A personal loan EMI is the fixed amount you pay to the bank each month until the loan is fully paid off. Personal loans are unsecured loans, which means they don't require collateral.
Key Features of Personal Loans:
- Unsecured: No collateral required, but higher interest rates
- Quick Approval: Faster processing compared to secured loans
- Flexible Usage: Can be used for any purpose
- Fixed Tenure: Usually 1-5 years with fixed EMIs
Factors Affecting Personal Loan Interest Rate:
- Credit Score: Higher score = Lower interest rate
- Income Level: Stable income reduces risk for lenders
- Employment History: Longer tenure with current employer helps
- Existing Debt: Lower debt-to-income ratio is preferred
- Loan Amount & Tenure: Larger amounts and longer tenures may have different rates
Tips to Get Better Personal Loan Rates:
- Maintain a credit score above 750
- Keep your debt-to-income ratio below 40%
- Have a stable job with consistent income
- Compare offers from multiple lenders
- Consider pre-approved loans from your bank
