Supposedly, the interest rate of a personal loan is proportional to its tenure (the time taken for a repayment). Components like the processing fee, stamping fee, credit appraisal, etc. are also included.
If at all the question is about who gives the cheapest loan, then it would be fair to start with Kotak Mahindra Bank first. It’s not surprising to know that the interest rates can go high upto 11% and this percentage is offered to a whopping amount.
Though, the interest rate is pre-determined by the banks, the personal loan EMI calculator can be effectively used to calculate the actual EMI amount. The calculator picks the principle amount and interest rate to calculate the final amount.
Banks in India are generally spread out, offering the similar loan products. They have interesting personal loan deals in all Indian cities. All that you need to do is fill your loan application and take a quick fine print. All you need to do is read the fine print of your loan application. That’s exactly where you will choose the best bank for yourself and future.
Currently Banks are providing interest rates as low as 11.25% onward. But don’t be assuming that you will get this %.
In order for you to get the best deal from the Bank, you must possess;
1. Credit score above 800 at least
2. No default history in the past 12 months’ minimum
3. Income level to be above 25,000 per month in hand.
It is tough to maintain all three together. In case you cannot fulfill one of these 3 pointers, you might end up getting a rate around 11.99-13.99%. In case you might not be able to maintain 2 out of the above 3 pointers, then the rate might go up to 15.99% for you. In case you cannot fulfill all three pointers then expect a interest rate around 17.99%. This is a scenario which is highly probable.
In order to get a better deal you can try and apply for a personal loan from the Bank where you already have an account. This is because they might give you a relationship discount and give you a better interest rate. Another advantage is that if you want an instant personal loan, getting it from the same Bank will be faster as they already have your documents. So you can fasten the loan approval process.
Be it a bank or a Non-Banking Financial Company (NBFC) like Bajaj Finserv Personal Loan, the amount you repay depends on the following parameters:
· Firstly, the interest rate is calculated as per base rate and bank rate. The standard base rate varies between 9.30% and 9.70%. An additional 3% to 8% is charged by the banks and that amounts to an overall estimated interest rate ranging between 12% and 28%.
· Secondly, banks charge an average of 2% to 3% of the loan amount as processing fee.
· Number of years you are opting for loan repayment also determines the interest rate.
· Usually pre-closure of the loan account after the first EMI payment is not charged. But certain banks charge a percentage of principal for pre-closure.
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