Are you running short of funds and need money immediately? A personal loan can help you avail funds for multiple requirements. You don’t need to mortgage your assets to take personal loans. It offers funds for your needs without any collateral. You can apply for a personal loan if you need a lump-sum amount for any personal usage. It can be for a medical emergency, marriage, education, foreign trip, among others.
A personal loan could be the best option if you need money immediately for the short term. Since a personal loan is unsecured, the lender disburses the amount after checking the applicant’s income, credit score, age, etc.
One of the best things about a personal loan is that if your documents are in order and you fulfil the lender’s eligibility criteria, your loan amount is immediately credited into your account. No time is wasted in the assessment of any collateral, unlike in the case of a secured loan.
Most lending institutions offer personal loans with minimal documentation and a speedy disbursement process. However, the disbursement and loan amount may vary from one institution to another. The amount you may borrow may range from Rs 25,000 to Rs 50 lakh; however, several institutions can offer a higher amount depending on your income and eligibility. You can choose the tenure based on your repayment capacity. The tenure may range from 12 to 60 months. It is good to recheck these details before you sign the loan agreement with your lender, according to Bankbazaar.
When it comes to documentation, banks may ask for income, employment and residence proof and assess your credit score. You may also be asked to furnish your existing loans and liabilities details. Experts suggest that taking a personal loan from the institution where you have an existing relationship is good. However, if you are getting better and more lucrative options on interest rates, duration and processing fees, you can also choose other financial institutions. Once you have taken the personal loan, you must repay the loan through EMIs (Equated Monthly Instalments).
You must compare the interest rate of different institutions before applying. You can calculate online by providing details such as loan amount, tenure and interest rate at which you are getting the loan. It gives you a fair idea of the EMI. You can also ask for these details when applying for the loan. If your credit score is 750 and above, you can negotiate with the lender for better interest rates or ask for other offers.
A piece of advice is that you must repay this loan and the interest to the lender on time. So, try to borrow only as much as you can repay comfortably without default and delaying your loan EMIs. Any default or delay may impact your credit score and disqualify your borrowing in the future.
The table below has more than 20 banks to help you compare the interest rates for a Rs 5-lakh loan for five years along with the EMIs.
Interest Rates & EMI on Personal Loan
Compiled by BankBazaar.com
Note: Interest rates on Personal Loans for all listed (BSE) Public & Pvt Banks considered for data compilation; Banks for which data is not available on their website are not considered. Table consists of the lowest interest on personal loans irrespective of the loan amount. Data collected from respective bank’s website as on 14 June 2022. Banks are listed in ascending order on the basis of interest rate i.e., bank offering the 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 Lakh Loan with a tenure of 5 years (processing and other charges are assumed to be zero for EMI calculation); Interest rates and charges mentioned in the table are indicative and may vary depending on banks’ T&C. *^for senior citizens; ^^For Govt employee and defence personnel; *for doctors.