Personal loans are unsecured loans. They do not require any collateral or security against them and hence have a higher rate of interest in comparison to secured loans. Personal loans are an excellent way of dealing with urgent and surplus funds which can be used for weddings, taking care of medical emergencies, travel or home renovation purpose. One can apply for personal loans directly by going to the bank or using the platform provided by Fintechs enablers like Loans Jagat which lets you compare the personal loan interest rates provided by different banks and lending institutions so that you can choose the one which best suits you.

Some of the benefits of personal loans are:

• They are unsecured in nature and do not require any collateral or security.
• The loan is approved and processed fast. Some banks also offer instant personal loan approval.
• Very less documentation required. The lending institutions consider KYC, CIBIL score, Income proofs to check for the repayment capacity of the borrower.

How to Get the Best Personal Loan Interest Rates?

Different banks offer different interest rates on personal loans. And the rate of interest charged is usually higher in comparison to other loans. Nobody wants to get a deal wherein they are liable to pay a higher rate of interest. Banks consider your CIBIL score before approving your loan application. A good credit score over 700 ensures a quick approval of the loan. It also puts the borrower in negotiating a position for a better rate of interest citing good credit history. 

If you are working with a big corporate, then also chances of getting a good deal in terms of lower interest rates are possible as the banks consider your repayment capacity. Higher the loan amount, the lower will be the interest rate.

Some of the best banks or NBFCs for personal loans are HDFC Bank, ICICI Bank, Citibank, RBL Bank, Tata Capital. Their rate of interest range between 10.99% to 16%. These banks have an online lending facility which makes the loan processing faster. LoansJagat is an excellent platform for applying for a personal loan online and check availability without submitting any documents. If you are an account holder of any of the above banks, then post-approval, the loan can be disbursed immediately.

Some Dos to get the lowest personal loan interest rates:

• Check for best offers and discounts for salaried customers of big reputed corporate and companies. 
• Always compare the personal loan offers of different banks.  Personal loan interest rates are usually lower for a higher amount.
• Check for the discount based on the loan tenure. Some banks offer lower interest rate for certain tenure. Try and choose tenures with a lower interest rate.

Some Don’ts to get the lowest personal loan interest rates:

• Always apply for the loan amount which you actually need. Don’t apply for the loan amount higher than what you want as it could lead to rejection of loan application. Aim to take the necessary amount which can be repaid duly on time and improve your credit score.
• Refrain from applying with multiple banks for your personal loan requirements. Simultaneous applications are reflected in your CIBIL record and can hamper it significantly.
• Your bank may not be giving you the best deal. Other banks too offer attractive schemes apart from your salaried account. So don’t be in haste and do proper research before choosing the bank for a personal loan.

Compare Personal Loan Interest Rates of All Banks

Apart from the basic personal loan interest rates, banks also charge other fees and charges. It is very important to compare the personal loan interest rates and charges of all banks to take the informed decision. 

Interest rates for personal loans: Many banks come up with schemes offering a low rate of interest catering to individuals working in big firms. The rate of interest is dependent on the categorization of the company in the internal categories of the banks which vary from bank to bank. Therefore it is advisable to compare different banks for the cheapest personal loan interest rates.

Personal loan processing fees: Many banks charge a processing fee of Rs. 999 to up to 2% of the loan amount, whichever is higher. As personal loans are given for short tenure, high processing fee can result in higher loan cost. Get to know about all the hidden charges and processing fee by comparing All Inclusive Rates (AIRs) for personal loans to get the best offer.

Insurance premium: With the risk involved with unsecured personal loans, many banks ask the borrowers to take an insurance policy when availing a loan. Depending upon the risk coverage under various policies, the premium varies from lender to lender. Thus, be informed about the coverage and premium.

Personal loan prepayment and foreclosure: Many banks also charge prepayment and foreclosure fee. Discuss everything about both these aspects when applying for the loan.