Here is your Personal Loan interest rate guide to make sure you get the right loan that fits your needs. Read on.
It really doesn’t matter how prepared you are to face financial emergencies in life because there comes a time when you may need a little cash to come out of a financial crunch. During those times, you may or may not always have a friend or relative to help you out, and that’s when a Personal Loan really comes in handy. It gives you the option to tackle your financial crisis on your own without having to depend on anyone for help.
A Personal Loan is simply an unsecured loan taken from a bank or a Non-Banking Financial Company (NBFC) to meet your personal needs. It is provided on the basis of various factors such as your income, credit history, employment details, and repayment capacity, etc. As it is an unsecured loan, you are not required to pledge collateral like gold or property to avail it. Hence, in case of a default, the lender cannot auction anything you own.
A Personal Loan can be ideally used for a wide variety of purposes like opening a new business, funding medical emergencies, paying additional debts, etc.
Additional Reading: A Personal Loan Could Be Your Very Own Superhero
Opting for a Personal Loan is helpful when you are stuck in a financial crunch, but do remember that you have to repay the loan. So, it’s wise to calculate your Personal Loan EMIs along with your monthly expenditures to strike a perfect balance between your monthly savings and expenditures.
Banks generally have different interest rates for Personal Loans, which may vary depending on several factors. So here’s a quick guide to Personal Loan interest rates offered by some of the popular banks in the country.
Kotak Bank Personal Loan
Interest Range: 10.50% – 16.99%
Eligibility Criteria:
- You should be at least 21 years and less than 55 years
- Must be a salaried Indian resident working at an MNC, public company, or a large private organisation
- Minimum net monthly income should be more than Rs. 25,000
Features:
- Kotak Mahindra offers loans up to Rs. 25 lakhs for salaried employees for a tenure of up to 5 years
- Balance transfer, e-approval and top-up loan facilities are available.
- No need for security, collateral or guarantors
Fees and charges:
- Foreclosure charges: 5% of the principal outstanding amount (pre-closure permitted only after the first year)
- Processing Fee: 2.5% p.a. of the loan amount, plus service tax.
HDFC Bank Personal Loan
Interest Range: 10.75% – 21.45%
Eligibility Criteria:
- You should be at least 21 years old and less than 60 years old for salaried professionals
- Minimum net monthly income should be Rs. 20, 000 (Rs. 25,000 in Madhya Pradesh)
- You should have a valid ID proof like passport, PAN card, driving license, voter ID card or photo ration card
Features:
- HDFC Bank offers loans up to Rs. 40 lakhs depending on your eligibility, income, nature of job and repayment capacity
- No need for security, collateral or guarantors
Fees and Charges:
- Processing Fee: Up to 2.50% of the loan amount, subject to a minimum of Rs. 1,000 and maximum of Rs. 25,000 for salaried customers
- Part-payments can be made only after completion of 12 months. For part payments between 13 to 24 months, a fee of 4% is applicable on the part-payment amount. 3% is applicable on payments made between 25 to 36 months and 2% is applicable post 36 months
- Part-payments are allowed only once a year and only twice during the loan tenure. The amount cannot exceed 25% of the principal outstanding
Citibank Personal Loan
Interest Range: 10.50% – 17.99%
Eligibility Criteria:
- You should have a valid ID proof like passport, PAN card, driving license, voter ID card or photo ration card
Features:
- Citi offers loans up to Rs. 30 lakhs for salaried employees for a tenure of up to 5 years
- No need for security, collateral or guarantors
- Balance transfer and top-up loan facilities are available
Fees and Charges:
- A pre-closure fee of up to 3% of principal outstanding is applicable. Pre-closure is permitted only after the first year
- Processing fee: The bank can charge you a processing fee in the range of 0.50% to 3%.
Tata Capital Personal Loan
Interest Range: 11.25% – 14.49%
Eligibility Criteria:
- You should be at least 24 years old and less than 55 years old
- Should have a job and worked with the current employer for at least 1 year
- You should have valid ID proof like passport, PAN card, driving license, voter ID card or photo ration card
Features:
- Tata Capital offers loans up to Rs. 20 lakhs for professionals for a tenure of up to 6 years
- You can take this Personal Loan without the need for security, collateral or guarantors
- It doesn’t charge any processing fee if you apply for this loan via BankBazaar
Fees and Charges:
- 25% part-payment is allowed within a year of taking the loan at zero charges. Payment of more than 25% of the outstanding principal will attract a 2% prepayment charge
- No processing fee
- Foreclosure charges: Up to Rs. 5,000 post 12 months, depending on the loan amount
IndusInd Personal Loan
Interest Range: 11.00% – 16.75%
Eligibility Criteria:
- You should be at least 21 years old and less than 60 years old
- Should have completed a minimum of two years of employment and a minimum of one year in the current organisation
- Should have completed minimum one year of stay at the current residence if rented
- You should have a valid ID proof like passport, PAN card, driving license, voter ID card or photo ration card
Features:
- IndusInd offers loans up to Rs. 25 lakhs depending on your eligibility, income, nature of job and repayment capacity
- You can take this Personal Loan without the need for security, collateral or guarantors
- IndusInd doesn’t charge any processing fee if you apply for the loan via BankBazaar
Fees and Charges:
- Foreclosure charges: 4% of the principal outstanding after repayment of 12 EMIs
ICICI Bank Personal Loan
Interest Range: 11.25% – 22.00%
Eligibility Criteria:
- You should be at least 23 years old and less than 65 years old for salaried professionals
- Minimum net monthly income should be Rs. 15,000
- You should have a valid ID proof like passport, PAN card, driving license, voter ID card or photo ration card
Features:
- ICICI offers loans up to Rs. 20 lakhs depending on your eligibility, income, nature of job and repayment capacity
- Conditional pre-closure – only after six months
- No need for security, collateral or guarantors
- If you are an ICICI Bank account holder, you may be eligible for a pre-approved Persona Loan for which you wouldn’t have to submit any documents and the amount will get disbursed in just 3 seconds
Fees and Charges:
- Foreclosure charges: 5% of the principal outstanding amount
- Processing Fee: Up to 0.75% p.a. of the loan amount plus service tax
Once you zero-in on the bank after taking into consideration different interest rates and other charges, the next ideal step is to calculate your monthly EMIs that you would have to pay back each month. This will help you get an estimate of how much money you would require to shell out each month and will help you plan your finances accordingly.
To calculate your monthly EMIs, you can make use of a Personal Loan EMI calculator which is an online tool that helps you calculate your EMIs easily.
In order to use the online EMI calculator, you just need to enter the following details:
- Tenure of the Personal Loan
You need to select the time period over which you intend to pay back the loan. Generally, the repayment tenure for a Personal Loan ranges from 12 months to 60 months. However, it varies from one bank to another.
- Desirable loan amount
Enter the loan amount you wish to apply for. Ideally, your Personal Loan should not exceed 10% to 20% of your income. Therefore, exercise caution when deciding the loan amount so that you don’t let yourself fall into a debt trap later on.
- Interest rate and processing fee
Next step is to enter the interest rate offered by your desired bank. Do take note that interest rates depend on various factors like Credit Score, income level, loan amount and tenure, previous relationship with the lender, etc.
Additional Reading: Your Personal Loan EMI Calculator Is Here
Once you enter these details, you will get an estimate about just how much you need to shell out each month to repay the loan amount.
A Personal Loan is a fast, easy and reliable way to tackle your financial crunch without hassles. So make an informed choice right away! Now that you know about the Personal Loan interest rates and your monthly EMI amount, don’t forget to check your eligibility online to apply for a Personal Loan.