Are You Aware About the Cheapest Personal Loan in India?

Category: Loans 39 0

Festival seasons are going on, and you must be planning to celebrate with much enthusiasm like every year. However, you have recently invested all your savings and are left with none to splurge on additional expenditures. ICICI, HDFC, Axis, Punjab National Bank, IIFL or SBI – which bank will you choose for a personal loan?

All of these have varied interest rates. This is because the offering of the rate depends on your income, company status, credit & payment history, existing relationship with the bank, and individual negotiation skills. If you have a stable job and all the documents are in proper place, then you can apply for Personal Loan from SBI Bank, HDFC or ICICI Bank Personal loan with ease.

Again these banks offer personal loan at very competitive interest rate. For your convenience, hereby we are mentioning the personal loan interest rate of several prominent lenders

State Bank of India 10.90%
HDFC Bank 11.25%
ICICI Bank 10.99%
Bajaj Finserv 10.99%
Citibank 10.99%
IDFC Bank 11.50%
Axis Bank 16%
Tata Capital 11.25%
Fullerton India 20.00%
IndusInd Bank 11.25%
Kotak Bank 10.99%
RBL Bank 14.5%
IIFL 13%
HDB Financial 13.99%
Karur Vysya Bank 13.90%
PNB 12.00%
Vijaya Bank 12.90%
Union Bank of India 12.60%
Syndicate Bank 14.20%
Standard Chartered Bank 11.99%
Indian Overseas Bank 12.45%
Andhra Bank 12.85%
Bank of Baroda 11.60%
Bank of Maharashtra 12.95%
Canara Bank 14.10%
Corporation Bank 12.90%
Dena Bank 11.60%
Federal Bank 10%
IDBI Bank 12.50%
Allahabad Bank 12.80%
Indian Bank 14.20%
Yes Bank 10.75%

Now, let us find out how interest rate varies for varied profiles.

Let’s take an example

Ms. Mansi, an engineer, took a Personal Loan to remodel her kitchen from ICICI Bank at an interest rate of 10.99% p.a.

Mr. Jadhav, a store manager receives a salary in cash. He managed to avail a Personal Loan at an interest rate of 18% p.a.

Mr. Khanna, a dentist by profession availed a personal loan to renovate his clinic at an interest rate of 14% p.a. from HDFC Bank.

The table below shows the variable EMIs, with varying Interest Rates –

Name Loan Amount Tenure Interest Rate EMI
Ms. Mansi Rs 1,00,000 3 years 10.99% Rs 3273
Mr. Jadhav Rs 1,00,000 3 years 18% Rs 3615
Mr. Khanna Rs 1,00,000 3years 14% Rs 3417

So, in the above cases, you can evaluate how the interest rates and the respective EMI vary with an individual’s profile.

One of the instrumental factors that can help you avail personal loan at better rate of interest is good credit score.

What is a good credit score?

Range of Credit Score Grade
750 + Very Good
700-750 Good
650-700 Fair
550-650 Poor
550 and below Bad

As evident from this diagram, 750+ credit score helps you make a winning personal loan application. Along with that, you will able to get a personal loan at better rate of interest.

Why CIBIL Score for evaluation?

Among the four credit information companies, the Credit Information Bureau India Limited (CIBIL) is the most popular one. It is licensed by RBI to operate as a company. The three other credit companies are Experian, Equifax and Highmark.

How you can improve your CIBIL score?

  1. Pay dues on time
  2. Avoid withdrawing cash from ATMs
  3. Settle your card balance via a personal loan
  4. Don’t make too many credit inquiries for loan
  5. Get your CIBIL report verified
  6. Keep a check on credit utilization ratio (It should not be more than 50%)
  7. Keep your oldest credit card running
  8. Don’t take too many debts at one time

How is CIBIL transunion score calculated?

The score is calculated on the basis of the following factors –

  • Credit exposure = 25%
  • Past performance = 30%
  • Credit type & duration = 25%
  • Other factors = 20%

How can a person switch over to a cheaper personal loan?

The answer is balance transfer. Suppose you took a personal loan of Rs 200000 at the rate of 12% interest rate for tenure of 3 years. The effective EMI is Rs 6642.

However, after 1 year, if you switched to another lender at the rate of 11% p.a. for tenure of 2 years, your savings will be more than Rs 2000.

Personal loan Balance Transfer is an excellent way to lower interest rates on your existing EMIs.

Who are eligible for a personal loan Balance Transfer?

Salaried Individuals Self-employed Individuals
Identity, Age & Address Proof – PAN card/driving license/passport/voter ID/Aadhaar Card Identity, Age & Address Proof – PAN card/driving license/passport/voter ID/Aadhaar Card
Bank statement for the past 6 months Balance sheet of the last 3 years along with profit & loss account
Salary slips for the last 3 months ITR income details
Personal loan statement from the current lender Personal loan statement from the current lender

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