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Personal Loan

State Bank of Mysore was set up in the year 1913 and founded by Dr. M. Visvesvaraya. The Bank was therein known as Bank of Mysore and had enjoyed the loyalty of the then Mysore Govt. Subsequently, the Bank expanded its scope of operations and was taken over by the State Bank of India. Presently, State Bank of Mysore functions as an associate of SBI Group wherein the State Bank of India holds an equity stake of nearly 92% of the subscriber base of the Bank.


SBM offers Personal Loan products in a wide range which may be utilized to cater to the varied funding needs of clients and customers resulting in increased convenience. The State Bank of Mysore offers Personal Loans at certain unique advantages which are not given by the other players in the market include reasonable interest rates, non-requirement of any added credit enhancement such as mandatory requirement of personal guarantee, collateral property or other variants of collateral security. The above mentioned benefits give the SBM personal loan products a greater value proposition to the customers vis-a-vis the other products offered by the market players. The State Bank of Mysore offers Personal Loans at another USP which is providing instant loan approval incidental to having a turnaround time which is one of the lowest amongst the current banking fraternity. The term TAT stands for Turn Around Time and denotes the time taken by Bank representatives to judge whether the SBM Personal loan proposal of the client should be accede or not. This apart, the Bank also boasts of a documentation process which is lucid and hassle free in respect of availment of any variety of SBM Personal loan facility.        


Personal Loan from State Bank of Mysore can be availed by any individual in his or her own name with the basic credit worthiness and a proper repayment intention with the minimum of efforts and in a hassle free manner. 

Types of Personal loans

Personal Loan – Xpress Credit


This is another type of personal loan offered by the State Bank of Mysore. The features of SBM personal loan of this variant are as mentioned below:
 

  • The loan offers Rs.24, 000 as the minimum amount and Rs.15 lakhs as the maximum amount of loan.
  • The repayment term granted for this SBM Personal loan scheme is a maximum of 60 months
  • A floating rate of interest is charged on this form of loan
  • A loan processing fee is payable when the applicant applies for the loan. This fee is charged at 0.5% of the amount of loan availed and is payable upfront on loan application.
  • If the amount of loan taken is more than Rs.25, 000 and there is a default in meeting the accrued instalment payments for more than a month, the bank would levy a penalty for the default. A penal rate of 2% which is above the rate of interest applicable for the loan would be charged on the outstanding amount of loan for the tenure of default. If a part payment has been made towards the EMI instalments then there would be no penal interest charged on the defaulted part of the instalment.
  • A collateral or security would be required for obtaining the loan which would be a third party guarantee from a person with equal means.
  • The rate of Equated Monthly Instalment (EMI) payable per lakh of the loan availed would depend on the applicant’s profile. For individuals with corporate salary packages and with or without check off facility, the EMI per lakh payable would be Rs.2296. for individuals with a corporate salary package and having a Salary Account with the bank, the rate of EMI is Rs.2322 while individuals with a corporate salary package and not having a Salary Account with the bank would be charged an EMI of Rs.2453 per lakh.

The corresponding interest rate for SBM Personal Loan and Xpress Credit Loan scheme are:


For SBM Personal Loan with a repayment tenure of 3 years – one year MCLR + 7.35% = 16.85%


Xpress Credit Loans:
 

  • Customers having a Salary Account with the bank with a Corporate Salary Package and with check off facility – 1 year MCLR + 3.85% = 13.35%
  • Customers having a Salary Account with the bank without a Corporate Salary Package and with check off facility – 1 year MCLR + 3.85% = 13.35%
  • Customers having a Salary Account with the bank without a Corporate Salary Package and without check off facility – 1 year MCLR + 4.35% = 13.85%
  • Other Customers who do not have a Salary Account with the bank neither a Corporate Salary Package and without check off facility – 1 year MCLR + 6.85% = 16.35%
  • Loan offered to State bank of Mysore officers - 1 year MCLR + 2.05% = 11.55%

SBM Personal Loan – Samachar
 

This is a specifically designed personal loan scheme meant for journalists engaged in reporting news. The features of the loan are as follows:
 

  • The loan is available to permanent employees of leading newspapers who earn a minimum salary of Rs.5000 per month
  • The loan is offered for purchasing articles specific for the profession of journalism like cameras, computer, books, mobile phones, two-wheelers, etc.
  • 12 times of the net monthly income of the journalist would be the permissible amount of loan with a minimum amount of Rs.10, 000 and a maximum of Rs.1 lakh.
  • A margin of 10% is retained by the bank while issuing the loan
  • The loan is offered as a term loan which is to be paid back in 36 months to 60 months at the maximum
  • The loan requires a security which is the hypothecation of the articles or any vehicle purchased with the loan amount
  • If check-off facility is available, the bank does not require any guarantee. However, in the absence of such a facility, an acceptable third party guarantee is required.
  • An insurance valuing 10% above the value of the articles purchased is required to be affected
  • The loan processing charge applicable on this loan is 0.50% of the loan amount sanctioned subject to a maximum of Rs.500
  • The loan would be disbursed directly to the dealer of the articles

SBM Personal Loan amount Eligibility

It is vital for a prospective client to judge whether he or she shall qualify for applying for a SBM Personal Loan at the very beginning.The Bank needs to satisfy itself with respect to certain basic SBM personal loan requirements which need to be fulfilled by a prospective candidate in order to avail any SBM Personal loan. Thus, some of the requirement criteria of SBM Personal Loan, in this regard are as follows:
 

a). The prospect needs to have completed a minimum age of 25 years at the time of availing the SBM Personal loan with the maximum age being fixed at 60 years.


b). The minimum incomerequired for SBM Personal Loan is fixed at Rs.6000 take home (monthly) and above to be able to become eligible for availing a SBM personal loan facility from State Bank of Mysore. It is also mandatory for a new customer to have access to telephone connection both at his/her home and official address.

SBM Personal Loan Interest Rate

The Interest Rate for personal loans charged by the Mysoreon its Personal Loan is one of the lowest in the industry at only 17.25% which is applicable for most SBM Personal loan applicants.However, the rates may be altered which usually a function of the credit worthiness of the customers seeking SBM Personal loans. In the vent or during the process of credit appraisal, if the Bank officials conclude that the applicant is not having a good repayment history in the past with the other financiers in the market or if he or she has previously defaulted in repayment of dues or does not meet the initial requirements of loan eligible criteria, the SBM Personal Loan interest rates may be altered or hiked to suit the requirement to cover for the possible increased risk exposure for the bank.


However, the variance if any are as per the norms of the industry and with linkage of interest rates to the benchmark market rates, there is not much biases that goes in favor of the banks while charging higher interest rates in such instances with respect to new applicants.


Following changes in the banking norms, the State Bank of Mysore now prices its loan on the MCLR the marginal cost of funds based lending rate. This MCLR is dependent on tenure and the MCLR in turn then determines the rate of interest on the bank’s loan products including personal loans. Let us see the MCLR of the State Bank of Mysore.
 

Period of application

Marginal Cost of fund based Lending Rate (MCLR)

Overnight MCLR

9.15%

1 month MCLR

9.25%

3 months MCLR

9.30%

6 months MCLR

9.40%

1 year MCLR

9.50%

2 Year MCLR

9.65%

3 Year MCLR

9.75%

 

Personal Loan Charges
 

Fee

Amount

Loan Processing Charge

1% of the loan amount

Tenure for SBM Personal Loan

12 months to 36 months

Sanctioned loan amount (*):

Up to Rs.1.5 lacs depending on the credit profile of the applicant

Pre-payment Charges

No pre-payment charges are charged by the Bank irrespective of when the customer forecloses the loan resulting in increased incentive for more credit discipline.

No Due Certificate / No Objection Certificate (NOC)

Complimentary

Stamp Duty and other Statutory Charges

As per applicable laws

Repayment Instruction Swap Charges

Nil

Cheque Bounce Charges

Nil

Duplicate Statement Issue Charges

None

CIBIL Report Copy Charges

Rs.50 per copy


(*) It may be possible for the applicant to increase his or her eligibility limit by clearing off all outstanding credit card dues as well as by choosing a greater tenure loan i.e. on that exceeds 36 months as stipulated.

Documentation

The loan approval process is always contingent upon the submission and acceptance of various documents which are required by the Bank officials when one decides to apply for a SBM Personal Loan. The loan approval process at State Bank of Mysore is also no different and calls for deposition of various documents pertaining to the credit profile and overall background of the applicant, which are in turn, scrutinized by the bank officials prior to giving the consent of disbursement of the SBM Personal loans to any proprietor or corporate.  It may be pertinent to note that any issues with respect to the assessment and or clarification of documents submitted may be viewed as a potential area of concern by the Bank officials. However, in most cases, the Bank provides a leeway to the customer by giving a grace period within which he or she can file the revised documents and is also given a chance to showcase or provide clarifications regarding the documents. A brief list of the documents that are required by the Banks to offer personal loans for the purpose of loan assessment is tabulated as below:


For Salaried Individuals:
  

  • Identity Proof – Copy of Passport / PAN card/Voter ID card / Driving License/Adhar card or letter issued by UIDAI.
  • Address Proof – Copy of Passport/Voter ID card / Driving License. The subject client is required to submit either one of the above documents which shall allow the bank representatives to verify the origins of the concerned applicant.
  • Proof of Age-Copy of Passport / PAN card/Voter ID card / Driving License/Birth Certificate/Adhar card or letter issued by UIDAI.The subject client is required to submit either one of the above documents which shall allow the bank representatives to verify the origins of the concerned applicant with a view to assess the age of the applicant.

For Self Employed:
 

  • Identity Proof – Copy of Passport / PAN card/Voter ID card / Driving License/Adhar card or letter issued by UIDAI.
     
  • Address Proof – Copy of Copy of Passport/Voter ID card / Driving License. The subject client is required to submit either one of the above documents which shall allow the bank representatives to verify the origins of the concerned applicant.
     
  • Proof of Age-Copy of Passport / PAN card/Voter ID card / Driving License/Birth Certificate/Adhar card or letter issued by UIDAI. The subject client is required to submit either one of the above documents which shall allow the bank representatives to verify the origins of the concerned applicant with a view to assess the age of the applicant.
     

Further, with respect to salaried individuals, it is mandatory to file certain financial documents in terms of the last 6 months bank statements alongwith pay slip for the last 2 months. Further, the latest Form16 certificate is also required to be submitted to the bank officials alongwith the last month’s telephone or electricity bill which serves as a double check on the applicant’s last known address.


The aforesaid documents help the bank officials to understand the monthly cash inflows and outflows of the applicant and also gauge the consumption pattern of the customer. Any suspicious or large value transaction in the bank statement will be looked into deeply by the bank officials’ and may also expose the applicant to various questions in order to justify the same. In case, the applicant is unable to support the rationale for such transactions the application of the applicant may be brought to doubt.If the bank balance maintained by the applicant is on the higher side, it also provides a positive impetus towards his loan approval as it indicates adequate coverage with respect to the bank’s debt servicing requirements for SBM personal loan. However the same also needs to be in line with the applicant overall background and profile as any inconsistency in the cash movement vis-a-vis the applicants nature of business operations is likely to draw a lot of questions from the bank officials.(Especially in case of personnel who are self- employed).


The above documentation requirement is equally applicable for both the salariedand self-employed personnel and is mainly used by the Bank to assess the background andorigins of the applicant, i.e. whether he is based in India or abroad. The same is significantly important from the banks’ perspective as if the applicant is an NRI citizen who spends considerable period of his time abroad in ayear, then the enforceability of the powers of the Bank can get severely restricted in view of cross country laws andstipulations which in turn may increase the credit as well as liquidity risk for the Bank in general, as is the case with any other financial entity.

Other Features

The State Bank of Mysore has the following features:
 

  • The bank gives various flexible payment options to the borrowers who apply for a SBM Personal Loan. For example, in case the applicant wants to avail to repay SBM Personal Loan through bullet payment structure or a structure where both the principaland interest charges increase gradually over the years, the same may be provided by the Bank to the applicant so that he or she is in a position to plan out the finances and reduce the repayment burden gradually. It also facilitates in a wise decision for the client as they are in a position to realistically make a credit risk assessment for themandthereafter manage the debt repayment obligations without any delay. The same not only help the Bank to reduce its NPA’s but also facilitates in the customer maintaining a good Cibil Score andrepayment track which in turn is favourable for him or her in the long run in the availment of any future loans.
     
  • As previously discussed in the article, a facility to calculate EMI for SBM Personal Loan online is also provided by the Bank to enable new clients to calculate their monthly repayment obligations with respect to their SBM Personal loans. The SBM Personal Loan EMI calculation can be explained with the help of various examples, details of which are tabulated below:
     
  • Mr. Ashish has ardent plans of visiting abroad, in conjunction with his family to USA with a view to celebrate the successful clearing of his daughter’s CA examination. The total cost of the tout turned out to be 10 lakhs for an all-inclusive round way fare for all the 4 members of his family. As the total cost seemed to exceed his budget, he sought to avail SBM personal loan in his name with a view to fund the balance shortfall of funds to make the trip. He makes a down payment of Rs.2 lacs and thereafter takes SBM Personal loan for the remaining Rs.8 lacs for the trip expenses with loan repayment tenure of about 4 years. In this regard, he was able to arrive at the exact loan repayment figure in terms of EMI and interest charges by availing of the EMI Calculator facility. Accordingly, he was able to conclude the figure of Rs.15,489 in respect of EMI taking into account an interest rate of 13%.
     
  • Mr. Basu has made elaborate arrangements with various events andprogrammes on a large scale for a period of 5 days to mark the celebration of his onlydaughter’s wedding anniversary in Kolkata. In order to make the event a success, he formalises a budget with respect to all the events andprogrammes in totality. After going through his finances, he was able to conclude that his existing finances would not be sufficient to meet the entire budgeted expenses and hence decides to opt for a SBM personal loan to the tune of Rs.5 lacs in his name to bridge the funding deficient (as against fixed budget of Rs.12 lacs). The decision of Mr. Basu was made not only within the confines of financials planning but also had an element of sentiment involved in it and hence though skeptical at the prospect, he was not willing to compromise on the quality of the planned events because of the enormity andsignificance of the event. Accordingly, he decides to avail of financial support from the bank in the form of a personal loan. After assessing his financial situation, Mr. Mitra resorts to Deutche Bank with the requirement and agrees to make good the loan in 5 years. Post calculation of the relevant figures, Mr. Basu was able to conclude hos total repayment obligations which turned out to be Rs.13,800 taking into account an interest rate of 12.5%.

A brief tabulation of the amounts payable as against the EMI’s for each of the above mentioned cases has been tabulated in the table for lucid understanding and inference:

 

Applicant

SBM Personal Loan Amount

Interest Rate

Term

EMI

Mr. Verma

10 lakhs

15%

5 years

21,567

Mr. Mitra

5 lakhs

13%

5 years

9800

Rakesh

2 lacs

14.5%

5 years

4327

 

  • The SBM Personal loans statementis also easily accessible through an online mechanism at the banks’ website and can be downloaded by the applicant to assess various vital information about the ongoing loan such as details of the last due date of payment, the amount of repayment obligations already due andlikely to fall due in course of time, the extent of amount of penaltyapplicable in case of delayed payment of interest and or principal by the client.
     
  • The details pertaining to the maximumamount of SBM Personal loan which may be availed by the clientalongwith facts as to whether the subject applicant meets the initialSBM Personal Loan eligibility criteria of the bank can also be easilyobtained through the effective use of the online tool. This helps the Bank to make an initial screening of all the applicants as the number of applicants who wish to avail of such loans is usually enormous with only a handful of them meeting the initial eligibility criteria of the Bank’s norms. It also leads to the indirect impact of minimizing the potential risk of default andlower the liquidity risk for the bank as well by curbing the desire to disburse SBM Personal loans to clients who are not as credit worthy as they claim to be.
     
  • The Bank’s stringent andformalized loan approval processes and structure benefitseither the existing as well as the new clients as they can be rest assured of full confidentiality of their private information as also the potential risk of non-payment of dues either due to their own or the Bank’s erroneousdecisions on their personal loan requests. The same is possible in view of the existence of various checks at the Bank’s as well as at the customer’s end. Thus, the new clients are able to get a peace of mind and not fret over the fact that the Bank may charge them extra fees or otherwise, which in turn, might an adverse impact on their fixed financial planning needs during the tenure of the loan. The same becomes possible due to existence of completetransparency during the entire loan approval process. This apart, the new clients can also get to know the current scenario of their loan application status as they can access the same online at the bank’s website with full clarity. However, in order to be able to do the same, the applicant is required to submit all required loan processing documentsand information in the onlineportal. The applicability of such facility also extends to existing account holders of the bank and is not only restricted to new users who have registered with the bank for the first time. All existing users of the bank can also avail of the Banks’ facility of knowing not only the current status of the loan processing mechanism and the extent of fresh funds which may be disbursed to them in due course of time but also gives an indication to the user when the funds are actually credited to his existing account with the bank.

Applying Online

The personal loan application at State Bank of Mysore can be done quite simply through the online portal resulting in an overall healthy and consumer friendly approval process for the potential clients. Any client with the intention of availing the Banks’ personal loan facility, needs to visit the website Paisabazaar.com and apply for the SBM Personal Loan


Generally, it has been observed that Bank requires the new loan applicant to furnish various details in the application form such as those pertaining to date of birth, current disposable income, ownership details of properties or other immovable properties if any, present organization details wherein he or she is employed, total years of experience and other requisite information. The same are thereafter analyzed by bank representatives namely Credit Officers in order to arrive at a decision of whether to accede to the loan proposal or not. The same is in turn a function of the debt serviceability of the subject applicant.