Amex To Unveil New Personal Loan Plan

American Express Bank (Amex) has decided to launch a new personal finance loan scheme which is aimed at reducing the processing time taken for granting a loan and also gives the borrower an opportunity to fix the interest rate himself.

Accordingly, the borrower can customise the loan as per the parameters set by the bank. Thus the borrower has a choice as to the amount and tenure that he would prefer in order to set the rate desired by him.

The new scheme called the "enhanced loan scheme" is aimed at the affluent class is an extension of the existing personal finance scheme which was launched in April 1999. The scheme provides loans upto Rs 10 lakhs for periods of upto four years.

 

"Here we assess the documents of the borrower based on which we arrive at the amount of loan they are entitled to receive from the bank. Within this limit, the borrowers were provided with a "choice grid", which is a chart enabling the borrower to determine the rate at which he would want to borrow linked to the amount and tenure," explained K L Muralidhara, senior director and business head at personal finance services at American Express. The interest rate on the unsecured loan will be in the range of 17 to 21 per cent.

Apart from the choice grid, the enhanced scheme provides for a having in processing time from 8-22 days to about 4-10 days. Also, the documentation has been reduced from 10 pages to 1 page, and requires signatures only on terms and conditions and on the promissory note. The scheme does not require any guarantors or collateral. The bank would charge two per cent of the loan amount as processing fees and three per cent as pre-payment fees. Muralidhara, however, declined to provide any target that the bank is planning to achieve and neither commented on the customer base it has till date for personal finance.