An unsecured personal loan is a loan on which particular borrowers do not require a form of security such as a house or car that being used to secure the loans. Instead the borrower”s entire personal credit history is measured through a credit check which is further used to decide when the particular loan will be offered to an individual.
Personal loan rates in the country generally vary on diverse criteria which purely depend on the income level. In the country, there are n numbers of banks and each of the banks has different classifications that based on diverse interest rate.
There are numerous important factors which usually determine particular personal loan interest rate which includes income, your company status, credit and payment history, relationship with the bank you intend to take loan from, individual”s negotiating ability and many others. Generally most of the personal loans in India have both good and bad points which give extra benefits to the people with their standard interest rate.
Without searching, you cannot find best deals for you. To get beneficial and advances solutions, it is important to get best deals which are offered by various companies in the country. Each company has its own rules and regulations which offer unsecured personal loans.
All these policies have both pros and cons but to understand them better, you need to compare these loans with each other to get beneficial results in the end. ICICI Bank, HDFC Bank, Bajaj Finserv, ING Vysya, Standard Chartered Bank, Citibank, Andra Bank, Bank of Baroda, United Bank of India and many others are some famous and renowned banks which provide personal loans in India.
Unsecured loans are generally for lower amounts as compare to the secured loans. Lenders usually have rigid requirements for borrowers which are concerned with the unsecured loans. Lenders usually prefer higher credit scores which will further considered as verifying income and comparing the debt to income ratio of the borrower.
The best way to get beneficial deals is by doing comparison between several unsecured personal loans in the country. Policy Bazaar compares these personal loan rates by using criteria and creates list of the unsecured personal loans that may be best deals for your personal circumstances. There are numbers of banks which offer personal loans in India. To get loan from these banks, you can easily apply for these loans to get beneficial results in the end.
Education finances are boon for people who want to do higher
studies but could not afford it. Education Loan in India is provided by
banks and financial institutions and covers fee for all years, which is
normally disbursed to the college/institute directly by the bank. The
finance amount also covers most of the boarding and lodging expenses.
Here are answers to questions that boggle one’s mind before taking an
What are the eligibility criteria?
The person taking the loan should have secured admission in the
institute. The institute or course of study must be recognized by
UGC/AICTE/AIBMS/ICMR, etc. The person needs to be an Indian citizen and
should be 17 years old or above.
What are the courses covered?
Education Loan in India is available for all approved courses leading
to Graduate/Post Graduate Degree and PG Diploma conducted by recognized
colleges/universities recognized by UGC/AICTE/AIBMS/ICMR, etc. Education
Loan is also available for part time courses and job oriented courses
subject to employability and earning potential. An education loan for
study abroad is also available for job oriented professional/technical
courses offered by reputed universities.
What are the expenses covered?
The amount is provided to meet all type of expenses which are necessary
for completion of course that includes purchase of books, equipments,
computer, travelling, study tours, boarding, lodging besides all types
What are Documents required?
Documents like age proof, address proof, proof of clearing last
qualification, prospectus of course, letter of admission, income proof
of parents or guardians, etc are mandatory to be submitted even before
the bank considers the loan application. The bank will verify the
enrollment of the student from the concerned institute. One may also
require collateral security such as papers relating to property to be
mortgaged if the loan amount is above Rs. 4 lakh.
Some banks or financial institutions require all or any of the following documents as pre sanction documents:
What is moratorium period or holiday period?
It is the maximum time given to the student after finishing studies
that go without catering any payments for your loan. Mostly, it range
from 6 to 12 months.
What is the repayment tenure?
The repayment tenure depends on the amount of loan taken and type of
course. The minimum time given to repay the loan is 1 years and maximum
is 10 years.
Why guarantor is mandatory?
The guarantor could be an applicant’s parents or guardians who take the
responsibility for the repayment of loan in case of any mishap. The
bank will go through the guarantor’s credit history and also verify the
same before sanctioning the loan.
Is there any tax benefit?
The moment a person start repaying the education loan, he/she can
deduct the interest amount from the total income while calculating tax.
This means the effective interest rate on the loan works out to a lower
State Bank of India is the foremost and most trusted banks in India. SBI along with its combine branches has a distribution more than 16,000 branches, which is the largest in any network of banking. BNP Paribas, Euro Zones leading Bank and is the oldest foreign bank having an existence in India. BNP Paribas Assurance has a chief presence in Latin America, Europe and Asia and is among the top15 insurance company in Europe. The company has other joint venture in Asia in countries like Vietnam, Taiwan, Thailand and South Korea.
SBI Personal Loan is the best options for individuals who require the urgent money. SBI also provides the attractive rates and easy flexible repayment options. Below are the various features, eligibility criteria and documentation required for the loan approval.
Features: People can avail SBI Personal Loan for various different purposes or events in life such as domestic or foreign travel, medical emergencies, marriage, education, paying the bills, consolidates the debt, dream vacations, small business establishment and home renovation. The bank provides the minimum loan amount up to Rs. 24,000 in metro cities and Rs. 10,000 in semi urban or rural cities. The maximum amount is 12 times net monthly salary for pensioners and salaried person and the maximum loan amount is up to 10 Lacs.
There is no need to give any security or collateral to the person for availing Personal loan. The maximum repayment period is up to 4 years.
Eligibility: The salaried person who has two years experience from any reputed company is eligible for SBI Personal Loan. The self-employed individual with 2 years of experience is eligible for the personal loan.
Charges: The banks charge the processing fee from 2 to 3 percent of the loan amount. The banks also charge the prepayment charges up to 1% of the loan amount if the borrower repays the loan before 6 months of the loan period.
Documents Required: The documents required by the banks for salaried individual are Application form with recent two passport size photographs, latest salary slip, residence proof, ID proof and bank statement for last three months.
Self employed individual have to give the documents like the application form with 2 photographs, Income Tax Returns (ITR) for last two years, proof of Residence, identity proof and bank statement for last six months.
People can get the instant approval for SBI Personal Loan if they are eligible and provide all the required documentation to the bank.
Even as it chases new customers, State Bank of India has set its sights on offering existing customers second home loans to grow its retail portfolio.
Increase in disposable income as a result of substantial jump in the pay of employees working in the Government (Central and States), public sector enterprises, banks and private sector firms has prompted the bank to woo existing customers with good track record with an offer of a second home loan. The bank is also encouraging its employees to take a second home loan.
India’s largest lender wants to take advantage of the emerging trend whereby people own their first home by the age of 25 and second by 35. The second home is for investment purposes.
Currently, 96 per cent of SBI home loan borrowers are first-time borrowers.
Capacity to pay
We know that customers’ income is rising. Hence, we look at their Equated Monthly Instalment to Net Monthly Income ratio. If the higher income is sufficient to cover the second home loan, we would make the offer without any hesitation. We don’t look at the value of the property, but the customers’ capacity to repay his/her loan, said a senior official.
This year, SBI is eyeing a 32 per cent year-on-year growth in its home loan portfolio. It plans to disburse Rs 22,000 cr (Rs 17,130 cr in FY2010).
In the first two months of the current financial year, the home loan portfolio has grown by around Rs 2,800 cr, from Rs 71,193 cr as on March 31, 2010 to around Rs 74,000 cr.
Besides sourcing customers, sanctioning and disbursing loans, SBI is laying thrust on follow-up with customers in cases where they fall behind on their mortgage payments.
The bank has roped in SBI credit card which has expertise in soft recovery. The follow-up involves contacting customers on telephone, reminding them about the delay in payment, and reverting to the bank with their response.
The bank is also strengthening the capacity of its 116 retail loan processing centres so that they can process loan application faster.
Although the bank will continue with its 8% teaser rate which the SBI had introduced more than a year ago for the first year, it has increased rates for the subsequent years, effective April 1. The hike in home loan rates by SBI was triggered by the recent increase in its cost of funds.
Till March 31, SBI had two schemes The Easy Home Loan (up to Rs 50 lakh) and Advantage Home Loan (above Rs 50 lakh). From April 1, both the schemes have been merged and extended for a month,” an SBI spokesperson confirmed to TOI. The rates applicable for new loans sourced from April 1 till April 30 are 8% for the first year, 9% for the second and third years and floating rate at 1.75% below SBAR (SBI’s equivalent of prime lending rate, or PLR) thereafter,” the spokesperson added.
So in effect, the home loan rates for the second and the third years have gone up by 50 basis points (100 basis points=1%), from 8.5% earlier to 9% now. While fourth year onwards, at the current structure, the interest rate will be at 10% per annum, since currently SBAR is at 11.75%. Earlier, from the fourth year onward, the floating rate was at 2.75% below the SBAR and the effective rate was 9%.
Under the new rate structure (assuming a 10% rate from the fourth year), on a 20-year loan of Rs 30 lakh, a customer would have to shell out about Rs 3.9 lakh over the tenor of the loan. Thus the effective rate that the customer would be paying over the 20-year period is 9.5%.
Explaining the rationale for hiking rates on home loans, the SBI spokesperson said it mainly reflected the increased cost of funds from April 1 stemming from the new methodology for paying interest in savings bank accounts on daily balances.” In April 2009, Reserve Bank of India (RBI) had mandated all the banks in India to move to a new methodology of calculating interest rates on savings bank accounts that would add interest on a daily basis. This is a significant departure from the earlier practice of calculating interest rate on minimum balance after the tenth of every month.
For sometime now, with the annual rate of food inflation hovering around 20% level and the yields on benchmark 10-year government securities around the 8% mark, bankers and home finance veterans were talking about the possibility of a hike in interest rate in the economy. And now with SBI, the country’s largest bank, hiking housing loan interest rates, industry players are almost sure that interest rates have bottomed out in the current cycle.
Lately a number of banks and financial institutions, including the country’s home loan pioneer HDFC, have withdrawn their home loan products at 8% or at a slightly lower rates, and are moving to a more sustainable interest rate structure.