Major economic reforms have been pushed since the news of the slowdown of Indian economy came through. To get back the Indian economy kicking again in full motion, RBI issued guidelines for loans. It read that all loans issued from now will be linked to the external benchmark specified by RBI. Banks can choose any of the benchmark from the following: repo rate, Government of India three months treasury bill published by FIBIL, Government of India six month treasury bill, or any other benchmark published by FIBIL. Like most banks, BOI personal loan interest rate is linked to the repo rate. The benchmark is called RBLR (Repo Based Lending Rate). Presently, the minimum Bank of India personal loan rate stands for 11.50% per annum. However, the interest rate you procure depends on various factors, which we’ll be discussing in a moment. Till then, let’s check what is the breakup of BOI personal loan interest rate are like:
- Secured Personal Loan: When a loan is secured, it means that you are submitting collateral in order to avail the loan. The risk for the bank minimizes. So comparatively, BOI personal loan interest rate for secured personal loan, is slightly less. It stands at 12.50% per annum.
- Unsecured Personal Loan: As it is an unsecured loan, so Bank of India doesn’t ask you to lay down any securities in order to get the personal loan. Since the default risk associated with unsecured loan is more, the rate of interest rate is also higher resulting to 13.50% per annum.
- Personal Loans to Senior Citizens: People who are 60 years old or more and want a loan upto INR 50,000, Bank of India offers them an interest rate of 11.50% per annum.
Has the BOI Personal Loan Interest Rate come down?
To encourage borrowing in order to make people spend more, the Reserve Bank of India (RBI) has brought down the interest rate by ordering banks to link it to external benchmark. So due to this, Bank of India’s personal loan interest rate has come down. If you are looking to borrow funds, this is the right time to do it because the personal interest rate is at its lowest for Bank of India.
How Can you Negotiate for a Low Interest Rate with Bank of India?
Personal Income: Your net monthly income can help you bag low interest rates from BOI. If you’ve a decent and consistent monthly income flowing into your account, chances are Bank of India will give you the lowest interest rate, which is 13.50%. Important thing to note is that more than the amount of the monthly income, emphasis is on the regularity of the monthly income. Irregular income puts in a high-risk factor zone, whereas regular income reflects that your repayment ability is high.
Relationship with Bank of India: If you have a healthy relationship with BOI in the past, like, an old loan, can help you bag low interest rates. The reason being that Bank of India has confidence in you or trusts you with the loan based on your earlier loan repayment track record.
A Good Credit Score: The term ‘credit score’ is over-emphasized but its relevance and importance still stands still in the case of personal loans. A score of 750 and above is considered to be a good credit score by Indian lenders. Maintaining a good credit score bestows you with negotiation power. It gives you the confidence and upper hand while bargaining for a low Bank of India interest rate.