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Personal Loan Interest Rate
Interest Rate

Starting @ 11.25%

Check Best Offers
Processing Fee

Upto 2999

Loan Tenure

1-5 years

Lowest EMI Per Lakh

2,604 for 5 years

Prepayment Charges

Nil charges

check your eligibility

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Personal Loan Interest Rates

Personal Loans are very useful and they are mostly referred to as multipurpose loans simply because they can be used for an array of purposes. A Personal Loan is an unsecured loan and one is not required to submit any kind of collateral to get the loan.

Therefore, the rate of interest for a Personal Loan is highest compared to other secured loan alternatives. The Personal Loans can be used for almost any purpose such as medical emergency, travel, and wedding or to buy a new gadget or for some other crucial circumstances. Most of the time, people are very conscious while opting for a Personal Loan. As the rate of interest is high, one may have second thoughts while opting for a Personal Loan.

That is why MyMoneyMantra presents to you a complete analysis of all the Personal Loan interest rates from major banks, which will help you analyse and understand the best loan options available to suit your requirements.

Compare Personal Loan Interest Rates of All Banks

One should always do a detailed comparison of Personal Loan interest rates and charges offered by all the banks before selecting a bank to take a Personal Loan from. Here are the parameters to check before deciding:

  • Interest rates for Personal Loans: Majority of the banks offer various attractive schemes with low-interest rates frequently especially for the individuals working with big and reputed organisations. The categorisation of the company you work in has an effect on the rate of interest. This may vary from a bank to bank. Therefore, it is always recommended to check various Personal Loan offers offered by multiple banks to get the benefit of the lowest rates.
  • Personal Loan prepayment and foreclosure: Many times you may think of repaying the loan in advance due to the availability of surplus money with you. You may also think of repaying only the part amount before the complete term of your loan. This is called part prepayment. If you decide to pay the complete loan amount before its term it is called foreclosure. Banks generally levy prepayment or foreclosure charges on Personal Loans, which range from nil to 5%. Therefore, you should check carefully if the interest rates are low whether a bank is charging a high prepayment or foreclosure charge or not.
  • Insurance premium: As these loans are unsecured loans, the banks request the bearer to get an insurance policy done while opting for a loan. However, the premium of an insurance policy varies from bank to bank depending upon the risk coverage and the kind of policy. Therefore, it is required to check the loan sanction letter minutely to know the exact coverage, premium, and other important details. It is also suggested to do a completely thorough and detailed comparison of various insurance policies before choosing a policy, which will give you adequate coverage at the lowest premium.
  • Personal Loan processing fees: The processing fees of most of the banks go up to 2% of the sanctioned loan amount. As the Personal Loans are for short tenure the higher processing fees result in a significant cost on loans. Hence, it is advisable to compare the All Inclusive Rates (AI for personal finance loans and shortlist the best offer. You should do a detailed comparison of interest rates and processing, as well as, attractive cash backs offered. This can be done easily and quickly by applying online through MyMoneyMantra.

Comparison of Personal Loan Interest Rates of Different Banks

Bank

Interest Rate

Processing Fee

HDFC Bank

11.29% - 21.50%

Up to 2.50% of the Loan Amount (min. 1,999 and max. 25,000 for salaried individuals)

ICICI Bank

11.25% - 19%

 Up to 2.25% of loan amount + GST

CITI Bank

10.99% - 18.49%

Up to 3.00% of the loan amount sanctioned

SBI

11%-17.05%

Up to 1% of the Loan amount + applicable taxes

HSBC

10.99% - 17.84%

Up to 1% of the disbursed loan amount

Standard Chartered

10.50% - 19%

Maximum of 3% of the loan amount

Axis Bank

15.75% - 24%

1.50% - 2% + GST as applicable

TATA Capital

11.25% - 19.00%

Up to 2% on the loan amount

Kotak Mahindra Bank Ltd.

10.99% - 24%

Up to 2.5% of the loan amount + GST + other applicable charges

Punjab National Bank

12.05% - 15.05%

1.80% of loan amount ( 270 - 450)   

Bajaj Finserv

12.99% onwards

Upto 3.99% of the loan amount

IndusInd Bank Ltd

10.50%-30.50%

Upto 2.50% of the loan amount plus taxes

Fullerton India

20% - 40%

 1.80% of the loan amount

Bank of Baroda

11.65% - 16.65%

2% of the loan amount (min. 1000 to max. 10,000)

Central Bank of India

11.60%

500 + applicable taxes

Union Bank of India

13.95% - 14.20%

1% of the loan amount sanctioned

Allahabad Bank

8.65% - 13.15%

1.06% of loan amount (min. 1,068)  

Dena Bank

13% - 14%

1% of loan amount

Indian Bank

 

10.65% - 11.25%

0.51% of the loan amount (max. 510)

Bank of Maharashtra

 

9.75% - 11.75%

1% of the loan amount (min. 1,000)

Andhra Bank

11.70% - 13.20%

1% of the loan amount (Min. 1000)

What is the Average Interest Rate and Tenure on a Personal Loan?

Five years is the maximum loan tenure offered by the majority of leading financial institutions. The average rates of interest on a Personal Loan vary from 11% - 20% along with a processing fee of up to 2% on the loan amount. The lowest EMI for a period of five years and at interest rate 10.50% works out to be approx. 2,149 for a loan amount of 1 Lakh. The prepayment and foreclosure charges range from nil to up to 5%.

Benefits of Personal Loans

 

Instant funding

It is very easy to apply for a Personal Loan in this internet-banking scenario. The procedure of the Personal Loan is liberal and quick. One can expect the lenders reply within a few hours and the desired loan amount will be credited straight into your bank account. Many lenders do not even require you to visit them in-person as the entire procedure is digitalised and organised.

Personal Loans are unsecured

The Personal Loan does not require you to submit any security or collateral as they are unsecured loans. Most of the financial institutions and leading banks may ask for an agreement before they can proceed your loan application.

Minimal documentation required

Minimum documentation is required nowadays to apply for a Personal Loan. One does not have to carry a bundle of documents. The documentation procedure in the entire banking sector is much simplified. The list of documents and mandatory information concerning Personal Loan is clearly mentioned on the lender's website.

Refer to the interest rates and apply for the Personal Loan that suits you by visiting our website. MyMoneyMantra brings for the direct comparison of interest rates offered by leading banks and financial institutions.

How to Get the Best Personal Loan Interest Rate?

 You can get a Personal Loan at an affordable rate depending upon the type of company you are working for, along with your loan repayment capacity, and loan amount. Most of the loan providers offer online lending process. You can also check the eligibility through MyMoneyMantra's EMI calculator without submitting the documents.

After the approval, if you are an existing account holder of any bank, you can be eligible for instant disbursement without even submitting any documents. You can even be asked to upload some required documents online through the mobile app or by personally submitting them to the bank loan officer who will further visit your place before the loan is sanctioned and disbursed.

Dos and Don'ts for Getting Best Personal Loan Interest rates

 

Do's:

  • Compare the rates of Personal Loans with respect to the loan amount: Many banks offer low-interest rate for the higher loan amount.
  • Check for the best available discount as well as running offers for salaried individuals: It is very important to always check all the current offers and interest rates offered to the employees of big and reputed companies.
  • Check for discounts related to loan tenure: Banks most of the times offer lower rates on the Personal Loan for certain tenure and therefore one should choose a tenure depending upon interest rates.

Don'ts:

  • Avoid taking multiple Personal Loans: One should not simultaneously apply for the loan with multiple banks as the loan applications get recorded in CIBIL report and it can lower your chance of getting a Personal Loan.
  • Avoid applying for loan amount more than your eligibility: It is highly recommended to apply for the loan amount that can be conveniently repaid by you. Applying for a higher amount than that you are eligible for can lead to loan rejection.
  • Do not rush into taking loan from your salary bank: One should check with several banks about attractive loan schemes so as to acquire premium customers. Therefore, the offer from your salary bank can sometimes not be the best suitable option.

How to Improve Your Chances of Getting a Personal Loan

Here are some tips that help a borrower to work and improve their chances to get the loan from a leading bank.

  • Identify the right product: Compare interest rates, foreclosure charges, prepayment charges, tenure, processing fees, and terms and conditions of the loan before selecting and finalising your bank. It is very important to carefully compare and select the right bank. Different banks offer different interest rates and have different eligibility criteria. You can also get a quick and detailed comparison of key loan offers through MyMoneyMantra.
  • Calculate and improve your credit score: You can obtain your credit report with the help of leading credit bureaus operating in India such as CRIF, Experian, CIBIL, Equifax. It is very important to check your credit score before applying for a Personal Loan. A high credit score also helps you to get a lower interest rate. It is necessary your credit score is 700 or above to get your loan approved. A lower credit score means your chances of defaulting on loan payment is high. A lower credit score can lower your chances of getting a Personal Loan. Therefore, a higher credit score is very crucial for obtaining approval on your loan.
  • Have options in case of bad credit loans: It is important to improve your credit score by working on it for a few months if your credit score is less than 700. However, if you are not in a situation to wait and improve on your credit score you can look for NBFCs or banks that provide loan for a lower credit score. You can also take a gold loan, loan against property or loan against your fixed deposits, as they do not consider your credit score.
  • Avoid multiple loan applications: Many times, loan applicants are in a hurry to get a loan, and they end up applying for the Personal Loan with various banks and institutions. However, this may lower your chances of getting your loan approved as each time query is captured in the credit report and multiple queries have an adverse impact of the CIBIL score.
  • Maintain a stable job: Lenders prefer customers who have at least two years of experience with the same firm. Therefore, if you are thinking of applying for Personal Loans avoid switching your jobs.
  • Space out Personal Loan applications: It is highly recommended to keep a gap of at least 6 months between two loan applications. Most of the banks do not grant a new loan to a borrower who has previously acquired a loan within 6 months. Banks may doubt you to bear the burden of additional EMI payments.
  • Your loan amount should match your repayment capacity: Use the Personal Loan eligibility calculator at MyMoneyMantra to calculate your loan amount eligibility. Requesting for a loan amount higher than your eligibility will increase the chances of rejection. Before applying for a loan, it is important to determine and fix the loan amount that you will be able to repay easily in the future. Banks also calculate the ratio of fixed expenses to income ratio of the borrower to calculate the amount of loan that can be approved to the borrower.
  • Provide correct information: It is very important to give exact and accurate personal details and information. If the banks doubt the authenticity of your information they can reject your application. For ease and convenience of lenders and customers, it is essential to provide accurate information. The lenders also call to confirm your personal data and in case of any discrepancy they can reject your loan application.

Factors Affecting Your Personal Loan Interest Rates

Your credit history: It is very important to follow a healthy and systematic credit discipline and regime and maintain a healthy score so as to increase the chances of getting a loan. Regularly check your credit report to ensure timely course corrections. You should systematically and regularly pay EMIs as late payments may have an adverse effect on the credit score. Limit the use of Credit Cards, opt for a secured credit, and restrict the number of Credit Cards before applying for a Personal Loan. It is important that you know your credit score before applying for the loan.

Your income: As per the current trends, if you have a monthly income of up to 50,000, the bank is likely to charge an annual interest varying between 16% and 20%. And in case your income falls between 50,000 and 1 Lakh, you can negotiate with the banks to give you the loan at a lower interest rate somewhere from 14% to 16%. Banks also give Personal Loans to few selected customers whose monthly pay is 1 Lakh and above with interest rates of approximately 12% per annum. To sum up, the higher your income, the lower the rate of interest banks will charge.

The reputation of your organisation:The more renowned and stable your organisation, lower the interest rate on your Personal Loan will be. The reputation of the organisation you work has got to play an important role in determining your Personal Loan interest rate. Banks are of opinion that employees of reputed organisations are likely to have a stable career and are financially more capable to pay off the loan.

Your relationship with the bank: A loyal existing customer is always given preference by a bank for a Personal Loan as they would not want to lose their customer to some other bank. Therefore, most of us have our fixed deposits and savings account in one bank, making us their loyal and preferred customers. The interpersonal relationship with a bank also has an impact on the rate of interest offered by the bank. Being an old customer, you can always leverage your loyalty to fetch a good interest rate and benefits.

FREQUENTLY ASKED QUESTIONS

 

How to get low interest rates on Personal Loans?

Ans. Many factors are involved in getting a Personal Loan with lower interest rates. Some of the factors include repayment of the debt on time, checking and rectifying the credit report, maintain a good credit score, and repaying existing loan EMIs on regular basis.

How to ensure that one has selected the perfect repayment tenure for the Personal Loan?

Ans. One chooses an ideal repayment tenure for a Personal Loan on the basis of many factors such as monthly budget calculation, interest rate, future financial planning and prospects, the existing liabilities, career goals, and so on.

How is Personal Loan interest rate calculated?

Ans. The interest rate on the Personal Loan is determined based on factors like the amount being borrowed, monthly income, the credit history, age of the borrower, and so on. Most of the time lenders prefer applicants who have the good credit score and who timely pay their EMIs.

How do I decide which is the best bank to take Personal Loan from?

Ans. Compare interest rates, processing fees, foreclosure charges, ease of applying for the loan and benefits of each lender before selecting the bank and choose the one that offers the best deal.

What is the importance of CIBIL score for the Personal Loan?

Ans. Higher the credit score, higher are the chances to get a loan application approved and vice versa. CIBIL score ranges from 300 to 900. A score of 700 and above is considered to be a good score to get a Personal Loan sanctioned.

Can I take a joint Personal Loan with my spouse?

Ans. Yes, you can apply jointly with a co-applicant (spouse or parents). This will help you to increase the eligibility and you can also get the loan of a higher amount as the income of your co-applicant will also get clubbed while calculating the eligible loan amount.

If I default on my Personal Loan, will it have an impact on my co-applicant?

Ans. Yes, if you fail to pay the loan on time then it will have the repercussions on the co-applicant as well. The default in the loan will affect adversely their CIBIL rating and score.

Is a bank account required to service a Personal Loan?

Ans.Yes, you need to have at least one functional bank account in your name. It is better to have an account with the same bank you are applying for the loan.

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