As the head of the family, you are always on the lookout for ways and means of meeting your expenses in an easy and affordable manner. When you need additional funds, whether it’s to meet expenses while making your child study abroad or to cover your daughter’s wedding costs or business start-up capital, or education loans, you have various options to choose from. You have the option of borrowing from friends or family, which is often time-consuming and cumbersome. You can opt for a personal loan, which is direct and fast but entails stringent conditions. A Personal Loan is a very beneficial product for all people who need money urgently. The entire process is so simple, it makes sense in situations when you don’t have ties with your family or friends and can’t borrow from them without an explanation (which is not always easy). And of course, if you have a less-than-perfect credit score and nobody lends at a reasonable rate, then a Personal Loan is the only solution.
Personal loans are loans made for personal reasons, unlike car or home loans which are taken for buying specific items or paying off your existing debt. With an array of offers available in the market today, you are able to compare rates of good and reputed banks on various criteria including interest rates and repayment period, etc so that you can finalise the best deal according to your current financial position. Here, we are going to compare the top 5 lenders with the lowest interest rates on a personal loan, so that you could choose what’s best for you:
Finzy
“Wouldn’t it be nice to have the ability to borrow in a situation of need, and then pay back later…without even having to go through the hassle of filling up those long loan applications?” That was what we thought when we started. Being entrepreneurs ourselves, we knew the pain of applying for loans using traditional methods. So when our personal situations put us in need of cash, turning to a loan was our only option. Little did we know that this option would take weeks on end. It felt so tedious — writing out your financial history every time you wanted an amount you could earn in an hour by working.
Benefits of Finzy Personal Loan | ||
Safe Digitised Process | Instant Eligibility Check Tool | No-Lock in Period |
No Foreclosure Charges | Automated EMI Collection | 48 hrs Loan Funding |
Mode of Process | Online |
Location | PAN India |
Loan Amount | Rs. 50,000 to Rs. 5 Lakhs |
Repayment Tenure | 6 – 36 months |
Approval and Disbursement | 48 hours |
ROI | 7.99% – 18.99% per annum |
Processing Fees | 1% – 5% of the disbursed amount + GST |
Foreclosure Allowance | Yes |
Prepayment Penalty | No charges |
Apart from Finzy, which offers the lowest interest rates in comparison to others, there are several other lenders or banks in the market that you can turn to for low-interest rate personal loans. Here is a brief comparison for you to consider:
Bank | ROI | Processing Fees | Repayment Tenure |
IDBI Bank | Starting at 8.90% – 14.00% | Up to 1% | Up to 60 Months |
Punjab National Bank | Starting at 9.35% – 15.35% | Up to 1% | Up to 7 Years |
HSBC Bank | Starting at 9.75% – 14% | Up to 1% | Up to 5 Years |
Indian Bank | Starting at 9.40% – 9.90% | Up to 1% | Up to 36 months |
State Bank of India | Starting at 9.80% – 12.80% | Up to 1.5% | Up to 72 months |
Central Bank of India | Starting at 9.85% – 10.05% | Up to 1% | 48 Months |
Bank of Baroda | Starting at 9.20% – 16.55% | Up to 2% | Up to 84 Months |
YES Bank | Starting at 10% – 24% | Up to 2.50% | Up to 60 Months |
HDFC Bank | Starting at 10.50% – 21% | Up to 2.50% | Up to 5 Years |
Bajaj Finserv | 13% onwards | Up to 4% | Up to 60 Months |
Types of Interest Rates
If you are looking for a loan, then you should certainly look for the type of interest rate you are being offered by a lender. There are two most common types of interest rates on loans, which can be followed by all lenders. These are fixed and floating interest rates. The first one is interest rates that are set at exactly a specific percentage level or amount and remain the same in the full course of the banking relationship or credit history between lender and borrower. But fluctuation in floating interest rate works in a different way as it is also known as the variable rate of interest where the amount that is decided at the time of taking an agreement changes over the course of time based upon the market conditions.
Floating Interest Rates
A floating interest rate is a type of interest rate that is determined by market variables. Meaning, that the amount of interest you pay on your loan depends on the initial rate set when you got the loan, plus any changes in the bank’s base rate. This means the interest you pay on your loan can change over time. t is an interest rate that fluctuates with the rate at which a lender can procure funds from another source, such as the current market interest rate for overnight borrowing. This is one of the rates of interest, along with base and margin rates, which are currently available from most banks.
Fixed Interest Rates
In this interest rates model, the lending rates on your loan will remain unchanged for the entire term of the loan. These rates are not affected by any change in the economic factors. The main benefit of fixed-rate mortgages is that there is largely no guesswork about how much your monthly payments will be for a given mortgage amount and term. Fixed interest rates: The lender delivers the exact fixed interest rate at the beginning of the loan term. This is beneficial to the borrower as it is easy to calculate the budget and compare several loans and lenders’ quotes.
If the floating interest rate on your loan rises or falls, you won’t have to worry about your EMIs changing. Instead, the loan tenure will vary.
No, according to RBI, lenders are not permitted to apply any sort of prepayment charges on floating interest rate loans.
You can simply visit ReferLoan’s website and easily compare a wide range of products.
The general Cibil Score that is demanded by loan lenders is between 500-750.