A personal loan, like other personal loans, is available to people who have a steady income and need immediate capital to fund their needs. Financial institutions in India offer personal loans and charge a certain interest rate on the principal balance when the Equivalent Monthly Rate (EMI) begins.
The Reserve Bank of India’s (RBI) hike in interest rates to 5.40% in August 2022 has prompted many banks to raise their lending rates. According to RBI, the average interest rate on 1-year MCLR, or lowest lending rates, in August 2022 was 7.65% for public sector banks and 8.53% for private banks, up 10 basis points from July this year.
A consumer can still get a reasonable interest rate on a personal loan. Banks are currently offering a personal loan ROI of 9% to 10% and more for loans from INR 25,000 to INR 20,000. Forbes Advisor India has compiled a list of interest rates charged by public and private banks on personal loans in September 2022 to help you choose the best deal.
Interest rates on personal loans in September 2022
The above interest rates and personal loan details were updated on September 8, 2022. Although we update this information regularly, interest rates and loan details may have changed since the page was last updated.
Related: How to Get the Best Personal Loan Rates?
How do you calculate your personal loan payments?
The total amount you will pay as EMI can be calculated after knowing the interest rate, term and amount from the lender.
Let’s understand this with an example: If you need a personal loan of INR 50,000 with 10% interest rate and a 12 month term, Forbes Advisor’s personal loan calculator estimates that your EMI would be INR 4,396 and you d almost INR 2,750 Pay interest on the principal amount.
How to compare interest rates on personal loans
The lending institutions with interest rates published online only give an idea of what they offer, not an exact interest rate. Banks charge a nominal GST fee, as well as fees for processing, maintenance, etc. In addition to all fees and other costs, have the interest rate applicable to your loan, also known as the nominal APR or APR, confirmed by your lender before the application.
In order to qualify for a personal loan after the application and documentation has been submitted, financial institutions are still required to perform a KYC check of the borrower’s creditworthiness.
Here’s what you need to submit to be eligible for a personal loan from banks.
- Aadhar number linked to mobile number
- Valid PAN number
- proof of identity
- Proof of residence
- Income Tax Refund
- Bank statement for the last 6 months
- Last payslip
- Some banks also require a guarantor
- Salary account at any bank
- The minimum age is 21 to 58 years
- Work for at least one to three years
- Borrower’s income should be at least INR 10,000 to INR 15,000 per month
Frequently Asked Questions (FAQs)
Who is eligible for a personal loan?
Personal loans are available for employees, freelancers and wealthy individuals, retirees or family retirees with a regular monthly pension, to name just a few.
How can I repay my personal loan?