Multiple banks. Different interest rates. Call it a "conflict of interest".

Lakshmi Vilas Bank Personal Loan Interest Rates

Lakshmi Vilas Bank offers personal loan interest rate at 11.50% p.a. and while the minimum loan amount that can be availed is Rs.10,000 there is no cap on the maximum amount. The repayment tenure for the Lakshmi Vilas Bank personal loan, labelled as ‘Lakshmi Easy Loan’, can be made in a maximum of 60 months. The Lakshmi Easy Loan can be availed to fulfill domestic and personal expenses such as investing in a business, paying income tax, etc.

Interest Rate 11.50% p.a.
Processing Charges 0.25% of the loan amount
(Minimum Rs.50 for demand loans and Rs.100 for secured overdrafts)
Repayment Tenure 60 months or 2 months before the maturity date of collateral pledged, whichever is earlier
Minimum Loan Amount Rs.10,000
Maximum Loan Amount No limit
Margin 10% of the accumulated values of the pledged Kisan Vikas Patras KVPs) and National Savings Certificates (NSCs) or surrender values of LIC policies

Features of Personal Loan from Lakshmi Vilas Bank

  • To avail this loan, you can pledge KVPs, NSCs, and LIC policies.
  • The interest rate on the personal loan from Lakshmi Vilas Bank is linked to the Marginal Cost based Lending Ratio (MCLR).
  • You can fund your personal and business expenses with the Lakshmi Easy Loan.
  • There is no limit on the maximum loan amount that can be availed.

Factors affecting Lakshmi Vilas Personal Loan Interest Rates

The interest rates on Lakshmi Vilas Bank depend on a lot of factors and we’ve listed them for you below:

  • Amount of loan availed – You are likely to receive a lower interest rate on personal loans from Lakshmi Vilas Bank if you avail a lower amount of loan. This is because the lower the amount of loan, the higher are the chances of you being able to repay the loan faster which is what most lenders want. This will, however, lie solely at the discretion of the bank.
  • Repayment tenure – A shorter repayment tenure may lead to the bank offering you a lower interest rate as it indicates your high repayment capacity. Opting for a shorter tenure will also ensure that you do not pay higher interest over the loan tenure.
  • Income – If your yearly income is high, there are chances of the bank offering you a lower rate of interest simply because a higher income shows your ability to repay the loan. The bank may also offer a lower interest rate if your debt-to-income ratio is low.
  • Assets – Depending on the valuation of your assets, Lakshmi Vilas Bank may offer you preferential rates of interest on the personal loan.
  • Credit score – Most lenders offer competitive interest rates to people with credit scores above 750. So, if your credit score is above this limit, you can negotiate with the bank for a lower interest rate. Before you approach the bank, make sure that you check your credit score. Doing so will either give you confidence while approaching the lender if you have a good score or will let you take corrective measures to enhance your score if it is low.

Illustration

When you avail a personal loan from Lakshmi Vilas Bank, the amount of Equated Monthly Payments (EMIs) that you need to pay each month will depend on the interest rate, loan amount, and the repayment tenure. The interest rate, in turn, will depend on a lot of other factors such as your income, credit score, etc. Below, we will talk about how interest rate impacts the EMI by considering 2 scenarios:

Scenario 1: Individuals Earning Rs.25,000 a month

Mr. Chowdhury draws a monthly salary of Rs.25,000 and wishes to avail a personal loan of Rs.3 lakh. His credit score is only 730 as he has been working only for the last 1 year. Since most banks look at a credit score of over 750 to offer a loan, Mr. Chowdhary was initially refused a loan by many lenders. One lender offered him a loan, but he was charged a high rate of interest. Let us say he was charged 20% and he chose a repayment tenure of 3 years. Supposing that the processing fee of the loan is 2%, let us look at the EMI he must pay for the loan along with the amortisation table.

Year Principal Paid (A) Interest Paid (B) Total Payment (A+B) Outstanding Loan Balance
1 Rs.45,257 Rs.32,787 Rs.78,044 Rs.2,54,744
2 Rs.90,870 Rs.42,918 Rs.1,33,788 Rs.1,68,871
3 Rs.1,10,808 Rs.22,981 Rs.1,33,789 Rs.53,063
4 Rs.53,064 Rs.2,682 Rs.55,746 Rs.0

So, for the above case, Mr. Chowdhury will be paying a monthly EMI of Rs.11,149, a processing fee of Rs.6,000 and total interest of Rs.1,01,367. Hence, the total amount payable over the loan tenure is Rs.4,07,367.

Scenario 2: Individuals Earning Rs.50,000 a month

Mr. Debbarma has a monthly income of Rs.50,000 and has a credit score of more than 800. He wants to avail a personal loan of Rs.5 lakh. Since his credit score is excellent, he was offered a lower rate of interest by his bank. Let us assume that he was offered an interest rate of 12% for a tenure of 2 years and for a processing fee of 2%.

Using the EMI Calculator tool on BankBazaar, the amortisation table will look like below:

Year Principal Paid (A) Interest Paid (B) Total Payment (A+B) Outstanding Loan Balance
1 Rs.1,33,714 Rs.31,041 Rs.1,64,755 Rs.3,66,285
2 Rs.2,52,053 Rs.30,390 Rs.2,82,443 Rs.1,14,234
3 Rs.1,14,234 Rs.3,349 Rs.1,17,683 Rs.0

In this case, Mr. Debbarma will be paying a monthly EMI of Rs.23,537 and a total interest of Rs.64,882. He will be charged a processing fee of Rs.10,000 and hence, over the loan tenure, the total cost of the loan will be Rs.5,74,882.

FAQs

1. Will the interest rates on Lakshmi Vilas Bank personal loan be fixed?  

Lakshmi Vilas Bank offers floating interest rates on its personal loan. The interest rates are linked to the MCLR which means it will change when there is a chance in the MCLR.

2. I have a credit score of 700. Am I eligible for a personal loan from Lakshmi Vilas Bank? 

Most lenders will be hesitant to offer you a personal loan if your credit score is below 750. With your score, you may be able to convince the lender to offer you a loan but may be charged a higher rate of interest. This will lie at the discretion of the bank.

3. Can I negotiate with the bank for a lower interest rate? 

You can get in touch with the bank and negotiate for a lower interest rate provided you have a good credit score (above 750) and if you are an existing customer of Lakshmi Vilas Bank. The interest rate may also depend on the kind of security you pledge.

4. Can I pledge my gold jewelry for availing a personal loan from Lakshmi Vilas Bank? 

Unfortunately, the personal loan from Lakshmi Vilas Bank is given only against government securities such as KVPs, LIC policies, etc. However, if you are planning to pledge your gold jewelry for availing a loan, you can opt for another scheme known as ‘Lakshmi Gold Power’.

5. If I have a query on Lakshmi Vilas Bank personal loan, who do I get in touch with? 

If you have any queries related to personal loan or any other product, you can reach out Lakshmi Vilas Bank at its toll-free number – 1800-425-2233. You can also fill out a ‘Product Query’ form available on the bottom left-hand corner under the ‘Loans’ section.

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