Personal Loan Interest Rates

Personal Loan Fees & Charges

Here are SMFG India Credit personal loan fees and charges to help you understand the same in detail,

There are a few personal loan charges to keep in mind. These, along with interest rates influence the total cost of the loan. Below enlisted is information on the applicable fees and charges.

All charges mentioned in the below table are in INR (₹)

Personal Loan Foreclosure Charges

Summarized below are the personal loan foreclosure charges applicable, if you wish to close your personal loan account before the end of the loan tenure..

Personal Loan Additional Interest Rates

Types of Personal Loan Interest Rates

There are two types of personal loan interest rates, fixed interest rates and floating interest rates. Most personal loan lenders offer a fixed interest rate. Let’s understand the difference between the two.

Fixed Interest Rate

Under the fixed interest rate type, the interest amount of the whole loan tenure can be determined at the start of the loan tenure. 

The formula for personal loan interest calculation under fixed interest rate type is:

Total Interest Payable = Principal * Rate of Interest * Loan Tenure

EMI = (Principal + Total Interest Payable) / Loan Tenure in months

Floating Interest Rate

Under the floating interest rate type, the interest payable on each EMI has to be calculated after the payment of each EMI as the rate of interest on personal loan is not constant.

The formula to calculate the interest on the outstanding personal loan amount:

Interest Payable = Outstanding Loan Amount * Interest Rate * Remaining Loan Tenure

EMI = [P * R * (1+ R) ^ N] / [ (1+ R) ^ (N - 1)]

P= Principal Amount
R= Rate of Interest
N= Loan Tenure in Months

In this method, the interest rate for the outstanding loan amount is calculated as per the prevailing interest rate after the payment of each EMI.

Please note that SMFG India Credit offers personal loans at a fixed rate of interest.

Factors that Affect Personal Loan Interest Rates

The determination of personal loan interest rates is affected by many factors, including both external and internal factors. Some of the key factors that affect personal loan charges include:

1. Age of the Borrower: The borrower must be of lower age, above 21 years and not close to the retirement age
2. Credit Score: The borrower must have a good credit score of 750 and above
3. Occupation: The borrower shouldn’t be involved in a job that is considered riskier and has uncertainty. A salaried professional enjoys a better bargaining power on interest rate compared to self-employed professionals. 
4. Employer: Working with a reputed employer increases your chances of getting a lower interest rate on a personal loan.
5. Repayment Capacity: You should have a lower debt-to-income ratio that will help you to get a personal loan easily
6. Relationship with the Lender: If you are an existing customer with the lender, the process to get a personal loan gets easier

How to Get the Lowest Interest Rate on Personal Loan?

There are many ways through which you can avail of low personal loan interest rates and that includes:

• Improve your Credit Score: By aiming for a high credit score, closer to 900, it improves your creditworthiness and ability to get a personal loan at low interest
• Compare Personal Loan Interest Rates: Before applying for a personal loan, always compare the personal loan fees and interest rates offered by different lenders. It helps you to get the idea of the prevailing market condition and negotiate with the lender in a better way.
• Keep an Eye on Offers: Lenders during festive or special occasions often come out with attractive offers in form of low-interest rates on personal loans for a limited period. You can use the opportunity to avail the benefits. 
• Don’t Miss on Repayments: Lenders often analyse your debt repayment history before approving your personal loan application. Always prioritise and make a loan repayment, including credit card due on time.