What type of loan has the lowest interest rate in India?
Every stage of your loan would pave the way to a new finding or a new set of commitments and challenges. Let’s talk about this like when you are a teenager, the commitment you stand at will be buying yourself a new bicycle or a new feature phone. This commitment slowly escalates; it could start off in your twenties as saving for retirement or buying your first car. Slowly as years go by, it becomes your own home.
Let’s be honest; it is quite hard to pay all of that in a single payment. Especially if you are a salaried employee, one-shot payments are not quite possible; that is when you can take the help of a loan and slowly pay it off. Here, let’s talk about these loans, low internet rates, high-interest rates, and so much more.
How Does a Bank Loan Work?
First things first, you need to know that there are various kinds of loans, and they are:
- Home loans
- Vehicle Loans
- Personal Loans
- Car Loans
- Small Loans
- Credit Card Encashment
- Gold Loans
- Collateral Loans
- And More
Each loan works in a different way, and they all have different sets of rules that they follow.
How Does a Bank Loan Work?
Let’s take an example.
Let’s just say you choose to take a home loan from the State Bank of India; well, there is a perk you can use the SBI home loan interest rate calculator, but let’s still talk about it in-depth to know more.
Firstly, you will apply for the loan through an application.
Once the loan is sanctioned, you will get the lump sum money.
Each month, you will pay monthly installments to pay off the principal amount, plus the interest that the Bank is charging on loan.Now, most people look for lower interest rates when they choose to take a loan from a bank, but that is obvious, and it is a given answer. But, there is one thing everybody has to know – it also depends on you.
Interest Rates on Loans Depend on your CIBIL
This is one factor that you simply can’t look over; that is, your CIBIL score is important. This means when you have a higher CIBIL score, the interest rates that are offered would be lower when compared to lower CIBIL scores.
But, apart from this, here are some loans in India and their interest rates.
Personal Loan Interest Rates from Different Banks
- State Bank of India – 9.80% – 13.80%
- Punjab National Bank – 8.80% – 15.35%
- HDFC Bank – 10.50% and higher
- ICICI Bank – 10.50%
- Union Bank of India – 9.80% – 13.90%
- Bank of Baroda – 9.20% – 16.55%
- Axis Bank – 10.25%
- Indian Bank – 9.40% – 9.90%
- Bank of India – 10.75% p.a.
- Kotak Mahindra Bank – 10.99%
- Yes Bank – 10.99%
- IDBI Bank – 9.50% – 14.00%
Home Loan Interest Rates in Various Banks
- Kotak Mahindra Bank – 7%
- Bank of Baroda – 8.25%
- Citibank – 6.75%
- Central Bank of India – 6.85%
- Union Bank of India – 6.90%
- Bank of India – 6.90%
- LIC Housing Finance – 6.90%
- HDFC Ltd – 7.05%
- State Bank of India – 10.85%
- Axis Bank – 6.90%
- Punjab Sind Bank – 6.85%
- Canara Bank – 9.30%
Interest rates of banks and the types of loans that are offered to the customer will most frequently be changed. This is exactly why you need to keep a constant eye on the interest rates of different banks and how they are offered to each customer.Also, as already mentioned, you might want to keep your credit score intact for some attractive interest rates.
How to Calculate the Interest Rates on a Loan?
There are two ways you can do this, one is the easy one, and the other is the hard one. The harder solution involves the process of using the formula to calculate the interest on a loan, and that is:
EMI = [P x r x (1+r)^n]/[(1+r)^n-1]
The other one is a simple and easy one that can be done in seconds. You do not exactly have to be tech-savvy for that; you can just follow the steps below.
How to Calculate Loan’s Interest Rate with an Online Calculator?
Step 1: You would have to go to the Bank’s loan calculator that you choose.
Step 2: You need to enter the principal amount that you require as the loan amount.
Step 3: You will now have to enter the rate of interest that the Bank will be charging you.
Step 4: Enter the tenure that you want the loan turnover to be, and then instantly click on submit.
You will now be displayed with how much interest you will be paying over your loan, and also, you will see the monthly EMI that needs to be paid by you. Make sure you do the right research before you choose to take a loan from a certain bank. There could be chances that you would find a bank that offers you a lower interest rate, a better tenure approach, easier EMI options, and much more.
Customers can enjoy attractive interest rates over any kind of loan when they have a good CIBIL score, but there are always chances that you could find lower interest rates, so make sure you do not end up with the first option that you find, and keep looking for more.