Personal loans are great options if you want immediate access to funds to meet emergency expenses. Getting a personal loan in India is easy when you meet the eligibility criteria established by lenders. Most lenders expect borrowers to earn a certain level of income and have all their documents in place when applying for personal loans.
Reasons to Apply for Personal Loans
The following are the main reasons to apply for personal loans in India:
- To meet vehicle expenses
- To take off on a vacation
- To repay credit card debt
- Rental deposits
- To meet school fees or tuition expenses
- To meet unplanned medical or other expenses
- To pay for home renovation
- To purchase new gadgets
- To build your credit history
- To finance a new business
Personal Loans for Individuals with Low Income
If you earn a monthly salary lower than Rs.20,000, you can still avail a personal loan to meet emergency expenses, if any. It can be especially difficult to have cash crunches when your salary is inadequate and you have no savings either. Some of the top banks and financial institutions in the country offer personal loans to those with low income in order to cater to those who don’t meet the eligibility criteria related to minimum income. For instance, if you have recently obtained your first job and need money to pay for your father’s medical bills, you can avail a personal loan from banks that offer them to people who earn even as low as Rs.10,000 per month.
Who Provides Personal Loans to Individuals with Low Income?
Several banks and private lenders offer personal loans to individuals with low income. Generally, these lenders expect you to spend over 55% of your income on Equated Monthly Instalments (EMIs). If you earn Rs.20,000 per month, you can spend Rs.11,000 at most on your EMIs, while the remaining amount can be used to finance your other monthly expenses.
Most banks offer personal loans up to Rs.5 lakh, but the maximum amount offered will vary from lender to lender and borrower to borrower. Here are the top five banks that offer personal loans to low income earners:
HDFC Bank Personal Loan
HDFC Bank is one of the leading financial institutions in India and a household name so far as the banking industry is concerned. The HDFC bank offers personal loans to those who earn low income in metro cities such as Delhi, Mumbai, Pune, Bangalore, Kolkata, Ahmedabad, Chennai, Cochin and Hyderabad. The minimum income requirement set by the bank is Rs.15,000, and you can apply for a personal loan online and the amount will be disbursed to your account within 24 hours provided you meet the other eligibility criteria set by the bank. The bank offers loans to first-time borrowers and provides special discounts for female customers.
SBI Saral Personal Loan
The State Bank of India offers personal loans to individuals with low salary. In case you reside in semi-urban or rural areas in India, SBI expects you earn at least Rs.10,000 per month when applying for a personal loan. In case you reside in urban centres or metro cities, the minimum monthly income you must earn to qualify for a personal loan from SBI is Rs.24,000. The maximum loan amount offered by the bank is 12 times your net monthly income, subject to a maximum of Rs.10 lakh. The bank does not require any collateral or security either, thereby making it relatively easy for you to gain access to immediate funds. The processing fees levied by the bank on personal loans usually range from 2% to 3% of the loan amount.
ICICI Bank Personal Loan
ICICI Bank offers multi-purpose loans at attractive interest rates and easy EMIs to individuals who earn low income. In case you reside in Delhi or Mumbai, the minimum salary you must earn to avail a loan from ICICI Bank is Rs.25,000. The minimum salary requirement for individuals who reside in cities such as Kolkata, Bangalore, Hyderabad, Chennai and Pune is Rs.20,000 per month . Individuals residing in other suburban cities need to earn a monthly income of Rs.17,500 to avail a personal loan from ICICI Bank. The minimum amount you can borrow from ICICI Bank is Rs.50,000 and the maximum is set at Rs.20 lakh. The interest rates on ICICI Bank personal loans start from just 11.59%, and the repayment tenures are quite flexible, ranging from 12 months to 60 months.
Punjab National Bank Personal Loans
Punjab National Bank is another big player in the Indian banking sector, offering personal loans to individuals who have immediate cash requirements. If you reside in a semi-urban area, the minimum monthly salary requirement for availing a personal loan from Punjab National Bank is Rs.10,000. For those residing in urban cities across the country, the minimum salary requirement is Rs.12,500 per month, and those who reside in metropolitan cities can avail personal loans from Punjab National Bank if their monthly income exceeds Rs.15,000. The processing fees levied by the bank on personal loans are 1.80% of the loan amount. The minimum amount you can borrow through a Punjab National Bank personal loan is Rs.50,000, and the maximum is set at Rs.4 lakh or 20 times your net monthly income. The repayment tenures are flexible too, ranging from 12 months to 60 months.
Axis Bank Personal Loans
Whether you require money for home renovation or a vacation or to meet wedding expenses, Axis Bank offers personal loans to low income earners at attractive interest rates. The documentation process is hassle-free and approvals are pretty quick, thereby making it easy for you to gain instant access to cash. The minimum monthly income criteria set by Axis Bank is Rs.15,000. The minimum amount you can borrow through an Axis Bank personal loan is Rs.50,000, and the maximum is Rs.15 lakh. The interest rates start from 15.50% and can go up to 24%. The processing fees levied on Axis Bank personal loans are 1.50% to 2%.
Different lenders have different minimum income requirements, so make sure you check for the same before applying for a personal loan.