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Taking a personal loan? Read this first!

August 29, 2019 15:00 IST

Before taking such loans, compare the interest rates charged by various players, advises Sanjay Kumar Singh.

Photograph: Kind courtesy Simon Cunningham/Creative Commons

With the Reserve Bank of India reducing the risk weight on all categories of consumer loans from 125 per cent to 100 per cent, banks will be more willing to extend personal loans.

A recent survey by consumer finance firm Home Credit India showed that personal loans are the third most popular category of loans after consumer durables and two-wheeler loans.

Banks are nowadays willing to offer pre-approved personal loans, especially to their existing customers.

Fintech companies also offer pre-approved loans based on the customer's credit profile, income and stability of employment.

Before taking such loans, a person should compare the interest rates charged by various players.

Remember that the sum total of your EMIs should not exceed 40-45 per cent of your take-home salary.

Taking a longer tenure loan will lower EMI but will enhance your overall interest burden.

 
Rates and charges: Personal loans
State Bank of India
Interest rate 10.90% - 15.30%
EMI (Rs)* 10,846 - 11,974
Loan amount (Rs) 25,000 - 20 lakhs
Processing fee Up to 1% of loan amount
   
Bank of Baroda
Interest rate 11.45% - 16.45%*
EMI (Rs)* 10,984 - 12,279**
Loan amount (Rs) 50,000 - 10 lakhs
Processing fee Rs 1,000 - Rs 10,000
   
HDFC Bank
Interest rate 11.25% - 21.50%
EMI (Rs)* 10,934 - 13,668
Loan amount (Rs) 50,000 - 40 lakhs
Processing fee Up to 2.5% of loan amount
   
Citi Bank
Interest rate 10.99% - 14.75%
EMI (Rs)* 10,869 - 11,829
Loan amount (Rs) 25,000 - 30 lakhs
Processing fee Up to 3% of loan amount
   
UCO Bank
Interest rate 11.4% - 11.8%
EMI (Rs)* 10,971 - 11,072
Loan amount (Rs) Up to 10 lakhs
Processing fee Up to 1% of loan amount
   
Oriental Bank of Commerce
Interest rate 10.9% - 12.4%
EMI (Rs)* 10,846 - 11,224
Loan amount (Rs) Up to 10 lakhs
Processing fee Up to 1% of loan amount
   
Union Bank of India
Interest rate 10.5% - 14.5%
EMI (Rs)* 10,747 - 11,764
Loan amount (Rs) Up to 15 lakhs
Processing fee Up to 0.5% of loan amount
   
Punjab National Bank
Interest rate 9.3% - 14.85%
EMI (Rs)* 10,452 - 11,856
Loan amount (Rs) Up to 15 lakhs
Processing fee Up to 1.8% of loan amount
   
ICICI Bank
Interest rate 11.50% - 19.25%
EMI (Rs)* 10,996 - 13,039
Loan amount (Rs) 50,000 - 20 lakhs
Processing fee Up to 2.25% of loan amount
   
Kotak Mahindra Bank
Interest rate 10.5% - 16.99%
EMI (Rs)* 10,747 - 12,424
Loan amount (Rs) 50,000 - 15 lakhs
Processing fee Up to 2.5% of loan amount
*Loan amount: Rs 5 lakhs. Tenure: 5 years
**Bank of Baroda may levy a spread in addition to the interest rate, which depends upon the customer's risk profile.

 

Source: Paisabazaar.com

 

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Sanjay Kumar Singh
Source: source
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