Personal loans come to the urgent rescue of the cash-strapped and help fulfill critical financial goals. These open-ended, unsecured financing facilities could be slightly pricier than the best secured loan offers, but they are still ideal for those who don’t possess or don’t want to pledge the necessary collateral to get a loan against securities such as gold, property, mutual fund investments, fixed deposits, endowment plans, car, etc.
In addition, personal loans are also the preferred financing tool for those whose loan requirement is bigger than the value of their security. If you have a stable income and a good credit score, you can get a personal loan at a rate just slightly higher than, say, a gold loan. In fact, according to the latest research by BankBazaar.com as per data available on September 10, 2020, Bank of India is offering possibly the lowest gold loan interest rate in the country starting at 7.4% per annum, while Union Bank is offering personal loans starting at 8.9% p.a., both subject to the lenders’ terms and conditions. Meaning, the difference is 150 basis points, but a personal loan would not require the borrower pledging a security (gold, in this case).
Moreover, most personal loans can be applied for in a completely contactless manner, something that is aligned with the social distancing norms necessitated by the prevailing Covid-19 pandemic. Personal loans could also ensure quick loan disbursal and might require zero to minimal documentation if they are pre-approved in nature.
That being said, borrowers must carefully gauge their options and go for a loan that best meets their requirements. Repaying any loan is a financial and moral obligation. Borrowers must have a clear repayment plan before signing up for any loan as failing to make timely repayments could lead to an accumulation of debt, loss of a precious asset (for secured loan products) and an impacted credit score-things that can throw their finances out of gear. And as far as personal loans are concerned, borrowers must realise that the best offers are reserved for applicants with credit scores over 750-800. Also, they would be well-advised never to borrow more than their actual requirement or take a loan just because they are eligible for one, according to BankBazaar.
So, if you are in the lookout for a personal loan, here is a list of what India’s top 10 banks (by asset size), including the State Bank of India, Punjab National Bank, Bank of Baroda, HDFC Bank, ICICI Bank and Axis Bank, are currently offering. Do note the interest rate applicable to you will be determined by the lender after considering your credit score, loan amount, loan tenure, among others.
Interest Rates on Personal Loans (by the top 10 banks in asset size)
Disclaimer: Data compiled by BankBazaar.com. List not exhaustive. The interest rates are based as per salaried individuals for regular personal loan products. Banks are selected on the basis of their asset size as per latest available information and its accuracy is not warranted. Data collected from the respective bank’s website as on September 10, 2020.