Taking out a personal loan is a smart option, especially when you need money to meet a particular need.
A personal loan is one of the quickest solutions to any monetary requirement. You can get a personal loan in days or even hours, provided all your paperwork is in order. This feature makes a personal loan more attractive as it provides immediate financial relief to people in need.
You can take out personal loans for any purpose like buying a gadget, paying your medical or travel bills, financing your children’s education, etc. Almost all banks offer personal loans in the shortest possible time with attractive interest rates. However, you are not supposed to use the loan for speculative activities such as betting.
Unlike secured loans, personal loans do not require collateral. Collateral is an asset that you pledge to the lender as collateral. It can be your property, ornaments or any valuables. Once you have repaid your secured loan, the collateral is returned to you.
On the other hand, personal loans make it easier for you to obtain funds from banks without pledging collateral; this is why these loans are slightly more expensive than secured loans.
Many lenders only require a simple documentation process for personal loans. This makes it easier for consumers to obtain personal loans. In most cases, providing proof of identity, address and income to lenders is sufficient to obtain personal loans. Personal loan applications are usually processed quickly and the disbursement of loans does not take too long either. Often, banks offer pre-approved personal loans to their customers who have sound and clean financial records. If your credit score is 750 or higher, your chances of getting a personal loan are very high, according to BankBazaar.
However, it is essential to note that consumers should borrow according to their needs and avoid borrowing beyond their ability to repay. A late payment or failure to pay personal loan EMIs can ruin your credit score.
As mentioned above, interest rates for personal loans are higher because they are unsecured, and banks take a greater risk of giving you the money without any collateral. Personal loans are an excellent financial product; that’s why it’s always good to make the most of it.
Taking out a personal loan is a smart option, especially when you need money to meet a particular need. Paying off this loan on time is one of the most critical aspects; therefore, you should check the duration of interest rates and compare different financial institutions before making a final decision.
Here is a list of 25 banks – including SBI, PNB, HDFC Bank and ICICI Bank – which are currently offering the lowest interest rates on personal loans of Rs 5 lakh for a term of five years and indicative EMIs. Please note that personal loan interest rates may vary depending on your loan amount, term, credit rating, among others.
Interest Rate and EMI on Personal Loans of Rs 5 Lakh for 5 Year Term
Compiled by BankBazaar.com
Note: Interest rates on personal loans for all listed public and private banks (BSE) considered for data compilation; Banks whose data is not available on their website are not taken into account. Data collected from respective bank’s website as of February 15, 2022. Banks are listed in ascending order based on interest rate, i.e. the bank offering the lowest interest rate on the personal loan is placed at the top and the highest at the bottom. The EMI is calculated on the basis of the interest rate mentioned in the table for the Rs 5 Lac loan with a duration of 5 years (processing fees and others are assumed to be zero for the calculation of the EMI); The interest and charges mentioned in the table are indicative and may vary depending on the general conditions of the bank. * Rack interest rate; ** min APR from October 21 to December 21; *^for seniors