Capital Market

ALL ABOUT CAPITAL MARKET

A.    Personal Loan:

Personal Loan will help you to meet your needs so that you never have to compromise with all what life has to offer. It is an unsecured loan which is available without submitting any collateral for the same. Any Bangladeshi earning individual may avail this loan facilities based on proofing his/her stable income without submitting any other collateral. It can be avail for numerous purposes to meet any financial requirement. This loan comes with attractive loan features and flexible repayment options. There are multiple numbers of Bank and NBFI's of the country are providing this loan facilities to their consumers once they meet their eligibility criteria.  

 

B.    Purpose:

Personal Loan is a multipurpose loan that can avail to meet any personal financial requirement, such as:

-  Household purchase;

-  House renovation;

-  Marriage;

-  Education;

-  Medical treatment;

-  Purchase of consumer durables;

-  Domestic or foreign travel;

-  Other financial need;

 

C.    Benefits:

No collateral required;

Flexible enjoyable tenue;

Low processing fees & charges;

Flexible repayment schedule;

Quick processing time;

Minimum documentation;

 

D.    Some Basic & Common Features of Personal Loan:

Now a days, various Bank and NBFI’s are offering most attractive features for the consumers, who wants to avail the personal loan facilities. Following are some basic and common features of personal loan offered by most of the Bank and NBFI, that need to be kept in mind:

 

       (a)   Who can avail?

              -    Any Bangladeshi earning individual with stable source of income.

 

       (b)   Age Limit

              Most of the Bank and NBFI’s are referring following age limits for the consumers.

              -  Minimum Age     :  21 Years;

              -  Maximum Age    :  65 Years (at the end of loan tenure);

 

       (c)   Professional Experience

Required professional experiences are varies based on consumer profession. Most of the Bank and NBFI’s are referring following professional experience limits for the consumers.

              -  Salaried              :  Confirmed employee having minimum 1 years of work experience with current employer;

              -  Professional       :  Having 2 years of professional experience;

              -  Businessman      :  Minimum 2 years of business experience in same business;

 

       (d)   Minimum Monthly Income

Required minimum monthly income level are varies based on consumer profession or source of income. Most of the Bank and NBFI’s are referring following minimum monthly income level for the consumers.

              -  Salaried              : BDT 20,000

              -  Professional       : BDT 30,000

              -  Businessman      : BDT 50,000

              -  Landlord             : BDT 40,000

              -  Others                : BDT 40,000

 

       (e)   Interest Rates

All Banks are currently offering 9.00% or below interest rate for personal loan product. NBFI’s also offering personal loan product against little bit higher interest rates with additional key features.

 

       (f)    Fees and Charges Related to Personal Loan

Apart from interest charges, some additional charges may also be applicable to a personal loan. Some of the most common charges & fees that should be kept in mind are as follows:

              -  Processing fee;

              -  Stamp duty;

              -  Late payment fee;

              -  Early settlement fee;

              -  Partial payment charges;

              -  Other fees & charges;

 

       (g)   Loan Tenure

              Most of the Bank and NBFI’s are offering following loan tenure for the consumers.

              -  Minimum       :  12 Months

              -  Maximum      :  60 Months

 

       (h)   Loan Limit

              Most of the Bank and NBFI’s are offering following loan limits for the consumers.

              -  Minimum       :  BDT 01 Lac

              -  Maximum      :  BDT 20 Lacs

 

       (i)    Disbursal Time

-    Most of the Bank and NBFI’s are completing the total procedure within 15 working days.

 

       (j)    Collateral

-    Personal loan is an unsecured loan product. No collateral or cash securities required.

 

       (k)   Repayment Mode

-    Flexible repayment polity through Equal Monthly Installments (EMIs) over a period of 12 months to 60 months.

 

E.    Personal Loan Interest Rate and Calculating Method:

Interest rate refers to the rate at which interest is applicable on any amount borrowed from a Bank or NBFI. Personal loan interest rate is one of the most important factors that determine selection of a loan offer. Thus, one should always compare interest rates from multiple lenders before settling on a loan offer.

 

(a)   Interest Rates

In our country, personal loan interest rate set on fixed rate basis. In this case, the rate of interest remains constant throughout the loan tenure. Consequently, monthly EMI amount also remains fixed throughout the loan repayment period. This may help you plan your monthly expenditure in the long term.

 

(b)   Calculating Method (Monthly EMI)

In our country personal loan interest calculation follows reducing balance method. In this method, as you pay off your monthly EMIs, parts of the loan amount and the interest component are paid off. Thus, the principal loan amount keeps on decreasing with time. In this method, interest is calculated on this decreasing loan amount and not the total amount initially borrowed.

 

F.    Factors Affecting on Personal Loan Eligibility:

Personal loan eligibility depends on many more factors. Most of the Bank and NBFI’s are considering following eligibility factors before approving any personal loan application.

Age;

Monthly net income level;

Current profession category;

Employment status (if salaried);

Professional experience;

Monthly expenses;

Other loan burden (if any);

Banking relationship;

 

G.    Things to Consider before Applying for a Personal Loan:

Before applying for a personal loan, consumers should consider following things.

Interest rate;

Loan tenure;

Loan limit;

Processing time;

Fees & charges;

Required documents;

Compare all financers rates & features;

 

H.    How to Improve Your Chances of Availing a Personal Loan:

As personal loan is mostly unsecured, lenders have a pre-decided set of rules (credit policies). Many loan applications get rejected as the borrower do not fulfil the basic set of rules of lenders for approval of the personal loan. Hence, the borrower works on improving his or her chances of availing a personal loan using some simple tips.

Maintain professional stability;

Maintain stable income source,

Maintain clean past loan records;

Identify options for bad credit loans;

Identify the right lender for you;

Avoid multiple credit cards;

Include all your sources of income;

Be honest and provide accurate information;

Avoid multiple loan applications simultaneously;

Provide all required documents as of lenders requirement;

Apply for a loan amount based on your repayment capacity;

Try to keep a gap of minimum 6 months between personal loan applications;

 

G.    Required Documents:

To apply for personal loan there are various types of documents are required. Proper documentation the only possible way to avail the loan facilities. Most of the Banks and NBFI’s are considering similar guidelines in respect to the documents required for personal loans. A generic list of such documents has been provided below:

Complete application form;

Proof of age;

Proof of identity;

Proof of income;

Proof of address;

Proof of nationality;

Proof of banking transaction;

Salary certificate (if salaried)

Certificate and profession proof (if professional);

Certificate and business existence proof (if businessman);

Land/building documents (if landlord);

 

Based on profession category, these are described below:

 

       (a)   For, Salaried Individuals

Letter of Introduction;

Last 6 months Bank Statement;

Photocopy of NID of loan applicant and guarantor;

Passport size photograph of loan applicant and guarantor;

Latest Tax Clearance Certificate/Latest Tax Return Receipt;

Visiting Card / Office ID copy of both loan applicant and guarantor (if applicable);

 

       (b)   For, Self-employed Professionals

Letter of Introduction;

Last 12 months Bank Statement;

Photocopy of NID of loan applicant and guarantor;

Passport size photograph of loan applicant and guarantor;

Photocopy of Membership Card/Professional Certificate;

Visiting Card of both loan applicant and guarantor (if applicable);

Latest Tax Clearance Certificate/Latest Tax Return Receipt;

Up to date Trade License of last 5 years (if applicable);

Registered Partnership Deed for partnership concern (if applicable);

MOA & Certificate of Incorporation for limited company (if applicable);

 

       (c)   For, Business Personals

Letter of Introduction;

Last 6 months Bank Statement;

Photocopy of NID of loan applicant and guarantor;

Passport size photograph of loan applicant and guarantor;

Latest Tax Clearance Certificate/Latest Tax Return Receipt;

Visiting Card / Office ID copy of both loan applicant and guarantor (if applicable);

 

       (d)   For Landlords

Letter of Introduction;

Last 6 months Bank Statement;

Photocopy of NID of loan applicant and guarantor;

Passport size photograph of loan applicant and guarantor;

Latest Tax Clearance Certificate/Latest Tax Return Receipt;

Visiting Card / Office ID copy of both loan applicant and guarantor (if applicable);