Canara Bank offers various schemes like Canara Budget, Canara Pension (General Public), Canara Pension (Canara Bank ex-employees), Canara Teachers Loan and Canara Consumer Loan under the personal loan category. These schemes provide a loan amount of up to Rs. 5 lakh to fulfil various personal needs like home renovation, wedding, medical emergency, vacation, etc.
Table of Contents:
- Interest Rates for Various Types of Personal Loan
- Canara Bank Reducing Balance vs Flat rate Interest Method
- EMI Calculation Using Reducing Balance Method
- EMI Calculation Using Flat Interest Rate
- Canara Bank Personal Loan Interest Calculation
- Canara Bank Personal Loan Interest Rate vs Other Lenders
- How to Get Low Interest Rates on Canara Bank Personal Loan?
- Factors Affecting Interest Rates
- FAQs
Interest Rates for Various Types of Personal Loan
Canara Bank personal loan interest rates are currently linked to the 1 year MCLR. Currently the 1 year MCLR of the bank is 8.50%. The following are the interest rates for various types of Canara Bank personal loan:
| Types of Canara Bank Personal Loan | Interest Rate (p.a.)* |
| Canara Budget (BSNL employees) | 10.80% onwards |
| Canara Pension (general public) | 11.70% onwards |
| Canara Pension (Canara Bank ex-employee) | 11.70% onwards |
| Canara Teachers Loan | 12.45% onwards |
| Canara Budget (with salary tie-up) | 12.80% onwards |
| Canara Consumer Loan | 12.95% onwards |
| Canara Budget (without salary tie-up) | 13.80% onwards |
The interest rates provided here are indicative and actual rates available may vary based on multiple factors such as individual applicant profile, bank’s internal criteria, etc.
Also Read Canara Bank Personal Loan Documents Required.
Canara Bank Reducing Balance vs Flat rate Interest Method
In case of the flat balance method, interest is charged on the loan principal amount till the loan tenure ends. Therefore, the EMI amount remains same throughout the tenure. The formula to calculate flat interest rate is:
Interest Payable per Instalment = (Original Loan Amount x No. of Years x Interest Rate p.a.) / Number of Instalments
In reducing balance method of calculating interest rate, interest is charged only on the outstanding loan principal instead of on the entire amount that is borrowed initially. Therefore, the interest payable is lower in case of the reducing balance method as compared to the flat balance method of interest rate calculation.
Canara Bank follows the reducing balance method to calculate the interest rate of a personal loan. Therefore, interest is charged only on the outstanding loan principal and hence you get to save on the interest rate.
EMI Calculation Using Reducing Balance Method
The below table shows loan amount that would be paid every month against different tenures and monthly EMIs that are calculated using the reducing interest rate method.
| Loan Amount (Rs.) and Interest Rate | Monthly EMI Payout (Rs.) | ||||
| 1-year | 2-year | 3-year | 4-year | 5-year | |
| 2 lakh @ 13% p.a. | Rs. 17,863 | Rs. 9,508 | Rs. 6,739 | Rs. 5,365 | Rs. 4,551 |
| 5 lakh @ 14% p.a. | Rs. 44,894 | Rs. 24,006 | Rs. 17,089 | Rs. 13,663 | Rs. 11,634 |
EMI Calculation Using Flat Interest Rate
The below table depicts loan amount to be paid every month against different tenures and monthly EMIs that are calculated using the flat interest rate method.
| Loan Amount (Rs.) and Interest Rate | Monthly EMI Payout (Rs.) | ||||
| 1-year | 2-year | 3-year | 4-year | 5-year | |
| 2 lakh @ 13% p.a. | Rs. 18,833 | Rs. 10,500 | Rs. 7,722 | Rs. 6,333 | Rs. 5,500 |
| 5 lakh @ 14% p.a. | Rs. 47,500 | Rs. 26,667 | Rs. 19,722 | Rs. 16,250 | Rs. 14,167 |
Also Read Personal Loan EMI Calculator.
Canara Bank Personal Loan Interest Calculation
The following are some examples of Canara Bank personal loan interest payable for different loan principal, interest rate and loan tenure:
| Loan principal @ interest | Tenure | ||||
| 1 year | 2 years | 3 years | 4 years | 5 years | |
| 1 lakh @ 11% | Rs. 8,838 | Rs. 4,660 | Rs. 3,273 | Rs. 2,584 | Rs. 2,174 |
| 2 lakh @ 11.5% | Rs. 17,723 | Rs. 9,368 | Rs. 6,595 | Rs. 5,217 | Rs. 4,398 |
| 4 lakh @ 12% | Rs. 35,539 | Rs. 18,829 | Rs. 13,285 | Rs. 10,533 | Rs. 8,897 |
| 5 lakh @ 12.5% | Rs. 44,541 | Rs. 23,653 | Rs. 16,726 | Rs. 13,289 | Rs. 11,248 |
Canara Bank Personal Loan Interest Rate vs Other Lenders
In the subsequent table, the personal loan options from top banks/NBFCs in India are compared to the loan offering from Canara Bank.
| Particulars | Canara Bank | HDFC Bank | Citi Bank | Axis Bank | ICICI Bank | Bajaj Finserv |
| Interest Rate | Starting from 10.80% | 10.75% to 21.30% | 10.50% to 18.99% | 12% to 24% | Starting from 11.25% | Starting from 12.99% |
| Tenure | Varies from customer to customer | 12 to 60 months | 12 to 60 months | 12 to 60 months | 12 to 60 months | 12 to 60 months |
| Loan amount | Up to Rs. 5 lakh | Up to Rs. 40 lakh | Up to Rs. 30 lakh | Rs. 50,000 to Rs. 15 lakh | Upto Rs. 20 lakh | Upto Rs. 25 lakh |
| Processing Fee | Up to 1% of the loan amount | Up to 2.50% of the loan amount | Up to 3% of the loan amount | Upto 2% of loan amount plus GST | Upto 2.25% of loan amount plus GST | Up to 3.99% of the loan amount |
How to Get Low Interest Rates on Canara Bank Personal Loan?
- Maintain your credit score: A credit score usually ranges from 300 to 900 and is a reflection of your past repayments. If you have a high credit score, it will indicate that you have been regular with your repayments in the past and hence are ideally placed to be offered a lower interest rate on your personal loan
- Relationship with the bank: If you already have a bank account with Canara Bank or have an existing loan that you have been repaying on time, the bank might offer you a lower interest rate on a personal loan
- Employment: If you have a stable job and are working with an reputed organization for some time, you might get a lower interest rate on a personal loan due to regular flow of income every month
- Don’t apply with multiple lenders simultaneously: Every time you apply for a loan, it gets mentioned on your credit report as a hard enquiry. Therefore, every time a lender checks your credit report and sees multiple hard enquiries, he might consider you credit hungry
Factors Affecting Interest Rates
- Credit score: Credit score of an applicant play a major role in the Canara Bank personal loan interest rate. The credit history of an applicant is a reflection of his repayment habits and helps the bank classify the risk involved in lending finances to that individual. A good credit score and history can help an individual get lower rate of interest on personal loans
- Income of the applicant: The applicant’s income affects the Canara Bank personal loan interest rate as it helps the bank judge an individual’s repayment capability and consequentially may help in getting a reduced rate of interest, if applicable
- Relationship with the bank: Having an existing relationship (savings/current/loan account) and maintaining a good track record of repayments can ensure that you maintain a good relationship with your lender. And therefore, based on the personal relationship, the bank might offer a lower interest rate on a personal loan
- Employer’s reputation: Working with a renowned organization and having a stable job can help an individual get a personal loan with lower interest rate as it reflects that you will be able to repay the loan on time due to regular inflow of cash
FAQs
Q1. What will be the interest rate of Canara Bank personal loan after GST?
Canara Bank personal loan interest is exempt from GST under the existing GST Act and Rules.
Q2. When is Canara Bank personal loan disbursed?
There is no time specified by Canara Bank for personal loan disbursal. However, once the loan is approved, it usually takes 3-5 working days for the loan to get disbursed to your bank account.
Q3. How can I get in touch with the customer care of Canara Bank?
You can call on 1800-4250-0018.
Q4. What is the minimum rate for Canara Bank personal loan?
Canara Bank personal loan interest rate starts from 10.80% for BSNL employees and 12.80% onwards for salary account holders. But the actual rate applicable to you may differ based on multiple factors such as your credit score, prior relationship with the bank, existing outstanding loans, etc.
Q5. What is the Canara personal loan interest rate for pensioners?
Currently pension loans offered by Canara Bank start from 11.70% onwards.
Also read Canara Bank Personal Loan Eligibility.
