|Rate Of Interest
Banks & NBFC’S constantly review Rate of Interest offers as per market conditions the rate of interest charged for a Personal Loan is between at an average 10.25% to 22%.
Leading Banks which offer the lowest Rate of Interest for a Personal Loan are HDFC Bank, Axis Bank, ICICI Bank and Kotak Bank.
The interest rate applied to an applicant can differ from one Bank to another lenders have their own policy according to which the interest rate is offered.
The rate of interest for a Personal Loan remains fixed for the entire tenure and cannot be altered. The only way to reduce the rate of interest for a running loan is via a balance transfer.
The changes in the Repo rate do not directly affect the rate of interest offered for a Personal Loan, but the Banks will review their cost of funds and alter the interest rates accordingly.
The lowest Rate of Interest is offered to high income applicant applying for a loan amount of ₹ 10 Lakhs or more.
If the applicants profile is the same or the income has increased currently the Rate of Interest for a Top Up will remain the same, whereas if the applicant has changed employment the Rate of Interest for a parallel loan will be applied as per the current income and company category.
Banks & NBFC’S offer a rate of interest as per the cost of funds and individual policy, therefore an applicant can be offered varied interest rates from various lenders.
The EMI for a Personal Loan is Calculated by adding the interest sum to the loan amount and dividing it into installments as per the applicable tenure. The only variable is that percentage of interest repaid at the start of the EMI is greater the proportion balances out at the middle of the tenure.
The cost of the loan will definitely come down with a lower interest rate but the EMI is also based on the tenure, if the tenure is extended it will decrease but will remain the same or increase if the applicant chooses a shorter tenure.