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Personal loans for government employees

Unexpected financial emergencies can happen to anyone irrespective of where they are employed. Personal loans may come in handy during these unforeseen circumstances and help people with their specific needs. Government jobs in India are considered to have better stability compared to other jobs in the private sector. Due to this reason, there are banks that offer attractive discounts and special interest rates for government employees. If you are a government employee, you may avail these benefits and make the most out of your personal loan.

Comparison of personal loans for government employees

Some of the personal loan products available for government employees in India are listed as follows:

Lender Interest Rate Maximum loan amount Maximum loan tenure
Oriental Bank of Commerce 11.5% p.a. Rs.10 lakh 60 months
State Bank of India From 12.05% p.a. onwards (for defense, paramilitary, and coast guard personnel) Rs.15 lakh 60 months
Bajaj Finserv From 12.99% onwards Rs.25 lakh 60 months
Axis Bank From 16% p.a. onwards Rs.15 lakh 60 months

Oriental Bank of Commerce

Oriental Bank of Commerce is one of the lenders in the market that offers loans for government employees at discounted interest rates. The interest rate offered to government employees is about 1% lower than the interest rate offered to other salaried employees. It offers loans for up to 15 times the gross salary of the employee subject to a maximum of Rs.10 lakh. The take-home salary of the employee should not be less than 30% of the gross salary after paying for all the outstanding EMI installments.

Benefits and key highlights:
  • The monthly income requirement for government employees who have their salary accounts in OBC is Rs.10,000.
  • A guarantor (preferably a fellow government employee) is required for availing this loan.
  • The documentation and approval process are very simple for government employees.
Bank Name Processing Fee EMI (for Rs.1 lakh) Pre-Closure Charges
Oriental Bank of Commerce 0.50% of the loan amount subject to a minimum of Rs.500 Rs.2,199 (for loan tenure of 60 months) Nil

*Service tax or GST may be applicable over the charges given here

State Bank of India

India’s largest lender State Bank of India (SBI) has different types of personal loan products in its lineup. Under the Xpress Credit scheme, it offers a special interest rate for defense personnel in the country. The maximum interest rate for defense, paramilitary, and Indian coast guard personnel is restricted to 12.55% p.a. For other applicants, this may be up to 15.05% p.a.

Benefits and key highlights:
  • The bank promises fast and easy processing for all applicants.
  • Applicants do not have to provide any collateral to avail this loan.
  • It also provides the option of taking a second loan one year after the disbursal of the first loan. Repayments must be done properly to avail the second loan.
Bank Name Processing Fee EMI (for Rs.1 lakh) Pre-Closure Charges
State Bank of India 1% of the loan amount Rs.2,227 (for tenure of 60 months) Nil

*Service tax or GST may be applicable over the charges given here

Bajaj Finserv

Bajaj Finserv is one of the top players in the non-banking financial sector. The personal loan offered by the company can be used by people employed in different professions. The company sets interest rates based on the risk profile of the individual. Since government employees have a very low risk with their employment, they can avail personal loans at a competitive interest rate from the company.

Benefits and key highlights:
  • It is possible to get approval instantly and get the loan amount within just 24 hours.
  • The documentation process is easy, and it can be done online.
  • The company offers personal loans without any hidden charges.
Bank Name Processing Fee EMI (for Rs.1 lakh) ForeClosure Charges
Bajaj Finserv 3.99% of the loan amount Rs.2,275 (for tenure of 60 months) 4% of the outstanding loan amount

*Service tax or GST may be applicable over the charges given here

Axis Bank

Axis Bank is one of the most popular banks in the private banking industry. The personal loan product offered by the bank is available for salaried employees working in the government as well as private sectors. The approval process is quite easy for government employees who earn at least Rs.15,000 per month.

Benefits and key highlights:
  • The documentation process is minimal, and the bank offers instant approval for all valid requests.
  • The bank offers a flexible repayment process with multiple modes of payment.
Bank Name Processing Fee EMI (for Rs.1 lakh) ForeClosure Charges
Axis Bank 1.50% to 2% of the loan amount Rs.2,432 (for tenure of 60 months) Nil

*Service tax or GST may be applicable over the charges given here

Eligibility criteria for government employees

The eligibility criteria outlined by various banks for personal loans are given as follows:

  • Most banks in the market provide personal loans for all salaried employees. For government employees, the process is much easier. Employees working in any public sector unit (PSU) can benefit from the loans offered to government employees. In addition to central and state government departments, employees of government schools and colleges can also avail these loans.
  • The age criteria outlined by banks may vary from one bank to another. Most of the banks in the market require the applicant to be at least 21 years old. At the time of maturity of the loan, the borrower must be less than 60 years of age.
  • Banks also have specific income criteria for borrowers. In most cases, borrowers must earn at least Rs.15,000 per month. Some banks provide certain relaxation in this criterion if the salary account of the government employee is in that particular bank.
  • The applicant must not have too many obligations with respect to other loans and liabilities. It is necessary that the take-home salary of the applicant must not be less than 30% of the gross income after paying for all loan EMIs.
  • The employment tenure of the individual is also considered by banks before providing loans. For government employees who are employed in the job for at least one year, there will not be any issue in getting a loan. However, people who have just entered the government service may check with the bank about their lending policy.

Documents required for getting personal loans

The documents required for government employees are listed as follows:

  • Identity proof
  • Address proof
  • Proof of employment
  • Salary slips (for at least 6 months)
  • Bank statement (for at least 12 months)
  • Signature proof verification

Things to consider before taking personal loans

If you are thinking about taking personal loans, you must consider the following factors:

  • You need to check out the interest rates and charges from multiple lenders before narrowing down on a particular loan product. By researching the products in the market, you can find the best personal loan suitable for your emergency needs.
  • Government employees who have their salary account with the lending bank can avail additional discounts on their loans. You may check with your bank regarding the offers available for you.
  • Pre-approved loans are offered only to customers of a bank. These loans are approved instantly, and they are disbursed within a few hours. If you need the loan urgently, you may check for the availability of pre-approved loans.
  • The charges imposed on personal loans vary from one bank to another. In addition to the interest rate, you must also focus on these charges to minimise the cost of getting a loan.
  • Before you choose the loan tenure, you need to check whether the EMI amount fits within your monthly budget. If the EMI is too high, you may have trouble repaying the loan on time. Plan your budget and choose the loan tenure accordingly.

How to apply?

You may use the following steps to apply for a personal loan:

  • Visit the official website of the lender and check out the information provided about personal loans. Most lenders provide an online application process to help their customers. You can simply fill out the details and wait for the bank to get back to you.
  • You may also visit the branch office of the bank and apply for the personal loan. You need to carry all the required documents and check with an agent at the bank to apply for the loan.
  • You may also use the services of a third-party aggregator like BankBazaar to apply for the loan. You can use the BankBazaar mobile app to keep track of your application.


1. What is the loan tenure available for personal loans?

The loan tenure typically varies from 12 months to 60 months. You can choose the desired loan tenure based on how much you can afford to pay in installments every month.

2. How much time do banks take to process personal loans?

With the advent of technology, it is now very easy to get your personal loan approval. Most banks provide their approval within just a few hours. The loan amount will be disbursed within just one or two days in most cases.

3. What are the occasions in which personal loans are offered?

Banks do not impose any restrictions on how the loan amount can be spent. Hence, you can take a personal loan for any occasion based on your financial requirements. You may use the loan amount for various things like emergency medical needs, wedding, home renovation, vacation, etc.

4. Is it okay for retired government employees to apply for personal loans?

Most banks provide personal loans to individuals who are still employed. Hence, it could be a little difficult for retired employees to get personal loans. You may check with the lender with your requirement to know your eligibility for obtaining a personal loan.

5. What is the best way to get a good deal on personal loan interest rates?

Banks consider various factors when they determine the interest rate for a personal loan. If you want the best interest rates possible, you must have a good credit score. This shows that you have a good credit history and you are at low risk of default. It is also better to have your other loans cleared before applying for a personal loan. If your risk level is low, banks provide a good deal on personal loan interest rates.

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