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A personal loan is a loan that does not require collateral or security and you can avail it by providing minimal documentation to the lender. You can use the funds from this loan for any legitimate financial need, stated the HDFC Bank website. And like any other loan, you must repay it accordance to the agreed terms with the bank.

A personal loan availed is to be repaid in equated monthly instalments (EMIs) and you can mandate the lender to directly debit the same through auto debit mandate or if you have an alternate bank account, then it can done through a NACH mandate. Normally this can include a few months to a few years in EMIs.

Also read: Latest loan interest rates in March 2024: ICICI Bank, Canara Bank, PNB, Bank of Baroda, HDFC Bank

Some banks allow you to prepay or foreclose your Personal Loan after the payment of at least one EMI. However, charges (and taxes) will be applicable for foreclosing a personal loan.

The banks will standardise a personal loan pricing matrix, which will be used to calculate interest rates based on each client’s individual characteristics.

PERSONAL LOAN – RATES AND CHARGES
Name of Lender Interest rate
(p.a %)
EMI (Rs)
Loan amount- 5 lakh
Tenure – 5 years
EMI (Rs)
Loan amount- 1 lakh
Tenure – 5 years
Processing fee
(% of loan amount)
HDFC Bank 10.50 onwards 10,747 onwards 2,149 onwards Up to Rs 4,999
Tata Capital 10.99 onwards 10,869 onwards 2,174 onwards Up to 5.5%
State Bank of India 11.15-15.30 10,909-11,974 2,182-2,395 NIL
ICICI Bank 10.80 onwards 10,821 onwards 2,164 onwards Up to 2.50%
Bank of Baroda 11.05-18.75 10,884-12,902 2,177-2,580 Up to 2% (minimum Rs 1,000 and maximum Rs 10,000)
Axis Bank 10.49 onwards 10,744 onwards 2,149 onwards Up to 2%
Kotak Mahindra Bank 10.99 onwards 10,869 onwards 2,174 onwards Up to 3%
Bank of India 10.75-14.75 10,809-11,829 2,162-2,366 Up to 1% (Maximum Rs 5,000)
Canara Bank 10.95-16.40 10,859-12,266 2,172-2,453 0.50% (Maximum Rs 2,500)
Punjab National Bank 10.40-17.95 10,772-12,683 2,144-2,537 Up to 1%
HSBC Bank 9.99-16.00 10,621-12,159 2,124-2,432 Up to 2%
Federal Bank 11.49 onwards 10,994 onwards 2,199 onwards Up to 3%
Union Bank of India 11.35-15.45 10,959-12,013 2,192-2,403 Up to 1% (Maximum Rs 7,500)
Bajaj Finserv 11.00 onwards 10,871 onwards 2,174 onwards Up to 3.93%
Punjab & Sind Bank 10.75-13.50 10,809-11,505 2,162-2,301 Up to 1%
South Indian Bank 12.85-20.60 11,338-13,414 2,268-2,683 Up to 2%
UCO Bank 12.45-12.85 11,236-11,338 2,247-2,268 Nil
IDFC First Bank 10.75 onwards 10,809 onwards 2,162 onwards Up to 3.5%
Bank of Maharashtra 10.00-12.80 10,624-11,325 2,125-2,265 1% (Rs 1,000-Rs 10,000)
Karnataka Bank 13.43 11,487 2,297 Up to 2% of loan amount (Min. Rs 2,500 & Max. Rs 8,500)
IndusInd Bank 10.49 onwards 10,744 onwards 2,149 onwards Up to 3.5%
Rates and charges as of 20th March 2024
Source: Paisabazaar.com

How is personal loan EMI calculated

Your EMI is determined in part by the loan amount, loan period, and payment schedule. Having the appropriate amount, simple EMIs, and adjustable duration all contribute to determining the best loan for an individual. The overall cost of the loan is determined by the interest rate and the processing charge. When choosing a loan, do take these considerations into consideration.Also read: PM Surya Ghar Muft Bijli Yojana: Solar rooftop installation loans of SBI vs Canara Bank vs Union Bank of India vs Bank of Baroda vs Bank of India

EMI or equated monthly instalments are an important part of a loan. It is the intervallic instalment amount that you pay to clear your loan.

There are three factors that determine your EMI:

  • The loan amount
  • The interest rate
  • The tenure

What is the stamp duty charge for a Personal Loan?

Stamp duty and other charges will vary from one state to another, as the laws of each state tend to differ.

The maximum repayment period is of 6 years or remaining period of service (whichever is lower). The loan can be repaid over a period of 12 to 72 months.

Basic important documents required

  • Latest passport size photographs – 2
  • Copy of identity card issued by the employer
  • Bank account statement if the salary account is not maintained with SBI.
  • Last 6 months’ salary slip or latest Form 16 (in case of Income Tax Payee)
  • Permanent Account Number (PAN).

At least one copy of the Officially Valid Documents (OVDs) mentioned below, as proof of identity and current address:
i. Passport
ii. driving license
iii. Proof of possession of Aadhaar Number
iv. Voter’s Identity Card issued by Election Commission of India
v. Job card issued by NREGA duly signed by an officer of the State Government.
v. Letter issued by the National Population Register containing details of name and address

Is it mandatory to buy insurances policy with Personal Loan?
According to the Union Bank of India website, “ This is optional and purely at the discretion of the Borrower. However it is always advisable to get a liability/life insurance cover so that family members don’t suffer in case of any unfortunate event. For the benefit of the borrowers, one time Liability Insurance premium can be added in the cost of the property so that the burden can be reduced. Further, Bank also has tied-up with various Insurance Providers so that suitable products can be available to its customers with reasonable premium.”

  • Published On Mar 20, 2024 at 03:32 PM IST

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