How Interest is Calculated on Personal Loans

By | September 3, 2015

Perhaps the most vital information you seek before applying for a Personal Loan, “How much interest will I pay?” Here’s how the interest on your Personal Loan is calculated.
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Monthly Income
There’s a definite relationship between your salary and interest rate. If you make less than Rs.35, 000 per month, the interest you pay would be between 16-20% per annum. Earnings of around Rs.75, 000 would make you eligible for an interest rate between 14.25 – 16% per annum, and so on. In simple words – higher income, lower rate.

Employer
If your salary is high but you work for a small company, you still might find yourself paying high interest. If you work for a company that is listed by the bank as a priority company, you may get a loan at better rates. Stability during repayment is considered an important factor.

Credit History
If you have been regular with your loan repayments, your credit score is likely to be higher. Banks use this information to assess your repayment capacity. This may affect the interest rate you are offered.

Negotiation
Your relationship with the bank and the ability to negotiate may also affect your interest rate to a great extent. Keep your credit report handy and if it is in good shape: negotiate!

That’s some good, solid information, right? Apply for a Personal Loan, now!

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All information including news articles and blogs published on this website are strictly for general information purpose only. BankBazaar does not provide any warranty about the authenticity and accuracy of such information. BankBazaar will not be held responsible for any loss and/or damage that arises or is incurred by use of such information. Rates and offers as may be applicable at the time of applying for a product may vary from that mentioned above. Please visit www.bankbazaar.com for the latest rates/offers.

2 thoughts on “How Interest is Calculated on Personal Loans

  1. shobhit

    How do i check credit card limit I’ll be given from various lenders ?

    Regards,

    Reply
    1. Team BankBazaar

      Hi Shobhit, Credit Card limit is decided by the lender depending on your income, employment, and other details. There’s no way to check on the limits different lenders offer. Cheers, Team BankBazaar

      Reply

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