The Indian Overseas Bank personal loan is particularly attractive to low income earners and borrower seeking a small personal loan up to Rs. 5 lakhs.
|Summary of IOB's Personal Loans|
|Loan Tenures of up to 5 years|
|Small loan amounts: up to Rs. 5 lakh|
|Interest Rates: From 10.80%|
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What Makes IOB Personal Loans Stand Out to Borrowers
IOB's personal loans are great for low-income borrowers, due to its low minimum monthly income requirement of Rs. 5,000 and relatively low floating interest rate of 10.80%. One drawback of these loans is that the bank's maximum loan size is just Rs. 5 lakh, which may deter those that seek a larger personal loan.
Estimated Cost of IOB's Personal Loans
|Duration (Years)||Processing Fee||Effective Interest Rate||Monthly Payment||Total Cost|
|*Assuming monthly income of Rs. 5,000, loan of Rs. 5 lakhs and 5 year tenure, total cost includes processing fee|
The bank is also a good option for high-income individuals that prefer a long-term personal loan. This is because it has the longest tenure option of any personal loan in India with loans of up to 7 years in duration. However, this loan comes with a minimum income requirement of Rs. 75,000 per month and a maximum loan size of Rs. 15 lakh, which can be limiting for those with moderate incomes or those that seek very large loans. Additionally, individuals that seek loans of 1 to 5 years are may be able to find more competitive rates from other lenders.
Who Can Apply: Eligibility Criteria
IOB has relatively minimal eligibility requirements compared to other lenders in India. It offers loans to individuals under 60 years old that earn at least Rs. 5,000 per month. This makes it a great option for borrowers with lower incomes. Individuals interested in the bank's standard personal loan are eligible for financing of 10 times their gross salary or 90% of the cost of article they plan to purchase whichever is less. However, the total loan amount is capped at Rs. 5 lacs.
Other Charges and Fees
IOB Charges a processing fee of 0.50%, which is much lower than the fees of its competitors which tend to charge 2.00% to 3.00%. The bank does not provide additional details regarding fees related to its personal loans on its website. However, other personal lenders in India typically charge fees for late payments, bounced cheques and cheque swapping. Our financial analysts recommend that borrowers enquire about fees before applying for personal loans in order to understand how to minimise their total cost of borrowing.
|Early Payment Fee||N/A|
How to Apply: Application Process
If you are interested in applying for one of IOB's personal loans you will have to fill out an application form. IOB does not specify which documents that it requires for personal loan applications, but most lenders in India require that applicants submit documents proving their identity, residence and income.
Documents Typically Required for Personal Loan Applications
- Proof of Identity & Address: KYC-PAN, copy of passport, voter ID card, driving license or Aadhaar
- Proof of Income: Salary slip or bank statement for last 3 months