A Detailed Overview of the Lowest Interest Rates on Personal Loans By Union Bank and Central Bank of India

Low Interest Rates on Personal Loan

Low Interest Rates on Personal Loan

In India, different banks offer personal loans. A large number of Indians apply for personal loan to meet multiple financial requirements. However, the availability of too many options often confuses borrowers. They fail to decide which bank is ideal for borrowing personal loan products. Apart from other terms and conditions, interest applied on loans impacts the borrower’s decision up to a great extent. Everyone loves to take loans with the lowest possible interest fees. Hardly anyone goes for loans with higher interest charges. Union Bank and Central Bank are two leading financial organizations in India. In today’s article, we will look at personal loan products offered by these two banks. This will increase borrowers’ knowledge and help them choose the right loan product with a lower interest fee.

A Brief Introduction To Union Bank Loan Scheme And Central Bank Loan Scheme

Union Bank Loan Scheme Central Bank Loan Scheme
Union Bank of India personal loan is an ideal financial aid for anyone looking for immediate cash injections. Eligible borrowers are allowed to take a loan up to 15 lakh for 60 months. The borrower is entitled to use the borrowed money to meet almost all essential financial commitments. The interest rate applied on the borrowed cash starts from 8.90% to 13% per annum. The bank offers a wide range of personal loan products to eligible Indians. On average, they need to maintain a credit score of a minimum of 700 or more to get personal loans from the Union Bank of India. The processing fee applied on loan is 0.5% of the approved amount. The Central Bank of India also offers personal loan products to a large number of eligible Indians. They can get funds maximum of upto 10 lakh for four years. Borrowers can use the required money to meet almost all essential and unavoidable financial commitments. The bank doesn’t intervene in the use of the borrowed money. The interest rate on a loan starts from 8.45% – 10.05% p.a. The processing fee of the loan is 1% of the approved loan amount. You need to maintain a Credit score of 750 or more to get funds under the central bank loan scheme.

Also Read: Account Aggregator System in India Explained

  • Union Bank Personal Loan Interest Rates Vs. The Central Bank of India Personal Loan Interest Rates

It wouldn’t be unfair to say that the interest rate on loans can attract or repel borrowers. Generally, people tend to take loans with fixed and lowest possible interest rates. For this, they need to look at different loan products available in the market and compare interest rates with each other. Both Union Bank of India and Central Bank of India offer personal loans with reasonable interest fees. If you are taking a personal loan from the Union Bank of India, the interest rate is likely to range between 8. 90 % to 13% p.a. If you take a loan from the Central Bank of India, the interest fee may start from 8.45% – 10.05% p.a.

The interest rate applied on the borrowed money may change from person to person depending on their requirement for cash, credit score, income and expenses, prepayment capabilities. To get a loan with a reasonable interest fee, you need to decide on an ideal loan amount and take other steps. The bank may treat you favorably if you hold an active account with them and meet all qualifying parameters. If you compare the interest fees of these two banks with other Indian banks, they appear pretty competitive & reasonable.

  • Employment & Salary Criteria

Employment and Salary Criteria

To get personal loans from the Union Bank of India or Central Bank of India, you need to qualify for the employment and salary criteria. In short, the general eligibility criteria for personal loans of both banks are detailed here below:

Qualifying Criteria Union Bank of India Central Bank of India
Age 21-58 years (Salaried people) and

25-65 years (self-employed individuals)

21-58 years
Type of Employment Permanent or confirmed employment with central or state government, company, business entity or firm. Self-employed must have a registered business entity. They should have been running their business regularly for the last two years. Almost identical
Minimum Monthly Salary Rs 15,000 PM. Those who live in Delhi, Mumbai, Kolkata, Chennai, Bangalore, Ahmedabad & Pune need to earn Rs 20,000 PM to apply for the loan. Rs 20000
Bank Account & Salary Credits You need to maintain an active bank account with Union Bank of India or any other Indian bank. You must have a good record of regular salary credits in your bank account. Maintain an active bank account with the Central Bank of India or any other Indian Bank.

Also Read : Expert Guide to IDFC Bank Personal Loan and Interest Rates

  • Documentation

Documentation

Both the Union Bank of India and Central Bank of India need a wide range of documents to process your application for loans and announce their decision. You should arrange the following documents to apply for loans:

Union Bank of India Central Bank of India
Correctly filled application form,

Identity proof,

Address proof,

Bank account details,

Income proof,

Proof of out-goes such as LIC payments, loan installments, etc.

six months’ bank account statement,

3 months’ salary slip,

Letter of undertaking from your employer to deduct the loan amount from your bank account.

Filled application form,

Latest Passport size photographs,

Id proof,

Proof of Address,

Processing fee cheque,

6 month’s bank account statement,

3 month’s salary slip with form 16

For Self-employed Individuals:

Statement of your company’s current bank account and

Latest ITR or form 16

Also read: Canara Bank Pre-Approved Personal Loan

  • Loan Amount

The quantum of loan amount decides the intention of borrowers. If a cash emergency demands lots of money, applicants will apply for the loan, which promises them a handsome amount as a loan. Both the union bank loan scheme and central bank loan scheme promises borrowers a good amount of money when they need funds desperately.

Union bank loan scheme allows all eligible borrowers to get funds up to 15 lakhs for five years. If you resort to a central bank loan scheme, you can get up to 10 lakhs for 48 months. Banks are pretty alert when they deal with first-time loan borrowers. They will scrutinize your profile and offer the loan amount which suits your needs in the best possible way. Both banks allow you to get funds for all essential monetary requirements. They also provide personalized loan products to get area requirements in the best possible way.

  • Credit Score Requirement

Credit Score Requirement

To get a loan, applicants need to fulfill the credit score criteria. It’s a report card of borrowers’ previous transactions. If your credit score is higher, then the chances of the approval of your application. Individuals with poor credit scores don’t impress banks. So, banks and financial organizations reject the application of bad credit people. To enjoy the advantages of the union bank loan scheme, applicants need to maintain a minimum credit score of 700 or more. On the other hand, they need to hold a minimum of 750 or more credit scores to gain the benefits of a central bank loan scheme.

  • Application Process

Both banks allow you to apply for the loan online or visit the Bank’s nearest branch. You can choose the method of application at your convenience. If you select the offline mode of the loan application, go to the nearest branch of the preferred Bank and contact the bank manager. Tell your requirement for the loan to him and complete an application form with correct details. You must check the correctness of the data and ensure everything is OK. Hand over your application to the bank manager and wait for his decision. A team of experts will verify the data mentioned in the application form and evaluate your profile for the loan.

The Bank will choose the best candidates for personal loans. If your profile doesn’t fit into their criteria, they might reject your application. There are many reasons why you are not suitable for personal loans. It may be your insufficient income, poor credit score, lots of pending bills, cases against you, etc. The Bank also conducts background checks and interviews to evaluate your requirement for money.

Don’t lose your patience if the Bank asks you to submit the required documents and participate in discussions. From the Bank’s perspective, these formalities are necessary to choose the best candidates for personal loans. If your application is OK from all angles and you meet all terms and conditions, the Bank will invite you to decide the loan amount, terms and conditions, repayment tenure, processing fees, and other things.

  • Read Terms and Conditions Before Signing a Loan Agreement

Before signing a loan agreement, you must understand all its terms and conditions very well. Then, ask the chosen Bank to change the loan agreement if any hidden clause doesn’t suit your interest very well. Don’t agree to the loan contract if it is not in your favor. Always keep in mind that taking an unfavorable loan can cause significant financial damages and land you in legal problems later on. Once you agree to the terms and conditions of the loan package, the Bank approves your application for the loan.

You will get the approved loan amount in your bank account in a few days. The online application method follows the same steps. The only difference is that you can apply for the loan by visiting the website of the chosen Bank. It keeps you away from the requirement of making several visits to the Bank for the loan application, documentation, and other formalities.

Just fill in your details in a digital application form and click the submit button. The Bank will have a look at your application and verify all the mentioned details one by one. If your application is OK, the Bank invites you to the office for further discussion and the competition of all formalities. The online application method is safe and highly convenient. You can submit your application for the loan from any location and at any time using any internet-enabled device.

Also Read : Simple Ways to Pay Off Your Personal Loan Quickly

  • Loan Repayment With Interest Charges

In India, there was a time when people had to visit the Bank to make loan repayments every month. Now the time has changed a lot, and the economy’s digitalization has also changed the banking sector. You don’t need to worry about loan payments with interest charges. When you take a personal loan from the chosen Bank, the Bank executives divide the entire loan into equal EMIs. These days, loan repayment takes place automatically on the due date.

Applicants need to maintain sufficient cash in their bank accounts for automatic refunds. If automatic reimbursement of the loan doesn’t take place due to an insufficient balance in your bank account, contact the banker as soon as possible. The Bank will ask for some additional charges and reschedule the EMI at a later date. If you knowingly skip the loan repayment, the Bank will apply heavy penalties on you. Make sure that you abide by the terms and conditions of the loan repayment without fail.

Frequently Asked Questions

  • What Is The Interest Rate of The Union Bank Loan?

When you take a loan from the Union Bank of India, they charge interest fees that start from 8.90 % to 13% p.a. The loan’s interest rate depends upon multiple factors. It may include your income, the strength of credit score, repayment potential, etc. If you hold an active bank account with Union Bank of India and meet all terms and conditions of the loan, the chances are high that you will get a loan with favorable interest fees.

  • Can I Get EMI From The Union Bank of India?

Generally, banks divide the loan in equal EMIs over the entire repayment tenure. It makes the loan repayment less burdensome work for most borrowers. Upon your request, the bank will divide the whole loan amount into convenient EMIs and activate an automatic refund on your bank account. It makes the loan repayment automated and trouble-free.

  • What Is A Reasonable Interest Rate On A Bank Loan?

An affordable interest rate is the one that suits the budget of most of the applicants. It is tough to tell a particular digit as a reasonable interest rate. It all depends upon the loan you want to get from the bank and their interest rate policy.

  • How Can I Get A Personal Loan From The CBI?

First, meet the loan’s eligibility criteria and apply to the bank with all the details. The bank will examine your application and see whether you are fit for the loan or not. If your profile is perfect for personal loans, the bank will invite you to discuss further and complete other formalities. Once you accomplish all formalities, the bank transfers the approved loan amount to your bank account.

  • What Is The Interest Rate For A Personal Loan In The Central Bank of India?

The interest rate on Central Bank Personal Loans start from 8.45% – 10.05% p.a. Remember, interest fees on the borrowed amount vary from person to person and depend on several factors.

Conclusion

All frequent credit borrowers pay special attention to interest fees applied on loans they take. A moderate interest fee on loans gives great respite to borrowers. It enables them to return the loan to the lender with interest fees. Loans with higher interest charges make the repayment work more troublesome. Sometimes, borrowers who take expensive loans default on repayment. That is why you must compare the interest fees applied on the loan products of different banks and choose what is best for you. Union Bank of India and Central Bank of India offer personal loans with reasonable interest fees. So, don’t delay and apply for the desired loan product from the chosen bank & repel all financial difficulties away.