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Navigating the Personal Loan Landscape for Unlisted Company Employees
Posted on Wednesday, January 31st, 2024 | By IndusInd Bank
Obtaining personal loans for salaried employees can be more difficult for employees of unlisted companies compared to those working for listed corporations. The lack of publicly available financial documents and shorter credit histories make this segment seem a higher risk to lenders. However, demand for flexible financing options from this growing professional group has led financial institutions to customize their personal loan offerings. Employees of unlisted companies now have avenues to access reasonable amounts within manageable repayment terms. This article provides an overview of the eligibility criteria, application process, loan terms and repayment strategies for individuals seeking personal loans while employed at private firms.
Eligibility Criteria and Application Process
The basic eligibility criteria include being an Indian citizen above 21 years of age with a minimum income of 25,000 per month depending on the city and loan amount sought. Most lenders allow salaried professionals with 1-2 years of work experience to apply. You may need to submit income proof like Form 16, recent salary slips of the last 6 months and bank statements. Credit score requirements range between 650 and 750 and vary from lender to lender. For institutions like IndusInd Bank, the application process is entirely online for personal loans, requiring no paperwork. A soft credit inquiry is conducted to give an instant decision in principle. Sanctioned loans are disbursed directly into the bank account within hours of approval.
Comparing Interest Rates and Loan Terms
Interest rates for personal loans tend to be higher than housing or auto loans since they are unsecured. The rate of interest offered by major players ranges from 12-24% per annum depending on factors like loan tenure, amount and credit profile. Go for lenders quoting attractive annual percentage rates (APRs) after factoring in all charges. For instance, IndusInd Bank has personal loans with interest rates starting from just 10.49%.
Tenures for IndusInd Bank personal loans vary from 12-48 months with flexible repayment options of EMILoan amounts start from Rs.30,000 going up to Rs.5 lakhs based on monthly income.
Use online rate comparison tools to find the best deal matching your specific requirements. Negotiate rates directly with customer care teams and check for ongoing festive offers too. Consider processing and pre-closure charges while choosing between multiple loan options.
Documentation and Approval Challenges
Income proof like six months’ bank statements and Form 16 may not be enough for unlisted private firms. In such cases, lenders ask for additional documents like listed company appointments letters, experience letters from clients or partners as income substantiation. Gaps in credit history also bring higher scrutiny during underwriting. Joint borrower or guarantor options also ease the approval process for those with thin files.
Strategies for Successful Loan Management and Repayment
To ensure on-time repayments:
- Set EMI due date reminders and track finances regularly through net banking or apps.
- Insure loan against risks like accidental death for coverage.
- Maintain a healthy credit mix by using not more than 30-40% of the sanctioned limit.
- Track CIBIL scores every 3-6 months and fix any errors to keep the reports clean.
Unlisted firms face greater challenges, but digital personal loans now offer viable financing. With responsible utilization and on-time repayments, borrowers can establish healthy credit histories paving the way for bigger loans in future. So, what are you waiting for? Apply for a personal loan today!
Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.
