- Getting a personal loan at a lower rate of interest holds the key to a seamless repayment journey
- But you also need to check other factors - Let’s read all those and apply smartly
People often apply for a personal loan to get instant cash and meet their respective needs. The fact that the loan does not require any collateral, the disbursal can be instant, provided you have the required income and good credit history. Sometimes, in a bid to get a personal loan quickly, people don’t pay much attention to the cost of loan acquisition and go on to pay much more. In an emergency, even the most intelligent borrowers may not pay attention to costs. But if you are planning something like a home renovation or travel, you can still do some introspection and apply at the right time. In this post, we have listed out the incidences when you should apply for a personal loan and reduce your cost. Let’s read further to know the same.
What is the Best Time to Apply for a Personal Loan?
The best time to apply for a personal loan will be when you get a substantially lower interest rate, less to zero processing fees, etc. Not only the cost of the loan has to be less, but you should also get adequate money from the lender to meet your needs. Let’s read all these in detail.
When You Get the Best Interest Rate on a Personal Loan
Personal loan interest rates are generally high as borrowers don’t need to submit any security or collateral to get this loan. The rate can be as high as 25% per annum across banks in India. But of late, the lowest limit of the personal loan interest rate at some banks has come down to even 10%. To get the lowest rate, one needs to have a credit score of more than 750 with an excellent repayment track showing no spot of payment delays.
What Else Lenders Check Apart from the Credit Score to Offer a Lower Interest Rate on a Personal Loan?
There’s no denying an excellent credit score helps someone grab a lower personal loan interest rate deal. But that is not the only thing the lender checks before giving you such a deal. Your income has to be sufficiently high. Plus, if you have any existing loan or credit card obligation, it should not be high. All that will increase your repayment capacity, prompting the lender to accept your request of lowering the rate on a personal loan. And, if you are working in a top organization, you only increase your chance of getting a lower rate. Special rates are offered to people working in top organizations across different sectors of the economy.
Shall You Look at the Interest Rates That Prevail Across Different Lenders?
You should do the same as it gives you an idea of the rate prevailing in the market. And, if you have a sound income and good credit score, you can get the best personal loan interest rate. Let’s check then.
|Lenders||Interest Rate (In Per Annum)|
|HDFC Bank||10.99% - 15.00%|
|ICICI Bank||10.50% - 18.00%|
|Bajaj Finserv||12.00% - 16.00%|
|State Bank of India (SBI)||9.60% - 13.60%|
|YES BANK||10.75% - 18.00%|
|Kotak Mahindra Bank||10.25% Onwards|
|IDFC First Bank||10.50% - 25%|
|Fullerton India||12.00% - 24.00%|
|Standard Chartered Bank||10.75% - 13.00%|
When You Have High Income and Less Obligations
Not only can you get the lowest rate by earning high and having less to zero obligations, but it can also get you a higher loan amount to meet your needs. Getting the personal loan amount that you seek will make you feel good when you don’t have much savings or you want to spend your savings on some other stuff. Check out the table below to know the maximum personal loan amount one can get from different lenders in India.
|Lenders||Maximum Loan Amount (In INR)|
|HDFC Bank||No Maximum Limit, It Depends on Your Income, Credit Score and Repayment Potential|
|ICICI Bank||40 Lakh|
|Bajaj Finserv||20 Lakh|
|State Bank of India (SBI)||20 Lakh|
|YES BANK||30 Lakh|
|Kotak Mahindra Bank||20 Lakh|
|Standard Chartered Bank||50 Lakh|
|IDFC FIRST Bank||40 Lakh|
|Fullerton India||20 Lakh|
When There’s a Least to Zero Processing Fee
The processing fee is a one-time fee charged on your loan. It can either be a percentage of the loan amount or a flat sum. But its concept in a personal loan is different from other loans. In a personal loan, the processing fee is debited from the loan amount you apply, unlike other loans where you have to pay the fee personally. The amount left after is the one you get in your bank account. But the interest rate will be charged on the amount you apply for and not the amount you get from the lender post the processing fee. So, the lesser the processing fee, the more the loan amount you can get from the lender to meet your needs. Sometimes, lenders come with a zero processing fee offer, mostly in the festive season to acquire more customers. In case you have got such an offer, you should grab it at the earliest.
Can a Pre-approved Personal Loan Prove Good to You?
Lenders offer personal loans to people having an experience of handling loan or credit card payments. But many are yet to experience the same. Can they get a personal loan? Yes, they can! The loan will be given by the lender where you have a savings or salary account. If you’ve maintained it well, you could get a pre-approved personal loan offer from the lender.
Particularly, salary account holders have an advantage. Any lender likes to have an idea of the income an individual has before sanctioning him/her a personal loan. If you have maintained a salary account for a long time, the lender can check the flow of income and offer you a pre-approved personal loan at attractive interest rates. The best part is that you don’t need to apply if you get such an offer. Just give consent to the offer and the loan will get disbursed to your bank account.
Banks send such an offer via SMS, email or a phone call. If you haven’t got such an offer on your salary account, you can talk to the bank representatives or dial the 24×7 customer care helpline number to know whether you are eligible for the same.