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All you need to know about HDFC personal loan vs Axis Bank personal loan vs SBI personal loan

Hdfc Personal loan, Current Personal Loan Interest Rates

Most lenders today adopt the technique of risk-based pricing for setting the interest rates of loan applicants. Lenders like HDFC, Axis Bank, SBI etc., also charge higher interest rates from those with increased credit risk. Remember that such a type of pricing in personal loans is highly prominent in the case of unsecured credit options like personal loans offered by lenders like HDFC personal loan, Axis Bank, SBI bank etc. It is because HDFC personal loan and other lenders like Axis, SBI, Citi etc., have no underlying asset or security towards which they can turn to in case the loan borrower defaults on a personal loan. Thus, the current personal loan interest rates differ widely between 9 % – 24 % p.a on the basis of the loan applicant’s credit profile, employer’s profile, income, existing relationship with banks or NBFCs etc. Here, we will first cover the current personal loan interest rates and charges offered by the top three banks – namely State Bank of India, Axis Bank & HDFC personal loan.

After this, we will discuss two major factors that these banks factor in when fixing the personal loan applicant’s interest rate.

Current personal loan interest rates & charges of SBI, Axis Bank, HDFC personal loan
LenderInterest Rate (%)EMI (Rs)Loan Amount: 5 LakhTenure: 5 YearsEMI (Rs)Loan Amount: 1 LakhTenure: 5 YearsProcessing FeeLoan AmountLoan Tenure
State Bank of India9.60-13.85%10,525-11,5952,105-2,319Up to 1.50% (Max: Rs 15,000)Up to Rs 20 lakhUp to 6 years (For defence pensioners: Upto 7 years)
Axis Bank12-21%11,122-13,5272,224-2,7051.5%-2%Rs 50,000 – Rs 15 lakhUp to 5 years
HDFC Bank10.50-21%10,747-13,5272,149-2,705Up to 2.50% (Max: Rs 25,000)Rs 50,000-Rs 40 lakhUp to 5 years
As on 24th September 2021



A brief on personal loans:

Personal loans being an unsecured credit option, can be taken up by the ones looking to mitigate their financial shortfall in case of travel abroad, home renovation etc., or to meet financial exigencies such as medical expenses etc. Their quick processing, minimal documentation and availability of loan proceeds with nil restrictions on loan usage make personal loans one of the highly preferred loans among most individuals in situations of a financial urgency. These loans usually are provided for a loan tenure of up to five years, with some of the lenders providing higher repayment tenures of up to seven years.

When submitting an application for a personal loan, you must remember to compare their current personal loan interest rates offered by other lenders as well as their charges. Here in this article, we will share a comparison among three top personal loan lenders like HDFC personal loan, State Bank of India and Axis Bank.

HDFC personal loan: Current personal loan interest rates offered by HDFC personal loan ranges anywhere from 10.50 % to 21 % p.a. for the salaried people only. In the case of self-employed people, the current personal loan interest rates are usually higher as these people have higher credit risk as compared to salaried individuals due to their income and cash flow uncertainty.

State Bank of India: State Bank of India offers personal loans at interest rates from 9.6 % to 13.85 % p.a. based on the employer’s profile, applicant’s job profile and existing relation with the financial institution. For example, as per the SBI salary package account holder category of the Xpress elite scheme, the personal loan applicants are being offered the lowest rates on personal loans ranging anywhere from 9.60 % to 11.10 % p.a. These individuals are the ones who share a good relationship with the State Bank of India in the form of salary bank accounts. However, the ones who are not under the salary package account holder category are provided higher personal loans ranging from 9.85 % to 11.35 % p.a. Similarly, those individuals working along with cooperatives or institutions not covered under this scheme of regular Xpress credit loan, i.e. are working with unrated corporates are provided with the highest interest rates on a personal loan. The current personal loan interest rates for this section ranges anywhere between 12.25 % – 13.85 % p.a.

Axis Bank: Axis bank’s current personal loan interest rates range anywhere between 12 % and 21 % pa. Similar to other lenders, Axis bank ensures to consider crucial factors such as the applicant’s credit score, income, employer’s profile etc., to determine the interest rate to be charged.

Here, we will 2 important factors that impact an applicant’s personal loan rate of interest:

Credit score

Lenders consider the credit score of the applicants to be an important parameter when assessing their application for a personal loan. Those with a score of 750 and above are considered to be creditworthy and have a higher probability of availing of personal loan approval at the lower interest rate. On the other hand, the ones with lower scores of less than 750 are considered to be lacking financial discipline, and lenders tend to compensate for the higher credit risk involved by charging higher interest rates on personal loans.

As the requirements for personal loans generally are unannounced in nature and hence assessing your score just before submitting your loan application will be of less help. Thus, applicants should ensure to inculcate the habit of periodically checking their credit report and undertake the needed steps to improve or maintain their credit score. Also, timely reviewing your credit report would motivate these individuals to undertake corrective measures to better their financial behaviour, which would help with credit score improvement. Periodical checking of credit reports will even help the consumers in finding incorrect information or mistakes in their credit reports. They can further report such errors or mistakes to the concerned bureaus or lenders for rectification, which would automatically enhance their score.

Income

Lenders generally endow higher preference to the ones with higher income owing to their increased disposable income. Those with reduced disposable income are considered individuals with higher default chances. Hence, many of the lenders, including HDFC personal loans, often charge higher interest rates on personal loans to those with lower disposable income.

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