Punjab National Bank Personal Loan Interest Rate

How does a personal loan work?

Personal loan is extended by the bank as a lumpsum, it has to be paid back in installments on a monthly basis. This is called the equated monthly installments (EMI), which includes both principal and interest. The EMI is payable over the tenure of the loan which is pre-determined. Typically, the tenure will range between 1 year – 5 years. The tenure is low compared to all other forms of loan, since they are of higher risk. To compensate for the high risk, the bank charges high interest compared to other types of loans.

Factors that affect the interest rate of personal loan offered by Punjab National Bank

The below mentioned factors have an implication on the interest rate of the personal loan offered by Punjab National Bank –

• Credit score – The credibility of the applicant is assessed by the credit score of the individual. The higher the credit score, the better are the chances for favorable interest rates. Typically, many banks prefer a minimum of 600 score for extending personal loan. A score of 750 is considered ideal and is likely to enable negotiation of favorable terms.
• Income level – The income level of an individual is likely to impact the quantum of loan and the interest rate. A higher income level will enable the individual to borrow higher loan amount and negotiate favorable interest rate.
• Stability of income – An elongated employment history is ideal for personal loan and favorable interest rate on the loan. The individual will be able to negotiate a lower interest rate and longer tenure on the personal loan.
• Loan amount and duration – A higher loan amount and longer duration provides the bank with clarity of revenue for longer tenure, thus enabling the applicant to negotiate favorable terms.
• Market interest rate – While most of the above points are still in the control of the individual, there are macro-economic factors which also determine the interest level on the personal loan. The market interest rate determines the base rate upon which the personal interest rate is determined. The interest rate on personal loan is arrived as base rate + margin. The base rate is dependent on the market interest rate trend.
• Money supply in the economy – The market sentiment and money supply in the economy also influence the interest rate on personal loan. If the money supply is more, then the situation is favorable for the borrower, thus the interest rate are likely to be favorable for the borrower. If the money supply is less, then the situation is favorable for the lender and the lender will charge a higher interest rate.

Rate of interest on personal loan extended by Punjab National Bank

Processing charges and upfront fee on personal loan extended by Punjab National Bank

Punjab National Bank personal loan for public

The key features of personal loan for public are –

• Purpose of personal loan – To meet financial needs such as medical treatments, marriage expenses, vacation, education etc.,
• Eligibility – All salaried employees with Central Government, State Government, Public Sector Units, public and private companies, schools, colleges, Universities etc., Self-employed professionals and businessmen with an income not lower than Rs. 4 Lakhs per annum, Defense personnel including officials of Military Station Headquarters, Border Security Force, Central Reserve Police Force, Central Industrial Security Force, Indo Tibetan Boarder Police, etc.
• Loan value – Minimum Rs.50000/-; Maximum – For all borrowers, Rs. 4 Lakhs or 20 times net salary whichever is lower subject to certain minimum net monthly salary
• Margin requirement – Nil; Security requirement – Suitable third party guarantee is accepted
• Repayment can be made over a maximum of 60 months.

Personal loan scheme for pensioners

The key features of personal loan scheme for pensioners is as below –

• Purpose – Meet financial needs such as medical treatments, marriage expenses, vacation, education etc.,
• Eligibility – All pensioners who draw pension and hold account with Punjab National Bank
• Loan value – Minimum – Rs. 25,000; Maximum loan (can be availed upto age 70 years) – Rs. 10 Lakhs or 18 times of net monthly pension (For Defense pensioners, 20 times net monthly pension), whichever is lower; (can be availed between 70 – 75 years) Rs. 7.5 lakh or 18x their net monthly pension (20x for defense pensioners) whichever is lower; (can be availed above 75 years) Rs. 5 Lakh or 12 months of pension amount whichever is lower
• Margin required – Nil; security – Spouse who is eligible for family pension, earning children (preferably Government employee) or third-party guarantee with net income equal or more than loan amount, acceptable to the bank
• Repayment period – Maximum of 60 months for repayment is allowed

  There are no pre-payment charges applicable on the personal loan pre-closure.

Rate of interest on personal loan for pensioners extended by Punjab National Bank

Punjab National Bank offers extremely competent interest rates on personal loan, the interest rate applicable on these types of loans are MCLR +2.8%. The quantum of loan is not considered and the interest rate is held even across all slabs.

Personal loan to pensioners has no processing charges, and upfront fee of Rs. 500 is charged. The upfront fee is the documentation charge applicable for the loan.

Punjab National Bank Personal Loan Interest Rate FAQs