personal loan: Banks offering the lowest interest rates on personal loan

A personal loan is also known as an unsecured loan, where you do not need to offer collateral. Personal loans are popular because there are no restrictions on how the money can be used.

According to the Axis Bank website, “A personal loan is a financial instrument that helps you obtain funds for a multitude of uses. Like any ordinary loan; when you take out a personal loan, you receive an advance payment. a specific amount of funds at a fixed interest rate and can repay it via a fixed repayment term.

Applying for a personal loan typically involves determining the borrower’s need for money, eligibility for financing, and ability to repay the loan, as it provides an unsecured advance.

Therefore, to be eligible for a personal loan, applicants must generally be employees who provide documentation of their personal and professional information.

5 banks with the cheapest personal loan interest rates

BANKS Personal loan amount Mandate Return on investment (%)
IDBI Bank >=25000 and 12 – 60 months 8.90% – 14.00%
city ​​union bank >=5000 and 12 months >=9.50%
Indian bank >=50000 and 12 – 36 months 9.40% – 9.90%
Karur Vysia Bank Up to 10 lakes 12 – 60 months 9.40% – 19.00%
National Bank of Punjab Up to 10 lakes Up to 60 months 9.35% – 15.35%

Source: Compiled by ETIG; Data as of July 28, 2022

Minimum CIBIL score required for a personal loan

A credit score is a number you receive from credit bureaus that ranges from 300 to 900 like CIBIL. The higher the score, the more likely your loan application will be approved.

According to the Axis Bank website, “If you have a high credit score, you can also get a higher loan amount or lower loan rates. However, a score below 750 may reduce your chances of getting a personal loan or give you a lower amount or a higher interest rate. If your score is below 600, it is advisable to try to find out why your credit score is low. This may be due to past behavior, such as consistently missing or delaying past IMEs, excessive purchases made on credit, or applying for loans or credit cards from many banks, etc.

Important Personal Loan FAQs According to Kotak Mahindra Bank

How are the personal loan application fees calculated?
The personal loan processing fee is calculated based on the loan amount. For example, say you are granted a loan of Rs.1 lakh and the processing fee for a personal loan is 2.5%, the fee would be Rs.2500 plus GST.

Do I have to pay extra for a personal loan?
You would have to pay a processing fee for a personal loan when you apply for a loan. Other fees would depend on the service demands you raise on the loan.

How are the interest rate, application fees, pre-closing fees determined on a personal loan?
The personal loan interest rate is calculated on the outstanding balance of the loan amount. Pre-closing fees are also charged against the outstanding amount of the loan as of the date of foreclosure. The processing fee, on the other hand, is calculated on the amount of the loan you have.

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