2021: Personal Loan for Low Income (Rs.2000-30000) Earners
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 poor income earners possible in India especially in case of any emergency such as hospitalization, marriage and others?
Yes. Yes, it is possible. 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.
(2) Is personal loan for low income earners provided by all the banks?
No. There are very few lenders that offer personal loan for low income earners, as listed in the below table.
|Sr.No.||Lender||Minimum Net Monthly Income Required (in INR)||Equivalent Annual Income Required (in INR)||Age Limit||Loan Amount Limit|
|1||The West Bengal State Co-operative Bank Ltd.||2,000||24,000||21-60 Years||Rs. 25,000 to Rs. 1,00,000|
|2||The Andaman and Nicobar State Co-operative Bank Ltd.||5,000||60,000||21-60 Years||Upto Rs. 2,00,000|
|3||The National Co-operative Bank Ltd.||5,000||60,000||21-60 Years||Rs. 25,000|
|4||Janakalyan Sahakari Bank||7,500||90,000||21-60 Years||Rs. 5,00,000|
|5||HDB Financial Services (part of HDFC)||6,250 (Self employed – professionals, individuals, and private companies and partnership firm)||75,000||22-65 years||Up to Rs. 20,00,000|
|6||State Bank of India (Xpress Credit Personal Loan)||7,500. This loan is only for the employees of state and government, PSUs, selected companies||90,000||21-58 years||Rs. 24,000 to Rs. 15,00,000|
|7||Abhyudaya Co-operative Bank||8,000||96,000||21-60 Years||Rs. 5,00,000|
|8||Thane Bharat Sahakari Bank||8,000||96,000||21-60 Years||Rs. 5,00,000|
|9||HDB Financial Services (part of HDFC)||8,333 (for Doctors, CA, CS, Architects, Physiotherapist)||99,996||22-65 years||Up to Rs. 20,00,000|
|10||Canara Bank||10,000||1,20,000||21-58 years||Rs. 3,00,000|
|11||TJSB Sahakari Bank||15,000||1,80,000||21-60 Years||Rs. 5,00,000|
|12||State Bank of India||10,000 (rural/semi-urban)||1,20,000||21-58 years||Upto Rs. 10,00,000|
|13||PaySense (Consumer Loan)||12,000 for salaried and |
15,000 for self employed
|1,44,000 & 1,80,000||25-60 years|
|14||ICICI Bank||15,000 (for individuals from Bangalore, Chennai, Hyderabad, Pune, Kolkata)||1,80,000||23-58 years||Rs. 50,000 to Rs. 15,00,000|
|15||Dena Bank||15,000||1,80,000||24-55 years||Rs. 1,00,000|
|16||HDFC Bank||15,000 (for individuals from Mumbai, Delhi, Bangalore, Chennai, Hyderabad, Pune, Calcutta, Ahmedabad, Cochin)||1,80,000||21-60 Years||Rs. 15,00,000|
|17||Punjab National Bank||15,000||1,80,000||21-58 years||Rs. 4,00,000|
|18||Axis Bank||15,000||1,80,000||21-60 years||Rs. 15,00,000|
|19||ICICI Bank||17,500||2,10,000||23-58 years||Rs. 50,000 to Rs. 15,00,000|
|20||AEON Credit||18,000 and above||2,16,000||22-65 years||Min: Rs. 30,000
Max: Rs. 2,00,000
|21||ICICI Bank (Privilege Banking Customer)||20,000||2,40,000||23-58 years||Rs. 50,000 to Rs. 15,00,000|
|22||Allahabad Bank||20,000||2,40,000||21-58 years||Rs. 7,50,000|
|23||Citi Bank||20,000||2,40,000||21-58 years||Rs. 30,00,000|
|24||IDBI Bank||20,000||2,40,000||22-60 years||Rs. 10,00,000|
|25||Standard Chartered||22,000||2,64,000||NA||Rs. 1,00,000 to Rs. 30,00,000|
|26||State Bank of India||24,000 (In metro and urban cities)||2,88,000||21-58 years||12 times net monthly income|
|27||Bank of Maharashtra||25,000||3,00,000||21-60 years||Rs. 15,00,000|
|28||ICICI Bank||25,000 (for individuals from Mumbai & Delhi)||3,00,000||23-58 years||Rs. 50,000 to Rs. 15,00,000|
|29||Yes Bank||25,000||3,00,000||25-58 years||Rs. 2,00,000 to Rs. 20,00,000|
|30||IndusInd Bank||25,000||3,00,000||21-65 years||Rs. 15,00.000|
|31||Deutsche Bank||25,000||3,00,000||25-60 years||Rs. 15,00,000
|32||Ratnakar Bank||30,000||3,60,000||27-60 years||Rs. 15,00,000|
|33||Bank of India||40% of Gross Income||-||21-58 years||Rs. 2,00,000|
|34||Indian Oversees Bank||50% of Gross Salary||-||21-58 years||Rs. 15,00,000|
|35||Karur Vysya Bank||25% of Gross Salary||-||21-58 years||Rs. 10,00,000|
|36||Central Bank||40% of Gross Salary||-||21-58 years||Rs. 5,00,000|
Based on the above table for individuals earning:
- Upto Rs. 10,000: Personal loan are granted by various co-operative banks, State Bank of India, Abhyudaya Co-Operative Bank, The Greater Bombay Co-Operative Bank Ltd, Canara Bank
- Rs. 15,000 per month or more: Personal loan for Rs. 15,000 income is provided by HDFC Bank, Dena Bank, Punjab National Bank, Axis Bank, ICICI Bank.
Remember that, a call/Email/SMS from a lender does not mean, personal loan is approved. 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 of the low income earners seeking personal loan. And such individuals are not even told the reason for application rejection.
FAQ from Poor Earning Individuals Needing Personal Loan
If you have any queries related to personal loan for poor earners then keep reading the questions below asked by the readers of this site.
(3) Can someone earning a salary of Rs. 15,000 or Rs. 10,000 per month or less get personal finance?
Yes. There are many banks whose income criteria is within this range. Refer table above.
(4) Which banks in India has lowest income criteria?
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.
(5) What is the minimum income required by various commercial, private, co-operative banks for granting personal loan?
Refer above table showing minimum income required by various lenders.
(6) How to get loan when income slip or form-16 is not available?
There are 3 ways to get personal loan with no income proof in India.
- Ask friends/relatives
- Against securities
- Private money lenders
(7) Can someone get loan against securities in India?
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 such 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.
(8) Can you generate fake salary slip for personal loan?
This practice is done by many applicants. However you should never do this. Producing fake income documents may result in legal action against you. Refer this article on implications of producing forged pay slips for getting loan or increasing the higher credit.
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 and no income proof. The options are:
- Secured loan i.e. loan against collateral
- Private money lenders
Personal Loan against Fixed Deposit for Poor Earners
Low income individuals can also get personal loan against FD, credit card, LIC policy, shares, mutual fund, and others. 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.
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.
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.
I am Nikesh Mehta, sole owner and writer of this site.