- June 30, 2020
- Posted by: Ganeshcbani
- Category: Blog
Interest Rate on Personal Loan
Personal loans are highly useful and are commonly called multipurpose loans because they can be used for a variety of purposes. A personal loan is an unsecured loan and no collateral is needed for the loan.
The interest rate for a Personal Loan is also higher than other secured loan options. The loans may be used for virtually any purpose, such as medical emergency, travel and wedding, or for the purchase of a new gadget or other important events. Most of the time, people are very aware of a personal loan. Since the rate of interest is high, you can take a second look at a personal loan.
Banks Interest Rate for Personal Loan
|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%|
|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|
|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%|
|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|
|Bank of Maharashtra||10.85%||1.00%, Min Rs. 1,000|
|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|
Top five factors impacting the interest rates on personal loans:
When you have a certain amount of revenue, banks assume that you are more likely that you have a daily profit to pay. Some banks have income categories, where different rates are issued.
If your monthly income increases, your personal loan would have a lower interest rate. Customers who have earnings between Rs . 20,000, Rs. 50,000 and Rs. 50,000 and Rs. 75,000 are subject to the prices. At the other hand, you’ll get a lower interest rate if you have earnings above Rs. 75,000.
Status of Company
Banks identify companies in 3-4 groups, namely
Cat A or Elite or Top 500
Boy B Boy
Cat of C
Someone who works in those businesses will take out banks’ personal loans. The higher your business segment, the lower the interest rate you get. Banks identify these businesses as businesses and their credibility
Banks offer CAT A customers a lower interest rate because they are less likely to default. When your firm (start-ups) is new and not listed in banks, it is possible that you will be offered a higher rate or no bank loan.
Credit and Transaction History
before giving personal loans , banks obey the CIBIL scores / ranking. When the fees for credit cards and loans do not suit, there is a risk that the bank will reject or increase interest rates. CIBIL SCORE for a personal loan is between 0-900, and most banks favor customers over 750. Therefore, if your Cibil score is above 800, you will raising your personal loan interest rate by 0.25 percent.
Relationship with your Bank
The bank with your Saving account is most likely to give you a preferential interest rate or personal loan processing fees. Banks guarantee that buyers with their personal loans and credit cards have more options than other banks. Check your own bank rate of interest before applying for a personal loan to other banks.
Negotiating skills of individuals
With this knowledge in mind, you can also bargain and ask banks for special exemption on interest rate, processing fees, etc.
Self-employed consumer considerations for personal loan interest rates:
Yearly Income Tax Return
When you’re high in income and are a big business, you should expect lower rates for you.
Banks are ready to give a sound company a lower rate, so that both manufacturing and safe businesses get a better interest rate on personal loans.
Special pricing for self-employed professionals-Banks prefer to finance Physicians / Engineers / CA and Architects, as they assume that these clients are rarely in default, and that rates are therefore higher than others.
Factors impacting interest rates on personal loans
Banks and NBFCs have determined certain criteria for a personal loan, on the basis of which they offer the interest rates to the lender. These are the factors that deliver personal loan rates.
The most important thing banks consider is the borrower ‘s loan requirement. The amount of the loan is determined by the income and the borrower and the business group in which they operate. The higher the applicant’s salary, the higher the value of the loan he / she will take.
The interest rate depends directly on the loan’s term. The longer the service, the lower the rates provided.
The individual’s repayment capacity plays a key role in interest rate determination. When the borrower does not have any financial commitments, lenders find that the borrower’s loan repayment is fine because the borrower will easily repay the loan in the future without any default.
Here are some of the important features that make a personal loan a good source of financial requirements for all kinds.
Personal loans are unsecured and easy to obtain
- Fewer records are available in a personal loan cycle because there is no need for authentication
- The borrower is free to use the money to meet any financial criteria (personal or business)
- The quick payment makes it more appealing as the borrower can select the loan term as convenient as possible.
- A personal loan helps in situations where a large sum of money is desperately needed.
- Self-employed and employees can take a personal loan
- The size of the loan and interest rates are dependent on the borrower ‘s profile. The higher the borrower ‘s income level , the greater the probability of securing a higher loan sum.
- Low processing costs and advance payments
- There is a flexible personal loan tenure