Guide on how private employees can get Personal Loan

All of us need a lump sum of money from time to time. This could be because of a wedding in the family, to clear a long-standing debt, or even for educational expenses. If you are a private sector employee and don’t have enough savings to cover your immediate financial needs, you can easily take a personal loan for private employees for all your requirements. A personal loan for private sector employees can also come in handy if, for whatever reason, you do not want to dig into your savings to cover the expense.

Can private sector employees get a personal loan?

Private sector employees often struggle to get a personal loan because they are oblivious of the eligibility criteria for personal loan. Some others don’t apply, assuming that being a private sector employee will automatically disqualify them from being eligible. The fact is that many financial institutions do provide personal loans to private sector employees. Read on if you want to know how you can get a personal loan for private employees.

Eligibility criteria for a personal loan for private sector employees

Personal loans are zero-collateral loans that do not require you to mortgage any of your assets. The bank/ financial institution takes the risk and, in exchange, charges a relatively higher personal loan interest rate. Therefore, they follow strict eligibility criteria while granting a personal loan for private employees.

Here are the things you should keep in mind when applying for a personal loan for private sector employees:

• Apart from the loan application, you will have to complete and submit an electric standing instruction (ECS) form so the lending bank/ institution can automatically deduct the EMI amount from your bank account on the designated dates.
• Private sector employees need to have a steady income — your salary determines the maximum loan amount you can get. Most banks/ NBFCs will grant a personal loan for private employees in the range of Rs. 2 lakh to Rs. 25 lakh.
• You must provide documentation for proof of income. This includes your bank statements for the past six months, income tax return (ITR) documents for the last three years, and KYC details.
• Personal loan tenors are quite flexible, and you can choose the contract according to your income and convenience. The tenors ranges from 12 months to 60 months. However, you can also prepay the loan in advance and avoid unnecessary interest. In case of a foreclosure, you will have to pay a prepayment penalty of around 2% - 3%.
• The minimum and maximum ages for getting a personal loan for private employees are 21 and 67 years, respectively.

Benefits of taking a personal loan for private sector employees

Availing yourself of a personal loan for private sector employees can help you in many ways if you can manage it well. Here are some benefits of taking a personal loan for private employees:

• Personal loans are more cost-effective than business loans because of their lower interest rates.
• When you take a personal loan for private employees, you are not bound by any condition from the bank/ financial institution to spend the amount for a particular purpose. The whole amount is credited into your bank account, and you can spend it at your discretion.
• Personal loans are great for building up your credit score — every time you repay the loan on time, points are added to your CIBIL score.
• A personal loan for private sector employees is ideal if you have an entrepreneurial mentality. If you want to start a business but do not have the initial capital investment, a personal loan can be used to pay startup salaries and more.
• Personal loans are flexible in nature. This means you can foreclose the loan before the designated tenor. This will allow you to save on the additional interest accrued in the entire tenor.

Summary: Taking a personal loan for private employees makes sense if you need a sizable sum of money for an urgent expense like a wedding, a vacation or even home renovation. A personal loan for private sector employees is a great way to finance your payments easily and conveniently. These loans come with flexible interest rates, foreclosing options, and you can use them for any purpose. Are you wondering if you are eligible for a personal loan for private employees? Read this guide and find out if you meet the eligibility criteria.