Where Your Work Can Affect Your Loan Application

Let’s say you work at a multi-national company and earn a salary of INR 30,000 per month and your friend Sanjay works with a start-up and draws a salary of INR 60,000 per month. Both of you apply for a loan with the same bank, but Sanjay receives the same loan amount at a greater interest rate.

Surprising? Not quite. Here’s why.

Categorization of Companies

Banks segregate companies based on their profiles. A start up would be rated the least while an MNC, a publicly listed or well-known company would go into the highest rated category.  But many believe that a start-up is would be more likely to go out of business than a listed company. And hence, listed companies are deemed to offer greater job security.

So, what can people like Sanjay do?

Categorization is only one of the factors that banks look at while offering Personal loans. You can actually approach the bank in which you have your salary account and enquire about the interest rates charged before applying for the loan. Often banks tied up with companies to provide salary accounts also offer concessions on the interest rates.

Another alternative is to approach NBFCs such Vivifi (which provides the loan offering FlexSalary).

How can FlexSalary help?

FlexSalary is a loan offering by Vivifi India Finance Pvt. Ltd. an RBI based NBFC. It is a line of credit that has a very lenient eligibility criteria and the place of work is not considered.  A person with a salary as low as ₹ 8,000 can apply. The application process is completely online. You can sign-up with your email address and phone number.

After filling a short form, you have to upload scanned copies of your income proofs, complete the electronic verification process, and then you will receive the amount in your FlexSalary account. Once you have received the amount in your account you can transfer the how much ever you need to your bank account and withdraw it.

Interest will be charged only on the amount withdrawn. As you pay back, you can reuse the amount. If you require more time to repay, you can make the minimum payments and pay back the principal whenever you can. However, please note that the interest incurred will increase as days pass by and the total amount to be repaid will increase.

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