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.
Indian Bank Personal Loan Interest Rate
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|
|Indian Bank Clean Loan (for salaried individuals)||Where Check-off facility & undertaking by the employer is available.||9.60%|
|Where Check-off facility & undertaking by the employer are not available, but salary is credited with Indian Bank.||10.20%|
|Indian Bank Pension Loan (for pensioners)||Repayment period of 12 months.||11.15%|
|Repayment period above 12 months but up to 36 months.||11.90%|
|Repayment period above 36 months but up to 60 months.||12.15%|
|COVID-19 Personal Loans||COVID Emergency Salary Loan||9.50%|
|COVID Emergency Pension Loan||8.75%|
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 10.25% 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 Personal Loan: Method of Interest Calculation
The following 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.
Indian Bank Personal Loan EMI Calculation
A personal loan EMI refers to the monthly installment that a borrower has to pay to the lender with respect to the loan amount. It stands for Equated Monthly Installment and depends on the following three factors:
- Loan Amount: This refers to the amount that you initially borrow from the bank.
- Repayment Tenure: This refers to the time period over which you repay the loan.
- Interest Rate: This refers to the rate of interest charged by the lender on the loan amount.
You can use Paisabazaar personal loan EMI calculator to instantaneously know the EMI amount. Additionally, you can try various combinations of loan parameters to decide the most suitable EMI amount for yourself. The following is a sample of EMI calculations for different loan amounts, tenure and interest rates:
|Loan Amount (Rs.)||Interest Rate (p.a.)||Tenure (months)||EMI (Rs./month)|
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:
|Indian Bank||Axis Bank||SBI||ICICI Bank||Bajaj Finserv|
|Interest Rate||10.20% onwards||12-24%||10.35% onwards||11.25-22.00%||12.99% onwards|
|Loan amount||Up to 20 times of gross salary||Up to Rs. 15 lakh||Up to Rs. 20 lakh||Up to Rs. 20 lakh||Up to Rs. 25 lakh|
|Processing Fee*||Up to 0.512% 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 Rate on Indian Bank Personal Loan?
Follow the below mentioned tips to get a low rate pf 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 Personal Loan Interest Rate
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. You can check your credit score for free at Paisabazaar.
- Credit Utilization Ratio: This refers to the proportion of the credit utilized out of the total credit available to you.
- Previous Relationship with the Bank: This means that if you already have a savings account or a fixed deposit with the lender, as it may also affect the personal loan interest rate.
- Number of Loan Applications: A number of loan applications at the same time may negatively impact your credit score, and hence the interest rate on personal loan.
- Employer’s Reputation: It plays an important role if you are a salaried individual, as employees working with reputed private companies and Central and State governments tend to get the loan at a lower rate of interest.
Frequently Asked Questions (FAQs)
Q1. What is Indian Bank personal loan interest rate per annum?
Ans. 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 10.20%.
Q2. What will be the interest rate after GST?
Ans. Interest rate on personal loan 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?
Ans. 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?
Ans. Indian Bank uses reducing balance method of interest calculation for personal loans.
Q5. Can pensioners get a personal loan from Indian Bank?
Ans. 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?
Ans. The 24×7 toll free customer care numbers of Indian Bank are:
Q7. What is the repayment tenure for Indian Bank personal loan?
Ans. You can repay the personal loan taken from Indian Bank in up to 5 years.
Q8. How can I compare interest rate of various personal loan offers?
Ans. 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?
Ans. 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 maintain 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?
Ans. The processing fee for Indian Bank personal loan to salaried employees is 0.512% of the loan amount with a minimum processing charge of Rs. 512.