Lenders charge an interest amount on any kind of credit you opt for. But the importance of interest rates becomes pretty crucial when it comes to a personal loan. What is the reason behind it? Well, first of all, a personal loan is an unsecured loan that means you don’t have to pledge any kind of collateral or security against lenders. To minimize the credit risk, lenders charge a higher interest rate on Personal Loan as compared to secured loans. Among top personal loans, SBI personal loan is one of the most popular options among customers.
The main reason behind its popularity is customers can choose from different schemes according to their choice. But before coming onto this, let’s talk about the impact of Interest Rates on your EMI amount first. Well, you should know that SBI Personal Loan Interest Rates directly affect your repayment amount. So, the higher will be your rates, the higher will be your EMI amount. The reason being your EMI consists of a portion of your principal amount and a portion of the interest amount. In this article, we will be talking about the impact of interest rates on EMI amount through an example and also about SBI Eligibility criteria.
So, let’s start.
Impact of SBI Personal Loan Interest Rates on EMI amount
To understand how interest rates affect your EMI amount, we are giving you an example of an individual who wants to opt for a 4-year SBI Personal loan of INR 5 lakh. To know the impact, we will take two different interest rates of 12% per annum and 15.50% per annum.
On taking the interest rates of 12% per annum, the EMI amount would be INR 13,167 while the interest outgo will be INR 1,32,012.
On the other hand, when you consider the interest rate of 15.50% per annum, you will be paying a monthly installment of INR 14,042 and an interest outgo of INR 1,74,037.
So, from the above example, you can clearly see that when you choose lower interest rates, you will need to pay a lower monthly installment as compared to a situation when you are choosing higher interest rates. This is why an individual always looks closely before choosing the final SBI Personal Loan Interest Rates.
How to use SBI Personal Loan EMI Calculator?
You must be thinking about the calculations we have done above. Well, you can do it too with the help of the SBI Personal Loan EMI Calculator. To use this, you only need to put a few basic details such as Required Loan Amount, rate of interest and Require Tenure (12 to 60 months). As soon as you put it into the tool, you will get
the EMI amount within a second. Other than this, you will also get Interest Outgo and Total amount payable. The results will be accurate and you won’t need to do lengthy calculations when you are using this tool.
What is the SBI Personal Loan Eligibility Criteria?
There are a few conditions that you will need to fulfill if you are looking to apply for an SBI Personal Loan. If you fail to meet any of these conditions, you will not get the personal loan amount. So, what are these conditions? Let’s find out about them below.
- An individual must have a salary account with SBI if he or she wants to apply for a personal loan.
- One of the most important things that you need to remember – the monthly income should be INR 15,000 or more.
- The ratio between Equated Monthly Installments (EMI) and Net Monthly Income (NMI) should be less than 50%. For example, if your NMI is INR 60,000, then your EMIs should not exceed INR 30,000.
- A customer can get a maximum loan amount of INR 20 lakh or 24 times of NMI while the minimum amount is fixed at INR 20,000.
- Customers can get a second SBI Personal Loan anytime after the disbursement of the first loan. Here also, the EMI/NMI ratio should be 50% or less.