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The best of personal loans

Niharika Bisaria

You have been dreaming of a getaway from the rut of city life, but don't get the time to take off. What's more when the boss finally sanctions leave, you realise it is too exorbitant and your salary bracket just can't take it. Well, not to worry. You can now avail of a quick personal loan and convert that dream holiday into a reality.

One good option to look at is Countrywide Finance's Express Cash scheme. The scheme that started off in April 1999 only in metros is now available in 27 cities. If you are 21 years old and residing within city limits you can avail of a loan between Rs 10,000 and Rs 100,000. To be eligible for this loan you need to be either a salaried employee earning Rs 7,500 per month or if you are self-employed you should be earning a minimum of Rs 6,000 per month. You will need to show your salary slip in case you are a salaried employee. If you are self employed you need to show your tax returns.

You will be charged a processing fee of 2 per cent with a minimum charge of Rs 300. In addition you will pay a flat interest rate of 14.65 per cent per annum on the principle amount. You can avail the loan amount for a period of 12, 18, 24 or 36 months and the company will work out an equated monthly instalment repayment schedule for you. In case you wish to pay the amount earlier there is no fine on prepayment.

If you avail of a loan for Rs 100,000, the equated monthly installment works out to Rs 9,554 for a period of one year, Rs 6,776 for 18 months, Rs 5,388 for a period of two years and Rs 3,999 for a period of 3 years. The period taken to get the loan is short, generally three days within receiving the completed loan forms and there are no questions asked about what you require the loan for. Though the interest rate is high, the plus point with this scheme is that the company is not particular about who your employers are; other schemes require you to be employed with an MNC or a public limited company.

In case you are a credit card holder and wish to avail of a loan of up to Rs 50,000, Countrywide offers you that too. For this you do not need to show your salary slip but do need to show your latest credit card billing statement.

If you are employed with a public limited company, Standard Chartered Bank will offer you a loan from Rs 50,000 up to Rs 500,000. Apart from being employed with a public limited company you need to be earning a minimum salary of Rs 8,000 per month. You can pay back the amount between 1 to 3 years. The flat rate of interest is 13 per cent. The effective interest works out to 23 per cent. A Rs 100,000 loan will cost you an EMI of Rs 9,408 for one year and Rs 5,237 for two years. The point to be noted is that the loan is available for a maximum of two years only.

In case you prepay the loan, you will be charged a penalty fee of 2 per cent on the outstanding principle. The bank, like all other banks, will ask you for post-dated cheques, in order to minimise the possibility of default. You must be between 24 to 58 years of age to qualify for the loan.

You need to give proof of residence and age, copy of your salary slip attested by your employer, copy of your passbook for the last three months and signature verification from the bank where your salary is being credited.

In case you wish to avail of a discounted rate of interest check out Citibank. The bank has lowered its interest rate on personal loans from 22 per cent monthly reducing to 20 per cent monthly reducing till the end of November as a special Diwali offer. The loan is available to all earning a minimum salary of Rs 8,000 per month working in a company with a turnover of over Rs 100 crore.

The bank offers loans up to 11 times, 9 times or 7 times of the net take home salary depending on whether you avail of the loan for 4 years, 3 years or 2 years. You are charged an interest rate of 10.5 per cent flat rate, which works out to an effective rate of 20 per cent on monthly reducing balance. It sounds good as in addition to the loan amount you also get a Citibank International Silver card free.

This implies that for the primary applicant as well as for one add-on member the annual fee of Rs 800 and add-on member fee of Rs 350 is being waived for one year. The documentation required is the salary slip for the last two months, bank statement for the last three months, proof of employment for the last three years and proof of date of birth. You need to be 25 years old. The bank charges an up-front processing fee of Rs 4,000 for a Rs 200,000 to Rs 300,000 loan, Rs 2,000 for a loan of Rs 100,000 to Rs 200,000 and Rs 1,000 for a loan up to Rs 100,000.

ANZ Grindlays bank also offers personal loans. These loans are once again offered only to those employed with a public limited company or a multinational. The bank charges an interest of 21 per cent on a monthly reducing balance and 12 per cent as the flat rate. You can avail of a loan between Rs 50,000 to Rs 5,00,000 for a period of one to five years. The amount of loan you can avail of depends on your net income. This means the income you pocket after all tax deductions as well as after deducting any other loan outstanding. You need to be earning a net income of Rs 8,000 per month.

If you avail of a loan for a period of one year you can take 4.3 times of your take home salary as the loan amount. For two years it is 7.8 times, 3 years 10.6 times, 4 years 12.9 times and 5 years 14.8 times respectively of your take home can be availed as loan.

You must remember that the processing fee is 2.5 per cent of the loan amount and the prepayment penalty is 2 per cent on the outstanding principle. Documentation required is much the same as asked by other banks viz a copy of pay slip, copy of TDS certificate (Form 16), six months bank statement, signature verification, proof of birth etc. You need to be between 21 and 60 years of age.

Taking a quick look at some of the options available, the Citibank offer looks good. So stop worrying, take the loan and make your dream holiday come true.

Equated Monthly Instalments for a Rs 100,000 loan
	1 Year	1.5 Years	2 Years	3 Years	4 Years	5 Years
Countrywide Finance	9,554	6,776	5,388	3,999	NA	NA
Citibank	9,264	NA	5,090	3,717	3,044	NA
Standard Chartered	9,408	NA	5,237	NA	NA	NA
ANZ Grindlays	9,312	NA	5,139	3,768	3,097	2,706

NA - Not Applicable

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