Kotak Mahindra Bank Personal Loan Interest Rate

Preliminary Information

Loan Details

Personal Details

+91


Kotak Mahindra Bank Personal Loan Interest Rate 18th September 2020

Interest Rate 10.75% to 17.99%
Loan Tenure 12 months to 48 months
Loan Amount Rs. 1 lac to Rs. 15 lac
Processing Fee Up to 2.5%
Part Prepayment Charges Not allowed
Preclosure Charges

Allowed after payment of 12 EMIs

Foreclosure charges are 5% of the outstanding amount

Kotak Mahindra Bank Personal Loan Interest Rate starts at 10.75% to 17.99%. The loan amount is between Rs. 1 lac and Rs. 15 lac on 12 months to 48 months tenure. You can use the loan amount to take care of personal expenses such as home repair, medical emergency, travel, marriage, education of children, and a lot more. The loan is available for both salaried and self-employed professionals. To avail the loan, you must lie within the age group of 22 years and 55 years.

In the below-given post, we will discuss about the features of Kotak Mahindra Personal Loan Interest Rate, its details, factors that influence the rate of interest, other charges, loan cost illustration, EMI calculation, interest calculation, and frequently asked questions.

Features of Kotak Mahindra Personal Loan Interest Rate

Below given are the features of personal loan interest rate

  • At 10.75% interest and 48 months tenure, the lowest EMI per lakh is Rs. 2,572.
  • Processing fee is up to 2.5%.
  • The bank has special schemes such as personal loan for home improvement and meeting unexpected expenses.
  • You can opt for prepayment. Foreclosure charges will apply. Part payment is not allowed.
  • Existing personal loan borrowers can apply for a top-up loan if they have a great track record of regular payments. Top-up loan is available at a similar interest rate on which the existing personal loan is approved by the bank.
  • Kotak Mahindra may provide special offers to borrowers working in banks, government sector, and reputed companies. These customers may be eligible for reduced interest rates.

Kotak Mahindra Bank Personal Loan Charges

Apart from the interest rate, there are other charges applicable on your personal loan that you need to check

  • Processing Fee: This is a mandatory fee that the bank may subtract from the disbursal amount or charge at the time of the loan agreement. The fee is up to 2.5% of the borrowed amount along with the applicable tax.
  • Part Payment Charges: You cannot make part payment for personal loan Kotak Mahindra Bank.
  • Foreclosure Charges: If you want to repay the entire loan amount before the tenure ends, then you can opt for a foreclosure. Kotak Bank permits prepayment after 12 EMIs for preclosing personal loan. It charges 5% foreclosure charges on the outstanding amount you have to pay.
  • Other charges: After the sanctioning of personal loan application, the bank will provide a statement of other charges. These charges may include that for loan cancellation, EMI cheque bounce, penalty on late payment, interest rate, and a lot more.

Factors that Influence Kotak Mahindra Personal Loan Rate

Kotak Mahindra provides the best interest rate after assessing your monthly income, loan amount, tenure, financial liabilities, employment history, and a lot more. The below given are factors that impact the decision of the bank about the applicable rate of interest:

  • Loan Amount: Kotak Bank may offer lower interest rate for loans of higher amounts. You can borrow between Rs. 1 lac and Rs. 15 lac.
  • Salary: Your monthly income helps the bank to analyse your ability to repay the loan. The interest rate will vary as per your net monthly income. The higher the disposable income, greater the possibility of getting the desired interest rate and loan amount. Borrowers from higher salary brackets may get offers of lower rates of interest.
  • Employer Category: Kotak Mahindra Bank may have a list of companies categorized from high to low based on the firm’s reputation, size, and relationship with the bank. Thus, borrowers who are employed with higher ranked companies may be eligible for attractive interest rates and discounts.
  • Relationship with the Bank: The bank may offer special charges, rates, and schemes to existing account holders. These account holders should have a good repayment record with Kotak Mahindra in the past to avail these offers.
  • Loan Tenure Longer tenures may attract lower rates, and vice-versa. The Kotak Bank has tenure between 12 months and 48 months for personal loan.
  • Repayment Capacity: The bank will check your repayment capacity before sanctioning the loan. It will look into your repayment track record, CIBIL Score, existing financial liabilities, and other factors for that purpose.

Personal Loan Illustration – Kotak Mahindra Bank

Here is an example of the total monthly cost for personal loan Kotak Bank:

Annual Percentage Rate (APR) 10.75% to 17.99%
Total monthly cost of the loan including all the fees and charges Here is the example:
  • Total loan amount: Rs. 1 lac
  • Kotak Bank Personal Loan Interest Rate: 10.75% to 17.99%
  • Tenure: 12 months to 48 months
  • Processing Fee: Rs. 2,000 or up to 2.5% of the entire loan amount + applicable tax
  • Fee payable to Loanbaba: No fee
  • Total Monthly Cost: On loan amount Rs. 1 lac at 10.75% for 48 months tenure, the EMI per lac is Rs. 2,572. The same loan amount for 12 months tenure at 17.99% will ask for Rs. 9,168 as EMI per lac.

Kotak Bank Personal Loan EMI Calculation

EMI is equated monthly instalment that you have to pay on a fixed date every month towards loan repayment. The Kotak Mahindra Bank Personal Loan EMI depends on your loan tenure, amount, monthly salary, interest rate, and other factors. Below mentioned is an example of EMI amount at 10.75% for Rs. 1 lakh over different tenures.

Loan Amount 4 Years Loan 3 Years Loan 1 Year Loan
Rs. 3 lac Rs. 7,717 Rs. 9,786 Rs. 26,480
Rs. 6 lac Rs. 15,435 Rs. 19,572 Rs. 52,959
Rs. 12 lac Rs. 30,869 Rs. 39,145 Rs. 1,05,918

EMI on loan considering 10.75% interest rate over different loan amounts and tenures:

Loan Amount 4 Years 3 Years 2 Years
Rs. 1 lac Rs. 2,572 Rs. 3,262 Rs. 4,649
Rs. 3 lac Rs. 7,717 Rs. 9,786 Rs. 13,948
Rs. 5 lac Rs. 12,862 Rs. 16,310 Rs. 23,246
Rs. 10 lac Rs. 25,724 Rs. 32,620 Rs. 46,492
  • An equated monthly instalment consists of principal as well as interest component. Though this amount remains constant every month, the interest and principal component change. As you pay the EMI, the interest components keep reducing, while the principal repayment keeps increasing.
  • It is evident that EMI amount is different for different loan amounts and tenures. EMI is higher when the personal loan spans over 2 years tenure than that on a longer tenure.

Kotak Mahindra Bank Personal Loan Interest Calculation

Below given is the interest amount and EMI calculation for loan amount Rs. 1 lac over different tenures at 10.75% interest rate.

Kotak Bank Personal Loan 4 Years 3 Years 3 Years
At 10.75% for loan amount Rs. 1 lac Rs. 2,572 Rs. 3,262 Rs. 4,649
Total amount to pay including principal and interest Rs. 1.23 lac Rs. 1.17 lac Rs. 1.12 lac
Total interest amount over the entire tenure Rs. 23,456 Rs. 17,432 Rs. 11,576
  • The illustration above indicated that EMI is lower on a loan than lasts for a longer tenure.
  • The interest payout however is higher on a longer tenure. For instance, if you take a loan of Rs. 1 lac for 48 months, then the lowest EMI on 10.75% is Rs. 2,572. But the interest outgo is Rs. 23,456 in this case.
  • On the other hand, if you take Rs. 1 lac as loan for 2 years at 10.75% interest, then the lowest EMI is Rs. 4,649. The EMI is higher here, but the total interest outgo is only Rs. 11,576. This is a lot lower than what you pay for a loan taken for 48 months.
  • Thus, choose the loan tenure wisely as per your repayment capacity. This way, you can choose an ideal tenure and loan amount, and calculate the interest outgo as well as total cost of the loan.

FAQs for Kotak Bank Personal Loan Interest Rate

Below-mentioned are the frequently asked questions about personal loan interest rates and schemes by Kotak Mahindra:

  • add1. How does interest rate influence the personal loan cost?

    Interest amount is the amount you pay to the bank over and above the principal borrowed amount. The bank applies an interest rate on the loan based on your financial and employment profile. It also considers your credit score to understand your repayment capacity and credit behaviour. These details help the financial institution to fix an interest rate on the personal loan.

    Lower the interest rate, lower will be the cost of the loan, and vice-versa. However, the loan amount and tenure too have a say in the total loan cost. To get the lowest rate of interest, you must maintain a good CIBIL score, have sufficient disposable income to pay the EMIs, and have a great financial record.

  • add2. How does tenure and loan amount impact the total cost of the loan?

    Lower the loan amount and shorter the tenure, lower will the interest outgo. On the other hand, a longer tenure and higher loan amount will increase the total expense on the Kotak Bank personal loan. Thus, you must request for a loan amount wisely. Stick to a realistic figure as to how much cash you need. Do not borrow more than what you need. Similarly, you need to select a tenure as per your repayment capacity. The bank will decide the tenure as per your eligibility status for the loan. But you can choose to foreclose the loan to save on the interest payout.

  • add3. What is the effect of other charges on the loan cost?

    Besides the interest rate on the loan, there are other charges that you may have to bear. Out of all the charges, the processing fee is the mandatory cost. For Kotak Bank personal loan, the processing fee is up to 2.5% of the loan amount + applicable tax. Apart from this fee, you may be charged additional charges based on certain scenarios.

    For instance, if you cancel the loan, then loan cancellation charges will apply. Similarly, if you make a late payment or there is EMI cheque bounce, then relevant penalties will apply. To keep the expenses on the loan low, you must try to avoid the incidences that increases the loan cost.

  • add4. How to get the best interest rate on the loan?

    As understood, interest rate charged by Kotak Mahindra has a great impact on the total expenditure on the loan. Thus, you may want to get the lowest interest offer. To get the ideal rate of interest, you must have a good CIBIL score, a clean repayment record, stable job and income, excellent repayment capacity, and perhaps a good relationship with the bank, among other factors. Special rates of interest may apply for borrowers who work for the government, reputed companies, defence sector, etc. A favourable financial profile will help you negotiate for the lowest interest rate.

  • add5. What is the relation between personal loan EMI and interest rate?

    EMI is the monthly instalment amount you pay towards the loan repayment. It contains component of both the interest amount and the principal that you have to repay. Thus, a lower rate of interest will significantly reduce the interest payout and vice-versa. This makes it moreover important for you to boost your credit score and financial profile to get the best rate of interest. Reduced rates mean reduced EMI burden, which may help you even the loan quickly as you are left with a higher disposable income.

  • add6. What is the formula to calculate EMI for personal loan Kotak Bank?

    Here is the EMI calculation formula:

    P*r* (1+r)^n/([(1+r)^n]-1)

    In the above formula,

    P = Loan amount or the amount you borrow from the bank. The borrowing amount is between Rs. 1 lac to Rs. 15 lac.

    r = Monthly rate of interest. The lowest and the highest rate of interest is 10.75% and 17.99%, respectively.

    n = Tenure in months. The tenure ranges between 12 months and 48 months.

Need Help?

Akshar Blue Chip IT Park, 703, Thane - Belapur Rd, Turbhe, Navi Mumbai, Maharashtra 400705

Subscribe to our newsletter

  • Mobile Apps
  • googleplay-loanbaba.com
close
Top

Did not find what you were looking for?

Browse through our Knowledge Bank for more articles.

Loanbaba Blog

Check your Loan eligibility!

Apply for a Loan online: