A report by Paisabazaar, the consumer credit marketplace, on November 16, 2023, listed the most affordable home, personal and car loans available. Bank of India leads with a starting rate of 8.30 per cent in home loans. In the car loan space, UCO Bank offers the cheapest rate at 8.45 per cent, while the personal loans list features HSBC at 9.99 per cent. These are the lowest rates offered by the banks to individuals typically having credit scores above 750.
The data shows that public sector banks are providing approximately 30 bps cheaper rates on average than private sector banks. Only LIC Housing Finance among the housing finance companies (HFCs) gives comparable rates to leading public sector banks, where the rates start at 8.40 per cent.
For borrowers seeking loans for up to Rs 75 lakh, the Bank of India provides the cheapest rate, ranging from 8.30 per cent to 10.75 per cent.
For those seeking loans up to Rs 30 lakhs, the State Bank of India, Bank of Baroda, and Union Bank of India offer rates ranging between 8.40 per cent and 10.80 per cent. For loan amounts exceeding Rs 30 lakh but capped at Rs 75 lakh, the same banks present competitive rates ranging from 8.40 to 10.95 per cent.
Among private sector banks, Kotak Bank, Axis Bank, HSBC and HDFC Bank offer the most competitive rates. Amongst them, HDFC Bank offers the lowest rate at 8.35 per cent.
Regarding car loan rates, UCO Bank provides the cheapest rates, starting at 8.45 per cent, followed by State Bank of India at 8.65 per cent. For a loan amount of Rs 5 lakh over a tenure of 5 years, the equated monthly instalments (EMIs) vary from Rs 10,246 to Rs 10,759 at UCO Bank. Also, it has a 1 per cent processing charge that can go up to Rs 1,500.
Union Bank of India and Punjab National Bank offer interest rates ranging between 8.75 per cent and 9.60 per cent. Bank of Baroda and Canara Bank rates span from 8.70 per cent to 11.95 per cent.
While some institutions, like Union Bank of India and State Bank of India, offer loans with nil processing fees, others, such as South Indian Bank and HDFC Bank, charge fees from 1 per cent to 0.50 per cent of the loan amount, up to predetermined limits.
HSBC Banks offers rates from 9.99 per cent to 16 per cent. The processing fee is 2 per cent. State Bank of India has no processing fees until January 31, 2024, and the rate starts from 10.55 per cent.
Punjab National Bank and HDFC Bank also offer competitive rates starting from 10.40 per cent and 10.50 per cent. Understanding the EMIs across different loan amounts and tenures is pivotal for borrowers. For instance, for a loan amount of Rs 5 lakh over five years, EMIs range from Rs 10,621 to Rs 13,414 across various lenders.
While some institutions like Tata Capital and Bank of Maharashtra levy fixed processing fees of Rs 51, others opt for percentage-based fees ranging from 0 to 3.93 per cent, subject to specific minimum and maximum limits.
Note that loans against shares, mutual funds, or fixed deposits can get you cheaper loans than the rates mentioned above. https://www.outlookindia.com/business/pledge-your-fd-shares-gold-to-get-money-at-cheaper-rates-than-personal-loans-news-305183.
Also, consumers should meticulously analyse competitive offerings, factoring in interest rates, EMIs, and associated charges to choose the best deal aligned with their specific requirements and repaying ability
