Unsecured Personal Loan for Low Income Earners from 17 Lenders
If you are a low income earner looking for money either for medical treatment, remodeling your old house, etc. and thinking of applying for a loan, then this article will be helpful.
There are multiple ways of getting personal loan for low income earners (or high income earners). But the two most common options are unsecured and secured loan. And before applying for a loan, you should know the difference between these two.
- Secured (With collateral) – Secured loans and lines of credit are guaranteed against your assets, which results in a higher loan amount and lower interest rates.
- Unsecured (Without collateral) – This is a cash advance loan that does not require any collateral and are approved faster within 24 hours.
In this article, we’ll get into the detail of unsecured personal loan for low income earners, so that you can choose the most appropriate option according to your financial and the best online personal loan.
Unsecured Personal Loan for Low Income Earners
Many direct online loan lenders offer personal financing purely based on your creditworthiness and your ability to repay the loan. Therefore, borrowers who have nothing of value that can serve as collateral may consider the unsecured loan a better alternative to financing, as it is not tied to the borrower’s assets.
Therefore, the lender cannot automatically seize asset in case of failure to repay. Generally, you need to have a good credit history and good income to be approved for an unsecured loan.
But what is considered a good income for personal loan?
While there is no standard number for the income to be considered high or low? But a minimum net monthly income of Rs. 10,000 or more is generally considered good to avail a decent loan amount.
Which lenders offer unsecured loan to poor income earners?
There are many lenders offering loan to individuals earning less and the below table displays list of all such banks, income criteria and the loan amount:
|Sr.No.||Lender||Minimum Net Monthly Income Required||Loan Amount Limit|
|1||The West Bengal State Co-operative Bank Ltd.||Rs. 2,000||Rs. 25,000 to Rs. 1,00,000|
|2||The Andaman and Nicobar State Co-operative Bank Ltd.||Rs. 5,000||Upto Rs. 2,00,000|
|3||The National Co-operative Bank Ltd.||Rs. 5,000||Rs. 25,000|
|4||Janakalyan Sahakari Bank||Rs.7,500||Rs. 5,00,000|
|5||Abhyudaya Co-operative Bank||Rs. 8,000||Rs. 5,00,000|
|6||Thane Bharat Sahakari Bank||Rs. 8,000||Rs. 5,00,000|
|7||HDB Financial Services (part of HDFC)||Rs. 6,250 (Self employed – professionals, individuals, and private companies and partnership firm)||Up to Rs. 20,00,000|
|8||HDB Financial Services (part of HDFC)||Rs. 8,333 (for Doctors, CA, CS, Architects, Physiotherapist)||Up to Rs. 20,00,000|
|9||Canara Bank Consumer Loan||Rs. 6,000 after meeting the loan installment||Rs. 1,00,000|
|10||TJSB Sahakari Bank||Rs. 15,000||Rs. 5,00,000|
|11||Dena Bank||Rs. 15,000||Rs. 1,00,000|
|12||HDFC Bank||Rs. 15,000 (for individuals from Mumbai, Delhi, Bangalore, Chennai, Hyderabad, Pune, Calcutta, Ahmedabad, Cochin)||Rs. 15,00,000|
|13||Punjab National Bank||Rs. 15,000||Rs. 4,00,000|
|14||Axis Bank||Rs. 15,000||Rs. 15,00,000|
|15||SBI Xpress Credit Personal Loan||Rs. 15,000||Rs. 20,00,000|
|16||ICICI Bank||Rs. 17,500||Rs. 50,000 to Rs. 15,00,000|
|17||AEON Credit||Rs. 18,000 and above||Min: Rs. 30,000
Max: Rs. 2,00,000
HDB Financial Services Limited (HDBFS)
- Both salaried and self employed individuals can apply for the loan
- Self employed should be in business for minimum 3 years
- Self employed individuals can be doctors, chartered accountants, architects, company secretaries, sole proprietors, partners & directors in the business of manufacturing, trading or services.
- Loan tenure is 1 year to 5 years
- No need of guarantor
- Very minimal documentation
- Income proof required from salaried are the latest 3 months salary slip along with latest Form 16 / ITR / appointment letter. Self employed individuals need to furnish latest ITR along with computation of income, B/S & P&L a/c for the last 2 years certified by a CA.
- Loan amount can be used for buying home appliances, furnitures, electronic devices such as computers, laptops, electronic gadgets, and others
- Repayment term is 3 years
- Processing fee is 1% of the loan amount with a minimum of Rs. 250.
- Interest rate is between 12.55% to 14.60%
SBI Xpress Credit Loan
- No hidden costs
- Minimal documentation
- No guarantor
- Minimum loan amount offered is Rs. 25,000
- This loan is only for individuals having salary account with State Bank of India
- Processing fee is 1.50% of the overall loan amount. Minimum is Rs. 1,000 and maximum ₹15,000
- 3% prepayment charges
- Minimum repayment period of 6 months and maximum of 6 years
ICICI Bank Personal Loan:
- Personal loan available for wedding, holidays, home renovation, freshers
- Borrower gets cash in 3 seconds
- No change in interest rate till the loan tenure ends
- Flexi tenure can be chosen 12 to 60 months
- Interest rate is 11.25% to 17.99% per annum
Features of Collateral Free Loan
- Because this product is not guaranteed by any type of asset, it indicates a higher risk for lenders.
- The amount of money accessible through an unsecured cash advance is comparatively less than what you can normally get through a secured loan.
- Interest rates are higher, as compensation for the risk the lender takes.
- Non-collateral loans (without committed assets) are considered risky for lenders. This is because there are no essential personal assets that can be recovered, in case of loan default.
- Loan term is fixed and EMIs remain constant for a certain number of installments.
- The approval process is instantaneous and funds are quickly deposited into your authorized account.
- The credit application can be done 100% online, including the signing of the contract which is done electronically, so there is no need to print any documents.
So before borrowing money from a bank or financial services company:
- It’s wise to understand the pros and cons of your loan option.
- It’s also important that you know the lender you’re borrowing from, the rates, fees involved, terms, conditions and eligibility criteria.
- Regardless of the loan product, be sure to repay your loan responsibly.
- Take help of loan comparison website, as they provide detailed information about multiple lenders.
- Remember that, the loan amount depends on multiple factors and income is one of the them. Low income but a very loan amount is not possible, because of the repayment capacity of the borrower.
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).