Get Lowest Personal Loan Interest Rate ✓ Loan up to 50 Lakhs ✓ Quick Disbursal ✓ Minimum Documentation! Apply Now

A personal loan interest rate is a charge levied by the lender on the amount you borrow. It is determined by factors like your credit score, income, loan amount, and repayment history, helping the lender assess the risk of lending to you. You can get a personal loan at interest rates starting from 9.99% p.a. on Bajaj Markets. Before applying for a loan, be sure to check the various interest rates and other applicable charges offered by multiple lenders to make a wise decision.

Compare Personal Loan Interest Rates

Partner Name

Min Interest Rate

Max Tenure

Processing Fee

Bajaj Finance Limited

10% p.a.

96 months

Up to 3.93% of the loan amount

CASHe

27% p.a.

18 months

₹1,200 or 2% of the personal loan amount (whichever is higher) + GST

Federal Bank

11% p.a.

48 months

0.70% to 2.80% of the loan amount + 18% GST

Fibe

14% p.a.

36 months

Up to 2% of the loan amount

Finnable

15.95% p.a.

60 months

Up to 3% of total loan amount

IIFL Finance

18% p.a.

42 months

2% to 6% of the loan amount + GST

InCred

16% p.a.

60 months

2%-5% on the sanctioned amount

Kissht

14% p.a.

24 months

3% - 5% of the loan amount

Kotak Mahindra Bank

10.99% p.a.

72 months


Up to 1.10% - 1.50% of the loan amount + GST

KreditBee

15% p.a.

24 months

-

L&T Finance

12% p.a.

48 months

Up to 2% of loan amount + GST

moneyview

1.33% p.m.

60 months

  • Processing fee/felicitation charges: Starting from 2% of the approved loan amount
  • Cheque bounce penalty: ₹500 for every bounce

mPokket

24% p.a.

90 days

₹50 to ₹200 + 18% GST (depending on the loan amount with a maximum APR of 48%)

Muthoot Finance

14.50% p.a.

60 months

2% to 4% of the loan amount

Olyv

18% p.a.

12 months

2% - 12% of the loan amount

PaySense Partners

15% p.a.

60 months

2% - 2.5% of the loan amount + GST or ₹500 + GST (whichever is higher)

Privo

9.99% p.a.

60 months

1%-3% of the loan amount +GST

SMFG India Credit

12% p.a.

60 months

0% - 6% of the loan amount

Upwards

18% p.a.

36 months

Up to 4% of the loan amount

YES BANK

12.50% p.a.

72 months

Up to 2.50% of the loan amount

Zype

18% p.a.

12 months

2% to 6% of the loan amount

*Disclaimer: The mentioned rates are as of 29th November 2024. These are subject to change at the lender’s discretion.

Factors That Affect Personal Loan Interest Rates

Here are some things which may have a major impact on the interest rate levied on your personal loan:

  • CIBIL Score: A higher score of usually 750 or more leads to lower interest rates

  • Income Level: Higher income reflects your repayment capacity, leading to lower rates

  • Debt-to-Income Ratio: A lower ratio indicates better financial health, leading to lower rates of interest

  • Employment Stability: Job security signifies stable earnings and repayment capacity resulting in favourable personal loan interest rates

  • Loan Amount: Larger loan amounts typically attract higher interest rates due to the increase in the associated risk for the lender

  • Lender’s Policies: Different lenders have varying risk appetites and operation costs, which influence the rates offered

  • Relationship with the Lender: Existing customers of a bank or NBFC may be offered a lower rate on their personal loans

  • Economic Conditions: Market trends and inflation affect the interest rates lenders offer

  • Type of Interest Rate: Depending on whether you opt for a fixed or floating interest rate, there will be a difference in the rate and associated calculations

Fixed Interest Rates vs Floating Interest Rates

Personal loan interest rates are of 2 types, floating and fixed interest rates. Let’s understand how these differ and affect your loan repayment costs.

Fixed Interest Rate

Floating Interest Rate

The interest rate is constant across the repayment tenure

The interest rate is regularly revised depending on fluctuations in market rates

The EMI payable remains the same over the loan tenure

The EMI payable changes during the tenure as per the revisions in the rate

In case of prepayment, an additional penalty may be levied

In case of prepayment, no additional charges are levied

The rate is not linked to any benchmark rate like the Marginal Cost of the Fund-Based Lending Rate (MCLR) or repo rate

The rate is linked to a benchmark rate like the Marginal Cost of the Fund-Based Lending Rate (MCLR) or repo rate. Based on changes in these rates, the lender revises the floating interest rate.

What Are Some Other Fees and Charges Levied by Lenders?

To get a complete understanding of your loan repayment costs, it is essential to be aware of the different charges applicable to a personal loan. Alongside the interest rate, here are some other charges you are required to pay on a personal loan:

Processing Fee

The processing fee is a one-time charge levied by lenders for processing your loan application. It is usually a set percentage of your loan amount.

Documentation Charges

For the verification and processing of the paperwork submitted, lenders usually charge a documentation fee

Loan Cancellation Fee

Post approval, if you wish to cancel the loan before the amount is disbursed, you need to pay a small charge known as the loan cancellation fee

Bounce Charges

A bounce charge is a penalty applicable to failed EMI payments caused by insufficient balance in your bank account

Late Payment Fee

In case of delayed or missed EMI payments, you need to pay a late payment fee to the lender

Prepayment Charges

You can make lump sum payments to service a portion of the loan’s principal amount by paying a prepayment charge

Foreclosure Charges

To close your loan before the end of the set tenure, you must pay a foreclosure charge, which is a percentage of the outstanding loan amount

How to Get a Low Interest Rate on a Personal Loan?

Here are some tips you can use to get a lower interest rate on your personal loan:

  • Leverage Pre-approved Offers: Lenders often provide lower interest rates to existing customers with good credit. So, regularly check for such pre-approved offers.

  • Apply During Special Promotions: Some lenders offer low interest rates during festive seasons or special events. Timing your application can help secure better rates.

  • Negotiate with Your Lender: If you have a high credit score and stable employment, try negotiating for a lower rate based on your past financial behaviour

  • Opt for Secured Loans: Offering collateral like fixed deposits, gold, etc. can sometimes lead to a lower interest rate on personal loans

  • Check with NBFCs: NBFCs often provide more competitive rates than traditional banks

  • Use Employer Tie-ups: Some companies have partnerships with lenders that offer lower rates for employees, so inquire about this benefit with your HR department

  • Keep Credit Utilisation Low: Maintaining a low credit utilisation ratio can positively influence your credit score and result in better rates

  • Compare Offers: Consider checking the offers from different lenders to find an option that suits your needs. You can easily compare loan offers from over 20 personal loan partners on Bajaj Markets.

How Do Lenders Calculate Interest on a Personal Loan?

Interest on a personal loan is usually calculated by lenders via one of the two methods mentioned below:

  • Reducing Interest Method: Herein, the interest charge is calculated on the outstanding balance of the loan after each EMI payment. In this case, the interest component of the EMI is usually higher during the initial tenure. As the tenure progresses, the interest charge reduces and the principal component increases.

  • Flat Rate Method: The interest is charged on the borrowed amount and remains the same across the tenure. This usually results in higher overall loan costs compared to the reducing interest calculation method.

Disclaimer

Reference of all T&C necessarily refers to the terms of the Partners as regards to pre-approved offers and loan processing time amongst other conditions.

Frequently Asked Questions

How does my income determine my Personal Loan’s interest rate?

If you have a higher income, the lender might offer you a lower interest rate. This is because a higher income can increase your creditworthiness.

What is the processing fee for personal loans?

The processing fee on a personal loan can be up to 12% of the loan amount.

How does my credit score impact the cost of my loan?

A higher credit score allows you to get a personal loan at a lower rate of interest, thus lowering your cost of borrowing. When approving a loan application, one of the first factors that lenders consider is the borrower’s credit score, as it is an indicator of their creditworthiness.

What is the lowest interest rate I can be offered if I apply for a Personal Loan on Bajaj Markets?

On Bajaj Markets you can get a Personal Loan at interest rates starting from as low as 9.99% p.a. 

How do I benefit if the interest is calculated on a daily/monthly reducing balance?

If interest is calculated on a daily or monthly reducing balance, you benefit from lower interest payments. This is because interest is charged on the outstanding loan amount, which decreases with each repayment.

How do my employment history and experience play a role in determining the rate of interest?

A stable employment record and extensive experience establish your repayment capability and lower the risk of default. This allows you to borrow the required money at lower interest rates.

Are personal loan interest rates fixed or floating?

Personal loan interest rates can be either fixed or floating. Choose the type of rate that suits your financial situation and repayment capabilities.

What is meant by reducing interest rates?

Reducing interest rate is calculated on the outstanding loan balance after each EMI payment. This results in reduced interest paid over time.

Do government employees get special personal loan interest rates?

Some financial institutions offer special interest rates for government employees on personal loans. Lenders usually provide them with more favourable borrowing terms because of their job stability and reliable source of income.

How does my current debt level determine my interest rate?

Your debt-to-income ratio is an indicator of your ability to manage your loan repayment. Therefore, the higher your current debt, the greater the risk associated with the lending. This can lead to higher interest rates being charged.

Can I get a low rate of interest even if my credit score is poor?

Yes. However, you may be required to submit an asset as collateral to mitigate the risk of default and get a loan at favourable terms.

Can banks change the interest rate during the loan tenure?

Lenders offer loans on floating rates, where the interest rate may fluctuate and are revised regularly based on market conditions. For fixed-rate loans, the interest rate will be the same over the course of the tenure.

How is the interest charged on a personal loan?

Personal loan interest is typically calculated using the reducing balance method. Let's say you borrow ₹100,000 at an annual interest rate of 10% for 1 year. In the first month, you pay interest on the entire principal amount. If your EMI is ₹8,791, the interest component is ₹8,333, and the remaining ₹458 goes towards the principal. The next month, interest is charged on the reduced principal of ₹99,542, and this process continues. As you repay, the interest reduces, making your EMIs more principal-centric over time, saving you on overall interest payments.

How does balance transfer help you get a lower interest rate?

When you opt for a balance transfer, you may be offered a lower interest rate and better loan terms that can help you save on your overall repayment costs.

Can I get a low-interest personal loan without a CIBIL check?

Getting a low-interest personal loan without a CIBIL check may be difficult. A good credit score generally enhances your chances of securing such loans at favourable terms.

Home
active_tab
Loan Offer
active_tab
CIBIL Score
active_tab
Download App
active_tab