate and got money into the bank account in less than 3 days.

Ramesh also had other options to get loan by asking someone to become guarantor and providing advance cheques. However the conditions were not favorable at that point of time for him.

Other cheaper options to arrange money for unforeseen events for individuals like Ramesh wanting small loan amount are:

  • Peer to peer lending: These are nothing but lending marketplaces where lenders are typically individuals. There is no financial institution in the middle and loans are approved within shortest period of time. Borrower can directly deal with multiple lenders and bargain on interest rates. Since the loan amount is fifty thousand only, low interest rate can be offered. Prominent peer to peer lending platforms in India are https://www.i2ifunding.com/, https://www.faircent.com/, https://www.lendbox.in/, www.lendenclub.com
  • Co-operative banks: Compared to commercial banks, taking loan from co-operative bank is much simpler. And most importantly, the interest rate is on a lower side. And for the loan amount of Rs. 50, 000; such banks are highly recommended.
  • Friends/relatives: This ideally should be the first option to be tried. Since the personal loan amount of Rs. 50000 is small, you can ask your acquaintances to pay this money and in return you can repay along with the interest. This way, both the parties would be at the advantage.
  • Against securities: You can also get personal loan against fixed deposit, shares, mutual funds, and LIC policy. Benefit of going through this route is that the interest rate would be low, which will help in saving money.
ShareShare on StumbleUponShare on FacebookTweet about this on TwitterShare on Google+Share on LinkedInEmail this to someonePin on Pinterest

7 Reasons to Take Personal Loan for Car

ShareShare on StumbleUponShare on FacebookTweet about this on TwitterShare on Google+Share on LinkedInEmail this to someonePin on Pinterest

Car loans are now offered for any type of the car – new or used one. And the approvals are quick. Although individuals opt for new car compared to second hand car, the demand for used car is still significant. Although car loan for used car is offered by many lenders, there are many conditions applied. In such cases, personal loan is recommended. And here are the reasons when personal loan for used car is recommended:

Buying second hand car is easy:

Not every bank offers car loan for used car. And even if they do, certain terms and conditions are applied. The most important being:

1) Age of the car – Lenders offer finance to only for the cars which are less than 5 years old.
2) Make and model – If you are planning to buy second hand car whose make/model is no longer manufactured or has poor demand, then loan application will get rejected.

In case of personal loan, no such conditions are applied. And while taking the loan, there is no need to provide the purpose. This is mandatory in case of car loan.

No need of hypothecation i.e. getting car title changed after payoff:

When you take car loan for new car from any lender, the holder of the car title is the lender himself. And until you pay-off the entire amount, it remains on their name. However, even if you repay the entire loan amount; the lender continues to remain the owner. You can legally become owner, only after changing the hypothecation in the RC book after personally visiting regional transport office (RTO) office.

Sell car anytime:

Whether vehicle loan is taken for new or old car; selling is allowed, only when the loan amount is fully paid and name in RTO is changed. However in case of personal loan, there is no such restriction, as you are the owner of the car. And you can sell car it anytime – be it new or old.

You can buy used car, no matter what the age is:

Most financial institutions offering car loan will reject the application, when age of the car is old or when the vehicle is already sold multiple times before. However in case of personal loan, there is no such restriction. This is because there is no need to provide purpose of the loan.

You want to modify the car:

Money received through personal loan can be used for – car modification, repair works etc. This is not possible in case of car loan.

Read more on car loan for cibil defaulters.

Avoid name change in insurance policy document:

Similar to name change in RC book; you will have to change name in the insurance policy document, by providing NOC copy received by the bank to the insurance company and RC book copy received from RTO.

Avoid location change:

Suppose you have taken car loan in Maharashtra. After paying-off all the installments, you shift to Andhra Pradesh, then you will have to remove hypothecation in the state of Maharashtra only. You cannot do the same in Andhra Pradesh. In case of personal loan, there is no such requirement.

Read about car loan or personal loan for car, what to choose?

However before taking personal loan for second hand car, two important points should be taken into consideration:

  1. Personal loan is costly: Interest rate on personal loan is 4%-5% higher compared to car loan. This is because, it is unsecured type of loan.
  2. If you are planning to buy second hand car thorough personal loan, then check whether total cost is less after adding the interest income.
ShareShare on StumbleUponShare on FacebookTweet about this on TwitterShare on Google+Share on LinkedInEmail this to someonePin on Pinterest

Personal Loan: 18 FAQs – Process, Interest Rates, Charges, Closure

ShareShare on StumbleUponShare on FacebookTweet about this on TwitterShare on Google+Share on LinkedInEmail this to someonePin on Pinterest

Personal loan is the most attractive option to meet financial emergency or need. And there are many lenders providing the same in India, as the profit earned is high for them. Although it sounds simple to get a loan, however there are many commonly asked queries by readers of this blog. Listed below are the FAQs and simplified answers to each.

1. Is personal loan easy to get in India?

There is no definite answer to this. If CIBIL score is good and income meets eligibility criteria of the lender, then chances of approval are high. But on the other hand, if the score is poor, you can still get loan, provided you meet other criteria. You can also get loan against securities, as mentioned in this article below.

2. Can I take personal loan for any purpose?

Personal loan has now become too personal. Individuals are using the money for almost every purpose such as buying gadgets, electronic appliances, wedding expenses, credit card bill payment, short term financial crunch, home renovation, business expansion, etc. While taking personal loan, you do not have to specify the reasons, so it’s your money and can be used for anything.

3. What is the process of getting the loan?

It is very standard in almost every bank. It is a five step process as follows:

  1. Apply for loan
  2. Submit complete verification documents
  3. Application review and other formalities by the banks. It may also include visit to your address by the bank’s investigative agency.
  4. Loan application status – approved or rejection is communicated by the bank
  5. Loan amount disbursal

4. Who offers personal loan in India?

There are seven broad categories of entities who offer financing:

  1. Public sector banks such as SBI, IDBI and others
  2. Private banks such as ICICI, Axis, HDFC and others
  3. Foreign banks such as HSBC, Bank of America, Citi Bank, American Express
  4. Co-operative banks
  5. Finance companies such as Bajaj Finance, Aditya Birla Finance, Tata Capital and others
  6. Peer to peer lending companies
  7. Private money lenders

5. How is the loan amount disbursed?

There are three options which varies for each bank – cheque, demand draft and direct bank transfer.

6. Why interest rates are high in case of personal loan?

This is because of the risk involved. Personal loan is an unsecured loan, i.e. banks do not ask for any collateral before lending money. So the risk factor is very high for the banks due to possibility of default or non-payment of dues, affecting their profits. So to lower the risk, higher interest is charged.

7. Why income is considered to be a deciding factor by the banks?

Income is the only proof based on which lenders evaluate the repayment capacity of the applicant and also calculate the loan amount. But this does not mean, low income earner cannot get loan. Check out personal loan for low income earners.

8. Can this loan be taken against any security?

Yes, you can take personal loan against securities such as property, car, gold, LIC policy, fixed deposit, shares, mutual fund and bike. This is helpful, even if CIBIL score is bad.

9. If loan is rejected, can I apply again with the same or other financial institution?

You should first understand the reason for rejection and then take further action. E.g. if the loan got rejected due to poor CIBIL rating, then your first objective should be to improve the score. Even if you apply for loan at some different lender, chances of rejection will remain as it is. Other alternate solution is to get loan from peer to peer marketplaces or co-operative banks.

10. When to prefer taking loan from co-operative bank?

Interest rate by co-operative bank is low compared to commercial banks. However there is a limit to the loan amount and you need to be a member of the bank, to avail loan. So if the fund required is less and you are a low income earner, then prefer co-operative bank. Read more about this.

11. Are there pre-closure and processing charges?

Yes, many banks charge these two fees.

12. What factors banks take into consideration while deciding on the loan amount?

The main eligibility criteria are – CIBIL score, income, age, profession (salaried or self earning), company you work for, qualification, work experience.

13. What are the two types of interest rates applied on personal loan and their pros and cons?

Fixed and floating/variable are the two types of interest rates applied by the bank. And each having its own advantages and disadvantages as mentioned below.

Pros and cons:

There is no change of interest in case of fixed. And till the time loan is fully repaid, the interest remain as it is. So budget planning becomes very easy. Opposite is the case with variable interest; the rates can change anytime and is dependent on market condition. So EMI can change multiple times and may go above or below the fixed interest.

14. Before applying for a loan, is there any planning required?

Yes, planning is must in any money related matter. You should consider following points before opting for personal loan:

  1. Evaluate your loan amount requirement
  2. Check your CIBIL score
  3. Compare product features offered by multiple lenders. Especially compare interest rate, prepayment and processing fees.
  4. Select the option which best suits your requirement.
  5. Ask lender about the post loan closure formalities and process.

15. If loan is rejected, does it affect CIBIL score?

Yes. And banks communicate the status to CIBIL. This is the reason you should do planning, as mentioned above. Get to know about personal loan for low CIBIL score.

16. Which is better – loan with low or high interest?

It depends on how much money you will end up saving on the EMI. Usually high interest is applied when tenure is short and vice-versa.

17. Once loan account is closed, what formalities should be done?

The most important thing to do when repayment is fully done, is to get loan closure letter from the bank. This is the only proof which states that you do not owe anything to the bank. Many people think that once the dues are fully paid, the obligation of the borrower ends. But legally, no due certificate or closure letter is the only document helpful in any future dispute with the bank or any incorrect information is present in the CIBIL record or when new loan is applied in the future. Once everything is successfully done, check your CIBIL score to confirm whether loan is marked is closed by the lender or not and that there is no due amount in the record.

18. How to pay EMI i.e. which payment mode?

There are multiple options available mainly – cash deposit in bank or ATM, cheque, demand draft, direct debit, online transfer, app.

If you have any more questions related to personal loan, then please mention in the comment section below. It will be answered as early as possible.

ShareShare on StumbleUponShare on FacebookTweet about this on TwitterShare on Google+Share on LinkedInEmail this to someonePin on Pinterest

Medical Loan for Surgery/Treatment: 8 Ways to Arrange Money

ShareShare on StumbleUponShare on FacebookTweet about this on TwitterShare on Google+Share on LinkedInEmail this to someonePin on Pinterest

The cost of medical treatments/operatives or surgery in India has risen drastically in last decade or so. Although India is considered to be the preferred destination for medical tourism and ranks in top 5 countries; the cost is still very high for an average Indian. This is because for a global tourist, the treatment cost (in dollars) they pay in their native country is high. Whereas, the same treatment cost is converted to Indian currency is very little for these tourists.

So how can a common man arrange money for expensive medical operations especially during emergency? Because arranging such a huge amount of money is very difficult.

Best option to arrange money is to take loan for medical treatment. Medical loan for surgery is basically a personal loan taken for treating health problems. In India, there are various options available to get medical loan for treatments.

Listed in the below table are the financial institutions or lenders who offer loan especially for medical operation:

Non-Banking LendersTrust / Charitable FundGovernment Funds/Schemes
Arogya FinanceNargis Dutt Memorial Trust (for cancer)Prime Minister National Relief Fund
MYA Health CreditYuvraj Singh Foundation (for cancer)Schemes under the Ministry of Health and Family welfare
Healthy Heart for AllThe Cancer Patient Aid Association
Bajaj FinservCancer Care Trust
hCueYoddhas (for Cancer)
First Hand Foundation (for Cancer)
Indian Cancer Society
Local NGOs
Narayana Multispeciality Hospital

1) Non-Banking Lenders:

Above listed non-banking lenders are medical loan providing companies operating on a core belief of providing quality healthcare for every India at affordable price. Apart from loan, they provide many other healthcare services.

How is the money paid to the borrower by non-banking lender?

Once you apply for the loan online and the application is approved, the money is directly paid to the hospital. All these financiers have direct contact with hospitals and doctors. Benefit of taking medical loan from such lenders are that there is no requirement to provide income documents or any form of collateral.

Other options to arrange money for medical treatment are:

2) Trust/Fund:

Above listed trust offer financial support especially to the poor people. There are many NGOs who get required support through local politicians. Narayana Multispeciality Hospital offers cheapest heart surgeries in the world.

Check out where to get low cost liver transplant in India.

3) Government Fund:

There are many government schemes such as Prime Minister National Relief Fund (PMNRF) and Schemes under the Ministry of Health and Family welfare which offer financial support to the individuals/families from the poor section of the society.

4) Personal loan from bank or finance companies:

You can also apply for a personal loan at private, public or co-operative banks and used the money for required medical treatment. However the problem with these financial institutions is that they offer loans only to select individuals depending on their evaluation criteria especially credit score.

Here’s the list of prominent banks or finance companies where can you apply for personal loan for medical treatment.

  • State Bank of India – Medi Plus Scheme
  • HDFC Bank
  • ICICI Bank
  • Bajaj Finserv – Has tie-ups with prominent medical centers and offers loan for various surgeries such as Bariatric, Laparoscopic, dental treatment, In Vitro Fertilization, eye care, stem cells and hair restoration.
  • Many other public, private or co-operative banks in India offer personal loan.

Typically this loan is unsecured, requiring no security by the bank. And no reasons for taking loan is required to be provided to the bank. However you can also get personal loan against LIC policy, equities, property, and fixed deposit which are nothing but loan with collateral.

5) Ask your friends/relatives:

This typically is the first option used to arrange money in the time of emergency. However not everyone has capacity to extend support due to personal obligations or kind of relation you have. Moreover many of the treatments required huge sum of money, which is actually not possible for a common man to arrange.

6) Peer to peer lending online marketplaces:

These are the online marketplaces where borrowers can apply for loan at multiple borrowers (mainly individuals). Interest rate can be bargained. P2PL have started gaining lot of popularity in the recent years due to less tedious application process, eligibility criteria and affordable rates compared to banks. Read more in detail about peer lending companies in India.

7) Health Insurance:

This is no doubt the must have component in every individuals financial planning kitty. Although it’s not an investment; but still it saves money. When the insured person is hospitalized, the treatment cost is bourne by the insurer. There are many medical insurance providers in India such as ICICI Lombard, Bajaj Allianz, Bharti AXA and others. The biggest problem with health insurance is that claim applications are not honored in many cases, due to the strict underwriting rules especially when the claim is made against pre-existing diseases. And claim made, within months of buying the policy are rejected due to the waiting period in many cases.

8) Private money lenders:

This should be the last option an individual should use. Because the interest rates are highest compared to banks/other financial entities or P2PL and others. And the recovery process is very substandard in many cases.

Cost of surgeries and treatments in India:

Following surgical procedures or treatments cost very high in India. And listed in the below table are the average price patient has to pay. The cost varies depending on the city and hospital and other procedures involved in the treatment:

Surgery/Operative/Treatment ProcedureEstimated Cost in Rs. (average)
In-Vitro Fertilization1,50,000 per cycle (1.5 Lakh)
Angioplasty2,00,000 - 3,00,000 (2-3 Lakh)
Chemotherapy30,000 – 40,000
Angiography25,000 – 40,000
Kidney TransplantOver 10,00,000 (10 Lakh)
Liver transplant Over 25,00,000 (25 Lakh)
Open heart surgeryOver 4, 00,000 (4 Lakh)
Bariatric surgery Between 3, 00,000 – 4, 00,000 (3-4 Lakh)

Medical loan can be used for any purpose such as surgeries, therapies, day care procedures and many other health treatments. Please check with above listed financing companies on eligibility criteria.

ShareShare on StumbleUponShare on FacebookTweet about this on TwitterShare on Google+Share on LinkedInEmail this to someonePin on Pinterest

6 Ways to Get Personal Loan for Jobless/Unemployed

ShareShare on StumbleUponShare on FacebookTweet about this on TwitterShare on Google+Share on LinkedInEmail this to someonePin on Pinterest

Steady income is the most important decisive factor when it comes to personal loan. Based on your income, application is either approved or rejected. However there might come a time when you go jobless. And not being in job/unemployed is very common scenario in today’s world.

And in such situations, shortage of money is obvious assuming you have a very limited savings. But at the same time, when you apply for loan; the application is going to get rejected, as there is no income.

Personal Loan for Individuals with No Job

So can you get personal loan when jobless i.e. at a time when you badly need the money? Answer is YES, it is possible. Because your income is not the only factor, on the basis of which loan application is decided. There are several other factors such as:

  • Credit history
  • Employment history
  • IT returns

Now there could be various categories of jobless as follows:

  • Who have been in job earlier but are currently unemployed
  • Who are searching for job for the first time especially recent graduate
  • Who were in business earlier but are now looking for the job

In this article, we’ll discuss about the first category of individual i.e. who were earlier getting steady income but due to some reasons, they are currently jobless and seeking for personal loan.

Ask your existing bank:

If you were getting steady and high income earlier and had excellent repayment history with your bank (especially bank with whom you had salary account), then you should first apply for the credit at the bank. The three other factors mentioned above such as credit history, employment history and income tax returns, can come to your rescue at this point.

Especially a good credit score, proves that you are not likely to default in the future. And assuming your income was high, it is likely expected that your future income will be mostly on the higher side and repayment will be done in a timely manner. There is also a possibility that, interest on loan might be on the higher side, but still you will get access to cash, in the financial crunch phase.

If commercial banks deny your application then you can also try to get loan from co-operative banks. The chances of approval are high as their eligibility criteria are not very stringent.

Peer to peer lending companies:

Another quick and easy option for unemployed individuals to get personal loan is from peer to peer lending companies (also called as P2PL). The prime objective of P2PL marketplaces is to make access to credit in a seamless and affordable manner. When we say affordable, it means the interest rate offered is less compared to the commercial banks. People with no job in hand currently, should definitely approach these online money lending marketplaces. There are many individuals who are ready to borrow their money with interest rate less than the banks. Read more on P2PL benefits.

Ask your friends/relatives:

Ideally this should be / is the first option, an individual takes into consideration when in need of money. However not everyone has capacity to provide helping hand even when mutual trust exists. But what you can do is, ask your acquaintances to lend money but in return of interest. Chances are quite higher that, you may get money. Because your acquaintance has some monetary advantage. Many times, people have in mind that what will I gain after lending the money? So being practical helps in such conditions.

Against fixed deposit:

If you already have fixed deposit with the bank, then loan against FD is another feasible option, provided you do not want to break FD to raise the money. It is actually a loan against security. In this case, security is the money you’ve kept in fixed deposit. And the credit you can get is around 75%-80% of the money kept with the bank and an additional interest of 2%-3% is charged.

So if the FD interest rate offered by the bank is 10% and bank charges 2% additional borrowing charge then you will have to pay 12% rate per annum, which is monthly 1%. So as you can see, the interest rate offered is very less than the standard loan rates which are typically above 15%. There are few more benefits apart from lower interest rates such as:

  • No pre-payment and processing charge, with most of the banks
  • Repayments are flexible with an option of paying either lumpsum or in instalments

Against life insurance policy:

Similar to loan against FD, if you have life insurance policy on your name, then you can get loan against life policy as well. And the benefit remains the same as mentioned above i.e. low lending rate. However remember that, the policy is transferred in the name of the financial institution and post that only, the loan is granted. The lending rate is calculated on the basis of two factors: premium amount and the number of times premiums paid till the time of application.

Private money lenders:

These private financiers offer loans especially to local borrowers. However the interest rate are very high and many of operate without getting license from the government. And most importantly, the kind of harassment borrower faces in an event of non-payment of dues, is very bad.

So basically the above listed six options to get personal loan for jobless individuals has its own pros and cons. But remember one thing – always have a good credit history. It is very important for a good financial future.

ShareShare on StumbleUponShare on FacebookTweet about this on TwitterShare on Google+Share on LinkedInEmail this to someonePin on Pinterest