Personal Loan Interest Rates

How to ensure your personal loan application is not rejected

Despite every financial planner advising against personal loans and a high interest rate range of 14-24%, their popularity is on the rise. This is likely to be more so after the recent rate hikes by the RBI and the increase in lending rates that are bound to follow. This is because people tend to opt for the simpler route as personal loans are easily accessible. "There has been a gradual increase in the overall demand for personal loans and it has typically grown at the rate of 10-15% year-on-year," says Sumit Bali, executive vice-president of Kotak Mahindra Bank . In fact, personal loans rose to 16.2% year-on-year in February from 4.1% a year ago, according to Sonal Varma, India economist,Nomura Financial Advisory & Securities, in a report titled 'India: Credit to Households and Services Still Buoyant'.

Besides, the ticket size of personal loans that are being sanctioned is also going up, with some banks offering up to Rs.30 lakh, a steep rise from the Rs.3-4 lakh limit in the pre-recession era. However, while banks are willing to lend more, the ask-and-you-shall-get regime does not uniformly extend to everyone. Here are the factors that are likely to affect the loan amount you are eligible for and the interest rate you will be charged.

Says Arvind Hali, head, retail assets & credit cards group, Dhanlaxmi Bank: "Typically, a reference may be required for a bachelor staying in rented accommodation to ascertain if he is eligible. If you are married and own a house, no reference is needed." Also, if you are staying in a rented house, the bank may require additional checks. In such cases, your job profile and tenure of service become important parameters.

Similarly, instability on the job front could bring you under the scanner. For instance, if your resume boasts five organisations in two years, it might put the bank on an alert mode and more stringent checks may follow. Says Shyamal Saxena, general manager and head of retail banking, Standard Chartered Bank: "Banks are more comfortable lending to people with a standard income flow and who display residential and office stability over a period of time."



Your place of residence is not only a reflection of your snob value, but also plays a crucial role in determining your eligibility for a bank loan. Mukesh Kumar, a resident of Muzaffarpur in Bihar, had applied for a loan of Rs.1 lakh in 2010, which was denied to him by ICICI Bank .

Low Interest Rate Personal Loans | purerock102.com

Getting a low-interest personal loan can be simple to obtain if the person has and meets the minimum qualifications. This is one type of personal loan that does not require the individual to have a certain amount of collateral to be approved. The low-interest rate personal loan is different from the standard personal loan. With the low-interest personal loans the person may be allowed to only borrow a few thousand dollars if they qualify and there are very rare exceptions to these guidelines. The person that applies and qualifies for the low-interest personal loan will have to have a good credit score (near to perfect). If the credit score is not perfect, it will diminish the chances of getting a personal low-interest loan. It is also best to apply at the financial institution where the person has had their bank account over the years. This pre-existing relationship can prove to be beneficial because they can also review a steady income stream and proven reliability of the persons checking, savings and other accounts.

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