Last Updated on 15/08/2020 by Deepak Singla
An expanding number of customers are currently taking individual credits for their buys, particularly the first-class ones. They are likewise changing over their buys into likened regularly scheduled payments (EMIs). Individual credits help the families meet any deficit they involvement with purchasing a house or a vehicle, in youngsters’ advanced education, or even in instances of therapeutic possibilities, in addition to other things. Personal Loan is one of the best choices to fulfil your dreams. Here’s an article on home advances to comprehend them better.
Personal Loan
Basically, it is an unbound credit taken by people from a bank or a non-banking budgetary organization (NBFC) to meet their own needs. It is given based on key criteria, for example, salary level, credit and work history, reimbursement limit, and so forth.
Not at all like a home or a vehicle credit, an individual advance isn’t verified against any advantage. As it is unbound and the borrower doesn’t set up a guarantee like gold or property to benefit it, the bank, if there should arise an occurrence of a default, can’t sell off anything you claim. The financing costs on close to home advances are higher than those on home, vehicle or gold credits as a result of the more noteworthy saw chance when endorsing them.
Be that as it may, similar to some other advance, defaulting on an individual advance isn’t great as it would reflect in your credit report and cause issues when you apply for Mastercards or different advances in future.
Personal Loans in India
In India, there are many kinds of Personal Loans given by Government Banks, Private Banks and NBFCs. For the most part, Private Sector Banks and NBFCs give a high rate of Interest than Government Banks. Each Bank provides Personal Loan based on [3] factors, for example, salary level, work history, credit scoring, existing month to month commitments, area/zone, and banking exchanges. A few times, giving an underwriter or a second individual who will share the risk of the advance reimbursement is additionally conceivable.
HOW TO APPLY FOR PERSONAL LOANS IN INDIA
Compare and apply for a personal loan online. Choose the best offers from top banks along with their interest rate, processing fee, foreclosure charges and latest offers. Avail personal loan From Banks for weddings, travel, home renovation, or an emergency financial requirement.
The following are the Intrest rates of personal loans in India
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*Interest Rates are subject to change at any time.
Top 10 Best Personal Loans in India
The following are the list of top 10 personal loans in India
1. HDFC Bank Personal Loan:
HDFC Bank is a leading bank that offers numerous banking products at affordable prices. The personal loan product provided by the bank is affordable and attractive.
INTREST RATE – 11.25% to 21.50% p.a.
MINIMUM AGE- 21 years
MAXIMUM AGE – 61 years
MINIMUM INCOME- Rs.15,000 net monthly income.(20000 for urban cities)
LOAN AMOUNT- Up to Rs.15 lakh
LOAN TENURE- 12 to 60 months
2. SBI Personal Loan
The bank offers multiple personal loan products at different interest rates.
a). State Bank of India (SBI) Xpress Credit Personal Loan
INTREST RATE – 12.50% to 16.60% p.a.
MINIMUM AGE- 21 years
MAXIMUM AGE – 61 years
MINIMUM INCOME- Rs.5,000
LOAN AMOUNT- Rs.25,000 to Rs.15 lakh
LOAN TENURE- Up to 60 months
b). State Bank of India (SBI) Personal Loan for Pensioners
INTREST RATE – 11.95% p.a.
INCOME- –
LOAN AMOUNT- Rs.25,000 to Rs.14 lakh
LOAN TENURE- upto 84months
c). State Bank of India (SBI) Saral Personal Loan
INTREST RATE – 11.75% to 12.45% p.a.
MINIMUM AGE- 21 years
MAXIMUM AGE – 60 years
MINIMUM INCOME- Rs.5,000
LOAN AMOUNT- Rural areas or semi-urban centres: Rs.10,000 to Rs.10 lakh Metro and semi-urban centres: Rs.24,000 to Rs.10 lakh
LOAN TENURE- up to 48 months
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Indiabulls personal loan
- Loan amount: Indiabulls offers a personal loan amount of as low as Rs. 1,000 to as high as Rs. 15 lakh.
- Complete online process: From applying to uploading documents to loan approval, each and every step of Indiabulls personal loan takes place online
- Flexible tenure: Indiabulls offers flexibility when it comes to repaying the loan amount with tenure ranging from 3 to 24 months
- Instant disbursal: As soon as your documents are verified, the loan gets approved and the amount is disbursed to your account instantly
- No pre-payment charges: There will be no prepayment charges for loans under Rs.20,000
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Axis Bank Personal Loan
INTREST RATE – 15.75% to 24% p.a.
MINIMUM AGE- 21 years
MAXIMUM AGE – 60 years
MINIMUM INCOME- Rs.15000,
LOAN AMOUNT- Rs.50,000 to Rs.15 lakh
LOAN TENURE- 12 to 60 months
5. Canara Bank Personal Loan
The bank offers multiple personal loan products at different interest rates.
a). Canara Bank Consumer Personal Loan
INTREST RATE – 13.15% – 14.15% p.a.
MINIMUM AGE- 21 years
MAXIMUM AGE – 60 years
MINIMUM INCOME- Rs.12,500
LOAN AMOUNT- Up Rs.1 lakh or 15 months of net income or 75% of invoice value
LOAN TENURE- upto 36 months
b). Canara Bank Teachers’ Personal Loan
INTREST RATE – 12.65% p.a.
MINIMUM AGE- 21 years
MAXIMUM AGE – 60 years
MINIMUM INCOME- Rs.10,000
LOAN AMOUNT- Rs.3 lakh or gross salary for 6 months, whichever is lesser
LOAN TENURE- upto 48 months
c). Canara Bank Budget Personal Loan
INTREST RATE – 11.00% to 13.00% p.a..
MINIMUM AGE- 21 years
MAXIMUM AGE – 60 years
MINIMUM INCOME- Rs.10,000
LOAN AMOUNT- Rs.3 lakh or gross salary for 6 months, whichever is lesser
LOAN TENURE- upto 60 months
6. Bajaj Finserv Personal Loan
Bajaj Finserv is a leading NBFC that offers a wide range of financial products. The company provides a great personal loan product that can be utilised for several personal requirements.
INTREST RATE – 12.99% p.a.
MINIMUM AGE- 25 years
MAXIMUM AGE – 48 years
MINIMUM INCOME- Rs.30,000
LOAN AMOUNT- Up to Rs.25 lakh
LOAN TENURE- 12 to 60 months
7. Tata Capital Personal Loan
Being the flagship financial services company of the Tata Group, Tata Capital with its sole aim of providing focused and transparent financial solutions is helping people to fulfill their dreams. This one-stop financial service provider is known for catering the diverse needs of the retail, corporate and institutional customers across businesses. This Non-Banking Financial Company with its wide array of services, have many products in the financial service sector, and personal loan is one of them. Yes, no matter what your personal financial needs are, this company with its best of personal loan services, fulfills the needs of all.
| Interest Rates | 10.99% – 18.00% |
| Loan Amount | ₹75,000-₹25 Lakh |
| Repayment | 12 months-72 months |
| Processing Fee | ₹999-2.50% of the loan amount |
| Pre-Closure Charges | 4% of the principal outstanding |
8. Fullerton India personal loan
With the wide range of options that come under Fullerton India personal loan, applicants from any section of society can fulfil their financial needs without any security or collateral. Business loans, home loans, personal loans, vehicle loans, and loan against property are some of the major offerings of this organization, among which personal loan is one of the most sought-after products. As the varied loan schemes are designed keeping in mind the changing needs of the borrowers, you get the flexibility to avail a loan scheme anytime based on your individual requirement. While applying for a personal loan from Fullerton, you needn’t wait for months to get the loan approved. Quick eligibility check, instant online approval, and quick disbursement of the amount are the benefits that the company offers
Interest Rate (Monthly reducing balance) 11.99% – 25% per annum
Processing Fees 3% – 6%
Loan Tenure 1 year to 5 years
9. ICICI Bank Personal Loan
It is one of the top lenders in India’s private sector. The personal loan offered by the bank comes with interest rates starting from just 11.25% p.a.
- Quick disbursal and hassle-free application process
- 25% processing fee
- Up to Rs.20 lakh in personal loans
- Loan tenure up to 5 years
10. Kotak Mahindra Bank Personal Loan
Benfits
INTREST RATE – 10.50% to 16.99%
LOAN AMOUNT – Minimum: Rs.50,000 Maximum: Rs.15 lakh
- Easy online application process
- Minimal paperwork and faster processing
- Hassle-free loan disbursal process
The following are also some of the main personal loans in India
CAPITAL FIRST PERSONAL LOANS
Capital First offers personal loans at attractive terms and conditions. With interest rates starting from just 12%, Capital First offers loans up to Rs.15 lakh to customers across the country. The repayment tenure of the loan is flexible, ranging from 1 year to 5 years, and the processing fee applicable to the loan is just up to 1.5% of the amount you borrow. The loan also requires no guarantor, thereby making it easier for you to borrow with ease.
ADITYA BIRLA PERSONAL LOAN
Features of Aditya Birla Personal Loan
- Quick disbursal of loans.
- Flexible repayment tenure from 6 months up to 36 months.
- No collateral required.
- Fast online approval of loans.
- Nominal interest rates.
- No documentation required for sanction of loans.
- Application process is hassle-free.
- No change in interest throughout the tenure of the loan.
- Loan amount of up to Rs.15 lakh.
YES BANK PERSONAL LOAN
Yes Bank offers personal loan interest rates starting at 10.75% p.a. Yes Bank charges a processing fee of up to 2.50% of the loan amount, subject to a minimum charge of Rs.999. Both salaried and self-employed individuals can borrow personal loans from Yes Bank. The minimum loan amount that can be chosen is Rs.1 lakh, while the maximum loan amount is Rs.25 lakh. The minimum loan tenure is 12 months and the maximum loan tenure if 60 months. You can borrow a personal loan from Yes Bank to pay for medical bills, debt consolidation, buy gadgets or appliances, etc.
CITI BANK PERSONAL LOAN
Citibank offers personal loans between Rs.25,000 and Rs.30 lakh at interest rates starting from just 10.50%. The maximum repayment tenure of the loan can extend up to 60 months, and the processing fee charged can be up to 3% of the loan amount.
Loan Amount Minimum: Rs.25,000 Maximum: Rs.30 lakh
Tenure 6 months to 60 months
Interest Rate 10.50% to 17.99%
Processing Fees 0.50% – 3.00%
Uses OF PERSONAL LOANS IN INDIA
Personal loans can be used for a wide variety of purposes. Check out the following types of personal loans:
- Wedding
Indian weddings can turn out to be quite expensive. Instead of draining all your savings, opt for a marriage loan. This personal loan helps you fund all your wedding related expenses with ease. - Home Renovation
Give your house a new look with a home renovation loan. This personal loan helps you handle the costs of maintenance works, refurnishing, redecoration, and more. - Travel
You can fund expensive family trips and vacations abroad with a personal loan for travel. - Medical loan
In case of an urgent medical expenditure, if you do not have insurance, apply for a medical emergency loan. With instant approval and low personal loan interest rates, this loan can be of great help. - Debt consolidation loan
You can take a personal loan to consolidate all your existing debts into a single one and manage your instalment payments in a better way. Use a personal loan EMI calculator to calculate and compare your repayments. - Higher education loan
A personal loan for higher education helps you finance other aspects of studying abroad like accommodation, travel, living expenses as well as tuition fees. - Small personal loan
The urgent need of money can occur at any point of time. Be it in a business or for your child’s education, if you need some additional funds you can choose a small personal loan.
RULES AND REGULATION WHILE TAKING PERSONAL LOANS
Pick the lender with care
Banks and NBFCs are carpet bombing customers with offers of personal loans at what they claim are very low rates. Don’t fall for the first offer you get on email or via SMS. Although it is convenient to say yes to a bank with which you already have a relationship, you may be missing out on better deals if you don’t research the market thoroughly. Shop around for the lowest rate using a loan aggregator website.
Calculate the interest rate
When it comes to financial jugglery, you can’t beat banks. The flat rate of interest is an oft used method to lure business. The flat rate is a misleading metric, because it does not take into account the reduction in the balance with every EMI paid by the borrower. For instance, if you borrow Rs 5 lakh for three years at 12%, the total interest outgo will be Rs 97,857. The average interest paid per year is Rs 32,620, so the flat rate comes to barely 6.5%, which makes the loan look very attractive indeed. Keep in mind that if you are repaying a loan with EMIs, the interest should be calculated on reducing balance. The flat rate will not tell you the actual cost of the loan.
Shun 0% EMI schemes
The 0% EMI scheme is a clever ploy that lenders use in conjunction with distributors of consumer durables and lifestyle products. The RBI has clamped down on such schemes but some lenders continue to offer these on the sly. They offer an interest free loan to the buyer. People fall for this without realising that the high processing fee and file charges for the loan is where the lender is making a killing. If you buy a washing machine worth Rs 50,000 at 0% interest for six months by paying a processing charge of Rs 2,000, you have effectively paid more than 14% interest on the borrowed amount.
Don’t opt for advance EMIs
Advance EMIs is another way that borrowers end up paying more than the contracted rate. Some lenders ask the borrower to pay 1-2 EMIs in advance at the time of taking the loan. If you take a loan of Rs 1 lakh for 18 months at 14%, the EMI comes to Rs 6,190. But if you pay two EMIs in advance, the effective loan amount come down to Rs 87,620. An EMI of Rs 6,190 means you are paying an interest rate of 17.5% instead of the 14% you are given to believe.
Check the other charges
Personal loans usually come with a processing fee, but some lenders slip in other charges as well. It may appear that a processing fee of 1-2% is not very high, but there is usually a minimum flat fee payable. Check the charges before you opt for the loan to avoid any heartburn later.
Why are Personal Loans rejected? and how to avoid it?
The most common reasons for being denied credit are Bad (or no) credit: Lenders look at your borrowing history, usually in the form of your credit scores when you apply for a loan. They want to see a solid history of borrowing and repaying loans
Tips to avoid personal loan rejection Reasons by:-
1. Check the credit requirement
2. Check the minimum income requirement
3. Meet the employment requirement
4. Have sufficient collateral
5. Limit your outstanding debt
6. Ensure your loan purpose is allowed
7. Verify your details
EMI CALCULATOR-
The online personal loan EMI calculator allows you to calculate approximately how much you will have to pay as the Equated Monthly Instalment (EMI).
The “EMI calculator displays” the EMI to be paid, along with a detailed repayment table with a break-up of the total amount payable (Loan Amount + Interest Payable + Processing Fee) for the tenure.
Calculation of Personal Loan EMI using Formula
E = [P x R x (1+R)^N]/[(1+R)^N – 1]
Where,
E is the actual EMI that you will have to pay
P: Loan amount you wish to borrow
R: Monthly Interest Rate applied
N: Loan Tenure considered in months
FEATURES AND BENEFITS OF PERSONAL LOANS
Main Features of Personal Loan
- Loan amount to be paid in equal monthly instalments over an agreed tenure
- Interest can be flat or reducing depending on the type of loan
- Have fixed terms which are specified beforehand detailing the amount, processing fees, interest, tenure and EMI
Benefits of Personal Loan
- Can be used for a variety of individual needs and not attached to a specific purpose like buying a house or vehicle
- Great offers are available for getting out of debt trouble by consolidating loans or shifting high interest credit card balance to a personal loan
- Some institutions have flexible payment terms including zero part-payment and pre-closure charges
- A range of options available to borrowers from short term salary advances to longer-term loans depending on the requirement
- Higher debt burden ratio offered compared to formal financial institutions making it possible to take another loan
Thanks for this informative article on personal loan. I will surely follow a few of them. Keep writing such detailed blogs.
Its good to see that you’ve mentioned the benefits of applying for personal loans. Nowadays many of them are considering personal loans very seriously. So to educate them you are doing a nice job. Thank you for sharing your thoughts.
Briefly explained, indeed a great article.