• IDFC First Personal Loan Interest Rate

    IDFC First Bank, a merger between IDFC Bank and Capital First, offers personal loan at 15% p.a. interest rate. The repayment tenures on the IDFC First personal loan ranges between 12 months and 60 months. You can avail a personal loan from IDFC First Bank starting from Rs.1 lakh to Rs.25 lakh.

    Interest Rate 15% - 22% p.a.
    Loan Tenure 12 months and 60 months
    Loan Amount Rs.1 lakh to Rs.25 lakh
    Foreclosure Charges 5% of outstanding principal amount (after 6 months)

    Factors Affecting IDFC First Bank Personal Loan Interest Rates

    • Credit Score – If you have a good credit score of more than 750, you can expect a lower interest rate on a personal loan from IDFC First Bank. This is because a score above 750 is an indication of your good repayment history. Before you approach any bank for a personal loan, ensure that you check your credit score on BankBazaar. By doing that, you can approach the bank with confidence if you have a good credit score and take corrective measures to improve your credit score if it is low.
    • Repayment Tenure – Choosing a shorter repayment tenure on your personal loan may fetch you a lower interest rate and help you in paying off the loan faster. Yes, the equated monthly instalments (EMIs) in this case will be higher but over the loan tenure, the interest you pay will be lower. To the lender, a shorter repayment tenure means that the loan will be paid off quicker and it also indicates your higher repayment capacity and hence, they would be happy to offer you a lower interest rate.
    • Relationship with the Lender – If you are an existing customer of IDFC First Bank and have a good transaction history with them, there are chances of you getting a personal loan with lower interest rates. This, of course, will also depend on other factors such as your credit score, income, etc.
    • Income – Having an income on the higher side can fetch you lower interest rates for the simple fact that higher earnings mean higher repayment capacity. Also, your debt-to-income ratio should be low in order to secure loans with lower interest rates.

    Illustration to show how Interest Rates Affect EMI

    The interest rate on your personal loan from IDFC First Bank will have a notable impact on the overall cost of the loan as well as on the monthly EMIs. The interest rate is directly proportional to the EMIs which means that if the interest rate is high, the EMI that you pay will also be high. However, there are other factors too such as the tenure and loan amount that affect the EMIs.

    In the below section, let us explain you how the interest rate on your personal loan will impact your monthly EMIs, with the help of illustrations:

    Scenario 1: A person earning Rs.25,000 a month

    Mr. Dominic wishes to avail a personal loan but since his salary per month is only Rs.25,000, lenders may be a bit apprehensive about lending to him. Also, since he has been working only for a year and has not availed any loans till now, his credit score is on the lower side. In this case, the lenders are likely to charge him a higher rate of interest.

    Let us suppose that he wishes to avail a loan of Rs.3 lakh and the lender agrees to give him a personal loan at an interest rate of 18%. Since the interest rate is high, Mr. Dominic chooses a longer repayment tenure, say 4 years, since he does not want to be burdened by the high EMIs every month.

    Using the EMI Calculator tool, we calculated the EMI he must pay each month, along with the total interest payable and the total loan amount. Mr. Dominic will be paying a monthly EMI of Rs.10,846, interest of Rs.90,446, and hence, the total amount payable by him will be Rs.3,90,446.

    The amortisation table for the above scenario will look like the following:

    Year Interest Paid (A) Principal Paid (B) Total Amount (A+B) Outstanding Loan Balance
    2019 Rs.46,471 Rs.29,451 Rs.75,922 Rs.2,53,530
    2020 Rs.91,846 Rs.38,302 Rs.1,30,148 Rs.1,61,684
    2021 Rs.1,09,812 Rs.20,335 Rs.1,30,147 Rs.51,871
    2022 Rs.51,872 Rs.2,357 Rs.54,229 Rs.0

    Scenario 2: A person earning Rs.50,000 a month

    Mr. Abhishek earns a monthly salary of Rs.50,000 a month and has a credit score of 780. He wishes to avail a personal loan of Rs.7 lakh to go for a vacation to a foreign country. Looking at his income and his credit score, lenders are happy to offer him a personal loan at an interest rate of 12%. He chooses a repayment tenure of 4 years.

    Using the EMI Calculator tool again, we calculated that Mr. Abhishek will be paying a monthly EMI of Rs.21,583 and an interest of Rs.1,84,817. Hence, he will be paying a total of Rs.8,84,817 over the loan tenure. The amortisation table for this scenario will look like the below:

    Year Interest Paid (A) Principal Paid (B) Total Amount (A+B) Outstanding Loan Balance
    2019 Rs.82,478 Rs.46,560 Rs.1,29,038 Rs.6,17,523
    2020 Rs.1,55,468 Rs.65,737 Rs.2,21,205 Rs.4,62,055
    2021 Rs.1,75,186 Rs.46,019 Rs.2,21,205 Rs.2,86,870
    2022 Rs.1,97,404 Rs.23,801 Rs.2,21,205 Rs.89,467
    2023 Rs.89,466 Rs.2,702 Rs.92,168 Rs.0

    Frequently Asked Questions

    1. Is the interest rate on IDFC First Bank personal loan reducing or flat?
    2. The interest rate on IDFC First Bank personal loan is reducing which means that the interest payable on the loan reduces when there is a reduction in the principal outstanding amount.

    3. I have a credit score of 650. Will I be charged a high rate of interest if I wish to avail a personal loan?
    4. Most lenders will be hesitant to lend to people with scores below 750. In your case, since the credit score is very low, you have low chances of securing a loan. However, you can approach the bank and check if you are eligible for a loan. Some lenders may agree to lend to you but you may be charged a high rate of interest.

    5. Are the interest rates on personal loan from IDFC First Bank negotiable?
    6. If your income is on the higher side and your credit score is above 750, you can negotiate with lenders to offer you low interest rate on your personal loan. Honoring your request will lie at the discretion of the bank.

    7. Can I get a top-up loan on my personal loan?
    8. Yes. IDFC First Bank offers top-up loan in cases where the loan amount availed is insufficient to meet your financial requirements.

    9. I am a self-employed individual. Will I get special interest rates on a personal loan from IDFC First Bank?
    10. If your business is making profit after the deduction of taxes and if you have been in the same line of business for at least 3 years, there is a good chance of you getting a personal loan at lower interest rates. Again, this will lie at the discretion of the bank.

        

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