At 8.9% Interest, This Govt Bank Offers Cheapest Personal Loan; HDFC Bank Most Expensive!
Latest trends show that Public sector banks have continued to lead the charge by continuing to offer lower interest rates on loans across categories in comparison with private sector banks.
Cheapest Interest Rate
You will be amazed to know the difference between the cheapest personal loan from a state-owned lender and a private sector bank.
It seems to be as wide as 159 basis points, indicated by the data compiled by Bankbazaar.com.
In this race, Union Bank of India offers the cheapest personal loan at the rate of 8.9 percent per annum.
Following that Punjab National Bank is currently offering loan at 8.95 percent rate.
Private Sector Bank Loans Are Costliest
It seems that the list is topped by Private sector banks Federal Bank and HDFC Bank, being the costliest in the top ten list, by offering 10.49 percent and 10.5 percent respectively.
Interestingly, eight out of the ten banks on the list happen to be government banks.
Analysis Of Bank’s Data
For this analysis, the Interest rate on personal loans for all listed (BSE) public and private banks data is considered.
Banks for which data is not available on their websites are not considered.
From the respective bank’s websites Data is collected as on February 4, 2021.
In this list, the banks are listed in ascending order on the basis of interest rate, that is, the bank offering the lowest interest rate is placed at the top and highest at the bottom.
Further, the EMI is calculated on the basis of interest rate mentioned in the table for a Rs 5-lakh loan.
It is offered with a tenure of five years (processing and other charges are assumed to be zero for EMI calculation).
It is noteworthy here that interest and charges are mentioned in the table are indicative.
It may vary depending on these banks’ terms and conditions.
Dependency On Credit Score
Although, being a borrower, you might be charged a much higher rate if your credit score is low.
In case your bank’s credit assessment team perceives you as a risky borrower, depending on several factors such as your income and profession.