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    About Federal Bank Personal Loan

    From renovating your home and buying appliances to funding college education and weddings, personal loans offered by Federal bank can help you fulfil any of your dreams. Customers can acquire a personal loan with the help of simple, minimal documentation in addition to a hassle-free process. Federal bank offers personal loans for a tenure of 72 months. Customers do not have to provide any guarantors to avail of personal loans offered by Federal bank. With over 1000 branches in the country, Federal bank ensures that customers get the desired products.

    Federal Bank Personal Loan Interest Rates

    Interest rates offered by Federal bank will be based on the risk appetite of its customers. The interest rate may vary from base rate + 5.30% to base rate + 10.85%. Federal bank has a base interest rate of 9.95% p.a (w.e.f Jun 18, 2015). Federal bank currently offers a floating interest rate of 15.25% to 20.80%. The base rate of Federal Bank depends on the its cost of deposit, Statutory Liquidity Ratio (SLR), Cash Reserve Ratio (CRR), administrative expenses and average return on capital. The final lending rates of Federal bank will be reviewed once in a quarter.

    Federal Bank Personal Loan Interest Rates Table:

    Interest rates - Maximum 15.25% to 20.80% (floating)
    Loan amount- Maximum Rs. 5 lakhs
    Loan tenure- Maximum 72 months

    EMI per lakh (lowest interest rate and maximum tenure)

    (Calculate EMI on your Personal Loan)

    Processing charges 0.50% of loan amount or Rs.500

    How to Calculate Interest/EMI on my Federal Bank Personal Loan?

    EMI comprises the interest on loan in addition to the principal to be repaid. The sum of principal and interest is divided by the tenure of the loan. Top rate aggregator websites such as provide a personal loan EMI Calculator which helps customers calculate the exact EMI which needs to be paid. All a customer has to do is enter the details of loan amount, tenure, interest rate applicable and processing fee, if any and click ‘calculate’. The customer will then find all the required information such as amortization figures and loan repayment figures for a specific loan amount. An amortization table provide a breakdown of loan repayment. Floating Rate EMI calculation:

    Borrowers should examine both possibilities of any increase or decrease in the rate of interest to calculate the exact EMI. Borrowers can then decide if they can afford to pay the EMI and choose their required loan tenure. Borrowers should, therefore, consider the following two options:

    • Deflation: If the rate of interest decreased by 1% to 3%, your EMI will reduce, in which case, you can opt for a shorter tenure.
    • Inflation: If the rate of interest increases by 1% to 3%, you will have to pay a higher EMI for the chosen loan tenure.

    For instance, Rahul Bharani, a 35-year-old IT employee, takes a personal loan of Rs.5 lakh at an annual interest rate of 15.25% for 5 years. Rahul, therefore, has to pay an EMI of Rs. 11,961 in the first month after undertaking the loan. The amortization table is as follows:

    Year Principal paid (Rs) Interest paid (Rs) Balance amount (Rs)
    Year 1 72,186 71,343 4,27,814
    Year 2 83,997 59,531 3,43,817
    Year 3 97,741 45,787 2,46,077
    Year 4 1,13,734 29,795 1,32,343
    Year 5 1,32,343 11,185 0

    Factors affecting your Federal Bank Personal Loan interest rates

    There are various factors which affect interest rates offered on Federal bank personal loan as listed below.

    • Loan tenure: Interest rate offered by Federal bank depends upon the loan tenure chosen by customers. If the customer opts for a short loan tenure, the bank is most likely to charge a higher interest rate as compared to loans offered on longer tenures.
    • Relationship with Federal bank: If a customer has a good rapport with his or her bank, there is no trust deficit. Consequently, the bank will be in a position to reduce their interest rates offered to privileged customers. Also, a long-standing customer of a bank can negotiate a lower interest rate, provided he or she fulfils all the required eligibility criteria for availing of a personal loan.
    • Repayment capacity: The repayment capacity of a borrower is of seminal importance. Banks usually provide personal loans up to 10 times the monthly salary of a customer. Banks check the CIBIL score of an applicant to determine his repayment capacity. Federal bank will offer attractive interest rates to loan applicants with a regular income and a robust credit history,
    • Employment details: The employment history and profile of a customer plays a pivotal role in determining the interest rates offered by Federal bank bank. Salaried individuals working with high net worth companies may be offered lower interest rates as compared to those who are self-employed, who, typically, don’t have a steady income.

    Note: Federal bank can alter its Interest rates at its discretion.

    How CIBIL score affects Federal bank Personal Loan interest rate?

    CIBIL score reveals an individual’s repayment capacity and credit history. A robust CIBIL score will boost the chances of a loan applicant to acquire a personal loan at competitive interest rates. If loan applicants have a low CIBIL score, they are unlikely to get their loan approved. If Federal bank decides to approve a loan request by an individual who has a low credit score, the interest rate charged on the loan may be higher compared to those who have a good credit score.

    Key things about Federal bank Personal Loan interest rates

    • It is always prudent to have a robust credit score to avail of the credit facility from any bank. A good credit score paves the way for a loan getting approved in that all banks including Federal bank review the credit history and repayment capacity of an individual before approving a loan.
    • When the RBI raises the repo rate, banks do not immediately raise their interest rates. In several cases, if a bank has had a lean growth rate, it will be reluctant to immediately pass on the increased rates to its customers. Banks analyze their liquidity and cost of funds before passing on the hike in repo rate to their customers by way of increased interest rates.
    • Floating interest rate changes as per the bank’s base lending rate.
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