When it comes to choosing between credit-card debt and personal loan, personal loan is considered to be a better option. One should avoid taking loans because they can land you in a debt trap and create hurdles for your financial goals. But if you have exhausted all other options, then you can opt for a personal loan. A personal loan can be used for the payment of home renovations, covering the cost of education, wedding, etc. Personal loans can greatly vary in terms of interest rates, repayment terms, fees, and amounts.
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Due to the rising inflation and repo rate, banks have been increasing their lending rates. For instance, the State Bank of India (SBI) recently hiked the Marginal Cost of Funds Based Lending Rate (MCLR) by 10-15 basis points (bps) across most tenors. In such a scenario, it becomes crucial to find a bank which is charging a low-interest rate on loans.
According to BankBazaar, here are some lenders who are offering the cheapest interest rates on personal loans of Rs 5 lakh:
Bank of Maharashtra
Bank of Maharashtra is providing the lowest interest rate of 8.9 per cent, with a repayment tenure of five years. The equated monthly instalment (EMI) amounts to Rs 10,355.
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Punjab National Bank
An interest rate of 9.8 per cent is being charged by the Punjab National Bank on personal loans amounting to Rs 5 lakh with five-year tenure. The EMI stands at Rs 10,574.
Yes Bank
Yes Bank is offering an interest rate of 10 per cent on personal loans of up to Rs 5 lakh. The repayment period is five years, and the EMI is Rs 10,624.
Bank of Baroda
This bank is offering 10.2 per cent interest, with an EMI of Rs 10,673 on Rs 5 lakh personal loans of five-year tenure.
Kotak Mahindra Bank
Kotak Mahindra Bank is charging 10.25 per cent interest. The EMI on a repayment period of five years is Rs 10,685.
