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• Personal loan benefits for government pensioners

  State Bank of India (SBI) and Punjab National Bank (PNB) are offering personal loans to government and defence pensioners. To get the benefits of these loans, the pension account must be maintained with them.

  The applicant must not be more than 76 years old. Some of the benefits include low processing fee (no processing fee for defence personnel), fast loan processing, and zero hidden charges. Applicants also get the option of prepaying their loans to reduce their interest costs.

  From SBI, retired employees can take loans of up to Rs.14 lakh. The minimum loan amount is Rs.25,000.

  For SBI, the repayment period is 60 months if the applicant is 72 years old or younger. For applicants between 72 to 74 years of age, the tenure is 48 months. For applicants between 74 to 76 years of age, it is 24 months.

  For retired defence personnel, the tenure is 84 months up to the age of 56 years. For ages 56 years to 72 years, the tenure is 60 months. Between ages 72 to 74 years, the tenure is 48 months, and between ages 74 to 76 years, it is 24 months.

  For PNB, the minimum loan amount is Rs.25,000 and the maximum is Rs.3 lakh. The maximum tenure is 60 months. For pensioners above the age of 75 years, it is 24 months.

  SBI charges interest ranging from 11.95% p.a. to 12.45% p.a. while PNB charges 11.25% p.a.

  SBI charges a prepayment fee of 3% of the amount prepaid. PNB charges documentation fees of up to Rs.450.

  

  25 April 2019

• MSME loans jump 2.5 times in the last 5 years

  The outstanding loans given by Indian Lenders to the micro, small and medium enterprises (MSMEs) expanded almost two and half time in the last 5 years till 2018 according to credit information company TansUnion CIBIL. The company also warned about debt build-ups that could lead to stress in the quality of assets.

  At the end of 2018, the outstanding credit to MSMEs grew at a rate of 19.6% to Rs.25.2 lakh crore from Rs.10.4 lakh crore in 2013. Additionally, the percentage of consolidated non-performing assets increased from 7.3% to 9%. Public sector banks were the largest lenders for MSMESs in the growth period. However, their loan exposure decreased to 39% from 58% after the central bank’s lending restrictions on banks with bad debt. The growth must be monitored as it this rapid acceleration in debt build-up may prove to be a stressor, opined TransUnion CIBIL managing director Satish Pillai.

  

  19 April 2019

• Individuals can avail a personal loan for a road trip

  Meeting new people, trying various food joints, exploring different places, taking a break from a daily routine, and taking the car out are the main reasons why people go on a road trip. Availing a personal loan is one of the easiest ways of funding a road trip.

  Since a personal loan is a multi-purpose loan, it can be used for the expenses that have incurred because of a road trip. Individuals can apply for a personal loan at banks or at Non-banking Financial Companies (NBFCs). The loan amount is usually disbursed within hours or a few days. The monthly repayment schedule can also be chosen by the individual who is availing the loan. Banks and NBFCs will do the necessary checks such as checking the credit score before deciding on the interest rates of the personal loan. Availing a personal loan requires minimum documentation and is a hassle-free process. However, individuals must have a good credit score, choose the tenure, submit the necessary documents, compare various personal loans online, check the amount of funds that are available, and choose their budget before applying for a personal loan.

  

  16 April 2019

• Taking loans from SBI to become easier in smaller regions

  People residing in remote villages of the country who want to grow their business will now have easier access to loans from the State Bank of India. SBI has joined hands with Paisalo Digital Limited to offer loans to empower MSME (Micro, Small, and Medium Enterprises) segment, agriculture sector, and small businesses. According to the agreement, the loan amount will range between Rs.10,000 to Rs.2 lakh. Paisalo is expecting to disburse over 2 lakh loan applications this financial year through their digital platform.

  Paisalo is an NBFC registered with the State Bank of India. The company signed its first co-origination deal with SBI to introduce a platform for the last-mile customers. With this agreement, the companies will disburse loans to even first-time last-mile borrowers. It is a first-of-its-kind deal signed by SBI which will boost the priority sector lending space.

  

  11 April 2019

• Personal loans emerging as instant finance

  Personal loans are becoming a popular instant finance option for Indians. People can meet urgent financial needs by borrowing the relevant amount. Personal loans are especially helpful in expenses related to weddings, travels, etc. Personal loans have a flexible tenure due to which, borrowers find it very convenient in nature. According to data released by the Reserve Bank of India, personal loans had the lion's share of 96% of new bank loans in FY2018.

  Personal loans are popular as they are unsecured in nature. Borrowers do not have to pledge anything to avail the loan unlike home loans and car loans. Another reason for its popularity is the flexibility in usage. Personal loans can be used for a variety of purposes. Such loans are also easy to avail as many lenders offer pre-approved loans at low interest rates.

  

  10 April 2019

• Reasons for rejection of personal loan applications

  Personal loans can come in handy for individuals during a financial emergency. Availing personal loans can help for various circumstances such as travel expenditure, emergency funds, etc. However, banks and non-banking financial institutions (NBFCs) have certain requirements that individuals must meet when they apply for a personal loan. In case individuals don’t meet these requirements, their applications will get rejected.

  Some of the main requirements that banks and NBFCs look into are the documents that have been submitted, the eligibility criteria, the credit score, and the number of applications that the individual has made. Self-employed and salaried individuals have to submit different documents when they apply for a personal loan. It is important that all the required documents are submitted so that the application does not get rejected. Banks and NBFCs have a minimum and maximum age limit for individuals when they apply a personal. This eligibility criterion must be met by individuals in case they want to avail a personal loan. Another important criterion that banks and NBFCs look into is the individual’s credit score. A good credit score can help in availing a personal loan easily, while a bad credit score can lead to a rejection.

  

  9 April 2019

• Changes affected to home, and personal, and auto loans due to repo rates

  The repo rate in India has had another cut from the Reserve Bank of India (RBI). The repo rate is 6% at the moment, and this would help in making the cost of borrowing cheaper. Usually, the loans are low-cost when there is cut in repo rates. However, a number of changes have been made by RBI that will have an impact on borrowing as well as the interest rates of loans.

  The RBI has set up a committee that will determine the state of housing finance securitisation in the country. This would help in bringing standard asset securitisation practices that will come with many benefits. The RBI has also decided to have further meetings with stakeholders so that transmission rates can have an effective mechanism. However, it must be noted that lenders determine the interest rates for vehicle, personal, and home loans based on the cost of funds. The interest rates that banks pay depositors must be lower than the interest rates that banks offer on loans. Therefore, banks are attractive because of the lower cost of funds.

  

  5 April 2019

• Artificial intelligence used by MoneyTap to personalise moneylending

  MoneyTap is a fintech company that was launched in 2015. It is a digital lending app for instant personal loans starting at Rs.3,000 and going up to Rs.5 lakh. Launched in partnership with RBL Bank, an account with the partner bank is not required. The unsecured personal loans are offered at lower interest rates and allows users to apply for the next loan after closing the current one. With over 5 lakh instalments in a month, MoneyTap has grown substantially since its launch, with its presence now in 40 cities and plans to expand to 150 cities soon. Millennials who often require smaller amounts of money that are not offered by the bigger banks are the major target audience for digital lending apps. MoneyTap harnesses the power of a wide range of technology to handle the increasing demand. This ranges from AWS for data storage, Hibernate and JAVA for the backend, Python for machine learning and data, and HTML since the platform used is iOS and Android. Chatbots are also utilised for verification and connecting the credit bureau with the banking system. This helps to analyse the credit history of the applicant before final approval is given.

  

  2 April 2019

• 5 common personal loan terms

  Mentioned below are 5 common personal loan terms:

  Eligibility: Banks and NBFCs have certain criteria that you have to meet if you want to take a personal loan. It is known as eligibility.

  Credit score: It is an important requirement to avail a personal loan. A score of 700 and above is usually considered good for approval of personal loans. It represents your credit history and your repayment capabilities.

  Interest: Interest is the amount lenders charge for allowing you to take the loans and using it according to your needs. It is a specific percentage of the principal amount. During repayment, you have to pay the principal amount along with the interest amount.

  Processing Charges: Processing charges refer to the additional charges levied on the loan amount. It usually ranges between 1% and 2 %.

  Charges for late payment: When you take a personal loan, you are required to pay back the amount in equated monthly instalments (EMI). Any delay in paying the EMIs can attract an ancillary charge called 'charges for late payment'. It is advisable to avoid such penalties by paying the EMIs on time, as failure to do so can increase the payment burden.

  

  29 March 2019

• 5 loans designed for millennials

  Numerous NDFCs and online platforms have found a new consumer base in millennials. Unlike their predecessors, millennials do not believe in saving before making a big purchase. This has shaped a new market strategy with lenders offering loans that are specifically designed for this generation.

  Advance salary loans are offered for times of financial emergencies. Lenders provide a specific percentage of the applicant's salary as the loan. The tenure for such loans range between 1 month and 12 months. Such loans can be taken by people who have been rejected by other banks due to their low credit score.

  Weddings are a huge expense in India and this loan is specifically designed to cover those expenses. Some lenders offer an interest-only payment option for the first 5 months of the repayment tenure. Holiday loans help individuals travel to faraway destinations without harming their savings. Such loans are credited with 24 to 36 hours.

  Rental loans are offered by some lenders to meet the expenses associated with moving into a new city or house. Since the security deposits are quite high, rental loans cover that need. The loan amount can be repaid on a monthly basis during the lease tenure.

  

  28 March 2019