Personal loans are one of the quickest ways to borrow money to handle an immediate financial need which could be due to multiple reasons such as a health emergency, wedding, travel, or repayment of your debts. The need could be anything, and a personal loan can be taken without restrictions on using money.
Many people prefer personal loans owing to the instant approval and disbursal process. As soon as you apply for the loan, the lender will perform due diligence on your income, credit score and employment status, age, and residence. Once your profile gets cleared from these checks, the lender will disburse the loan directly into your bank account.
These days it is easy to apply for personal loans. You can either apply online or visit the nearest bank branch or financial institution to apply. Some customers get pre-approved personal loan offers considering their income and clean track records. However, before accepting such offers, you need to check all terms and conditions.
The purpose of getting a personal loan must be clear to avoid non-essential spending through this money. You must have immediate financial need and sufficient income to repay the loan without delay and default. It is crucial to choose the tenure of the loan carefully. Often the tenure may range between 12 months and 84 months. However, it may vary depending on your profile and the lender. The longer the tenure, the bigger the interest amount.
When you apply for a personal loan, it is advisable first to check your eligibility basis your monthly income and credit score vis a loan amount requirement. Once you are sure of the amount you want to borrow and the repayment plan, you can compare the different lenders, and the interest rate offered. It will help you make a wise decision. A simple .25 basis points difference can significantly bring down your overall interest on the loan.
Also, you should only borrow a personal loan when you need the funds for something crucial and know that you can easily pay back the money. Delay or default on loan can badly damage your credit score, and you may face challenges while borrowing any loan in the future.
Below you can compare the interest rates of more than 20 banks for a loan amount of Rs 5 lakh for a 5-year tenure. It will help you take a decision based on your financial need.
Interest Rates & EMI on Personal Loan of Rs 5 Lakh for 5-Year Tenure
Compiled by BankBazaar.com
Note: Interest rate on Personal Loan for all listed (BSE) Public & Pvt Banks considered for data compilation. Banks for which data is not available on their website are not considered. Data collected from respective bank’s website as on 29 Nov 2022. Banks are listed in ascending order on the basis of interest rate i.e. bank offering lowest interest rate on Personal loan is placed at top and highest at the bottom. EMI is calculated on the basis of interest rate mentioned in the table for Rs 5 Lac Loan with a tenure of 5 years (processing and other charges are assumed to be zero for EMI calculation); Interest and charges mentioned in the table are indicative and may vary depending on the bank’s T&C.