Personal Loan

How Government Employees Can Apply For A Personal Loan?


Government personal loan schemes are collateral-free loans made by banks and non-bank financial institutions. These are loans taken against their pay. This loan, like every other personal loan, has no limits on how it can be used. Personal loans are available to government employees for a variety of purposes. This includes weddings, holidays, higher education, debt settlement, and more.

Government personnel can get loans from banks including Oriental Bank of Commerce, HDFC Bank, Axis Bank, and State Bank of India at interest rates as low as 10.6% per annum. Processing fees are imposed ranging from 0.5% to 3.99% of the loan amount. Government personal loan schemes have a maximum loan term of 72 months.

Eligibility Criteria

  • Permanent employees of Central and State Government agencies, Public Sector Units (PSUs), and Government institutions and colleges.
  • Employees of the Defense and Personnel Ministries
  • Officers in all Indian services are eligible.
  • The age should be between 18-67 years.
  • Applicants with credit worthiness of 750+ are more likely to be approved for personal loans with reduced interest rates.
  • Most banks consider a baseline monthly income of Rs. 15,000 to be acceptable.
  • After all EMI deductions, take-home pay should not be less than 30%.
  • A year of work experience is necessary.

Documents Required

  • Completed application form with passport-sized photos
  • Identity, age, and address verification
  • Employment verification
  • Salary slips over the previous six months
  • Bank statement from the previous year
  • Signature proof
  • Any further documentation that the bank requires

State Bank of India

The Government Personal Loan Schemes offered by the State Bank of India have the following highlights:

  • Loans are given under the Xpress Credit personal loan initiative.
  • A reduced interest rate is given to defense personnel in the nation. 
  • The highest interest rate for military, paramilitary, and Indian coast guard employees is 12.50% per annum. This might be up to 15.40% p.a. for other candidates.
  • It also offers the choice of taking out a second loan a year after the first loan is paid off. Repayments must be completed correctly to obtain the second loan.
  • Pre-payment penalties are removed if the loan is paid off with the profits of a new loan obtained under the same program.
  • The processing fee is 1% excluding taxes, while the EMI per lakh is Rs. 2250.


Personal loans are available from HDFC Bank to both private limited firms and government personnel. Applying for a bank loan is straightforward and requires little documentation. Apply for the loan online via the bank’s official website.

  • For HDFC Bank account customers, pre-approved loans are authorized immediately. Loan approval for non-HDFC Bank account holders can be expected in less than 4 hours.
  • The bank provides flexible loan terms.
  • The interest rate on a personal loan can be reduced by shifting the loan balance to HDFC Bank.
  • The processing fee can extend up to 2.50%, and the EMI per lakh stands at Rs. 2405.

Axis Bank

The bank’s loan product is available to salaried personnel in both the government and commercial sectors. For government employees earning at least Rs. 15,000 per month, the clearance process is quite simple. Here are some benefits and essential features:

  • The paperwork requirements are simple, and all eligible petitions are approved immediately.
  • The bank provides a flexible payback process with many payment options.
  • Existing personal loans can be transferred to Axis Bank.
  • The processing fee may vary from 1.50-2%, and the EMI is Rs. 2419 per lakh.

Oriental Bank of Commerce

Oriental Bank of Commerce has a government personal loan scheme. It is only available to confirm and permanent workers of PSUs, state and federal governments, and other government entities. 

  • It is a term loan that permits loan borrowers to borrow up to Rs. 10 lakhs.
  • This loan requires a guarantor (ideally another government employee).
  • For government personnel, the paperwork and approval procedures are fairly easy.
  • The interest rate available to public servants is around 1% lower than the rate of interest available to other salaried employees.
  • The processing fee is 0.50%, and the EMI per lakh is Rs.2199.

Things to keep in mind before taking a personal loan

  • Before settling on a certain loan program, you should compare interest rates from other lenders.
  • Before you pick a loan term, consider if the EMI sum fits within your monthly budget. You may have difficulty returning the loan on time if the EMI is too high. Plan the budget and the loan duration accordingly.
  • Government personnel who have a salary account with the lending bank are eligible for extra loan reductions. You can inquire with your bank about the options that are available to you.
  • Personal loan interest rates differ from one bank to the next. To reduce the cost of obtaining a loan, you must consider these fees in addition to the rate of interest.
  • Pre-approved loans are only available to bank clients. These loans are authorized immediately and paid within a matter of hours. If you need the loan right now, you should look into the option of pre-approved loans.

How to apply for a personal loan?

  • You may also make a loan application in person at a bank. To apply for a loan, you must provide all relevant documents and consult with a bank agent.
  • Visit the lender’s official website and look over the information on government personal loan schemes. Most lenders offer an online registration procedure. Simply fill out the form and wait for the bank to contact you.


Taking a loan can prove to be a tricky task if you do not keep your budget and financial capability in mind. Government personal loan schemes are offered by various banks at affordable rates, to help with this problem. For more such blogs, go to the Piramal Finance website, and look into their products and services.