A personal loan, like other personal loans, is available for people who have a stable income and need instant capital to finance their needs. Financial institutions in India offer personal loans and charge a certain rate of interest on the principal amount when the monthly equivalent installment (EMI) commences.
The increase in the Reserve Bank of India (RBI) policy rate in August 2022 to 5.40% led many banks to raise their interest rates on loans. According to RBI, the average rate on the 1-year MCLR, or lowest lending rates, in August 2022 was 7.65% for public sector banks and 8.53% for private banks, which is up 10 basis points from July this year. .
A consumer can still get a reasonable interest rate on a personal loan. Banks currently offer personal loan ROI of 9% to 10% on loans from INR 25,000 to 20 lakh. Forbes Advisor India has compiled a list of interest rates charged by public and private banks on personal loans in September 2022 to help you choose the best deal.
Personal loan interest rates in September 2022
The above interest rates and personal loan details are current as of September 8, 2022. While we update this information regularly, the interest rate and loan details may have changed since the last page update.
Related: How to get the best interest rates on a personal loan?
How to calculate the monthly payments of your personal loan?
The total amount you will pay as an EMI can be calculated after knowing the interest rate, term and amount from the lenders.
Let’s understand this with an example: if you need a personal loan of INR 50,000, with an interest rate of 10% and a term repayment period of 12 months, Forbes Advisor’s personal loan calculator estimates that your EMI would be INR 4,396, and you would pay nearly INR 2,750 in interest on the principal amount.
How to Compare Personal Loan Interest Rates
The interest rates that lending institutions post online only give an idea of what they are offering, not an exact rate. Banks charge a nominal GST fee, as well as processing, handling, etc. fees. Be sure to confirm the rate applied to your loan plus fees and other costs, also known as the nominal annual percentage rate or APR, with your lender before applying.
To qualify for a personal loan even after submitting the application and documents, financial institutions still need to perform a KYC check on the borrower’s credit.
Here is what you need to submit to be eligible for a personal loan from banks.
Necessary documents :
- Aadhar number connected to mobile number
- Valid PAN number
- Identification proof
- Proof of address
- income tax return
- Bank account statement for the last 6 months
- Last payslip
- Some banks also require a guarantor
- Salary account at any bank
- Minimum age is 21-58
- Work for at least one to three years
- Borrower’s income must be at least INR 10,000 to INR 15,000 per month
Frequently Asked Questions (FAQ)
Who is eligible for the personal loan?
Personal loans are available for salaried, professional and wealthy individuals, regular retirees or family retirees on a regular monthly pension, to name a few.
How can I repay my personal loan?