- July 20, 2020
- Posted by: Ganeshcbani
- Category: Blog
Personal loans are a great way to get the finances you need, without having to go through a bank. While banks might be your first thought when it comes to getting a loan, there are other lenders out there that can offer you a similar product.
Personal Loan Options
Whether you need funds for an immediate need or for a limited period, a personal loan is the perfect option. It can be used in every way. The lender approves the loan basis on which the applicant ‘s information such as age, wages, current liabilities and credit score, among other items, is given as an unsecured loan. Unlike a secured loan, such as the gold loan, securities loan or land loan, no time is spent reviewing the collateral. Depending on end-use, there could be various forms or styles of personal loans. Nevertheless, a personal loan is usually only of one form and can be used for any sort of necessity.
A personal loan is an unsecured loan with no end-use limitation. The loan can either be used for consumption or for production. For example, you that bought a loan for purchasing a high-end home theater system, a medical emergency if your health insurance is short, a foreign vacation with your family, etc. If you are a businessman, a personal loan can help expand your business, such as adding more inventory or making down payment for new offices, etc.
Personal Loan Features
No collateral / security Required
No collateral for a personal loan is needed, such as the house or the vehicle. The loan will only be accepted based on your creditworthiness depending on your credit score, wages, payment history, credibility of your employer, etc.
Versatile end use
Personal loans can, unlike a car loan or a home loan, be used for various purposes, such as medical emergency expenditure, travel, house renovation, debt reduction and more.
Flexible tenure
Personal loans usually range from 12 to 60 months and have flexible tenure.
Minimal paperwork
You can apply for a personal loan with minimum of documents online and even offline. Key documents which the lender usually requires to provide the applicant include identity certificates, proof of address and proof of income.
Fast Disbursal
Personal loans can be issued within a few hours after the request is accepted. Turnaround times can also be as low as a couple of minutes if a pre-approved loan offer can be used.
Flexible Loan Amount
The qualifying personal loan is dependent on the repayment history, the monthly income, the age, profession, credibility of an employer and other factors. Lenders sell personal loans as small as Rs 10,00,00 to Rs 60 lakh.
Personal Loan Interest rate
| Bank | Personal Loan Interest Rates | Processing Fee |
| SBI Personal Loan | 11.30% | 1.00% |
| HDFC Bank Personal Loan | 10.75% | Upto 2.50% Min Rs. 1,999 |
| ICICI Bank Personal Loan | 11.25% | Upto 2.25% of Loan Amount |
| Bajaj Finserv | 12.99% | Starting from 1.50%, Up to 3% |
| Citibank | 10.50% | Upto 0.5% |
| IDFC First Bank | 10.75% | Upto 1.5% |
| Axis Bank | 10.99% | Upto 1.75% |
| Tata Capital | 10.99% | Upto 2.50% of Loan Amount |
| Fullerton India | 11.99% | 2% |
| IndusInd Bank | 11.00% | Min 0.75% to Max 1.75% |
| Kotak Bank | 10.75% | Upto 2.5% |
| RBL Bank | 13.99% | Upto 2% |
| IIFL | 12.99% | 1 – 2% |
| HDB Financial | 13.99% | Upto 2% of Loan Amount |
| Andhra Bank | 11.55% | Case to Case |
| Yes Bank | 10.99% | Starting at 0.99%, Upto 2% |
| Muthoot | 14.00% | 2.5-3.5% |
| Standard Chartered Bank | 10.99% | 1.00% |
| Bank of Baroda | 10.50% | 2%, Min Rs. 250 |
| Union Bank of India | 11.00% | 0.5%, Min Rs. 500 |
| Canara Bank | 13.00% | 0.50% |
| Bank of Maharashtra | 10.85% | 1.00%, Min Rs. 1,000 |
| IDBI Bank | 12.00% | 1.00% |
| Allahabad Bank | 12.15% | 1.06%, Min Rs. 1068 |
| Federal Bank | 11.49% | 0.5%, Min Rs. 500 |
| Karur Vysya Bank | 12.00% | 0.40% |
| Syndicate Bank | 13.40% | 0.5%, Min Rs. 500 |
| Corporation Bank | 12.95% | 1.5%, Min Rs. 500 |
| PNB | 11.50% | 1.8% + Taxes |
| Indian Overseas Bank | 11.50% | Rs. 204 Per Lakh |
| Indian Bank | 11.05% | 0.5%, Min Rs. 508 |
Interest Rate
Personal loans, as unsecured loans, have an interest rate higher than that on secured ‘home and vehicle’ loans. Many leading banks and NBFCs currently sell such loans at interest rates of up to 11.49%. The borrower’s rate, however, is based on key variables, including credit interest, income level, loan amount and term, existing relationship with the borrower (savings accounts, lending or credit cards), etc.
Extra fee payable
Yeah. Yeah. In addition to the interest charged on the principal amount, the application for an individual loan is subject to a non-refundable fee. The lender pays fees, generally 1-2% of the loan amount, for the handling of documents which have to be reviewed as part of the approval process. If you have a long-term relationship with him, the lender will waive this fee.
Interest rates fixed or floating
The EMIs stay set for a fixed rate personal loan. Floating rate means that the EMIs tend to decline as the balance method of estimating interest payments on personal loans has been reduced. According to the new Marginal Cost of Funds Lending Rate rules (MCLR), floating rates will adjust either semi-annually or annually.
Difference between reduction and flat rate
As the name suggests, in the former, the creditor charges interest only on the outstanding loan balance, i.e. the residual balance after the main payment has been reduced. Under the flat rate case, the borrower charges interest during the loan term on the entire loan balance. Therefore, even though the creditor makes daily EMI payments, the interest payable does not decrease.
