RBI’s New Norms May Increase Personal Loan Costs: Compare Lowest Interest Rates from Top Lenders
Introduction:
The Reserve Bank of India (RBI) recently implemented changes that impact personal loans. The risk weights for consumer credit exposure, specifically personal loans, have been raised by 25 percentage points to 125 percent. This update requires banks to hold more capital, resulting in increased capital costs for these loans. Both existing and new loans are affected by these adjustments, which may lead to higher interest rates and limited credit access for borrowers.
Lowest Personal Loan Interest Rates offered by Top Lenders in November 2023:
| Name of Banks/NBFCs | Interest Rates (p.a.) |
| Navi Finserv | 9.90% – 45.00% |
| HSBC | 9.99% – 16.00% |
| Faircent | 9.99% onwards |
| Bank of Maharashtra | 10.00% – 12.80% |
| Bank of India | 10.25% – 14.75% |
| Punjab National Bank | 10.40% – 16.95% |
| Axis Bank | 10.49% onwards |
| IndusInd Bank | 10.49% onwards |
| IDFC First Bank | 10.49% onwards |
| ICICI Bank | 10.50% onwards |
| HDFC Bank | 10.50% onwards |
| State Bank of India | 10.55% – 14.55% |
(Interest rates as of 22nd November 2023)
Impact on Borrowers:
With the implementation of RBI’s new norms, borrowers may experience higher interest rates and potential challenges in accessing credit. As banks adjust their lending practices to meet the new capital requirements, it is essential for individuals seeking personal loans to be aware of these changes.
Compliance and Timeline:
The Reserve Bank of India has announced that all regulated entities must adhere to the new regulations by February 29, 2024. Banks and other lenders are actively working towards ensuring compliance with these updated norms.
Considerations for Borrowers:
Personal loan interest rates are influenced by various factors, including the chosen bank and credit score. To make an informed decision, borrowers are advised to compare the most recent interest rates and processing fees offered by reputable banks. This can help individuals secure loans at more favorable terms and ultimately save on costs.
Conclusion:
As the RBI’s revised risk weights for consumer credit exposure come into effect, personal loans are expected to become costlier. Borrowers should closely review and compare the lowest interest rates available from top lenders to mitigate the impact of these changes. By staying informed, borrowers can make confident decisions when applying for personal loans and minimize the overall financial burden.
Disclaimer:
Estabizz Fintech compiled the material in this article using the most recent Acts, Rules, Circulars, Notifications, Provisions, Press Releases, and material applicable at the time. They ensured the completeness and correctness of the material through due diligence. When using this material, users must consult the relevant, applicable legislation. The given data may change without prior notice and does not constitute professional advice. Estabizz Fintech disclaims all liability for any results from the use of this material.
