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. 10 lakh to fulfil various personal needs like home renovation, wedding, medical emergency, vacation, etc. Canara Bank personal loans are offered at an interest rate starting as low as 9.40% p.a. and can be repaid over a convenient tenure ranging upto 84 months.
Canara Personal Loan Interest Rates
The interest rate for Canara Bank personal loans starts as low as 9.40% p.a. However, particular interest rate applicable to an applicant depends on the person’s individual applicant profile including his/her credit score, age, the applicant category that the person belongs to, personal loan variant opted for, etc.
Canara Bank Interest Rate for Different Types of Loans
Canara Bank personal loan interest rates are currently linked to RLLR (Repo Linked Lending Rate) of the bank. Currently the RLLR of the bank is 6.90%. 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 Home Improvement Loan||9.40% onwards|
|Canara Pension||10.20% onwards|
|Canara Teachers Loan||10.90% onwards|
|Canara Budget||11.25% 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 Calculation
Flat interest rate method involves computing interest on the entire loan principal amount throughout the loan tenure, without taking into account the portion of principal that has already been paid off. This method does not take into consideration the fact the outstanding amount of the loan principal gradually decreases as monthly EMIs are paid off. Whereas, in case of the reducing balance method 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 calculation.
Canara Bank uses the reducing balance method to calculate the interest payable on its personal loans. Thus, interest is charged only on the outstanding loan principal and hence you get to save on interest.
EMI Calculation Using Reducing Interest Rate
The table below gives a sample of EMI calculations using reducing interest rate taking varying loan amounts, tenures and interest rates into consideration:
|Loan Amount (Rs.) and Interest Rate|
Monthly EMI Payout
|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 table below gives a sample of EMI calculations using flat interest rate taking varying loan amounts, tenures and interest rates into consideration:
|Loan Amount (Rs.) and Interest Rate|
Monthly EMI Payout
|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 Personal Loan Interest Calculation
The interest rate on Canara Bank personal loans starts at %p.a. The following table shows a sample of the total interest payout, total amount repaid and the proportion of interest in total amount repaid for varying loan amounts, interest rates and tenures.
|Loan Amount (Rs.)||Tenure (years)||Total Interest Payout (Rs.)||Total Amount Repaid (Rs.)||Proportion of Interest in Total Amount Repaid|
|1 lakh @ 12%||1||6,619||1,06,619||6%|
|3 lakh @ 13%||3||63,895||3,63,895||18%|
|5 lakh @ 15%||5||2,13,698||7,13,698||30%|
Canara Interest Rate Comparison
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||9.40% onwards||10.50% onwards||9.99% onwards||10.49% onwards||10.50% onwards||11.49% onwards|
|Tenure||Up to 84 months||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. 10 lakh||Up to Rs. 40 lakh||Up to Rs. 30 lakh||Rs. 50,000 to Rs. 15 lakh||Up to Rs. 25 lakh||Up to 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||Up to 2% of loan amount plus GST||Up to 2.25% of loan amount plus GST||Up to 4.13% of the loan amount|
How to Get Low Interest Rates on Canara Bank Personal Loan?
- Maintain your credit score: 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
- Good existing 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
- Stable job and employment history: 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
- Avoid applying with multiple lenders simultaneously: Applying for a personal loan with multiple lenders at the same time can increase the number of hard inquiries on your credit report. Too many inquiries not only show you to be credit hungry but can also adversely affect your credit score.This can in turn lead to higher rate of interest being charged on your personal loan
Factors Affecting Interest Rates
- Credit score: Credit score of an applicant plays 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 consequently 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
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 9.40% p.a. 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, the interest rate on pension loans offered by Canara Bank starts from 10.20% p.a. onwards.
Also read Canara Bank Personal Loan Eligibility.