What Are the Best Personal Loan Interest Rates in India?

Personal loans are revolving lines of credit with fixed monthly payments payable over a set period of time decided by the financial institution. It can be three, four, or five years.

The personal loan rate of interest will now be calculated by the banking institution depending on the principal amount borrowed. In addition, the lender expresses it as a percentage. The lending rate, commonly known as the “nominal annual percentage rate,” will include any fees and other expenses.

What is the personal loan interest rate?

A consumer can take a personal loan with a fair personal loan rate of interest. Here, we have put together a list of interest rates. Both public and private banks charge these on personal loans to help you choose the best deal.

Have a look at the different interest rates of banks in India:

Company	Interest Rate Range	Loan Amount
Bank of Baroda	10.2% to 17.55%	50,000 to 20 lakh
Bank of India	9.75% to 14.75%	10 lakh to 20 lakh
Bank of Maharashtra	10.20% to 14.7%	Up to 20 lakh
Central Bank of India	11.75 to 11.95%	Up to 15 lakh
Punjab National Bank	10.8% to 15.85%	Up to 20 lakh
State Bank of India	10.3% to 13.6%	24,000 to 30 lakh
UCO Bank	11.95% to 12.2%	Up to 15 lakh
Axis Bank	12% to 21%	Up to 40 Lakh
Bandhan Bank	10.25% to 18%	50,000 to 25 lakh
HDFC Bank	11% to 21%	50,000 to 40 lakh
ICICI Bank	10.75% to 19%	Up to 2.5%

The preceding personal loan rate of interest and personal loan information are current as of October 15, 2022. While this information is being kept up to date, personal loan rates of interest and loan terms may have changed since the last time this page was updated.

Factors Affecting the Best Personal Loan Rate

Let’s take a look at the different factors to keep in mind to get the best personal loan rate of interest.

Employment History and Employer Credibility

Many lenders will look into your employment record, job stability, residential stability, and other factors. All of this, as well as your ability to repay. It is not needed; however, it is preferred if you work for the government. You might have a better chance of obtaining a cheaper personal loan rate of interest. Multinationals, reputed companies in various sectors with a history of providing stable career options. A good salary can also influence how much interest you are charged.

Comparing Personal Loan Rates of Interest and Offers

There are numerous aggregator platforms available today to assist you in making an informed decision. Once you’ve determined your eligibility and requirements, you can go to one of the financial websites that compare different lenders offering personal loans.

A good relationship should not be underestimated. If you already have a long-standing relationship with your bank or a non-banking financial firm (NBFC), they might be able to tailor a plan to your specific needs.

Good Credit Score and Repayment History

A good customer must have a credit score of 750 or higher. This increases your chances of earning a better personal loan rate of interest.

Making timely payments on any loans you may have helps your credit rating. This will influence the interest rate that is decided for you.

Fixed or variable interest loan

Fixed-rate loans will have a fixed interest rate that won’t fluctuate over time, as the heading suggests. In comparison to fixed-rate loans, variable-rate loans typically start out with lower personal loan rates of interest. Therefore, it appears that they are superior to a fixed-rate loan.

But over time, the personal loan interest rate may vary on the variable interest loan, which may affect your budget. Consequently, it is always wiser to choose fixed-rate loans. You are aware that your personal loan rates won’t go up regardless of the state of the market.

Secured or Unsecured Loan

The distinguishing characteristic of a loan, whether secured or unsecured, is the latter. A personal loan is obtained using a valuable asset as collateral, such as a car, house, or other items. Secured loans are preferable because they are easier to get and don’t depend much on your credit score.

The lender’s risk is negligible in a secured loan. As a result, the rates are lower than for unsecured personal loans.

If you choose unsecured personal loans, your credit score must exceed a specific limit. Furthermore, if you fail to repay the unsecured loan, the lender may claim you to recover its losses.

Repayment Timeline

Longer loan terms are associated with higher interest rates. This is because the lender is exposed to greater risk. Therefore, personal loans with a shorter term are preferable. Because the lender is taking less risk, they have lower interest rates.

A lower rate of interest is determined by a number of factors, including the loan’s term, its security status (secured or unsecured), its repayment plan (fixed or variable), your credit score, your repayment history, your stable income, etc.

Determine Your Monthly Personal Loan Payments

Once you are aware of the interest rate, term, and amount of the lenders, you can calculate the total amount you will pay as EMI. 

Consider the following scenario: The personal loan calculator says that your EMI will be INR 1833 if you need a personal loan of INR 20,000 with an interest rate of 10% and a term of 12 months to pay it back.

Documents Needed

• Aadhar number connected with mobile number
•  Valid PAN number
•  Proof of identification
•  Proof of residence
•  Income tax return
•  Bank account statement for the last six months
•  Latest salary slip
•  Some banks also require a guarantor

Eligibility 

• Salary account with any bank
• The minimum age is 21–58 years
• Working for at least one to three years 
• The borrower’s income should be between INR 10,000 and INR 15,000 per month

Conclusion

Banking and NBFC credit remain the heart of India’s small and medium-sized businesses. A business loan allows you to invest in infrastructure, operations, plant, and machinery, helping your small firm grow. Furthermore, company loans can be a reliable source of funding for crucial business activities.

Customized business loans are a new type of loan that is tailored to the specific demands of a new-age business or startup. With these loans, your business can grow and get the edge it needs to be successful in today’s market.

Piramal Finance is an excellent financing solution for customers looking for low-interest personal loans. Visit Piramal Finance’s website to learn more about its offerings and services.