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Personal loans are unsecured loans
Personal loans are unsecured loans

These banks are offering lowest interest rates on personal loans

  • The interest rates on term loans have been falling since RBI started reducing policy rates to revive demand and economic activity that has taken a beating due to the lockdown
  • Personal loans are a way to use tomorrow’s income today, and the process involved is simple

With the Reserve Bank of India (RBI) cutting repo rate to an all-time low, term loans offered by the lenders have also seen a substantial reduction. Some of the public lenders such as Central Bank of India, Canara Bank and Punjab National Bank are offering personal loans at a rate as low as 8.35%.

The interest rates on term loans have been falling since RBI started reducing policy rates to revive demand and economic activity that has taken a beating due to the lockdown. In its last monetary policy meeting, the central bank reduced the repo rate by 40 basis points (bps) to 4% and reduced the reverse repo rates by 40 bps to 3.35%. One basis point is one-hundredth of a percentage point.

Personal loans are a way to use tomorrow’s income today, and the process involved is simple. But you must note that the interest rates are much higher than, say, for a car loan. This is because personal loans are unsecured loans. This means that the loan is not backed by any asset.

The loan amount and interest rate depend on parameters such as your income, credit, repayment capacity, and others. As personal loans come with high-interest rates, continuous default will put you on a downward spiral.

Here are some of the lowest personal loan interest rates offered by various banks:

Loan amount  <span class='webrupee'>₹</span>1 lakh, Tenure 5 years
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Loan amount 1 lakh, Tenure 5 years
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