Information about Personal Loan Interest Rates in India

Personal Loan Interest Rates in India

Taking personal loans is flattering a norm for the middle class Indian today. With expenses sky rising and salaries affecting at a slower pace, there is little one can do to evade the debt of personal loans. Be it for the additional education of one's child, buying domestic appliances, modernizing and repairing one's house, meeting the expenditures of special junctures and weddings; the need to borrow a substantial sum of money is being handled amongst almost all strata of the society. It is thus significant to understand the payment options and to know how the interest rates on personal loans are intended.

Persons who are salaried or self-employed and can display a substantial flow of income, signifying the high possibility of repayment over time, can smear for a loan. The status of the company where one is salaried, credit history of the person smearing for the loan and his/her relationship with the bank issuing the loan are the few other deliberations for getting a loan grant. Based on the status on each of these, the individual can negotiate for lower interest rates and in relinquishing off processing fee etc. The best part of a loan is that it can be got without the need for any kind of security or collateral, and has a simple process of application and documentation.

Personal Loan Interest Rates vary across dissimilar banks. The range of interest rates on loans is between 12% and 15%. There are different methods of calculating interest on loans. Contingent on what the bank has put on offer, and what mode of calculation is appropriate for the person taking the loan, a method of interest rate calculation is definite upon. Getting a loan on a flat interest rate is paying back much more than one otherwise would. As in a flat rate calculation, the interest is calculated on initial principal amount throughout the tenure of the loan, the outstanding loan amount is never reduced. Thus, one ends up repaying much more than one would through different kinds of interest rates used for calculation.