IDFC Bank Personal Loan Review: Great Short Term Loan Options

IDFC Bank Personal Loan Review: Great Short Term Loan Options

IDFC does not charge the lowest interest rates for personal loans in India; however, it is a great option for borrowers that seek very short-term loans

Good for

  • Individuals seeking a personal loan with a duration of less than 1 year

Bad for

  • Self-employed individuals
  • Individuals that prefer a loan of at least 1 year

Editor's Rating

4.0/5.0

If you are in search of a short-term personal loan, IDFC's personal loans may be a perfect fit. The bank offers loans with tenures as short as 3 months, unlike any other personal lenders in India. Additionally, the bank offers a Smart Personal Loan that allows borrowers to make early payments without any fees.

Summary of IDFC's Personal Loans
Shortest Loan Tenures: 3 to 60 months
Interest Rates: 12% to 20%
Flexible Repayments with Smart Personal Loan

Table of Contents

What Makes IDFC Personal Loans Stand Out to Borrowers

IDFC's personal loans are great for individuals that need quick financing. This is because it is the only lender to offer personal loans with tenures of less than one year. Additionally, through the bank's Smart Personal Loan, borrowers are able to make early-repayments (up to 40% of loan amount per year) without a penalty, which is helpful for those individuals that may prefer to get ahead on their loan and reduce their total interest cost. However, IDFC's personal loans are less competitive for longer tenures as their loans charge 12% to 20% annual interest rates, while some of the cheapest loans in India charge 10% to 14%. While this may not sound like a big difference, borrowers can save hundreds of rupees on their monthly payment and thousands over the course of their loan tenure, by choosing one of the cheapest available loans.

Estimated Cost of IDFC's Simple Personal Loans

Duration (Months)Processing FeeEffective Interest RateMonthly PaymentTotal Cost
32%12%Rs. 34,002Rs. 4,067
32%20%Rs. 34,451Rs. 5,352
62%12%Rs. 17,255Rs. 5,529
62%20%Rs. 17,652Rs. 7,914
*Assuming loan of Rs. 1 lakh, total cost includes processing fee

Who Can Apply: Eligibility Criteria

Consider this if you prefer a short-term loan

Required Monthly Income Rs. 20,000
Min. Loan Amount Rs. 50,000
Max. Loan Amount Rs. 20 lakh
Processing Fee 2%
Interest Rate Type Fixed
Loan Tenure 3 to 60 months

Applicants must be between 25 and 56 years old in order to be eligible for IDFC's personal loans. Also, borrowers are required to earn salaries of Rs. 20,000 per month. This makes IDFC a less suitable lender for self-employed or low-income individuals.

Other Charges and Fees

IDFC charges a processing fee of up to 2% of the loan amount, which is a standard fee among personal lenders in India. The bank also charges a number of other fees for loan foreclosure, bounced cheques and disbursement cancellation among other instances. While all of IDFC's fees are similar to those of other banks, we recommend that borrowers aim to avoid fees when possible in order to minimise the total cost of their loan.

FeeAmount
Processing FeeUp to 2.0% of loan amount
Early Redemption FeeN/A
Foreclosure Fee3% on principal outstanding + GST
Bounced Cheque FeeRs. 500
Repayment Instrument Swap FeeRs. 500
Disbursement Cancellation FeeRs. 500
Overdue Interest2.5% per month

How to Apply: Application Process

Individuals interested in applying for IDFC's personal loans must fill out an application form and submit the required documentation. These documents include proof of identification, age, address and income. The bank processes loans within 5 days, though it's average application decision is made in just 30 minutes.

Required Documents for IDFC Personal Loan Applications

Documents
Proof of IdentificationAADHAR Card , Voter ID Card, Passport, NREGA Job Card or Driving License
Proof of AddressUtility Bill or Registered Rental Deed
Proof of AgePan Card
Proof of IncomeLast 2 months' Salary Slip, Last 6 months' Bank a/c Statement
Other Mandatory DocumentsPassport Size Photograph