How to Know Personal Loan Interest Rates of Different Banks?
When someone needs money, private loans can be quite useful. Personal loans may help you pay for payments of any kind. These include those related to engagement, healthcare, home improvement, travel, and other expenses. But research multiple lenders before applying for a private loan to get the best one. Several banks provide the best rates and promotions for personal loans.
What is a Personal Loan?
A personal loan is a loan that is provided with little to no documentation and without the need for security or collateral.
Personal Loan Interest Rate Types
Some of the highest interest rates are available on personal loans. So, apply for a loan from an organization that offers comparatively short terms. Also, check if they offer cheaper rates. That’s because the cost of interest rises with tenure length.
There are no limitations on how the capital may be used. You can use the money in any way you see fit. Interest on personal loans is often available in two forms:
- A Decreasing or Fluctuating Interest Rate
One kind of personal interest rate would be a decreasing or adjustable rate. The dynamic real exchange rate on a personal loan varies often. It relies on the Reserve Bank of India’s policy rates. The adjustable or falling interest rate is another name for the flexible interest rate.
- Rate of interest, Fixed or Variable
According to this strategy, the interest rate on the borrowed amount is fixed. It stays the same for the loan duration. The lender calculates it using projections for the average rate of return during the loan period.
Interest rates for personal loans at banks
Bank processing is faster for a personal loan than for a home loan. It allows you to take out loans as needed rather than all at once. Thus, it is an excellent choice if you require money right now.
| Bank | Interest Rate (p.a.) |
| HDFC Bank | 10.5% p.a. – 21.00% p.a. |
| Yes Bank | 10.99% p.a. onwards – 16.99% p.a. |
| Citibank | 9.99% p.a. – 16.49% p.a. |
| IDBI Bank | 8.15% p.a. – 10.90% p.a. |
| Kotak Mahindra Bank | 10.25% and above |
| Axis Bank | 12% p.a.- 21% p.a. |
| IndusInd Bank | 10.49% p.a. – 31.50% p.a. |
| HSBC Bank | 9.50% p.a. – 15.25% p.a. |
| IDFC First Bank | 10.49% p.a. onwards |
Get the Lowest Interest Rate on a Personal Loan
Here are some suggestions to assist you in obtaining the lowest interest rate when applying for a personal loan:
Improve your credit score
You are creditworthy if you have a high credit score. Banks and other financial institutions give applicants with good credit the lowest personal loan interest rates. So, before requesting a personal loan, you should check your credit rating. You should look for techniques to raise your credit score if it is below 750. If your credit score is over 750, you have a better chance of receiving a personal loan with a low interest rate.
Prevent skipping repayments:
Your credit score may suffer if you forget to make a loan or credit card payment. Before setting the interest rates on personal loans, lenders typically consider your repayment history. A lower interest rate is probably going to be assessed for those who have previously made on-time EMI and credit card payments.
Keep an eye out for offers:
During celebratory times, banks and other financial institutions frequently provide exceptional interest rates for a constrained window of time. While such an offer is active, you can be given a loan with a lower interest rate.
Interest rate comparison:
It is important to check the personal loan interest rates charged by several NBFCs and banks before requesting a loan from a specific bank. Thanks to this, you will be able to obtain a personal loan at a reasonable interest rate.
Negotiate with the lender:
If you have an excellent working relationship with the loan provider or are an existing customer of the bank, you can work out a deal for the lowest interest rate. It is advised to send the loan provider a formal, written request while doing this.
Personal Loan Factors Affecting Interest Rates
Income:
When determining the interest rate for a loan, lenders consider the applicant’s income. High-earning people may have a reduced interest rate since they are a smaller risk to the bank. Conversely, those with lower yearly salaries might be required to pay a higher interest rate.
Employer information:
The bank or financial institution is more likely to give you a reduced interest rate if you work for a reputable company.
Type of employment
Loan providers may charge different interest rates based on whether a borrower has a regular job or works for himself.
Age:
The interest rate may also depend on your age. A greater interest rate might be applied to people who are getting close to retirement age.
Relationship with the loan provider:
Existing clients of the bank or financial institution could get lower interest rates. But, you need to have a strong working connection with the lender. But, the bank reserves the right to decide whether to give a good interest rate to all current customers.
Conclusion
The best way to meet your short-term financial needs is with personal loans at cheap interest rates. Your reputation might benefit from a solid supplemental monthly payment, especially if it’s credit you don’t currently have. Check your credit record right away to see if the asset you’re thinking about acquiring receives information from all three credit reporting bureaus.
You may use a personal loan to pay for anything, including your child’s wedding and a trip with your significant other. But it’s important to get a loan with a low-interest rate from Piramal Finance. You will find it simpler to make payments as a result. Therefore, picking the best price is crucial.