Life is full of uncertainties. We can’t always anticipate what is coming ahead. Sometimes, destiny puts us in situations – whether good or bad – when we face instant need of money. Sometimes our instant financial need overflows our budget or bank balance. Then we have no other choice left but to borrow money. Many of us feel ashamed of borrowing money from friends and relatives due to self-respect issues. Now what’s the way out?
Nowadays, many banks and financial organizations in Bangladesh are offering ‘Advanced Loan against Salary’ to the salaried executives. This type ‘Personal Loan’ is provided on the basis of an individual’s monthly salary multiples. This loan is also popular as ‘Any Purpose Loan’ as it is provided to fulfill any legitimate need of the borrower. Self-employed professionals, business owners and landlords also get loans under these schemes.
You can take personal loan to meet any ‘legitimate’ personal financial need, like medical treatment, education, tourism, marriage, home renovation, interior designing, purchasing consumer goods, purchasing different tools and equipment for office set up, etc.
In this article, we are gonna introduce you with some renowned scheduled banks and financial organizations who are currently offering worthwhile Personal Loan Deals in Bangladesh.
How to Choose the Best Personal Deals in Bangladesh?
In this section, we have focused on some vital parameters to find which bank is providing the best personal loan deal for you.
Rate of Interest
Interest rates are basically two types: fixed and floating. From our survey, it revealed that the banks mostly set floating interest rates on their loan products.
The above info-graph shows the initial rate of interest for ‘Personal Loan’ for different banks in Bangladesh. Averagely, the initial interest rate fluctuates around 11 to 13 percent. A few banks like BCB demand a higher (about 17%) rate of interest. However, the rate of interest is about to change any time depending on respective bank policy.
If you need a good deal of money for medical treatment or marriage or any other legitimate purpose, it is wise to check out which banks are offering the highest loan ceiling.
On average, most of the banks in Bangladesh sanction a maximum of 10 to 20 lacs in BDT under Personal Loan/ Any Purpose Loan/Advanced Loan against Salary scheme. For some banks the loan ceiling may be lower. For instance, NCC Bank offers maximum 1 lac BDT under ‘Personal Loan’ scheme.
Loan Amount at Salary Multiplications
Some banks are offering ‘Advanced Loan against Salary’. This kind of loan product is especially designed for salaried executives who draw salary through any government approved bank in Bangladesh. It depends on the bank policy how much money can you get against your current monthly salary.
The above graph reveals the trend of advanced loan against salary multiples offered by several reputed banks in Bangladesh. Researching a number of renowned scheduled banks in Bangladesh, we noticed that generally banks offer 10 to 15 multiples of the monthly salary amounts as ‘Advanced Loan against Salary’. However, EBL stands out from the other banks in offering the maximum multiples (up to 20 times) of salary as advanced loan.
Lowest Amount of Loan
For sudden financial requirement you may need to borrow a small range loan. The scheduled Banks in Bangladesh provide personal loan starting from minimum 25000 BDT.
Our research shows that most of the scheduled banks in Bangladesh provide a minimum 50 thousands BDT for ‘personal loan’ or ‘any purpose loan’. However, some banks – like City Bank and EBL – don’t approve applications for personal loan when the expected loan amount falls below one lac BDT.
Loan Repayment Tenure
Though loan tenure depends on the policy of respective bank, the tenure can be cut short depending on the borrower’s age. For instant, if banks set maximum age limit 60 years on loan-maturity. Then, a 59 year old person can get Personal Loan; but s/he gets only one year for repaying the total loan amount.
Starting from a minimum six months, an individual borrower usually avails 5 years period to repay his/her loan including interest. However, a few banks like NCC Bank and BCB sanction loan for limited tenure (3 years). On the other hand, NRBC Bank offers extensive tenure (6 years) for loan repayment.
How Banks Choose Potential Borrower for Personal Loan
The scheduled banks in Bangladesh provide ‘Any Purpose Loan’ or ‘personal loan’ or ‘Advanced Loan against Salary’ to the deserved customers who can meet the specific standards set by respective bank policy. In this section, we are gonna discuss some significant factors which the banks tend to evaluate before sanctioning any personal loan.
Debt Burden Ratio (DBR)
While evaluating any loan application, the banks evaluate the client’s income-expenditure profile and calculate the Debt Burden Ratio (DBR). In simple words, DBR calculates the burden of your liabilities (loan EMI, and other monthly expenditure) over your earning (monthly).
The maximum allowed range of DBR varies depending on monthly earning. For instance, banks may allow up to 60% DBR when you earn two lacs BDT per month. The same banks may not approve your loan loans when the DBR crosses 40%, if your monthly earning falls below fifty thousand BDT.
Our research shows that the renowned scheduled banks choose prospective clients with lesser DBR profiles. It seems that the possibility of loan approval increases while the DBR value decreases. While approving ‘personal loan’ the scheduled banks tend to keep the DBR range within 40 to 60 percentages, in general.
If you are a salaried executive you can’t get a loan after taking retirement from your office according to Government policy. In Bangladesh, the age of retirement is mostly 60 or 65 years. The scheduled banks approve ‘personal loan’ calculating the borrower’s age of retirement at the end of loan tenure. Usually, the banks want their clients to complete the loan tenure before hitting retirement age. However, the maximum age limit for getting a loan may vary depending on the borrower’s occupation type. And the minimum age of getting any loan starts from 18 years.
The above graph depicts the age range for personal loan approval by the government approved banks in Bangladesh. Mostly the banks are comfortable to offer loans to 21 years or older clients. The maximum limit of age is hovering around 60 to 65, on average. However, some banks like NCC Bank don't approve loan to clients over 50 years; whereas DBBL allows up to 70 years – at the end of loan tenure.
Banks are highly interested to offer ‘personal loan’ to salaried executives, professionals, business owners, landlords, self-employed and government employees who make handsome amounts per month on a regular basis. However, the minimum earning requirement for loan approval may vary depending on the prospective borrower’s occupation type. For instance, earning requirement is a bit flexible for government professionals.
The above graph represents the trend of minimum required monthly earning for salaried executives working in private sector organizations. A good number of banks are ready to offer ‘Personal Loan’ for minimum monthly earning of 15 thousands BDT. Average banks require 20 to 25 thousands earning per month. While a few financial organization and banks (like IPDC and NRB Bank) expect a bit higher level of earning.
The required length of work experience varies for government employees, private salaried executives, self-employed professionals, businessmen and landlords. Usually, the scheduled banks have flexible earning requirement for the renowned businessmen, Government officials, successful professional, etc.
The above info graph reveals the length of required work experience for salaried executives working in private sector. Mostly the scheduled banks are comfortable to provide loans to permanent executives working in well-known organizations. A significant number of banks want 2 to 3 years of continuous work experience with at least one year working history with the current employer.
Opportunity of getting Advanced Loan against Salary is a windfall for many salaried executives in the moment of crisis. People from other profession can avail this opportunity taking ‘Personal Loan’ or ‘Any Purpose Loan’. Some banks are providing ‘Special Loan’ to professionals working under some specific sectors. Therefore, it behooves upon you to find an appropriate Loan Scheme that complies with your specific legitimate financial need.
Our research also shows that a good number of banks are offering as high as 20 lacs BDT as ‘Personal Loan’. However, under the scheme of Advanced Loan against Salary, the banks decide the loan ceiling counting monthly salary multiplications of the salaried executives. On average, the scheduled banks sanction 10 to 20 times of monthly salary as loan amount.
And, most of the banks provide 50 thousands BDT as minimum amount under ‘Personal Loan’ category. Though the scheduled banks in Bangladesh allow 5 years loan tenure, this term might be shorter depending upon the maximum age limit set by respective bank as well as the retirement age of the borrower from his/her current working place. Usually, banks prefer clients aged not less than 21 years and not more than 65 years.
Minimum required monthly earning ranges from 15 to 30 thousands BDT depending on specific policy set by respective bank. And, for work experience the scheduled banks require 1 to 3 years of continuous experience under reputed institutions.
In this article, we have analyzed ‘Personal Loan’ schemes offered by different scheduled banks and financial organizations in Bangladesh. Due to the inadequacy of time, budget, and manpower, we couldn’t research all banks. But we have tried our level best to overview the lucrative offers for Personal Loan in Bangladesh. Hope it helps!
Also Read: Home Loans in Bangladesh