Lowest Personal Loan Interest Rates for August 2022
A personal loan is an option for those who have a consistent source of income and require quick access to funds to meet their demands. In India, financial institutions offer personal loans. When the equivalent monthly installment (EMI) period begins, a rate of interest is added to the principal amount.
Many banks have raised their lending interest rates in response to the Reserve Bank of India (RBI) raising the official repo rate to 5.9% in September 2022. According to the RBI, the lowest lending rates, or the average 1-year MCLR rate for scheduled commercial banks (SCBs), increased from 7.65% in August 2022 to 7.75% in September 2022.
You can still get a personal loan with an affordable interest rate. Here is a complete guide to personal loan interest rates. Check out what the lowest personal loan interest rates are for August 2022. We have tried to answer all the questions that may come after you say, “I want a personal loan.”
How do personal loan interest rates work?
The best way to understand interest rates on personal loans is to understand what personal loans are.
Personal loans fall under the category of closed-ended lending and have predetermined repayment terms with fixed monthly payments. Anywhere from three to five years is possible.
Now that you have borrowed the principal amount and the interest rate has been expressed by the lender as a percentage, the financial institution will analyze it. Your loan’s rate, usually known as the nominal annual percentage rate, or APR, will include all fees and other expenditures.
In contrast to secured loans, personal loans are typically unsecured and have higher interest rates. The personal loan program is called “unsecured” if it is not backed by a guarantee or an asset that can be taken back.
How to get the lowest interest rates on a personal loan?
Here are some suggestions to assist you in obtaining the lowest rate of interest for a personal loan:
Make your credit score go high
You are creditworthy if you have a high credit score. Banks and other financial institutions give applicants with good credit scores the lowest rate of interest for a personal loan. 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 the lowest rate of interest for a personal loan.
Avoid skipping repayments:
Your credit score may suffer if you forget to make a loan or credit card payment. Before setting the lowest rate of interest for a personal loan, 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.
Be on the lookout for promotions:
During festive times, banks and other financial institutions typically provide special interest rates for a certain period. While such a promotion is active, you might be given a loan with the lowest rate of interest for a personal loan.
Interest rate comparison:
It is important to check the lowest rate of interest for personal loans charged by several NBFCs and banks before requesting a loan from a specific bank. Thanks to this, you will be able to obtain it at the lowest rate of interest for a personal loan.
Talk to the lender about a loan:
You can bargain for the lowest rate of interest for a personal loan if you are an existing customer of the bank or have a good working relationship with the loan provider. It is advised to send the loan provider a formal, written request while doing this.
Bank’s lowest rate of interest for a personal loan
| Bank | Personal Loan Amount | Tenure | ROI |
| Union Bank of India | >=50,000 and <=15,00,000 | Upto 60 months | 10.2%-11.45% |
| SBI | >=25,000 and <=20,00,000 | 6-72 months | 9.8%-12.8% |
| Punjab and Sind Bank | >=1,00,000 and <=3,00,000 | Upto 60 months | 10.4%-12.4% |
| PNB | Upto 10 lakhs | Upto 60 months | 9.35%-15.35% |
| Karur Vysya Bank | Upto 10 lakhs | 12-60 months | 9.4%-19% |
| Indian Bank | >=50,000 and <=5,00,000 | 12-36 months | 9.4%-9.9% |
| IDBI Bank | >=25,000 and <=5,00,000 | 12-60 months | 8.9%-14% |
| HDFC Bank | >=25,000 and <=25,00,000 | Upto 60 months | 10.75%- 15.25% |
| City Union Bank | >=50,000 and <=5,00,000 | 12 months | >=9.5% |
| Central Bank of India | Upto 10 lakhs | 48 months | 9.85%-10.05% |
How to compare the lowest rate of interest for a personal loan?
The interest rates that lending organizations display online do not provide an actual rate; they rather provide an impression of what they provide. Banks levy a small GST cost in addition to processing, servicing, and other expenses. Before applying, make sure to confirm with your lender the nominal annual percentage rate, often known as the APR, that will be applied to your loan, along with any fees and other expenditures.
Even after receiving an application and supporting documentation, financial institutions still demand that a KYC check be done on the borrower’s credit to qualify for a personal loan.
What factors affect your lowest rate of interest for a personal loan?
Keep a note of these factors that can influence your interest rate for a personal loan:
- Employer credibility and work experience
- Comparison between the offers and interest rates
- Good repayment history and credit score
- Check the method used to calculate interest.
- Constant or variable interest rate
- loan type: secured or unsecured
- Payment schedule
Conclusion
Look for the finest banks or institutions. Find out what they are offering and compare their personal loan interest rates because a small percentage difference in the interest rate can have a significant impact on the entire cost of the loan over a few years. Check out Piramal Finance to learn more about the lowest rate of interest.