HDFC bank personal loan is quite helpful when you have a shortage of the required funds. Through this scheme, you get funds starting from ₹50,000 to ₹ 40,00,000 for 60 months. It helps meet all emergency needs with ease & maintain sufficient liquidity in everyday life. You can use the borrowed money to finance the higher education of your sons/daughters, medical treatment, home improvements, etc.
Many people consider personal loans from NBFCs and banks much better than borrowing from ubiquitous microfinance organizations. The hassle-free application process, easy documentation, no requirement for collateral placement, swift releasing of the loan amount after approval have increased the popularity of HDFC personal loans. The interest charged on this loan starts from 10.50% APR to 21.30% APR. Furthermore, HDFC personal loan processing fee may go up to 2. 50% of the loan amount.
HDFC Personal Loan Eligibility: What Makes You Eligible For HDFC Loan Products?
To get approved for HDFC personal loans, applicants need to fulfill the following terms and conditions:
For job holders:
- The applicant should be an Indian citizen,
- Their age should be 21-60 years,
- They must have stable employment with an established company, business organization, government-controlled entity, etc.,
- Their income should be either ₹25,000 or more and
- Applicants who earn less than ₹25,000 need to apply with a co-applicant.
For Self-employed or Business People:
- You should have a stable and resurgent business organization,
- Income Tax returns of last two years,
- Account statement and business records.
What Helps Me Qualify For HDFC Personal Loans?
HDFC is India’s leading business Bank with a vast customer base. The terms and conditions of loan products are not very tough. But it doesn’t mean that you should be careless while applying for HDFC personal loan. The Bank receives plenty of applications for its loan product every year. You need to have a professional approach and pay attention to every detail to qualify for the loan. An unprofessional approach to loan application, document forgery, inaccurate information may provoke the Bank to reject your application. Therefore, you need to start the loan-application process in the following way:
Consider Are You A Risky Borrower?
The risk factor is always associated with a loan when it is not backed up by collateral, and the borrower has a volatile financial record. In India, non-repayment of the loan is a troubling issue. If you believe the report compiled by Economic Times, hundred wilful defaulters have not returned Rs. 84,632 crore to different Indian banks. Thirty-one top defaulters have already run away from India to avoid loan repayment. Business Standard reports that India saw Rs 25,000-cr wilful defaulter cases even before lockdown in 2020. All these increase the non-performing assets of Indian banks. That is why they have made the credit lending terms and conditions quite strict. Now, they only deal with less risky borrowers.
You should analyze yourself carefully and determine if you are a risky borrower or not. For example, are you earning sufficient income every month to meet all your monthly expenses? Do you have adequate resources to return the borrowed money with the applicable interest fee at the right time? A positive answer to all these questions will make you a less risky borrower automatically.
Income Vs. Monthly Expenses + EMIs + Savings
When you apply for HDFC personal loan, the Bank will pay more attention to your monthly income, expenses, EMIs, and savings. HDFC is more interested in issuing a new personal loan to a borrower with a sound financial record. That is why your employment and regular monthly income matters a lot. You should have been employed with a prominent business organization or company for the last two years. You must get your salary regularly in your bank account, and it is verifiable.
If you can meet all your essential monthly expenses in a particular month and save 60% of your income, Bank executives consider it a plus point. However, most Indians live from one paycheck to another and don’t have sufficient cash reserves. Therefore, before you apply for a loan product:
- Try to maintain financial discipline as forward as possible,
- Reduce all unnecessary expenses and unsubscribe from premium services if they are not necessary anymore and
- Try to reduce the number of pending bills and credit card payments as far as possible.
It’s because too many pending bills let bank executives develop a negative perception about your financial condition. You should have sufficient monthly income and additional resources to repay the new loan commitment at the right time.
What Is Your Expectation For The Loan Amount?
During the interview, Bank executives will ask this question. You should have a proper answer to it and reasons to justify it. Ordinary Indian loan borrowers hardly do any homework before loan applications. The sole intention is to get the maximum loan amount anyhow. They are not worried about its future implications. Excessive debt burden often results in non-repayment of the loan. Because the borrower often finds it challenging to meet all monthly expenses and repay the loan EMI simultaneously with regular monthly income. Therefore it is essential to determine how much money is necessary for your needs.
Take a loan amount that doesn’t put an additional burden on your monthly budget. You should be able to repay the loan amount during the repayment tenure. Many times, multiple people don’t have sufficient cash to clear EMIs. You can extend the loan repayment tenure by talking to the banker. But it comes with negative results. Your credit score may go down, and you will have to pay extra charges to the Bank. It can make the entire loan very expensive too.
Do You Have Expensive Assets Or Valuables?
In general, collateral doesn’t accompany personal loans offered by Indian banks. HDFC bank takes a look at your income and repayment potential to decide the loan amount. If you want to get a loan with flexible interest fees and accessible terms and conditions, never hesitate to display your additional sources of income. Indians are always ahead when it comes to saving cash for future use.
Many Indians invest in life insurance policies, mutual funds, share market, gold, land purchasing, expensive buildings at prime locations of the city, etc. If you display the details of these resources to the Bank, it may work in your favor. Bank executives will evaluate the total market value of all these resources. They use the obtained data to verify your claim for the desired loan amount. Demonstration of all the resources will help you get a massive amount as a loan quite comfortably.
Also Read: Tips To Get Your First Personal Loan From Banks and NBFCs in India
How Many People In Your Family Are Dependent On Your Income?
For HDFC Bank, borrowers’ ability to repay the loan matters a lot. That is why when you apply for the loan, they will demand the details of people dependent on your income. If you live on a particular monthly payment, the money you earn is distributed among the dependents. The more dependents you have in your family, the less repayment capability you will have. During the background check and verification process, you must tell the Bank how many people are dependent on your income. It allows Bank executives to determine your repayment capability and decide the loan amount accordingly.
Your Credit Score
When you apply for any personal loan online, the Bank consults credit rating agencies sooner than later. With this move, they can extract your previous credit records and quickly evaluate the risk factor associated with you. There are a large number of Indians who downplay the importance of good credit rating. Keep in mind that an excellent credit rating helps get loans on favorable terms and is quite helpful in everyday life.
The credit score is a financial statement that displays a person’s total earnings, spending, borrowing, and repayment habits in the last ten years. Looking at this report, Bank executives can determine the financial discipline you maintain in your everyday life. A good credit score means that you are financially sound, have fewer pending bills, and banks can trust your ability to repay the borrowed money.
On the other hand, having a bad credit score gives a negative message to the banker. The bank executive will feel that you have unstable employment, your income is insufficient, there are many pending bills against your name, and issuing a new loan to you is not free from risk. This is the reason why people with bad credit scores often face rejections from the HDFC bank. You need to maintain a credit score of 700- 750 to get approved for HDFC Personal Loan.
Can You Arrange A Co-Borrower For The Loan?
In India, a large number of individuals earn below Rs. 25,000 per month. If you see from this perspective, the overwhelming majority of Indians automatically become ineligible for HDFC personal loans. However, if your earning is below Rs. 25,000 per month, there is no reason to get disappointed. The Bank will still approve your application for the loan if you manage to arrange a Co-borrower. Make sure you choose a person with a stable financial record and good credit history. Such a co-borrower helps you to get approved for the loan.
Also Read: HDFC Online Personal Loan: A Necessary Loan Product for All Troubled Borrowers
HDFC Personal Loan Application
To apply for a HDFC personal loan, you can either use the internet or visit the nearest HDFC branch in your area. In both methods of application, you need to follow the same procedure. You need to fill the required information in an application form and submit it to the banker in an offline method. The Bank will ask you to attach documents to verify your employment, income, identity, credit scores, and other details. The whole process may take several days, or it can be accomplished in a few days soon after applying. It all depends upon the number of applications the Bank gets from applicants. That is why you need to maintain patience after loan application and wait for results.
The online application method is quite convenient and simple. You need to visit the website of HDFC Bank, navigate to the personal loan section, and submit your details using an electronic application form. Once the Bank gets your details, its executives start verifying details one by one. Always keep in mind that the Bank can reject your application due to one or more reasons. Therefore you should check the accuracy of information while applying for the loan online or offline. Banks conduct background checks to extract the previous record of credit borrowers and prevent unlawful loan borrowing practices. If it finds that you fulfill the loan eligibility criteria entirely and have a clean financial history, it may approve your application.
You can get the loan amount in your bank account in a few days. The Bank will deduct the processing fee from the approved money. On the other hand, applicants who fail to satisfy Bank executives are rejected for the loan. In both cases, applicants get notifications via call, SMS, and email.
Concluding Remarks
HDFC bank personal loan proves to be helpful when you need additional fonts on short notice. HDFC is present in almost all states in India. You can apply for the loan online and get the required money after completing all formalities. You must get this loan when there is an urgent requirement for cash. This loan is not designed to finance your lavish lifestyle. If you take this loan for luxurious needs, you will fall into an endless cycle of debt. So, borrow the loan carefully and maintain stability in your financial life. Happy borrowing.
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Frequently Asked Questions
Q. My Monthly Income Is Below Rs. 25,000. Can I Apply For An HDFC Personal Loan And Get Approved For It?
A. The priority of the Bank is to give loans to applicants who meet its eligibility criteria completely. However, if your monthly income doesn’t match the eligibility criteria, arranging a co-borrower might help. Negotiate with the banker regarding this and take the steps accordingly.
Q. My Credit Score is Below The Bank’s Criteria. So, What Are The Chances For The Approval of My Loan Application?
A. Applicants need to maintain a credit score starting from 700 to 750. If there are lots of applications for the loan, banks prefer candidates with a 750 credit score. There is no chance for loan approval if you are a bad credit borrower. If you are rejected for the loan, start working on issues that downgrade your credit score. With sincere effort and regular follow-up, you will improve your credit score in the coming days. This will help you to get a positive response from HDFC Bank in the future.
Q. What Should I Do To Repay The HDFC Bank Personal Loan?
A. The only thing you need to do is to maintain a balance in your bank account. These days, loan repayment is automated. On the due date of the payment, a certain amount automatically gets deducted from your bank account. You will get the notification for the same on your email ID and through SMS. You can also use a post-dated cheque or cash to repay the loan amount to the banker. However, the first loan repayment method is very convenient as you don’t have to visit the Bank.
