SBI is one of the leading banks in India. Like all other banking services, they also cater to Personal Loan requirements of a vast database. Their loans are competitively placed and are approved to customers only on fulfilment of pre-defined norms and adequate documentation.
Advantages of SBI Personal Loans can be listed as follows:
- Applicability of interest at low rates.
- Computation of interest payable on daily reducing balance method.
- Low processing charges.
- No hidden or administrative costs.
- Collateral security is not required.
- Minimum documentation for loan sanction.
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Eligibility Criteria for Sanction of Personal Loans
SBI has a set of established criteria subject to which they approve loans to customers. The general SBI Personal Loan Eligibility guidelines can be detailed as follows.
| Eligibility Criteria | Salaried Individuals | Self-Employed Professionals |
| Profession/ Occupation | Salaried employees who are working with Government and Private companies. | Professionals like Architects, CA, Doctors, etc. |
| Age criteria | Applicant should be greater than 21 years of age and less than 58 years of age. | Applicant should be greater than 21 years of age and less than 65 years of age. |
| Income Criteria | Minimum income should be Rs. 5000 per month. | Minimum income should be Rs. 7000 per month. 5 Lakh of gross annual receipts can also be considered as the minimum income. |
| Loan Amount | The minimum amount of Personal Loan sanctioned is Rs. 25,000. The maximum amount is Rs. 15 Lakh, subject to 24 times of the net monthly income. | The minimum amount of Personal Loan sanctioned is Rs. 25,000. The maximum amount is Rs. 15 Lakh. |
| Minimum work experience | A total work experience of 24 months with at least 12 months with the current organisation. | A professional experience of at least 24 months. |
Documentation required for SBI Personal Loans
- Passport size photographs
- Identity proof
- Address proof
- Income proof
Eligibility Criteria for Different Types of Personal Loans by SBI
SBI has a few specific Personal Loan products. The eligibility guidelines for these are discussed below.
| Particulars | Xpress Credit personal loan | SBI Pension loan | SBI Xpress Power |
| Profession | This type of loan is generally sanctioned to employees of Central and State Government, Quasi- Government, Central Public Sector Units, Profit Making State Public Sector Units, Repted Educational Institutions, selected Corporates who have a business relationship with the bank. | Central and State government pensioners with pension account in SBI. Pensioners of Armed forces including Army, Navy, Air Force, and Paramilitary Forces. | This type of loan is sanctioned to employees of Central and State Government, Defence Establishments, Quasi- Government, PSUs, Educational Institutions of national repute, and selected Corporates. |
| Income Criteria | Net monthly income greater than Rs. 5000. The ratio of EMI to NMI should not be more than 50%. | The ratio of EMI to NMP should not exceed 50%. For family pensioners, this ratio is restricted to 33%. | This type of Personal Loan can only be extended to those individuals who have a monthly income of Rs. 50,000 per month. |
| Loan amount | Minimum amount of loan: Rs. 25,000, Maximum amount- 24 times of net monthly income subject to a maximum of Rs. 15 Lakh. Amount is restricted to 12 months of gross salary for eligible school teachers. | Minimum amount of loan: Rs. 25,000. Maximum amount of loan is restricted to 14 lakh for people less than or equal to 72 years of age, 12 lacs from 72 to 74 years of age, 7.5 lacs for pensioners between 74 and 76 years of age. This is subject to the amount of 18 months of pension. Defence employees also have a different slab for pensioners in the age group of 56 to 72 years of age. | Minimum amount of loan: Rs. 25,000, Maximum amount- 24 times of net monthly income subject to a maximum of Rs. 15 Lakh. |
| Loan tenure | A period of 72 months of residual service period whichever is lower. | NA | The loan needs to be repaid in 60 months or the remaining tenure of service, whichever is earlier. |
| Number of loans | 2 loans of this category may be extended subject to a time gap of 1 year between the loans and maintenance of NMI/EMI ratio. | NA | NA |
Tips for Boosting SBI Personal Loan Eligibility:
SBI is very strict about the fulfilment of its criteria at the time of approving loans. Steps which may be taken for improving chances for loan sanction are discussed below.
- Aim at Achieving and Maintaining a Favourable FOIR or Fixed Obligation to Income Ratio
SBI accesses the FOIR of every individual before approving a Personal Loan. FOIR refers to the aggregate of fixed expenses the individual has to undertake. These include rent paid, current EMIs which he would be paying monthly and such other fixed expenses. The ratio of these unavoidable expenses to his income gives an insight into his disposable income. This indicates whether he is in a position to repay further EMIs and loan liabilities. SBI looks at a FOIR of 0.45 as the benchmark for sanctioning Personal Loans.
Hence, chances of Personal Loan approval increase if you improve your FOIR.
- Apply Jointly
You can choose to Apply for Personal Loan with another co-applicant. The chances of loan approval are far higher if it is applied jointly rather than by an individual alone. This is because re-payments look easier if there is an additional source of income. Moreover, a co-applicant with a good income flow, strong Credit Score, and NIL to minimum financial obligations may boost the chances of Personal Loan sanction.
- Maintain a good Credit Score
Credit Score is a measure of an individual’s financial credibility. A Personal Loan is extended subject to maintenance of a decent score. One should not attempt to get a Personal Loan from SBI with a score lesser than 650. With a score less than 750 the chances of loan approval are remote. Your chances for Personal Loan approval from SBI increase manifold with a Credit Score of 750 and above.
- Stability of Job and Profession
At the time of sanctioning a Personal Loan, the bank would attach a lot of importance to your job and professional stability. That is to say, the tenure for which you are practicing in holds a lot of significance. You must be in the same profession for 24 months, with stability of at least 12 months in the current job. The total work experience vis-à-vis the tenure in the current workplace is evaluated to ascertain your professional stability. Sticking to one organisation for a significant period before applying for any loan would boost your chances of getting approved for credit.
- Residence location and tenure of stay
An owned residence belonging to the borrower is a big plus point while getting a loan approved. The bank generally looks at a minimum span of 12 months of residence at the current address while sanctioning a Personal Loan. The bank would also verify the address before processing your request.
It is a good idea to check SBI’s pre-defined list of locations. A lot of importance would be attached to your location of residence.
