What Is Personal Loan and SBI Personal Loan
We will learn about SBI personal loan. Now, SBI personal loan—meaning if your eligibility criteria are met and if your past CIBIL score is absolutely perfect, then you can avail a personal loan of up to a maximum of 35 lakh from the State Bank of India.
Now, as soon as you visit the official website of SBI, that is, if you want to apply for a personal loan and you want to apply here with SBI because SBI is the most trusted bank in India. First, it is a government bank, and second, it has the trust of the maximum number of people in India.
Personal Loans Offered by SBI
So, if you want to take a personal loan from SBI and you visit the official website of SBI, then there you will see many types of personal loans. Such as SBI Quick Personal Loan, SBI Express Credit Personal Loan, and SBI Pension Loan. For example, basically for the salaried class—government employees have a separate personal loan, corporate employees have a separate personal loan, and private sector employees have a separate personal loan.
Apart from this, if someone’s CIBIL score is absolutely perfect and someone has a high net income. meaning if someone’s salary is more than one lakh, then for them there is a personal loan in a separate category. So, at a minimum, they offer seven to eight types of personal loans.
What Is a Personal Loan
Look, whenever we take a loan from a bank, the bank gives two types of loans. On one side there are secured loans, and on the other side there are unsecured loans.
1.Secured Loans Explained
What does a secured loan mean? It is clear from the name itself that the bank has security, like a home loan, car loan, or gold loan. These are secured loans for the bank.
For example, if tomorrow someone stops paying the home loan amount, then the bank has the power to vacate the house and recover its money. In a car loan, the bank will take back the car. In a gold loan, the gold is already kept with the bank.
So, all these are secured loans. The bank has the power that if the customer does not pay the money, then the bank can sell the customer’s asset and recover the money. That is why their rate of interest is low.
2.Unsecured Loans Explained
On the other hand, what comes under unsecured loans—credit cards and personal loans. In a personal loan, the bank gives the loan only on trust. If the customer does not pay the money, then the bank does not have any asset.
The bank can file a case in court, but recovering the money becomes difficult. That is why the rate of interest on personal loans and credit cards is very high.
You will see that a home loan is available at 8%, a car loan at 8–9%, but a personal loan at 14% or more. In credit cards, if even once a payment is missed, then interest of up to 40–42% gets charged.
That is why the rate of interest on personal loans is always higher.
Current Personal Loan Interest Rates
As of today’s date, which bank is providing the cheapest personal loan?
SBI mentions on its official website that the rate of interest on personal loans starts from 10.65%. But 10.65% is not available to everyone. This is given only to those customers whose income is more than one lakh and whose credit history is absolutely perfect.
For the normal salaried class, the rate remains around 12–13%, and if the CIBIL score is bad, then it can go up to 16–17% as well. So this depends from customer to customer. They clearly mention that the rate of interest on their personal loans starts from 10.65%. As your CIBIL score is, according to that only your rate of interest keeps getting applied.
Importance of Negotiation While Taking a Loan
Now here we start analyzing their personal loans one by one. First of all, we see that the very first type of personal loan that the State Bank of India offers is called SBI Personal Loan – Quick Personal Loan.
Before starting that, let me tell you one very important thing. Whenever you visit any SBI branch, okay, and you need a personal loan. Suppose they say that they will give you a rate of interest of 14%—always negotiate with the bank. Tell the bank that ICICI Bank is giving you a lower rate of interest, or imagine and create any such comparison in front of them. Banks always negotiate.
If they are offering you 14%, you should fight and say that give me a lower rate of interest. By 1%, very easily, they will reduce it from what they are offering. Whatever loan it is, always negotiate with the bank. It is not like whatever rate of interest they told you, you have to take it at that rate only. Always negotiate.
If they are saying 14%, if you convince them, they will come down to 13%. Because see, whether it is a government bank or a private bank, as of today every bank has fixed a target on every employee. That means the employee also has a compulsion to disburse loans. As much as you need the loan, they also have targets fixed.
So you should negotiate. That is why the bank employee will reduce the rate of interest on the loan for you. So negotiation is very important.
SBI Quick Personal Loan
So first of all, we discuss SBI Quick Personal Loan. Now, SBI gives Quick Personal Loan to those customers whose salary account is not maintained with SBI. For example, suppose I work somewhere, okay, and my salary comes into, say, HDFC Bank. Suppose I work in TCS, okay, so I work in TCS and my salary account is in HDFC Bank.
But now I want that the personal loan I need should be from SBI. So such customers whose salary comes into some other bank, but they want to take a personal loan from SBI, the personal loan that SBI gives them comes under the category of SBI Quick Personal Loan. That means the name of this personal loan is SBI Quick Personal Loan.
So now, let us take a look once at its features, eligibility, and terms and conditions.
Loan Amount and Eligibility
In SBI Quick Personal Loan, the maximum loan that you will get from SBI is up to ₹20 lakh. If we talk about eligibility, your minimum income should be ₹15,000. Apart from this, the EMI and NMI, that is, the net monthly income ratio, should not be more than 50%. This means, suppose someone’s income is ₹50,000, then in this case the maximum EMI that they can keep for a personal loan is ₹25,000.
That is, to explain it in another way, if someone’s income is ₹50,000, then they can take only that much personal loan that their EMI does not exceed ₹25,000. The bank does this because you may say that any customer will always say, give me the maximum personal loan. But the bank also has to see that the person should have enough money left to run the household.
Because suppose someone has an income of ₹50,000 and they take such a big personal loan that their EMI becomes ₹45,000. The customer will not refuse, they will say give it. But if they pay an EMI of ₹45,000, then only ₹5,000 will be left. With ₹5,000, the household will not run. If the household does not run, then somewhere or the other, the chances increase that the customer may default on the personal loan.
That is why the bank says that according to your salary, they will give you a personal loan in such a way that your EMI becomes only half of your total salary. If someone’s salary is ₹50,000, then their EMI will be ₹25,000 only, and they will give only that much personal loan.
Eligibility Criteria
Now, talking about eligibility, here anyone whether a central government employee, a private sector employee. or any employee whose salary account is in any bank other than State Bank of India—is eligible for this. Your minimum age should be 21 years and your maximum age should be 58 years. You should have at least one year of job experience.
Here, the minimum loan amount is ₹24,000 and the maximum loan amount is up to ₹20 lakh. Now, one question also comes here suppose my salary is ₹50,000, so will I get a personal loan of ₹20 lakh? No, no bank gives a personal loan of ₹20 lakh on a salary of ₹50,000.
The bank has a simple thumb rule that whatever your salary is, multiply it by 24. That is the maximum personal loan you can get. For example, if someone’s salary is ₹10,000, then ₹10,000 × 24 = ₹2,40,000 personal loan will be given.
Processing Fees and Charges
Apart from this, a processing fee is also charged, which we call a file charge. If someone takes a personal loan of ₹1 lakh, then 1.5%, that is ₹1,500, has to be paid as processing fee. The minimum processing fee is ₹1,000 and the maximum is taken only up to ₹15,000. It is not that on a loan of ₹20 lakh, 1.5%, that is ₹30,000, will be charged. SBI takes a maximum of ₹15,000 only.
If you miss the EMI on time, then a 2% monthly penalty is charged on the pending amount. This is a very high penalty, so while taking a personal loan, always make sure that you pay the EMI on time.
Pre-Payment Rules
Talking about pre-payment, you can do pre-payment only after a minimum of 6 months. If you took a loan of ₹10 lakh and after 6 months you want to pay the entire amount at once. Then you will have to pay an extra 3% charge, that is ₹30,000 as pre-payment penalty.
Required Documents
Talking about documents, ITR is required, 6 months’ bank statement, latest salary slip, Form-16 (sometimes it can be waived in negotiation). Aadhaar card, PAN card, and two passport-size photographs are required.
So this pre-approved loan is given only to those whose CIBIL score and everything is absolutely perfect, who had taken loans earlier and paid their EMIs on time. Then they get this type of pre-approved personal loan.