How Personal Loan EMIs Work
Personal loans are unsecured, meaning no collateral is required. Because of this, interest rates are higher — typically 10.5% to 24% depending on your credit score, income, and employer profile.
Watch out for the processing fee (usually 1%-2.5%) which is deducted upfront, reducing the amount you actually receive. Foreclosure or prepayment penalties of 2%-6% may also apply if you close the loan early.
Frequently Asked Questions
Can I prepay my personal loan?
Yes, but most banks charge a foreclosure penalty of 2% to 6% on the outstanding principal if paid before the tenure ends.
What credit score is needed for a personal loan?
A CIBIL score of 750 or above generally gets you the best interest rates. Below 650, approval becomes difficult or rates rise sharply.