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Karnataka Bank offers personal loans at an interest rate of 13.15% p.a. The minimum loan amount is Rs.1 lakh and the maximum amount is Rs.25 lakh. You can choose a maximum tenure of up to 24 months (2 years). The loan can be used towards any personal expense of your choice. The minimum salary you must earn per month is Rs.10,000. The processing fee is 0.50% of the loan amount subject to a minimum of Rs.250.
Particulars | Loan details |
Interest Rate | 13.15% p.a. |
Processing Fee | 0.50% of the loan amount (minimum of Rs.250) |
Loan Tenure | Up to 60 months (5 years) |
Loan Amount | Maximum Rs.5 lakh |
Employment Status | Salaried individuals |
Credit Score | Ideal score – above 700 |
Lowest EMI per Lakh | Rs.2,283* |
Note:*The EMI of Rs.2,283 has been calculated using a principal amount of Rs.1 lakh, an interest rate of 13.15% p.a., a tenure of 5 years, and a processing fee of 0.50% of the loan amount.
Let’s look at two examples to understand how all these factors work when it comes to your interest rate and persoanl loan repayment.
Illustration 1: Ashish has a total work experience of 3 years and currently earns a salary of Rs.25,000 per month. He has not been regular in paying his credit card bills. Therefore, his credit score is 630. He wants to borrow Rs.1 lakh from the bank and repay it over a tenure of 1 year. Since he has a low credit score, the bank charges him an interest rate of 18.5% p.a. He also has to pay a processing fee of 0.50%. The table below shows how this loan of Rs.25,000 will have to be repaid over the chosen tenure of 12 months.
Loan particulars:
Month | Principal Paid(A) in Rs. | Interest Paid(B) in Rs. | Total Payment (A+B) in Rs. | Outstanding Loan Balance in Rs. |
1 | 7,650 | 1,542 | 9,192 | 92,350 |
2 | 7,768 | 1,424 | 9,192 | 84,582 |
3 | 7,888 | 1,304 | 9,192 | 76,694 |
4 | 8,009 | 1,182 | 9,191 | 68,684 |
5 | 8,133 | 1,059 | 9,192 | 60,552 |
6 | 8,258 | 934 | 9,192 | 52,293 |
7 | 8,386 | 806 | 9,192 | 43,908 |
8 | 8,515 | 677 | 9,192 | 35,393 |
9 | 8,646 | 546 | 9,192 | 26,747 |
10 | 8,779 | 412 | 9,191 | 17,967 |
11 | 8,915 | 277 | 9,192 | 9,052 |
12 | 9,052 | 140 | 9,192 | 0 |
Total | 99,999 | 10,303 | 110,302 |
Note: The figures in the table are taken only for illustrative purposes. The actuals may vary. Please contact the bank for the correct figures.
Illustration 2: Santosh is earning Rs.50,000 per month as salary. He has a total work experience of 5 years and works for a reputed organisation. He wants to borrow an amount of Rs.1 lakh from the bank. He has a credit score of 845 and due to this, the bank is offering him an interest rate of 13.15% p.a. He chooses a tenure of 1 year and his processing fee is 0.50% of the loan amount. Let’s look at how Santosh has to repay his loan of Rs.50,000 over a tenure of 12 months.
Loan particulars:
Month | Principal Paid(A) in Rs. | Interest Paid(B) in Rs. | Total Payment (A+B) in Rs. | Outstanding Loan Balance in Rs. |
1 | 7,843 | 1,096 | 8,939 | 92,157 |
2 | 7,929 | 1,010 | 8,939 | 84,228 |
3 | 8,016 | 923 | 8,939 | 76,212 |
4 | 8,104 | 835 | 8,939 | 68,109 |
5 | 8,192 | 746 | 8,938 | 59,916 |
6 | 8,282 | 657 | 8,939 | 51,634 |
7 | 8,373 | 566 | 8,939 | 43,261 |
8 | 8,465 | 474 | 8,939 | 34,797 |
9 | 8,557 | 381 | 8,938 | 26,239 |
10 | 8,651 | 288 | 8,939 | 17,588 |
11 | 8,746 | 193 | 8,939 | 8,842 |
12 | 8,842 | 97 | 8,939 | 0 |
Total | 100,000 | 7,266 | 107,266 |
Note: The figures in the table are taken only for illustrative purposes. The actuals may vary. Please contact the bank for the correct figures.
Usually, banks allow you to get a co-applicant to apply for the loan along with you. This way, even if you have a low credit score, you can get good rates provided your co-applicant has an excellent score. Before you apply, ask the bank if you have such options.
This depends on what you prefer. A fixed rate does not change even if the market rate changes. A floating rate, on the other hand, is likely to change every time the market rate changes. Floating rates are usually lower than fixed rates.
Yes, it is important to calculate your EMI before you submit your loan application. This will show you whether you will be able to afford the loan at the given interest rate or not. You can use BankBazaar’s online EMI calculator to find out your EMI.
You may get a lower rate if you choose a longer tenure. But this varies from one bank to another. You can get in touch with Karnataka Bank for the latest information on this. Do keep in mind that a longer tenure will keep you in debt for a longer period. As such, you may end up paying more interest in total. Calculate your total repayment amounts before you choose your tenure.
For information on other fees and charges, you can contact the bank directly.
A GST rate of 18% will be applicable on banking services and products from 01 July, 2017.
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