Personal loan interest rates have faced a drastic fall due to the pandemic. The economy of the whole world has suffered so much and India have met the same fate. The personal loan rates that used to be anywhere in the range of 12% to 24% before the pandemic hit the world, have now touched the ground as low as 8%. But what caused such a dramatic fall in low-interest rate in personal loan? And what are the ways to get a personal loan on such low interest rates? Stick to this article to find all the possible answers to such big queries. To apply instant personal loan, click on apply now.
Table of content:
- Lower Repo Rate
- To Revive The Demand
- Floating Rate for Shorter Terms
- Maintain a Low FOIR
- Pre-approved Personal Loans
- Opt For A Shorter Tenure
- Compare The Lenders
- Which bank offers the lowest personal loan interest rate?
- Which bank is best for a personal loan?
- How can I get a low interest on my personal loan?
- What is the SBI personal loan interest rate?
- What can be the EMI for an Rs. 10 lakhs personal loan?
- How is interest calculated on a personal loan?
Lower Repo Rate
The repo rate is the rate at which the lenders borrow funds from the Reserve Bank of India(RBI). To deal with the unavoidable financial crisis, the Reserve Bank of India reduced the repo rate and the present rate which is currently at 4% is comparatively lower than ever before. Eventually, banks have reduced the interest rates to make the loans available to the borrowers at a low-interest rate.
To Revive The Demand
A lower personal loan interest rate makes a loan more approachable and convenient for the borrowers. And that initiates the revival of various personal finance products to promote the cash flow in the economy. So low-interest-rate also helps to deal with the cash crunch in the overall economy.
To avail of a low personal loan interest rate, the following tips can help you.
Floating Rate for Shorter Terms
Taking a personal loan at a fixed rate of interest can be hassle-free and convenient as the rate of interest stays constant throughout the tenure. Floating rates of interest may change throughout the tenure but that can be effective if you’re borrowing funds for the short term. Initially, the lender will charge a lower personal loan interest rate and that will change as per the available rates in the market. When you opt for a shorter tenure, you can repay the amount before getting the rate of interest too high and thus can avail of the benefits of a low personal loan interest rate.
Maintain a Low FOIR
Your Fixed Obligation to Income Ratio (FOIR) can reflect your risk factors as a borrower. The monthly EMIs that you pay out of your net monthly income shall be low to show that you are left with enough funds to bear another personal loan burden. A higher FOIR reduces the chances of getting a low-interest rate personal loan. Some lenders might provide you with a high FOIR, but the rate of interest won’t be up to your expectation of a low-interest rate.
To know more about FOIR, Check 6 Factors To Ensure Personal Loan Approval In India
Pre-approved Personal Loans
The bank you’re a customer of or the lender from whom you’ve already borrowed previously may offer you pre-approved or seasonal personal loans. Try to grab that deal, as the lender might have designed the particular loan criteria based on your relationship with the lender, your credibility, credit history, credit score, etc. And that particular loan offer may be at a lower interest rate.
Opt For A Short Tenure
Your lender seeks complete assurance from your end about the repayment of the loan amount. The longer time you’ll consider doing so, the more chances of getting a low personal loan interest rate will get reduced as per that. On the contrary, shorter tenure makes them feel safe about the early revival of the loan amount. So they charge a comparatively lower rate of interest.
Compare The Lenders
An available interest rate will depend on the factors like loan quantum, repayment tenure, credibility, etc. And if everything remains constant, then comparing the lenders can get you a lower rate for your desired loan quantum. Top banks and NBFCs available in the market come up with different eligibility criteria and conditions. So, comparing such lenders will be one of the best options to get a low-interest rate. At Roopya, you can compare personal loans from different lenders.
Which bank offers the lowest personal loan interest rate?
State Bank of India (SBI) lends a personal loan of up to 20 lakh with a low-interest rate of 9.60% for a tenure of 6 months to 6 years.
Which bank is best for a personal loan?
SBI has the lowest rate available in the market, but your required loan quantum and tenure will decide the most convenient personal loan lending bank for you.
How can I get a low interest on my personal loan?
Multiple ways can help you to get a low-interest rate. Look for the pre-approved loan offers, opt for a floating rate of interest, shorter tenure, etc. can help you.
What is the SBI personal loan interest rate?
SBI personal loan interest rates start from 9.60% p.a.
What can be the EMI for an Rs. 10 lakhs personal loan?
@ 9.60% p.a. SBI personal loan your total EMI will be 45,961/- in 2 years and 32,080/- in 3 years.
How is interest calculated on a personal loan?
You can use a personal loan EMI calculator to calculate your personal loan interest. It is a tool to provide you with calculated data on your interest rate, principal loan amount, and tenure.
Opting for a low personal loan interest rate is not a hassle anymore as Roopya is there to help you. Keep these facts in your mind before selecting a lender. And let us know how helpful this content is.