Canara Bank offers low-interest rate personal loans that will help you realise your dreams. Whether it is house renovation or wedding, Canara Bank personal loan interest rates will help you save money with affordable Equated Monthly Instalments.
|Interest rate||13.60% p.a.|
|Loan Amount||Equivalent to gross salary of 6 months or Rs.3 lakh, whichever is lesser|
|Loan Tenure||Up to 60 instalments|
|Lowest EMI||Not available|
|Processing Fee||0.5% of the loan amount, a minimum of Rs.1,000 and a maximum of Rs.5,000|
|Age||No limit specified|
|Prepayment Charges||Not available|
|Foreclosure Charges||Not available|
Canara Bank Personal Loans are a credit option that can help an individual with sudden expenses, an occasional vacation, pay fees, make arrangements for weddings and the like. In short, personal loans from Canara can help in almost any expenditure that one hasn’t actually planned for in advance and thus make the best of a worst situation many times. Personal loans from Canara Bank are readily available through minimal documentation and low waiting periods.
Canara Bank Personal Loan Interest Rates
Canara Bank Personal Loan interest rates have varied within 2-3% in the past five years and the recent changes in the repo rate from RBI have resulted in a lowering of the interest rate recently. As of May 2015, the rates for personal loans from Canara Bank range from 10.5-15% and might be applicable for salaried and self-employed individuals. The interest rates are variable for different customers and categories of customers and are at the sole discretion of the bank.
Calculating Interest on Canara Personal Loan
A personal loan of any amount from Canara Bank needs to be paid back in equated monthly installments (EMIs) and every EMI consists of a portion of the principal amount as well as the interest. As the personal loan moves towards maturity, the principal portion gradually increases and consequently the interest portion decreases.
The method for calculating the EMI on a personal loan can be mentioned as follows -
E = P*r*[(1+r)^n/((1+r)^n-1)]
Here E - Monthly EMI, r - rate of interest per month, n - number of years.
For a ballpark figure of Rs. 1,00,000 at an interest rate of 10.5% with a loan tenure of 1 year, the first EMIs for the first year would be Rs. 44,074 out of which the interest will account for Rs. 3,674.
For example, a personal loan of Rs. 10,00,000 for a period of 5 years at an interest rate of 10.5% from Canara Bank would have the following scenario for the EMI to be paid (starting from August 2015) -
|Year||Total Payment (INR)||Balance (INR)||Principal Portion (INR)||Interest Portion (INR)|
It is to be noted that though the amounts of principal and interest keep varying throughout the loan tenure, the total EMI amount doesn’t change much.
Factors affecting Canara Personal Loan Interest Rates
Canara personal loan interest rates stay the same for any salaried individual who has been approved for availing a personal loan. The approval process might be dependent on several factors such as -
- Personal loan amount - Based on the amount of personal loan applied for, the interest rate might be changed beyond the advertised rate for specific customers or categories of customers. A higher loan amount could cause a lower or higher rate of interest
- Tenure of the personal loan - Based on the discretion of the bank, a longer tenure might have a lower or higher rate of interest
- Repayment capacity - Canara Bank keeps a tab on the income and consequently the repayment capability of a customer. Depending on amount of cash inflows and transactions carried out by a customer, the bank might offer some leniency on personal loan interest rates
- Income - Income plays an important part in making sure if one is eligible for even applying for the loan. Additionally, the bank may change the interest rate for a personal loan based on the income of a customer
- Assets - Presence of fixed and movable financial assets play a crucial loan in improving the financial picture of one’s life. Based on the same, Canara Bank might provide a preferential rate of interest for personal loans
- Relationship with the bank - An existing customer of Canara Bank is bound to get preference when applying for a personal loan and the bank might consider providing a better rate of interest to the customer
- CIBIL scores - Approval of a personal loan takes one’s credit history into account. So, the CIBIL score might also work in favour of getting a better interest rate from the bank
All the above factors notwithstanding, any change in the advertised interest rates is at the sole discretion of the bank.
How does the CIBIL Score affect Personal Interest Rates of Canara Bank?
A personal loan can serve as an emergency fund, but a bit of planning always helps and it especially comes in handy when dealing with CIBIL scores. Along with a credit history report, scores from CIBIL play a pivotal role in furthering the case of getting a personal loan approved from Canara Bank. CIBIL scores range from 300 to 900 and a score above 700 is considered a good one. Scores above 750 might allow the bank to consider offering a better rate of interest to the customer. Else the rates might be higher than expected. Doing a check on the CIBIL score and fixing the same to an appreciable level might help in getting preferential interest rates.
Key Points regarding Canara Bank Personal Loan Interest Rates
Availing a personal loan from Canara Bank is easy for salaried individuals who meet the base minimum eligibility criteria, however, the following points should be borne in mind -
- The interest rates in Canara Bank for personal loan are subject to the repo rate of RBI and may come down further, but not with an immediate effect
- The personal loan interest rates in Canara Bank are floating and not fixed
- Personal loans from Canara Bank don’t require a security or a collateral, addition of such factors may not have any impact on the interest rate
- On approaching Canara Bank for a personal loan, the bank will already have a look at your credit score. Based on the same, the loan amounts might be vary, but there might not be any change in the interest rates