Credit & CIBIL News Help and Advice

Best Personal Loans For Government Employees

Best Personal Loans For Goverment Employees

Top Personal Loans for Government Employees

Government employees could be the most pampered workforce in all of India or they could be the most underpaid, overworked and overlooked category, depending on whom you ask. The Central Government along with various Public Sector Undertakings, Nationalized banks, Navaratna & Miniratna companies and the various State Governments employ anywhere between 100 to 200 million people. Of all the perks that come with a government job, the most attractive is that of job security. And interestingly, this is what makes them almost instantly eligible for a bank loan! This is precisely why banks and financial institutions compete to come up with attractive, tailor-made offers for government employees.

Personal loans are offered for a variety of reasons like:

  • To meet personal/ family expenses like marriage /family functions
  • Purchase of consumer durables
  • Medical expenses incurred/to be incurred for self, spouse, children, dependent, near relative.
  • For repairs/ renovation/ extension of existing house/flat.
  • Repayment of existing housing loans from other banks/financial institutions
  • Education of self, spouse, children, near dependent relatives

Unlike personal loans offered for other individuals and regular salaried class, the ones offered for government employees comes with many benefits like low interest rates, low processing charges, no administrative charges, no prepayment penalties, no security loans, minimal documentation, easy repayment options etc.

In this article, we will look at some of the best personal loans available today for government employees.

  • Oriental Bank Of Commerce Personal Loan Scheme (OPLS-Govt.)- Customized Scheme For PSUS & Central / State Govt. Employees (Working & Pensioners)

The Oriental Bank of Commerce offers attractive personal loans for permanent and confirmed employees of Public Sector Undertaking (PSU) and Centre / State Govt. Department and other Government institutions like Universities/Colleges etc. at attractive rates. To avail this offer, the individual needs to maintain their salary account with the bank. The amount of personal loan disbursed could be up to 15 times the net take home salary with a maximum of Rs. 5.00 Lacs. Any government employee with a net monthly salary above Rs. 10000 is eligible for this loan. Even pensioners below 68 years of age can apply for a personal loan subjected to few conditions.

The rate of interest for Govt. (Central / State) & PSU Employees (Working & Pensioners) under this scheme is 11.95% p.a.

  • Bank of India Star Personal Loan

Under the Bank of India Star Personal loan, an individual is eligible for a maximum quantum of Rs.10.00 lakhs, depending on their net monthly take home salary.

The interest rates under this scheme are as follows

i. Fully Secured 4.50 % above 1 Year MCLR
ii. Clean/Unsecured 6.00% above 1 Year MCLR
iii. For Senior Citizens aged 60 years & above for loans upto Rs.50,000/- 3.50% above 1 Year MCLR
iv. Financing Secured under tie-up arrangements 4.50% above 1 Year MCLR

MCLR- Marginal Cost of Funds Based Lending Rate

The processing charges are a onetime charge @ 2.00% of loan amount with a Min. Rs.1000/- and Max. Rs10, 000/- plus service tax. There is no processing charges for Senior Citizens (60 years & above).

  • State Bank of India Xpress Credit Personal Loan

The Net Monthly Income (NMI) to qualify for this personal loan is Rs.7500p.m. The loan amount available under this scheme is Rs.24000 to Rs 15.00 lacs depending on the NMI. The repayment period varies between six months to sixty months.

The processing fee of the Xpress Credit Personal Loan is fixed at 1%. There is a pre-closure option that allows the individual to close the loan before its tenure, but a prepayment charge of 3% may be applicable. The rate of interest may vary between 8 to 10%.

The bottom line 

Apart from the above, there are other financial institutions like Tata Capital, Axis Bank, HDFC bank, ICIC Bank etc that offer personal loans for government employees. However, the individual should consider the various rates, pre-closure clauses, overdraft charges, penalty rates etc. before making a decision.

Leave a Comment