Introduction:

Any banker who offers a personal loan product is concerned with the borrower’s repayment capacity. After a bank has financed the desired amount, it expects a timely serving of the monthly dues.

Thus, in the case of government employees, the banker has additional comfort due to job assurance and a consistent source of income.

Given the other risk parameters, obtaining a personal loan is relatively easy for a government employee compared to employees of a corporate organisation.

What are the Eligibility Criteria for Government Employees?

Age: The first most essential criteria are at least 21 years to apply for a personal loan.
Profession: Personal loan becomes easier for government employees since they are salaried. Hence, employees of public sector units, departments of Central Government, state government and even government schools are eligible to apply.
Salary: Persons having salary income at least Rs. 15000 per month are eligible for the application of personal loans.
Existing obligations: The applicant should have enough disposable income after all current financial obligations. The banker evaluates through the same user information from the CIBIL report.
Period of service: Employees who just started their service have to check their eligibility outright with the banker. Generally, employees with a service period of at least one year are eligible.

What are the features of a Personal Loan for Government Employees?

The lenders have essential comfort in job security of the applicant. Thus, the personal loans intended for Government employees are driven from the consistent source of income and lower risk of default.

Accordingly, the following are the key features:

The approvals are instant. With minimum documentation, the application process is quick and easy for personal loans. If you have a salary account in the same bank, documentation is not asked.
The personal loan interest rate is lower considering the lower risk of default.
Using the personal loan EMI calculator, you can evaluate the monthly outgo. For government employees, you have a choice to choose to equate only the interest portion and agree to repay the principal amount at maturity. It allows you to plan your finances well.
Further, loan disbursals are quick. Once the bankers approve the application, the amount is quickly transferred to your loan account. Thus, you get instant access to the funds.
Due to the lower risk involved, Government employees can apply for a higher loan amount. The loan quantum differs from bank to bank.
The repayment tenure is flexible since it allows up to 5 years. However, with a longer-term, the interest outgo is higher. You can check the same through the personal loan EMI calculator. Moreover, for government employees, the loan amount gets transferred to the account, and the applicant needs to pay the interest only on the amount utilised.

Things to keep in mind while applying for personal loans:

Personal loan interest rates are competitive these days. Hence, check for the interest rates offered by various lenders.
If the government employee has a salary account with the lending bank, the banker may offer an additional discount or waive the processing fees on the personal loans. You should check for the offers from your banker.
Each banker may levy different charges for personal loans. Compare the processing fees imposed by various lenders, and you can reduce the loan cost.
Few bankers also provide customised offers to salaried individuals. Before making an application, check with your banker first. In such a case, the application and disbursal process is quick.
The EMI amount is essential than the desired loan amount. The banker may provide you with the highest loan amount. However, you need to check your repayment capacity using the personal loan EMI calculator. It will help you to plan your budget accordingly.

Conclusion: