• Credit score: Personal loans are unsecured loans that are offered only on the basis of a person's repayment ability. This, however, is ensured with the help of credit score. All personal loan lenders ensure lending loans to an individual with a good credit score of 700 and above. In case of relatively low credit score, you may either get a personal loan at a high rate of interest or may not get it all.
• Income: Income is another factor that ensures the lender of the loan repayment ability of the borrower. Thus, the higher the income, the lower would be the personal interest rate. Many lenders have fixed income criteria for lending personal loans, failing to which you may not be considered an eligible personal loan borrower.
• Repayment history: A good repayment history depicts the financial discipline related to payments and repayment of loans and credit card bills. In case of any defaults in the repayment schedule, the lender may be suspicious of your abilities and may charge a higher interest rate. Thus, the credibility of your repayment history may help you grab a lower interest rate.
• Existing relationship with the bank: In case you are an old customer of the lender via a savings or investment account, then it is likely that you will be offered a lower interest rate from that bank. This is because banks often offer pre-approved personal loans at concessional rates to their existing customers, in order to maintain their relationship with the existing customers.
• Your organization’s reputation: The reputation of the organization you are currently working for plays an important role in helping you grab a decent personal loan interest rate. This is because a renowned and stable organisation will ensure the lender of your jobs security.

• Check special offers for your company – Always check current offers and interest rates offered for the company you are working for, as banks run special schemes for employees of top corporate.
• Compare bank offers for varios loan amount – Some banks offer low interest rate at higher loan amount.
• Check for rates at various loan tenure – Banks may offer lower rates on personal loan for certain tenure and, if possible, opt for tenures with lower interest rates.
• Apply for loan amount within the limit you are eligible for – Applying for an amount higher than your eligibility may lead to rejection of your loan application. Always check eligibility for a particular amount of loan before applying.
• Look beyond the offer from your salary bank – It is not e Various banks keep offering attractive schemes to acquire premium customers. Hence, the offer from your salary bank may not be the best option.

• Special offers for salaried employees and salaried account customers: Banks launch attractive schemes with low interest rates on a regular basis, especially for individuals working with large reputed companies. Rate of interest varies based on the categorisation of your company in the internal categories of banks which can vary from bank to bank. Hence, always check for offers from multiple banks to get the cheapest personal loan rates.
• Processing fees – Most banks charge a processing fees of ₹ 999 to upto 2% of loan amount, whichever is higher. Since these loans are short tenure loans, higher processing fees can result in significantly high cost on loans. Hence, it is important to compare the All Inclusive Rates (AIRs) or the effective rate on personal finance loans to compare and select the right offer.
• Insurance premium - Since these are unsecured loans, banks request the borrower to take an insurance policy when availing a loan. However, the premium varies from bank to bank depending upon the risk coverage under various policies. So, check the loan sanction letter carefully to know the coverage and premium.
• Personal loan prepayment and foreclosure – Banks typically levy prepayment or foreclosure charges on personal loans that can range from from nil to up to 5%. So, be careful to be mindful of choosing a loan with low prepayment charges as you consider low rate personal loan offers.

• Fixed-rate of interests: The rate of interest charged on the loan amount remains constant throughout the loan tenure. Thus, the personal loan EMI also remains the same throughout the repayment schedule.
• Floating rate of interest: Personal loan rate is not fixed and remains variable. The interest rate, in this case, is linked to the external benchmarks perceived by the lender such as RBI repo rate. Hence interest rates keep changing with market conditions. Also, since the rate is not fixed, the EMI on personal loan may increase or decrease abruptly.

Personal loan interest calculation can be done differently using the below-mentioned types of personal loans interest rate calculation. These are listed as follows:

• Flat Rate Method : According to the flat rate method calculator of personal loan interest rate, the personal loan rate is calculated on the original loan amount throughout the loan tenure. Thus the principal amount remains the same. For instance, even when you borrow a personal loan for five years of Rs 10 lakhs, you will continue paying the interest on the whole of Rs 10 lakhs amount throughout the five years. This method is also called the fixed method of personal loan interest calculation.
• Reducing rate method : The reducing balance method, as the name suggests calculates the interest rate on the outstanding loan amount. As per this method of interest calculation, the principal component that is paid during the monthly EMI is not chargeable for interest calculation;thus the outstanding balance reduces with time, and the interest is charged only on the remaining principal amount. As per this method, the interest amount reduces with time.

• Purpose : Some of the basic purposes for which this loan is granted include vacation or travel, higher education, wedding, medical treatment, credit card payment and many more. Banks specify the purpose for which they are willing to grant this loan.
• Key Features:
  • Age of the borrower: Loan available for both salaried and self-employed profesionals within the age group of 21 and 60 years
  • Loan Amount:In the range of ₹ 9,000 to ₹ 75 Lakh.
  • Loan Tenure:Can range from 1 to 72 months.
  • Interest rates:Personal Loan Interest Rates starting from 10.40%.
  • Personal Loan EMI: Lowest EMI of ₹ 2,144 per lakh.
  • Work Experience:Up to 3 years of total experience.
  • Processing Fees:Up to 2% of loan amount
  • Documents Required:Address Proof, Identity Proof, Income Documents.
  • Special Schemes: Banks offer good personal loan interest rates and schemes for salaried borrowers working in government, defense, private or MNC companies. Banks offer personal loan to self employed professionals like Doctors, CA, CS, Architects. Top banks has also launched special loan schemes to pensioners up to an age of 76 years.