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    Ratnakar Bank Limited (RBL Bank) Personal Loans

    RBL Bank (previously Ratnakar Bank Limited) offers personal loans under a single category to salaried resident individuals at attractive interest rates. These loans can be utilised in any manner as seen fit by the individual and have a relatively faster time for processing. Personal loans are a go to solution when it comes to facing a sudden financial crunch, meeting an urgent purchase or spending obligation. With minimal documentation and short turnaround time, personal loans from RBL Bank can prove to be a boon for salaried individuals.

    RBL Bank Personal Loan Interest Rates

    Personal loan interest rates have seen a gradual rise and a minimal decrease over the period ranging from 2011 to 2015. While in 2011 Q1, the personal loan interest rate was 8.50%, it gradually increased to a high of 11% by the end of 2011. There was a minor temporary drop of 0.10% during the second quarter of 2013 before returning to 11% in the last quarter of 2013. Following the directive issued by the Reserve Bank of India, after the imposed cut on the repo rate, RBL bank reduced the personal loan interest rate by 0.15% and as of May, 2015 it stands at 10.85%.

    Interest Rate (for salaried individuals only)10.85% (depends on the bank’s discretion and other factors)
    Loan AmountMinimum - Rs. 1,00,000 Maximum - Rs. 20,00,000
    Loan Tenure12 months to 60 months
    EMI per lakhRs. 1061
    Prepayment ChargesApplicable at the discretion of the bank
    Base Rate (as of May 2015)10.85%

    Calculating Interest on RBL Personal Loan

    After availing a personal loan of any amount from RBL Bank, the loan amount needs to be paid back in equated monthly installments (EMIs) and every EMI comprises a portion of the principal amount as well as the interest charged. As the personal loan moves towards its maturity, the principal portion gradually increases and 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 10.85% with a loan tenure of 1 year, the payable EMI would be Rs. 8,831 out of which the interest will account for Rs. 5,974.

    For example, a personal loan of Rs. 5,00,000 for a period of 4 years at an interest rate of 10.85% from RBL 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)
    2015 64,432 4,57,409 42,591 21,841
    2016 1,54,636 3,47,019 1,10,390 44,246
    2017 1,54,636 2,24,038 1,22, 981 31,655
    2018 1,54,636 87,029 1,37,009 17,628
    2019 90,205 0 87,029 3,176

    It is worthwhile to note that though the amounts of principal and interest keep varying throughout the loan tenure, the total EMI amount doesn’t change much.

    Factors affecting RBL Personal Loan Interest Rates

    RBL 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 - RBL 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, RBL Bank might provide a preferential rate of interest for personal loans
    • Relationship with the bank - An existing customer of RBL 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 Kotak Bank?

    A personal loan can serve as an emergency financial airbag, 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 Kotak 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 RBL Bank Personal Loan Interest Rates

    Availing a personal loan from RBL 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 RBL Bank for personal loan is subject to the repo rate of RBI and may come down further, but not with an immediate effect
    • The personal loan interest rates in RBL Bank are fixed, not floating and are among the best rates available in the market
    • Personal loans from RBL Bank don’t require a security or a collateral, addition of such factors may not have any impact on the interest rate
    • On approaching RBL 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
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