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Union Bank Personal Loan Review: Interest Rate, Eligibility

Union Bank of India personal loans are best suited to salaried borrowers with a pre-existing relationship to the lender, pensioners, and government employees.

Union Bank Personal Loan Review: Interest Rate, Eligibility

Union Bank of India personal loans are best suited to salaried borrowers with a pre-existing relationship to the lender, pensioners, and government employees.

Editor's Rating

4.0/5.0

Good for

  • Pensioners and government employees
  • Low income borrowers
  • Small personal loans

Bad for

  • Self-employed borrowers seeking lowest interest rates
  • Borrowers without ITR
  • Large personal loans

Union Bank of India offers a variety of personal loan options, with interest rates ranging from 7.20% to 12.90%. In addition to these lower than average interest rates, the lender also has relatively low processing fees up to 0.50% of the total loan amount. Though Union Bank has generous eligibility criteria, the bank's personal loans are best suited to salaried employees. Self employed borrowers can still avail a cheap personal loan from Union Bank of India, but they should have a good CIBIL score and income.

Summary of Union Bank Personal Loans
Basic personal loan rates starting from 10.90%
Loan amounts between Rs. 5 lakhs and Rs. 15 lakhs
COVID-19 personal loan available
5 year loan tenures
Minimum income requirement of Rs. 15,000
Low processing fees

Table of Contents

What Makes Union Bank Personal Loans Stand Out to Borrowers

Union Bank of India offers lower than average personal loan interest rates starting from 10.90%, as well as a COVID-19 personal loan scheme that few banks are offering during the pandemic. Additionally, low income borrowers will find Union Bank's income requirement of Rs. 15,000 per month more suitable compared to other lenders who require a monthly salary of Rs. 25,000.

Below, you can find a list of Union Bank personal loans, as well as the features that make them stand out amongst the rest.

Union Bank Personal Loan SchemeFeatures
Covid Personal Loan
  • Residents Indians can avail up to Rs. 5 lakhs with 3 month moratorium and 5 year tenure.
  • Interest rates starting at 7.20%.
Union Personal Loan for Salaried
  • Avail up to Rs. 15 lakhs with 5 year tenure.
  • Interest rates starting at 10.90%.
Union Personal Loan for Self Employed
  • Avail up to Rs. 15 lakhs with 5 year tenure.
  • Interest rates starting at 12.90%.
Union Personal Loan for Government Employees
  • Avail up to Rs. 15 lakhs with 5 year tenure.
  • Interest rates starting at 8.90%.
Union Cash for PensionersAvail up to Rs. 10 lakhs with 3-5 year tenure.
Final loan amount and interest rate will depend on eligibility of borrower.

Union Bank Personal Loan Interest Rates

Union Bank description
Union Bank description

The most basic Union Bank of India personal loan has interest rates starting at 10.90%, making it one of the 10 cheapest personal loans amongst the banks that our financial analysts reviewed. However, your final interest rate will be determined by the Union Bank personal loan you qualify for, as well as other factors like your CIBIL score, job position, and income.

Below, you will find Union Bank personal loan interest rates per loan scheme.

Union Bank Personal Loan SchemeMinimum Interest Rate
Covid Personal Loan7.20%
Union Personal Loan for Salaried
  • Under Tie Up: 10.90%
  • Under Non-Tie Up: 11.90%
Union Personal Loan for Self Employed12.90%
Personal Loan for Government Employees
  • When Undertaking is Available: 8.90%
  • When Undertaking is Not Available: 10.40%
Union Cash for PensionersNot advertised.
Borrowers with a CIBIL score below 700 will have an additional rate of 0.10%.

Government employees can avail rates as low as 8.90% at Union Bank, though rates begin at 10.40% where employer undertaking is not available. While these are not the absolute lowest rate in the market, Union Bank of India is the only personal loan lender amongst the 35+ banks we analysed that dedicates a loan scheme to government employees. Therefore, if you work for a government organization such as Defence, Armed Personnel, and Ministries, consider Union Bank for your personal financing needs.

Similarly, Union Bank of India is amongst the few personal loan lenders that offers a COVID-19 personal loan. Eligible borrowers under this loan scheme can avail rates as low as 7.20% with monthly resets.

As a final mention, the most common Union of Bank of India personal loan has preferential rates for salaried borrowers, starting from 10.90%. Non-salaried employees will find slightly higher rates at 12.90%. If you are a self-employed borrower, you will find lower personal loan interest rates at UCO Bank or Citibank.

Union Bank Personal Loan Eligibility Criteria

Consider this if you seek a small personal loan

Required Monthly Income Rs. 15000 p.m. | Rs. 20000 for cities
Min. Loan Amount Unknown
Max. Loan Amount Up to Rs. 15 lakh
Processing Fee 0.50%, minimum Rs. 500 + GST
Interest Rate Type Floating
Loan Tenure Up to 60 months

Among the bank's 5 personal loan schemes, Union Bank of India's eligibility criteria is comparably generous compared to other banks.

First, salaried employees as young as 18 and as old as one year prior to the age of retirement are eligible for a Union Bank personal loan. Considering most banks have a minimum age requirement of 21, Union Bank is a good option for younger borrowers, especially students.

Self employed borrowers, on the other hand, have a minimum age requirement of 25 years and maximum age requirement of 75. While Union's minimum age requirement is on the slightly higher side — compared to UCO Bank's minimum age requirement of 21, for instance — its maximum age requirement of 75 is the most generous amongst all of the banks ValueChampion analysed.

Read more: UCO Bank Personal Loan Review

Below, you will find eligibility criteria per personal loan scheme, including income requirements, maximum loan quantum, loan tenures, and whether it is necessary to be a salary account holder before applying for a Union Bank of India personal loan.

Income RequirementLoan AmountLoan RepaymentRelationship With Bank
Union Personal Loan for COVID-19Not advertised.Rs. 5 lakhs5 year tenure inclusive of 3 month moratoriumMust be a 12 month salary account holder or existing borrower.
Union Personal Loan for SalariedRs. 15,000 p.m.Rs. 15 lakhs5 yearsSalary account not mandatory.
Union Personal Loan for Self EmployedRs. 25,000 quarterly balance in branch salary account.Rs. 15 lakhs5 yearsMust be a 24 month salary account holder.
Union Personal Loan for Government EmployeesNot advertised.Rs. 15 lakhs5 yearsSalary account not mandatory.
Union Personal Loan for PensionersNot advertised.Rs. 3 - 10 lakhs3 - 5 yearsMust draw pension from Union Bank salary account.

It's important to note that pre-existing customers can avail up to Rs. 15 lakhs, while new borrowers can only avail up to Rs. 5 lakhs, regardless of salaried and self-employed eligibility. If you are seeking a large personal loan of more than Rs. 30 lakhs, consider HDFC or Citibank instead.

Union Bank Personal Loan Processing Fee and Other Charges

Union Bank Personal Loan SchemeProcessing Fee
Union Personal Loan for COVID-19Nil.
Union Personal Loan for Salaried0.50%, minimum of Rs. 500 and maximum of Rs. 7500
Union Personal Loan for Self Employed0.50%, minimum of Rs. 500 and maximum of Rs. 7500
Union Personal Loan for Government EmployeesNil.
Union Cash for Pensioners0.10%, minimum of Rs. 100

Union Bank of India processing fees are lower than most other personal loan lenders who can charge up to 4.00% of the total loan amount. If you are seeking to minimise your total cost of borrowing, Union Bank's personal loan with a 0.50% processing fee is a good place to start.

If you qualify for the Union Bank Pensioner Loan, you will be charged a 0.10% processing fee, subject to a minimum of Rs. 100. Additionally, government employees and borrowers who are eligible for the COVID-19 personal loan will not face any processing charges.

Union Bank Personal Loan: Apply Online

You can apply for a Union Bank personal loan online or in person.

For the sanctioning of your loan, you will need to submit an assortment of documents including proof of address, identity and income. Union Bank of India requires more documents than other banks, including your last 3 years of your income tax return. For self employed borrowers, this may be a drawback, therefore you can consider Yes Bank or Tata Capital for your personal financing needs.

Union Bank of India Required Documents

Salaried BorrowersSelf Employed Borrowers
GeneralPAN Card, 2 photographs
Proof of Identity (any one of the following)Passport, PAN card, employee ID card, any other valid proof
Proof of Address (any one of the following)Electricity bill, telephone bill, Aadhar card, any other valid proof
Proof of IncomeLaste 3 years ITR, last 3 years Form-16 or letter from employer, last 6 months salary slipLast 3 years ITR
Proof of Out-GoesLoan repayment statement, LIC policies, valid proof of any other out-go

Union Bank Personal Loan Customer Care

If you have any queries regarding the Union Bank personal loan application process, you can reach out to Union Bank of India customer care.

Natalia Sanchez-Kumar

Natalia Sanchez-Kumar is a Junior Research Analyst at ValueChampion, specialising in loans in India. She is a History graduate of New York University and has worked in the area of social impact, Future of Work and socio-technological research in the US and India. She has co-authored policy proposals alongside the International Labour Organisation in Sri Lanka and the Maldives, as well as hosted a data privacy conference with Facebook in New Delhi.