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Personal Loan Interest Rate Comparison: Personal loans help people fulfill their urgent capital needs, including sudden medical bills, education fees, home renovations and weddings. With the help of technology, banks offer personal loans in minutes to borrowers without any collateral. Even though personal loans are helpful to complete one’s current needs, they carry risks. Misuse or lack of proper knowledge can quickly lead to debt and harm one’s financial health. Being aware of common costly mistakes is essential to avoid these pitfalls. Banks, however, charge interest on personal loans from customers. The rates of interest on personal loans depend on lender to lender. It ranges between 9 per cent to 14 per cent, with processing fees. Personal Loan Interest Rates Comparison Interest Rates* Processing Fees 9.99% – 12.5% Rs. 3,499 – Rs. 6,500 11.00% – 13.00% 9.99% – 17.15% Kotak Mahindra Bank 9.98% – 17.20% 1.1% – 1.5% State Bank of India 10.05% – 15.05% Up to 1.5% (Min. Rs. 1,000; Max. Rs. 15,000) IDFC FIRST Bank 9.99% p.a onwards IndusInd Bank 10.35% – 16.5% Tata Capital 11.99% – 13.99% Up to 1.25% Bank of Baroda 10.40% – 18.10% Up to 2% (Max. Rs. 10,000) Aditya Birla Finance 10.99% p.a. onwards Source: Paisabazaar Common Mistakes People Do While Applying For Loans: Not Checking Credit Score One of the biggest mistakes people make while applying for a personal loan is ignoring their credit score. Not reviewing it beforehand can increase the chances of rejection during the approval process. aking Multiple Loans At A Time Taking multiple loans at a time can lead to a debt trap you might not even realise, until you find yourself stuck in the middle of it. Borrowing more than you can comfortably repay or taking a loan with unfavourable terms can backfire. Mismanaging the loan may lead to excessive fees and even harm your credit score. Ignoring Interest Rate Many borrowers fall into the trap of unwanted loans based on advice from loan agents. To avoid this, never commit to a loan without properly comparing rates. Even a small difference in interest rates can have a significant impact on your total repayment over time. Ignoring The Fine Print Personal loans come with brochures detailing terms and conditions, interest rates, processing fees, tenure, and repayment schedules. Reading the fine print is crucial, as hidden costs, prepayment penalties, and extra charges can substantially increase the total loan cost if ignored. Never Skip Or Delay EMIs Avoid taking a personal loan if you cannot make timely repayments. Missing EMIs can lead to penalties, harm your credit score, and damage your credit profile. In extreme cases, it may even result in legal consequences. Lying on your loan application Always provide accurate information when applying for a loan. Overstating income or omitting details may seem tempting, but it can backfire. Lenders may cancel the loan, demand immediate repayment, or take legal action. In cases of fraud, it could even result in criminal charges and imprisonment. Don’t Take Loans For Non-Essential Expenses Personal loans should be reserved for genuine financial needs and emergencies. They should never be used for discretionary spending such as vacations, luxury shopping, or other non-essential expenses. Loans are best utilised for unavoidable costs or productive purposes that provide long-term value.
