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Personal Loan for Government Employees 2021

Personal Loan Interest Rates for Government Employees

Last Updated 27th Jul 2021

  • Lenders offer government personal loans for the people who work for Indian government or public sector undertakings.
  • There are different schemes for pensioners and defence personnels.
  • Bank loan for government employees is availed if identity proofs, address proof and income proofs are available.
Interest rate11.49%
Age18 years to 65 years
Max Tenure120 months
Max Loan Amount ₹ 100 Cr
Apply for Personal Loan @ 10.25%* Get upto ₹ 1,000* Cashback

Personal Loan for Govt Employees

  • The interest rate on Personal loan for government employee starts @11.49%
  • Special offers are available for government employees of India and public sector undertakings
  • Lenders do not charge processing fees for defence personnel
  • Lowest interest rates for employees of public sector banks

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 17.25%.

Personal Loan for Govt Employees - Best Banks Offer

SBI Personal Loan for Govt Employees

Interest rate12.10%
Loan Tenure72 months
Loan Amount₹ 20,00,000
Processing fees1.00%

Axis Personal Loan for Govt Employees

Interest rate15.50%
Loan Tenure48 months
Loan Amount₹ 20,00,000
Processing fees2.25%

ICICI Personal Loan for Govt Employees

Interest rate17.25%
Loan Tenure60 months
Loan Amount₹ 30,00,000
Processing fees2.25%

HDFC Personal Loan for Govt Employees

Interest rate15.20%
Loan Tenure60 months
Loan Amount₹ 50,00,000
Processing fees2.00%

Government Bodies Who Offer Personal Loans

Maharatna PSU – 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 are 11.49% to 13.99%.

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 are 11.49% to 13.99%.

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 are 15.50% .

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 are 15.00% to 15.20%.

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 at to 15.20%.

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

Personal Loan for Govt Employees - Category Wise Breakdown

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% 12.49%

Personal Loans for Defence Personnel

  • Banks have come out with special offers for our armed forces, in lieu of their unmatched contribution to India. Banks such as HDFC and ICICI Bank offer special 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, Police department, The Indian Airforce, The Indian Navy and The Indian Army.
  • The eligibility of these loan schemes is linked to the seniority and designation of the personnel. The personal loan rates for defence personnel are 12.49% to 15.00% . 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 personal loan for retired government employees at lowest discounted rates. These loans can be availed by retired employees of the 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 9.75% to 10.25% interest rates for pensioners and interest rate of ICICI Bank for pensioners is in the range of 16.00% .

Eligibility Criteria for Government Employees Personal Loan

  • Minimum age of the applicant should be 21 years and maximum 65 years.
  • Govt. and permanent salaried employees with minimum income of ₹ 25,000 per month are eligible for personal loan. Income eligibility may vary depending upon your profile.
  • Bank give loans to those applicants who are at least 6 months experienced in their current job with a total experience of 3 years although it may vary bank to bank.
  • CIBIL score should be 700 or more than that with a good credit history which is equally important to get approval on loan application.

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

Personal Loan Fees and Charges for Government Employees

Banks charge fees from PSU employees on processing and pre-closure of personal loans. 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.


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 in India?

As per the current rates, the lowest rate on personal loan for government employees starts at 11.49%. However, the government personal loan interest rate for every lender is different.

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.

Is a Personal Loan for retired government employees available?

Yes, loan for government employees in India are offered by lenders like SBI, HDFC, Axis Bank and ICICI bank. The interest rate on such loans vary for every bank.

Can I apply for personal loans for government employees with bad credit?

No, you cannot apply for personal loans for government employees if your credit score is low. You need to have a credit score above 750 to avail the same because credit score shows the creditworthiness of a borrower.

What is the minimum salary required for Personal Loan for govt employees?

The minimum salary required for personal loan for govt employees is ₹ 25,000. Remember that the eligibility criteria for every bank for such loan is different.

Which bank is best for personal loan for govt employees?

Currently, HDFC Bank is the best bank for personal for govt employees because it offers the lowest interest rate of 11.49%.

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*Terms and conditions apply. Credit at sole discretion of lender, which is subject to credit appraisal, eligibility check, rates, charges and terms. Information displayed is indicative and collected from public sources. Read More
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