How to Apply for Personal Loan for Salaried Employees in India?
Personal loans are unsecured loans that can be availed of by both salaried and self-employed professionals and non-professionals. Banks and NBFCs usually prefer salaried employees to give out loans. This is primarily because salaried employees have a fixed source of income. Lenders consider applicants with a fixed source of income less risky than others. So, if you’re looking for detailed information on a personal loan for salaried, this blog might just interest you!
What is a Personal Loan for Salaried Individuals?
A personal loan is an unsecured loan (loan that doesn’t require collateral) that could help you during a financial emergency. Be it medical expenses, buying appliances or a new phone, house repair, or marriage or travel expenses, you could use a personal loan for anything.
Banks offer personal loans at a certain rate of interest. You are required to repay the loan in EMIs or Equated Monthly Instalments. Since, salaried individuals have a steady source of income, banks often roll out loan offers (reduced interest rates, higher loan amount, etc) dedicated to the salaried class. However, the final amount and interest rate are decided based on various parameters, including your credit score. Anyone with a good credit score has a better chance of personal loan approval.
So, what are personal loan interest rates for salaried individuals?
Personal Loan for Salaried Interest Rates 2022
Refer to the table below for the latest personal loan interest rates for salaried:
| Banks/NBFCs | Interest Rate (p.a.) | Processing Fee |
| Navi Personal Loan | 9.90% onward | Check with the lender |
| HDFC | 10.50% onward | Up to 2.5% |
| Yes Bank | 13.99% onward | Up to 2.5% |
| Kotak Mahindra | 10.25% onward | Up to 2.5% |
| Axis Bank | 12.50% onward | Check with the lender |
| IndusInd Bank | 11% onward | 2.5% and above |
| IDFC FIRST | 12% onward | Up to 3.5% |
| Home Credit | 19% onward | Up to 5% |
| Aditya Birla Capital | 14% onward | Up to 2% |
| IIFL | 24% | 2% onward |
Disclaimer: Note that this table is for educational purposes only and the final rate offered is solely at the concerned lender’s discretion. Navi doesn’t take responsibility for any interest rate changes that may occur in the due course of time.
Advantages of Personal Loan for Salaried
Here are some of the benefits of availing cash loan for salaried:
No Collateral: There is no requirement of any collateral or mortgage if you opt for a personal loan since it is an unsecured loan.
Easy Eligibility Criteria: Banks prefer salaried customers. Indian citizens working in a private company or Government organisation could get a loan without much difficulty.
Pay in Easy EMIs: Personal loan for salaried tenure varies between 6 months and 7 years. You can choose loan tenure at your convenience.
EMI Calculator: There are dedicated personal loan EMI calculators to help you with EMI calculation.
Instant Disbursal: If you need a quick loan with money in your bank account within minutes, you could use apps like Navi. From the application of the loan to its disbursal, everything can be completed easily in a short span of time.
Eligibility Criteria for a Personal Loan for Salaried Employees
Most personal loans have an eligibility requirement that needs to be adhered to, which may vary from lender to lender. Some of the most common requirements for a personal loan that other lenders might have are:
| Age | 18 years to 65 years |
| Income level | You should have a minimum monthly salary to qualify for the loan. This minimum limit is specified by the lender and varies across different lenders |
| Credit score | Minimum 650 |
| Nationality | Indian |
Documents Required for Personal Loan for Salaried Employees:
Most lenders need certain documents to process your personal loan, which comprises of:
- Proof of identity and age of the applicant – Aadhaar card, PAN card, passport, etc.
- Proof of income, i.e. 3 months’ salary slips or 6 months’ bank statements
- Proof of address – Aadhaar card, passport, driving licence or voter ID card
- A coloured photograph of the loan applicant
Follow these steps to apply for a personal loan with Navi:
- Download the Navi app from Google PlayStore or App Store
- Enter your mobile number to get OTP
- Fill in your basic details – Name, DOB, PAN, Employment Type, Profession and Total Monthly
- Check loan offer
- Select loan amount and tenure
- Link your bank account
- Get funds instantly transferred to your bank account
Tips for Salaried Employees to Take Loans During the Pandemic:
This pandemic has had a major impact on the entire population of India. With job cuts, downsizing and pay cuts, a financial crisis has seeped into many households even with stable salary incomes. This is where a personal loan can be effectively used to your advantage as this is one of the simplest credit instruments in the market. With the following tips for effectively using a personal loan, you can surely make the most of it:
Tip # 1:
Choose an appropriate tenure of loan repayment. Do not go overboard to quickly repay your loan even if that hurts your financial stability. Take time to repay but ensure you repay it back within the specified timelines.
Tip #2:
Do not skip your payments. Your credit score does get affected negatively by your payments bouncing. Schedule your repayment a day after your salary credit. That way, the EMI would surely be paid on time.
Tip #3:
Choose a loan quantum based on your requirement and repayment capability. Remember that EMI needs to be paid regularly and from your disposable income after your necessary expenses are done.
How to Calculate EMI for Personal Loan for Salaried?
You can use a personal loan EMI calculator to check your monthly repayment obligations. These EMI calculators are extremely easy to use. Just enter the loan amount, interest rate, and tenure. Once done, you can check the EMI amount.
Let’s understand this with an example.
Let’s say you have taken a loan of Rs.1 lakh for a tenure of 5 years. The interest rate charged is 9.9%. Upon calculation, your EMI would be Rs.2,531.
Here’s a detailed breakdown of your repayment details (yearly)
| Year | Principal Paid | Interest Paid | Total Payment | Outstanding Loan Balance |
| 2022 | Rs.14,052 | Rs.6,199 | Rs.20,251 | Rs.85,948 |
| 2023 | Rs.22,887 | Rs.7,489 | Rs.30,376 | Rs.63,059 |
| 2024 | Rs.25,260 | Rs.5,118 | Rs.30,378 | Rs.37,798 |
| 2025 | Rs.27,879 | Rs.2,500 | Rs.30,379 | Rs.9,920 |
| 2026 | Rs.9,921 | Rs.206 | Rs.10,127 | Rs.0 |
This table is for illustrative purposes only.
Different Purposes for Availing a Loan for Salaried
As mentioned earlier, a personal loan for salaried is multipurpose. Here are some of the most popular reasons for opting for a personal loan:
- Debt consolidation or repayment of high paying loans or credit card balances
- Medical emergencies of self or family
- Expenses for your wedding or that of a family member
- Vacation expenses in India or abroad
- Fund your higher or professional education for your spouse or child
- Buy your dream car
- Renovate or redesign your home
- Expenses for a consumer durable or the latest gadget
There could be multiple other reasons for the requirement of funds for a salaried employee which could be easily met by opting for a personal loan from Navi.
Final Word
Lenders usually prefer salaried applicants when approving a personal loan. However, before applying, make sure that you have checked your credit score, evaluated your repayment capacity and compared multiple lenders. It’s always important to make an informed decision before signing up for a personal loan.
In case you’re looking for an instant loan, you can try Navi Personal Loan. Download the Navi app and get loans up to Rs.20 lakh at competitive interest rates starting from 9.9% p.a. with flexible EMI options.
FAQs
Ans: Yes, Government employees can avail of an instant loan for salaried employees as they are working with the Government.
Ans: The amount of loan that you can avail yourself of depends on your monthly income, credit score and also on the minimum and maximum loan limit allowed by the lender. You can check the available loan amount when you apply for the loan with the lender.
Ans: If you apply through the Navi app the loan would get sanctioned within minutes (sometimes seconds).
Ans: If you have an excellent credit score, say 800 or more and have a good business relationship with your lender (long-term accountholder), the lender could offer you preferential rates, which could be lower than the advertised later. The final rate would be decided by the lender base don your creditworthiness.
Ans: You could improve your CIBIL score by paying bills on time, correcting mistakes on your CIBIL report and maintaining a healthy credit utilisation ratio.
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