A Comprehensive Guide to Personal Loan Interest Rates in 2020
Personal Loan Interest Rates by Top Banks: Comparison Table
|Bank||Interest Rate||Tenure||EMI (Per lakhs)||Disbursed|
|HDFC Personal Loan||5 Years||Rs. 2,162||Instant Disbursed only for HDFC Customer|
|ICICI Personal Loan||5 Years||Rs. 2,187||3 to 4 days|
|SBI Personal Loan||5 Years||Rs. 2,149||5 to 7 days|
|PNB Personal Loan||5 Years||Rs. 2,122||5 to 7 days|
|Bajaj Finserv Personal Loan||5 Years||Rs. 2,273||24 Hours|
|Tata Capital Personal Loan||5 Years||Rs. 2,174||5 to 7 days|
|Indiabulls Personal Loan||5 Years||Rs. 2,224||24 Hours|
|Citibank Personal Loan||5 Years||Rs. 2,127||5 to 7 days|
|Yes Bank Personal Loan||5 Years||Rs. 2,174||5 to 7 days|
With rising financial inclusion and financial awareness, Personal Loans have become one of the fastest mushrooming financial products in India. Particularly, in the last three to five years it has become almost hassle-free to get approved for unsecured loans if you have a fixed monthly income and a decent credit repayment history.
While Personal Loans are popular for sheer financial freedom it extends to the borrowers, there is no one-size-fits-all Personal Loan product. Depending on your profile, credit score, credit history, income, EMIs and Credit Card bills; the loan amount, duration and interest rate would vary.
The market is full of attractive Personal Loan Offers for the customers. For instance, Yes Bank offers Rs 1 Lakh to Rs 25 Lakh Personal Loan for 12 to 60 months at interest rate starting at 10.75% p.a. This is also the lowest offer in the market currently. However, the effective rate would depend on the credit profile of the applicant.
ICICI Personal Loan Interest Rate is also competitive as Yes Bank Personal Loan Interest. While HDFC Personal Loan Interest Rate is a bit higher but the bank promises almost instant disbursal of funds for pre-approved HDFC Bank customers. You would also save on loan processing charges.
To ease your decision making, we have compiled a comprehensive guide on different aspects of Personal Loan such as Personal Loan Interest Rates, Loan Tenure, Amount and other costs so that you can conveniently make an informed decision.
First things first, what are Personal Loans?
A Personal Loan is an unsecured loan raised for personal expenses. There is no restriction on the purpose of fund utilization, and this is why often consumers borrow Personal Loans for emergency cash lapses.
Your income, credit score, and current EMI burden primarily help banks and financial institutions in adjudging your loan eligibility. You do not need any collateral or loan guarantor to get approved for a Personal Loan.
With NBFCs like Indiabulls Dhani you can apply for small Personal Loans up to Rs 50000 with flexible terms and condition. In all, Personal Loans are fast cash loans available without collateral.
Top Reasons: Why People Borrow Personal Loans?
There is no restriction on the use of funds. Primarily, borrowers in India apply for Personal Loans for the following reasons:
Wedding celebrations are exhaustive in India. Top banks and NBFCs offer customised Personal Loans for marriage-related expenses to cater to the ever-emerging need of Wedding Loans.
Small and regular breaks from the hustle of city life is a necessity these days. A lot of people plan their vacations by applying for flexible Personal Loans for the domestic and/or international holiday. Small Travel Loans are instantly available as preapproved Personal Loans.
3. Home Improvement:
Be it a need to repair the existing home or to extend an additional room or make over the patio, many people apply for Personal Loan for home improvement as home renovations help them maintain their asset value.
4. Medical Emergency:
Another common reason to apply for Personal Loan is a medical contingency. Whether you need an urgent Personal Loan for unprecedented emergency or seek additional financial support for the treatment of a family member, you can apply for Personal Loan according to your needs. The credit is available at flexible tenure.
5. Child’ education:
A sizeable percentage of customers depend on Personal Loan for higher studies of their children.
Leading Personal Loan Providers in India
- Axis Bank Personal Loan
- SBI Bank Personal Loan
- HDFC Bank Personal Loan
- ICICI Bank Personal Loan
- Standard Chartered Bank Personal Loan
- Yes Bank Personal Loan
- Kotak Mahindra Personal Loan
Factors that affect Personal Loan Interest Rates
Currently, banks in India are offering Personal Loan Interest rates ranging from 10.75% to 21%. The variation in interest rate is primarily owing to difference in credit profile of the applicants. Here is a quick sneak peek on factors that affect personal loan interest rate offers of the banks and NBFCs:
A credit score is a three-digit numeric score ranging from 300 to 900 points. It typically defines your worthiness to avail the loan. Higher is the score, better is your chance to avail a loan. A score of 700 or above is considered as a good credit score.
Basically, banks and financial institutions calculate the risk of lending based on your credit score.
The status of employment helps financial institutions in calculating stability of your income. Certainly, employees of listed companies, central and state government and PSUs are considered better prospects for better interest rate offers.
Whether you are a long-term employee or not, also affects your chances for loan approval. Particularly self-employed individuals need to prove the continuity of business and income stability to be eligible for a Personal Loan.
Your age is another factor that determines your eligibility for Personal Loan. You should be at least 21 years of age with a stable monthly income source to avail a Loan.
Other factors such as your gross income, take-home salary, outstanding loan instalments, and Credit Card liabilities also affect your prospects for availing a Personal Loan.
Things to Consider before Applying for a Personal Loan
In all likelihood, you can find multiple bank-offers to meet your Personal Loan requirement. While one bank will offer the lowest rate of interest, the other would vouch for fast approval and same-day disbursal. So, it is essential not to hasten your decision. You must compare various Personal Loan deals from different lenders before making the decision.
Herein, it is also important to know that besides the interest rate, there are other costs involved such as processing charges, foreclosure charges, bounce charges, etc. Carefully assess all the aspects about the cost of Personal Loan before applying for the one. It is indeed important to use online EMI calculator to estimate a loan instalment according to your budget correctly. Alternatively, you can also go for professional help to borrow exactly according to repayment capacity.
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