Like other commercial lending sectors, state-owned banks are leading the race in providing cheaper interest rates on personal loans as well. The personal loan rate at Union Bank of India for a loan of Rs 5-lakh for five years of residence starts at 8.9 percent. The same was followed with 8.95% by PNB and Central Bank of India.
While rates appear to be much lower due to the negative interest rates on the system, these are still higher than secured loans such as gold loans, where interest rates start at 7 percent, and additional home loans. So, by comparison, personal loans are expensive as this is unsecured. This is best avoided without eliminating all other forms of fundraising, including loans against endowment insurance policies, provident fund (EPF), provident fund (PPF), shares, and joint funds.
Load inspection after suspension
If you have already taken out your loans or opted for a six-month suspension approved by the Reserve Bank of India last year, you should take immediate steps to reduce your loan debt. Consider borrowing such items to clear the loan and thus prevent the slide from getting into debt.
The interest rate of personal loans for all public and private listed (BSE) banks is considered for data consolidation. Bank’s data not available on their websites are not monitored. Information was collected on the relevant banking websites from December 31, 2020. Banks are listed as per the rise in the interest rate – that is, the bank which offers the lowest interest rates is placed higher in the list and the banks with the highest interest rates are placed at the bottom. Interest rates decide the amount of EMI quoted in the Rs 5-lakh loan over a period of five years (processing and other payments are considered zero in the EMI calculation). Interest and costs shown in the table reflect and may vary depending on the policies and conditions of the banks.