What is drawing power in SBI?

What is Drawing Power in Personal Loan?

Your (Loan Receiver’s) maximum legitimate withdrawal from the loan/debt account is mentioned as their “drawing power” in an SBI loan. It is the credit limit that can be used for a loan account, determined by your collateral, ability to repay, and other factors. Based on your loan repayment and other credit obligation, the moneylender decides your drawing power, which may be oftentimes measured.

Certainly! The “drawing power” in an SBI loan is essentially the maximum amount that a borrower is allowed to withdraw from their loan account. It acts as a credit limit and is determined by various factors to ensure responsible lending practices. Let’s break down these factors:

Collateral

The value of the collateral provided by the borrower plays a crucial role in determining the drawing power. Collateral can include assets like property, securities, or other valuable items. The higher the value of the collateral, the greater the drawing power.

Ability to Repay

SBI assesses the borrower’s ability to repay the loan based on their financial stability, income, and credit history. A borrower with a strong repayment capacity is likely to have a higher drawing power.

Creditworthiness

The Receiver’s creditworthiness, as reflected in their credit score and credit history, is another important factor. A good credit history indicates a lower credit risk, potentially increasing the drawing power.

Loan Type and Purpose

The type of loan and its intended purpose also influence the drawing power. Some loans may have specific restrictions or conditions based on their nature and usage.

Regulatory Guidelines

SBI, like other financial institutions, operates within regulatory guidelines. These guidelines may set certain limits on drawing power to ensure financial stability and risk management.

Understanding the drawing power is crucial for both the borrower and the lender. It helps the borrower manage their finances responsibly and within the agreed limits while providing the lender with assurance regarding the repayment capacity of the loan receiver.

How to apply for a personal loan in SBI.

At SBI it is very easy to apply

You must fulfill the following criteria:

• You must be a permanent employee of any organization, i.e. on a payroll (Contractual employees or probationary employees are not eligible). If you get your salary into your salary account maintained with SBI, then the process will be quicker. If you do not withdraw your salary from SBI, then no worries; you have to provide a salary slip for the last 6 months.
• You should have been working for at least one year in that organization as permanent employee.
• Your minimum salary must be ₹15000/-
• Maximum amount that can be lend is 24 time your net paid salary provided your EMI/Net Salary ratio doesn’t exceed 50%. Minimum loan amount is ₹24000/- and Maximum loan amount is depends on your salary and CIBIL Score.
• Maximum loan tenure is 5 years.

Now coming to the process:

First collect these following documents:

• Latest 6 months salary slip
• Last 2 years form 16 or IT Return. (Or at least one year if you have been working for past 1 year only)
• KYC documents, i.e. Aadhaar card and PAN Card
• Latest photographs (not older than 6 months)

If you are a SBI customer, then you can apply for personal loan on YONO app or SBI personal loan website.

If you do not hold salary account in SBI, you can still apply for loan through link, click on Personal Loan.

Go to your home branch of SBI and consult the credit officer, RMPB, or field officer. Take the application form, duly fill it out, and submit it with required documents. The officer will verify the furnished details and KYC and then feed the information into loan software As per eligibility, your loan will be sanctioned and post-documentation, you will get the amount.

The rate of interest is fixed (not floating) for the whole loan tenure but decided at the time of loan application depending on your firm’s or organization’s rating and your personal CIBIL score.