Jan’20 – 40 Personal Loans for Low Income Earners (Rs.2000-30000) per Month

Personal Loan for Low Income Earners

Personal loan is one of the most profitable business category for a lender. And that is the reason why individuals receive so many calls/E-mails from such lenders/their partners asking whether you want personal loan.

However getting a lead i.e. when individual says YES for seeking personal loan is the first step. The real processing of the application begins after the loan application is received by the lender. And during the processing many of the applications are rejected especially low income earners seeking personal loan. And such individuals are not even told the reason for application rejection.

This is the reason why readers of this site (especially low income earners – salaried and self employed) have asked various queries related to personal loan as follows:

(1) Is personal loan for low income earners provided by Indian banks?

Answer: YES. There are many lenders and ways to get personal loan for low income earners.

(2) Can someone earning a salary of Rs. 15,000 or Rs. 10,000 per month or less get personal finance?

Answer: YES. There are many banks whose income criteria is within this range.

So if you want to know, various banks in India offering personal loan for low income earners then, this article will help you. So keep reading…


Personal Loan Income Required for Poor Earners

Is personal loan for low income earners possible in India especially in case of any emergency such as hospitalization, marriage and others?

The answer is YES. And it’s a myth that loans are granted only to high income earners (salaried or self employed). Personal loan for low income earners with salary as low as Rs. 5,000 are offered by banks in India.

Listed in the below table are the personal loan and monthly salary requirement of various Indian banks along with the interest rate applicable.

Sr.No.LenderMinimum Net Monthly Income RequiredAge LimitAnnual Interest RateLoan Amount Limit
1The West Bengal State Co-operative Bank Ltd.Rs. 2,00021-60 YearsNARs. 25,000 to Rs. 1,00,000
2The Andaman and Nicobar State Co-operative Bank Ltd.Rs. 5,00021-60 YearsNAUpto Rs. 2,00,000
3The National Co-operative Bank Ltd.Rs. 5,00021-60 Years16% – 18%Rs. 25,000
4City Union Bank (Consumer Loan) for SalariedRs. 5,00021-60 Years16%Rs. 50,000
5City Union Bank (Consumer Loan) for ProfessionalsRs. 6,25021-60 Years16%Rs. 50,000
6Janakalyan Sahakari BankRs.7,50021-60 Years16%Rs. 5,00,000
7State Bank of India (Xpress Credit Personal Loan)Rs. 7,500. This loan is only for the employees of state and government, PSUs, selected companies21-58 years13.35%Rs. 24,000 to Rs. 15,00,000
8Abhyudaya Co-operative BankRs. 8,00021-60 Years13%Rs. 5,00,000
9Thane Bharat Sahakari BankRs. 8,00021-60 Years16%Rs. 5,00,000
10HDB Financial Services (part of HDFC)Rs. 6,250 (Self employed – professionals, individuals, and private companies and partnership firm)22-65 yearsNAUp to Rs. 20,00,000
11HDB Financial Services (part of HDFC)Rs. 8,333 (for Doctors, CA, CS, Architects, Physiotherapist)22-65 yearsNAUp to Rs. 20,00,000
12Canara BankRs. 10,00021-58 years14% to 15%Rs. 3,00,000
13TJSB Sahakari BankRs. 15,00021-60 YearsNARs. 5,00,000
14PaySense (Consumer Loan)Rs. 12,000 for salaried and
Rs. 15,000 for self employed
25-60 years1.4% to 2.3% per month
15State Bank of IndiaRs. 10,000 (rural/semi-urban)21-58 years13.35%Upto Rs. 10,00,000
16ICICI BankRs. 15,000 (for individuals from Bangalore, Chennai, Hyderabad, Pune, Kolkata)23-58 years11.99% to 20.00%Rs. 50,000 to Rs. 15,00,000
17Dena BankRs. 15,00024-55 years13.00% to 14.30%Rs. 1,00,000
18HDFC BankRs. 15,000 (for individuals from Mumbai, Delhi, Bangalore, Chennai, Hyderabad, Pune, Calcutta, Ahmedabad, Cochin)21-60 Years15.75% to 20%Rs. 15,000
19Punjab National BankRs. 15,00021-58 years13.00% to 16.00%Rs. 4,00,000
20Axis BankRs. 15,00021-60 years15.50% to 24%Rs. 15,00,000
21ICICI BankRs.17,50023-58 years11.99% to 20.00%Rs. 50,000 to Rs. 15,00,000
22AEON CreditRs. 18,000 and above22-65 yearsDiffers for each individualMin: Rs. 30,000
Max: Rs. 2,00,000
23ICICI Bank (Privelege Banking Customer)Rs. 20,00023-58 years11.99% to 20.00%Rs. 50,000 to Rs. 15,00,000
24Allahabad BankRs. 20,00021-58 years13.00%Rs. 7,50,000
25Citi BankRs. 20,00021-58 years14.50% to 16.50%Rs. 30,00,000
26IDBI BankRs. 20,00022-60 years13.00% to 14.00%Rs. 10,00,000
27Standard CharteredRs. 22,000NA12.99%Rs. 1,00,000 to Rs. 30,00,000
28State Bank of IndiaRs. 24,000 (In metro and urban cities)21-58 years13.35%12 times net monthly income
29Bank of MaharashtraRs. 25,00021-60 years15.50% floatingRs. 15,00,000
30ICICI BankRs. 25,000 (for individuals from Mumbai & Delhi)23-58 years11.99% to 20.00%Rs. 50,000 to Rs. 15,00,000
31Yes BankRs. 25,00025-58 years10.50%Rs. 2,00,000 to Rs. 20,00,000
32Indusind BankRs. 25,00021-65 years12.99% to 18.25%
Rs. 15,00.000
33Deutsche Bank
Rs. 25,000
25-60 years
Upto 24%
Rs. 15,00,000
34Ratnakar BankRs. 30,00027-60 years14.50% to 18.00%Rs. 15,00,000
35Kotak Mahindra BankRs. 40,00021-55 years13% – 18%Rs. 15,00,000
36Bank of India40% of Gross Income21-58 years12.95% to 14.95%Rs. 2,00,000
37HSBC BankRs. 4,00,000 per annum21-58 years12.00% to 17.50%Rs. 15,00,000
38Indian Oversees Bank50% of Gross Salary21-58 years15.05%Rs. 15,00,000
39Karur Vysya Bank25% of Gross Salary21-58 years14.25% to 16.75%Rs. 10,00,000
40Central Bank40% of Gross Salary21-58 years13.45%Rs. 5,00,000

Based on the above table for individuals earning:

  1. Upto Rs. 10,000: Personal loan are granted by various co-operative banks, City Union Bank, State Bank of India, Abhyudaya Co-Operative Bank, The Greater Bombay Co-Operative Bank Ltd, Canara Bank
  2. Rs. 15,000 per month or more: Personal loan is provided by HDFC Bank, Dena Bank, Punjab National Bank, Axis Bank, ICICI Bank

Low income individuals can also get personal loan against fixed deposit, credit card and LIC policy. These are called as loan against securities and the interest rate charged is very less compared to traditionally applied loan. This is because banks keep control of your security until the repayment is fully done. Most importantly, income is not asked by the banks for this type of loan.

Note that, GST rates are now applied on various financial services. So borrower will have to shell out more money.

Eligibility criteria apart from the salary are: age, credit score, company worked for, work city, years staying in the current address. Also check out credit cards for poor income earners.

(3) Which banks in India has lowest income criteria?

Answer: The West Bengal State Co-operative Bank Ltd. requires lowest income i.e. Rs. 2,000 per month. But the applicant should be the member of the bank.

(4) What is the minimum income required by various commercial, private, co-operative banks for granting personal loan?

Answer: Refer below table showing minimum income required by various lenders.

(5) How to get loan when income slip or form-16 is not available?

Answer: There are 6 ways to get personal loan with no income proof in India. Ask friends/relatives, joint loan, against securities, private money lenders, co-operative banks, peer to peer lenders.

(6) Can someone get loan against securities in India?

Answer: Yes. Most of the banks in India offer loan against securities. Also called as secured personal loan. Check this article for more details.

The reason for above questions is that – For high salaried individuals getting a credit card or personal loan (or loan for car, home and others) is very easy as their repayment capacity is good due to their income. Individuals from this category are typically the target customers of banks and financial institutions who are ready to offer them loan/credit card.

Other Options to Get Loan for Low Income Earners

There are three more options to get personal loan irrespective of whether your income is high/low with no credit score check. The options are:

  1. Secured loan i.e. loan against collateral
  2. Friends/Relatives
  3. Private money lenders

Check out: How to get personal loan with no credit score check

Financial institutions keep on revising interest rate. For latest rate and loan amount, please contact banks where you are applying for the loan.

Also remember to repay monthly EMI on time. Frequent delayed repayments will affect your CIBIL score, which will give tough time in getting any type of credit in the future.

Not many people in India are aware of getting personal loan from peer to peer lending companies (also called PTPL or P2PL). These lenders offer loans at low interest rate and approvals are speedy. And these are best recommended for individuals with low income or poor CIBIL score/no credit or those who are in need of small credit. Check out comparison of banks and P2PL.

Read more: Credit cards for low income earners

Features of Personal Loan

  • The amount of credit offered is low since the minimum net income required is low. Quantum of loan is directly proportional to the income. i.e. higher the income, higher would be the credit offered.
  • Repayment tenure ranges from 1 year to 5 year.
  • Interest rate in case of unsecured loan is high ranging from 14% – 24%.
  • Processing fee charged in addition to the interest rate.
  • There is a prepayment penalty charged but not by every lender. Payment made before the actual tenure is actually loss making for the lender. This is the reason lenders charge extra money, if someone wants to end the loan before the standard tenure.
  • Depending on the city where borrower resides, the credit amount and monthly income required varies.
  • If the borrower stays in metro city like Mumbai, Pune, Chennai, Hyderabad, Bengaluru and others, the income requirement is high whereas someone staying in semi-urban city such as Nashik, Ahmedabad and others will be required less salary.

Documents Required

For verification purpose, most of the banks will ask for following documents from salaried employee:

  • Application form and passport size photograph
  • ID Proof: Passport / Driving License / Voters ID / PAN Card
  • Address Proof: Leave and License Agreement/ Utility Bill / Passport
  • Last 3/6 months bank statement
  • Salary slip for last 3/6 months
  • Income tax return for the last 3 years, business continuity proof and additional documents are requested from self employed individuals.

While choosing any type of loan, always select the one available at low interest rate. Read more on when to apply for personal loan. If you are interested in earning more money then check out simple ways to do it.

What are the risks to the banks when lending money to poor salaried?

There are two types of loans in India – secured and unsecured.

Personal loan can fall under both these categories. Assuming individuals with low salary has no collateral or guarantor to keep in the custody of the lender, the risk associated is high. This is because, in case of default, banks will end up losing money. Although they have full rights to recover money.

Author Bio – Chandra Mehta:

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).

He can be reached at [email protected]. You may also visit his LinkedIn profile.

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