Introduction

Personal Loan:
An unsecured loan with high interest rates
Loan provided based on credit history with instant approvals
Purpose – vacation, home renovation, wedding, medical emergency, education, home appliances, balance transfer etc.
Unsecured Loan – In case of loan default, bank cannot recover loan dues. Credit score is badly hampered
Loan size – 50k to 25L
Tenure – 1-5 yrs
Interest rate – 3-10% more than home loan
Lock in period – 3-12 months
ECS or Auto Debit
Post-dated cheques
Eligibility:
Repayment capacity
Annual income and other loans
Minimum income – 50k
Customer Profile
Salaried/Self-employed/Professional/Business
Occupation & income stability
Age – 21-60 yrs (salaried), 25-65 yrs (professional, businessman)
Professional & Businessman – Min 3 yrs into business
Credit score
A&L
Number of dependents
Spouse income

Additional Charges:
Processing fee: 1-2% of loan amount + GST
Pre-payment & foreclosure charges
Floating interest rates
Nil, in case of payment from own funds
2-3% of outstanding loan amount, in case of loan transfer
Fixed interest rate
2-3% of outstanding loan amount
GST applicable @18% on all services charges.
Pros & Cons:
Pros
Minimum documentation and hassles
Instant approvals
Cons
Expensive loan – high interest rates
High variation in interest rate
Tips:
Compare interest rates of various banks and negotiate for the lowest rate
Explore cheaper loan first – Home Loan, LAP, Top Up Loan
Go for personal loan for
Smaller Amounts
Shorter time periods
Urgent requirements when other loans are not immediate possible
Paying higher cost debt like credit cards
Customer Persona:
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Competitor Analysis:
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Cross selling:

1. Four main goals of bank marketing: 1) cross selling, 2) retention, 3) increase utilisation, 4)acquisition and 5) cost/service quality.

2. These are the economic ‘footprints’ of an individual customer and they can be used to deduce customer preferences, behaviour,
affordability, financial needs, etc

Active selling can now be targeted towards a particular group of customers, such as customers of the same life stage or occupation, and
product bundles can be designed for each particular group based on their preferences, needs and affordability.

Different aspects of one’s personal life such as lifestyle, purchase preference, family structure, affordability and even loyalty to the bank
(NPO- Next product to offer)

Three factors are believed to have contributed to the decline in campaign response rate: competition, product life cycle and proliferation of
direct mailing.

Data mining techniques such as logistic regression, neural networks, decision trees and market basket analysis, have emerged as the key
technologies for analysing the causation or association relationship among hundreds of variables in order to explain and predict the product
choice for millions of customers in the database. Latent class modelling and clustering algorithms can be used to derive actionable
marketing segments. Factor analysis is applied to develop product bundles based on observed customer choices.

Moreover, each potential customer is also evaluated according to his/her expected incremental cost and profit before the prospect list is
finalised.

However, cross-selling can be a double-edged sword. Too much can upset customers and make them less responsive, effectively weakening
the relationship. Effective use of the tactic requires that the basic objective of marketing is fulfilled: to offer the right product to the right
person at the right time.

It may be worthwhile maintaining the relationship if the likelihood of a purchase is high and the timeframe short, but less rewarding if the
likelihood is low and at some distance in the future.