Are you looking for a personal loan?
If yes, understanding the interest rate and payment structure is crucial.
Interest rates happen to be one of the first ‘make or break’ factors when it comes to picking the right personal loans. However, the interest rate alone should not influence your decision. You should also look at other factors, including service charge, approval timelines, pre-closure options, personal loan eligibility criteria, documents required for personal loan, among others.
We at Kotak Mahindra Bank understand that goals sometimes need funding. With our lending products, we aspire to help our clients achieve their dream lifestyle.
Our personal loans are specifically designed keeping in mind your personal goals. We provide fast-disbursed and low-interest personal loans.
With Kotak personal loans, you can fulfill your goals of buying a car or funding your education, and a lot more. Take the first step towards your dream life with our personal loans starting at INR 50,000 and going as high as INR 25,00,000.
You may have several questions in your mind. How can you apply for a personal loan? What are the interest rates for a personal loan? What factors can influence our calculations for your loan?
We want to help you find the answers to these questions. So we attempt to answer the questions that most personal loan seekers have regarding personal loan interest rates. Please note that though we have tried to answer these to the best of our abilities, some charges and conditions on the personal loan interest rates are subject to change.
While seeking a personal loan, you can always calculate your EMI on our personal loan EMI calculator.
Check your personal loan eligibility here.
|Personal Loan Interest Rate as per Employment Status||Rate of Interest|
Starting at 10.25% p.a.
What are your income sources and financial standing?
A lender assesses your loan proposal primarily based on your ability to repay the loan. A high income reflects on your ability to pay your installments on time.
The focus isn’t just on a higher salary but also a regular stream of income. Those with multiple reliable sources have a better chance of getting a lower interest rate on a personal loan.
Where or with whom do you work?
Working for a well-established organization reassures a lender that your income source is reputed and your income is regular. So, you are more likely to repay the loan.
What kind of work arrangement is it?
Salaried, self-employed, contractual, or unemployed: depending on the box you tick, your interest rate could vary.
How old are you?
It is assumed that young people are more creditworthy given their ability to grow in their careers. This factor also means that the older you get, the more you pay in interest.
What does your lender feel?
Some banks, like us, may be willing to give a prioritized treatment to our loyal customers and even be ready to disburse the loan faster for them. However, no policy mandates every bank to do the same, and it is at the bank’s discretion.
Your status on the above factors is determined based on the documents your loan agent or you individually provide. To get a checklist on documents required for Personal Loan applications, click here.
The different types of personal loan interest rates are as follows:
As the name suggests, the personal loan interest rate doesn’t change throughout the loan’s tenure. The lender would issue a fixed rate when approving the loan, which is pre-communicated to you.
This method is preferred because it avoids the chances of ambiguity and larger payment in the future. The interest rate is calculated on the whole amount of the personal loan you have applied for.
Contrary to a fixed rate of interest, the lender issues a loan at a variable interest rate, which might change during the loan’s tenure. The changes are made as directed by the policy for loans under the Reserve Bank of India.
It is also called a reducing rate of interest since the idea here is to benefit from the changing policies. However, there is no guarantee that the rate of interest will reduce with the loan’s tenure.
The outstanding amount gets reduced, and the interest is always charged upon it. That is why “adjustable” interest rate is a more appropriate name for this interest rate.
Knowing how much interest you would have to pay on your personal loan even before you get it is a great relief.
In the case of reducing interest rate models, you do not get that luxury. Though you can end up paying less if the interest rate recedes, you might have to pay more if it doesn’t. If you are okay with that uncertainty and want to put your bets on a low interest rate, you could go for a variable interest rate. However, a fixed interest rate is more stable and less ‘surprising’.
There is no “one-size-fits-all” when it comes to money matters and loans. We recommend you go through both the models and evaluate what works better for your particular financing need.
When it comes to looking for loans, applicants often seek out low-interest personal loans. However, the lowest personal loan interest rate may not be in your interest. There may be hidden charges which can make the loan overall more expensive. So, while you are looking for a personal loan, the desired interest rate must not be your only parameter.
Nonetheless, If you are looking to apply for a personal loan, here are a few tips that will help you avail a lower rate of interest:
How is your credit score calculated? The lender usually considers your previous track record of clearing outstanding dues on your existing loans or credit cards. Defaulting on those can affect your future loan permissions.
While factors like age, salary, etc., that significantly help reduce the interest rate may not be in a seeker’s control, you can still control your creditworthiness. Your CIBIL score is a measure of that.
A credit score greater than 750 denotes a highly credible citizen who is most likely to repay on time. At Kotak, we prioritize such applications and even grant them the lowest interest rates.
For those who have a credit rating below 600, not only is getting a personal loan difficult, but it is also far more expensive.
Around the festive season, Kotak offers great discounts and special offers, particularly on personal loans. Be on the lookout!
Kotak is dedicated to helping you fulfill your goals. We value trust and relationships above all. Especially for customers who have lasted long with us, we are always willing to make an exception. And if you have successfully received and repaid a past loan with us, you have the edge over other applicants!
However, even if you’re new to the whole thing, we are happy to meet you over a virtual coffee. Get in touch with us, apply, let’s talk it out. Let us together build the future of your dreams on your terms.
Kotak offers personal loans at a reasonable interest rate starting from 10.25% p.a. However, the rate may vary depending upon a customer’s profile, income, previous credit record, among other factors.
Yes, it most certainly will. If you have a track record of not paying your credit card dues on time or have pending installments for previous debt, you are less likely to be approved.
Yes, a CIBIL score or a credit score is among the first factors loan providers check because it reflects your creditworthiness. People with a low score can still get a personal loan.
Yes, it is possible to secure the lowest personal loan interest rate with a poor credit rating. The easiest way of doing so is offering collateral, which might help your loan provider trust you.