Any Purpose Loans
By Limana Solaiman Mridha
Sometimes you just need some extra cash to buy that thing you have always wanted _ be it a new refrigerator, air-conditioner or washing machine that have become an essential part of modern living, or even a much deserved holiday or better education for your child. But for most people in Bangladesh, with a rising middle income group, buying something that costs over Tk 50,000 still needs planning, and savings, well ahead. But for those who need immediate purchases, our local banks have stepped in with a myriad of schemes and loan plans for people from all walks of life.
When you go into a bank and say that you need a loan, you will be directed to an officer immediately and then they will explain the entire process to you in details. You can even look up their helpline numbers where call centre executives are well equipped to answer your queries in details. These are trained individuals who will help you understand the loan procedures and how to avail their facilities, and at the same time explain the consequences if you fail to repay. Do not hesitate to let your limitations be known as the bank will then let you know what you can do to subsidise or get around your problem. The Weekend Independent scouted a few local banks and looked up their options for personal loans, interest rates and eligibility criteria.
A personal loan is an unsecured loan, which translates to a loan offered without the bank securing the deal by keeping assets (example property, car, etc). These are usually offered to people who have a clean credit history based on their salary or bank account statement. If you are not a defaulter of previous loans or installments and your bills are all paid on time, you will be assessed as a low-credit risk. The repayment tenure ranges from one to five years, depending on the amount and policy of the bank you are dealing with. Very little paperwork is involved and the loan is usually disbursed within two to seven days. Fees charged by the bank for handing out the loans may include processing fee, pre-payment fee, late payment penalties, documentation charges and cheque bounce charges.
Among the local private banks, IFIC Bank offers 12 kinds of loans under its retail banking service. It even offers a holiday loan where one can avail up to Tk300, 000 with an interest rate of 12.5 percent. All you need for getting this loan is an account with the bank that shows transaction of Tk20, 000 or above every month and a salary certificate from your work place where you have worked for at least six months.
I have always wanted to go to Nepal, but family life claims so much of my time and money that until last month, my dream remained unfulfilled, Salma Solaiman, a 33-year-old school teacher told this correspondent at the banks Dhanmondi branch. I took an any purpose loan against my salary for the amount of about Tk100, 000 for one year, and I was finally able to make my trip. I am grateful that this bank has this facility and I received all the information the minute I walked in. Everyone was very helpful and to tell you the truth, I am usually intimidated when it comes to dealing with banks, but this was a new experience altogether.
The holiday loan falls under the banks any purpose loan that includes products like marriage loan and medical loan. All the loans are payable in monthly installments and you can choose the option of paying back within 12, 24 or 36 months.
Another impressive product is the banks Aamar Account where both deposit and overdraft facilities are enabled in a single account. Since this offers multiple benefits in a single account, customers will ultimately pay less in terms of operation costs for several accounts. You need to be a working individual for availing the overdraft option and your limit will be three times your salary or a maximum of Tk500, 000, whichever is less. If you do not have money in the account, you can use your debit card like a credit card and spend up to your limit at a monthly interest rate of 14 percent. With unlimited transaction facilities, you can also use your cheque book for withdrawing the overdraft amount.
Shafaq Hussain, a 32-year-old entrepreneur turned to Mercantile Bank Limited when he started his business. Since my student life, I have been dreaming of starting something on my own, a small business after I have sufficient work experience in that field. So after my graduation, I started working in a private company and four years down the line, with my savings and a small personal loan against my salary, I was able to start my jute product business. And now I have repaid my loan and I am really glad I was able to get it when I really needed it. I took Tk300, 000 at 14 percent interest for a one-year period. They even let me pay in four installments, so I had to pay a certain amount every three months.
Faysal Islam, a 34-year-old employee of a private institution, said: I needed a personal loan to meet an urgent family requirement and I was looking for a bank or financial institution that would be able to provide me with the loan at the fastest possible time. Through the reference of a friend, I applied for a personal loan at a local top-tiered financial institution. The requirements were basic, such as tax certificate, bank statements of salary account, copy of pay slip and personal guarantee from two persons, etc. Once I submitted all the documents to them, they were able to complete all the formalities in no time and provided the loan. This definitely helped me to meet my cash flow requirement at the time of need.
Brac Bank offers personal loans to salaried persons, businessmen, professionals like doctors, and homeowners. So even if you are retired, you can avail this opportunity by submitting documents of your existing property, such as the title deed, updated land or holding tax documents, survey reports, etc. And of course you will need a guarantor who will have to provide his or her personal information. The interest rate starts from 11 percent.
The City Bank also offers a variety of loans at competitive rates and applying for a personal loan is quite easy. You can apply for amounts ranging from Tk50, 000 to Tk1 million, payable in 12 to 60 months installments. There is a two percent processing fee on any loan amount, and the bank claims there are no hidden charges. If you have a salary account with the bank, you will be charged 10.25 percent interest, 10.50 percent if you have a salary account with another bank and 11.50 percent if you are a business person. To be eligible for a personal loan, you have to be between 22-60 years of age with one year work experience, including six months with your current employer if you are a salaried executive. If you are a professional such as a lawyer or doctor, you need to have one year of practice experience, and for business people you need to be involved in the same business for a minimum of two years. They offer loans under four more categories.
My overall experience with the personal, consumer and retail loans available in the banking industry is quite satisfactory. Currently, the interest rate is as low as 10-13 percent in most retail-focussed banks like City, Eastern, Brac, SCB, etc. Their loan processing is really fast upon fulfillments of the required documents. Retail-focussed banks are very aggressive in terms of collection and recovery. As of today, I am lucky that I havent faced any collection penalties. It is also very true that sometimes customers face difficulties in obtaining loans due to lack of data, experience of the salesperson, etc, said Mukul Mohammad, a 38-year-old merchandiser.
Education purpose loans are available in a numerous institutions. Eastern Bank Limited offers three types of education loans, one of which is given without a security deposit. And of course apart from personal loans, most banks also offer home loans for renovating or developing your property, or for buying an apartment. They also have auto loans where the interest rates vary ranging from 10-15 percent.
These banks have thought of everything, all you need is a good credit record, and of course a guarantor. While taking out a loan, it always helps if you have an FDR or other savings and assets. All private and government banks offer several savings schemes which are quite lucrative and will secure your future and help you during an emergency.
Photos : Internet
