American Express To Offer On-The-Spot Personal Loans

Now you may no longer need to go all the way to the bank or log on to the Internet to get approval for a personal loan. If you drive into a nearby petrol pump, you may just be lucky to find a banker from American Express Bank offering an instant personal loan. There and then.

The deal is that the applicant should have taken a loan earlier from any bank or non-banking finance company, and the car model will determine the personal loan amount. Obviously, the bank has the cushion of comfort that the customer has been vetted by some bank or NBFC earlier for a car loan.

 

Amex says "Cheque on the spot" scheme will be dispensed in a tie-up with a select Indian Oil petrol pumps in metros like New Delhi, Mumbai, Chennai and Bangalore. In all, the bank has tied up with 20 petrol pumps with five petrol pumps in each city.

The bank has said this is expected to be a hassle-free loan which will not require any guarantors and collateral or security. Says American Express Bank's K L Muralidhara, senior director and country manager of personal financial services, "The bank is aggressively pursuing the rapidly growing personal loan market in India. However there are several issues facing the market and consumers are hesitant to avail of personal loans."

The offer is open for the next 30 days whereby the customer can get on the spot disbursal of loan cheques. The bank will charge interest rate of 22 per cent on reducing balance in addition to the processing fees of Rs 3000.

The bank will provide loan upto Rs 75,000 if the customer has an economy car model like Maruti 800 and Omni, upto Rs 125,000 for mid-sized cars Santro, Zen, Matiz and Uno and upto Rs 1,75,000 for premium models Astra, Ford, Escort, Esteem and Maruti 1000.

The bank has said that this "loan is targeted at car owners who have availed of a loan to purchase their car from designated banks or NBFCs."

According to Muralidhara, the bank has embarked ion a relatively hassle-free procedure "because consumers have to go through loan and complicated documentation procedures, slow processing and limited availability of personal loan options. After all this the customers have to bear the uncertainty of their loans not being sanctioned."