After the pandemic, the common Indian man met with a substantial financial blow as an enormous number of people were laid off across all fields of work. Many were forced to take hefty loans at steep interest rates to make their ends meet and survive the ordeal.
Now the importance of interest rates is only truly understood by those burdened by heavy interest rates meted out by the banks. The rates of interest, which differ by only 1 or 2 percent, might signify an enormous difference of lakhs of rupees to be paid extra over the original sum.
If you are in a similar position or want to take a loan, you are in luck, as this article will enumerate a list of companies to avoid or opt for while searching for the perfect loan with a lucrative interest rate. However, before getting into the list, we must first be aware of what a personal loan is and what it entails.
A personal loan is a form of installment credit provided to the borrower. However, unlike a credit card, a personal loan delivers a one-time cash/online payment to the borrowers, who then pay back the amount along with interest in regular, monthly installments over the loan's lifetime, which is known as its term or tenure.
The interest rate on the loan amount is set according to the risk undertaken by the moneylender. This is the reason a good credit score is essential when opting for personal loans, as a good credit score inherently denotes low risk and therefore, low-interest rates.
Let's now look at the top 15 personal loan companies in India in no particular order. This list is entirely subjective, and can vary based on a number of factors.
Although counted among the top NBFCs (Non-Banking Financial Company), Mahindra Finance offers the least competitive numbers on the market. Their interest rates on personal loans can go as high as 26% p.a. The maximum loan amount is up to INR 3 lakh, and the maximum loan tenure is also not extensive (only 3 years).
Finance Buddha is one of the fastest growing personal loan companies with relatively quick processing of loans and free loan advice. However, they have yet to make a noteworthy mark in the mainstream market as they are still relatively unknown in the field.
This is the only caveat, though, as they offer competitive interest rates ranging from 10.50% - 24.00 % p.a. for up to 5 years. The maximum amount of money provided is INR 5 lakh.
Turboloan is a personal loan provided by Cholamandalam or Chola, which offers an entirely digital and paperless method to avail of a personal loan. The interest rates are manageable, and the features of same-day disbursement and instant e-approval are eye-catching.
The interest rates start at 15% p.a. onwards, and the maximum loan amount is only INR 3 lakh, with the tenure being up to 3 years max.
Canara Bank offers a personal budget loan as well as a teacher's personal loan. The teacher's loan is perfect for those who are new to the teaching field and are out of work for some reason at the moment.
The interest rate is 12.40% p.a. which is quite steep. The maximum loan amount is INR 3 lakh or gross salary for 10 months, whichever is lesser.
The personal loan's interest rate is 11.30% p.a. to 12.30% p.a, and the maximum amount available is INR 3 lakh or gross salary for 6 months, whichever is lesser.
Punjab National Bank offers a personal loan at a reasonable interest rate to help you meet your immediate financial expenses. It even has a doctor's delight personal loan scheme of up to INR 20 lakh aimed at doctors having a maximum tenure of 84 months or 7 years.
PNB offers interest rates of 8.7% p.a. to 14.25% p.a with a loan amount ranging from Rs.50,000 to Rs.10 lakh or 20 times the monthly net income, whichever is lower. The maximum repayment tenure ranges from 5 to 7 years.
UCO Bank offers a personal loan scheme that has been customized to take care of various expenses and other personal obligations. One can repay the loan in 48 EMI installments.
The interest rate for the loan is 13.5% p.a., and the maximum amount ranges from INR 50,000 to INR 15 lakh. The maximum tenure of the loan is 12 years.
Andhra Bank (now merged with Corporation Bank to form Union Bank of India) has its headquarters in Hyderabad, Telangana, and offers complete coverage of all personal expenses.
The interest rate offered ranges from 15.75 % p.a. to 16 % p.a. The loan amount ranges from INR 50,000 to INR 15 lakh. The maximum tenure of the loan is 12 years.
HSBC bank offers MyTerms Credit which entails 4 simple repayment options along with competitive interest rates. There also are special relationship discounts with existing customers.
The interest rate ranges from 13% p.a. to 15 % p.a. The loan amount ranges from INR 50,000 to INR 15 lakh. The maximum tenure of the loan is 12 years.
ICICI Bank offers personal loans at 12-60 months' repayment choices. The loans offered are all aimed at the average Indian consumer.
The interest rate ranges from 12% p.a. to 24 % p.a. The loan amount ranges from INR 50,000 to INR 15 lakh. The maximum tenure of the loan is 12 years.
The Indian Overseas Bank offers loans to those who have a stable source of income. These loans are meant for PSU employees, the government, reputed private firms, and other companies.
The rate of interest offered starts from 10.80% p.a above. The loan amount ranges from INR 5,000 to INR 5 lakh. The maximum tenure of the loan is 5 years.
The Axis Bank personal loans offered by Axis Bank have the unique characteristic of no hassle paperwork and easy approval. The loans are relaxed, and the repayment schedule is also equally relaxed.
The rate of interest offered ranges from 12% p.a. to 21 % p.a. The loan amount ranges from INR 50,000 to INR 15 lakh. The maximum tenure of the loan is 5 years.
IDBI Bank personal loans boast attractive interest rates and offer you solutions to many personal and even professional expenses. The processing fee is meager, as low as 1%.
The interest rate offered ranges from 8.15% p.a. to 10.90 % p.a. The loan amount ranges from INR 25,000 to INR 5 lakh. The maximum tenure of the loan is 5 years.
MoneyView offers instant personal loans at lucrative interest rates. The rate of interest offered is 16% p.a. However, the processing fee is only 1% of the entire loan amount. The loan amount ranges from INR 5,000 to INR 5 lakh, with a maximum repayment tenure of 5 years.
One of the leading options, incredibly affordable interest rates and relaxed payment schedules are characteristic of HDFC personal loans.
The interest rate offered is between 10.50% to 21% p.a. The loan amount can be up to INR 15 lakh with a maximum repayment tenure of 5 years.
SBI personal loans offer some of the best interest rates in the entire country. The SBI Xpress Credit personal loans and pension loans offer interest rates going as low as 8% p.a. to 10.60 % p.a. The loan amount is up to INR 20 lakh, and the maximum repayment tenure is 7 years.
Even if you go through the entire list and finalize your ideal loan company, all will be for naught if your credit history and credit score are in any way damaged. While taking a loan, each facet must be extensively considered and analyzed.
The money lenders not only lend their money to you, but they also lend you their trust, which is highly fickle and delicate. So, you must remember to be responsible for your loans and credits to have an enjoyable experience.