Compare the low interest personal loans from India’s top banks & NBFCs in 2021
Be it a personal loan, home loan or vehicle loan, the interest rate offered by your lender is one of the most influential factors that determine the entire value of your loan. Especially in a personal loan, the interest rate matters the most because the applicant does not require any collateral. However, when an applicant fetches for a personal loan, he/she always try to capture low interest personal loan as it defines more economical EMIs and drops credit payout throughout the loan tenure period.
So, firstly, let us have a glimpse at the list of personal loan interest rates offered by top Indian banks and NBFCs in 2021.
| Banks/NBFCs | Interest Rate (p.a.) | Loan Amount (Rs.) | EMI/1 lakh for 1 year (Rs.) |
| State Bank of India | 9.60% onwards | Up to 20 lakhs | 8,773 |
| Bank of India | 9.35% onwards | Up to 10 lakhs | 8,761 |
| Union Bank of India | 8.90% onwards | Up to 20 lakhs | 8,741 |
| ICICI Bank | 10.50% onwards | 50,000 to 25 lakhs | 8,815 |
| HDFC Bank | 12.50% onwards | Up to 25 lakhs | 8,908 |
| Axis Bank | 11.00% onwards | Up to 15 lakhs | 8,838 |
| UCO Bank | 8.45% onwards | Up to 15 lakhs | 8,720 |
| Punjab National Bank | 8.95% onwards | 25,000 to 15 lakhs | 8,743 |
| Bank of Maharashtra | 9.55% onwards | Up to 20 lakhs | 8,771 |
| Citibank | 9.99% onwards | Up to 30 lakhs | 8,791 |
| IndusInd Bank | 11.00% onwards | 50,000 to 15 lakhs | 8,838 |
| Bajaj FinServ | 11.49% onwards | Up to 15 lakhs | 8,861 |
| Yes Bank | 12.49% onwards | Up to 50 lakhs | 8,908 |
| Kotak Mahindra Bank | 10.50% onwards | Up to 30 lakhs | 8,815 |
| Tata Capital | 11.75% onwards | Up to 20 lakhs | 8,873 |
| HDB | Up to 36% | Up to 20 lakhs | 10,046 |
| Muthoot Finance | 14.50% onwards | 50,000 onwards | 9,002 |
| IDFC First Bank | 11.00% onwards | Up to 40 lakhs | 8,838 |
| IndusInd Bank | 11.00% onwards | 50,000 to 15 lakhs | 8,838 |
| Bank of Baroda | 10.50% onwards | 50,000 to 10 lakhs | 8,815 |
How to calculate personal loan interest rates?
The following are two means to calculate personal loan interest rates:
- Reducing Balance Method:
While you pay your monthly EMIs, part of your interest rate and loan value are also paid off. In that way, your principal loan amount kept on lessening with time. Hence, your lender calculates your interest rate upon the lessening amount, not the total principal value you borrowed.
- Flat Rate:
Here, the lender calculates your interest rates on the principal borrowed amount throughout the tenure period, which will be similar during the whole time.
Some factors that can affect your Personal Loan Interest Rates:
When you opt for low-interest personal loans, you should be aware of several factors that can initially affect your interest rate.
The interest rates in every loan type are fixed by the lender institution like bank or NBFC periodically. On the basis of your repayment capacity, credit score and history, plus employment type, the provider decides on your interest rates. By the time you appeal for a personal loan, the lender institution analyses the latter factors. It is to determine your interest rates and loan eligibility.
- Employment and earning type:
Higher earnings depreciate the risk of the lender. Sequentially, it shows a likelihood to get moderate interest rates since the applicant is capable of repaying the loan. Besides, if your employer is a reputed company or MNC or government institution, lenders may offer you a personal loan at a more economical rate. NBFCs and banks perceive this as a symbol of steady employment. In general, salaried individuals experience a better chance of getting moderate interest rates for a personal loan as lenders find it difficult to assess the income of self-employed people
- Credit score:
While you apply to borrow money, the lender always considers your credit history and current credit score report to determine your loan. Your credit report portrays your creditworthiness. If you have compensated your past debts on time and are able to maintain a decent credit score, the lender possibly agrees to offer you more moderate interest rates.
- Multiple loan applications:
There are a number of people who apply for multiple loans over a short period and end up failing to repay the credit amount. Every lender looks after this matter strictly. Being an applicant, you must know that each time you appeal for a financial product like a loan, it reflects on your credit score report. Supposedly, you have enquired about multiple financial products over a short time, lenders consider it as a sign of ‘credit hungriness.’ It simply indicates your desperateness for credit. This will also impact the possibility of getting your loan approved.
Wrapping Up:
So, when you decide to go for low-interest personal loans, you should also keep in mind that the personal loan procedure may come with some hidden/additional charges. Therefore, prepare yourself accordingly. Also, it is advisable to enquire about your lender carefully. Afterward, select the financial institution that matches your convenience. 5 Brilliant Strategies to Earn Money on the Internet
