Personal Loan for Non-Listed Companies in India – A Complete Guide

In India, personal loans offer a convenient solution for individuals facing various financial needs, such as medical emergencies, education, or home improvements. While the loan application process is relatively simple for employees of well-reputed, listed companies, those working in non-listed companies may face additional challenges.

This article delves into the challenges faced by employees of non-listed companies when applying for personal loans and provides insights on how they can improve their chances of approval.

Differences Between Listed and Non-Listed Companies

Listed Companies

Listed companies are those whose shares are publicly traded on stock exchanges such as the Bombay Stock Exchange (BSE) or the National Stock Exchange (NSE). These companies are subject to stringent regulations by financial authorities like the Securities and Exchange Board of India (SEBI). They are required to make regular disclosures about their financial health, profitability, and operations , which helps build trust among lenders and investors.

Non-Listed Companies

Non-listed companies, on the other hand, are privately held, meaning their shares are not traded on public exchanges. These companies are not subject to the same level of regulatory oversight as listed companies. While many of these entities remain financially stable, the lack of public transparency and the limited availability of financial information can make lenders more cautious when approving personal loans for unlisted company employees.

Challenges in Loan Application for Employees of a Non-listed Company

Limited Employer Credibility

Lenders generally assess an applicant’s job security or stability, which can extend to checking the financial strength of their company. Since non-listed companies are not required to publicly disclose detailed financial statements, it can be difficult for lenders to verify their credibility. The lack of transparency may lead financial institutions to perceive a higher risk, making them hesitant to approve personal loans for employees of such companies.

Strict Documentation

Compared to employees of listed companies, individuals working for non-listed firms may be required to provide additional documentation when applying for a personal loan. Lenders may seek extra verification to confirm the applicant’s financial stability and ensure that they are employed by a reliable organisation.

Personal Loans for Non-Listed Company Employees

Many financial institutions offer personal loans to employees of non-listed companies, subject to their internal policies and risk assessment criteria. The loan amount, interest rate, and other terms are influenced by several factors, including the applicant’s creditworthiness, income stability, and employment history. Employees of non-listed companies with strong public reputations may find it relatively easier to secure a loan.

Eligibility Criteria for Personal Loans for Non-Listed Company Employees

Eligibility requirements vary by lender, but the general criteria are as follows:

• Age of the Applicant: At least 22 years old at the time of application and no more than 65 years old when the loan matures.
• Minimum Monthly Income: INR 25,000 for residents of Delhi and Mumbai, and INR 20,000 for residents in other parts of India.
• Credit Score: 750 and above.
• Nationality: Residing citizen of India.
• Work Experience: At least one year of total work experience, with a minimum of six months in the current job.

*Please note that the final eligibility will depend on several factors including the lender’s policy at the time of loan application.

Documents Required

The following documents are generally required to apply for a personal loan for non-listed company employees:

• Duly signed and completed application form
• Identity proof (such as Aadhaar card or PAN card)
• Address proof (such as passport or driving licence)
• Salary slips for the last 3 months
• Bank statements for the last 6 months
• Income Tax Returns or Form 16

*Please note that additional documents may be requested depending on your individual profile and the lender’s policy at the time of loan application.

Tips to Get a Personal Loan for Non-Listed Company Employees

1. Maintain a Good Credit Score:

A high credit score significantly increases the likelihood of loan approval. To achieve this, ensure timely payment of EMIs and credit card dues, keep your credit utilisation ratio below 30%, and avoid applying for multiple loans within a short period.

2. Provide Complete Documentation:

Ensure that all required documents are up-to-date and error-free. Incomplete or incorrect documentation can lead to delays or rejection of your loan application.

3. Demonstrate Job Stability:

Lenders prefer applicants with a stable employment history. If you have been with your current employer for an extended period, highlight this in your loan application to assure lenders of your job security.

4. Be Honest About Your Financial Situation:

Always provide honest and complete financial information to the lender. Overstating your income or underreporting liabilities can lead to rejection and affect your credibility.

5. Add a Co-Applicant:

If possible, include a co-applicant with a strong credit history and stable employment in a reputed, listed organisation. This will strengthen your loan application.

Conclusion

While employees of non-listed companies may face additional scrutiny during the personal loan application process, maintaining good financial habits and following the tips mentioned above can significantly improve their chances of approval.

SMFG India Credit offers tailored personal loans of up to INR 30 lakhs* at attractive interest rates and flexible repayment tenures of up to 60 months*. Check your eligibility and apply online or visit your nearest branch for personalised assistance.