What is the first query you have in your mind when you avail a personal loan? Well, let us give you some time to think… What is it? Still don’t get it. Well, it’s none other than ‘Interest Rate’ my friend. It is undoubtedly one of the most important or you can say the deciding factor while availing any sort of loan. So, it is important to know the rates further before you make that final call as it can make a huge difference in your loan journey. So, if you are also amongst the one who wants to know how much is the interest rate on a personal loan, this article is worth reading for you. Yes, you read that absolutely right my friend. If you are looking to avail a personal loan, but don’t know about the interest rates, dig into this article to unlock the things which were unknown to you earlier.
Why Personal Loan Rate matters?
When we say interest rates on a personal loan, numerous banks and non-banking financial companies (NBFCs) provide you this loan and that too at different interest rates. Yes, many lenders offer you the loan at an interest rate ranging between 11.49%-25% per annum. This is the usual rate that can be availed by you if your eligibility matches with a particular lender. Yes, frndz here comes the interesting part. Excited to know what it is? Read below…
Different lenders have different eligibility norms when they avail you the loan, and if your eligibility matches with their set norms, only you are eligible to get the loan on the above- mentioned rate. But, what would be the case, if you are not eligible for the loan? Well, friends here is a catch. Really wanna know what it is? Let’s not keep you in shadow anymore. It’s time to reveal the suspense. So, let’s get started.
Just imagine Mr. Rakesh Jain wants to avail a personal loan of Rs.10 Lakhs for 5 years. He works in an MNC and earns a handsome monthly income of Rs.90,000. He has monthly expenses of Rs.45,000, hence saves 50% of what he earns. Now after looking at his profile, which is quite promising, the lender will be more than happy to give him a loan as he can easily repay the same with the saving he has. He meets the other eligibility criteria also, hence he can avail the loan at lower interest rates as things are in his favour.
Now, let’s take a look at the other side, where the same individual has applied for the same loan amount for the same tenure, but there is a slightly change i.e. let’s say he gets a monthly income of Rs.25,000 and spends almost half of it to pay for the monthly expenses. Now, if that is the case, the lender will think many times to give him a loan as its gonna be a risky matter. Until and unless a lender is not confirmed about the loan repayment, it won’t offer a loan to the applicant. And, even if it offers the same then an applicant can avail the loan at higher interest rates, which ultimately gonna make a hole in his pocket as his EMIs will rise.
Thus, a lower interest rate will result into lower EMIs, thus reduces your overall outgo. Whereas higher interest rates will result into higher EMIs, thus increases overall outgo from your pocket. So, I guess now you know how much is the interest rate on a personal loan can be availed if you are eligible for the same.