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Personal Loan for Government Employees 2020

Personal Loan Interest Rates for Government Employees

Last Updated 19th Sep 2020

HDFC Bank RatesICICI Bank Rates
Maharatna PSU11.49% 11.60%
Navratna PSU11.49% 12.25%
PSU Banks15.50% 13.25%
Central Govt. Employees15.00% 12.25%
Railways15.00% 12.25%
State Govt. Employees15.00% 12.25%
Defence15.00% 11.75%

Personal Loan for Govt Employees

  • The interest rate on Personal loan for government employee starts @11.49%
  • Special offers available for government employees of India and public sector undertakings
  • Nil processing fees for defence personnel
  • Lowest interest rates for employees of public sector banks

As per the current rates, both HDFC and ICICI bank offer the lowest interest rates of 11.49% for Government Employees. Based on processing fee, ICICI Bank offers lowest processing fee with 0.99% charges for government employees working in Defence. For central govt. employees, the best personal loan rates are 12.25% to 16.5%.

SBI Personal Loans for Govt Employees

SBI offers special Loan Schemes for Government Employees in order to meet their urgent fund requirements. SBI Xpress Credit is a loan for meeting medical emergency, wedding or family vacation expenses. All government employees are eligible to avail loan of up to ₹ 15 Lakh from SBI with a maximum tenure of 48 months. SBI Xpress Credit personal loan interest rate starts from 11.50%. Another similar scheme, SBI Pension Loan is a specially designed schemes for government pensioners. Under the scheme, an amount of up to ₹ 14 Lakh is available for government pensioners for a tenure of up to 60 months . Interest rates charged on SBI Pension loan starts at 11.45%.

Government Bodies Who Offer Personal Loans

Maharatna PSU – Maharatna Pubic Sector Undertaking (PSU) can raise the investment of any company from ₹ 1,000 crore to ₹ 5,000 crore. The companies whose 3 years average annual profit is ₹ 5,000 crore or average annual net worth of ₹ 10,000 crore for 3 years or average annual turnover for 3 years is ₹ 20,000 crore are eligible to become a Maharatna PSU. Presently, there are 7 government companies which comes under Maharatna categories and these are BHEL, GAIL India, ONGC, NTPC, Coal India, Indian Oil Corporation and Steel Authority of India. The rates for these PSUs are different from the rates offered to private sector companies. The personal loan rates for Maharatna PSU employees in HDFC Bank are 11.49% - 13.99% and in ICICI Bank are 11.60%.

Navratna PSU – Navratna PSUs are decided on six parameters like net worth, net profit, total manpower cost, total cost of production, cost of services, PBDIT (Profit before Depreciation, Interest and Taxes), capital employed etc. A Miniratna company with 4 independent directors on its board team can become a Navratna PSU. Navratna PSU includes 17 companies and some of these are Bharat Electronics, Hindustan Aeronautics, Bharat Petroleum Corporation, Oil India, NMDC etc. Personal loan interest rates for Navratna PSU in HDFC Bank are 11.49% - 13.99% and in ICICI Bank are 12.25%.

Public Sector Banks – These banks are those whose majority share of more than 50% is held by a government. Currently, there are 21 nationalized banks in India which mainly includes SBI, PNB, Bank of Baroda, UCO Bank etc. The loan rates for Public Sector Bank employees in HDFC Bank are 15.50% and in ICICI Bank are 13.25% - 15.75%.

Central Government Enterprises – In these companies, direct holding of Central Government Departments/ Institutes or other Central Public Sector Undertaking is 51% or more. The personal loan rates offered to Central Government Enterprises by HDFC Bank are 15.00% - 15.20% and by ICICI Bank are 12.25% - 16.75%.

Railways – Indian Railways is a State-owned national transporter and is owned and operated by Government of India via the Ministry of Railways. Indian Railways employees can get personal loan by HDFC Bank at 15.00% - 15.20% and by ICICI Bank at 12.25% - 16.75%.

State Government Enterprises - The rates for State Government employees and Institutes like Universities, Colleges, etc. vary from bank to bank. Currently, HDFC Bank personal loan rates for State Government Enterprises are 15.00% - 15.20% and ICICI Bank rates are 12.25% - 16.75%.

Personal Loans for Defence Personnel

Banks have come out with special offers for our armed forces, in lieu of their unmatched contribution to India. HDFC and ICICI Bank offer special rates on personal loans for defence personnel as they classify under the armed forces category. Key armed forces category which are eligible for these offers are BSF, CRPF, ITBP, CISF, SSB, NDRF, The Indian Airforce, The Indian Navy and The Indian Army. Some banks also include the Police Department under their schemes for defence personnel. The eligibility of these loan schemes is linked to the seniority and designation of the personnel. The personal loan rates for defence personnel in HDFC Bank are 15.00% - 15.10% and in ICICI Bank are 11.75% - 13.50%. Also, remember to compare the processing fees before taking a personal loan offer for defence personnel as many banks offer nil processing fee on loans for armed forces.

Personal Loan for Pensioners

Pensioners or retired individuals are often in need of funds to meet their personal expenses such as a child’s wedding or medical expenses. Leading banks such as SBI and ICICI Bank offer loans for pensioners at lowest discounted rates. These loans can be availed by retired employees of Central Government, State Govt. or defence forces. Banks cap the maximum age of pensioners to be eligible for a personal loan at 76 years with a maximum loan tenure of up to 5 years. Banks charge a nominal processing fee for pensioners. SBI charges 11.45% to 11.95% interest rates for pensioners and interest rate of ICICI Bank for pensioners is in the range of 16.00% .

Government Employees Personal Loan Eligibility

  • Minimum age of the applicant should be 21 years and maximum 65 years.
  • Govt. and permanent salaried employees with minimum income of ₹ 20,000 per month are eligible for personal loan. Income eligibility may vary depending upon your profile.
  • Bank gives loans to those applicants who are at least 6 months experienced in theircurrent job with a total experience of 3 years although it may vary bank to bank.
  • CIBIL score matters as personal loans are unsecured loans. Your CIBIL score should be 700 or more than that with a good credit history which is equally important to get approval on loan application.

Loan for Government Employees – Fees & Charges

Bank charge fee from PSU employees on processing and pre closure of personal loan. These charges include -

Processing Fee – This fee varies from bank to bank and is higher than secured loans and can range upto 2% for government employees.

Pre Closure Fee – This fee is charged when you want to close your loan before the completion of the tenure. Foreclosure charges are different in all banks. Most of the banks charge a preclosure fee from nil to up to 5% on outstanding loan amount.

Documents Required for Public Sector Personal Loan

  • Signed application form
  • Age proof - Passport, PAN Card, Birth Certificate, Employee ID Card
  • Identity proof - PAN Card, Aadhar Card, Driving License
  • Address proof – Passport, Voter ID Card, Aadhar Card, Utility bills (not more than 3 months old)
  • Income proof – Form 16 of last 2 years, salary slips of last 6 months and last 6 months bank statement


Maximum Annual Percentage Rate (APR)11.39% to 16.9%
Representative example of the total cost of the loan, including all applicable fees Here is an illustration of the total cost of the loan:
  • Total amount borrowed: ₹ 1 Lakh
  • Time period: 12 months to 60 months
  • Interest Rate: 10.99 % to 16.50%
  • Processing Fee payable to: Upto ₹ 2,000
  • Fee payable to MyLoanCare: NIL
  • Total Monthly Cost – From ₹ 2,174 for 60 months ₹ 1 Lakh loan at 10.99% (lowest rate, longest time period) to ₹ 9,097 for a 12 months ₹ 1 Lakh loan at 16.50% (highest rate, shortest time period). This is inclusive of principal repayment.
  • Annual Percentage Rate (APR) of charge including all applicable fees: 11.39% to 16.9%
Total cost payable over loan tenure: ₹ 11,161 for 12 months loan to ₹ 32,424 for 60 months loan


What is the lowest interest rate on personal loan for government employees?

As per the current rates, the lowest rate on personal loan for government employees starts at 11.49%.

How much personal loan can a government employee get?

Banks provide personal loans to government employees of India and public sector undertakings. To avail a personal loan upto ₹ 50 Lakh, they must have a minimum income of ₹ 25,000. However, the amount of loan a government employee varies as per their profile and income eligibility.

Are government pensioners eligible for a personal loan?

A personal loan can be availed by self-employed individuals and salaried professionals, including all the government employees of India and public sector companies. There are various banks which provide personal loan for government pensioners as well. However, before taking a loan, one must check the eligibility criteria for choosing a personal loan.

Are there any processing fees for a personal loan for government employees?

Yes, most of the banks charge a processing fee upto 2% on a personal loan for government employees. However, some banks do not charge any processing fees for a personal loan for defence personnel. Hence, they must compare the processing fees before taking a personal loan offer.

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