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 Bank||Interest Rate||Monthly EMI||Total amount to be paid|
|ICICI Bank||11.70 – 18.85%||4435||53225|
|Axis Bank||15.50 - 24%||4525||54297|
|State Bank of India||11.95 - 16.55%||4441||53295|
|HDFC Bank||15.75% to 20%||4531||54368|
|Bank of Baroda||11.60% to 16.60%||4433||53197|
|Punjab National Bank||11.55 – 14.55%||4432||53183|
|IndusInd Bank||12.99 - 20.00%||4465||53587|
|Union Bank of India||14.40%||4499||53985|
|Oriental Bank of Commerce||10.85% to 11.85%||4416||52987|
|Bajaj Finserv||11.99% onwards||4440||53281|
|Standard Chartered||10.99 - 14.49%||4418||53026|
|Kotak Mahindra||11.50 - 19.65%||4430||52169|
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.