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Government employees can avail loans from banks such as Oriental Bank of Commerce, HDFC Bank, Axis Bank, and State Bank of India for interest rates starting from as low as 10.6% p.a. While Union Bank of India levies no processing charges, a few others levy 0.5% to 3.99% of the loan amount as processing charges. The maximum loan tenure for personal loans offered to government employees is 72 months.
Some of the personal loan products available for government employees in India are listed as follows:
Bank | Interest Rate | Max. Loan Amount | Max. Loan Tenure |
---|---|---|---|
State Bank of India | 12.50% p.a. onwards (for defence, paramilitary, and coast guard personnel) | Rs.15 lakh | 72 months |
Axis Bank | 15.75% p.a. | Rs.15 lakh | 60 months |
Bajaj Finserv | 11.99% | Rs.25 lakh | 60 months |
HDFC Bank | 11.25% | Rs.40 lakh | 60 months |
Union Bank | 10.60% onwards | Rs.10 lakh | 60 months (One year prior to retirement) |
Oriental Bank of Commerce | 11.5% p.a. | Rs.10 lakh | 60 months |
IDBI Bank | 12.9% p.a. | Rs.10 lakh | 60 months |
State Bank of India (SBI) offers a special interest rate for defence personnel in the country, under the Xpress Credit personal loan scheme. The maximum interest rate for defence, paramilitary, and Indian coast guard personnel is restricted to 12.50% p.a. For other applicants, this may be up to 15.40% p.a.
Benefits and key highlights:Bank | Processing Fee | EMI per Lakh | Pre-Closure Charges | |
---|---|---|---|---|
SBI | 1% + Taxes | Rs.2,250 | 3% on pre-paid amount |
*Service tax or GST may be applicable over the charges given here
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:Bank | Processing Fee | EMI per Lakh | Pre-Closure Charges | |
---|---|---|---|---|
Axis | 1.50% to 2% | Rs.2,419 | Nil |
*Service tax or GST may be applicable over the charges given here
Bajaj Finserv offers a special personal loan product specifically for government employees. The interest rates for this product start from as low as 11.99% p.a. The bank allows the borrower to manage the loan and track the repayment schedule online.
Benefits and key highlights:Bank | Processing Fee | EMI per Lakh | Pre-Closure Charges | |
---|---|---|---|---|
Bajaj Finserv | Up to 3.99% | Rs.2,275 | 4% of the outstanding loan amount |
*Service tax or GST may be applicable over the charges given here
HDFC Bank offers its personal loan scheme to private limited companies as well as government employees. Applying for a loan with the bank is simple and involves minimal documentation. You can apply for the loan online through the bank’s official website.
Benefits and key highlights:
Bank | Processing Fee | EMI per Lakh | Pre-Closure Charges | |
---|---|---|---|---|
HDFC | Up to 2.50% | Rs.2,405 | 2% - 4% of the outstanding loan amount |
*Service tax or GST may be applicable over the charges mentioned above
Union Bank of India offers retail loans to government employees who are in need of immediate funds. The Union Personal loan scheme is offered at two interest rates depending on whether the employer’s undertaking is available or not. If the employer’s undertaking is available, the rate will be the latest 1-year MCLR+2%, whereas if the employer’s undertaking is not available, the rate will be the latest 1-year MCLR+3.5%.
Benefits and key highlights:
Bank | Processing Fee | EMI per Lakh | Pre-Closure Charges | |
---|---|---|---|---|
Union Bank of India | Nil | Rs.2,154 | 1% on outstanding liability |
*Service tax or GST may be applicable over the charges mentioned above
IDBI Bank offers its personal loan scheme to salaried individuals, non-professionals, self-employed professionals, and pensioners. The loan provides a free personal accident insurance cover. Pensioners who apply for a personal loan with the bank will have to provide a third-party guarantee.
Benefits and key highlights:
Bank | Processing Fee | EMI per Lakh | Pre-Closure Charges | |
---|---|---|---|---|
IDBI | 1% of the loan amount | Rs.2,270 | Nil to 2% |
*Service tax or GST may be applicable over the charges mentioned above
Oriental Bank of Commerce offers a personal loan scheme exclusively for confirmed and permanent employees of PSUs, state and central governments, and other government institutions. It is a term loan that allows interested loan applicants to avail loans up to Rs.10 lakh.
Benefits and key highlights:Bank | Processing Fee | EMI per Lakh | Pre-Closure Charges | |
---|---|---|---|---|
OBC | 0.50% (minimum of Rs.500) | Rs.2,199 | Nil |
*Service tax or GST may be applicable over the charges given here
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 instalments every month.
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.
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.
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.
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.
A GST rate of 18% will be applicable on banking services and products from 01 July, 2017.
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