Top Personal Loan Banks In India 2021

How do you figure out which personal loan is the best? Many of us make decisions solely on the basis of interest rates, and as a result, we end up choosing an inconvenient option. Yes, interest rates are important, but they aren't the only factor to consider. You should also look for top banks in India that can lend you more money based on your income and repayment capacity, in addition to lower rates. Some personal loan banks are ICICI Bank Personal Loan, Kotak Mahindra Bank Personal Loan, IDBI Bank Personal Loan, SBI Personal Loan, Axis Bank Personal Loan, and more. You can check the list of current personal loan interest rates provided by the banks in India 2021 and the factors affecting the same.

Current Personal Loan Interest Rates in India 2021

Factors Affecting Personal Loan Interest Rate

• Credit History and Score: When you apply for any type of loan, a bank will first look at your credit history, including your credit score and report. It helps you to maintain your creditworthiness which is determined by your credit history and credit score. Your credit score is likely to be high if you have used credit properly in the past.

• Fixed Obligation to Income Ratio (FOIR): The percentage of the monthly income that you use to pay off your existing loan EMIs and credit card bills is another important factor that banks consider when processing your loan application. This is calculated using FOIR, which is the ratio of your monthly in-hand income to your pre-existing loan EMIs and credit card dues.

• Credit Utilization Ratio: This shows the percentage of credit that has been used compared to the total amount of credit available. Banks consider a higher Credit Utilization as a sign of over-reliance on credit, which can put one's future repayment capability in danger. If you routinely max up your credit cards, for example, some banks may be hesitant to provide you a low-interest personal loan.

• Several loan applications in a short period of time: Applying for credit with multiple banks in a short period of time is never a good idea. It's important to understand that every time you apply for a credit product, it shows up on your credit report. If you have a lot of inquiries on your credit record in a short period of time, bank executives will interpret this as a symptom of 'credit hungriness,' which suggests you are desperate for credit.

• Relationship with the bank (Pre-existing or Previous): Having a prior relationship with the bank can sometimes have an impact on the personal loan interest rate. If you already have a payroll account or a credit card with a bank, it can estimate your risk based on your prior data.

Conclusion According to current interest rates, HDFC Bank and Kotak Bank Personal Loan Interest Rate are offered at the lowest rate of 10.25%. The lowest personal loan rate has decreased by 0.15% from prior rates and will be effective in 2021. If you are salaried, working for a reputable company with no payment defaults, and have an established relationship with the bank, you may be qualified for the lowest rates.