Best Personal Loan Interest Rates for 2021 in India
A Personal loan is an all-purpose unsecured loan that can be availed to meet all kinds of financial requirements, including medical, educational, business, and home repairs. However, the rate of interest varies according to the customer’s credit profile. The Best Personal Loan Interest Rate is provided to those with a stable income resource and a high credit score.
Let’s discuss the top 5 Personal Loans available in India and know the best rates available in 2020:
|Top Banks||Interest rate (%)||EMI (In Rs.)|
|YES Bank Ltd.||
|State Bank of India||
|ICICI Bank Ltd.||
|Axis Bank Ltd.||
Yes Bank Personal Loan:
Yes Bank Personal Loans start from 10.75% p.a. and can go as high as 14.99%. The Loan can be processed within 5 business days, after the documentation. The tenure for the Personal Loan ranges from 12 to 60 months. The processing fee is 2.50% of the loan amount, subject to a minimum of Rs. 999. Pre-payment is only possible after paying 12 EMIs. Foreclosure charge ranges from 4% to 0% depending on the time at which this option is initiated.
SBI Personal Loan:
The Personal Loan Interest Rate for SBI Bank ranges from 9.60% to 15.65% p.a. The loan processing charges are 1% of the total amount plus the applicable service charges. SBI has strict prepayment policies concerning Personal Loans. The prepayment of the loan before the end of a term will attract foreclosure charges of 3%. No charges are applicable if you avail a new loan under the same scheme.
HDFC Personal Loan:
The interest rate for HDFC Personal Loan varies from 10.75% to 21.30%. The loan processing charges can go up to 2.50% of the total amount. Pre-payment is allowed only after you’ve paid 12 EMIs. The charge for the same ranges from 2% to 4% of the amount prepaid. It can be only allowed once a year or twice within the loan tenure. The loan can be processed in 2 business days after the documentation is complete.
ICICI Personal Loan:
The interest rates range from 11.25% to 21% p.a. The processing fee is 2.25% of the total amount, excluding taxes. Part prepayment is not allowed whereas foreclosure is allowed after paying 12 EMIs. The charges are 5% of the loan amount, excluding GST.
The interest rate varies from 10.49% to 24% p.a. if the tenure is less than 36 months. The interest rate ranges from 15.75% to 24% p.a. for loans extended for over 36 months. The loan processing charges can vary from 1.50% to 2% of the loan amount excluding GST. There are no pre-payment or foreclosure charges levied by this bank.
Apart from your Credit Score, there are more factors that help you get a good interest rate offer on Personal Loan.
You need to fulfill basic Eligibility Criteria to Borrow a Loan. You must be between the age group of 21 to 58 to for Personal Loan. As loans are given based on the ability to pay from the regular source of income, it is important that you have a steady source of income. Your income and debt will be verified by banks before they sanction the loan. It will entail an attractive loan rate because you are less risky to invest in.
If you are employed in a company of a high repute, you are more likely to get a better rate. Every bank has a minimum amount which you have to borrow and the maximum amount you can borrow. So, you should choose a bank which ascertains your amount within that range. Their processing fees also vary, but some banks have a maximum amount beyond which it doesn’t exceed.
The documents that are required to be submitted for Personal Loan include:
- Two to five photographs
- Aadhar Card
- Pan Card
- Residential Proof
- Income Tax returns for the last 2 years
- Proof of Earning a minimum of 1.5 lakhs annually
- Proof of continuation of Business
- Bank Statement for the last 6 months
- A duly filled loan application
Read more: Impact of Aadhaar On Personal Loan
If you want to try to get a better rate of interest you can always ask a creditworthy co-signer to apply with you. This will improve your qualification and make you less risky, and the bank can offer you a lower interest rate. Your spouse, siblings or parents, or anyone with good credit rating can become your co-applicant.
Next, it also helps if you are an existing bank customer as most banks extend better rates to their patrons. In case you need an urgent loan, private banks can be more helpful. For example, ICICI Personal Loan can be approved faster than Allahabad Bank Personal Loan. However, public banks have lower processing fees as compared to the private ones. So, you need to prioritize if you want the loan fast or want a loan with a low processing fee.
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