Loan for Starting Business for Low Income Earners (Rs. 5000 – 40,000)
|Name of Bank||Minimum Monthly Salary Required|
|City Union Bank||Rs. 6,500|
|Jammu and Kashmir Bank||Rs. 6,500|
|Abhyudaya Co-operative Bank||Rs. 8,000|
|Karnataka Bank||Rs. 10,000|
|Karur Vysya Bank||Rs. 10,000|
|Indian Overseas Bank||More than Rs. 5000|
|Oriental Bank of Commerce||More than Rs. 6000|
|State Bank of India||Rs. 24,000 – Urban
Rs. 10,000 – Rural and semi-urban
|HDFC Bank||Rs. 20,000 – Urban
Rs. 15,000 – Rural and semi-urban
|Axis Bank||Rs. 15,000|
|YES Bank||Rs. 25,000|
|ICICI Bank||Rs. 20,000-25,000 – Urban
Rs. 17,500 – Rural and semi-urban
|Allahabad Bank||Rs. 20,000|
|Canara Bank||Rs. 25,000|
|Dena Bank||Rs. 15,000|
|Punjab National Bank||Rs. 30,000|
|Dhanlaxmi Bank||Rs. 35,000|
|Federal Bank||Rs. 50,000|
|Nainital Bank||Rs. 25,000|
|Ratnakar Bank||Rs. 25,000|
|South Indian Bank||Rs. 25,000|
|Kotak Mahindra Bank||Rs. 25,000|
|IndusInd Bank||Rs. 25,000|
|Deutsche Bank||Rs. 25,000|
|Bajaj Finance Limited||Rs. 30,000 – Rs. 40,000 (Depending on the city)|
What if banks deny loan?The very first thing to do is ask the bank about the reason for rejection. If a poor credit score is the reason then you should first improve it. This is because most of the banks will first check the CIBIL rating before approving the loan.
There are two more options to get personal loan for starting a new business:Peer to peer lending – Although they have been present in India few years back but are now gaining attraction due to mainly because of lower interest rate, speedy approval, and minimal documentation. Most importantly borrower has an option to interact directly with the investor/lender and negotiate on the interest. Private money lenders – The strict application process by banks and P2PL is very painful for the applicant. And this is a plus point for private money lenders who offer credit without asking for much documents but at a higher interest rate compared to banks or P2PL. Credit score is not checked by them, which is a biggest advantage. Though this option sounds very convenient, there are risks involved such as small repayment period, harassment in case of non-repayment of loan, not all are licensed lenders, illegal use of signed document and others. Remember that using personal loan for business is different than a business loan and should ideally be taken for small business with a small loan requirement. For larger amount, business loan are highly recommended that are offered by many banks in India.
This article has been written by Chandra Mehta.
Chandra is a seasoned banker with 35+ years of experience in banking and financial services industry. He’s a retired banker and has served as Chief Manager and Assistant Vice President in State Bank of India/or its subsidiaries.
He has authored many articles on this site (allonmoney.com).