- How to choose the Cheapest Loan and reduce your payments?
- Know features of cheapest loans such as Gold Loan, Home Loan, Car Loan, etc.
People face different kinds of needs in various stages of their lives. This need can be in the form of a Home, Four-wheeler/Two-wheeler, Smartphone, Child’s education/Marriage, Funding your travel, etc. For all such purposes, there is a loan available irrespective of how small or big an individual’s need is. Lenders provide different types of loans to customers, such as Home Loan, Personal Loan, Car Loan, Gold Loan, etc. But a common question that individuals often ask – which type of loan is the cheapest among all the types of loans.
Loans can be classified into two types – Secured and Unsecured. When lenders provide the loan amount against some collateral or security provided by you, the loan is called Secured Loans (home loan, loan against FD, Gold Loan, etc.) while Unsecured loans (personal loan) are given to customers without having to submit any security. The definition of cheap when it comes to loan is basically affordable interest rates. Simply put, loans at lower interest rates are usually cheap ones. The reason being lower interest rates result in lower monthly installments and vice versa. People will always find that loan cheapest for them, for which they need to make the least repayment amount.
Interest rates usually tend to be on the higher side when it comes to the unsecured Loans. Why? Because lenders want to minimize their credit risk as borrowers don’t need to submit any security against the loan amount. To know which type of loan is cheapest, we are providing some of the top secured loans so that you can decide better. You need to remember that the cheapest loan option can be different from one individual to another depending upon his or her requirement. To know more about the cheapest loan in India, keep reading!
Table of Contents
Top Secured Loans in India
To know which type of loan is cheapest in India, we are showing some of the top secured loans so that you can make the decision. All of them are quite popular among the customers for different reasons. Do check out!
Home is the basic necessity of any individual but owning it is a dream of many. High prices of real estate make people opt for a home loan. Banks, NBFCs, and Housing Finance Companies (HFCs) provide Home Loans to customers at affordable interest rates. The most important thing that makes Home Loan one of the cheapest loans in India is its affordable interest rates. On average, Home Loan Interest Rates range from 7% to 9% per annum and vary from one lender to another. As we said, lower interest rates mean lower monthly installments. Also, the loan amount ranges from 75% to 90% of the overall property value.
Your credit score also plays a huge role in determining the final rate of interest. A good credit score can get you lower home loan interest rates. Other factors that affect interest rates are loan amount, property location, property value, existing obligations. Apart from all of this, home loan lenders also have soft eligibility norms so people can easily get a home loan. We are showing interest rates of some of the top lenders below. Please check.
Home Loan Interest Rates of Top Lenders in India
|Home Loan Lenders||Rate of Interest (in per annum)|
|State Bank of India (SBI)||6.70% - 7.10%|
|Axis Bank||6.90% - 8.55%|
|ICICI Bank||6.80% - 8.05%|
|Bank of Baroda||6.85% - 8.25%|
|LIC Housing Finance (LIC HFL)||6.90% - 7.90%|
|Tata Capital||7.50% - 8.75%|
|Indiabulls Housing Finance||8.99% Onwards|
|Bank of India||6.95% - 8.35%|
|PNB Housing Finance (PNBHFL)||7.35% - 9.05%|
|Piramal Capital & Housing Finance (PCHF)||9.65% Onwards|
The process of taking money against gold is quite old and has been in our culture for many years. But nowadays, with a Gold Loan, banks and NBFCs provide the required loan amount against the gold ornaments and coins in a well-organized way. Your gold is kept safe in the locker, and as soon as you repay the amount, you will get your gold back.
Since the loan amount is backed by the gold pledged by the borrower, the interest rates are usually on the lower side. Gold Loan interest rates range from 10% to 16% per annum on average. This is one of the reasons because of which a Gold Loan comes in the list of cheapest loans in India. Moreover, an existing relationship with the lender can get you a loan at further reduced interest rates.
Gold loan amount directly depends on the overall price of Gold and lenders provide the same upto 90% of the overall value of Gold. So, if the prices are high, you can get a higher loan amount against gold ornaments. So, we are providing some of the top Gold Loan lenders and their interest rates below. Have a look.
Gold Loan Interest Rates of Top Lenders in India
|Gold Loan Lenders||Interest Rates (In Per Annum)|
|Muthoot Finance||12.00% - 27.00%|
|ICICI Bank||10.00% - 19.76%|
|HDFC Bank||9.50% - 17.55%|
|State Bank of India (SBI)||7.50%|
|Manappuram Finance||12.00% - 29.00%|
|Union Bank of India||7.00% - 9.60%|
|YES BANK||9.00% - 15.00%|
|IIFL||9.24% - 24.00%|
Lenders provide required loan amounts to individuals for buying their dream car or bike with a Four-wheeler and Two-wheeler Loan. We cannot put a car/bike loan into the category of secured loans (because of their depreciating value over time) but both of them certainly come in the list of cheapest loans in India. A Car loan could be a good option for an individual who wants to buy a new car at affordable interest rates that generally ranges from 7% to 14% per annum. The loan amount also ranges from 85% to 90% of the on-road price of the vehicle.
Keep this fact in mind that interest rates may vary from lender to another. So, if you want to opt for the cheapest loan with lower EMIs, you should choose the interest rates accordingly. Some banks also provide additional cuts in the interest rates and the processing fee to their existing customers. So, you should always check with your existing bank to see whether you are eligible for it or not. To help you more, we are showing some of the top car loan interest rates below. Check them out.
Car Loan Interest Rates of Top Lenders
|Car Loan Lender||Interest Rate (in per annum)|
|State Bank of India (SBI)||7.75% - 8.45%|
|Bank of Baroda||7.50% - 10.30%|
|Punjab National Bank||7.40% - 7.65%|
|ICICI Bank||9.30% - 12.85%|
|HDFC Bank||7.70% - 13.55%|
|Bank of India||7.35% - 7.95%|
|IDBI Bank||8.10% - 8.70%|
|Jammu and Kashmir Bank||7.95%|
|Union Bank of India||7.80% - 7.90%|
|Central Bank of India||7.25% - 7.45%|
Loan Against Property
With interest rates ranging from 8% to 13% per annum on average, Loan Against Property could be also a suitable option for someone who is looking to opt for the cheapest loan. With this facility, lenders provide the required loan amount to individuals against their property. Property as collateral ensures that people get the loan amount at lower interest rates without any trouble.
The final rate of interest may vary from lender to another as it depends on several factors such as the loan amount, property value, age, monthly income, etc. Individuals can also get higher loan amounts as lenders provide upto 65%-70% of the property value. This Loan-to-value (LTV) ratio tends to vary from one bank to another. Some banks provide upto INR 10 crore as the loan amount.
If you want to make your EMIs lower, you should choose a lender that offers lower interest rates.
We are showing some of the Loan Against Property interest rates of some top lenders below. Please check it out.
Loan Against Property Interest Rates of Top Lenders
|Loan Against Property Lenders||Rate of Interest (in per annum)|
|Axis Bank||10.50% - 11.25%|
|HDFC Ltd.||8.75% - 10.40%|
|ICICI Bank||8.90% - 9.10%|
|Union Bank of India||8.40% - 10.65%|
|Bank of India||8.85% - 9.35%|
|State Bank of India (SBI)||7.00% - 7.70%|
|United Bank of India||8.70% - 9.80%|
|Standard Chartered Bank||9.65% - 10.05%|
|Punjab & Sind Bank||9.35% - 9.70%|
|Bank of Baroda||8.20% - 13.35%|
So, after knowing details about some of the top secured loans in India, you must have got an idea about the cheapest loan. The most important thing that you should check while choosing the cheapest loan is the Rate of Interest on your loan facility. Lower interest rates will make your EMIs lower and vice versa. Also, you must see if the loan is fulfilling your fund requirements.