Tata Capital personal loan is an ideal way to meet a range of financial needs/emergencies. You can avail loans of up to Rs. 20 lakhs for a variety of reasons, such as for medical expenses, marriage, travel, home renovation, etc. The interest rate for Tata Capital personal loan starts at as low as 11.75% p.a. with tenure of up to 60 months. In the following sections, key aspects of Tata Capital personal loan interest rate and factors affecting it are discussed.
Tata Capital Personal Loan Interest Rate
The interest rate for Tata Capital personal loan starts from 11.75% p.a. That said, the actual rate at which you can get a personal loan sanctioned typically depends on a number of factors, including your income, credit score, type of employer/employment, etc. Currently Tata Capital does not advertise different personal loan interest rates based on end-use or applicant type.
Tata Capital Personal Loan Balance Transfer Interest Rate
Personal loan balance transfer refers to a process where you transfer your existing personal loan with Bank A to Bank B to benefit from a better (lower) rate of interest. Tata Capital allows select individuals to avail this facility using which you can transfer your outstanding loan amount from any other bank/NBFC to Tata Capital and avail a lower personal loan interest rate on the transferred amount. However, the rate of interest charged in case of a balance transfer is not fixed and varies from applicant to applicant.
Method of Interest Calculation for Tata Capital Personal Loan
Typically, lenders calculate the interest on a personal loan using one of the following methods:
- Flat Balance Rate Method: In this method, personal loan interest is calculated on the entire loan amount i.e. principal that was initially borrowed. Hence, the interest portion of your monthly payout/ EMI remains the same throughout the loan tenure.
- Reducing Balance Rate Method: Under this method, interest is calculated only on the outstanding loan principal (after each EMI payment) and not on the total amount initially borrowed. Please note that loan EMIs constitute both principal and interest components. Thus as you pay EMIs, the outstanding loan principal keeps decreasing and so does the interest chargeable on it. As a result, you end up saving significantly on the loan interest payable when this method is used.
Tata Capital uses the “Reducing Balance” method of interest calculation. Thus, the interest on Tata Capital personal loan will only be calculated on the outstanding loan amount allowing you to save on the interest component over the entire loan tenure.
Tata Capital Personal Loan EMI Calculation
EMI stands for Equated Monthly Installment which is the monthly payment that you need to make in order to pay off your Tata Capital personal loan within the contracted loan tenure. This is calculated on the basis of the following 3 parameters:
- Loan amount
- Loan tenure
- Interest rate
You can easily know your monthly EMI payout using the Paisabazaar personal loan EMI calculator. You can also use the calculator to try out multiple combinations of the loan parameters to arrive at the most suitable EMI for your unique requirement. Let us see how EMI changes with changes in loan parameters in the following table (the reducing balance method has been used to arrive at the EMI figures):
|Loan Amount (Rs.)||Interest Rate (p.a.)||Tenure (months)||EMI (Rs./month)|
Tata Capital Personal Loan Interest Calculation
Let us understand how total interest payout (using the reducing balance method) varies with different loan principal, interest rate and tenure in the following table:
|Loan Amount (Rs.)||Tenure (years)||Total Interest Payout (Rs.)||Total Amount Payable (Principal+ Interest) (Rs.)||Proportion of Interest in Total Amount Repaid|
|5 lakh @ 15%||2||81,840||5,81,840||14.06%|
|10 lakh @ 12%||3||1,95,715||11,95,715||16.37%|
|12 lakh @ 14%||5||4,75,314||16,75,314||28%|
Tata Capital Interest Rate Comparison
The following table compares the interest rate as well as other key features of a personal loan from Tata Capital with other top lenders in India:
|Tata Capital||Axis Bank||HDFC Bank||ICICI Bank||Bajaj Finserv|
|Interest Rate||11.75% onwards||11% onwards||10.50% onwards||10.50% onwards||11.49% onwards|
|Tenure||Up to 60 months||12 to 60 months||12 to 60 months||12 to 60 months||12 to 60 months|
|Loan amount||Up to Rs. 20 lakh||Up to Rs. 15 lakh||Up to Rs. 40 lakh||Up to Rs. 25 lakh||Up to Rs. 25 lakh|
|Processing Fee*||Up to 2.75% of the loan amount||Up to 1.5% of the loan amount||Up to 2.5% of the loan amount||Up to 2.25% of loan amount||Up to 4.13% of the loan amount|
*NOTE: Additional taxes may apply as per the bank guidelines.
Factors Affecting Interest Rates
Following are the key factors that affect personal loan interest rates of Tata Capital as well as other lenders in India:
- Credit Score: It is a 3 digit number between 300 and 900, which serves as a measure of financial health on the basis of your repayment history. In most cases, a higher credit score results in a lower personal loan interest rate. You can check your credit score for free on Paisabazaar.
- Credit Utilization Ratio: It is a ratio of the credit that you have used to the total amount of credit you have available. A higher credit utilization ratio indicates a higher risk of default from the bank’s perspective and can drive up your loan interest rate.
- Multiple Loan Applications: Applying for personal loans with multiple lenders simultaneously can portray you as credit hungry which can adversely affect your credit score. This can lead to higher interest rates being charged.
- Pre-existing Relationship with the Lender: Having a previous relationship with the bank/ NBFC impacts personal loan interest rate positively (i.e. lower rates offered). This is as long as you have been responsible with your previous debts.
- Fixed Obligation to Income Ratio (FOIR): It refers to the portion of your salary that you utilize to pay ongoing loan EMIs and credit card dues. A higher FIOR increases the risk of default from the lender’s perspective that may lead to higher interest rates being charged.
How to Get Low Interest Rate on Tata Capital Personal Loan?
Interest rate on a personal loan depends on a variety of factors. We have listed some of the most important measures that you can take to avail Tata Capital personal loan at the lowest possible interest rates.
- Maintain a high credit score by paying all loan EMIs and credit card dues in a timely manner. Higher your score, better are your chances of getting your personal loan approved at a low rate of interest.
- Always maintain a low credit utilization ratio. You should ideally maintain your credit utilization ratio under 30% to get the best interest rate offers.
- Your relationship with the lender also affects the interest rate of the personal loan. If you have a long standing history of prudent financial decisions such as timely repayments with Tata Capital, you are better placed to get your personal loan approved at a lower interest rate.
- Minimize existing debt before borrowing. If your outstanding debt is low, your repayment capability increases in the eyes of your borrower. This can help you get a lower personal loan interest rate from Tata Capital.
Frequently Asked Questions (FAQs)
Q1. What is Tata Capital personal loan interest rate per annum?
The interest rate for Tata Capital personal loan starts from 11.75% p.a.
Q2. What will be the Tata Capital personal loan interest rate after GST?
Personal loan interest rate is not affected by GST so there is no impact post GST. However, other charges like processing fee and foreclosure charges attract GST at 18%.
Q3. What is personal loan interest rate for existing customers of Tata Capital?
The interest rate for Tata Capital personal loan starts at 11.75%, however, pre-existing customers may be able to avail personal loans at lower rates. Please note that this is purely based on the lender’s discretion and varies from applicant to applicant.
Q4. What are the minimum and maximum loan amounts offered by Tata Capital?
You can avail a Tata Capital Personal loan for amounts as low as Rs. 75,000 and as high as Rs. 20 lakh.
Q5. What is the processing fee for Tata Capital personal loan?
The processing fee for the Tata Capital personal loan is 2.75% of the loan amount plus the applicable GST.
Q6. Which method of interest calculation does Tata Capital use?
Tata Capital uses the reducing balance method of interest calculation.
Q7. I have my own business. Can I avail Tata Capital personal loan?
Yes, both salaried employees and self-employed individuals can apply for Tata Capital personal loan. You do have to fulfill the eligibility criteria specified by the NBFC.
Q8. What are the cancellation charges for Tata Capital personal loan?
You are charged either 2% of the loan amount or Rs. 5,750, whichever is higher plus the applicable GST on cancellation of an approved Tata Capital personal loan.
Q9. Do I need any collateral to avail Tata Capital personal loan?
No, you do not need to provide any security or collateral to take a personal loan from Tata Capital. However, you have to meet the eligibility criteria specified by the NBFC to get approved for this unsecured loan.
Q10. How much time does Tata Capital take to disburse the loan amount?
Typically, Tata Capital disburses the loan amount within 72 hours of verification of loan application and supporting documents submitted by the applicant. Actual disbursal times may however vary based on various criteria such as loan amount, tenure, applicant type, etc.