Personal Loan Interest Rates and Charges

Interest rates and other charges for personal loans at Money View are transparent and affordable with no hidden costs. Take a look at the applicable charges below -

Fees and Charges Amount Chargeable
Interest Rate Starting from 1.33% per month
Loan Processing Charges Starts at 2% of the approved loan amount
Interest on Overdue EMIs 2% per month on the overdue EMI/Principal loan amount
Cheque Bounce Rs.500/- each time
Loan Cancellation
  • No additional charges levied
  • The interest amount for the period between loan disbursement and loan cancellation will be payable.
  • Processing fees will also be retained

Foreclosure and Part-Prepayment Charges

Fees and Charges Amount Chargeable
Foreclosure Charges Nil but foreclosure can be done only after a minimum number of EMIs have been paid as illustrated below-
Tenure Foreclosure
Up to 6 months Not allowed
7 - 18 months Allowed after 6 EMI payments
Over 18 months Allowed after 12 EMI payments
Part- Prepayment Charges Part-prepayment is not allowed

Factors That Affect Personal Loan Interest Rates

Lenders set interest rates based on their cost of funds and their assessment of the credit risk of their loan applicants. The following are some of the most important elements that can affect your personal loan interest rates:

  • Credit Score

When determining interest rates, many lenders now use the borrowers’ credit ratings. Personal loans are offered at cheaper interest rates to those with better credit scores. As a result, you should aim for credit ratings of 750 or above.

Having higher credit scores requires good financial habits such as paying credit card bills and EMIs on time, avoiding several loans or credit card applications in a short period of time, and maintaining a low credit use ratio.

  • Income/Salary

Higher income signifies a greater ability to repay the debt. As a result, the lender's credit risk is reduced. As a result, many lenders offer reduced personal loan interest rates to higher-income borrowers. However, if you are already repaying multiple EMIs through your income, then the interest rate imposed may be higher.

  • Repayment History

Those with good repayment history are known to present less risk to lenders hence, can avail loans with lower interest rates

  • Work

When determining interest rates for personal loans, many lenders take into account the applicant's employment profile. Salaried people typically pay lower interest rates than self-employed people, owing to the former's stronger income security.

Because of their superior employment stability and income certainty, the government and PSUs typically offer lower borrowing rates to salaried applicants. Personal loan applicants who work for MNCs and reputable private sector businesses are thought to have a better chance of surviving economic downturns than other private sector organizations.

  • Existing Relationship with the Moneylender

Many lenders provide personal loans with low-interest rates to applicants who already have a banking or lending relationship with them. Those seeking personal loans should always inquire about personal loan offers from banks/NBFCs with which they already have a lending or banking connection.

Type of Interest Rates

There are two main types of personal loan interest:

1. Reducing or Variable Interest Rate

Reducing or variable interest rate is a type of personal loan interest rate. A personal loan's variable interest rate fluctuates on a regular basis and is tied to the Reserve Bank of India's repo rate adjustments. The adjustable interest rate is also known as a lowering or variable interest rate.

2. Fixed or Flat Interest Rate

The interest rate on the loan amount is fixed under this method and remains constant throughout the loan term. The lender determines it based on assumptions about the average discount rate over the loan term.

How to Get the Lowest Interest Rate on Personal Loan?

Personal loans with low-interest rates are the most effective solution to address your immediate financial demands. A personal loan can help you finance everything from your child's wedding to a romantic getaway with your partner. However, acquiring a loan at a low-interest rate is critical. This will make it easier for you to make payments. As a result, choosing the best rate is critical. 

Use the tips below to get the lowest interest rate on a personal loan:

1. Keep Your Credit Score in Good Shape:

Your credit score reflects your creditworthiness based on previous credit management. A credit score of 700 or 750 qualifies you for a personal loan. As a general rule, the greater your score, the better. Lenders use your credit score to determine payback terms, loan amount, and interest rate. When it comes to negotiating terms, a higher score provides you with an advantage.

2. Shop Around for the Greatest Deal from Different Lenders:

In your search for easy personal loans, a little research will go a long way. Compare personal loans from several lenders to find the best interest rate and features. This will take time, but it will ensure that you make the best decision possible. Choose a personal loan from Bajaj Finserv, one of the country's largest non-banking financial companies. Check your eligibility for a personal loan and apply online. Instant approval and disbursement of the personal loan amount to your account is possible in as little as 24 hours.

3. Keep an Eye Out for Seasonal Deals:

Customers are notified of special deals via SMS and email by lenders. Keep an eye out for these deals if you want to make your loan cheaper. These deals allow you to enjoy interest rate savings for a short time. During the holiday season, these savings are frequently available when you apply online.

4. Try Negotiating with Your Moneylender:

If you earn a good wage and work for a reputable public or private company, the lender sees you as a reliable applicant. So, take advantage of this to get a better interest rate. Because the lender is certain that you will have the financial resources to make timely payments, your company's outstanding reputation can help you acquire a reduced interest rate.  

Fixed Interest Rates vs Floating Interest Rates – Which is Better?

Fixed Interest Rate Floating Interest Rate
The interest rate is higher. The interest rate is lower.
Untouched by financial market fluctuations. Susceptible to changes in the financial market.
Monthly installments are fixed. Monthly installments vary according to the interest rate.
Easy to plan and manage finances and/or budget. Planning and managing finances and/or budgets are difficult.
Gives a sense of security. Helps in generating savings.
Ideal for a medium/short term. Suitable for a long tenure.

There is no such thing as a better loan arrangement. Your needs and financial condition will determine whether you choose a fixed or floating home loan interest rate. To choose the best option, compare loans based on a variety of factors and learn everything there is to know about them.

What is Meant by Reducing Interest Rates with Regard to Personal Loans?

The interest rate on a personal loan is determined by your credit score, age, and the amount of loan you have taken out as well as the repayment period you have chosen. Aside from negotiating the interest rate, you need also look at how the rate is determined.

The interest rate is determined using one of two methods:

  • Flat Interest Rate

  • Reducing Balance Interest Rate

Every month, the interest in reducing the balance interest rate process is applied to the outstanding loan amount. The interest on the outstanding loan amount is included in the EMI.

Personal Loan Interest Rates - Related FAQs

Ans: The rate of interest for personal loans starts at an affordable 1.33% per month and varies based on the amount availed, your credit score, repayment history, etc.

Ans: Yes, a small amount is charged as a processing fee and starts from 2% of your loan amount. The amount is decided by our system based on multiple factors and will be deducted from your loan amount while the remaining balance will be transferred to your bank account.

Ans: If you are unsure of how much to pay and the interest rate charged, visit the Money View loans app and check the column titled ‘Monthly EMI’. This section will also display the duration of the loan and amount that you need to pay as monthly EMI. Additionally, the entire interest that you will be paying on the loan will also be given as reference.

Ans: Your EMI or Equated Monthly Installment consists of a portion of principal amount as well as interest payment on the loan. The EMI amount on your loan depends on the principal amount, the loan tenure, and the rate of interest.

Money View follows the reducing balance method for interest calculation. Given below is an example to illustrate the same.

Suppose you avail a loan for Rs 50,000 for a term of 6 months at an interest rate of 16%, your repayment schedule will be as given in the table below. Your outstanding loan amount reduces with payment of each EMI, which is why this method is called the reducing balance method for interest calculation.

MonthPrincipal RepaidInterest PaidEMI AmountOutstanding Principal
18060667872741940
28167559872733773
38276450872725497
48387340872717110
5849822887278612
6861211587270

Ans: Yes, you can. As Money View uses its own unique algorithm to process loan applications, individuals with relatively lower credit scores can also avail personal loans from Money View. However, the minimum credit score requirement is a CIBIL score of 600 or an Experian score of 650.

Ans: When the risk-free rate of interest, which is usually determined by a central bank, is lower than the historical average for an extended period of time, it is called a low-interest-rate environment.

Ans: The majority of banks charge personal loan interest rates ranging from 10.50% to 24% per annum. Your interest rate will be determined by a number of factors, including your credit score, income, employer, age at the time of application, and so on.

Ans: A decent personal loan interest rate is one that is less than the national average, which is less than 12%

Ans: The principal source of revenue for most commercial banks is interest income. It is completed by removing money from depositors who do not want their funds right now. Depositors are compensated with a particular interest rate and the security of their savings in exchange for depositing their money.

Ans: There are various banks in India that offer the best personal loans to their customers. The rates offered by different banks vary between 8.30% p.a. and 49% p.a.

Ans: According to survey data from Q2 2021, the average interest rate on a personal loan is 9.4%. Personal loan interest rates can range from 6% to 36%, depending on the lender and the borrower's credit score and financial history.

Ans: There are several ways to reduce the interest rate on loan amount such as maintaining a good credit score, having a good repayment history, working under a credible employer, etc.

Ans: Interest rates on personal loans are available at both fixed and adjustable rates. A fixed-rate loan's interest rate will remain constant during the loan's term. A floating-rate loan, on the other hand, has interest rates that fluctuate with market movements.

Ans: Because EMIs are paid monthly, the interest rate will be calculated monthly. As a result, if the interest rate is 10%, you must divide it by 12. In addition, the number of months will be the tenure. If you have a 20-year loan, the term will be 20x12 = 240 months.

Ans: It is completely legal for registered banks/lenders to charge interest on personal loans.