Compare Interest Rates: Unsecured Loan can be compared primarily on the basis of interest rates which vary across banks depending on your profile which is further linked to your occupation, salary/income, credit history etc and the company that you work with. The personal loan interest rates ranges from 12% to 22%, you must go for that loan which is offering you at the minimum rate.
Evaluation of various Loan offers: You should first calculate the entire loan cost across banks which constitute the rate of interest & other charges. Evaluate offers keeping the tenure of the loan constant & compare the rate of interest, EMIs & other charges. This process will help you get the Best Loan deal.
EMIs: EMI is the monthly equated installment which constitutes the principal amount and the interest on the principal equally divided across each month in the loan tenure. Use our EMI Calculator to compare EMIs across banks
Tenure: Tenure is the time frame for the loan payments to be paid back to the bank; it ranges from 1 year to 5 years. If you have a longer tenure you will end up paying more interest & will have lower EMI, on the other hand shorter loan tenure will carry higher EMIs & the interest amount is less. You must compare the loan offers by keeping the tenure constant.
The Interest Rates vary between 12.99% and 22% depending on your profile & payment ability. There are basically two types of interest Rates offered by banks which are
In the Reducing Interest Rate calculation method, the interest on your loan keeps on reducing as it is calculated on the reduced principle amount which gets reduced daily, monthly, quarterly or annually. Flat Interest Rate calculation method on other hand implies that your rate of interest remains the same & is calculated over the entire loan period. The outstanding loan amount is never reduced over the loan tenure.