Bank of India Personal Loan Interest Rate is based on one year Marginal Cost of Fund-based Lending Rate (MCLR) of Bank of India, which is currently 7.35%. So as per the Bank of India 1-year MCLR the personal loan interest rate ranges from 10.85-12.85%. But other than that the factors which will affect your Bank of India Personal Loan Interest Rate is your eligibility. So, if you want to get an affordable rate from Bank of India, you need to ensure that you will take care of the following factors that are mentioned in this article below.
Credit Score
To make a good first impression, you need to make sure that your credit history is free from default and due payments. How is a credit history built? Your credit score is built on the base of your borrowed credits including both secured and unsecured loans. And the score will range from 300-900.
If your credit score comes under the range of 300-600, it means you have some unsettled debts on your credit history.
If your credit score falls under the range of 650-750, your credit score is neutral
And in case your credit score ranges from 800-900, this means you have a high credit score
So before applying for a personal loan at Bank of India, do check your credit score if you want to grab an affordable Bank of India Personal Loan Interest Rate.
Debt to Income Ratio
Your current credit obligations can impact the Bank of India Personal Loan Interest Rate, that’s why you should maintain your debt to income ratio at least 40%. If you don’t have any idea about the debt to income ratio, let us tell you that it is the number of debts upon your monthly income.
Suppose you have credit obligations of INR 25,000 per month and you have a monthly income of INR 70,000, your debt to income ratio will be 33.3%. So the lower your debt to income ratio the higher will be your chances of getting an affordable Bank of India Personal Loan Interest Rate.
Note - For the calculation of debt to income ratio, debts such as mortgage loans, credit cards, personal loans will be taken into account. The debt to income ratio will have no relation to your monthly expenses like utility bills, rent, etc.
Loan Amount & Term
As you know, you can borrow up to 10X your gross monthly income from Bank of India in respect of its personal loan. The maximum loan amount is capped at INR 5 lakh or INR 10 lakh as per your residence state or city. So while applying for a Bank of India Personal Loan, you need to ensure that you borrow the amount you need, because there is no sense in borrowing a high limit when your needs can be met at a lesser amount.
In case you borrow a high loan amount, you will have to pay a higher EMI amount and so will the Bank of India Personal Loan Interest Rate outgo increases. So if you don’t want to commit such a mistake, use the Bank of India Personal Loan EMI Calculator. Using the online EMI calculator, you can estimate the loan amount that is suitable for you and the EMI which will fit in your budget.
For example. Mr. Sunny Sharma needs money for his wedding expenses, so he applied for a Bank of India Personal Loan. And because of his good credit history and less debt to income ratio he is successful in grabbing a lower interest rate of 11.00% for a loan of INR 5 lakh. But now he wants an EMI that will fit in his budget and don’t bother him for a long time. So he uses Bank of India Personal Loan EMI Calculator and as per the estimated calculation he chooses the tenure of 36 months. Now after the tenure completion, he sees his repayment schedule and finds that he has only paid an interest outgo of INR 89,297 at a monthly EMI of INR 16,369.
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