Personal Loan Interest Rate 2022

Apply for personal loan with interest rate starting from 10.25% p.a. in 2020 then you need to compare. Afinoz helps you to choose the best personal loan rates online.

Though personal loans are easily available at various banks but there are sometimes huge variations in terms of the personal loan interest rate, offered by these financial bodies.

A person can opt for the type of personal loan interest rate, after doing a thorough study of the market and help himself save from any future losses.

Here’s is a list of interest rates of various financial institutions of India

To suit the demand and the situational need of the borrower, there are many two types of personal loan interest rates offered by the banks. Further, these interest rates differ in accordance to varied factors of respective banks.

Fixed Rate Personal Loan: Here the rate of interest is fixed throughout the tenure of the loan. The borrower has to pay the same personal loan interest rate from the beginning until the end of the loan time. It remains unchanged irrespective of the ongoing changing in the interest rate of the bank.

Variable Rate Personal Loan: Also known as the floating interest rate, this gives the borrower the benefit of giving the less interest rate if the market rate has fallen over the period of the loan life. Additionally, it can be the opposite also if the interest rate goes high, then he has to pay a higher calculated amount.

As mentioned earlier, there are various factors in reference to which these interest rates are calculated by different financial institutions. Every bank makes sure of these factors before finally offering the rate of interest to the concerned person. Such factors are explained in brief below:

Income level of the person and its comparison with the loan amount:

This certainly plays a crucial role in deciding the rate of interest, as the capability of the person to pay back the loan amount is judged with the salary he is earning on a monthly basis. The surety of the repayment of the loan is the major priority of the bank as they have to make sure that the money that is lent to the borrower comes back within the fixed period of time. Therefore, the calculation of the personal loan interest rate is as per the risk involved in the repayment.

The time period of the Loan:

The tenure of the loan is inversely proportional to the rate of interest that is applied to the principal amount of the loan. If the loan is for a shorter period, then the interest rate would be higher and the rate would be comparatively less for a longer loan duration. This is because there is a fixed return rate that is to be given to the bank, therefore to attain the same, the variations are made by the financial institutions.

Individual’s Credit Rating:

Ensuring the return of the payment is the duty of every bank, for which he needs to assess the credit rating of the borrower. His past loan record, their payments and repayments are checked in detail before passing the loan application of the respective person

Further, the personal loan interest rate is also dependent on the type of personal loan you want to avail. There are generally two types of personal loans, secured and unsecured.

Secured Loan: This is the type, where the person takes the loan keeping a property, gold or any movable or immovable security as collateral. Here the benefit is for the borrower, as the rate of interest is less, because of the low-risk involvement. Also, the bank or the lender always has support, which can yield it the risk involved.

Unsecured Loan: These are the loan types, where no security in terms of property or any other asset that assures cash conversion to the lender if the borrower fails to pay back the loan amount. The personal rate of interest in such cases is high because of the high-risk involvement, but, it entirely depends on the person which type of loan, the secured or the unsecured he wants to avail.

Read More : 

• 5 Tips to Get the Best Interest Rates on Personal Loan
• SBI Personal Loan for Government Employees – Eligibility, Interest Rate
• Some Important Factors which Influence Interest Rate on Personal Loan