Personal Loan for Senior Citizens from 11 Banks, Loan against Securities

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Post retirement or when retirement is nearing the fear of managing cash flow during sunset year starts. Many people believe that the money accumulated during their working life is sufficient. However it is a mistake. What such individuals don’t consider is the inflation, rising healthcare costs, increasing life span and at the same time protect dependents.

So in case of emergency when own savings is not sufficient to fulfill the need, the option remains is the personal loan. However getting personal loan for senior or retired individual is not easy as it is for a working professional. Let’s understand the reasons behind this.

Personal loan approval is dependent on four most important factors which are as follows:

  • Income
  • CIBIL score
  • Age
  • Loan amount

Other factors also play a major role but above mentioned factors holds most importance.

A regular income earner has higher chance of meeting these eligibility criteria. However for a senior or retired individual (with no income or pension), the chances of loan approval are very less as they don’t have an income post retirement. Age factor is also one of the reason for rejection, as most of the banks normally provide loan to individuals with maximum age of 60 years.

Read more on 7 best jobs to earn money after retirement.

So under such conditions, how can senior citizens get personal loan in India so that need of money can be met especially during emergencies?

There are many options available in the market for senior people to avail loan as shown in the table below:

Public/Private Sector BankCo-operative BanksAgainst Shares/LIC Policy
State Bank of IndiaAryapuram BankAditya Birla Finance
Syndicate BankCalicut city service co-operative bankAxis Bank
Allahabad BankAkola Janta Co-operative bankIDBI Bank
Bank of IndiaLIC Housing Finance
IDBI BankHDFC Bank
Dena BankICICI Bank
Andhra Bank
Bank of Baroda

Few details on getting loan from above entities:

State Bank of India: SBI offers loans to pensioners of central and state government with age limit set to 72 years with a loan amount of Rs. 14, 00,000 (14 Lakhs). However in this case the repayment tenure is small.

Allahabad Bank: Age of the pensioner should not exceed 73 years

Bank of India: BoI offers loans to pensioners with age less than 75 years.

IDBI Bank: Offers reverse mortgage loan for citizens above the age of 60 years.

Dena Bank: For pensioners with age not exceeding 73 years and 80 years.

Andhra Bank: Offers personal loans to individuals drawing pension in the branch.

Bank of Baroda: For individuals with age not exceeding 65 years.

Syndicate Bank: For pension account holder with the bank and age not exceeding 70 years.

Check out retirement investment tips.

Co-operative banks:

Many co-operative banks also offer loan to senior citizens. Few of them are:

  • Aryapuram Bank
  • Calicut city service co-operative bank
  • Akola Janta co-operative bank

Personal loan against shares:

This is offered by many public and private sector banks in India such as HDFC bank, Axis bank, ICICI bank, and many others. Individuals including senior person can pledge shares from any depository with the bank and get finance. So there is a good chance to monetize assets.

Also see home loan for retired.

Against LIC policy:

Similar to loans against shares, many credit lenders also offer loans against money back or endowment life policies. Senior citizens can avail loan by pledging their policies. Few lenders are Aditya Birla Finance, Axis Bank, LIC housing finance, IDBI Bank.

Private lenders:

There are many private money lenders offering finance at high interest rate compared to banks. However you should be careful as it is an unregulated lending market even though getting a loan is hassle free and quick process. Private financiers should be the lost option.

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Self Employed Loan Rejection: 7 Most Common Reasons

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Salaried individuals are always liked by financial institutions. Because when they offer any credit to this category of individuals the repayment is expected to be done – fully and on time and risks involved are less.

However there is another category of individuals – self employed who have equal rights to get credit but are most often denied. Even if their earnings are higher than salaried individuals, getting loan approval is difficult because of following reasons:

Risk: Not all businesses will continue to remain in profit all the time. There would be times when business may drop impacting the revenue. In such cases, repayment of loans often becomes difficult for the borrower. So basically, risk is a crucial factor which banks assesses before approving any loan application. Although banks take into consideration long duration financials for tracking business performance, a frequent loss creates doubt to the bank. Afterall if such an individual or business turns out to be a non-performing entity then losses would be high, impacting the profitability of the bank.

Income: Since ups and downs are part of business cycle, the current account held by the owner may not have sufficient balance all the time. Also there is a possibility that transaction history of such account may not be at its best. Also many customers still prefer paying in cash rather than online transfer/cheque/demand draft. So such transactions do not make entry into the account as mentioning the source of income cannot be considered as a valid proof.

Read more on personal loan for self employed.

Multiple business owners: In case of a partnership firm, the chances of loan approval are further grim. This mostly happens when one of the partner has poor credit score impacting the credibility of the other partner.

Business address: It is quite common that in the initial phase of the business, individual starts working from home and mentions his/her personal address as business address. This is disliked by the creditors as they generally offer loans to well established or with location operating from a commercial space. Although this ideally is the last factor taken into consideration.

Check out details on getting credit card for self employed.

Income tax: Typically banks asks for last two years income tax to judge the risks. However if the business is newly started then providing the income tax related documents is impossible. In such cases, banks will scrutinize the application more minutely. If business is running into losses, then banks will review IT returns of couple of more years.

Documentation: For self employed individuals documents required for loan application is little different and includes business continuity proof, last 6 months bank statement, income tax return of last 2 years, certified financials. All these documents may not be available with everyone especially when the business is newly started. So it takes personal visit to the bank to support your loan application.

CIBIL score: The most important decisive factor taken into consideration by financial institution is the CIBIL score. A poor score has higher chances of credit denial whether the applicant is self employed or salaried. However in case of self employed especially those who freshly start a business and has no CIBIL score the possibility of getting a loan is low. This is because, lenders have no way to judge the credit worthiness of the applicant.

Other options for self employed to get loan:

Even if banks reject personal loan application, it’s not the end of the world. There are other options available in the market to get loan which includes:

  1. Co-operative banks: Compared to commercial banks, co-operative banks do not have strict guidelines and have easier terms and conditions. Although the quantum of money granted is less. But on the other hand the interest rates are better. Another benefit is that processing fees or prepayment penalty is NIL or very less.
  2. Peer to peer lenders: Short termed as P2PL, this is a fairly new concept in India. Read more on P2PL here. The benefits offered are attractive rates, faster processing, speedy disbursal and easy application process.
  3. Local financiers: Borrowing money from these private financiers should be your last option as the interest rates are very high. Although they do not check CIBIL score and have very simple eligibility criteria.
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Close HDFC Personal Loan in 2 Steps, Imp. Things to After Closure

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It’s a golden rule to repay any type of loan before the term ends. This is because personal loan carries a very high interest rate compared to other loans. So getting yourself out of recurring debt will help in saving good amount of money.

In India, there are multiple avenues to get personal loan such as commercial lenders, co-operative banks, peer to peer lenders, local money lenders, and others.

HDFC bank, India’s top most private bank offers personal loan at an interest rate of 15.75% – 20%. This article provides procedure to close HDFC personal loan in 2 steps as follows:

Step-1: Call their customer care number to get address of the nearest HDFC branch office. You can get their support number by clicking on this link.

Just select your city from the dropdown list. E.g. for top cities – Ahmedabad / Bengaluru / Chennai / Delhi & NCR / Hyderabad / Kolkata / Mumbai / Pune, 61606161 is the calling number. You need to add STD number of the city. If you are an NRI, then visit this link to get the calling number.

Step-2: Once you get the branch details, take your government issued identification document, loan account number for verification to the bank. Bank personnel will then verify all the documents and get loan account details. In case of any remaining due, you will be asked to pay the same.

Points to note: HDFC personal loan closure is not possible online or over phone. You will have to personally visit the bank to close the account.

Check out personal loan for low income earners.

Important things to remember after closing the personal loan account at HDFC:

Considering the fact that HDFC bank charges interest rate of 15.75% – 20%; quick closing of the loan account is the key for the borrower to save money spent on EMI. But closing your account does not necessarily mean, you are all done. There are certain key things you need to do for a successful closure:

  • Collect all the important documents: After HDFC personal loan is closed, collect acknowledgement letter from the bank. Collect all the documents if you have taken loan against property/securities/policy etc.
  • No objection/due certificate: Another important document to ask HDFC bank is the NOC. No objection certificate or no due certificate is officially accepted legal proof of loan account closure. The certificate states that the borrower has made all the repayments and no outstanding balance is pending.
  • Pre-closure acknowledgement receipt: If you have closed your HDFC loan account before end term; then get pre-closure acknowledgement receipt from the bank.
  • Get report from CIBIL: After 60 days of HDFC loan closure, visit CIBIL website and get your personal credit report. Key thing to check is whether bank has updated the loan account record at CIBIL stating loan account closed. If record is not updated, then E-mail HDFC bank to do so at the earliest. E-mailing will help you in case no response is received from the bank.

Read about HDFC credit card payment options.

The reason to do all these is because it will help you in case any disputes arise in the future when you apply for any type of credit or loan or if the bank get back to you stating dues are still remaining.

Various personal loans from HDFC Bank:

  • Loan on credit card: This pre-approved loan Insta Loan and Insta Jumbo loan is for HDFC credit card holder. Loan amount is within the credit card limit for Insta loan. Higher loan amount can be granted in case of Jumbo loan. Other bank’s card holder can also get loan by transferring the balance from other bank to HDFC bank credit card. After transfer you can continue payin the due in EMI.
  • Loan against securities: Instead of selling securities such as equity shares, mutual funds, gold deposit certificates, LIC policies, NSC, KVP; you can get loan by giving these securities to the bank. Interest is charged only on the amount withdrawn from the account and the time for which the amount is utilized.
  • Loan against property: Higher loan is possible by mortgaging your property with the bank. Another benefit is that the EMI is low and higher tenure.

Other types of loans offered are professional loan, loans against assest, and consumer durable loan.

Benefits of taking personal loan from HDFC Bank:

  • Eligibility check in one minute
  • Get loan approved within a day provided all the eligibility criteria are met
  • Faster loan processing
  • No hidden charges
  • Account holders can get special offers on interest rates and other charges
  • Women employees get better rates compared to others
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17 Personal Loan with No Foreclosure & Partial Prepayment Charges

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Emergency money requirement can impact financials of anyone especially those who earn less. And unforeseen events such as medical emergency, job loss, etc. can affect person’s financial health badly. At such times borrowing money in the form of personal loan is the best alternative.

You can get personal loans from following common sources in India:

  • Commercial banks
  • Scheduled and un-scheduled co-operative banks
  • Peer to peer lenders (P2PL)
  • Local money lenders

Getting yourself out of recurring debt as early as possible is the key to financial success. Sooner you pay-off your dues, better would be your finances as you will save money on EMIs and the interest. And the saved money can then be used for any other purpose such as investing etc. Check out personal loan for low income earners.

However financial institutions do not think this way as they want borrower to continue repayment as long as possible. Because for them, pre-payment of loans or partial prepayment before the end term is loss making as they lose out on EMI. This is the reason banks keep loan tenures longer or charge higher EMI to earn more profit. And this hurts honest borrowers the most. Even though they have a timely loan repayment record, they still can’t close their loan account before the standard tenure ends.

Foreclosure charge is basically a certain percentage charged on the outstanding principal amount in addition to the applicable taxes. Part prepayment is charged in a similar way but the charge is lower than the foreclosure.

But not every bank charges fee for paying the entire loan amount before the actual end of its term. Enlisted in the below table are the lenders offering personal loan with no preclosure charges or offer partial waiver along with the interest rate charged by each. Many of these lenders do not levy prepayment charges when EMI is paid for a certain number of prefixed months/years.

Name of LenderInterest RateLoan Foreclosure Charges
Axis Bank15.5% to 24%No foreclosure and prepayment charge
Bank of Baroda0.1475Nil
Oriental Bank of Commerce0.1375Nil
Punjab National Bank16% to 16.25%Nil
State Bank of India0.182Nil
United Bank of India0.1625Nil
IIFL Finance14%-18%Nil
IDFC Bank11.99% - 19.50%Nil
LendboxOn applicationNil
i2ifundingOn applicationNil
Andhra Bank0.1575Nil
Corporation Bank12.75Nil
State Bank of Mysore0.1655Nil
State Bank of Hyderabad15.25%-15.75%Nil
State Bank of Patiala0.1195Nil
State Bank of Travancore0.1245Nil
Dena Bank0.13Nil
HSBC Bank11.49% to 17.5%4% - partial prepayment
YES Bank0.14Nil - partial prepayment
Allahabad Bank12.10% – 14.60%Partial Prepayment - 2.25% of Outstanding Balance
Bajaj Finserv 0.1199Partial waiver - 2% on principal outstanding
HDFC Bank15.5% to 22.25%Partial Prepayment - 4% of Principal Outstanding
ICICI Bank15.5% to 22.25%Partial Prepayment - 5% pa of principal outstanding

Some banks may allow you to pay a certain percentage of the loan amount in a financial year, thereby reducing the burden of the loan. And even this option is better compared to loans offered by banks with pre-closure charges.

Things to do after closing personal loan:

Loan account closure gives a good sigh of relief to the borrower. However things may become problematic in future, if you do not consider following factors:

  • Get all important documents from the bank: Post loan closure, you should get back all the important documents submitted to the bank while taking the loan. Most importantly this includes acknowledgement letter given to you at the time of closure, etc.
  • No objection/due certificate: Another important document is the NOC, a legal proof of closure. This states that the borrower has made all the repayments and no outstanding balance exists. Although it is the responsibility of the lender to send NOC to the borrower but you should too not forget to ask for the document.
  • Pre-closure acknowledgement receipt: If you have closed your account by paying all the dues before the term ends, then get pre-closure acknowledgement receipt from the bank. Also try not to make pre-closure payment in cash. Cheque or demand draft can help as proof.
  • Get report from CIBIL: After 45 days of closing the loan, get report from CIBIL and check whether the lender has updated the loan account record at CIBIL. If record is not updated, then ask your bank to do so at the earliest. Make this particular communication in writing, which will act as a proof.
  • In addition to these, always keep a duplicate copy of each and every loan related documents handy including loan application, approval, closure letter, cheque payment copy, etc. And it’s best to keep soft copy of all these documents in your mailbox. Every document pertaining to the loan is critical and can help in the time of need.

The reason to do all these is because it will help you in case any disputes arise in the future when you apply for any type of credit or loan or if the bank get back to you stating dues are still remaining.

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Instant Cash Loan @1% interest per day: Peer to Peer Lenders

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The need of immediate money can arise anytime and you might need money for any purpose such as medical expenses, existing loan repayment, emergency at home, financial crisis, etc. And at such time when there is a dire need of money, you have to rely either on your personal savings or ask your relatives/friends. Although these are the best sources; but the quantum of money decides whether these sources would be sufficient enough to meet the requirement of emergency money requirement.

If these sources doesn’t help in meeting the urgent money requirement; personal loan is the best option. You can approach any bank (co-operative or commercial) and apply for the loan and get the money. But this is not that simple as it sounds; because banks especially commercial banks take into consideration multiple factors before approving the loan. The main objective is to prevent losses. The most common eligibility criteria include but not limited are:

  • Income
  • Credit score
  • Age
  • Loan amount required
  • Documentation

So how to get instant personal or cash loan?

The answer is peer to peer lenders who provide short term money which are typically in small amount.

There are many peer to peer lending (P2PL) companies in India offering instant cash loans with few even approving within 1 hour.

Here’s the list of prominent peer to peer lending companies in India:

  • https://www.moneyinminutes.in
  • https://www.rupeelend.com
  • https://www.faircent.com
  • https://www.i-lend.in
  • https://indialends.com/
  • https://www.i2ifunding.com
  • https://www.instapaisa.com/

These companies can offer loan with amount as low as Rs. 5000. However there is a ceiling on the maximum loan amount. Check out difference between P2PL and banks.

But considering the fact that instant cash loans are best suited for people with no job or with poor or no credit history, the loan limit should not be a concern. Moreover when loan repayment is fully done on time, borrower can apply for another loan at a reduced interest rate compared to the previous loan. Read more about peer to peer lending.

How to apply to get instant cash loan?

Since the cash loans are made available on an urgent basis and serviced 24*7, the application process is much simpler at these online money lenders and takes just few steps:

  1. Online registration by the short term loan applicant on the website of the P2PL. Details to be entered are personal, employment and financial.
  2. Uploading documents as listed below on the website/via E-mail/handing the same to the P2PL’s executive
  3. Once details are verified the money is transferred directly to the bank account of the applicant. You will notification from the P2PL

Documents required are:

  • Proof of government issued ID proof (Aadhaar/PAN/Passport/Voter-ID) & address proof
  • Income and employment proof
  • Bank statement

Benefits of getting instant cash loan:

  • Rates of interest are very less and some even charge on a per day basis. For e.g. Moneyinminutes.in charges between 0.1%-1% interest per day. Although the rates, tenure and loan amount varies with each lending company.
  • Next time you apply for a loan again, the interest rates offered are normally low.
  • No processing and prepayment penalty charges.
  • Loan term can be less than 3 months as well

Above listed features or benefits are not possible in case of commercial or co-operative banks. This is the reason why the concept of peer to peer lending is growing in India. Loans from such companies are worth recommended due to flexibility in tenure and simpler documentation and eligibility criteria.

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Personal Loan for Government Employees/PSU: Income, Loan Amt., Interest

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Government or PSU employees, especially those who have retired have to be very good at savings. In order to meet their day to day expenses sufficient saving is the key especially when he/she is the only earning person in the family or when there is no one to support financially. However life is uncertain and any unfortunate event or emergency can take place anytime and can take a hit on your pocket. Although personal saving can be utilized in such scenarios but it may not be able to fulfill the demand always. And even if it does, you may not be able to meet the future financials objectives.

And at such difficult times like medical emergencies, marriage of children etc. taking finance from banks help. There are many financials offering personal loan for government employees or PSU. Although such loans are expensive but still it helps in attaining the temporary money crunch. Check out personal loan for low salaried individuals.

Here is the list of banks offering personal loan for PSU or central/state government employees. The table also shows loan amount, interest rate and income required.

Name of BankMaximum Loan Amount (INR)Interest Rate %Monthly Income Required
Oriental Bank of CommerceFor govt. employees: 5,00,000
For pensioners: 2,00,000
11.9510,000 +
Bank of India5000004.00% + BSS (0.30%) above 1 Year MCLRNA
Axis Bank150000015.50% to 24%15000+
State Bank of India150000012.45% - 12.95% 7500+
IDBI Bank10000000.129915000+
Bank of Baroda1000000One year MCLR +SP+3.00% to One year MCLR +SP+ 6.00%NA
State Bank of Travancore - Suvidha Loan36 times the net monthly income12.20-12.7020000
State Bank of Bikaner & Jaipur150000011.85 + one year MCLR9000
Punjab National Bank1000000MCLR+3.10%NA
Central Bank of India1000000MCLR(12m) + 3.00%

There are many other banks offering personal loan to state/central government employees or from public sector undertakings (PSUs). But above listed ones are the top most banks.

Note: Interest rates keep changing from time to time. So check with bank for latest rates.

Which working class individuals fall under the category of government or pensioners?

All central and state government employees falling under the following categories

  • University or college teachers
  • Permanent and employees who are confirmed
  • Age not greater than 65 years. Age criteria varies for each bank.

Eligibility criteria for personal loan:

Not every application guarantees loan as banks carry out very strict financial history check of the applicant. The main purpose is to evaluate credit worthiness of the individual so that risks involved can be avoided beforehand. Here are the most common eligibility criteria required:

  • Income: Your earning plays the most important role. The loan amount and interest rate approval is dependent on this.
  • Most banks ask for salary account with their bank.
  • Credit history: This is the most important factor in any type of loan or cedit card application. This is the only way using which banks get the whole financial transaction history of the applicant. A poor credit history is the indicator of default and banks can reject the application in such cases. Read more on loans for individuals with poor credit score.
  • Applicant should be a permanent employee
  • Other criteria include age, employment history – years been with the current organisation, documentation, & others.

Other options to get personal loan are:

  • Peer to peer lenders
  • Co-operative banks
  • Secured loans either against FD or LIC policy
  • Private money lenders
  • Against gold
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Personal Loan from Co-operative Banks for Low Income Earners

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Low income earning individuals have to face lot of hardships to meet the demand for day to day money requirement especially when they are the single breadwinner in the family.

Most common options for low salaried to meet emergency fund

They have two options – either use own source of income or ask other sources – relatives, friends, financial institutions and others. Using personal income is the best recommended option as you won’t owe anyone. But it is not possible for everyone to raise money at the time of need especially when emergency strikes e.g. medical emergency which often needs huge amount of money.

And at such difficult times, asking your friends or relatives is the best alternative, when own source of income does not help. However everyone has their own limitations. So that’s when commercial financial institutions come to the rescue as they offer personal loan but at a cost i.e. interest rate. But the fight doesn’t end there because low income earners fail to meet the income requirement to get personal loan; as most of the commercial banks have high income eligibility criteria. Although commercial banks also offer loans to low salaried but their terms and documentation process are very tedious.

Other alternative to commercial banks are the co-operative banks (scheduled and non-scheduled). Individuals with low income can get small personal loan from co-operative banks much easily compared to commercial banks which includes public sector and private sector such as SBI, ICICI, Axis, HDFC bank & others. Even though many scheduled co-operative banks mandates applicant to be the member of the bank. But this should not be a problem for such individuals, as loan approval process is simple.

Here is the table with list of co-operative banks along with income requirement, loan amount, and interest rate. Few banks provide small loan amount which normally does not require higher salary. So interested individuals should try applying at these banks.

Name of Co-operative bankMaximum Loan AmountInterest Rate (%)Monthly income required
Greater Bombay Co-operative Bank2 Lacs14.510000
Abhyudaya Co-operative Bank 5 Lacs13.58000
Punjab & Maharashtra Co-operative Bank5 Lacs1618000
Janakalyan Sahakari Bank5 Lacs167500
Thane Bharat Sahakari Bank5 Lacs148000
TJSB Sahakari Bank5 LacsNA15000
Sardar Bhiladwala Pardi Peoples Coop Bank2500012.5NA
Janata Sahakari Bank3 Lacs14Based on latest income proof
Bharat Co-operative Bank (Mumbai)2 Lacs13Fair income required
Bharati Sahakari Bank5 Lacs132 years of minimum employment
Citizencredit Co-operative Bank1 Lac+13.25Salary slips required
New India Co-operative BankUpto 50,000On reducing balance methodMinimum taxable
income of Rs100,000/- for last 2 years
New India Co-operative BankAbove 50,000On reducing balance methodMinimum taxable
income of Rs. 150,000/- for last 2 years

The reasons low income earning person should apply for personal loan at cooperative banks are as follows:

  • Approval process is simpler
  • As loan amount provided is small the eligibility criteria is not very strict
  • Interest is normally low compared to commercial banks
  • Income requirement is low
  • Not very complicated terms and conditions and hidden charges
  • Not all banks report or request CIBIL data
  • Very small processing or prepayment fees
  • Even if you had poor or no credit history, your chances of loan approval are high compared to commercial banks as they mainly judge loan eligibility on previous credit history.

What are the other choices available apart from commercial and cooperative banks?

Low income earners can get personal loan from following alternatives:

  • Peer to peer lenders
  • Secured loans against FD/LIC policy/gold/property
  • Private money lenders
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5 Options to Get Loans with No Credit Check: P2PL, Against FD/Gold

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Your CIBIL credit score is the most important decisive factor in getting any type of finance or credit card. Lenders do a comprehensive credit history check in order to gauge the repayment capacity of the applicant. Apart from the credit rating, income and the company you work for also plays a key role. Higher the credit score, which is out of 900, higher would be the chances of loan approval.

But what about individuals, seeking loan with no credit bureau record or poor score. Are there any options out there in India where credit score of borrower is not checked by the lenders while granting loan or when credit score is not the only selection criteria?

Answer is YES but the options are very limited as follows. Each of these options are explained in detail below.

  1. Peer to peer lending companies
  2. Co-operative banks
  3. Loans against fixed deposit or LIC policy or credit card
  4. Private money lenders
  5. Loan against gold

Peer to Peer Lenders (P2PL): This type of lending is gaining attraction in India and is an excellent option, as loan approval process is not tedious like commercial banks. These financiers do not solely rely on an individual’s previous credit history i.e. even if the credit rating is checked by gathering data from CIBIL, a poor score does not necessarily mean that loan application will be rejected. Read more about peer to peer lenders.

Following P2PL do not check credit score of the loan applicant:

  1. Eborrow.in
  2. Lendbox
  3. Moneyminutes.in

Co-operative banks: Apart from P2PL, co-operative banks are also an option to get a loan quickly compared to commercial banks such as public sector or private sector banks. Loan application does not go through credit history check by most of these banks. In case, you fail the credit check but your income is good and employer is big, you can convince these banks on the basis of these two plus points you have.

Loan against fixed deposit: If you have fixed deposit account at the bank but have poor credit score, then you can take loan against fixed deposit as credit check is not done. The loan amount granted is around 85%-90% of the value and can help in raising money for short term. Read in detail about the loan against FD and LIC policy.

Private money lenders: Private financiers (person / entity) are another solution for getting loan with no credit check. Only requirements are guarantor, security cheque, should have own house, and must provide income proof. Best way to look for such financiers is google search or quikr. Just search for “personal financiers in cityname”.

Loan against gold: If you have physical gold or ornaments and are in need of loan, then you can get secured loan against gold deposit with no credit check done by the lender. Such loans are offered by private gold loan companies such as Muthoot Finance, Manappuram Finance, others and commercial banks like ICICI, HDFC, Axis, SBI, and others.

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Pay Personal Loan Fast: Tips for Low Income Earners

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Low income earners always find it difficult to get any type of credit (loan or credit card). The obvious reason is the money they earn. However there are many financial institutions offering loans to low income individuals. The minimum income required is very less for such personal loans. The fight does not end here.

After getting loan, repayment worries further add up to the pain. And especially when the individual is the single breadwinner in the family, things become more difficult. For poor salaried individuals, fulfilling even the day to day needs become difficult, as loan repayment becomes higher priority. So how can these individuals can make best use of available resources and pay personal loan fast and become worry free as early as possible.

In this article we will discuss how to low income earners can pay personal loan fast.

Keep expense diary: Very few people have habit of tracking and writing down their day to day expenses. If you are amongst them then you definitely must be knowing its benefits. Track ExpensesIt helps in understanding your expense habits and keep control on unnecessary expenditures. Every time you save money, the same can be used for paying EMIs. Even a Rs. 1000 saving every month can help in reducing your EMI burden.

Start saving money: To save money, you should compare prices whenever and wherever possible and avoid unnecessary expenses. You should especially compare prices online and in-store. There are many places (online & offline) you will find bulk deals. For e.g. Buy 10 kg cooking oil and get 1 litre oil free. Such deals make sense, as it is an everyday necessary thing. online shopping sites offering heavy discounts, which may not be available in-store.

Look for cashbacks/coupons online: Another way to save money is to look for coupons online on websites like groupon.com, coupondunia.in, and others, verify, and buy from partnering sites. Cashbacks are also offered by various online sites such as Paytm. Refer image.Cashback

Earn extra income: If your income is small, you will mostly end up sacrificing on many things. Best is to create additional sources of income. For e.g. you can sell off your unused stuffs on olx or ebay, become online trainer on udemy, offer training on weekends, and many others. You can even take part-time job on weekend and earn extra money. There is no need to shy or think what people will say. It’s your life and finally you know what it takes to become debt free.Earn extra money

Increase EMI: If your income rises then you can request your bank to raise the EMI and at the same time reduce the loan tenure. This is an excellent opportunity to ease off the burden of your shoulder before the standard loan tenure.

Ask your relatives or friends: You can ask your acquaintances and borrow some money and use it for loan repayment. You can then pay back your friends on a lower interest than the bank. This way both of you would be happy. This options works best when your EMI is high and bank does not make you pay extra money for loan foreclosure.

Open FD account: To make loan repayment you need money. Why not make use of existing money and invest in fixed deposit? By doing so, for even a 7 day FD you will earn additional money, even though less. But this money can then be used for the repayment. For e.g. If you have Rs. 50, 000 available with you and bank does not accept foreclosure, then you can open FD account with any bank offering higher interest and earn money on the invested amount. This money can then be used for loan repayment.Invest in FD

Make use of bonus or money earned from somewhere else:Bonus If you receive a bonus then instead of saving it in the bank account or spending on other stuffs, use it for clearing the debt. Ask your bank whether you can pay the big sum in one go as repayment. This will automatically reduce the EMI for the remaining period.

Switch personal loan: Transfer personal loanIf your current lender is charging higher interest then look for a bank offering low interest and transfer loan to them. But before making a switch, ask your existing bank on reducing the rates. This way you can save decent sum as burden of higher EMI will eventually reduce. But make sure you calculate the money you will save and any additional charges incurred before transferring the loan. Also try balance transfer to other bank during the early period of loan tenure and not when the loan with the existing bank is about to end.

Remember the thumb rule for any debt – Earlier you repay and on time, better would be your financials.

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Personal Loan for Home Improvement: Eligibility, Loan Amount, Interest Rate

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Everyone has a dream of owning their own house. And upon buying one, the next step is to renovate as per your requirement. When you buy an individual house or flat from a builder, they will not get customization done as per your requirement unless and until you construct on your own by hiring personal developer. The main objective of builder is to deliver home as per their construction plan and not yours. So for house improvement as per your requirement additional money would be needed. Or if you’ve been staying in your own house for years and want to change look and feel and want to arrange money for the same, what will you do? Of course you can turn to your relatives and friends, but they all have their own financial commitments and they may not offer you a support.

So what will you do in such a situation?

Personal loan for renovating house comes to your support offered by most of the financial institutions in India such as public, private, or co-operative banks, housing finance companies, or peer to peer lending companies.

What does home renovation include?

Improving your home includes but not limited to the following:

  • Remodeling the house
  • Painting
  • Repair – internal and/or external

Let’s get into the details for getting finance for home improvement:

Eligibility:

Listed below are the basic eligibility criteria set by lenders for getting credit for home furnishing or decoration or renovation:

  • Ownership: The most basic requirement is that the loan applicant should be the owner of the house/flat. You cannot take personal loan for house renovation, if the property belongs to someone else. For e.g. tenants are not eligible. But at the same time tenants can take loan for purchasing furnishing or decorating items.
  • Property documents: Lenders will also ask for original documents related to the concerned property.
  • Credit Score: Irrespective of the type of credit you apply for, every lender will first take into consideration the CIBIL rating. It is a score given to every borrower out of 900 depending on his/her credit usage. According to CIBIL, any individual with a score of 750 and above is more likely to get credit approved. Higher the score, higher the chances of loan or credit card approval. If your CIBIL score is low, then still there are lenders such as co-operative banks and peer to peer lending companies who can offer you the loan.
  • Profession: Salaried, self employed or businessman are eligible for the loan. If you do not have any source of income but own a home then getting a loan is difficult. This is because lenders won’t be able to calculate your loan repayment capacity.
  • Annual Income: The most important decisive factor for evaluating credit worthiness of any individual. Although there are personal loan for low income earners but it has its own pros and cons. In order to reduce non-performing assets, banks take multiple factors into consideration and amongst them annual income is the most important. Every lender has there own monthly or annual income eligibility criteria.
  • Employment history: Work experience and years being in the same job is also taken into consideration by some lenders.
  • Age: Minimum age of the applicant should be 21 years.

Who offers financing for improvement of home?

Following three categories of lenders offer loans for renovating house:

  • Banks: Public, private & co-operative. Almost every bank offers this loan.
  • Finance companies: HDFC, Bajaj Finserv & others
  • Peer to Peer Lenders: Lendbox.in, LendenClub & others. More about P2PL here.

Below table shows loan details from few lenders:

Lender's NameMonthly Income RequiredInterest RateLoan Amount
Kotak Mahindra BankMinimum Rs. 2500011.49% - 20.15%Rs.20Lacs - Rs.75Lacs
Bajaj FinservMinimum Rs.30000. But varies between cities11.99% minimumUpto 25 Lacs
HDFCNA9.40% - 9.90%Rs.30Lacs - Rs.75Lacs
IndusInd BankMinimum Rs. 2500011.25% minimumNA
Indian Overseas BankNA9.50%Rs. 25000 - Rs. 15 Lacs
Axis BankNA9.45% minimumMinimum Rs. 3 Lacs
DHFLNABased on DHFL's retail prime lending rateMaximum Rs. 50 Lacs
PNB HousingNA9.40% - 10.40%Rs.20Lacs - Rs.75Lacs
Bank of BarodaMinimum Rs. 50000Base rate 9.60%Minimum Rs. 50000

Note: Please check with the above listed companies and get latest details on interest rate, loan amount and other criteria.

Charges:

Every loan you take will carry basic charges such as processing fees, interest rate, late payment, cheque bounce, prepayment, loan type conversion. But remember there could be other charges involved which lenders may not disclose clearly initially but are present in the documents provided by the lender.

Although personal loan is costliest loan type but it is most preferred as collateral is not required. Moreover applicant has to go through less tedious documentation and disbursement is fast.

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