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Banks Offer Lower Rate On Personal Loan; But Is It Truly Less: Check What Interest Rates Are Being Offered?

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The situation as it is now with halt in various business activities and job losses, many in India and world over might be facing financial stress. Though some countries have begun to reopen as the situation has improved there, talking about India the situation is both critical and uncertain.

 

Amid this uncertainty what has also come as a huge distress is banks unwilling stance to lend easy money. In a conversation with a friend who applied for a personal loan, he faced rejection on the following grounds:

1. His employee was not registered on the panel of the bank's exclusive list

2. His salary was less

3. And the same was not verified or supported by the employer's HR group.

4. Further if at all, all the listed above factors were good he would have secured a personal from a private lender at a huge 19 percent.

Note for some of the private lenders to secure a personal loan, the minimum salary threshold has been hiked to Rs. 40000 per month.

Now considering this we may also bring to light that in the Covid 19 pandemic arena:

Banks highly cautious when it comes to lending money:

Banks highly cautious when it comes to lending money:

As it is the banking sector in not so distant far will feel the heat of the rising non performance accounts which were given a break or relaxation as part of the moratorium last year that they should not be classified as NPAs. But now, they have no way to go but be more safe with their lending.

Documentation changes amid the pandemic for personal loans

Documentation changes amid the pandemic for personal loans

Other than the usual salary slip that is to support that you are employed and can repay the borrowed money

Banks amid the pandemic have been asking for new documentation formalities such as:

1. A work from home(WFH) certificate issued by the employer.

2. Also the KYC is a definite need here with personal loan being an unsecured loan

 Personal loan rates slashed for various banks amid the pandemic:
 

Personal loan rates slashed for various banks amid the pandemic:

BankLoan ticket sizeInterest rate per annum
SBI Up to Rs. 20 lakh 9.6-13.85%
Bank of Baroda Rs. 50000 to Rs. 10 lakh 10-15.6%
PNB Up to Rs. 10 lakh 8.95-14.5%
Union Bank Up to Rs. 15 lakh 8.9-13%
HDFC Bank Rs. 50000 to Rs. 40 lakh 10.5-21%
ICICI Bank Up to Rs. 25 lakh 10.5-19%
Axis Bank Rs. 50000 to Rs. 15 lakh 10.49-21%
IndusInd Bank Rs. 50000 to Rs. 15 lakh Starts at 11%
HSBC Bank Up to Rs. 30 lakh 9.99-14%
Kotak Mahindra Bank Up to Rs. 20 lakh 10.75-24%
Bajaj Finserv Up to Rs. 25 lakh 13.00%

Now to get the best deal on a personal loan, your relationship with the bank, your credit worthiness, credit history, credit profile as well as your current earnings and future earning prospects all come into picture.

So, until and unless you have an handsome earning that draw you a minimum of say Rs. 50K per month, forgot about personal loans for now and may be scout for another fund raising ways.

GoodReturns.in

Read more about: loan personal loan coronavirus
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