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    Know the lowest personal loan interest rate offered by lenders

    GeorgeBy GeorgeMay 13, 2022No Comments6 Mins Read
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    The personal loan interest rate basically determines your overall loan cost. A lower rate of interest means lower interest costs and EMIs over the loan repayment tenure. Hence, applicants must compare the personal loan rates across financial institutions. Lenders factor in various facets of the applicant’s credit profile like income, credit score, employer’s profile and occupation when setting your personal loan rate.

    Personal loan rate comparison offered by different financial institutions

    Lenders Rate of interest (% p. a) Processing charges (% of the loan amount)
    HDB Financial Services Up to 36 percent Up to 3 percent
    Cashe 27 percent onwards Up to 1,200 or 3 percent
    Home Credit 24 percent onwards Up to 5 percent
    EarlySalary 18 percent onwards 2 percent
    PaySense 16.80 percent onwards Up to 2.5 percent
    MoneyView 15.96 percent onwards Starting from 2 percent
    Dhani loan and Services 13.99 percent onwards 3 percent onwards
    Money Tap 12.96 percent onwards 2 percent
    KreditBee 12.24 percent onwards Up to 6 percent
    Faircent 12.00 percent onwards Up to 8 percent
    Fullerton India 11.99 percent onwards Up to 6 percent
    StashFin 11.99 percent onwards Up to 10 percent
    Axis Bank 10.25 percent onwards 1.5 – 2 percent
    Union Bank of India 8.90 – 13.00 percent Up to 0.50 percent
    Bank of Baroda 9.10 – 15.35 percent 2 percent
    ICICI Bank 10.50 -19.00 percent Up to 2.5 percent
    Punjab National Bank 7.90 – 14.50 percent Waived off till March 31st, 2022
    HDFC Bank 10.25 – 21 percent Up to 2.50 percent
    SBI personal loan interest rates 9.60 – 13.85 percent Nil
    HSBC 9.50 – 15.25 percent Up to 1 percent
    Standard Chartered Bank 11.00 percent onwards 1 percent
    Tata Capital 10.99 percent onwards Up to 2.75 percent
    Citibank 9.99 – 16.49 percent Up to 3 percent
    Muthoot Finance 14.00 percent onwards Up to 3.5 percent
    RBL Bank 14.00 percent onwards Up to 3.5 percent
    Bajaj Finserv 13.00 percent onwards Up to 4 percent
    IDFC First Bank 10.49 percent onwards Up to 3.50 percent
    Bank of Maharashtra 9.45 – 11.80 percent Up to 1 percent
    Federal Bank 10.49 – 17.99 percent Up to 3 percent
    UCO Bank 10.05 – 10.45 percent Up to 1 percent
    Yes Bank 10.99 percent onwards Up to 2.5 percent
    Indian Overseas Bank 10.00 percent – 11.00 percent Up to 0.75 percent
    IDBI Bank 9.50 percent – 14.00 percent 1 percent (minimum: Rs 2,500)
    IndusInd Bank 11.00 percent onwards Up to 3 percent
    Central Bank of India 8.45 percent onwards Up to Rs 500
    Kotak Mahindra Bank 10.25 percent onwards Up to 2.50 percent
    Indian Bank 8.50 percent onwards 1.5 – 2 percent
    Bank of India 9.35 – 12.35 percent Up to 2 percent

    Important tips to get a personal loan at a lower rate of interest

    Listed below are crucial points you must factor into avail lowest personal loan interest rate:

    • Form and maintain your CIBIL score of 750 and above.
    • Review the pre-approved offers from NBFCs, banks, SFBs (Small Finance Banks), MFIs or Micro Finance Institutions.
    • Enquire with NBFCs or banks with whom you hold a loan or/and deposit account.
    • Keep thorough track of the rate of interest concessions offered by lenders during the festive times.
    •  Approach online lending markets to review and compare the personal loan offers from different lenders.

    Parameters impacting personal loan rate of interest

    Lenders set the rate of interest primarily based on their fund cost and credit risk assessment of their personal loan applicants. Listed here are major parameters that can impact your interest rate on personal loan:

    Credit score: Many lenders today have begun factoring in the credit score of the loan applicants when setting the rate of interest. Those with higher credit scores are generally provided personal loans at a lower rate of interest than others. Thus, try and maintain a credit score equaling 750 and above. Excellent financial habits such as repaying your credit card dues and loan EMIs by the due dates, maintaining lower CUR (credit utilization ratio) and avoiding multiple loans and credit card enquiries in a short duration can assist you in maintaining a score of 750 and above.

    Income: Higher income means a higher repayment capacity for a loan. It results in reduced credit risk for lenders. Thus, many personal loan lenders provide lower interest rates on personal loans to the ones with a higher monthly income.

    Employer: Many personal loan lenders factor in the applicant’s employer profile when fixing the rate of interest. Salaried are generally charged a lower rate of interest than the self-employed owing to the higher income certainty of the former. Amongst the salaried, PSUs and the government generally are provided with a lower rate of interest owing to income certainty and higher job security. Next, the applicants employed with reputed companies and MNCs are generally considered to hold higher chances to withstand economic downturns than other private sector companies.

    Existing banking or lending relation with the lender: Many lenders provide personal loans at the concessional rate of interest to applicants with existing lending or banking relation with the lender. Hence, if you are planning to take up a personal loan, then you must contact the NBFCs or banks with whom you already hold an existing banking or lending relation for personal loan offers.

    FAQs (frequently asked questions)

    Which bank endows the lowest personal loan interest rate?

    The interest rate provided by NBFCs, and banks depend upon the applicant’s credit history, salary, credit score and repayment capacity. However, public sector banks provide lower rates of interest than NBFCs and private sector banks.

    How is the personal loan rate of interest computed?

    A personal loan rate of interest is computed based on your credit score, income, and other eligibility parameters.

    What is known as a flat personal loan rate?

    A flat personal loan rate is when there is zero change in the rate of interest throughout the repayment cycle or tenure. It is computed on overall loan proceeds during the complete tenure on the principal amount.

    What is reducing the personal loan rate?

    A reducing rate is a way in which the interest rate is computed on the outstanding loan each month. During this rate type, the loan EMI involves interest payable on outstanding loan proceeds.

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