A personal loan from Indian Bank can be used to meet a variety of personal financial needs. Common uses of the personal loan from Indian Bank include expenses related to medical treatment, travel plans, and other household expenses. But before applying for a personal loan from any lender, some of the key things you should always know include the interest rate, the method of interest calculation, and the factors affecting the interest rate applicable to you. Read this article to know all about Indian Bank personal loan interest rate, including some tips to get your personal loan at a low interest rate.
Table of Contents:
- Indian Bank Personal Loan Interest Rates
- Indian Bank Personal Loan Balance Transfer Interest Rates
- Indian Bank Reducing Balance vs Flat Rate Interest Calculation
- EMI Calculation Using Reducing Interest Rate
- EMI Calculation Using Flat Interest Rate
- Indian Bank Personal Loan Interest Calculation
- Indian Bank Interest Rate Comparison
- How to Get Low Interest Rates on Indian Bank Personal Loan?
- Factors Affecting Interest Rates
- FAQs
Indian Bank Personal Loan Interest Rates
Indian Bank offers different types of personal loans with different interest rates. The following table summarizes the interest rate for all the loan types.
| Personal Loan Type | Classification | Interest Rate (p.a.) | ||
| For Women | For General Public | |||
| Indian Bank Clean Loan (for salaried individuals) | For employees of Government organizations / PSUs & Central / State Government and for Salaried individuals of reputed Private Sector / other reputed organizations approved by respective Zonal Office (tenure upto 60 months) | Where Check-off facility & undertaking by the employer is available. | 9.05% onwards | 9.20% onwards |
| Where Check-off facility & undertaking by the employer are not available, but salary is credited with Indian Bank. | 9.65% onwards | 9.80% onwards | ||
| For Housing Loan Borrowers (Salaried Class) | Where salary is credited with our Bank | 9.05% onwards | 9.20% onwards | |
| For tenure of more than 60 months upto 84 months | 13.50% onwards | 13.65% onwards | ||
| Indian Bank Pension Loan (for pensioners) | Repayment period of 12 months. | 10.60% onwards | 10.75% onwards | |
| Repayment period above 12 months but up to 36 months. | 11.35% onwards | 11.50% onwards | ||
| Repayment period above 36 months but up to 120 months. | 11.60% onwards | 11.75% onwards | ||
| COVID-19 Personal Loans | COVID Emergency Salary Loan | 9.50% onwards | ||
| COVID Emergency Pension Loan | 8.75% onwards | |||
Indian Bank Personal Loan Balance Transfer Interest Rates
Personal loan balance transfer refers to a process by which you can transfer an ongoing personal loan with one bank to another for better interest rate and terms of loans. The rate of interest for such a personal loan is usually comparable to the personal loan interest rate starting at 9.05% p.a. However, the actual interest rate for Indian Bank personal loan balance offers depend on key factors such as outstanding loan amount, repayment period, interest rate of current loan, etc.
Indian Bank Reducing Balance vs Flat Rate Interest Calculation
The following are 2 key methods of personal loan interest calculation:
- Flat Rate Method: As per this method, interest is calculated on the entire loan amount initially borrowed without considering the fact that monthly EMIs keep reducing the principal. As a result, total interest payout is greater when this method of interest calculation is used.
- Reducing Balance Method: As per this method, interest is calculated on the outstanding loan amount only and not the entire loan amount initially borrowed. Please note that an EMI constitutes both interest and principal components. Thus, with every EMI payment that you make, the outstanding principal keeps decreasing, which results in significantly reduced interest payout when this method of interest calculation is used.
Indian Bank uses the “Reducing Balance” method of interest calculation, i.e., interest in calculated only on the outstanding loan amount.
EMI Calculation Using Reducing Interest Rate
The following table gives a sample of EMI calculations using different loan amounts, tenures and interest rates using reducing interest rate.
| 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 @ 11% p.a. | 44,191 | 23,304 | 16,369 | 12,923 | 10,871 |
EMI Calculation Using Flat Interest Rate
The following table gives a sample of EMI calculations using different loan amounts, tenures and interest rates using flat balance rate method.
| 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. | 9,333 | 5,167 | 3,778 | 3,083 | 2,667 |
| 5 lakh @ 11% p.a. | 46,250 | 25,417 | 18,472 | 15,000 | 12,917 |
Indian Bank Personal Loan Interest Calculation
Interest payout on a personal loan depends on the loan amount, interest rate and tenure. Let us understand how the payout varies with change in these 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 |
| 10 lakh @ 15% | 5 | 4,27,340 | 14,27,340 | 30% |
| 5 lakh @ 12% | 3 | 97,852 | 5,97,852 | 16.4% |
| 2 lakh @ 11% | 1 | 12,112 | 2,12,112 | 5.7% |
Indian Bank Interest Rate Comparison
The following table compares interest rate of Indian Bank personal loan to other key lenders offering similar loans:
| Particulars | Indian Bank | Axis Bank | SBI | ICICI Bank | Bajaj Finserv |
| Interest Rate | 9.05% onwards | 10.49% onwards | 9.60% onwards | 10.50% onwards | 11.49% onwards |
| Tenure | Up to 84 months | 12 to 60 months | Up to 72 months | 12 to 60 months | 12 to 60 months |
| Loan amount | As per applicant’s profile | Up to Rs. 15 lakh | Up to Rs. 20 lakh | Up to Rs. 25 lakh | Up to Rs. 25 lakh |
| Processing Fee* | Upto 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 Indian Bank Personal Loan?
Follow the below mentioned tips to get a low rate of interest on Indian Bank personal loan:
- Maintain a good credit score. Higher the score, higher are the chances of getting a loan at a lower rate of interest.
- Try to keep your credit utilization ratio below 30%.
- Ensure that your current debt level is low. A lower FOIR suggests greater repayment ability, and hence helps you to get a personal loan at a lower rate of interest.
- Try to apply for a personal loan at a bank with which you have a good pre-existing relationship.
- Avoid submitting multiple loan applications simultaneously. Doing this may portray you as credit hungry. Moreover, doing so results in multiple hard enquiries of your credit report, which will decrease your credit score.
Factors Affecting Interest Rates
Following is the list of major factors that affect the interest rate on a personal loan.
- Credit Score: This refers to a 3-digit score based on your repayment history of loans and credit cards. It ranges between 300 to 900. A high credit score indicates a higher creditworthiness and thus, a lower risk for the lender. It not only may help you avail a personal loan more easily but may also help you secure a personal loan at a lower interest rate. You can check your credit score for free at Paisabazaar.
- Age: Often the interest rate charged on personal loans increases with an increase in the age of the applicant and vice versa. The reason behind this is that the chances of increase in your income level decrease as you get closer to your retirement age.
- Previous Relationship with the Bank: This means that if you already have a savings account or a fixed deposit with the lender, it may help you secure a personal loan at a comparatively lower rate of interest.
- Income: Your income level also affects the interest charged by the lender. Applicants with higher annual incomes are often perceived to have a better repayment capacity which in turn reduces the risk for the lender and thus, are offered a lower rate of interest on their personal loans.
- Employment: Having a stable job and employment history or working with a reputed organization may help you avail a lower rate of interest on your personal loan.
FAQs
Q1. What is Indian Bank personal loan interest rate per annum?
The interest rate on Indian Bank personal loan for salaried individuals, where Check-off facility and undertaking by the employer are not available, but salary is credited with Indian Bank starts at 9.65% p.a.
Q2. What will be the interest rate after GST?
Interest rate on personal loans is not affected by GST and hence remains the same as specified in your loan agreement. However, charges like processing fees, balance transfer fees, etc. are subject to GST.
Q3. What is Indian Bank personal loan interest rate for an existing customer?
The pre-existing customers of Indian Bank may get a personal loan at a lower rate of interest, however, it completely depends on your profile and bank’s discretion.
Q4. Which method of interest calculation does Indian Bank use?
Indian Bank uses reducing balance method of interest calculation for personal loans.
Q5. Can pensioners get a personal loan from Indian Bank?
Yes, pensioners can avail a personal loan from Indian Bank, provided they meet the eligibility criteria.
Q6. What is the customer care number for Indian Bank?
The 24×7 toll free customer care numbers of Indian Bank are:
- 1800-4250-0000
- 1800-425-4422
Q7. What is the repayment tenure for Indian Bank personal loan?
You can repay the personal loan taken from Indian Bank in up to 84 months.
Q8. How can I compare interest rate of various personal loan offers?
You can compare multiple loan offers with their respective interest rates and chances of approval on the Paisabazaar platform. It not only saves you from the hassle of visiting the individual bank websites, but also doesn’t affect your credit score.
Q9. How can I maintain a good credit score?
Credit score is a direct reflection of your repayment history. Hence, you can maintain a good score by paying your loan EMIs and credit card dues on time. Moreover, keeping your debt at low levels and maintaining a credit utilization score of less than 30% can also help you maintain a high score.
Q10. What are the processing fees for Indian Bank personal loan for salaried applicant?
The processing fee for Indian Bank personal loan to salaried employees is 1% of the loan amount.
