Personal loans are unsecured loans that can be availed without any collateral (collateral).
Here is an overview of the banks offering the lowest interest rates on personal loans.
Before applying for a loan, it’s usually best to check your options for the best rates based on your eligibility and to fully understand the documentation requirements to avoid any unpleasant surprises later. Personal loans come with associated fees, such as processing fees and penalties for early closing and partial prepayment.
EMI personal loan
In order to calculate your EMI, factors such as loan amount, term, and payment are crucial.
Three factors determine your NDE:
- The amount of the loan
- The interest rate
- The mandate
Personal loans attract high interest rates and short repayment terms, which increase your monthly EMI. Considering your current salary, assess whether you will be able to repay on time.
Fixed or floating interest rate
When applying for a loan, it is essential to check with the lender whether the interest rate is fixed or variable. If the interest rate is fixed, changes to the bank’s MCLR have no effect on your monthly equivalent payment (EMI) amount. Also, because personal loans are unsecured, their interest rates are often much higher than those paid on home loans or gold-backed loans.
Eligibility for a personal loan
Your credit score is a crucial factor in assessing your eligibility for a personal loan. Individuals must be between the ages of 21 and 60 and have worked for at least two years, one of which with the current employer.
Personal loan criteria differ from bank to bank. According to the SBI website, you must have a minimum monthly income of Rs 15,000 to be eligible for a personal loan, whether or not you have a salary account with the bank.