5 Lakh Personal Loan

The personal loan interest rates usually start from 9.98% p.a. onwards with some public sector banks offering lower interest rates, usually to their own customers. The final interest rate will depend on the risk-based pricing models followed by the lender and the credit profile of the applicant. If you have an existing relationship with a public sector bank, do check if it has any personal loan offer for you, as it may come with a lower rate of interest.

The eligibility criteria for a Rs 5 lakh personal loan vary depending on the lender’s credit risk policies, loan type, and the applicant’s occupation. Below are the general personal loan eligibility criteria considered by most lenders before loan approval:

You can access a personal loan of Rs 5 lakhs seamlessly through pre-approved loan offers. Most lenders provide pre-approved personal loans or instant loan offers to select customers with a strong credit history. These loans are processed digitally and are often disbursed within minutes. For example, HDFC Bank offers instant loan disbursal of up to Rs 40 lakhs in 10 seconds for its eligible customers.

Have a look at the EMI for a Rs 5 lakh loan at 11.00% p.a. interest for different tenures:

Longer Tenure vs. Shorter Tenure - Quick Analysis

As the loan tenure increases, the EMI decreases, making repayment more manageable. For instance, EMI decreases from Rs 44,191 (1-year tenure) to Rs 10,871 (5-year tenure). While longer tenures lower your EMI, they significantly increase the total interest paid. For a 5-year loan tenure, you end up paying Rs 1.52 lakh as interest – more than 5 times the interest paid on a 1-year loan tenure (Rs 30,290). This is because interest is compounded over a longer period.

How To Choose Optimum Tenure for Rs 5 Lakh Loan

Borrowers with adequate repayment capacity can opt for shorter tenures to save on interest, while those with limited repayment capacity can choose longer tenures and prepay when they have surplus funds. However, prepayments should not come at the cost of essential financial goals and monthly contributions. Some lenders may require borrowers to repay a predetermined number of EMIs before allowing prepayments or foreclosures. Thus, one should carefully compare the prepayment fees and prepayment-related restrictions of multiple lenders. Note that floating rate loans have no prepayment penalties.

The following are the general personal loan documents required by most lenders: