Obtaining a personal loan with a low interest rate is the first choice for most people in India who want to borrow funds for any reason, such as consolidating debts, purchasing a home appliance, or covering unexpected bills. The interest rate is the major factor that determines the cost of borrowing, and getting low interest personal loans can be a huge change when you think of the money you pay back over a long period. Today, in this article, we will show you the way to obtain a personal loan with low interest rates in India, as well as some of the most popular low interest personal loans.
What Are Low Interest Personal Loans?
A low interest personal loan is a loan that charges a relatively lower interest rate than the typical rate for personal loans in India. The interest rate is the rate at which the lender charges interest on the amount borrowed, and the lower the rate, the less money one pays for interest over the term of the loan.
In India, personal loan interest rates usually are between 10% and 25% annually, based on your credit score and the financier. Availing a low interest personal loan is possible to meet your expenses while keeping your expenses in check without loading yourself with high repayment costs.
How to Get a Personal Loan with a Low Interest Rate in India
Getting a personal loan with low interest rates in India involves knowing the determinants of loan rates and doing some preparatory work. Here's how you can raise your chances of obtaining a loan at the lowest interest rate available.
1. Check Your Credit Score
One of the largest determinants of the personal loan interest rate in India is your credit score. Your credit score is used by lenders to decide how risky it is to lend to you. The higher your score, the less risky you are, and lenders might give you a low interest personal loan.
To enhance your prospects, get your credit score checked prior to taking a loan. In India, a credit score of 750 and above is generally considered good and will qualify you for lowest interest rate personal loans. If your score is below this, work towards increasing it by settling pending debts or clearing any errors in your credit report.
2. Compare Loan Offers from Various Lenders
Interest rates differ with lenders in India, and thus one needs to compare quotes prior to selecting a loan. There are different banks and financial institutions such as private sector banks, public sector banks, and NBFCs (Non-Banking Financial Companies) offering different interest rates.
Search for lowest interest rate personal loan by comparing rates from top financial institutions. Most online loan aggregators enable you to compare personal loan interest rates conveniently. Ensure you also compare the loan terms, charges, and repayment terms to get the best offer.
3. Choose a Shorter Loan Term
The term of your loan can have a big impact on your interest rate. Short-term personal loans in India usually have lower interest rates than longer terms. Your payments might be larger each month, but you will pay less in interest over the course of the loan.
For instance, if you borrow ₹5,00,000 for a period of 3 years with an interest of 11%, you will be paying much less interest compared to taking a loan for 5 years at the same interest rate.
4. Look into Secured Personal Loans
If you possess assets like a property or fixed deposit, you can take a secured personal loan. Secured loans in India tend to have lower interest rates than unsecured loans. This is due to the fact that the lender has the security of the collateral, which means that they face less risk.
For example, you can take your Fixed Deposit (FD) as collateral to obtain a low interest personal loan. In case you are not in a position to repay the loan, the bank can sell off the collateral to recover the loan amount.
5. Check for Special Offers and Discounts
Most lenders in India provide one-time interest rate cuts or offers at intervals. This may either be in terms of lower rates of interest or concessions on the processing fees so that you are able to enjoy a low-interest personal loan at your convenience. Be on the lookout for such offer periods, particularly during the festive season or new year deals, when the lenders usually roll out attractive proposals.
Besides, there are lenders that will charge you a lower interest rate if you consent to automatic debit of your bank account, which will also reduce your overall cost of repayment.
6. Look for the Best Loan Offers Online
Online lending platforms and online lenders have gained popularity in India. These online lending platforms usually provide competitive rates of interest on personal loans with low interest due to their less overhead cost. Some popular ones are banks such as HDFC, ICICI, and online lenders such as ZestMoney and MoneyTap.
Taking a loan online is usually able to provide you with better rates due to the efficient application process, and the ease of comparing quotes without having to enter a physical branch.
Best Low Interest Personal Loans in India
Now that you have an idea of how to get a personal loan with low interest rates, let's discuss some of the best low interest personal loans in India.
1. HDFC Bank Personal Loan
Personal loans from HDFC Bank begin at an interest rate of 10.50% per year. They even offer flexible repayments between 12 months to 60 months. The processing charge is normally 1% of the amount borrowed, although HDFC makes frequent promotional deals with lower charges or special deals.
2. ICICI Bank Personal Loan
ICICI Bank provides personal loans with interest rates starting from 10.99% per annum. The loan amount can range from ₹50,000 to ₹25 lakh, with repayment terms varying from 12 months to 60 months. ICICI also offers a quick disbursal process, especially for existing customers, making it a good option for those seeking best low interest personal loans.
3. Bajaj Finserv Personal Loan
Bajaj Finserv provides personal loans with a minimum interest rate of 11.99% per annum. They provide flexible loan amounts between ₹1,00,000 and ₹25 lakh, and repayment periods between 12 months and 60 months. Bajaj Finserv also offers instant approval and low documentation, which makes it a convenient choice for borrowers with good credit scores.
4. Tata Capital Personal Loan
Tata Capital provides personal loans from 10.99% per annum. They give speedy approval, low paperwork, and flexible repayment tenures from 12 months to 60 months. Tata Capital also provides loan amounts between ₹1,00,000 to ₹25 lakh based on your eligibility and credit score.
5. My Mudra Fincorp Ltd Personal Loan
My Mudra Fincorp Ltd provides many kinds of loans so you can apply personal loan online at 11.99% per annum. They offer loan amounts between ₹50,000 and ₹25 lakh, with the flexibility of repayment between 12 to 60 months. My Mudra Fincorp Ltd is a good option for borrowers in need of a low-interest personal loan with rapid approval, simple documentation, and no additional fees.
Conclusion
Borrowing a personal loan at low interest rates can help you save a lot of money in the long run. To secure the best offer in India, review your credit score, compare offers, and opt for secured loans or autopay discounts. Compare the interest rates and conditions of different lenders to secure the lowest interest rate personal loan that is best for you.
