IDBI Bank offers personal loan to various types of applicants including salaried individuals, self-employed professionals, non-professionals and pensioners. You can avail up to Rs. 5 lakh in the form of personal loan from IDBI Bank to meet a variety of urgent financial needs, such as home renovation, hospitalization or educational expenses. Subsequent sections discuss the interest rate for IDBI Bank personal loan, including the tips to get a loan at a low rate of interest.
IDBI Personal Loan Interest Rates
The interest rate for IDBI personal loan starts from 9.50% for salaried individuals. Please note that IDBI Bank offers 3 different types of personal loans, which come with different interest rates. Additionally, the interest rate depends on the type of applicant. Thus, we have accordingly grouped the rates in the following section.
IDBI Personal Loan Interest Rates for Different Applicant and Loan Types
The interest rates for all the types of personal loan offered by IDBI Bank as per the applicant category have been listed below.
1. IDBI Personal loan to Salaried Individuals, Self Employed Professionals (SEPs), Self Employed Non Professional (SENP) & Pensioners
The interest rate for this loan category depends on your Credit Vision Score, which in turn is based on your repayment history.
|Credit Vision Score||Applicants Having Salary/Payroll/Pension accounts with IDBI Bank||Employees of State/Central Government/ Public Sector Undertaking/ MNCs not having payroll/salary account with IDBI Bank||All other Salaried Individuals||Self-employed Professionals (SEP) having Asset/Liability relationship with IDBI Bank||Self-employed Non-Professionals (SENP) having Asset/Liability relationship with IDBI Bank|
|776 to 800||9.75%||10.25%||12.25%||12.75%||13%|
|740 to 775||10.75%||11.25%||13.25%||13.75%||14%|
|700 to 739||11.75%||N.A.||N.A.||N.A.||N.A.|
Note: Discount of 50 bps applicable on the above slabs for home loan & loan against property borrowers with clear repayment track in last 2 years (Not available for Pre-EMI cases), subject to minimum rate of interest of 9.50% p.a.
2. IDBI Personal Loan: Salary Account with In-built Overdraft facility
The interest rate for this personal loan variant is floating in nature, i.e., linked to Repo Linked Lending Rate (RLLR). It starts from 10.90%.
3. IDBI Personal Loan: Pension Account with in-built Overdraft facility to Pensioners of IDBI Bank Ltd
The interest rate for this personal loan variant is also floating in nature and starts from 8.15%. Please note that this is applicable for retired IDBI staff only.
IDBI Personal Loan Balance Transfer Interest Rates
Personal Loan Balance Transfer refers to a process where you can transfer your ongoing loan with any other bank to IDBI Bank for better terms and lower rate of interest. However, the rate of interest for such a case is not fixed and depends on the applicant’s profile.
IDBI Bank Reducing Balance vs. Flat Rate Interest Calculation
There are two main methods of interest rate calculation for personal loan. They have been explained in the following table.
|Flat Rate Method of Interest Calculation||Reducing Balance Method of Interest Calculation|
|The interest on your personal loan is calculated on the entire loan amount initially borrowed.||The interest on your personal loan is calculated on the outstanding loan amount and not the total amount initially borrowed.|
|You tend to pay a greater interest by the end of the loan tenure.||You significantly save on the interest component when this method of interest calculation is used.|
IDBI Bank uses the “Reducing Balance” method of interest calculation. Thus, the interest on IDBI Bank personal loan will only be calculated on the outstanding loan amount, which will help you to save a lot on the interest component.
EMI Calculation Using Reducing Interest Rate
A sample of EMI calculations using reducing interest rate taking varying loan amounts, tenures and interest rates into consideration is given below:
|Loan Amount (Rs.) and Interest Rate||Monthly EMI Payout (Rs.)|
|1-year loan tenure||2-year loan tenure||3-year loan tenure||4-year loan tenure||5-year loan tenure|
|1 lakh @ 12% p.a.||8,885||4,707||3,321||2,633||2,224|
|5 lakh @ 14% p.a.||44,894||24,006||17,089||13,663||11,634|
IDBI Personal Loan Interest Calculation
Let us understand how the total interest paid on a personal loan varies as per the loan parameters in the following table:
|Loan Amount (Rs.)||Tenure (years)||Total Interest Payout (Rs.)||Total Amount Repaid (Rs.)||Proportion of Interest in Total Amount Repaid|
|5 lakh @ 14%||2||76,155||5,76,155||13%|
|1 lakh @ 12%||3||19,572||1,19,572||16%|
|3 lakh @ 13%||5||1,09,555||4,09,555||27%|
IDBI Interest Rate Comparison
|IDBI Bank||Axis Bank||SBI||ICICI Bank||Bajaj Finserv|
|Interest Rate||9.50% onwards||11% onwards||9.60% onwards||10.50% onwards||11.49% onwards|
|Tenure||12 to 60 months||12 to 60 months||Upto 72 months||12 to 60 months||12 to 60 months|
|Loan amount||Up to Rs. 5 lakh||Rs. 50,000 to Rs. 15 lakh||Up to Rs. 20 lakh||Up to Rs. 25 lakh||Up to Rs. 25 lakh|
|Processing Fee*||1% of the loan amount||Up to 2% of the loan amount||Up to 1.50% of the loan amount||Up to 2.25% of loan amount||Up to 4.13% of the loan amount|
How to Get Low Interest Rates on IDBI Bank Personal Loan?
Following are the tips to get a personal loan at a low rate of interest:
- Maintain a good credit score. Higher the score, better are the chances of getting a loan at a low rate of interest.
- Keep your credit utilization ratio low, preferably less than 30%.
- Avoid multiple loan applications.
Apply at a lender with whom you have a good pre-existing relationship. For instance, you may have a long run savings account or a fixed deposit with Bank A, then apply at this bank for a personal loan to get a low rate of interest.
Factors Affecting Interest Rates
Personal loan interest rate depends on the following factors:
- Credit score: This refers to a 3-digit number that varies between 300-900. It is calculated on the basis of your previous loans and credit history, and hence is reflective of your repayment ability. A high credit score (generally 750 or higher) can help you secure a personal loan more easily. It can also help you avail a personal loan at a lower rate of interest. You can check your credit score for free with Paisabazaar.
- Pre-existing relationship with the lender: Your previous relationship with the bank/ NBFC also impacts the personal loan interest rate. Having a good prior relationship with the lender can help you avail a personal loan at a lower rate of interest.
- Age: Usually the interest rate charged on personal loans increases with an increase in the age of the applicant. This is because the chances of increase in the person’s income level decrease as he/she gets closer to retirement.
- Employment details: Applicants working with reputed organizations and having a stable job and employment history can usually avail a lower rate of interest on their personal loan. Also, the nature of employment of the applicant- whether the person is salaried or self-employed also affects the interest rate offered on a personal loan.
- Loan amount and tenure desired: Usually, the interest rate charged on a personal loan increases with an increase in the loan amount and repayment tenure and vice versa.
Frequently Asked Questions (FAQs)
Q1. What are the maximum and minimum loan amounts with respect to IDBI personal loan?
The maximum and minimum personal loan amounts offered by IDBI Bank are as follows:
For salaried, self-employed professionals and non-professionals:
- Maximum: Rs. 5 lakh
- Minimum: Rs. 25,000
- Maximum: Rs. 3 lakh
- Minimum: Rs. 25,000
Q2. What is the IDBI personal loan interest rate for salaried individuals?
IDBI personal loan interest rate for salaried individuals starts from 9.50% p.a.
Q3. What method of interest calculation does IDBI Bank use for personal loan?
IDBI Bank uses the reducing balance method of interest calculation for personal loan.
Q4. What is the personal loan interest rate for existing customers of IDBI Bank?
The personal loan interest rate for existing customers of IDBI Bank may be lower than that for other customers. However, this completely depends on the applicant’s profile and bank’s discretion.
Q5. How can I pay IDBI Bank personal loan EMIs?
You can pay IDBI Bank personal loan EMIs by means of Standing Instructions to automatically debit the amount from your savings account on the respective due dates. Alternatively, you can issue post-dated cheques (PDCs) or pay via Electronic Clearing Service (ECS).