Union Bank Personal Loan Interest Rates

*Note: For the EMI calculation, it is assumed that a loan amount of Rs.1 lakh has been borrowed for a tenure of 5 years at an interest rate of 10.60% p.a. In this example, it is assumed that the lender does not charge a processing fee.

Personal Loan Schemes Offered by Union Bank

1. Personal Loan: Union Bank of India’s Personal Loan can be availed by salaried employees who are in need of credit. Applicants are not required to submit any collateral to avail this loan. That said, the applicant should have at least two guarantors.

2. Union Personal – Non-Salaried: As the name suggests, the Union Personal – Non-Salaried Loan is designed for self-employed professionals who earn a regular income. This loan helps prospective borrowers avail funds to purchase consumer durables, pay for emergency hospitalisation expenses, etc.

3. Personal Loan Under Special Retail Lending Scheme For Government Employees: This loan scheme is designed for permanent or confirmed government employees. The lender charges a discounted interest rate and processing fee under this scheme.

Factors Affecting Union Bank Personal Loan Interest Rate

• Job details and asset information: If you have a considerable amount of assets and you are a permanent employee of a reputed organization, Union Bank may offer lower rates of interest on your personal loan.
• Relationship with Union Bank: Union Bank may consider your relationship with the bank as one of the key decisive factors while deciding its personal loan interest for you. A long and steady relationship with any bank always helps in building a good relationship with the bank. Banks may offer you a reduced rate if you are a valued and reliable customer.
• Tenure of your personal loan: A personal loan opted for a longer tenure can help you get a cheaper rate of interest than one taken for a short tenure.

• Capacity for repayment: If Union Bank is convinced of your ability to repay the amount taken as personal on time, you may receive a lower rate of interest on it.
• Age: Your age could also be one of the factors that may affect your Union Bank Personal Loan interest rate. Normally, banks offer a lower rate of interest to senior citizens than salaried youngsters.
• Credit Score: Your credit score is an important factor that is taken into consideration by the lender before deciding the interest rate for your loan. A good credit score indicates that you are more likely to repay your loan as per the schedule specified by the lender. For this reason, before you take a personal loan, ensure that you check your credit score. If you wish to borrow a personal loan at a competitive rate of interest, it is advisable to maintain a credit score of over 700.

Illustration

Now that you know the key features of the various personal loan options offered by Union Bank of India, let’s take a look at a few examples to better understand how the repayments will work when you borrow a personal loan from Union Bank of India.

Example 1: Sonali earns a monthly salary of Rs.25,000. She will be taking a vacation with her family and would like to have at least Rs. 1 lakh in hand. Since she isn’t comfortable using her hard-earned savings for a vacation, she decides to borrow a personal loan for Rs.1 lakh from Union Bank of India and repay it in small instalments within a term of 2 years. Union Bank of India charges her an interest rate of 14% p.a. and a processing fee of 0.50% of the loan amount. Her repayment details are as follows:

Thus, Sonali will have to pay a monthly EMI of Rs.4,801. She total repayment amount will come up to Rs.1,15,731, which includes the loan amount of Rs.1 lakh, interest of Rs.15,231, and a processing fee of Rs.500.

Example 2: Nishant is a young professional who is employed at an MNC. He earns a monthly salary of Rs.50,000 and needs to take a personal loan of Rs.2.5 lakh from Union Bank of India. Since he doesn’t have any other financial commitments, he chooses a loan tenure of 1 year. Given that he has an excellent credit score of over 800, Union Bank of India charges Nishant a very reasonable interest rate of just 13% p.a., along with a processing fee of 0.50% of the loan amount. His repayment details during the loan tenure will be as follows:

Nishant will, thus, have to pay a monthly EMI of Rs.22,329 for 1 year. He will be paying a total interest of Rs.17,952 and a processing fee of Rs.1,250. His total repayment amount will be Rs.2,69,202.

Union Bank of India offers affordable personal loan solutions to prospective borrowers. If you wish to borrow a personal loan from Union Bank, ensure that you read through the features and benefits of the various loan solutions that are offered by the lender and apply for a loan that is most suitable to your needs. Also, it is advisable to use Persoanl loan eligibility calculator to find out how much you are eligible to borrow.

FAQs

1. How is interest calculated for a personal loan?

The interest on personal loans from Union Bank of India is charged on reducing balance method. An EMI or Equated Monthly Instalment has two main components, viz. principal and interest. The interest on personal loans from Union Bank is computed at monthly rests, which means that the interest charged on the principal will be deducted every month, thus allowing you to save more money over the course of the loan tenure.

2. How can I make repayments towards my personal loan?

Customers who avail a personal loan from Union Bank must make repayments within 60 months as the maximum tenure of the loan is five years. In this case, 60 EMIs must be paid, and the principal plus interest will be deducted from your salaried account every month.

3. Should I provide any collateral or security to avail a personal loan from Union Bank?

Customers need not provide any collateral or security when availing a personal loan from Union Bank. An undertaking from the employee is all the bank will require to process your application for a personal loan. However, the bank will require you to nominate a guarantor, so you will have to visit the nearest branch of the bank to know more about it.

4. What are the documents that must be furnished to avail a personal loan?

After you have filled in the loan application form, you will have to submit it along with a few documents in order for the bank to ascertain your eligibility for a personal loan. The documents required include proof of identity, which may be presented in the form of your passport, employee ID card, or PAN card. For proof of address, the documents accepted by the bank include ration card, telephone bill, or electricity bill. For proof of income, the documents accepted by the bank include salary slips of the past six months, a letter from the employer / Form 16, and income tax returns for the past year. In addition, customers will also have to provide three photographs along with proof of out-goes such as LIC policies or loan repayment statements, if any.

5. How long does it take for the bank to approve my application for a personal loan?

The first step to availing a personal loan from Union Bank is submitting a duly-filled application form along with the required documents. If the bank is satisfied with all the documents you have submitted and considers you an eligible candidate for a personal loan, it will sanction you an amount depending on your repayment abilities and your credit history. The final step in availing a personal loan from Union Bank is disbursement wherein the bank will disburse the amount of money it reckons you can repay within the predetermined loan term. It generally takes the bank around three days after you have furnished all the necessary documents to sanction your loan.

6. How do I avail a personal loan from Union Bank?

Customers can avail for a personal loan from Union Bank by visiting any of the branches or special retail lending outlets known as Union Loan Points. Alternately, you can also apply for a personal online by downloading the loan application form through the official website of the bank. Another way to apply for a loan is to contact the 24x7 call centre of the bank and requesting a representative to help you with the same.