Personal loans are made available to individuals by banks, Non-Banking Financial Companies and private financial lending firms and are subject to various eligibility and procedural parameters. These loans can be availed by individuals who are salaried, self-employed, or have a varied income. The financial institution usually takes the call on the approval/rejection of the loan application based on various aspects including income, employment stability and existing in-house standards. As for non-listed companies, banks and financial companies sometimes abstain from lending personal loans to their employees for factors ranging from the company’s financial stability and reputation to the income stability of the individual itself.
In order to answer this question, let us look at the Hyderabad in specific. Hyderabad is home to a diverse set of companies starting from start-ups and SMEs to large MNCs. In the recent past, the startup environment has seen a significant boost, mostly owing to government sponsored initiatives. Most new start-ups that commence operations aren’t listed with banks or financial institutions because of aspects pertaining to stability, debt and finances. While such is the case, there are other parameters that can supersede the “non-listed company” tag that sometimes prevents loans from being disbursed.
Hyderabad is a fast growing loan market with personal loans being one of the most common loan types availed by people from diverse financial backgrounds. While we make reference to non-listed companies, we’re mostly citing the case of salaried individuals. A majority of personal loan seekers are salaried individuals employed with private corporations or government enterprises. While it is a norm that banks are cautious in processing loans of employees from non-listed companies, there are certain factors that can positively impact the loan application, resulting in its approval. As far as listed companies are concerned, banks exercise less scrutiny in determining the company’s financial stability as the procedure of rating the company has already been completed. Moreover, listed companies, mostly MNCs, get a preferential rate of interest for their employees.
Let us look at these important aspects that banks take into consideration while processing loans of employees from non-listed companies.