How much interest on Personal Loan?

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%
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

Top five factors impacting the interest rates on personal loans:

Revenue

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

Anything else

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.

Business form

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.

Loan Amount

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.

Term

The interest rate depends directly on the loan’s term. The longer the service, the lower the rates provided.

Repayment Capacity

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


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