IndiaLends Advisory

By IndiaLends Advisory

Aug 17, 2018

Best Personal Loan Interest Rates in India

Although a personal loan is the best way to finance short-term requirements, one of the important factors that determine the decision of taking it is interest rates. An interest rate is a cost borne by the borrower for taking a loan.

Before we get into the best personal loan interest rates in India, you first need to understand the factors affecting a personal loan and the types of interest rates. 

Personal Loan Interest Rate Factors

The factors to determine the best personal loan interest rates in India are:

A lender wants to know the credibility of an applicant not only by how he handles his finances but by his professional working style. An applicant has a good chance of getting the best personal loan deals if his credibility is reported by his/her employer.

We all know how important your credit score is when it comes to credit products. The credit score is another important personal loan interest rate deciding factor. A good credit score gives an impression of the applicant of having a good financial standing. Any score above 750 can, in fact, give you the power to negotiate on the terms of service.

A monthly income is another crucial factor in deciding the interest rates. If the applicant has a consistent source of income and is paying taxes on-time, his/her credibility is better in the eyes of the lender. The monthly income also helps the lender to determine the repayment capacity of the applicant.

The negotiation power of the applicant also helps in deciding the interest rates of a personal loan. If the applicant is able to convince his creditworthiness to the lender, he might get a personal loan with the best interest rates.

The credit history of the applicant is one of the important ways to determine the interest rates on a personal loan. The credit history gives an idea about the credibility of the applicant and whether he/she will repay the amount. If the lender is doubtful about the creditworthiness of the applicant, they would want to charge high-interest rates in order to cover the interest cost as soon as possible.

Therefore, an applicant can get a low-interest personal loan easily if his/her track records are clear.

A good history with the lender can help in getting the better interest rate on your personal loan. This is because the lender already knows the integrity of the applicant and will have no doubt in offering the best interest rate. For example, an individual having a long-term relationship with the bank will have a better chance of getting the best interest rate when compared to someone who is newly joined.

Another crucial factor when you apply for personal loans online is the personal loan eligibility criteria. The general personal loan eligibility criteria are the following:

→ Age
→ Income
→ Documentation
→ Credit Utilisation Ratio

Although this could vary on case-to-case, the above factors are the general factors that come under personal loan eligibility criteria.  

Types of Personal Loan Interest Rates

Interest rates are calculated in two ways which are fixed or flat rates and floating or variable interest rates. In India, currently, variable interest rates are been applied to different types of loans.

Under this interest rate system, the interest rate is fixed or locked for the entire loan period. It does not get affected whether the market rate increases or decreases. So, a loan taken for a period of 5 years at an interest rate of 13% will have the same interest rate throughout.

The best part about fixed rate is that it brings a lot of certainty in the cash outflows. In fact, the fixed interest rate system helps in better management of finances. Although these loans generally cost 2-3% more than variable interest rates.

Floating interest rates depend on the future situations and can change due to different factors. These rates are governed by the policy rates declared by the government. So, as and when the policy rates increase or decrease, the same is replicated here. It can either increase or decrease your EMI(keeping the loan tenure fixed) or can increase/decrease your loan tenure(keeping EMI fixed).

The benefit of a floating interest rate is that it is cheaper when compared to a fixed interest rate.

Best Personal Loan Interest Rates

The best personal loan interest rates in India are:

Bank Name

Interest rate (p.a)

Processing Fee

Loan amount

Best Personal Loan Interest Rates in India

10.75% Up to 2.50% of the loan amount subject to a minimum of Rs. 999/- plus taxes ₹1 lakh – ₹25 lakhs

Best Personal Loan Interest Rates in India

10.99% From Rs. 999/- Up to 2.0% of the loan amount and applicable Service Tax ₹50k – ₹25 lakhs

Best Personal Loan Interest Rates in India

10.99% Up to 2.5% of the loan amount subject to a minimum of ₹1,999 and maximum of ₹25,000 ₹50k – ₹40 lakhs

Best Personal Loan Interest Rates in India

11.00% Up to 2.5% of the loan amount + GST and other applicable statutory levies ₹1 lakh – ₹30 lakhs

Best Personal Loan Interest Rates in India

11.49% 2% to 3% of the loan outstanding ₹25K – ₹15L


Yes Bank Personal Loan Interest Rate 

Best Personal Loan Interest Rates in India

YES Bank personal loans are quite popular in India due to the low-interest rates. Being one of the leading banks in India, YES Bank provides its customers with a lot of benefits such as:

→ Flexible repayment options
→ Part Pre Payment options available
→ Quick disbursal of funds
→ Balance transfer facility

>> Know More


ICICI
Personal Loan Interest Rate

Best Personal Loan Interest Rates in India

ICICI Bank provides ICICI personal loan interest rate on the benchmark 1- year Marginal Cost of funds lending rate(MCLR). The personal loan by ICICI are easy-to-get, quick and require minimum documentation.

Some of the benefits offered by ICICI Bank personal loan are:

→ Quick processing of loan
→ Simple documentation
→ 
No security/collateral required
→ 
Easy repayment options including ECS, AD or PDC

>> Know More


HDFC
Personal Loan Interest Rate

Best Personal Loan Interest Rates in India

HDFC personal loan application process is hassle-free and the disbursals are popularly fast and quick. The HDFC personal loan interest rates are competitive and also provide convenient repayment options.

Some of the benefits of HDFC personal loan are:

→ Attractive Interest rates
→ Special privileges for HDFC customers
→ 
Quick approvals and disbursals
→ 
Convenient repayment options

>> Know More


Kotak Personal Loan Interest Rate

Best Personal Loan Interest Rates in India

Kotak personal loans are popular for its multi-functional purposes. Be it a family wedding or a medical emergency, personal loans by Kotak bank can be the solution for the extra money requirement.    

The highlights of Kotak personal loans are:

→ Competitive Interest rates
→ Minimal documentation
→ 
Easy application process
→ 
No collateral/security required

>> Know More


SBI
Personal Loan Interest Rate

Best Personal Loan Interest Rates in India

SBI offers personal loans at a minimal interest rate and helps to meet individuals’ requirements.

The other benefits of SBI personal loan are:

→ Transparent application procedure
→ Loan tenure ranging from 1 to 5 years
→ 
Minimal processing fee
→ 
Dedicated customer care

How To Get The Best Personal Loan Interest Rates In India?

→ Do your homework: Generally, lenders have different personal loan schemes that are not very popular. Hence, a thorough research is required to find the best deal as per your needs. This could be a tedious and time-consuming process.

Alternatively, you can apply for personal loans online at third-party financial comparison portals that can help you in your research. IndiaLends is one such portal that helps you find the best personal loans as per your credit profile. The algorithms with machine learning help in finding the right bank/NBFC for you.

>> Know more about the personal offers here.

 Clear your past dues: Before you apply for a new personal loan, it is advisable to clear the previous dues as much as possible. This gives the applicant a leverage to negotiate on an excellent deal by giving an impression of being a good customer.

→ Get help, if needed: In a case where you don’t have a chance to improve your credit score, it is best to get help. Applying with a co-applicant with a good credit history can help you share the credibility, and thus help in getting a decent interest rate on your personal loan

→ Go safe with security: Although this is less preferred, a personal loan with security can help you get better interest rates. The market value of the collateral acts as a security for the loan taken and thus can help you get the best deals during emergency times.

Do’s and Dont’s To Get The Best Personal Loan Interest Rates

 

DO’s

 DONT’s

Compare interest rates on the basis of the loan amount.

Do not apply at too many institutions simultaneously

Check for any discounts available on tenure.

Don’t apply for loan amount more than your eligibility

Calculate your personal loan EMIs to assess your affordability

Don’t sign the deal without reading the terms of service.

 

To calculate your EMI’s, use our EMI Calculator

GET STARTED

Before you apply for a personal loan, it is recommended to check our website to find the best personal deals as per your credit profile. IndiaLends is a credit card and loan marketplace with an aim to provide the best financial products to its customers.

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