Interest Rate on Personal Loans

The lending industry in India has seen a lot of changes in recent years. With the entrance of many more banks and financial institutions, it has become easier for people to get access to financing and different kinds of loans as well. The Interest rate on Personal loans in India is different from bank to bank and similar to Credit Cards. The demand for personal loans in India is growing exponentially and loan lending companies keep striving to offer the lowest bank lending rates to borrowers.

People looking for the best and lowest interest rate on personal loans have to do a bit of research to find the best bank lending (both private and public) products and services. A lot of information can be found on the website BankandFinance.com. The aim is to make it easy for customers to find information in one place. Find banks and financial institutions around India, information on products and services they offer, interest rates on different types of loans and credit cards as well. All one has to do is fill out an information form and the site will collate information on the best matches on companies and services. It becomes easy to pick from a comprehensive list and get the best lending interest rate in any Indian city.

Age

Self employed professionals should be at least 24 years old and maximum of 65 years at the time of loan maturity. Age criteria will differ from bank to bank; before applying for personal finance loans for Self Employed, check with the bank and find out what their requirements are. If the applicant’s age is not sufficient to apply for finance loans, then one has no choice but to wait and become eligible for bank lending.

How the Loan process works:

Personal loans are easy to get from a bank or a private lending institution. Many of the institutions don’t require collateral or security to give loans to individuals. Since lenders take a risk to hand out loans, in case of a default they are entitled to take borrowers to court for non-payment. One of the options/methods to receive money from a bank is to apply for a credit card. People applying for personal loans get them at high lending rates. In India, the interest rate on personal loans usually starts at 16% and can go up to 22%.

Another factor to be aware of is that bank lending rates not only differ from bank to bank, but also with the individual's earning profile. It can be different for professionals who such as salaried and self employed. If you have credit cards, chances to get a loan go up for borrowers.

A major factor that influences an individual’s decision to apply for a loan is the interest rate on personal loans that the banks and other financial institution in India have to offer. Other factors such as special schemes, festive offers, and discounts play a major role for people wanting to get a loan. Borrowers have to be absolutely sure that they need the money before applying. Taking loans just because the money is available can get people into a lot of trouble and deep in debt. Many factors come into play when people are being considered for loans. They are:

1) Income: If the annual income of a borrower is high, the chances of getting a discount on the interest rate on personal loans are pretty high. This is because the bank is confident that the person’s ability to repay the loan. An applicant with valid credit cards will get lower rates from the banks because of their history.

2) Job Profile: If the company a borrower works for has a good reputation in business circles, it is a positive indication for lenders and works the borrower’s favor. Customers can end up getting lower interest rates and preferential treatment.

3) Loans from Existing Bank: Having an account with a specific bank is another plus in the favor of the borrower. Salaried individuals and self employed people can get good deals if they have a history with a particular bank – discounts and special privileges on lending rates are extended to customers first before anyone else.

4) Good Credit: Maintaining a good credit history is very important for a number of reasons. It is becoming a much used benchmark for lenders to check whether the applicant has a good payment record, other existing loans, defaults and repayments. If any issues crop up during the verification process, the chances of getting rejected for a loan are pretty high.

5) Discounts: Companies try to attract customers who are looking for a loan by providing discounts at the time of festivals. Many of the lenders decrease the lending rates due to the competition for loans based on prevailing market conditions. Use our personal loans calculator for free to know your EMI on the loan and create a budget for repayment

6) Credit Cards: Applicants with credit cards have a better chance and the eligibility to get loans in India. Credit cards can also be used to pay back the loan amount taken from the bank.

Service Charges and Fees Applicable

Beyond interest rates, there are several other factors that should be taken into consideration before applying for a loan in India.

1) Search our site for information on all of the top lending companies

2) Gather all the required information

3) Compare the bank lending rates, charges and applicable fees

4) Select the bank according to your requirements

Gathering details on the lending rates, charges and fees are important for an individual to be aware of when getting a loan. Educating oneself by reading up on the different types of banks in India and the fees that they charge is necessary to understand the loan process to make informed choices. Some of these fees are:

• Processing Charge: In order to process a loan application, banks usually charge 0.5% - 2.0% of the loan amount as a processing fee. This amount can vary from bank to bank. Customers would be well served to check this information with different lenders as a part of the information gathering process. This can range from 0.5% to 2.0% of the loan amount you are taking. Our sophisticated personal loans EMI calculator predicts all the monthly installments when a borrower enters information about the processing charges and other fees.
• Prepayment Charges: If a borrower wants to pay off the loan amount before the loan tenure period ends, then it will be important to check with the lender what the loan prepayment charges are likely to be. There are a select few lenders who waive prepayment penalties. Use the loans calculator to calculate all the fees and charges.
• Duplicate Statement Charges: Lenders usually provide duplicate statements on request – there may be a charge for this facility. It pays to check before requesting a statement.
• Other Charges and fees: There are a few charges applicable to customers on a loan in India such as cheque bounce charges, cheque swap charges, personal loan rebooking charges and personal loan cancellation charges.

Banks have two distinct types of lending rates:

Floating Rates: If a customer chooses to go for floating rates, he/she should be prepared to pay varying amounts of interest on the loan. Floating rates are tied closely to variations in the financial market. Borrowers should be prepared to deal with increases or dips in the interest rates and have enough room in their budget to repay the loan while dealing with the swings.

Fixed lending Rates: - If a borrower chooses to go for fixed rates, the interest rate on personal loans will not change until the tenure period ends. Once the loan lender and the borrower predetermine the rates, the lending rates will be fixed.

Before applying for a loan in India, please check with the banks about the different types of interest rate on personal loans, penalties and terms and conditions. Understand all the rules and exceptions tied to these loans before signing up. Apply for Credit Cards, Home Loans, Car Loans and Two Wheeler Loans at BankandFinance.com.