Banks make beeline for personal loans - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Banks make beeline for personal loans

Jul 5, 2000

A Personal Loan is an all-purpose loan, which you can use for whatever you want, whereever you want, however you want – no questions asked. The present spurt in personal loans is evident from the fact that the banking major – State Bank of India has set aside Rs 1 bn, the amount being equal to the amount for housing loan allocation.

Banks are now days willing to finance any conceivable expense. Having financed cars and homes for several years, these days business savvy moneylenders are beginning to realise the value of financing even small domestic needs of the individuals.

Some of the major players offering personal loan are HDFC Bank, ICICI Bank, Citibank, HSBC Countrywide, ANZ Grindlays Bank, American Express, SBI and Standard Chartered Bank with ABN AMRO being the latest entrant in the arena. And the most important factor is one does not need to maintain an account with the bank, although a few nationalised banks insist on it.

While the nationalised banks offer only consumer loans for specific product, foreign banks and multinational finance companies also give clean cash.

To reduce the paperwork and processing time these banks and NBFCs have very minimal document requirements as compared to housing and auto loans. For instance most banks demand:

  • Proof of residence and identity
  • Last few months’ salary slips and bank statement.

Most of the banks offer personal loans in the range of Rs 20,000 to Rs 1,000,000 and the interest rate varies in the range of 19% to 23%

Banks Years Loan
Amount (Rs)
Processing
fee (%)
Prepayment
charges (%)
Interest
rate (%)
Citibank 1 to 4 40,000 - 10,00,000 2 2 21
HSBC 1 to 4 50,000 - 800,000 2 2 20
HDFC Bank 1 to 4 25,000 - 300,000 2 2 21
ICICI Bank 1 to 3 20,000 – 300,000 2 2 21
StanChart 1 to 3 40,000 – 500,000 2 3 23

The concept of personal loans is fast catching up in the Indian psyche. The number of players in this arena has increased dramatically over the last few months. Now most of the banks (foreign as well national) and NBFCs are adding personal loans to their product portfolio. This is a win-win situation for both consumers and the financial institutions. It’s also a good thing for the economy as banks keep the money in the system rotating at all times.

Equitymaster requests your view! Post a comment on "Banks make beeline for personal loans". Click here!

  

More Views on News

Sorry! There are no related views on news for this company/sector.

Most Popular

Infosys vs TCS: Which is Better? (Views On News)

Nov 26, 2021

In the post pandemic era, the top two IT companies in India are fighting to capture the growing demand for IT.

This Multibagger Stock Zooms 20% After Dolly Khanna Buys Stake (Views On News)

Nov 24, 2021

Shares of this edible oil company zoomed over 50% in three days after ace investor bought around 1% stake.

6 Popular Stocks that Turned into Penny Stocks (Views On News)

Nov 27, 2021

A look at popular stocks that crashed big time and never recovered, i.e. which went from 'Multibaggers to Multibeggers'.

India's Top 5 Monopoly Stocks to Watch Out for (Views On News)

Nov 30, 2021

These 5 companies dominate their sectors with a huge piece of the pie.

5 Indian Companies Embracing Blockchain Technology (Views On News)

Nov 23, 2021

Blockchain adoption in India was slow in the past. Now, the technology is being well received.

More

Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

MARKET STATS