According to the Axis Bank website, “A personal loan is a financial instrument that helps you avail funds for a multitude of uses. Like any regular loan; when opting for a Personal Loan you are advanced a specific amount of funds at a set interest rate and can clear it via a fixed repayment tenure.”
A personal loan application typically entails determining the borrower’s need for money, eligibility for funding, and ability to repay the loan because it provides an advance without collateral.
As a result, in order to qualify for a personal loan, applicants must typically be employed people who provide documentation of their personal and employment information.
5 banks offering cheapest personal loan interest rates
|BANKS||Personal Loan Amount||Tenure||RoI (%)|
|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 Vysya Bank||Upto 10 Lacs||12 – 60 Months||9.40% – 19.00%|
|Punjab National Bank||Upto 10 Lacs||Upto 60 months||9.35% – 15.35%|
Source: Compiled by ETIG; Data as on July 28, 2022
Minimum CIBIL score needed for personal loan
A credit score is a number that you receive from credit bureaus that ranges from 300 to 900 such as CIBIL. The greater the score, the more likely it is that your loan application will be approved.
According to the Axis Bank website, “If you have a high credit score you may also get a higher loan amount or lower loan rates. However, a score below 750 may reduce your chance of getting a personal loan or grant you a lower amount or a higher interest rate. If your score is below 600 it is advisable to try and find out why your credit score is low. It could be due to past behaviour, such as consistently missing or delaying past EMIs, excessive purchases made on credit, or applied for loans or credit cards with many banks, etc.”
Important FAQs on personal loan as per Kotak Mahindra Bank
How is the personal loan processing fee calculated?
The personal loan processing fee is calculated based on the loan amount. For instance, say you avail of 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 any additional charges for a Personal Loan?
You would have to pay a processing fee for a personal loan when you apply for the loan. Other charges would depend on the service requests that you raise on the loan.
How is the rate of interest, processing fees, pre-closure fees determined on a personal loan?
The personal loan interest rate is calculated on the outstanding balance of the loan amount. The pre-closure fee is also charged on the outstanding amount of the loan on the date of the foreclosure. The processing fee, on the other hand, is calculated on the amount of loan that you avail of.