Tag: personal loans

PNB cuts repo-linked lending rate by 25 bps to 6.55%

Banking & Finance

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Punjab National Bank (PNB) on Friday said it has reduced its the repo-linked lending rate (RLLR) by 25 basis points (bps) to 6.55 per cent from 6.80 per cent earlier.

“The repo-linked lending rate (RLLR) has been changed from 6.80 per cent to 6.55 per cent, with effect from September 17, 2021 (Friday),” PNB said in a regulatory filing with the bourses.

This is expected to push retail lending as it comes ahead of the upcoming festival season.

The RLLR, which was introduced in October 2019, is a floating rate-based and is linked to the repo rate of the Reserve Bank of India (RBI).

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Comparison of top bank personal loan rates, BFSI News, ET BFSI

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A personal loan comes in handy when we are short of funds and need the money as soon as possible. A personal loan is an unsecured loan given by a lender. While taking this loan, the potential borrower is not required to provide collateral or security against the loan, unlike in a gold loan where gold jewellery is taken as security by the lender.

Read on to find out more about personal loans.

Where can you avail a personal loan?
While one can approach one’s friends and relatives for a personal loan, lending institutions such as banks and non-banking financial companies (NBFCs) offer personal loans in a more structured and ‘on-tap’ format. Apart from banks like State Bank of India (SBI), HDFC Bank, NBFCs such as Tata Capital, Bajaj Finserv also offer personal loans. As personal loan from one’s friends and relatives may not always be readily available, we shall consider the more structured format of personal loans offered by lending institutions.

Maximum and minimum amount
The minimum and maximum amount that can be taken varies from one lending institution to another. For instance, according to its website, SBI offers a maximum personal loan of Rs 20 lakh to salaried individuals. On the other hand, HDFC Bank offers personal loans up to Rs 12 lakh, as per the bank’s website.

According to Tata Capital’s website, you can take a minimum personal loan of Rs 75,000 and maximum of Rs 25 lakh depending on your eligibility.

Fixed or floating interest rate
While taking a loan, one should check with the lender if the interest rate offered on the personal loan is fixed or floating. In case the interest rate is fixed, changes in the bank’s MCLR will not impact your equated monthly instalment (EMI) amount. Also, do remember that normally the interest rates charged on personal loans are much higher than on home loans or loans against gold because the former are unsecured loans.

Interest rate, loan amount offered by banks for personal loans

BANKS Personal Loan Amount Tenure RoI (%)
AU Small Finance Bank Upto 7.5 Lacs Upto 60 months 11.49% – 23.00%
Axis Bank Upto 15 Lacs Upto 60 months 12.00% – 21.00%
Bandhan Bank >=50000 and <=5 Lacs 12 – 36 Months 15.90% – 20.75%
Bank Of Baroda >=50000 and <=10 Lacs 48 – 60 Months 10.50% to >=16.15%
Bank Of India Upto 10 Lacs 36 – 60 Months 10.75% – 12.75%
Bank Of Maharashtra Upto 10 Lacs 60 months 9.55% – 12.90%
Canara Bank Upto 20 Lacs Upto 60 months 12.40% – 13.90%
Central Bank Of India Upto 10 Lacs 48 Months 9.85% – 10.05%
City Union Bank >=5000 and <=5 Lacs 12 Months >=9.50%
Dhanlaxmi Bank >=1 Lacs and <=15 Lacs 12 – 60 Months 11.90% – 15.70%
Federal Bank Upto 25 Lacs 48 Months 10.49% to 17.99%
HDFC Bank Upto 15 Lacs 12 – 60 Months 10.50% – 21.00%
I O B Upto 5 Lacs 60 Months >=10.80%
ICICI Bank Upto 20 Lacs 60 Months 10.50% – 19.00%
IDBI Bank >=25000 and <=5 Lacs 12 – 60 Months 8.30% – 14.00%
IDFC First Bank >=1 Lacs and <=40 Lacs 12 – 84 Months >=10.49%
Indian Bank >=50000 and <=5 Lacs 12 – 36 Months 9.05% – 13.65%
IndusInd Bank >=50000 and <=15 Lacs 12 – 60 Months 10.49% – 31.50%
J & K Bank Upto 1.50 Lacs 48 Months >=10.80%
Karnataka Bank Upto 5 Lacs Upto 60 months >=12.45%
Karur Vysya Bank Upto 10 Lacs 12 – 60 Months 9.40% – 19.00%
Kotak Mahindra Bank >=50000 and <=20 Lacs 12 – 60 Months >=10.75%
Punjab & Sind Bank >=1 Lacs and <=3 Lacs Upto 60 months 9.35% – 11.50%
Punjab National Bank Upto 10 Lacs Upto 60 months 8.95% – 14.50%
RBL Bank Upto 20 Lacs 12 – 60 Months 14.00% – 23.00%
South Indian Bank >=1 Lacs and <=10 Lacs Upto 60 months 11.95% – 12.65%
State Bank Of India >=25000 and <=20 Lacs 06 – 72 Months 9.60% – 15.65%
Union Bank Of India >=5 Lacs and <=15 Lacs Upto 60 months 8.90% – 13.00%
Yes Bank >=1 Lacs and <=40 Lacs 12 – 60 Months >=10.99%
Ujjivan Small Finance Bank >=50000 and <=15 Lacs 12 – 60 Months >=11.49%

All data sourced from Economic Times Intelligence Group (ETIG)
Data as on August 29, 2021Eligibility to apply for personal loans
The eligibility criteria for sanctioning personal loans vary from lender to lender. To be eligible for a personal loan from SBI, your minimum monthly income should be Rs 15,000 irrespective of whether you have a salary account with the bank or not as per the bank’s website.

In case of HDFC Bank, to be eligible for a personal loan an individual should be between 21 years and 60 years of age and should have a job for at least two years, with a minimum of one year with the current employer. Further, if salary account is maintained with HDFC Bank, then the individual should have minimum Rs 25,000 net income per month. If the individual is not an HDFC Bank account holder, then he/she should have minimum Rs 50,000 net income per month.

Your credit score will also play an important role in determining whether or not you are eligible to get the personal loan.

Tenure of personal loans
Usually, a personal loan is offered for a maximum of five years by lending institutions such as banks. However, the tenure can vary from lender to lender.

Charges in personal loan
To avail a personal loan, a bank or NBFC will levy certain charges such as processing fees, stamp duty and other statutory charges etc. These charges vary from lender to lender.

Further, a lender can also levy pre-payment charges or pre-closure charges. Therefore, before taking a loan from the lender do check the different types of charges leviable.

Disclaimer: The data/information given above is subject to change, hence before taking any decision based on it, please check terms and conditions with the bank/institution concerned.

For any queries or changes, please write to us on etigdb@timesgroup.com or call us at 022 – 66353963.



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SBI announces various special offers for retail customers

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The country’s largest lender State Bank of India on Monday announced a slew of offers for its retail customers ahead of the festive season.

The bank has announced a 100 per cent waiver on processing fees for its car loan customers across all channels, a release said, adding that customers can get the facility of up to 90 per cent on-road financing for their car loans.

The lender is also offering a special interest concession of 25 basis points (bps) to a customer applying for a car loan through YONO.

YONO (You Only Need One App) is the mobile banking app of the lender.

YONO users can avail car loans at an interest rate starting at 7.5 per cent per annum, the release said.

The bank is offering a reduction of 75 bps in the interest rates for customers availing gold loans. They can avail gold loans from across all channels of the bank at 7.5 per cent per annum.

Moreover, it has waived off the processing fee for all the customers applying for gold loans via YONO, the release said.

For personal and pension loan customers, the lender has announced a 100 per cent waiver in processing fees across all channels.

For Covid warriors i.e, frontline healthcare workers applying for personal loans, a special interest concession of 50 bps has been announced. This offer will soon be available for application under car and gold loans as well, it said.

The lender said it is introducing a ‘Platinum Term Deposits’ offer for its retail depositors, to mark 75 years of independence. Under the offer, customers can get additional interest benefits of up to 15 bps on term deposits for 75 days, 75 weeks, and 75 months tenors starting August 15, 2021 to September 14, 2021.

“We believe that these offerings will help customers to save more on their loans and at the same time add value to their festive celebrations,” the bank’s managing director CS Setty said in the release.

Last month, the bank had announced a 100 per cent waiver on processing fees on home loans till August 31, 2021. Its home loan interest rate starts at 6.70 per cent.

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RBI ups threshold for personal loans given by a bank to directors of other banks

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The Reserve Bank of India (RBI) has upped the threshold up to which a bank can grant personal loans to any director of other banks by 20 times from ₹25 lakh to ₹5 crore.

The upward revision in the threshold is aimed at reflecting the increase in general prices, encourage professionals with the expertise to join the boards, and reduce the cases requiring approval at the board/management committee level without diluting the regulatory intent. The ₹25 lakh threshold was fixed way back in 1996.

However, the RBI said unless sanctioned by the board of Directors/Management Committee, banks cannot grant loans and advances aggregating ₹5 crore and above (hitherto ₹25 lakh and above) to any relative (other than spouse) and dependent children of Chairmen, Managing Directors or other Directors of their own bank as well as other banks.

The central bank said the proposals for credit facilities of an amount less than ₹25 lakh or ₹5 crore to these borrowers may be sanctioned by the appropriate authority in the financing bank under powers vested in such authority, but the matter should be reported to the board.

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LoanTap sees 120% increase in loan demand during January-May 2021

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Digital lender LoanTap witnessed a 120 per cent growth in loan applications between January and May 2021 compared to the same period last year.

“With a total of 58,131 loan applications between the months of January and May 2021, the company disbursed personal loans worth over ₹105 crore,” LoanTap said in a statement on Monday.

LoanTap saw demand and applications for credit lines and vehicle loans pick up second to term loans. Over 8,000 unique customers came on its platform, largely for term loans.

Most of the loan demand came from salaried personnel in Tier-I cities, it said. Additionally, millennials were keen on catering to their lifestyle needs from the comfort of their homes. This led to increased interest in convenient, one-tap personal loans.

LoanTap saw a 20 per cent increase in its assets under management, which now stands at ₹370 crore. The company has also expanded to 22 cities from its earlier presence in 15 cities.

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IndusInd Bank rolls out digital lending platform ‘IndusEasyCredit’, BFSI News, ET BFSI

Banking & Finance

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IndusInd Bank today, launched the ‘IndusEasyCredit’, a fully digital end to end platform leveraging India’s public digital infrastructure- ‘Indiastack’ to offer personal loans and credit cards in a paperless and cashless manner.

The stack leverages more than 35 interfaces to digitally verify KYC and employment information as well as analyse bank statements. It then uses advanced analytics and machine learning based models to assess eligibility in real time. Post this, the customer can conduct Video KYC and get the loan disbursed into his or her account after executing the agreement digitally.

“Over the past few months, we have been constantly working towards creating a comprehensive solution that enables customers with easy access to credit from the comfort and safety of their homes. ‘IndusEasyCredit’ is a testament to that effort which provides customers with the flexibility to avail a personal loan or a credit card on a single platform, in a completely seamless, paperless, and digital manner.” said Charu Mathur, Chief Digital Officer & Head-Business Strategy, IndusInd Bank in a statement.

Existing as well as non-IndusInd Bank customers can avail an instant personal loan by following the below mentioned steps:

  1. Complete e-KYC and provide basic details to check eligibility (only applicable for non-IndusInd Bank customers)
  2. Select the amount from the pre-approved loan offer as required. Accept the auto populated interest rate, processing fee and EMI amount.
  3. Complete Video KYC (only applicable for non-IndusInd Bank customers).
  4. Authenticate the request for enabling instant money credit into their account, after digitally signing the agreement.
  5. The money gets transferred to the customer’s account instantly on completion of this procedure.

In order to avail credit card, customers can simply follow the below steps:

  1. Complete e-KYC and provide basic details to check eligibility (only applicable for non-IndusInd Bank customers).
  2. Customers will get the pre-approved offer.
  3. They can then select the desired IndusInd Bank Credit Card product.
  4. Complete Video KYC (only applicable for non-IndusInd customers).
  5. On completion of Video KYC, the said card is dispatched to the customer.

Currently, customers can only apply for the ‘IndusEasyCredit’ facility through the Bank’s website. It will also be made available shortly on IndusMobile, the Bank’s mobile banking application, according to the statement.



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Muthoot Finance ties up with NIRA to offer personal loans

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Muthoot Finance Limited has announced its collaboration with fintech NIRA as part of its strategy to strengthen its digital footprint.

Through this partnership, salaried customers can avail a personal loan of up to ₹1 lakh from Muthoot by downloading the NIRA app from Google’s Play store.

NIRA is a Bengaluru-based fintech offering small ticket personal loans to salaried workers from India’s middle class. They offer loans to borrowers starting at incomes as low as ₹12,000 per month. This partnership will help Muthoot Finance build its unsecured lending book.

Pradeep, Head – Personal Loan, Muthoot Finance said, “We are excited to have this tie-up to enhance our personal loan growth with quality. Muthoot Finance is also aggressively moving towards an end-to-end digital process, and this tie-up is one of the initiatives in the same direction.”

Rohit Sen, CEO and co-founder at NIRA, said: “Muthoot is a trusted brand Pan-India, and trust is a vital ingredient in the provision of financial services. This partnership bolsters our ability to continue our mission of providing accessible formal credit at affordable rates and in a timely manner to India’s mass market.”

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BankBazaar to add 600 new hires to support growth and expansion in FY22

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BankBazaar.com, the free credit score provider and online financial product marketplace, plans to ramp up its 1,000-plus workforce with 600 new employees to support growth and business expansion in FY2022.

The company will hire across technology, product, operations and customer service domains as it looks to expand its digital KYC and analytics solutions, which are the key growth drivers for the company, to a much larger portfolio of unsecured credit products. Hiring will take place across all BankBazaar locations in Chennai, Bengaluru and Mumbai. In the last fiscal, BankBazaar had added 500 employees to its team.

“We are continuing to see an increase in the demand for innovative contactless solutions that make access to credit products easier and smoother. Given the growth momentum and the high resource utilisation we are seeing, we believe it is essential to shore up our strengths and build an even bigger team that is ready to meet every future challenge that comes our way,” Sriram V, CHRO, BankBazaar, told BusinessLine.

According to BankBazaar, the primary driver for growth last year was credit cards, and in less than a year since the start of digital KYC, 72 per cent of credit card issuances were contactless, indicating a dramatic shift in access to credit. Additionally, in the last quarter of FY21, there has been a resurgence in demand for personal loans for the first time after the pandemic. The company indicated that there has been a 2x growth in the number of applications between January and March 2021 as credit outlook improved and credit tightening normalised. Almost 88 per cent of personal loans disbursed were via contactless alternatives such as digital KYC.

Considering the present surge in Covid-19, BankBazaar announced that the company will be bearing the cost of vaccinating employees and their immediate family members who are eligible as per government guidelines. The company, which moved its corporate workforce work to an entirely remote working set-up last March, plans on continuing that way for the foreseeable future. Consequently, the Work From Home options for existing and potential employees have been extended, and employee engagement activities have been ramped up.

Adhil Shetty, co-founder and CEO, BankBazaar said, “In the last one year, BankBazaar’s technology and innovation withstood the test of an unprecedented global pandemic and the resultant economic downturn. This has been possible only due to the commendable commitment and enthusiasm shown by our employees in developing game-changing solutions that have positively impacted the financial sector. At this crucial time, this is our way of acknowledging their efforts and successes and doing our bit to contribute to our employees lives in a meaningful way.”

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Piramal Retail Finance enters consumer & used car finance

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With a focus on retail lending, Piramal Retail Finance on Thursday announced its foray into consumer and used car finance, even as it expects the retail share of the lending book of the Piramal Group to increase to over 40 per cent with the merger of Dewan Housing Finance Corporation Ltd (DHFL) with Piramal Capital and Housing Finance Ltd.

“The overall lending book is at about ₹45,000 crore, of which ₹5,000 crore or 11 per cent of the total lending book is from retail. DHFL book has got a substantial retail portion as well. By end of the fiscal year, retail share of the financial services business is likely to grow to mid-40s,” said Jairam Sridharan, Chief Executive Officer, Piramal Retail Finance.

focus on Non-mortgage products

In the medium term, it plans to grow the retail book to about two-thirds of the financial services business.

“With DHFL, though we have launched a lot of non-mortgage products, our business will become very mortgage heavy. We are keen to launch more non-mortgage products so that we can cross sell products to these consumers as and when the transaction happens,” Sridharan told reporters at a virtual press conference.

“The acquisition of DHFL fits perfectly into our overall retail strategy,” he said.

Earlier this week, the Competition Commission of India gave its nod to the acquisition of DHFL by PCHFL. Sridharan did not give a timeline for the expected approval from the National Company Law Tribunal but said the process is going as per expectations.

The Reserve Bank of India had in February this year approved the resolution plan for DHFL submitted by the Piramal Group.

Expansion plans

Meanwhile, elaborating on plans for Piramal Retail Finance, Sridharan said it aims to be one of the top five non-bank retail lenders over the next five years.

On Thursday, it announced the launch of its expanded multi-product retail financing platform. It is targeting ₹3,000 crore of new loan originations organically in next 12 months, in addition to inorganic growth.

Sridharan said the company, which plans to launch four more products this fiscal, is also looking at two wheeler financing and education financing in the next 12 months.

“We are working on a loans-against-shares product as well. We will also grow unsecured and multi-collateral lending products for small businesses,” he said.

At present, Piramal Retail offers seven products in its target markets –affordable housing loans, mass affluent housing loans, loans against property, secured small business loans, purchase finance, unsecured loans, and used-car loans. It is also looking to expand to 10 more locations in the next three months over the 40 locations it is already present in.

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Report, BFSI News, ET BFSI

Banking & Finance

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More women have resorted to unsecured personal loan borrowings rather than home loans or auto loans during the pandemic, a report said on Thursday. Personal loans, which are typically consumption loans borrowed without any security to meet expenses, have witnessed a 23 per cent year-on-year rise in the number of women borrowers in the first nine months of 2020-21 (FY21) till December, as against a 5 per cent growth in Home Loans segment, the report by CRIF High Mark, a credit information company, said.

The COVID-19 pandemic resulted in deeper financial issues in some households as the pandemic and the resultant lockdowns hurt financially.

The active loans to women borrowers stood at 6,482 in the personal loan segment, as against 4,354 home loans, while auto loans witnessed a 4 per cent de-growth to 1,818 women borrowers, the report released in the run-up to the women’s day said.

Women’s share in the overall personal loan and auto loan pie has increased by one percentage point to 16 per cent now, the report said, adding they constitute 29 per cent of the home loans market.

The company data said average ticket size of personal loans borrowed by men and women has reduced by 10 per cent and 5 per cent, respectively, over the past one year.

The average size of loan borrowed by women continues to be smaller than that borrowed by men, while the average auto loan size borrowed by women is 8 per cent higher than that borrowed by men.

The share of top five states in the personal loan portfolio outstanding for women has increased by 18 per cent over the previous year, and women borrowers from southern states have higher credit book size as compared to western and northern states, it said.

A total of 1.8 crore loans – split into 18 lakh auto loans, 15 lakh home loans and 1.5 crore personal loans – were given out in the first three quarters of 2020-21, it said, adding that this was 40 per cent lower than the 2.97 crore in the year-ago period.

In terms of the value of loans disbursed to women borrowers, public sector banks have had the largest share observed over the past four quarters, followed by NBFCs and private banks, it said.

Maximum loans are given to women in the age group 26-35 having a share of 40 per cent in the overall disbursements in the year 2020, it said, adding that 6.26 crore women borrowers have a credit history as of now.



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