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Personal Loan Interest Rates and Charges
Understanding the impact of the interest rates and charges on your personal loan is important in making cost-effective borrowing decisions. A lower interest rate can lead to lower monthly instalments while a higher interest rate can increase the EMIs you pay significantly. But it’s not just the interest rate that you need to consider while calculating the total cost of your loan. There are several other charges, like processing fees, foreclosure charges, etc., that you must consider.
Interest rates for a Shriram Personal Loan start at just 11%* p.a., helping you manage EMIs effectively. All our other charges are also minimal and communicated clearly to you during your application. This helps you make smart decisions when it comes to managing your personal loan with us. Here is a detailed breakdown of some of the fees and charges on a Shriram Personal Loan.
| Type of Fees | Applicable Charges |
|---|---|
| Interest Rate | Starting at 11%* p.a. |
| Processing Fees | Up to 5%* |
| Foreclosure Charges | Capped at 4%* on the outstanding principal amount. (Please also note that the customer shall not be permitted to foreclose the account within 12 months from the date of the first EMI. Also, an additional 2% will be levied if the loan is transferred to another financier) |
Please note that the interest rates and charges of the Shriram Personal Loan are subject to change. They may vary based on your loan tenure, market conditions and other relevant factors. Check the Interest Rates and Charges document for the most accurate and up-to-date information.
Tips to Get a Personal Loan at Competitive Interest Rates
Securing a personal loan at a competitive interest rate requires careful planning. Here are some strategies that help you negotiate for a lower interest rate and favourable terms for a Shriram Personal Loan:
- Improve Your Credit Score
A higher credit score, usually above 750, often results in a lower interest rate. Pay your EMIs on time, keep your Debt-to-Income (DTI) ratio within 30-40% and check your credit report for errors, to improve your credit score.
- Show Stable Income and/or Employment
Applicants with stable employment and/or consistent income often qualify for a better interest rate due to lower perceived risk. Keep documents handy that showcase a steady income.
- Choose a Shorter Tenure
If possible, choose a shorter loan tenure. This not only reduces the overall interest you end up paying but also helps you negotiate a lower interest rate.
- Consider a Co-applicant
If you’re unsure about your credit score meeting the requirements, try applying with a co-applicant with a strong credit and income profile.
- Improve Your Credit Score
How to Reduce the Impact of High Personal Loan Interest Rate with a Prepayment
A high interest rate on a personal loan can lead to high EMIs and total interest outgo. But there are ways to lower the financial burden with prepayment. Here are some effective strategies that can help you:
Try to make lump sum payments towards your loan whenever possible to reduce the outstanding principal and the overall interest payable.
If you have surplus funds, consider repaying a large portion of your loan early. This may come with a small prepayment fee but can help reduce your interest burden.
If possible, pay a higher EMI than what was initially decided. This can reduce your loan tenure and the total interest outgo.
How to Calculate Personal Loan Interest Rate
To calculate the EMI on your personal loan, use this formula:
Where,
- P is the principal loan amount
- R is the monthly interest rate (annual rate divided by 12)
- N is the loan tenure in months
Using this formula, you can calculate your EMI and total interest payable over the loan tenure. This helps in effective loan repayment and overall financial planning.
To make things simple and take out the stress out of manual calculations, you can use our online personal loan EMI calculator. All you need to do is feed in your desired loan amount, interest rate offered to you, and the loan tenure. The calculator will calculate the EMIs and total interest payable in seconds for you.
Personal Loan Interest Rate FAQs
What is the interest rate on a personal loan?
Interest rates on a Shriram Personal Loan start at 11%* p.a. and vary based on the applicant’s profile and loan details.
How can I calculate personal loan interest rates in India?
You can use the formula P x R x (1+R)^N/ [(1+R)^N-1] to calculate your EMIs, where P is the principal loan amount, R is the monthly interest rate and N is the loan tenure in months. Alternatively, you can also use the Shriram Personal Loan EMI Calculator to make things simple.
How can I reduce the interest rate on a personal loan?
To negotiate for a lower interest rate on your personal loan, try maintaining a good credit score, paying your EMIs on time, keeping your DTI ratio below 40%, demonstrating stable income and/or employment and keeping all the required documents up to date.
What are the processing fees for a personal loan?
The processing fee for a Shriram Personal Loan is capped at 5%* of the loan amount.
What is the interest rate on an unsecured personal loan?
Unsecured personal loan interest rates at Shriram Finance start at 11%* p.a., making it easy for you to handle your EMIs.
How do personal loan interest rates work?
Personal loan interest rates are determined based on factors like your credit score, income and employment stability, loan amount, loan tenure and existing debt obligations.
Low Processing Charges & Quick Loan Disbursals on Personal Loan
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