Standard Chartered Bank Personal Loan

Standard Chartered Bank, like its contemporaries, offers an attractive scheme of Personal Loan to individuals seeking finance to fund their personal or business expenses. One might face any sort of financial requirement and for every requirement, the Personal Loan scheme of the bank comes to the aid of the individuals. These loans are generally of a shorter term and come at higher rate of interest than a secured loan like a home equity Loan. The bank has many variants when it comes to offering a personal Loan and each variant promises something attractive for the borrower. These loans are simple loans which do not demand any security or collateral and are offered provided the applicant meets some basic eligibility criteria of the bank.

• Expenses which an individual cannot avoid and require financing for can be met by the personal loan which is a multi-purpose loan eligible to meet any sort of expenses like marriage, business needs, education needs of the child, etc.
• These Loans provide a tenure period ranging from 12 months to a maximum of 60 months i.e. 5 years, depending upon the business profile of the applicant.
• These loans can be availed by individuals, whether salaried, non-salaried or self- employed.
• Also called unsecured loans, these loans do not demand any security or collateral against the amount of the loan sanctioned. They can be simply availed by meeting certain pre-requisite conditions in the form of the inherent eligibility criteria.
• The rate of interest charged on the loans is not very high. This makes the loan cheaper as the required EMIs are lower and easy affordable for the borrowers.
• Bank provides for repayment of the loan through Electronic Clearing Service (ECS), PDC and Auto Debit Facility i.e. the EMI amount is debited directly from the applicant’s bank account.
• Keeping in mind the convenience of its customers, Standard Chartered bank provides loans with a simple documentation process. It follows this method to protect its customers from unnecessary burdens of arranging too many documents.
• Along with quick documentation, it also adopts quick processing methods in order to avoid a long waiting period of loan sanctioning for the applicant. It ensures a quick loan disbursement. Generally, it sanctions the loan within 4-7 working days after having received the required documents.
• It may so happen that the customer may require extra funds during the tenure of the loan. For that situation, the bank provides the facility to the customer to avail of extra funds if he is already and existing Personal Loan customer in the form of top up loans. However, these top up loans can availed only after completion of a minimum of 9 months from the disbursement of the original loan amount.
• The loan is disbursed either by ways direct deposit to the applicant’s bank account or through a cheque (if the applicant so wishes).  However, the validity of the cheque depends on the bank’s discretion.
• The interest accrues on a daily basis and is calculated on a 365 day year and on a 366 day year in the case of a leap year.
• These loans come at a fixed rate of interest. However, the amount of interest keeps getting reduced on every installment paid, because it is calculated on the overdue amount i.e. the amount to be repaid after the EMI and Interest paid.
• The bank provides the facility of EMI calculator which calculates the EMIs payable depending on the amount of loan availed and the tenure. So before applying for a loan, the customer may estimate the expense required to pay off the loan. The factor of affordability and the regular budgeting decisions can be made according to the calculated EMIs.
• The bank along with an EMI calculator also provides the facility of eligibility calculator.This eligibility calculator helps an individual to find out the amount of loan he/she is eligible for. The loan amount to be sanctioned is decided depending upon the borrower’s repayment capacity, income and the city where the loan is being disbursed.However, the loan amount ranges from Rs.1 lakh- Rs.30 lakhs. Salaried employees can avail up to Rs.30 lakhs whereas a non salaried professional can avail loans up to Rs.10 lakhs.
• The bank issues loans at an interest rate from a range of 11.99% to 21%.
• The bank also allows certain discounts amounting up to 50% of the processing fee in case of online application of the loan.
• The bank also allows for ‘Approval in Principle’ benefit, which helps an individual to check his/her loan eligibility in less than three minutes.
• An applicant can also apply for a loan on the basis of his /her existing standard chartered credit card or via Life Insurance policies.
• The bank charges certain processing fee at the time of application of the loan. These charges are non-refundable. However, if the bank fails to process the loan request for some reason, then the entire processing fee minus Rs.2000 is refunded by the bank.

• Application Form with a self-attested photograph: the basic requirement is the Application form which has to be filled correctly by the applicant stating all the required information. The borrower should ensure that the furnished details are duly supported by the other documents which are required. The form should also contain a clear photograph of the individual signed across by the applicant.
• An Identity Proof for which the Driving License, the passport copy or the Voter’s ID Card copy can be furnished. All these documents have the photograph of the applicant and his name which goes towards establishing the identity of the borrower in the eyes of the bank. Required in case of both salaried and Non-salaried employees.
• Address Proof – Copy of Ration Card / Electricity or Telephone Bill / Rental Agreement / Passport/Medical insurance policy/Apartment allotment letter. The applicant needs to submit any one of the afore-mentioned documents which state the correct address of the applicant needed for the verification process of the bank. However, the documents should not be more than 3 months old.
• The borrower’s age proof would be required which can be the Pan Card or the Passport Copy. These documents are the acceptable certified documents which would state the age of the borrower correctly
• Signature proof: PAN card/Driver’s license/Passport copy/Banker’s attestation Bank account statements. Any one of the document can be submitted. However, the applicant’s signature in the provided document should be clear and understandable. The applicant needs to maintain the same signature throughout the loan period.
• Last 3 months’ bank statement or latest ITR or Form 16. These documents establish the financial position of the applicant at the time when he makes the application. The financial position of the applicant is required to establish his creditworthiness. In case of salaried professionals, last three months bank statement, where the salary is credited. Required in the case of non-salaried professionals.
• Latest Salary Slip or current dated Salary Certificate with latest Form 16 is required in case of salaried employees to check their current level of income and match it against the minimum required level of income as per the eligibility standards.
• Processing Fee Cheque: the bank charges a minimal amount for processing the loan. An applicant has to submit the same along with other documents at the time of loan application.

The interest rate on the loans charged by standard chartered bank depends either on the existing base rate of the bank or on the Mortgage variable reference rate.

Base Rate:

Standard chartered bank decides the base rate keeping in mind, the cost of the current and savings account (CASA) along with the 6-9 months term deposit rate, and other factors which are common amongst all of the bank’s loan customers. The existing bank rate of the bank stands at 9.15% p.a.The bank, depending upon various factors such as the credit worthiness of the customer, the quality of the property being kept as collateral, nature of the applicant’s business and the risks involved in the operating sector, account behavior, relationship with the bank, costs and other related factors, decides the percentage of margin to be kept in between the variable rate of interest and the base rate. The margin may fluctuate according to the changes in these factors.

The bank levies certain service fee and charges against the loan that it issues. The list of Charges is given below:

1. Processing Fees: The bank charges a processing fee standing at the rate of 2.25% of the sanctioned loan amount, in case of new loans.
2. Prepayment Fees: The bank levies a prepayment fee standing at the rate of up to 5% of the original loan amount for all personal loans disbursed till 30^th September 2004, and for all loans disbursed post 30^thSeptember 2004, it charges a prepayment fee up to 5% of the original loan amount.
3. Late Payment Fees: The applicant must make sure that the EMI’s are paid well on time; otherwise the bank levies a late fee of Rs.495 per instance.
4. Interest on arrears: The bank charges an arrear fee standing at 2% per month.
5. Swap Charges: The bank charges a Swap fee of Rs.500 per instance.
6. Documentation and administration charges: In case of top up loans, the bank charges certain documentation charges standing at 2.5% of the net loan amount.

The above mentioned charges are exclusive of service taxes. Service tax of 14% will be charged over and above the mentioned charges.

However, the maximum interest rate cannot exceed 27% p.a.

The bank adopts a healthy repayment and prepayment facility. It ensures that the repayment of the loan is convenient for all the applicants. Hence, it has a proper schedule laid down for the same. The details for which are given below:

Repayment:

The bank allows for the repayment of the loan by the ways of Equated Monthly installments (EMI’S). EMI’s are calculated on the basis of accrued interest and principal to be paid monthly at the specified date.

• The installments are payable immediately after the disbursement of the loan, irrespective of the fact that whether the disbursed amount has been put to use by the applicant.
• The repayment of the loans can be done through ECS, PDC’s or standing instructions on the applicant’s account.
• The repayment of the loan has to be done on a regular basis in order to avoid late fee charges.

Terms and Conditions:

Whatever, be the course of payment, the applicant must make sure, that the mode of payment chosen by him should be honored every time the payment process is undertaken.

In case of a direct debit from the account:

• The applicant must ensure that he/she has sufficient funds in his/her account on the specified EMI date.
• The applicant must also provide Standard chartered with a proper authority to debit the applicant’s bank account directly. The applicant can do so by filling up the ECS mandate form and providing the bank with the necessary account details and signing the form duly, thereby, authorizing the bank to make the necessary EMI deductions on the due date.

In case of payments through Post-dated cheque:

• In case the payment is being done through post-dated cheques, then the applicant must make sure to issue post-dated cheques equivalent to the amount of the EMI’S to be paid, in favor of the bank. The applicant must replace the cheques, if the bank so demands.
• The applicant must ensure that he/ she does not issue any stop payment instructions on the Post -dated cheques given by him/her to the bank.
• The applicant must also ensure that the account from which the cheques are being drawn is running and in operation. If he/she chooses to close the mentioned account, then he/she will have to pay certain charges as set out in the loan agreement.
• The bank is authorized to use the cheques issued by the applicant to the bank, against the settlement of the loan. It means that the bank is free to fill the cheque with any outstanding amount in connection to the loan. However, the amount cannot exceed the loan amount at any time.
• The applicant must also authorize the bank to issue instructions to his/her employer to pay the applicant’s salary or other monetary remunerations in order to pay off the balance, if any, after the payment of all the EMI’S owing to the applicant’s loan account.

Pre-Payment:

Prepayment is a facility offered by the bank wherein the customer can repay the entire loan amount before completion of the original tenure. However, certain things are to be kept in mind before opting for this option.

• This facility can be availed only after completion of twelve months of availing the loan .i.e. a minimum of 12 months gap has to be kept between the loan issuance date and the repayment date.
• The applicant has to give the bank 21 days’ notice in advance.
• The applicant has to prepay the amount in accordance with the quote provided by the bank.
• In case, the applicant fails to give the bank a prior notice, then he/she will have to pay an amount equivalent to one month’s interest on the loan or the amount as decided by the bank.
• The interest, fees and other charges are calculated till the last day of the prepayment month. The prepayment charges stand at 5% of the principal outstanding amount.These charges are exclusive of service tax. Service taxes and other statutory taxes as applicable will be levied above the mentioned charges.
• The customer has to make the prepayments in full i.e. the principal amount along with all the accrued interests and charges along with any other applicable fee at one go. He/she cannot opt for part prepayment option.

• The bank also provides its customers certain additional services such as balance transfer program, funds transfer programs or other services which are available with the bank at the given time. However, in case of any inconsistency between the banking agreement terms and the terms of the additional services, the original agreement term will prevail unless otherwise stated in the additional services agreement.
• The top up loans issued in accordance to the existing loans are treated as a separate loan.
• The availed funds can only be used for the mentioned purpose. An applicant cannot use the funds for further investment.
• In case the applicant wishes to cancel the loan, he/she can do so by paying a minimal cancellation fee.
• The interest rate or the default rate of the loan may vary depending upon the prevailing market rates. These fluctuations will affect the installment amount and the number of installments.
• The bank at any point of time can demand immediate payment of the loan in full along with all the accrued interest, charges and fees in connection with the loan.
• The bank at its sole discretion may choose to use the given installments to set off the accrued interest rather than using the amount against the outstanding principal amount i.e. the bank may use a larger proportion of one or more installments towards the settlement of interests accrued instead of the principal amount to be paid by the borrower