Do you run out of funds and need money immediately? A personal loan can help you obtain funds for several needs. You do not need to mortgage your assets to take out personal loans. It offers funds for your needs without any guarantees. You can apply for a personal loan if you need a lump sum for any personal use. It can be a medical emergency, a wedding, studies, a trip abroad, among others.
A personal loan might be the best option if you need immediate, short-term cash. Since a personal loan is unsecured, the lender disburses the amount after verifying the income, credit score, age, etc. of the applicant.
One of the advantages of a personal loan is that if your documents are in order and you meet the lender‘s eligibility criteria, your loan amount is immediately credited to your account. No time is wasted in evaluating any collateral, unlike the case of a secured loan.
Most lending institutions offer personal loans with minimal documentation and a fast disbursement process. However, the disbursement and loan amount may vary from one institution to another. The amount you can borrow can range from Rs 25,000 to Rs 50 lakh; however, several institutions may offer a higher amount depending on your income and eligibility. You can choose the duration according to your repayment capacity. The mandate can range from 12 to 60 months. It’s a good idea to double-check these details before signing the loan agreement with your lender, according to Bankbazaar.
As for documentation, banks may ask for proof of income, employment, and residency and assess your credit score. You may also be asked to provide details of your existing loans and debts. Experts suggest that it is good to take out a personal loan from the institution you have an existing relationship with. However, if you get better and more lucrative options on interest rates, term, and processing fees, you can choose other financial institutions as well. Once you have taken out the personal loan, you must repay the loan through EMI (equivalent monthly installments).
You should compare the interest rate of different institutions before applying. You can calculate online by providing details such as loan amount, term and interest rate at which you are getting the loan. This gives you a fair idea of the NDE. 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 to get better interest rates or ask for other offers.
A word 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 comfortably repay 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 contains more than 20 banks to help you compare interest rates on a Rs 5 lakh loan for five years with EMIs.
Interest Rate and EMI on Personal Loan
Compiled by BankBazaar.com
Note: Interest rates on personal loans for all listed public and private banks (BSE) considered for data compilation; Banks whose data is not available on their website are not taken into account. The table consists of the lowest interest on personal loans, regardless of the loan amount. Data collected from respective bank’s website as of June 14, 2022. Banks are listed in ascending order based on interest rate, i.e. the bank offering the lowest interest rate on the personal loan is placed at the top and the highest at the bottom. The EMI is calculated on the basis of the interest rate mentioned in the table for the Rs 5 Lakh loan with a tenor of 5 years (processing fees and the like are assumed to be zero for the calculation of the EMI); The interest rates and fees mentioned in the table are indicative and may vary depending on the general conditions of the banks. *^for seniors; ^^For government employees and defense personnel; *for doctors.