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Personal Loan Interest Rate
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How to Calculate Personal Loan Interest Rate Online?
What is the Personal Loan Interest Rate?
A Personal Loan is a one-stop solution for all of your urgent financial needs such as a medical emergency, wedding expenses, higher education fees, and more. It is an unsecured form of financing, which means you do not need to put up any asset as collateral. When you avail of a Personal Loan, you need to repay the principal amount along with interest over a set period. So, before applying, you must be aware of the Personal Loan interest rate as well as the factors that influence the rate of interest.
Current Personal Loan Interest Rates 2025
Hero FinCorp offers competitive interest rates on Personal Loans starting at 1.58% per month. Whether you are a salaried individual or self-employed, Hero FinCorp can help you meet your Personal Loan needs. For more details about Personal Loan interest rates and other fees, look below.
| Fees & Charges | Amount Chargeable |
|---|---|
| Interest Rate | Starting from 1.58% per month |
| Loan Processing Charges | Minimum 2.5%+ GST |
| Prepayment Charges | N.A. |
| Foreclosure Charges | 5% + GST |
| EMI Bounce Charges | Rs 350/- |
| Interest on Overdue EMIs | 1-2% of the loan/EMI Overdue Amount Per Month |
| Cheque Bounce | Fixed Nominal Penalty |
| Loan Cancellation | 1. Online loan app does not charge any cancellation charges |
| 2. Interest amount paid is non-refundable | |
| 3. Processing charges are also non-refundable |
How to Calculate Rate of Interest on Personal Loan?
Your Personal Loan rate of interest in India can be calculated using two different methods. One is a flat interest rate, and another is a Personal Loan reducing rate of interest. Let us look at both methods in detail:
- Flat Interest Rate
Under this method, the applicable personal loan interest rate is charged on the total principal loan amount throughout the tenure. To compute your interest rate using this method, use the following formula:
Total Interest Payable = (Principal × Rate of Interest × Loan Term) / 100
Once you know the total interest payable, you can easily compute your EMI by using the below formula.
EMI = (Principal＋Total Interest Payable) / Total Loan Tenure in Months
- Reducing Balance Method
Under this, the personal loan interest rate is computed on the outstanding principal balance. It implies that every time you pay your EMI, the interest on the remaining balance is recalculated. To calculate the EMI using this method, use the following formula.
EMI = [P x R x (1+R)^N] / [(1+R)^ (N-1)]
Where,
E is the EMI
P is the Principal Loan Amount
R is the Rate of Interest
N is the Loan Tenure in months
How to Get the Best Personal Loan Rate of Interest?
Do not skip EMIs
Do not skip paying your loan EMI. You can also opt for an auto debit to ensure you do not miss an EMI.
Shop around
Do consider checking the Personal Loan interest rates of other lenders before you finalise your loan.
Negotiate with the lender
Do negotiate the interest rate with your lender, especially if you have a good credit score.
Points to Consider while Availing of a Personal Loan
Besides low rates of interest for Personal Loans, other factors to consider include:
- Processing Fee: It is a one-time fee that covers the costs of processing your loan application. Even though the fee is nominal, borrowers should still consider it.
- Pre-closure Fees: If you pay off your outstanding dues before the binding due date, the lender will levy a foreclosure fee. Read the pre-closure terms and charges before signing the loan document.
- Eligibility Criteria: Before applying for a Personal Loan, check the eligibility criteria on the lender's website. Choose a lender whose qualifying conditions match your profile and makes you eligible for the lowest Personal Loan interest rates in India.
- Special Offers: Check the availability of special festive offers and discounts.
- Disbursal Time: In the face of a crisis, every minute matters. If you are availing of the Personal Loan to meet some urgent financial needs then do not forget to check the lender’s loan disbursement time. This, usually, varies from lender to lender. Choose a lender who offers instant personal loan approval.
How to Secure the Lowest Interest Rate for a Personal Loan?
If you're hoping to get the best possible interest rate on a Personal Loan, be conscious about your credit profile and check the rates offered by different providers. In general, lenders are able to offer a lower rate to applicants who have a stable source of income and a low debt-to-income (DTI) ratio. With just a little bit of work, you'll be able to save thousands of rupees in interest payments.
Ways to get the lowest interest rate:
- Maintain a high credit score (750 and above)
- Compare fees and rates from lenders
- Choose a shorter repayment term
- Have a low debt-to-income ratio
- Apply with a co-applicant to improve your eligibility
Factors That Influence Personal Loan Interest Rates in India
If you want to get a low-interest personal loan, you first need to learn about the factors that affect your interest rate.
Age
Applicant should be between 21-58 years
Citizenship
You should be a citizen of India
Work Experience
Two years for self-employed and six months for salaried individuals
Monthly Income
Applicant should at least earn a minimum amount of R.15,000 monthly
Personal Loan Interest Rates Related Blogs
Frequently Asked Questions (FAQs)
You can compute the personal loan interest rate manually by using the following mathematical formula:
Interest = Principal × Interest Rate × Tenure / 100
You may also calculate it online using the rate of interest on a personal loan calculator.
Hero FinCorp’s Personal Loan interest rate starts at 1.58% per month, depending on factors such as age, income, and credit history of the applicant.
Your income reflects your repayment capacity. If your current personal loan interest rate is on a higher side, it could mean you don't earn enough income and the lender considers you a high-risk borrower.
When evaluating your personal loan application, the lender calculates how much of your income goes toward existing debt payments. If you spend more than half of your income on debt repayment, the lender will either deny your loan application or charge you a higher interest rate.
Working for a reputable company ensures job security and stable income. Also, your work experience reflects your employment stability. Therefore, you may get a personal loan with a lower interest rate if you work for a reputable company and have sufficient work experience.
Yes, you may acquire a low-interest personal loan if you apply with a co-applicant who has a good credit history. Another alternative is to find a creditworthy guarantor.
Follow these tips to obtain a low-interest personal loan:
Improve your credit history
Make timely EMI payments
Negotiate with your lender
Explore the offers with different financial institutions
At Hero FinCorp, our interest rate for Personal Loan 1.58% per month or 19% to 30% per annum. However, your Personal Loan interest rates may vary according to your eligibility, credibility, and repayment capacity. We look at your income, financial obligations, employment, work experience, age, credit score, and other factors to determine your eligibility and offer you an appropriate Personal Loan interest.
The interest rate for Personal Loan at Hero FinCorp starts from 1.58% per month or 19% to 30% per annum. However, it may vary depending on several factors we consider before sending you a loan offer. These include the following:
Income: You must be earning enough to repay your loan’s Equated Monthly Instalments (EMIs) conveniently.
DTI Ratio: You must not be already indebted heavily, which might make the EMI repayment challenging for your finances. Ideally, your Debt to Income (DTI) ratio should not exceed 40% of your monthly income.
Age: You must have good earning years in your career to repay the EMIs without hassle. We consider applicants aged 21-58 years.
Employment: To determine your interest rate, we want to ensure stable employment with minimum monthly income of Rs 15,000.
Work Experience: We consider salaried applicants with a work experience of at least six months in the same job. Self-employed professionals should have in their business for over two years.
Credit History: We check your credit score to evaluate your repayment habits and see how responsibly you handle credit.