An urgent need for money can crop up any moment, especially when you are least prepared. A Personal Loan addresses this situation. Not only are Personal Loans hassle-free, but also, in most cases, you get them promptly. Most Personal Loan approvals come through within three days flat.

Banks and non-banking finance companies (NBFCs) may not give you money to fund speculative ventures. But they will extend loans to borrowers for just about everything else. You could take a loan to fund personal requirements or family expenses. A Personal Loan will also allow you to buy consumer incurables or renovate your home.

Personal Loan for government employees

Lenders give Personal Loans to both salaried and self-employed individuals. If the borrower is a government employee, the lender can breathe a little easy. In fact, the lender may even relax the rules a bit. It would hardly ever do this for a private sector borrower.

Usually, banks follow a different set of guidelines for loans to government employees. Apart from this, most of the other criteria will remain the same. For example, you will still need a decent CIBIL score to get a Personal Loan.

Banks and NBFCs are always willing to extend loans to you. After all, it is their business to do so. At the same time, they have every right to examine your creditworthiness. Therefore, it pays to do some self-assessment before applying for a loan. In the meantime, maintain a clean financial record by closing old debts. Remember, tough situations may arise at the most unexpected of times. Personal Loans only help in making the ride less bumpy.

Who is eligible?

* Permanent and confirmed employees of public sector undertakings (PSUs)

* Central or state government officials

* Employees of other government institutions, like universities or colleges.

* Usually, government employees get preference if their salary account is with the same bank where they are applying for the Personal Loan.

* The net monthly salary (take-home pay) should not be less than Rs 20,000.

* The net take-home salary should not be less than 30% of the gross salary after deducting the equated monthly instalments (EMIs) of the proposed loan.

Tenure of the Personal Loan

Many nationalised banks will offer it as a term loan of 60 EMIs subject to the remaining period of service.

Loan amount

The loan amount will vary from lender to lender. In certain nationalised banks, the loan amount will be 15 times the net take-home salary. But there may be a maximum permissible limit set by the bank.

Security

You may need to submit one personal guarantee, preferably of a fellow employee. This is subject to the condition that one employee will not stand as guarantor in more than two accounts.

Interest rate

The interest charged will vary from lender to lender. Private sector banks and financial institutions often charge much higher interest rates. So, government employees may prefer the nationalised banks. In the latter, the rate of interest charged is only a little above 12%. But the borrowing limit has a cap in most cases—it should not exceed Rs 10 lakh. Most banks offer special Personal Loan interest rates for government employees, which is a distinct advantage.

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