With rising expenses and aspirations, there is an increase in the needs of individuals across various walks of life. There comes a time in life when we need that extra help in terms of money to meet our demands. An increasingly popular medium to fulfill such requirements has become Personal Loans. Buying a dream vehicle, child’s marriage, furnishing the home, higher education and a family holiday are few of the common needs met through a Personal Loan.
A Personal Loan is a type of unsecured financing which is given by banks/ lending institutions subject to factors such as the credit history of the borrowers and their ability to repay the loan. Usually, a good credit score, the income tax return statements and last three months’ salary slips are sufficient to avail this loan. The tenure of Personal Loans can range between 1 to 7 years typically. These loans are paid back via EMIs (Equated Monthly Instalments) during the tenure of the loan and usually, have an option to prepay them (subject to the Terms and Conditions).
While Personal Loans have been around and salaried employees have had easier access to them, till recently these loans were not as easy to access for certain government employees, specifically those that served in the Defence and Paramilitary forces. Usually, Personal Loans have been accessible from Public Sector Banks for these categories of employees, and Private Sector Banks extended these to those in the higher ranked profiles.
Few factors that made for the disinclination to provide Personal Loans were based on factors like lower salaries (before the 7th pay commission), regular and frequent transfers of the employees and changing relationships with the banks.
However, with the change in many policies and offerings of banks, some of the leading private sector banks have also proactively started offering Personal Loans to government employees serving in Defence and Paramilitary services. Some such examples are as mentioned in the table below:
| Service Type | Rank/Grade | Typical Net Income Requirement | Eligibility Criteria / Any Other Info |
| Indian Army | JCO & Above | 25-35,000 P. M. | 3-5 years job continuity |
| Indian Navy | JCO & Above | 25-35,000 P. M. | 3-5 years job continuity |
| Indian Airforce | JCO & Above | 25-35,000 P. M. | 3-5 years job continuity |
| CRPF | All Ranks | 25-35,000 P. M. | 3-5 years job continuity |
| CISF | All Ranks | 25-35,000 P. M. | 3-5 years job continuity |
| SSB | All Ranks | 25-35,000 P. M. | 3-5 years job continuity |
| SPG | All Ranks | 25-35,000 P. M. | 3-5 years job continuity |
For the above, applicants have usually had to be posted at the same location until the verification of their documents and disbursal of the funds. They also could require a confirmation regarding their employment, authorized by their department head. Post disbursal, the process is the same via EMIs through an auto debit facility.
For men and women serving these organizations, the larger private sector banks such as ICICI, HDFC, and AXIS to name a few have extended their Personal Loans at Interest Rates ranging starting from 14 to 15%.
Considering this outreach, MyMoneyMantra, India’s leading online financial services provider, has started offering a range of Personal Loan offers for such employees.
Also Read: Personal Loan Pre-Payment Decoded
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