Federal Bank Personal Loan Eligibility 

Federal Bank personal loan eligibility is quite simple. The bank offers personal loans to salaried individuals who are earning at least Rs. 25,000 monthly income and are aged up to 60 years at the end of loan tenure. Applicants must be Indian residents and should have completed at least 3 years in the present job.

Federal Bank Personal Loan Eligibility Criteria

The first step for applying for any bank's Personal Loan is to make sure that you satisfy the eligibility criteria of the bank. The eligibility criteria depend upon the age, residency, income and other factors that the bank finds necessary.

Please find the eligibility criteria for Federal Bank Personal Loan mentioned below:

  • Residency: Federal Bank Personal Loans are available only for Indian Nationals. Personal Loans for NRIs are also available.
  • Occupation: The occupational eligibility depends on the type of Personal Loan. In the case of FedPremia, the loan is only available for salaried individuals, while the other loans can be availed by both self-employed and salaried employees.
  • Minimum income: Salaried individuals must have a minimum monthly income of 25,000 or above.
  • Maximum age: The individual should not exceed 60 years at the end of the loan tenure
  • Work experience: Applicant must have a work experience of at least 3 years with his or her current employer.

Features of Federal Bank Personal Loan

Please find the main features of the Personal Loan below:

PurposeThe usage of this loan is at the personal discretion of the borrower
Maximum loan amountThe maximum loan amount depends on the type of loan. For FedPremia, the maximum loan amount is Rs - 25 Lakhs.
Maximum tenure48 months
Interest rate10.49% to 17.99%
Loan processingLoan applications are speedily processed within a few days
Minimal documentationThe documents required to apply are few and quite easy to obtain from relevant issuing bodies.
Processing feeBorrowers are charged a 3% processing fee on the loan amount
ForeclosureLoan can be foreclosed after the first 12 months of issue
Flexible repayment planEMI is broken down into smaller amounts monthly for ease of payment on your part.
Multiple repayment channelsYou enjoy the luxury of picking a repayment channel that suits you from among the numerous options available.

Factors That May Affect Your Eligibility for a Federal Bank Personal Loan

Applying for a Federal Bank Personal Loan is relatively straightforward and in many cases, applicants receive the funds they apply for. However, rejections are also common due to the ineligibility of applicants.

Here are some of the factors that may affect your eligibility and by extension, your ability to access this loan:

  • Age: Your current age is a major factor that will always be considered during the loan process. For starters, Federal Bank does not issue Personal Loans to applicants who are under 21 or 60 years of age. But this is not all though. Another thing to keep in mind is how old you will be at the time the loan will mature. If you will exceed 60 years before the loan matures, your application will be denied.
  • Income: Your income is another factor that may make or mar your application. Remember that you will repay the loan from your monthly income, and if your income is not large enough to cover the EMI payment, you will not be given. The minimum monthly income acceptable is 25,000. If the monthly EMI charge on the loan exceeds 60% of your monthly income, your request will most likely be turned down.
  • Employer: The status of your employer is another factor the Federal Bank will consider. Government agencies are highly ranked as top employers and so are blue-chip companies with a very strong network and financial standing. The status of your employer is not a major factor but one that will still be considered by the bank before issuing you a loan.
  • Work experience with current employer: How long have you worked with your current employer? This is one information that will be asked of you. If you have worked for your employer for 3 years and above then that is good enough. If you have worked with the same employer for less than 3 years Federal Bank may not give you the loan.
  • Other existing loans: Debt accumulation will not serve your best interest when applying for this loan or for any other type of loan for that matter. Having an existing loan with this lender or with a different lender may not be a bad thing, but if the debt is huge and takes a large chunk of your income as repayment, then you may not be issued this loan.
  • Documents: Submitting an invalid, outdated or fictitious document will lead to the outright cancellation of your application. And what's worse is that you may be prosecuted or prevented from ever applying ever again.
  • Credit score: Your credit score is a very important factor in your Personal Loan application. A credit score is calculated taking all your prior credits in consideration. A good credit score can display a good handling of finances and good behaviour towards your credits. A credit score higher then 750 is required by the Federal Bank for Personal Loan approval.

Tips to Improve Federal Bank Personal Loan Eligibility

Now that you know more about some of the factors that may affect your eligibility for a Personal Loan, let's discuss some of the tips to improve them to make you creditworthy and less of financial risk.

  • Obtain your credit report: It is always a wise choice to obtain your credit report card and study it carefully before submitting a loan application to Federal Bank. Obtain your credit report and check for errors to your name, address, or erroneous entries. If you find any errors in your report, endeavour to correct them first before you apply for the loan. If you also notice that a debt you had previously cleared is still showing as unpaid, contact the creditor and have it corrected.
  • Pay your debt: If you have debts unpaid, do well to pay up. Lenders find huge debts very unattractive and may disqualify you on this basis alone. If the debt is not one that you can settle at once, enter into an agreement with your creditor(s) to repay in instalments. The more you pay up, the less indebted you will be and the better your credit score will be too.
  • Include your earned allowances: When providing details regarding your income make sure you include your allowances as well as this will increase your income eligibility further. If you can, implore your company accountant to pay your allowances into your salary account if this is not the case, but if it is paid separately, keep the allowance slips to serve as a piece of evidence.
  • Amke joint applications: Submitting a joint application is your best bet if you do not earn a very large income. If you are not able to increase your income (which is hugely unlikely), consider applying jointly with your spouse. Joint applications are great because just like paid allowances, they improve your income eligibility and brighten your chances of getting the loan amount you want.
  • Infuse other income sources: If you have an extra source of income different from your paid job, make sure you factor that into your income computation when filling the application form. Lenders who know that a borrower has other income sources often give them loans because they know that they won't default at the end of the day.
  • Verify your documents: Before you submit your application alongside your documents, make sure you verify the documents and the information you have provided. Your details and documents must correspond otherwise, your application will be denied. Your address must match the address in your KYC documents. The same is applicable for your age and your income details. Do not be in a hurry to submit the application. If you must apply for a loan, do it right the first time.
  • Apply early: Applying for a Personal Loan early enough, is also advisable. This is because the closer you get to the age of 60 years; the more difficult it will be to access loans. If you plan to apply for a maximum loan term of 48 months, make sure you apply for it at least before you are 56 years of age. This will ensure that you do not exceed the maximum age acceptable.
  • Go for a higher tenure: A higher tenure often means a lower EMI. A lower EMI will place a lesser burden on your finances. This way, the bank also has more trust factor in your repayment capabilities. A higher tenure also means longer time to repay the loan. This further helps improve your chances of loan approval.

Kotak Personal Loan Festival Offer 

Ahead of festival season, Kotak Mahindra Bank has announced Rs 999 flat processing fee offer on Personal Loans. Customers can avail of instant approvals on personal loan applications up to Rs. 20 Lakhs at lowest interest rate starting at 10.25% p.a for maximum of 5 years. 

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Federal Bank Personal Loan Eligibility Criteria FAQs

If I earn less than 25,000 can I still apply for Federal Bank's Personal Loan?

Federal Bank does not prevent anyone from applying to any of its products or services however, your request will not be granted. Only applicants who earn at least 25,000 will get the loan. Any amount below this figure will not be considered. You can choose to apply with an earning co-applicant. This way, your combined incomes can help reach the minimum income for the Personal Loan and increase your chances of approval.

How much can I borrow as a Personal Loan from the Federal Bank?

Although the maximum amount you can borrow is 25 Lakhs, this is not an indication that you will be issued this amount. Federal Bank will evaluate your ability to repay the principal amount you have requested for alongside the interest based on your income, your age and other factors that may not be disclosed to you. Personal Loans are issued at the discretion of the Federal Bank.

What is the longest possible time within which I can pay off the loan?

This depends on the loan tenure at which the loan is issued. Federal Bank Personal Loans have a maximum tenure of 48 months. This translates to 4 years so you can spread your repayments over this period but definitely not beyond it.

Can I use the funds from this loan to settle an existing debt?

Yes, the primary benefit of Federal Bank Personal Loans is that there is no limit to the end-use of the Personal Loan. You can use the funds availed by the Personal Loan to pay off any existing debt. Moreover, Personal Loans can have a lower rate of interest than credit card debts too.

Can I apply for this loan online?

Yes, Federal Bank offers you the option of applying for the Personal Loan online as well as offline. For an online application, you just to visit the Federal bank website. The procedure is similar to a physical application where you need to fill up and application form and submit it after uploading and attaching the relevant documents and photographs. Alternatively, you can apply for the Personal Loan through MyMoneyMantra's website.

Can I foreclose my Personal Loan after a few months of the issue?

Federal Bank allows loan foreclosure under a special condition. You cannot foreclose the loan before the first 12 months of issue. After 12 months, you are free to do so. Loan foreclosure attracts a foreclosure fee. Please contact any Federal Bank customer agent for more information about loan foreclosures.

Can I apply for this loan even though I have an existing loan with another lender?

An existing loan can mean a higher Interest rate for your Personal Loan application. You can, however, still apply for the loan if you have enough income to be able to pay for multiple EMI's. The bank will scrutinize your application carefully to determine your income eligibility. Another option is to consider paying off the existing loan or to increase its tenure to decrease the EMI amount. This will increase your chances of approval.

What collateral will Federal Bank accept before they issue me a Personal Loan?

Federal Bank does not demand collateral for Personal Loan. Once you are eligible for the loan and you submit all the relevant documents along with the completed application form, they will be reviewed and the funds will be disbursed within days.

Which documents can I use to prove my address?

The residential proof document is a mandatory document for Personal Loans. You can use any of the following documents to prove your identity:

  • Passport
  • Driver License
  • Voter ID
  • Electricity Bill
  • Telephone Bill
  • Lease Agreement

Which documents will I be asked to provide to prove my income?

The bank needs to make sure that you are capable of paying off the loan in time. For this, the bank will need documents that prove your income and your liabilities and expenses.

Federal Bank will demand the following documents as income proof for Personal Loan:

  • ITR or Form 16 for the last 2 years
  • Statement of Salary Bank account for the last 6 months
  • Salary slip for the last 6 months

How will Federal Bank decide my eligibility?

Federal Bank will decide your eligibility by reviewing the documents you have provided. For your age, your personal document like your Voter ID Card will be reviewed. As for your income, your salary account statement will be reviewed to ascertain the same.