The IIFL personal loan offers two types of interest rates. These are -
Fixed-rate personal loan
In this type of personal loan by IIFL, the interest rate is kept fixed for the entire loan tenure. The rate is not affected at all by the fluctuations happening in the market. The Equated Monthly Installment (EMI) is the same for the borrower for the entire loan tenure.
Floating rate personal loan
In this type of personal loan by the IIFL, the interest rate is not fixed for the entire loan tenure. Rather, it changes with market fluctuations. As a result, the EMI paid by the borrower also changes with the corresponding change in the rate of interest. However, if the borrower wants, he may keep the same EMI by making changes to his loan tenure.
Determinants of an IIFL Bank Personal Loan interest rate
Different factors come into consideration when the IIFL Bank calculates its personal loan interest rates for deserving individuals. Some of these factors are discussed here:
Age of the applicant
If you are going to retire, the perceived risk for the lender is that much more. In this scenario, the IIFL will hesitate to consider your loan application. Because of this risk attached, the rate of interest offered to you will be on the higher side.
Your CIBIL score
While considering your personal loan application, the IIFL Bank does a thorough check on your credit profile. Your credit profile includes details from where the Bank determines how efficient you are in handling your credit. The IIFL also takes stock of your previous repayments (loan EMIs, credit card bills, etc) as well. If you failed to repay your previous dues on time on a couple of occasions and your CIBIL score is below 700, the Bank will set the interest rate on the higher side.
On the other hand, if the criteria mentioned above are found satisfactory, then the IIFL may offer you the best interest rates applicable.
The personal loan tenure
The loan tenure or the loan repayment period of the IIFL personal loan has a decisive impact on the interest rates prescribed to the applicant. The interest rate is higher for shorter loan tenures and vice versa.
Your monthly income
Your affordable monthly income has a significant impact, while the IIFL decides on the interest rate to offer to you. Your monthly income enables the Bank to ascertain your repayment capacity before approving the loan to you. It also helps the Bank to attain surety in the event of a possible default.
If you have a high income, the IIFL is somewhat convinced that the amount you borrowed would return to the Bank inside the loan tenure itself. On the other hand, if you have a low income, you will not be in good shape to pay your EMIs on time. In such a scenario, the IIFL will see you as a risky proposition in terms of loan repayment. Hence, it will hamper your chances of getting the cheapest interest rates from the Bank.
If you are an existing IIFL customer
If you say, “Yes” and have maintained a good track record, you can expect to get special offers with cheaper interest rates. However, do have in mind that interest rate and other offers are matters of sole discretion of the Bank. By becoming a customer, you do not necessarily ‘earn' the right to get all the offers from the Bank.
Your bargaining power
Let’s not mince words! It’s very much like buying any product from the market. Yes, you can bargain too, while applying for an IIFL personal loan. If you have the right credentials, (possess an impressive credit profile/monthly income) it will certainly make your task easier.
If you have a good credit score and fulfill all the loan eligibility criteria to the satisfaction of the IIFL, it will value you as a ‘prized possession’. The Bank would not like to lose out a credible customer like you to its competitors and would certainly wish to form a long-term association with you. This way, you will stand a great chance to avail the best rates from the Bank.
If you are an existing employee of an organization of repute, it may help your cause a great deal. Such employees are considered financially stable enough to make timely repayments. Hence, in such a case, you are in a better position to negotiate and obtain the best interest rates from IIFL personal loan.
The Type of IIFL Personal Loan you opt for
The rate of interest for an IIFL personal loan is also influenced by the loan type you have opted for. As you are aware, there are two types of personal loans.
Secured Personal Loan: In this case, you need to pledge gold, a movable/immovable security or property as collateral while applying for your IIFL personal loan. The Bank now has a fallback option if you can't repay your loan tomorrow and hence, you are considered a less risky proposition. The IIFL will not hesitate to grant you better offers with lower interest rates, if you opt for a secured personal loan.
Unsecured Personal Loan: In contrast to the secured personal loans, you do not need to pledge any security/collateral to the IIFL. Therefore, your creditworthiness/credit profile (as assessed by the Bank) is everything upon which it determines your loan repayment capability in the future. The interest rates on an unsecured personal loan will be higher in comparison to secured loans as the IIFL deems you as a higher risk proposition while approving a loan to you.