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Personal Loan Interest Rates and Charges

Understanding the complexities of personal loan interest rates and fees is essential when making informed borrowing decisions, as personal loans often act as a financial lifeline for many people, offering a solution to immediate financial requirements.

Understanding personal loan interest rates and the accompanying fees is crucial for responsible borrowing. To make informed decisions and obtain loans that match their financial objectives, borrowers should evaluate their financial status, utilize online calculators for precise estimates, and collaborate with reputable lenders such as IIFL Finance. By following these steps, individuals can confidently navigate the intricacies of personal loans while exercising financial wisdom.

Applicable Personal Loan Interest Rate and Charges

IIFL's personal loan interest rates are intricately connected to the Reserve Bank of India's (RBI) benchmark rate. After conducting a meticulous evaluation of both your credit score and overall financial profile, the specific interest rate for your personal loan is precisely determined. These interest rates span a wide range, beginning at a competitive 12.75% per annum and potentially reaching up to 44% per annum.

This variation hinges on the unique nuances of your individual risk profile, ensuring that the interest rate you receive is tailored to your specific financial situation and creditworthiness. Essentially, this personalized approach to determining interest rates enables IIFL to accommodate a diverse array of borrowers, providing rates that suit their individual financial requirements and risk profiles.

PERSONAL LOANS RANGING FROMINR 5,000 to INR 5,00,000
RATE OF INTEREST12.75% - 44% p.a. (reducing balance interest rate)
TENURE03 months to 42 months
PROCESSING FEE2% - 6% + GST (Additional Upto ₹500 will be charged as Convenience Fees)
LOAN PROCESSING CHARGES2% - 6% + GST (Additional Upto ₹500 will be charged as Convenience Fees)
PENAL CHARGES, LATE PAYMENT CHARGES, DEFAULTS OF ANY MONIES PAYABLE2% Compounded Monthly
LOAN CANCELLATIONInterest charged for interim period between date of disbursement and date of loan cancellation
ANY OTHER CHARGES (CASE TO CASE BASIS)At actuals
  • Processing Fee

    It's important for applicants to be mindful of the processing fee associated with these personal loans, which can vary depending on the loan amount. IIFL Finance maintains a processing fee that falls within the range of 2% to 6% of the loan amount, along with an additional component for GST (Goods and Services Tax).

    Additionally, borrowers should note that there may be a convenience fee of up to ₹500 applicable in specific cases.

  • Interest Rate Structure

    The personal interest rate plays a crucial role in shaping the overall borrowing expenses when it comes to personal loans. At IIFL Finance, personal loan interest rates are intricately tied to the benchmark rate set by the Reserve Bank of India (RBI). The precise interest rate that applies to your loan is determined through a thorough assessment of your credit score and financial background.

    IIFL Finance's personal loan interest rates generally start at 12.75% per annum and can go up to 44% per annum. The particular rate you qualify for depends on factors such as your risk profile, creditworthiness, and other pertinent considerations.

  • Loan Amount and Tenure

    IIFL Finance's personal loans cater to a wide range of financial needs, offering loan amounts that span from INR 5,000 to INR 5,00,000. This flexibility empowers borrowers to secure the necessary funds for various purposes, whether it be covering urgent medical expenses or financing home renovations.

Personal Loan Interest Rate Calculation

To get an idea of the overall cost of borrowing through personal loans, it's crucial to understand how personal interest rates are calculated. The formula for determining Equated Monthly Installments (EMIs) and personal loan interest rates is as follows:

  • EMI = P *r * (1 + r)^n / ((1 + r)^n - 1)

    In this equation, "P" stands for the principal amount, "r" represents the monthly interest rate, and "n" denotes the loan tenure. To demonstrate this calculation, let's consider an example:

    Imagine you're seeking a personal loan of ₹2 lakh (P) with an interest rate (r) of 15% for a loan term (n) of 2 years. Taking these values and applying the formula, we get:

    • P = ₹2,00,00
    • R = 15% per annum (monthly rate approximately 1.25%)
    • N = 24 months

    The computed total interest amounts to ₹32,736, which, in percentage terms, equals 14% of the total repayment amount for the loan.

    While manual calculations are possible, IIFL Finance offers an easily accessible online personal loan EMI calculator. By entering the necessary basic information on their website, borrowers can promptly determine their personal loan interest rates and monthly EMIs.

Calculation of Personal Loan Interest Rate

The interest rate applicable on personal loans is dependent upon your credit score, loan amount and repayment period. Interest is calculated on a daily reducing balance basis and is charged at the end of each month for the total outstanding amount during that month. The rate of interest is rounded off to two decimal places. Customers have the option of choosing their own repayment tenure of up to 5 years.

At IIFL, we strive to provide our customers with the best personal loan solutions based on their needs and requirements. Calculate your personal loan EMI easily using the IIFL Personal Loan interest rate calculator. All you need to do is enter your desired loan amount, tenure, interest rate, and processing fee (if any), and then click on the "Calculate" button to know your equated monthly installments.

  • Interest Rate

    12.75 - 44% P.A.

    (Reducing Balance Interest Rate)

  • Processing Fee

    2 - 6% + GST

    (Additional Upto ₹500 Will Be Charged As Convenience Fees)

  • Penal Charges, Late Payment Charges, Defaults Of Any Monies Payable

    2% COMPOUNDED

    Monthly

PERSONAL LOAN FAQs

What does a bounce charge signify?

A bounce charge, sometimes known as an EMI bounce charge, is imposed when a borrower's EMI payment fails, often due to insufficient funds or other reasons. A fee is imposed for such occurrences.

What is a reducing Personal Loan Interest Rate?

A reducing personal interest rate, often utilized for personal loans, is computed based on the remaining loan balance after each EMI payment. As borrowers continue making repayments, the interest is applied to the decreasing principal amount, leading to reduced interest payments over time.

What factors influence personal interest rates?

Personal loan interest rates are influenced by several factors, including one's credit score, income stability, employment history, loan amount, and the lending institution's policies. A robust credit profile and a steady income typically result in a more favorable unsecured loan interest rate.

How are prepayment charges determined?

Prepayment charges are computed as a percentage of the outstanding loan amount being prepaid. The specific calculation may differ depending on the lender's policies and the terms outlined in the loan agreement.


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