Getting instant money in your bank account can help you handle an immediate financial emergency or meet any other requirements. Often people find themselves short of funds when a crisis strikes them. This is the time when the personal loan could come to your rescue.
A personal loan is a type of unsecured loan that you can borrow if you require funds to pay for your financial needs such as medical emergency, education, wedding and even travelling, among others. Lenders offer personal loans usually for the period ranging between 1 and 5 years. Personal loans are mostly an attractive proposition as they are instantly disbursed with minimum documentation process.
Firstly, you choose a lender and apply for the personal loan. The lender will verify your application and do a thorough check on your credit history and income to assess your repayment capacity. How much personal loan you can take will also be calculated based on your annual and monthly income along with factors like your credit history and in-hand income.
The maximum amount a bank or financial institution will offer as a personal loan varies from company to company. However, some lenders offer up to Rs 50 lakh but you must take the loan only to meet your existing need as borrowing more than your repayment capacity can hamper your credit score if you delay or default.
A useful rule of thumb is that you check all other charges along with the interest at the time of taking a personal loan. Charges for prepayment if any, processing fee and legal fee and other hidden cost involved, you must get a clarity on the same with your lender without hesitation. Also, some lenders may allow you to make prepayment of your personal loan only after 1 year. You must clear all your doubts on these conditions, according to Bankbazaar.
If you have funds available after a few months or years of taking a personal loan, you may consider repayment as it can reduce your overall interest on the loan. You can either go for reducing the EMI or tenure whatever suits your circumstances. A shorter tenure for a personal loan is often advisable as the total interest you pay will be much lesser as compared to loans with long tenures.
Selection of a personal loan may look easy, but one must perform all basic due diligence to understand all the pros and cons. Personal loans may command a high rate of interest as banks or financial institutions take higher risk in disbursing funds without any collateral. You can avail personal loans instantly even with basic eligibility. Therefore, it is advisable to dwell upon factors like the interest rate, EMIs, tenure, and financial institutions you will borrow from. Comparing interest rates and other terms and conditions can help you save some extra bucks and make repayment hassle-free.
Here is a list of 25 banks that are currently offering the lowest interest rates on personal loans of Rs 5 lakh for a tenure of five years and the indicative EMIs you will have to pay. Please remember, the interest rates applicable to you could be higher based on your loan amount, tenure, credit score etc.
Interest Rates & EMIs on Personal Loans of Rs 5 Lakh for 5-year Tenure
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. Data collected from respective bank’s website as on 18 Jan 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 rates 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 and charges mentioned in the table is indicative and it may vary depending on bank’s T&C. * Rack Interest Rate; ** min APR during Jul 21 to Sep 21; *^for senior citizens.