In today’s fast-paced world, getting a personal loan has become easier than ever, thanks to numerous instant loan apps. However, the interest rates on these apps can be as high as 30-35%. On the other hand, banks like SBI offer personal loans at much lower interest rates, often half of what these apps charge. In this video, we will discuss everything you need to know about personal loans, specifically focusing on SBI, the largest bank in India. By the end of this article, you won’t need to watch any other aricle on this topic.
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What is a Personal Loan?
Personal loans are unsecured loans that you can use for any personal needs, such as medical expenses, education fees, or travel. Since these loans do not require any security or collateral, they tend to be more expensive compared to other types of loans like car loans, home loans, or gold loans.
Why are Personal Loans More Expensive?
- Unsecured Nature: Banks do not take any security against personal loans.
- Higher Risk: Banks charge higher interest rates to compensate for the risk.
Understanding Personal Loan Terminology
It’s essential to understand some key terminologies to negotiate better with bankers:
Rate of Interest
- Fixed Interest Rate: The interest rate remains fixed for a certain period, usually 2-3 years.
- Floating Interest Rate: The interest rate varies based on an external benchmark, like the RBI’s repo rate.
Advice: Opt for a floating interest rate as it is expected that the RBI repo rate might decrease in the near future.
Loan Eligibility
- Generally, you can get a loan amount of up to 20-25 times your monthly income.
- For example, if your monthly income is ₹50,000, you can get a loan of up to ₹12 lakhs from SBI.
Other Charges
Banks also levy various charges such as processing fees, prepayment charges, and documentation charges. These charges are negotiable.
Loan Repayment
Repayment can be done through ECS or ACH mandates, which means a fixed EMI will be deducted from your bank account every month.
Required Documents for Personal Loan
Keep these documents ready to expedite your loan process:
- Income Tax Returns or Form 16
- Six months bank account statement
- Aadhaar and PAN card
- Three months’ salary slips
SBI Personal Loan Products
SBI offers various personal loan products, each catering to different needs:
1. SBI Express Credit
- Eligibility: Minimum monthly salary of ₹15,000
- Loan Amount: ₹25,000 to ₹20 lakhs
- Interest Rate: 11.35% to 14.50%
- Processing Fee: 1%
- Other Charges: Penal interest, prepayment charges, etc.
2. SBI Quick Personal Loan
- Eligibility: Minimum monthly salary of ₹15,000
- Loan Amount: ₹25,000 to ₹20 lakhs
- Interest Rate: 14% to 15%
- Processing Fee: 1.50%
3. SBI Real-Time Express Credit
- Target Audience: Government and defense employees
- Features: Digital application via SBI YONO app
- EMI/NMI Ratio: Up to 60%
4. SBI Express Flexi
- Eligibility: Premium customers
- Loan Amount: Minimum ₹1 lakh
- Features: Only overdraft facility available
5. SBI Express Elite
- Eligibility: Minimum monthly salary of ₹1 lakh
- Loan Amount: Up to ₹35 lakhs
- Interest Rate: Lower than other products
- Features: No overdraft facility
Tips for Getting the Best Deal
- Compare Interest Rates: Check rates from at least 2-3 different lenders.
- Consider Home Loan Top-Up: If you already have a home loan, a top-up can be cheaper than a personal loan.
Conclusion
We hope this article provided you with all the information you need about personal loans, especially from SBI. If you found this video helpful, please like, share, and subscribe to our website. Also, don’t forget to fill out the survey link in the description if you have taken a personal loan or plan to take one in the future.
Everything You Need to Know About SBI Personal Loans in 2024
