Suppose, you are taking a personal loan of ₹ 5 lakh for 3 years. If you get a loan at 11%, you will have to pay approximately ₹ 89,296 interest. But if the bank charges 13% interest, then this interest will directly reach ₹ 1,06,491. You see, just because of 2% more interest, there is an additional burden of ₹ 17,195 on your pocket. Therefore, even a small difference in interest rate increases your total cost significantly.
