ICICI Bank gives personal loans at an attractive rate of 10.25% onward. And you might get that rate on your borrowed amount if you have a good repayment history. But first, check your credit score. Because it displays your repayment performance. A score of 300 is the lowest, so if you’re near that, it is not good for you! And this may not let you borrow money from any bank or NBFC. So, if you want a low ICICI Bank Personal Loan Interest Rate, correct your score by repaying your due loan EMIs and credit card bills. To learn more about the same, keep reading this page further.
How is the ICICI Bank Personal Loan Interest Rate Determined for You?
Well, the bank considers all your records while computing your interest rate. So, let’s see how ICICI Bank Personal Loan Interest Rate is determined basis these.
The money you Earn Per Month
The monthly income of an individual shows how much he/she can spare for EMIs. An individual with a minimum income of INR 30,000 is eligible for a personal loan. And the requirement of income may vary based on your loan amount. So, for a high loan amount, you need to have such an income to afford its EMIs. Ensuring the same would mean a loan approval is a sheer formality. However, if you are making massive amount of money, you may need an Xero Certified Advisor for managing your finance and taxation issues.
Current Obligations such as EMIs, Credit Card Bills, etc.
When you’re already dealing with loan or credit card repayments and need a lump sum amount, you better have an income to afford the same. Otherwise, the ICICI Bank Personal Loan Interest Rate will be high. The rate of interest increases when an applicant is more likely to default on loan payments given his/her low income. A high interest ensures the security of the loan amount. Because as you know, the bank can’t take your valuables in case of non-payment.
But, they can summon you to court. And this would be a very difficult situation for you. So, if you’re sure that you’ll be able to manage multiple repayments with your monthly salary, only then, apply for a loan. Otherwise, wait till the current obligations are over.
Always Take Help from the ICICI Bank Personal Loan EMI Calculator
You might not know this, but an EMI calculator can help you in many ways. Using the tool, you can find how much interest you’re going to pay. So, if you just want to reduce the interest payout, change the tenures accordingly and see at which period, the interest is less. This way, you can reduce the effects of a high interest rate.
Let’s see an example below to know more about this.
Kajal is a sales representative and needs INR 4 Lakh for her sister’s education. She considered borrowing an ICICI Personal Loan. But due to her poor record in repayment, she gets an interest rate of 19.00% per annum.
If she chooses a tenure of 72 months, the total interest payout will be INR 2,73,250, accounting for 41% of the loan amount. Well, it is quite high. So, she changed the tenure to 48 months. Now, the interest is INR 1,74,082. And for this, she needs to pay INR 11,960 EMI.
You can close your loan early and reduce your interest payments considerably. To do the same, take the help of the ICICI Personal Loan EMI calculator again and see when you can pay a lump sum amount. After deciding the time to prepay your loan, start investing money accordingly. And when the time comes, pay the lump sum amount and reduce your interest obligations.
Note – The bank charges you with a 5% prepayment penalty upon closing the loan before the original tenure.
Also Read: Factors that affect interest on personal loan.