personal loan interest rates

Personal Loan Interest Rate & Charges @ 9.99%* p.a.

Loan up to 30 Lakh | 100% Digital Process | Quick Approval

A Personal Loan is a loan that provides borrowers with collateral-free funds. Throughout the loan period, often known as the 'term', the borrowed sum can be paid back to the lenders in monthly instalments. The interest payable on the loan is the cost of borrowing, and you should always prioritise affordability when you are planning to take a loan.

When you opt for a loan with Poonawalla Fincorp, you can access cost-effective, competitive interest rate loans, tailored to match your profile. Borrow a loan at an attractive interest rate with no hidden charges and get an even better deal if you have a strong financial profile.

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Personal Loan minimum interest rate

We understand that affordability is a top priority for any borrower, so Poonawalla Fincorp offers attractive interest rates starting at 9.99%* p.a.

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Loan processing fees

The processing fee for a loan varies between lenders. Whether you opt for an online Personal Loan or any other type, you must pay the related administrative charges. To keep your costs low and savings optimal, our charges for loan processing are minimal and range between 0% and 2% of the loan amount plus taxes. You only need to pay these fees & charges to apply for a loan with Poonawalla Fincorp.

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Pre-payment charges

There is zero prepayment or foreclosure charges or penalties applicable if paid from own sources. 4% prepayment or foreclosure charges will be applicable if paid from other sources.

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Zero hidden costs

Hidden charges can sometimes make customers lose a lot of money without their knowledge. There are no hidden charges involved with Poonawalla Fincorp’s loan. We highly value transparency in all dealings, whether big-ticket or small loans. Every charge and condition, right from the processing fee to any other administrative fees and other charges, are clearly communicated during the loan transaction process.

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Late payment penalty

Missing EMI payments during the loan tenure will attract a late payment penalty:

  • Penal interest: 2% penalty per month, levied on the overdue EMI amount.

Also, for cheque bounce, charges would be ₹500 per bounce + taxes.

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Online interest calculator

Planning your loan is crucial to borrowing smartly. A portion of each re-payment goes toward the amount you borrowed (called the principal amount), and another piece goes toward interest costs as you repay the loan over time. You should know the EMIs payable as well as the interest owed on your loan. Use our EMI calculator to simplify these calculations. Through this, you can calculate the interest amount to be paid according to the latest interest rates offered to you. Apply at Poonawalla Fincorp and get an attractive interest rate on your Personal Loan.

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The interest rate on a personal loan can vary depending on several factors, including your credit score, the amount you're borrowing, the lender you choose, and the loan term.

  • Check your credit score: Lenders use your credit score to determine your creditworthiness, and a higher score can help you secure a lower interest rate. Make sure your credit report is accurate and dispute any errors.
  • Choose a shorter loan term: A shorter loan term typically comes with a lower interest rate, as the lender takes on less risk.
  • Improve your credit score: If your credit score is low, take steps to improve it before applying for a loan. Pay your bills on time, pay down credit card debt, and avoid applying for new credit.

Using the loan amount and the interest rate offered to you, you can calculate your monthly payments to plan your budget. The following formula is used to calculate the EMIs:

E = [P x R x (1+R) N] / [(1+R) (N-1)]
Where,
○ Principal or the loan amount
○ R = Monthly interest rate (annual interest rate/12)
○ N = Number of monthly instalments

This formula is used to calculate the fixed monthly payment that a borrower has to make towards the loan re-payment, which includes both the principal amount and the interest charged on it.

  • P = Loan Amount
  • R = Rate of Interest
  • N = Loan Tenure
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EMI

2,00,000 * 15%/12 *

(1+15%/12)^2/((1+15%/12)^2-1)

EMI

₹9,697

Personal Loan Interest Rates 9.99%* p.a. onwards
Loan Amount ₹1 Lakh to ₹30 Lakh
Loan Processing Fees Up to 2% plus applicable taxes
Lowest EMI per month Starting from ₹2,124* per Lakh for 60 months
Loan Tenure 12 – 60 months
Pre-payment/Foreclosure Charges 0%* If paid from own sources & 4% If paid from other sources
Default Interest 2% per month
Re-payment Instrument Dishonor Charges ₹500 per bounce plus applicable taxes
Stamp Duty At actuals (as per state)
No Other Hidden Charges

We assess several factors in your financial and credit profile to offer the most appropriate interest rate. Depending on your financial stability, credit history, and income status, you can even get approval for a competitive interest rate in India. Poonawalla Fincorp offers competitive interest rates so that you don't have to worry about paying high EMIs.

Here are the different factors that affect loan interest rate & charges.

  • Income logo

    Income

  • Credit score logo

    Credit score

  • Employment status logo

    Employment status

  • Credit history logo

    Credit history

  • Existing debt logo

    Existing debt

  • Relationship with the lender logo

    Relationship with the lender

There are two types of loan interest rates, fixed and floating. Knowing all about these types is important as it helps you borrow smartly.

  • Fixed Interest Rate

    If you don't take any financial risks and prefer stability, a fixed interest rate is a choice for you. This is because the interest rate remains the same throughout the tenure. The main downside of a fixed-rate loan is that it costs a little higher than a floating interest-rate loan. If the interest rate falls due to policy changes, a fixed rate will not be affected in this scenario. As a result, the borrower will be required to pay the same predetermined amount each month. However, irrespective of a fixed or floating interest rate, you can find the best personal loans with competitive interest rates at Poonawalla Fincorp.

  • Floating Interest Rate

    Floating interest rate changes based on the financial market. This is better for those comfortable with some risk, as the interest rate can increase or decrease. If the policy changes are favourable to the customer, the interest rate is accordingly lowered, and you end up paying a lot less interest. However, there is always a risk that the policy changes are unfavourable to the customer, and the interest rate may be higher than what you initially signed up for. So, apply at Poonawalla Fincorp and get competitive interest rates.

Fixed interest rate Floating interest rate
Interest rates remain constant Interest rate can change depending on the fluctuation in the market
Your EMI payable will remain the same throughout the re-payment tenure Your EMI payable is likely to change during the re-payment tenure.
You are likely to be charged a pre-payment charge if you prepay your loan You may not be charged a pre-payment charge if you prepay your loan

A loan with low interest rates is great for fulfilling specific goals without having to strain your budget. If you have a good credit score and credit history, getting a low-interest loan could be possible. Make sure that you maintain a high credit score and that you are regular with your repayments.

Following are some points that you need to bear in mind for getting a loan at a lower interest rate:

Credit Score logo

Maintain a healthy credit score

Lenders logo

Look out for pre-approved offers from lenders

Stable Income logo

Maintain a stable and regular source of income

Tenure logo

Choose the right mix of principal and tenure

What is the current interest rate on Poonawalla Fincorp Personal Loan?

The current interest rates on Poonawalla Fincorp’s loans start at 9.99%* p.a. However, these interest rates are subject to several other factors like income, credit score, employment, and existing monthly obligations etc.

What is the processing fee for a Personal Loan, and why is it charged?

This is a fee charged for processing and assessing your loan application. It can range anywhere between 0% to 2% of the approved loan amount. Do note that since the processing fee for a loan is a service charge, you will have to pay an additional amount in tax as well.

How do I get a Personal Loan with less interest rate?

This is a fee charged for processing and assessing your loan application. It can range anywhere between 0% to 2% of the approved loan amount. Do note that since the processing fee for a loan is a service charge, you will have to pay an additional amount in tax as well.

  • Maintain a high credit score
  • Have a good re-payment track record
  • Maintain stable income as a salaried employee
  • Meet all the required loan eligibility criteria
How to calculate the Personal Loan Interest Rate?

Your ROI or rate of interest determines the monthly EMIs that you repay against your loan. The percentage of interest is determined by the lending institution. However, the interest component can be calculated as per the following formula:

A = P (1 + r/n) nt
Where,

  • P = Principal amount
  • r = rate of interest
  • n = number of times interest is compounded every year
  • t = time (in years)
When can I foreclose my Loan in Poonawalla Fincorp?

You can foreclose your Loan any time before the tenure ends.

What are the foreclosure charges?

There are no charges or penalties applicable on foreclosure payments for a loan from Poonawalla Fincorp. Do note that for this benefit to apply, the payment must be made through your funds.

When can I make a part payment?

Just like foreclosure, you can make a part-prepayment at any time before the tenure ends.

What are the charges for part payment?

There are no additional charges or penalties for partially prepaying the loan before the tenure ends. This is true if the payment is made through your funds or personal savings.

Can I pay off the Personal Loan before my tenure ends?

Outstanding loan amounts can be paid either partially or in full. The whole loan amount can be settled in a single pre-payment, while you can also pay a part of the principal for a partial pre-payment of the outstanding amount. Most lenders charge a penalty fee when you try to repay your loan early. The pre-payment fees can be a flat fee or a percentage of the amount paid. It can also be measured on the interest amount overdue.

Some financial institutions, like Poonawalla Fincorp, do not charge any pre-payment fees. It is essential to compare the penalty fees incurred against your savings on interest for the remainder of the loan tenure. Rather than making your pre-payment decision based only on the remaining term, factor in the interest fees when thinking about foreclosing your loan. So, apply at Poonawalla Fincorp and get the competitive interest rates in India.

What is the loan rate formula?

The loan rate formula, also known as the interest rate formula, is used to calculate the interest charged on loan. The interest rate is a percentage of the loan amount that the lender charges the borrower as compensation for lending the funds.

The most commonly used formula to calculate loan interest is:

Interest = Principal x Rate x Time

Where:

  • Interest represents the amount of interest charged on a loan.
  • Principal refers to the initial loan amount borrowed.
  • Rate denotes the interest rate per period (usually per year).
  • Time represents the duration of the loan in the same time units as the interest rate.

For example, let's consider a loan of ₹1,00,000 with an annual interest rate of 10% for a duration of one year:

Interest = ₹1,00,000 x 0.10 x 1 = ₹10,000

In this case, the interest charged on the loan would amount to ₹10,000.

Here are some key points to consider when using the loan rate formula:

  • It's important to note that the interest rate can be calculated on different time periods, such as per month, per quarter, or per annum. To match the interest rate calculation with the loan tenure, the time value needs to be adjusted accordingly. For instance, if the loan duration is three years, the time value would be 3.
  • It's also worth mentioning that lenders may use different methods to calculate interest rates, such as compound interest or reducing balance methods. These methods can impact the total interest payable and the distribution of interest over the loan tenure.

When considering loans, borrowers should pay attention to the interest rate, as it directly affects the cost of borrowing. Higher interest rates result in higher interest expenses and, consequently, higher overall loan costs. Therefore, it's advisable to compare loan offers from different lenders and consider the interest rate along with other factors such as processing fees, loan tenure, and re-payment terms.

Is it good to repay a Personal Loan early?

Repaying a loan early can have several advantages, but it's important to carefully consider your financial situation and the terms of your loan before deciding to do so. Here are some factors to consider when determining if it is good to repay a loan early:

  • Interest Savings: One of the primary benefits of repaying a loan early is the potential to save on interest. By paying off the loan sooner, you reduce the total amount of interest you would have paid over the loan term. This can result in significant savings, especially if the interest rate on the loan is high.
  • Debt-Free Sooner: Paying off a loan early allows you to become debt-free sooner. It can provide a sense of financial freedom and relieve the burden of monthly loan payments. Being debt-free can give you more flexibility in managing your finances and pursuing other financial goals.
  • Improved Credit Score: Timely re-payment of loans is important for maintaining a good credit score. If you repay your loan early, it demonstrates responsible financial behaviour and can positively impact your credit history. A higher credit score can improve your chances of obtaining future loans at favourable terms and interest rates.
  • Prepayment Penalties: Before deciding to repay a Personal Loan early, it's important to check if your loan agreement includes any pre-payment penalties. Some lenders charge a fee for early re-payment to compensate for the interest they would have earned over the original loan term. Evaluate the pre-payment penalties and compare them to the potential interest savings to determine if early re-payment is financially beneficial.
  • Financial Stability: Consider your overall financial stability before deciding to repay a loan early. Ensure that you have enough savings to cover emergencies and other financial obligations. It's important to have a solid financial foundation and not compromise your financial well-being by using all your resources for early loan repayment.
  • Other Financial Goals: Assess your other financial goals and priorities. Suppose you have other high-interest debts or important financial milestones, such as saving for a down payment on a house or investing in retirement. In that case, it may be more beneficial to allocate your resources towards those goals rather than paying off your loan early.
What is the repayment period of a Personal Loan?

The repayment period of a Personal loan refers to the duration over which you are required to repay the loan amount and any associated interest to the lender. It is the agreed-upon timeframe within which you make regular instalment payments toward clearing the loan balance. The repayment period for a loan can vary depending on several factors, including the lender's policies, the loan amount, and your creditworthiness.

Personal Loans typically have repayment periods ranging from 1 year to 5 years, although some lenders may offer longer terms. Shorter repayment periods generally result in higher monthly instalments but lower overall interest payments. In comparison, longer repayment periods may result in lower monthly instalments but higher total interest costs over the life of the loan.

The specific repayment period for your loan will be determined during the loan application process, and it is important to carefully consider this aspect before agreeing to the loan terms. Longer repayment periods can provide you with more affordable monthly instalments, making it easier to manage your cash flow. However, it is important to keep in mind that longer re-payment periods may result in paying more interest over the life of the loan.

When deciding on the repayment period for your loan, consider your financial situation, income stability, and long-term financial goals. It is crucial to choose a re-payment period that aligns with your budget and allows you to comfortably make the required monthly payments without straining your finances. Additionally, consider the total interest cost over the repayment period and assess the impact on your overall financial well-being.

It is worth noting that some lenders may offer flexibility in choosing the re-payment period, allowing you to select a timeframe that suits your needs. However, it is important to balance your desired repayment period with your ability to meet the monthly instalments and avoid any default or late payment penalties.

Can we close Personal Loans early?

Yes, it is generally possible to close a Loan early by making full repayment of the outstanding loan amount before the scheduled loan tenure. Closing a loan early can have several benefits. Still, it is important to consider the terms and conditions of your loan agreement and any potential charges or penalties for early repayment.

Here are some key points to consider regarding closing a loan early:

  • Interest Savings: By closing a loan early, you can save on the interest that would have been charged over the remaining loan tenure. This can result in significant savings, especially if the loan carries a high-interest rate. Early repayment can help reduce the overall cost of borrowing.
  • Prepayment Penalties: Some lenders may charge a pre-payment penalty for closing a loan before the agreed-upon tenure. The pre-payment penalty is usually a percentage of the outstanding loan amount and is intended to compensate the lender for the interest they would have earned if the loan had been repaid as per the original schedule. It is important to check your loan agreement or consult with the lender to understand if there are any penalties associated with early repayment.
  • Improved Credit Score: Timely re-payment of loans is important for maintaining a good credit score. If you close your loan early by making full re-payment, it demonstrates responsible financial behaviour and can have a positive impact on your credit history. A good credit score can enhance your future borrowing capacity and help you obtain better loan terms.
  • Financial Stability: Before closing a loan early, ensure you have enough funds to make the full re-payment without compromising your financial stability. Consider your other financial obligations, emergency savings, and future financial goals. Closing a loan early should not put you in a financially vulnerable position.
Can we pay the full loan amount in advance?

Yes, it is generally possible to pay the full loan amount in advance, commonly known as making a full pre-payment. By paying off the entire outstanding loan balance before the scheduled tenure, you can effectively close the loan and relieve yourself from any further repayment obligations. However, it's important to consider a few factors before deciding to pay the full loan amount in advance.

  • Prepayment Charges: Some lenders may charge a pre-payment penalty for repaying the loan before the scheduled tenure. This penalty is typically a percentage of the outstanding loan amount and is intended to compensate the lender for the interest they would have earned if the loan had been repaid as per the original schedule. Check your loan agreement or consult with the lender to understand if any pre-payment charges apply.
  • Interest Savings: By paying off the entire loan amount in advance, you eliminate future interest payments. This can result in significant interest savings, especially if the loan has a long tenure or carries a high interest rate. By closing the loan early, you can reduce the overall interest paid over the loan term.
  • Financial Impact: Consider your overall financial situation before making a full pre-payment. Evaluate the impact of paying off the loan on your cash flow and financial goals. Ensure that you have sufficient funds to pay off the loan without compromising your financial stability or neglecting other financial obligations.
  • Communication with the Lender: If you decide to pay the full loan amount in advance, inform the lender in advance. They can provide you with the necessary instructions and assist you with the loan closure process. Ensure you obtain a formal closure statement or No Objection Certificate (NOC) from the lender once the loan is fully repaid.

It's important to note that the process and terms of making a full pre-payment may vary among lenders. Some lenders may have specific procedures and requirements for loan closure, so it's advisable to communicate with your lender directly to understand their specific guidelines.

What is the gap interest in a Personal Loan?

In the context of personal loans, gap interest refers to the interest charged by the lender for the period between the loan disbursement and the actual commencement of the Equated Monthly Installments (EMIs). When a loan is approved, there is typically a time gap between the loan disbursal and the start of the regular re-payment schedule. During this period, the lender may charge gap interest to compensate for the borrowed funds being utilized by the borrower before the EMIs kick in.

Here are some key points to understand about gap interest in a loan:

  • Calculation: Gap interest is calculated based on the disbursed loan amount and the applicable interest rate. It is typically calculated daily or monthly for the period between the loan disbursal and the first EMI payment.
  • Purpose: The purpose of gap interest is to compensate the lender for the time during which the borrower has access to the loan funds without making any re-payments. It ensures that the lender does not incur a loss or opportunity cost during this initial period.
  • Loan Disbursal and EMI Commencement: After the Personal Loan is approved and disbursed, there is usually a gap period before the EMIs start. The gap period varies among lenders and can range from a few days to a couple of months, depending on the loan agreement.
  • Inclusion in Loan Repayment Schedule: The gap interest is typically added to the loan principal, and the total amount (including the principal and gap interest) is divided into EMIs over the loan tenure. This means that the borrower repays both the loan principal and the accrued gap interest through the regular EMIs.
  • Impact on Loan Repayment: Gap interest increases the overall cost of the loan since the borrower is liable to pay interest for the period before the regular EMIs commence. It's important to factor in the gap interest while calculating the total re-payment amount and assessing the affordability of the loan.
What is 5 Year Personal Loan?

A 5-year loan refers to a loan that has a repayment period of five years or 60 months. It is a type of loan where you borrow a specific amount of money from a lender and agree to repay it over a period of five years through regular monthly instalments. Here are some key points to understand about a 5-year loan:

  • Loan Amount: The loan amount for a 5-year loan can vary depending on the lender and your eligibility criteria. The loan amount is determined based on factors such as your income, credit score, re-payment capacity, and the lender's policies.
  • Interest Rate: The interest rate for a 5-year loan can vary among lenders. The rate is usually determined based on factors such as your creditworthiness, loan amount, and the prevailing market rates. A higher credit score and a good re-payment history can help you secure an attractive interest rate.
  • Monthly Installments: With a 5-year loan, you will be required to make fixed monthly payments, known as Equated Monthly Installments (EMIs), over the loan tenure. The EMI is calculated based on the interest rate, loan amount, and loan tenure. It's important to budget and ensure that you can comfortably afford to pay the monthly instalments.
  • Eligibility Criteria: Lenders have specific eligibility criteria that you need to meet to qualify for a 5-year loan. These may include factors such as your age, income, employment stability, credit score, and existing financial obligations. Meeting these eligibility criteria increases your chances of loan approval.
  • Purpose of the Loan: A 5-year loan can be used for various purposes, such as funding home renovations, wedding expenses, education expenses, debt consolidation, or any other personal financial needs. It's important to clarify the purpose of the loan to the lender during the application process.
  • Prepayment and Foreclosure: Some lenders allow borrowers to make prepayments toward the loan before the completion of the tenure. Prepayment options may come with certain terms and conditions, including prepayment charges. It's advisable to inquire about prepayment options and associated charges from the lender before availing of the loan.
  • Documentation: To apply for a 5-year loan, you will be required to submit certain documents such as identity proof, address proof, income proof, bank statements, and employment details. The specific documentation requirements may vary among lenders.
What is 2 Year Personal Loan?

A 2-year Personal Loan refers to a loan that has a repayment period of two years or 24 months. It is a type of loan where you borrow a specific amount of money from a lender and agree to repay it over a period of two years through regular monthly instalments. Here are some key points to understand about a 2-year loan:

  • Loan Amount : The loan amount for a 24-month loan can vary depending on the lender and your eligibility criteria. It is determined based on factors such as your income, credit score, re-payment capacity, and the lender's policies.
  • Interest Rate: The interest rate for a 2-year loan can vary among lenders. The rate is usually determined based on factors such as your creditworthiness, loan amount, and the prevailing market rates. A higher credit score and a good re-payment history can help you secure a lower interest rate.
  • Monthly Installments: With a 2-year loan, you will be required to make fixed monthly payments, known as Equated Monthly Installments (EMIs), over the loan tenure. The EMI is calculated on the basis of interest rate, loan amount, and loan tenure. It's important to budget and ensure that you can comfortably afford the monthly instalments.
  • Eligibility Criteria: Lenders have specific eligibility criteria that you need to meet to qualify for a 2-year loan. This may include factors such as age, income, employment stability, credit score, and existing financial obligations. Meeting these criteria increases your chances for a loan approval.
  • Purpose of the Loan: A 2-year Personal Loan can be used for various purposes, such as funding weddings, medical expenses, travel expenses, debt consolidation, or any other personal financial needs. It's important to clarify the purpose of the loan to the lender during the application process.
  • Prepayment and Foreclosure: Some lenders allow borrowers to make prepayments towards the loan before the completion of the tenure. Prepayment options may come with certain terms and conditions, including prepayment charges. It's advisable to inquire about prepayment options and associated charges from the lender before availing of the loan.
  • Documentation: To apply for a 2-year loan, you will be required to submit certain documents such as KYC documents, address proof, income proof, bank statements, and employment details. Please note that the specific documentation requirements may vary among lenders.
What is a 1.5-Year Personal Loan?

A 1.5-year Personal Loan refers to a loan that has a repayment period of one and a half years or 18 months. It is a type of loan where you borrow a specific amount of money from a lender and agree to repay it over a relatively short period through regular monthly instalments. Here are some key points to understand about 18 months loan:

  • Loan Amount: The loan amount for an 18-month loan can vary depending on the lender and your eligibility criteria. It is determined based on factors such as your age, income, credit score, re-payment capacity, and the lender's policies./li>
  • Interest Rate: The interest rate for a 1.5-year Personal Loan can vary among lenders. The rate is usually determined based on factors such as your creditworthiness, loan amount, and prevailing market rates. A higher credit score and a good re-payment history can help you secure a lower interest rate.
  • Monthly Installments: You'll need to make fixed monthly payments (EMIs) calculated based on the loan amount, loan tenure, and interest rate. Ensure you can comfortably afford the instalments.
  • Eligibility Criteria: Lenders have specific criteria, including age, income, employment stability, credit score, and financial obligations. Meeting these criteria increases your chances for a loan approval.
  • Purpose of the Loan: A 1.5-year loan can be used for various purposes, such as funding short-term financial needs, paying off high-interest credit card debt, financing a wedding, or any other immediate financial requirement. It's important to clarify the purpose of the loan to the lender during the application process.
  • Prepayment and Foreclosure: Some lenders allow prepayment with certain terms and conditions, including charges. Inquire about prepayment options and charges before taking out the loan.
  • Documentation: To apply for a 1.5-year Personal Loan, you'll need to provide KYC documents, address proof, income proof, bank statements, and employment details. Please note that specific requirements may differ among lenders.

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