“Regardless of what our national credit rating is, people will always want a roof over their heads, food on their tables, fuel for their cars, and clothes on their backs,” American author Robert Kiyosaki famously said.
It is these needs, along with a few others that make us want to earn our livings. And when, on occasion, the salary falls short, we look at other options like loans or credit cards to tide us over. A line of credit also helps negotiate through times of financial difficulty and need.
What is a Personal Credit Line?
To put it simply, a personal credit line or a line of credit loan is a loan, but with a few differences vis-à-vis a conventional loan. In personal credit lines, a lender approves the entire amount, but the borrower pays interest only on the amount used.
A line of credit loan works well when you need money for expenses such as sudden hospitalisations or medical emergencies, weddings, construction or refurbishment of a home. In such cases where you need to borrow money incrementally to make on-going purchases or payment, it is a good idea to opt for a line of credit personal loan. A personal credit line usually does not need collateral. All you need is a good CIBIL score.
Businesses can also seek a line of credit to tide over financial emergencies. Banks and NBFCs offer a line of credit of different amounts and varying time periods.
Where Can I Get a Line of Credit?
Most banks and financial institutions, as well as NBFC entities, have started offering a line of credit in India. Stalwarts like Citibank, Bank of Baroda, Union Bank of India, along with companies like Bajaj Finserve and the app-based MoneyTap have revolutionised the line of credit loans playing field.
Banks That Offer Line of Credit in India
Citibank provides personal credit lines through Citibank Ready Credit Facility. Here a customer pays interest only on what he or she uses and the duration of use. There are no fixed EMIs and with each repayment, the available cash line proportionately increases. The scheme is available only to employees of companies with Corporate Suvidha tie-up, subject to at least one salary credit in the Citibank Suvidha Account. Persons desirous of availing this personal line of credit should be between 21 to 65 years of age and earn a minimum of Rs. 20,000 per month.
2. Bank of Baroda
Bank of Baroda provides a line of credit to medium/large business units. The aim of the service is to facilitate efficient management of borrowing requirements within the sanctioned line of credit facility. Bank of Baroda launched the line of credit scheme to provide operational flexibility to its clients. By using the line of credit, clients can switch over between the various working capital facilities sanctioned. Normally Bank of Baroda considers/ sanctions separate limits for Cash Credit (Stocks/Book Debts) and DA LC facilities. But for clients availing the line of credit facility, a combined limit for Cash Credit (Stocks & Book Debts)-cum-DA LC limit is sanctioned, with a sub-limit for DA-LC facility.
3. Union Bank of India
Union Bank of India sanctions a single combined limit to companies to meet their borrowing requirements. Clients have the flexibility to interchange between fund based & non-fund based limits, pre-sales and post-sales limits. All this at no additional cost.
Considering the fact that most banks offer a line of credit in India to businesses or to individuals that meet the perquisites, the best place to get a personal line of credit is to explore options online.
How To Get a Credit Line Online in India
India’s first app-based credit line, MoneyTap is the brainchild of Bala Parthasarathy, Kunal Verma, and Anuj Kacker. The company was started with the aim of solving the problem of consumer credit in India. MoneyTap’s proprietary technology allows a borrower to seek between Rs. 3000 to Rs. 5 lakh as a line of credit. The USP of MoneyTap is its user-friendly app that lets consumers use their personal line of credit whenever and however they want.
Customers can check their eligibility within 15 minutes of downloading the MoneyTap app and answering a series of questions that assess the eligibility. A loan agreement is drawn up and reviewed by one of the many banks and NBFCs partnering with MoneyTap. As soon as the bank approves, the customer gets a credit line in his or her name. The company offers a one-time credit assessment. Launched in September 2016, the company currently has about 300,000 users in 14 cities of India. Customers can either transfer money to their bank accounts or swipe their MoneyTap credit cards to avail their line of credit.
CHECKOUT: The Simplest Way to Get Financial Help via MoneyTap’s Personal Loan 2.0
LoanMeet is a Bangalore based platform that facilitates lending and borrowing by connecting credit-worthy borrowers to investors, Banks, NBFCs, and individuals. All Indians with a bank account can borrow as well as lend or invest via the platform. Since LoanMeet does not disburse loans from its own resources, it does not come under the purview of the RBI at present. LoanMeet provides short-term lines of credit to small and medium-sized businesses.
Retailers, wholesalers, traders and e-commerce merchants can seek a revolving credit line of up to Rs. 5 lakhs. Cash is disbursed within 24 hours of the credit line being approved. No collateral is required. The company offers flexible repayment options from 15 – 45 days for each cash request. For a business to apply for a line of credit from LoanMeet, it must be at least a year old and have an annual turnover of Rs. 25 lakhs and above. Apart from this PAN Card, Aadhaar Card, 3 months bank statements and GST/VAT certificate are the documents required.
SV Creditline Pvt Ltd (SV Creditline) was incorporated in 1996 as Mantrana Finlease Pvt Ltd. The company currently provides services in nine states of India, i.e. Uttar Pradesh, Madhya Pradesh, Rajasthan, Bihar, Uttarakhand, Haryana, Chhattisgarh, Punjab, and Jharkhand. Individuals who are unable to avail credit facility from the existing banking system on account of lack of access or collateral security are the target base for SVCL’s line of credit. Currently, SVCL offers loans based on the ‘Joint Liability Group model’. These loans can range between Rs. 10,000/- to Rs. 35,000/. The company also provides insurance, at an appropriate premium, to each borrower and his/her spouse to help provide a cushion against any financial upheaval. This ensures that ‘on the death of the insured borrower or spouse/ guarantor, loan outstanding will be waived off and the nominee gets the sum assured amount.’
7. Bajaj FinServe
The Bajaj FinServe line of credit allows customers to manage cash flows. The customer can choose the amount he or she wants to withdraw from the credit line. As with other credit lines, the customer pays an interest only on the amount used/withdrawn. Customers also have a flexible repayment tenure that ranges between 24 to 60 months. The Bajaj FinServe line of credit is available without collateral and is disbursed within 72 hours of approval. One can seek up to Rs. 25 lakh as a line of credit. The company is currently offering attractive assured gift vouchers to make their offers more interesting to prospective customers. There are no part-prepayment or foreclosure charges.
Today, there are many different ways to avail a line of credit in India. Whether you are seeking a personal line of credit or one for your business, there are a variety of options to choose from. Pick one that meets your requirements, and get ready to kiss your financial problems goodbye.