HDFC Bank: Personal Loan for Rs.8333 Monthly Income Earners
HDFC Bank Limited is one of the largest private sector bank in India with market capitalization of Rs. 6,91,094 Crore (Source: Moneycontrol.com as on 07Nov2019). The bank offers various financial products such as loan, credit card, mutual funds and others.
What is a personal loan?
It is a loan of a certain amount of money (principal amount) granted by a financial entity (lender) to an individual entity (borrower), which involves the obligation of the latter to return the principal amount along with interest and expenses determined in the loan contract. This type of loan is offered to meet specific needs such as for marriage, medical expenses, travel, and others.
The most basic requirement to get loan is the income of the applicant. And depending on the income of salaried or self employed professional; loan is either approved or rejected and loan amount and interest rate is calculated.
Amongst the various financial services companies in India offering personal loan, HDFC Bank Limited is one of them. And in this article, we’ll discuss personal loan for low income earners from HDFC Bank.
HDFC Bank – Personal Loan for Rs. 8,333/Month Earning Professionals
HDFC Bank offers personal finance for following professionals earning a minimum income of Rs 8,333 per month:
- Chartered Accountants
- Company Secretary
For each of the above individuals; annual income required is very less Rs. 1,00,000 (1 Lakh i.e. less than Rs. 10,000 per month) and minimum 4-5 work experience is required after qualification. And the applicant’s age should be minimum 25 years and maximum 65 years.
Table below shows details of this loan:
|Minimum Net Monthly Required||Rs. 8,333 (Rs. 1,00,000 per annum)|
|Maximum Loan Amount||Rs. 75,00,000|
|Late Payment Fee||2% per month on EMI|
|Repayment Period||5 Years (Maximum)|
|Interest Rate||12.50% to 15.65%|
|Prepayment Charge of % Outstanding||07-24 Months – 4%
25-36 Months – 3%
>36 Months – 2%
|Processing Fees||Up to 2.50% of the loan amount subject (Minimum Rs. 2359) & Maximum (Rs. 88500/-)|
HDFC bank personal loan requires no collateral and can be used for various purposes such as purchase of medical devices, machineries, appliances, among others.
Table below shows EMI for the maximum tenure of 4 years at the interest rate of 14.15% for varying loan amount.
|Rs. 5 Lakh||Rs. 13,701|
|Rs. 8 Lakh||Rs. 21,921|
|Rs. 10 Lakh||Rs. 27,402|
What to look for when taking personal loan?
Speed: Visiting bank, submitting all documents is time consuming and physically exhaustive. So look for a lender who processes loan application online.
Convenience: Look for a lender who offers multiple EMI repayment options such as direct debit from the bank account, debit/credit card payment, cheque, ATM deposit and others. So that you don’t have to worry about paying on time.
Transparency: Avoid lenders who hide various charges. Everything should be detailed in the loan agreement.
Innovative: Thanks to the “Big Data Scoring” technology, the process of analysing the applicant’s data and granting the loan should be completely automated, so that loan is processed speedily.
Security: Customer data is the key to the borrower as well as. So make, sure the lender meets the necessary security standards for data protection.
Support: Customer support team should be available 24 hours a day, 365 days a year.
Remember that before signing a loan you must check the interest rates and all the repayment terms. Take your time, make your calculations, don’t make decisions lightly and don’t let yourself be carried away by advertising campaigns that promise a lot.
Fixed or Variable Interest Rate?
When you apply for a loan, the financial institution may offer you a fixed interest rate for a certain term or a variable rate, which, are reviewed at periodic intervals and may change at any time.
Which one to choose? That depends on many factors, because the future is uncertain. And there are no right or wrong answers about which one is better. However, you manage less risk with the fixed rate, you know what to stick to and plan accordingly. While with the variable rate, although it is true that it can go down, but at the same time it can go up, and this can generate distortion in your personal cash flow.
Therefore it is recommended to opt for a fixed interest rate, since it allows you to plan your money efficiently. Although most banks offer personal loan at a fixed interest rate, it is your duty to get it clarified before taking the loan.
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).