Personal Loan for Government Employees

With the changing lifestyle of people, there has been a great demand for finance to fulfil growing aspirations. Personal Loans have become the most popular way to fund an array of requirements instantly. Personal Loans are unsecured loans that are given without any specifications of end use. This is the most convenient loan to resort to when in need of urgent funds. It can be used for just about anything. Be it medical emergencies, planning a wedding, planning a vacation, education expenses or for bridging the budget gap during the construction of a house or for the renovation of your existing house.

The availability of a technology platform to apply for these loans online such as MyMoneyMantra has made it even easier to avail the loan. There is no need to submit a pile of documents and make multiple visits to the financial institution for availing the loan. All you need to do is to furnish the required details online and upload soft copies of the necessary documents and it's done! If you satisfy the eligibility criteria, you will get instant approval and the loan will be disbursed within less than 2 days. The loan proceeds will be credited directly into your bank account.

Special Schemes for Government Employees

Many banks have devised special Personal Loan schemes for Government Employees wherein the interest rates are lower than the regular Personal Loans. Concession in certain charges associated with Personal Loans like interest rates, processing charges, and pre-payment charges is also available.

Details of specialised Personal Loan scheme for Government Employees by some of the top banks are as enunciated below:

SBI Xpress Credit Personal Loan

Parameter	Features
Eligibility	Permanent/confirmed employees of State/Central Government, Quasi Government, PSUs and profit earning State PSUs, National Level Educational Institutions, Select Corporates having a business relationship with the SBI Bank, Corporates without any business relationship with the Bank (subject to certain terms & conditions). The applicant should be in the age group between 21 years to 60 years. Minimum Net Monthly income should be 5,000 The EMI to Net Monthly income ratio after consolidating all the present commitments including the EMI of the proposed loan should not exceed 50%. Salary account should be maintained at SBI
Nature of facility	Both term loan and overdraft facilities
Purpose of loan	No specific purpose defined. Can be used for just anything. Can be used for planning a wedding or a vacation, for medical emergencies, for the renovation of the house, for education expenses, and so on.
Quantum of loan	For Term Loan: 24 times Net Monthly Income with a minimum of 25,000 and maximum of 15 Lakhs. For Overdraft: 24 times Net Monthly Income with a minimum of 5 Lakhs and maximum of 15 Lakhs. For teachers, the maximum loan amount is capped at 12 times gross salary.
Margin	Nil
Collateral security	No collateral security. This is the specialty of this loan
Third party guarantee	No third -party guarantee required
Repayment	Maximum 72 months or remaining service period (whichever is less)
Interest rate	The Interest is between 12% to 15% (as on 14.05.2019)
Processing fee	1% of the sanctioned loan amount + applicable GST
Pre-payment charges	3% of the amount t be prepaid Nil if the loan is closed with the proceeds of new loan account opened under the same scheme
Penal interest	2% over and above the applicable interest on the overdue amount for the period of default. If part EMI is overdue then penal interest will not be levied.
Other facilities	There is a provision for a 2^nd loan under this scheme which can be taken after 1 year of disbursement of the loan provided the repayment towards the first loan is regular. There cannot be more than 2 Xpress Credit loans outstanding for a borrower. The second loan will be sanctioned only if the EMI to Net Monthly Income is maintained at 50% after including the EMI for the second loan.

Union Bank of India Special Personal Loan for Government Employees (SRLGE)

Parameter	Features
Eligibility	Permanent/confirmed employees of State/ Central Government, State/ Central Government undertakings, Armed personnel, PSUs, Ministries/ Department under Ministries, Defence personnel, Officers of All India Services, Teaching and non-teaching staff in Government Schools & Colleges. Minimum age of the applicant should be 18 years The applicant should have a salary account with the bank An applicant without a salary account will be eligible for only the Term Loan facility.
Nature of facility	Both term loan and overdraft facilities
Purpose of loan	End-use for the loan is not restricted. It can be utilised for just about anything.
Quantum of loan	The maximum quantum of loan is 15 Lakhs depending on the repayment capacity.
Margin	Nil
Collateral security	No collateral security
Third party guarantee	Guarantee of one co-employee is required. One employee cannot be a guarantor for more than 2 co-employees. Guarantee of the spouse: If the borrower is unmarried/ widow/ widower, then third-party guarantee of a person who is having equal means and has a credit score of 700 and above should be given.
Repayment	�� For term loan, the maximum repayment period is 60 months or one year prior to retirement whichever is earlier. For overdraft facility, on attaining the age of 55 years or 5 years prior to retirement age whichever is earlier. The overdraft limit will be reduced by 25% every year so as to clear the entire loan one year prior to retirement.
Interest rate	10.60% to 12.10% (as on 14.05.2019)
Processing fee	Nil

Oriental Bank of Commerce Personal Loan Scheme for Government Employees

Parameters	Features
Eligibility	Permanent and confirmed employees of PSUs, Centre/State Government, and other Government Institutions like Colleges/ Universities, etc. Applicants should have their salary account with the Oriental Bank of Commerce. The minimum net monthly salary should be 10,000 or above (not less than 30% of the gross salary after EMI deduction for the proposed loan). For employees who do not maintain a salary account with the Oriental Bank, gross monthly salary should be 50,000 or above.
Nature of facility	Term Loan
Purpose of loan	Can be utilised for any purpose like education, family function, wedding, travel, purchase of a gadget, renovation/repair of the home, medical emergency, and so on. There is no restriction on the end use, except that, it should not be used for speculative purposes.
Quantum of loan	Up to 15 times of the gross salary (maximum 10 Lakhs)
Security	Personal guarantee of a fellow employee with a restriction that one employee cannot stand as guarantor for more than 2 loan accounts.
Margin	Nil
Interest rate	11.50% p.a. (as on 14.05.2019)
Penal interest rate	2% above the normal interest will be charged on the overdue amount for the overdue period.
Repayment	Up to 60 months
Processing fee	0.50% of the sanctioned loan amount (minimum 500) + applicable taxes.
Pre-payment charges	Nil

Axis Bank Personal Loan to Government Employees

Parameters	Features
Eligibility	Confirmed government sector employees of PSUs, Central/Local bodies Minimum net monthly income 15,000 Age between 21 years to 60 years
Nature of facility	Term Loan
Quantum of loan	Minimum 50,000 and maximum 15 Lakhs
Purpose	Can be used for any purpose as per the borrower's discretion. There is no restriction on end use.
Security	Unsecured loan. No security is required
Margin	Nil
Interest rate	Fixed Rate of Interest (as on 14.05.2019): For loans with repayment tenure up to 36 months: 16% to 24% For loans with repayment tenure above 36 months: 15.75% to 24%
Penal interest rate	2% on the overdue amount for the overdue period
Pre-closure charge	Nil

Personal Loan for Defence Personnel

Earlier, it was difficult for the defence personnel to avail Personal Loans owing to their unpredictable postings. Since the operations in the bank account were manual in nature visiting the branch to conduct any transaction was mandatory. Now the whole scenario has changed and they will be able to access their account from any corner of the country.

With this development, defence personnel are now able to avail a Personal Loan. They are even offered special benefits like concession in interest rates and other charges stipulated by the bank.

The mandatory requirement for availing a loan is having their salary account with the bank from where they are availing the loan.

State Bank of India (SBI) and Union Bank of India, to name a few, are the banks that offer Personal Loans to defence personnel.

HDFC Bank is having a special loan scheme for defence personnel but SBI and Union Bank of India are offering Personal Loan to the defence personnel under the special scheme meant for Government Employees.

Union Bank of India is offering Personal Loan to defence personnel with the same features and benefits offered to other Government Employees.

State Bank of India is offering Personal Loan to defence personnel under their X-press Credit Scheme meant for Government Employees but with a difference. SBI is offering concession in rate of interest to Defence Personnel.

Documents Required for Personal Loans to Government/Defence Employees

Personal Loan application form (duly filled and signed), along with 2 recent coloured passport-sized photographs.
Income Tax Returns for the past 2 years
Identity proof
Proof of residential
Proof of income/ pension (in case of pensioners)
Defence personnel should submit a copy of ID card issued by the Department

Personal Loans to Pensioners

If you are a Central/State Government or defence pensioner and are below 76 years of age, then, you can avail Personal Loan from the bank where your pension is being credited.

The following is a list of banks, to name a few, who offer loans to pensioners. The features and benefits of the loan are as mentioned below:

SBI Pension Loan

Parameters	Features
Purpose	Can be used for any purpose like planning a wedding, for travel, for the purchase of a gadget, to meet medical emergencies, and so on. There is no restriction on usage. Can be utilised for any purpose as per the discretion of the borrower.
Quantum of loan	For Central/State Government Employees Minimum quantum available is 25,000 and maximum quantum equal to 18 months' pension with a ceiling in the amount as mentioned below: For pensioners of age up to 72 years:� 14 Lakhs For pensioners above 72 years but less than 74 years: 12 Lakhs�� Above 74 years to 76 years: 7.50 Lakhs For Defence Pensioners Minimum quantum available is 25,000 Quantum for pensioners less than 56 years being 36 months pension with a maximum of 14 Lakhs For pensioners above 56 years quantum being 18 months pension with a slab wise ceiling as mentioned below: Age greater than 56 years and up to 72 years: 14 Lakhs Age greater than 72 years and up to 74 years: 12 Lakhs Age greater than 74 years and up to 76 years:� � 7.50 Lakhs EMI to Net Monthly Pension should not exceed 50% for both Central/State Government pensioners and defence pensioners. For Family Pensioners (including defence pensioners) Minimum quantum: 25,000 Maximum quantum: 18 months pension with a slab wise ceiling as mentioned below: Age greater than 56 years and up to 72 years: 5 Lakhs Age greater than 72 years and up to 74 years: 4.50 Lakhs Age greater than 74 years and up to 76 years: 2.50 Lakhs EMI to Net Monthly Pension should not exceed 33% of the pension for family pensioners.
Repayment	The repayment period is also fixed slab wise as per the age of the pensioner. For Central/State Government Employees Age up to 72 years: 60 months Age above 72 years and up to 74 years: 48 months Age above 74 years and up to 76 years: 24 months For Defence Pensioners Age up to 56 years: 84 months Age above 56 years and up to 72 years: 60 months Age above 72 years and up to 74 years: 48 months Age above 74 years and up to 76 years: 24 months For Family Pensioners Age up to 72 years: 60 months Age above 72 years and up to 74 years: 48 months Age above 74 years and up to 76 years: 24 months Standing instruction to debit pension account to recover monthly EMI should be given in case of all pensioners.
Margin	Nil
Guarantee	Third party guarantee of a spouse eligible for family pension In the absence of a spouse, the guarantee of other family members or third party who is worth the loan amount.
Processing charges	0.50% of the sanctioned loan amount for Central/State Government pensioners including family pensioner + GST. Nil charges for defence pensioners
Pre-payment charges	For pre-payment and part- payment 3% of the outstanding liability will be collected. If the loan is closed before the term by the proceeds of another loan then no pre-payment charges will be applicable.
Interest	11.95% to 12.45% p.a. (as on 14.05.2019)

Punjab National Bank Personal Loan to Pensioners

Parameters	Features
Nature of facility	Term Loan or overdraft
Purpose	No restrictions on end use of the loan. Can be used for any purpose as per the discretion of the borrower.
Quantum of loan	Minimum amount is 25,000 For pensioners up to the age of 70 years: 18 months pension in case of Central/State Government Pensioners and 20 months for Defence pensioners with a maximum of 10 Lakhs. For pensioners above 70 years of age and up to the age of 75 years: 18 months pension in case of Central/State Government Employees and 20 months salary in case of Defence pensioners with a maximum of 7.50 Lakhs. For pensioners above 75 years of age: 12 months pension with a maximum of 5 Lakhs
Repayment	Up to 60 months For pensioners above 75 years of age, the maximum repayment period is 24 months. Repayment should be fixed in such a way that EMI to Net Monthly Pension should not exceed 50%.
Margin	Nil
Interest	For both Term Loan and Overdraft at 11.45%
Guarantee	Third party guarantee of spouse eligible for family pension or guarantee of children who are employed specifically, in a government department or any other person with means equal to or more than the loan amount.
Processing charges	Nil
Documentation charges	500 + applicable taxes

Eligibility Criteria for Personal Loan to Pensioners

Like any other Personal Loan to individuals/self- employed professionals and non -professionals, even pensioners have to satisfy the eligibility criteria set out by the banks to qualify for the loan.

For Central and State Government Pensioners

The age of the pensioner should not be more than 76 years and in the case of Vijaya Bank Pensioner loan, the age of the pensioner should not be more than 72 years.

Pension should be credited to the account maintained at any one of the branches of the bank where the pension loan is availed.

Pensioners whose pensions are disbursed by Government Treasuries by way of cheques drawn in favour of the bank branches as per the mandate of the pensioner are also eligible for the loan. In such cases, the original Pension Payment Order will remain in the custody of the Treasury and the pensioner gives a mandate to the Treasury for payment of pension through a particular branch of a bank.

Such pensioners should furnish an irrevocable mandate stating that they will not amend the mandate to the Treasury and the pension will be paid to the account in the bank branch till the pendency of the loan.

The Treasury concerned will consent in writing that it will not accept any request from the pensioner to transfer their pension payment to any other bank/branch till a No Objection Certificate is issued by the Bank.

For Defence Pensioners:

Pensioners of Armed Forces, including Army, Navy and Air Force, Paramilitary Forces (CRPF, CISF, BSF, ITBP, etc.), Coast Guards, Rashtriya Rifles and Assam Rifles who's Pension Payment Order will be with the Bank.
There is no minimum age stipulated. But the maximum age at the time of availing of the loan should be 76 years.

For Family Pensioners (including defence family pensioners)

Family pensioner i.e., spouse of the Pensioner who is authorised to receive the pension after the death of the pensioner, provided the family pensioner is not more than 76 years of age at the time of availing of the loan.

Frequently Asked Questions - Personal Loan for Government Employees

What are the eligibility criteria for a Personal Loan to Government Employees?

The eligibility criteria for a Personal Loan to Government Employees are as follows:

Permanent/confirmed employees of State/Central Government Department, Quasi Government Department, PSUs and profit earning State PSUs.
Teachers of government schools and colleges are also eligible for this loan
The applicant should be in the age group between 18 years to 60 years
Minimum Net Monthly income should be between 5,000 to 15,000 depending upon the bank where the loan is availed from.
The EMI to Net Monthly income ratio after consolidating all the present commitments including the EMI of proposed loan should be between 30% to 50%, depending upon the bank from where the loan is availed.
Salary account should be maintained at the bank where the loan is availed

What is the repayment tenure available for the Personal Loan to Government Employees?

The repayment tenure available is typically between 12 months to 60 months.

What is the turnaround for these Personal Loans?

With the facility of applying for the loan online available, the turnaround for these loans has drastically reduced. The loan will be disbursed within hours if all the details are furnished accurately.

What are the purposes for which the loan can be utilised?

The loan can be utilised for any personal purpose like education expenses, marriage expenses, travel expenses, and for any medical emergencies. This unrestricted end use has made this product very popular.

What is the best way to get a good deal on Personal Loan interest rate?

Banks consider applicants with a good credit score (700 or above) as low-risk borrowers. A good credit score indicates good management of funds and regular repayment of loans. If the credit score is good, negotiation for a good deal, in terms of interest rate can be done.

What is the difference between a Personal Loan to government employees and a Personal Loan to defence personnel?

All the key features for both the loans are similar except that defence personnel get the loan at a concessional rate.

What are the eligibility criteria for Personal Loan to pensioners?

Central/State Government/Defence pensioners can apply for the Personal Loan
Age of the pensioner should not be over 76 years
The pension should be routed through the account maintained at the bank from where the loan is availed.

What is the repayment tenure available for the Personal Loan for pensioners?

The repayment tenure is fixed depending upon the age of the pensioner:

For pensioners below 56 years(defence pensioners): 84 months
For pensioners above 56 years but = 72 years: 60 months
For pensioners above 72 years but = 74 years: 48 months
For pensioners above 74 years but = 76 years: 24 months