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  • Andhra Bank Personal Loan Interest Rates

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  • Andhra Bank offers two different personal loan schemes with interest rates ranging from 11.6% to 13.25% p.a. The interest rates vary depending on whether you are a private sector employee, a self-employed individual or an individual working under a government organisation. Typically, government employees get lower rates of interests. The highlight of both the schemes offered by the bank is that there are no pre-payment or part payment charges and only a nominal processing fee. The maximum loan tenure option available is 5 years.

    Particulars Government Employees Private sector Employees, Self-employed
    Interest Rate 11.6% to 12% p.a. 12.1% to 13.25% p.a.
    Processing Fee Nominal
    Loan Tenure Maximum 60 months
    Loan Amount Depends on the income of the applicant
    Credit Score 700 and above
    Lowest EMI per Lakh Rs.2,204 (11.6% interest for 5 years) Rs.2,230 (12.1% interest for 5 years)
    Pre-Payment Nil
    Part Payment Nil

    Personal Loan Schemes

    The key features and interest rates for either of the personal loan schemes offered by Andhra Bank are shown in the table given below:

    Personal Loan Scheme Best For Interest Rate
    Government employees Private sector employees, self-employees
    Consumer Loans Purchasing durable items and household appliances
    • Up to 36 months: 11.6% p.a.
    • After 36 months: 11.85% p.a.
    • Up to 36 months: 12.1% p.a.
    • After 36 months: 13.1% p.a.
    Clean Loans Meeting immediate financial contingency
    • Up to 36 months: 11.75% p.a.
    • After 36 months: 12% p.a.
    • Up to 36 months: 12.25% p.a.
    • After 36 months: 13.25% p.a.

    Consumer Loan

    Andhra bank offers this loan to individuals who wish to consumer durables such as refrigerators, wooden furniture, TVs, cooking ranges, and other household items. Salaried individuals, self-employed persons, and LIC agents can avail this loan from the bank. Also, pensioners, Central/State government employees, and employees of Public Sector Undertakings (PSUs) who draw pension/salary from Andhra bank are eligible for the loan.

    The maximum quantum of finance available under this scheme is as follows:

    • Salaried: Gross salary of 10 months or 75% cost of the item, whichever is lesser
    • Non-salaried: 40% of gross annual income or 75% cost of the item, whichever is lesser
    • Pensioners: Pension for 4 months or 75% cost of the item, whichever is lesser

    Clean Loan

    This loan scheme is offered to individuals who have an urgent need for cash for any personal reason. In this case as well, employees of private sector companies, non-salaried individuals, and LIC agents can apply for the loan. State and Central government employees, employees of PSUs, and pensions who draw salary/pension from Andhra Bank are also eligible.

    The maximum quantum of finance available under the scheme for each profession is given below:

    • Salaried: Take home pay, after all deductions including EMI for the loan being applied for, cannot be less than 40% of the gross salary
    • Non-salaried: Twice the average annual proven income that is mentioned in the previous three years IT return documents
    • Pensioners: 8 times the monthly pension up to a maximum of Rs.5 lakh
    • LIC agents:
      • Income tax assesses: Twice the average of the renewal commission received over the last three years, up to a maximum amount of Rs.2 lakh.
      • Non-income tax assesses: 50% of the average renewal commission received over the last three year, up to a maximum amount of Rs.2 lakh.

    Details regarding the personal loan interest rates and other important details about the schemes offered by Andhra Bank are given in the table below:

    Particulars Interest Rate Processing Fee Loan Tenure Loan Amount Minimum salary
    Salaried/Self-employed 12.1% to 13.25% p.a. Nominal Up to 60 months Depends on the income of the loan applicant At the discretion of the bank
    Government Employee 11.6% to 12% p.a.

    Factors affecting Personal Loan Interest rate

    Here are a few factors that affect the interest rate offered to you by Andhra Bank:

    • Profession: Banks look into whether you are salaried or self-employed and your pay at the time of application. The bank will check if you have a regular stream of income and if you will be able to repay the loan from the pay you receive from your employer or earn through your business. The interest rate will be fixed accordingly.
    • Your relationship with Andhra Bank: Your relationship with the bank also plays a crucial role in helping you receive a lower rate of interest on your personal loan application. You can maintain a good relationship with your bank by paying your previous loans on time. Besides, Andhra Bank may also consider other factors like whether you pay your credit card bills on time or not while offering an interest rate on your personal loan.
    • Mode of interest: Since the bank offers a floating rate of interest, it is subject to changes. The interest is linked to the base rate and is charged on the daily reducing balance. Therefore, the effective rate of interest would be significantly low each time.
    • MCLR: The interest rate is calculated based on the one-year MCLR fixed by the bank, which in turn depends on the repo rate fixed by the RBI. In case of a change in the MCLR, there may be a change in the interest rate too.
    • Loan amount: The bank will decide the interest rate applicable on the loan amount based on the possible risks. The higher the risk, higher the interest rate.
    • Age of the applicant: Interest rates for older applicants might be higher than it is for younger applicants due to the associated risk. However, this could differ from bank to bank.
    • Repayment capacity: The bank bases its approval for the loan application as well as the interest rate on the repayment capacity of the candidate. In case the repayment capacity is low, the interest rate offered could be higher.

    Key things you should know about Andhra Bank Personal Loan interest rates

    Before you apply for a personal loan with Andhra Bank, an understanding of the following key factor will help you understand Andhra Bank Personal Loan Interest Rate:

    • You need to understand what fixed and floating interest rates are. In a fixed rate personal loan, you need to repay a fixed amount of interest on your personal loan for the whole tenure. But, if you opt for a flexible rate of interest, your personal loan interest rate will change as per the change in bank’s prime lending rate.
    • Your personal loan interest rate may go up, when the repo rate goes up.
    • Andhra Bank may not ask for security or collateral to grant you a personal loan.
    • A good CIBIL score is important to avail a competitive rate of interest on your Andhra Bank Personal Loan Rate. CIBIL score plays a crucial role in determining your personal loan interest rates.

    Illustration

    1. Mr. Mehta, who earns Rs.25,000 per month in a private company, was in urgent need of funds for his son’s graduation studies. He decided to get a Rs. 1 lakh personal loan from Andhra Bank for a 1-year tenure. The interest rate offered to him under the Clean Loan scheme was 12.25% p.a.

    The amortisation table for the loan applied for is as follows:

    For Salary of Rs.25,000 Per Month

    Loan amount Rs.1 lakh
    Processing fee Nil
    Loan tenure 1 year
    Interest rate 12.25% p.a.
    Month Principal Paid(A) Interest Paid(B) Total Payment (A+B) Outstanding Loan Balance
    1 7,876 1,021 8,897 92,124
    2 7,956 940 8,896 84,168
    3 8,037 859 8,896 76,131
    4 8,119 777 8,896 68,011
    5 8,202 694 8,896 59,809
    6 8,286 611 8,897 51,523
    7 8,371 526 8,897 43,152
    8 8,456 441 8,897 34,696
    9 8,542 354 8,896 26,154
    10 8,630 267 8,897 17,524
    11 8,718 179 8,897 8,807
    12 8,807 90 8,897 0

    2. Ms. Soni, who earns Rs.50,000 per month in a private company, wished to get a Rs.1 lakh loan to buy a new refrigerator for her home. She approached Andhra Bank for a 1-year Consumer Loan and was offered the loan at 12.1% p.a. interest.

    The amortisation table for her loan is as follows:

    For Salary of Rs.50,000 Per Month

    Loan amount Rs.1 lakh
    Processing fee Nil
    Loan tenure 1 year
    Interest rate 12.1% p.a.
    Month Principal Paid(A) (in Rs.) Interest Paid(B) (in Rs.) Total Payment (A+B) (in Rs.) Outstanding Loan Balance (in Rs.)
    1 7,881 1,008 8,889 92,119
    2 7,961 929 8,890 84,158
    3 8,041 849 8,890 76,117
    4 8,122 768 8,890 67,995
    5 8,204 686 8,890 59,791
    6 8,287 603 8,890 51,504
    7 8,370 519 8,889 43,134
    8 8,455 435 8,890 34,680
    9 8,540 350 8,890 26,140
    10 8,626 264 8,890 17,514
    11 8,713 177 8,890 8,801
    12 8,801 89 8,890 0

    FAQs

    1. Is there a requirement for a co-obligator? 

    Yes, Andhra Bank requires loan applicants to provide a co-obligator for the loan. The individual’s father, spouse, or any third party who has sufficient income on a regular basis can act as the co-obligator.

    In case of pensioners who have applied for the Clean Loan, the nominee of the pensioner can be the guarantor. In case of LIC agents who have applied for the Clean Loan, an additional guarantor who is also an LIC agent is required.

    2. Do I have to pledge anything for the consumer loan? 

    Yes, as the primary security, you will have to pledge the hypothecation of the item you purchase with the loan. As collateral security, you will have to pledge a LIC policy with a surrender value equal to the loan amount or shares, Units, or NSCs of sufficient value.

    3. Is there a maximum age restriction? 

    In case of the Clean Loan scheme offered by the bank, the maximum age limit for pensioners is 75 years and for LIC agents is 55 years.

    4. Can I get a joint loan? 

    Yes, you can get a joint loan with your spouse from Andhra Bank.

    5. Are any administrative charges applicable? 

    Yes, the bank may apply administrative charges on your loan account that will have to be paid by you every quarter.

    6. How do I repay the loan? 

    You can visit the nearest Andhra Bank branch on the due date to pay your monthly instalment. Alternatively, you can provide standing instructions to the bank to deduct the amount from your savings account.

        

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