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Players in HDFC Bank’s Personal Loan Segment
One of HDFC Bank’s product segments is loan segment, and personal loan segment is its sub-segment. HDFC bank’s personal loans are essentially unsecured loans. Usually, for taking loans people need to back up their applications by a guarantor or collateral but this is not the case with personal loans, they need no such backing, what is required for availing personal loans from HDFC bank is proven creditworthiness.
So what sets the personal loan segment rolling and what in turn does it roll? Well, consumption opportunities in the market like a new car, a great foreign vacation, an education or skill development course and many such more product and services offers cost a chunk of money. But suppose this chunk is broken down into small pieces then it becomes quite affordable by the salaried and self-employed segment who can easily pay such small ‘chunks’ of monthly instalments as EMI’s out of their salaries or monthly incomes.
Role of Players in HDFC Bank’s Personal Loan Market
So we can say that four players have really mobilized markets and funds and the personal loan segment and they are:
- The buyer or the loan seeker: the buyer is the person who honours the available opportunities by making efforts to purchase them. Buyers appreciate the offers and want to avail the products and services on offer without waiting for them a lifetime. He/she wants the most out of life and has the ability to acquire products and services that they cherish.
- The seller: they are the entities who make attractive offers, a holiday in Europe, a six month’s training course, a techy gadget, beautiful interiors and the list goes on.
- The lending bank: pays the lump sum and gets repaid by the borrower in instalments
- Credit information agency: provides credit scores of loan applicants by which banks are able to take loan sanctioning decisions with ease and without errors.
How does the Personal Credit System Work?
Credit no more has a negative connotation, but unplanned and reckless credit seeking does. But if the credit consumption is planned and honoured duly then this leads to high creditworthiness, no credit history is not also a mark of creditworthiness.
The personal loan market has gathered pace, and the game changing factor has been technology and algorithms that make the swift coding of credit-worthiness possible. In the absence of credit scores, the unsecured loan market wouldn’t have taken off as banks would have never gained that surety while sanctioning loans. Credit information agencies like Credit Information Bureau of India or CIBIL collect information from various banks and financial institutions pertaining to loans taken up by individuals and generate CIBIL score and report. From the various lending institutions, CIBIL is able to gather information on
- How much loan has an individual has taken in the past?
- Have the past loans been duly repaid?
- How much loan is outstanding?
- Is the individual within credit limits?
When HDFC bank receives a loan application, it sends the applicant’s CIBIL score and CIBIL report. The CIBIL score assigned to the applicant as well as CIBIL report impacts significantly HDFC bank’s personal loan sanctioning decision. Individuals can also obtain their own CIBIL score and report directly from CIBIL for maintaining a tab on their credit status.
Meaning of CIBIL scores
As soon as an individual takes a loan from a bank or financial institution his/her credit related information becomes available with CIBIL. CIBIL assigns three digit code to individuals with credit history; a code within 300 to 900 implies that the individual has more than six months of credit history. Scores below 300 are considered high-risk individuals, whereas a score above 700 is considered credit worthy individuals. The closer the score is to 900, the higher the individual’s credit worthiness.
CIBIL Credit Report
Besides individual credit scores, CIBIL also furnishes individual credit report. In the credit report, the credit score is mentioned at the top. Besides the credit score, the credit report furnishes information on:
- Personal details
- Employment details
- Information on various accounts (including credit and loan accounts)
- Information on loan repayment records
- Information on enquiries made on the credit report.
Eligibility for HDFC Bank Personal Loan
HDFC Bank offers online personal loan eligibility check within minutes, and HDFC bank loans can be availed within ten minutes by existing HDFC bank customers. The main eligibility criteria for availing HDFC bank personal loans include:
- Applicants should be within 21 to 60 years of age.
- Applicant should have been in employment for at least two years
- Applicant should have been in same employment for at least one year
- Applicants residing in Mumbai, Delhi, Bangalore, Chennai, Hyderabad, Pune, Calcutta, Ahmedabad, Cochin should have monthly income of minimum Rs 15000
- Applicants residing in other places should have minimum monthly income of Rs 12,000
- High creditworthy applicants with sound CIBIL scores and reports get preference.
Salient Features of HDFC Bank Personal Loan
- Interest rate of loans: the minimum interest rate levied by HDFC bank on personal loans is 11 % and maximum interest rate is 19.84 % and average interest rate is 13.67%
- Prepayment of loans: loans cannot be settled by salaried people prior to 12 EMIs
- Other charges: includes loan processing charges, taxes if applicable.
How to Maintain Sound Credit Worthiness?
Sound credit worthiness can be attained by managing credits. These days credits can be managed online. We at Credit Seva provide online credit services to our members, our benefits include:
- We provide free joining
- We provide analytics on credit information
- We point out possible errors in credit reports and ways to correct them
- We point out bad loans and quick ways to dissolve them
- We suggest best credit options
- We send timely alerts and reminders
- We provide safeguards against frauds and thefts
- We provide a secure online platform
- We enable members to always keep a tab on their credit status.
What is the Importance of a Good CIBIL Score?
HDFC Bank places high importance on CIBIL scores. A good CIBIL score enables applicants to
- Be prioritized for loan sanctioning
- Avail unsecured loans without requirement of backup
- Avail benefit features, discount offers and gifts on HDFC personal loan products
- Negotiate better at the time of availing loans
- Invoke confidence in lender
- Never miss on best loan offer opportunities.
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