Personal Loan Interest Rates

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

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.

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

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.

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.

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

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

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.

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.

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.

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.

Ensure that you have a high CIBIL score, stable employment history and income, as well as a low debt-to-income ratio. Alongside these, the chosen loan amount and tenure also play a major role in determining the interest rate charged by your lender.

Here are some factors that have a major impact on the personal loan interest rate offered by lenders:

• Credit score

• Repayment History

• Income 

• Employment stability

• Debt-to-income ratio

• Loan amount

• Loan tenure

• Relationship with the lender

• Market conditions

• Type of interest (fixed or floating)

• Collateral (if any)

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.

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.

Alongside the interest rate, other charges you may be required to pay include processing fees, prepayment penalties, and documentation fees. Ensure to read the fine print of your loan agreement and check the charges levied by the lender prior to making a decision.

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.