A personal loan is one of the most popular loan options among customers. We can easily name several reasons behind this but the most prominent one is the ease and convenience with customers who can get the loan amount into their account without any collateral. This is why a personal loan is the number one choice for those who need urgent money. United Bank of India is one of the leading lenders who provide personal loans to customers. The main factor behind its popularity is its affordable United Bank of India Personal Loan Interest Rates.
When going for a personal loan, it is important to know the impact of interest rates. Since a personal loan is an unsecured loan and that’s why lenders charge a bit higher interest rates on the loan amount as compared to other secured loans. Lenders also check the credit score of an individual and then decide the final rate of interest for people. For example, individuals with bad credit scores may get higher United Bank of India personal loan interest rates. This post will shed some light about the factors that affect the interest rates and how do interest rates affect your repayment amount. So, keep reading to know more.
Affect of United Bank of India Personal Loan Interest Rates on Repayment
When a person opts for a personal loan, he or she needs to repay the loan amount within a fixed tenure via Equated Monthly Installments (EMIs). This amount will be paid on a monthly basis towards the lender which consists of both a part of principal amount and a part of the interest amount.
So, the EMI amount directly depends on the interest rate. The higher the rate of interest, the higher would be the EMI amount. That’s why it is always advised to opt for lower United Bank of India personal loan interest rates.
Let’s understand this with an example. Let’s say an individual who wants to opt for a 5-year personal loan of INR 10 lakh. We are taking two different United Bank of India Personal loan interest rates of 9.00% and 11.50% per annum so that we can understand the difference.
On taking the 9.00% per annum interest rate, the EMI amount would be INR 21,247 and the interest outgo will be INR 2,74,823.
On the other hand, when we consider the 11.50% per annum interest rate, the EMI amount and interest outgo would be INR 21,993 and INR 3,19,556.
So, you can clearly see the difference between the two EMI amounts and interest outgo when you choose to opt for a higher United Bank of India personal loan interest rate.
Factors Affecting United Bank of India Personal Loan Interest Rates
There are a few factors that contribute to decide the final United Bank of India personal loan interest rates. These factors are applicant’s age, Employment Type, Job History, Monthly Income, Residing City, Existing Obligations, and most importantly, Credit Score. Individuals with good credit scores can get lower interest rates as compared to people who have low credit scores. Among lenders, a score of 750 or above is considered to be a good credit score while any score less than 600 is considered to be a low credit score among lenders.