Personal Loan Interest Rates

A personal loan is one of the financial products you can get for yourself. To meet your financial needs, you can apply for a personal loan. You can apply online or in person for personal loans from many Indian banks. It would be best to compare the interest rates offered at different banks before applying for a personal loan. They can vary between 7.90% and 49% p.a. 4.9% p.a.

Apply today to compare the current personal loan interest rates, processing fees, and bank information.

Current Interest Rate on Personal Loans

Bank Interest Rate (p.a.) Processing Fee
HDFC Bank 10.5% p.a. – 21.00% p.a. Up to 2.50%
TurboLoan Powered by Chola 15% – 21% (fixed) p.a. 3.00%
Yes Bank 10.99% p.a. onwards – 16.99% p.a. At the discretion of the bank Up to 2.50%
Citibank 9.99% p.a. – 16.49% p.a. Up to 3%
Kotak Mahindra Bank 10.25% and above Up to 2.5%
Axis Bank 12% p.a.- 21% p.a. At the discretion of the bank
IndusInd Bank 10.49% p.a. – 31.50% p.a. 3% onwards
HSBC Bank 9.50% p.a. – 15.25% p.a. Up to 1%
IDFC First Bank 10.49% p.a. onwards Up to 3.5%
Tata Capital 10.99% onwards Up to 2.75%
Home Credit Cash Loan 19% p.a. – 49% p.a. 0%-5%
Ujjivan Small Finance Bank 11.49% p.a. – 16.49% p.a. At the discretion of the bank
Aditya Birla Capital 14% p.a. -26% p.a. Up to 2%
State Bank of India 9.60% p.a. – 15.65% p.a. Up to 1.50%
Karnataka Bank 12% p.a. – 17% p.a. Maximum of Rs.8,500
Bank of Baroda 10.50% p.a. – 12.50% p.a. Up to 2%
Federal Bank 10.49% p.a. – 17.99% p.a. Up to 3%
IIFL 24% p.a. onwards 2% onwards
Bank of India 10.35% p.a. – 12.35% p.a. Up to 2%
Fullerton India 11.99% p.a. – 36% p.a. Up to 6%
IDBI Bank 8.15% p.a. – 10.90% p.a. Contact the bank
Karur Vysya Bank 9.40% p.a. – 19.00% p.a. 0.30% onwards
South Indian Bank 10.60% p.a. – 18.10% p.a. Up to 2%
Indian Overseas Bank 9.30% p.a. – 10.80% p.a. Up to 0.50%
RBL Bank 14% p.a. – 23% p.a. Up to 3.5%
Punjab National Bank 7.90% p.a. onwards Up to 1.00%
Bank of Maharashtra 9.45% p.a. – 12.80% p.a. Up to 1%
Central Bank of India 9.85% and above Up to 1%
City Union Bank 12.75% p.a. 1.00% subject to a minimum of Rs.250
J&K Bank 10.80% p.a. Up to Rs.500

Current Interest Rate on Personal Loans

Additional GST will be added to the application processing fee.

How to Get Lowest Interest Rate on Personal Loan?

Here are some tips to help you get the best personal loan rate.

  • Increase Your Credit Score A high credit score indicates that you are financially sound. High credit scores are eligible for lower personal loan interest rates from banks and financial institutions. Before applying for a personal loan, it is essential to check your credit score. You should improve your credit score if it is lower than 750. If your credit score exceeds 750, you have a greater chance of getting a personal loan with a lower interest rate.
  • Do not miss any payments: Your credit score could be negatively affected if you default on loan repayment or credit card payment. The lender usually determines personal loan interest rates. They will often consider your past repayment history. Those who pay their past EMIs and credit card bills on-time are more likely to be charged a lower rate.
  • Watch out for Offers Banks and financial institutions often offer special interest rates during holidays. You may get a lower interest rate if you apply for a loan during this offer.
  • Compare Interest rates Before applying to any bank for a personal loan, compare the individual loan interest rate charged by different NBFCs and banks. This will allow you to get a personal loan at an affordable interest rate.
  • Talk to the Lender. If you’re a bank customer and have a good relationship, you may be able to negotiate a lower interest rate. You must submit a formal request to the lender for this.

Banks and financial institutions consider the applicant’s credit score when determining the interest rate. To ensure that you receive a favorable rate, make sure to verify your credit score as soon as possible.

CIBIL Ratings Credit Score Chances of being approved for a Personal Loan
Poor Less than 600 You may not qualify for a personal loan
Average Between 600 and 750 Loan may be approved, but at a high interest rate
Good Over 750 Loan is likely to be approved with a lower interest rate
Excellent Between 800 and 900 Loan with a low interest rate, faster approval, larger loan amount

Factors that Affect Personal Loan Interest Rates

  • Income: When determining the interest rate, loan providers consider the applicant’s income. A bank might offer a lower interest rate to individuals with a higher income. However, people with lower annual incomes might have to pay higher interest rates.
  • Details for Employers: A bank/financial institution that is well-respected will offer you a lower interest rate.
  • Type of Employment: Loan Providers may offer applicants different interest rates based on whether they are self employed or salaried.
  • Age The interest rate offered by a loan provider can also be affected by the applicant’s age. A higher interest rate may be charged to those who are close to retirement.
  • Relationship to the Loan Provider: Existing clients of the bank/financial institution might be eligible for a lower interest rate when they apply for a personal loan. This is subject to their relationship with the loan provider. However, this is at the bank’s discretion and may not be available to all customers.

Fixed Interest Rates vs Floating Interest Rates – Which is better?

Fixed interest rate Floating interest rate
Interest rates remain constant Interest rate can change depending on the fluctuation in the market
Your EMI payable will remain the same throughout the repayment tenure Your EMI payable is likely to change during the repayment tenure.
You are likely to be charged a prepayment charge if you prepay your loan You may not be charged a prepayment charge if you prepay your loan
Not linked to MCLR Linked to MCLR

Fixed interest rates are advantageous because you can know how much you will pay over the loan term. Fixed interest rates are ideal for those who want to plan ahead.

You can choose a floating/variable rate if you don’t mind a fluctuating rate. Variable interest rates have the advantage that your repayment amount will decrease when the interest rate drops.

What is meant by Reducing Interest Rate with regard to Personal Loan?

A personal loan with a flat interest rate will charge interest on the total loan amount for the duration of the loan repayment period. The interest charged on a loan with a reduced interest rate/reducing balance structure is calculated only on the amount outstanding. In this instance, the interest on the remaining loan term will be calculated based on the outstanding loan balance.

Things to Think

There are some other factors to consider when choosing a personal loan with low interest rates.

  • Processing fee: Loan providers may charge a one-time fee known as the processing fees. This can raise the loan cost. It is important to compare different lenders’ processing fees, even if the interest rate you pay is low.
  • Pre Closure Charges: Some banks may charge a pre-closure fees if the loan balance is not paid by the due date. Check to see if the bank/financial institutions you are applying to levy a pre-closure fee.
  • Customer Service To have a great borrowing experience, you need to choose a lender with good customer service. Before you submit your loan application, make sure you check out the available customer service channels and how prompt the lender responds to you when you need it.
  • Eligibility Criteria Although a bank or financial institution might offer personal loans at very low interest rates, it is important to verify that you meet the criteria set by the lender. It would be best if you verified that your income is within the allowed limits and that you meet any age restrictions.
  • Loan Disbursal Times: If your emergency calls for a personal loan, you should consider the loan disbursal times. Many banks and financial institutions are quick to disburse your loan amount.
  • Other charges: Although the interest rate may be higher, the lender may not charge you any additional fees. However, you might be able to lower the total cost of the loan by reducing the check/EMI bounce, instrument return charges and stamp duty charges. Before you apply for a personal loan, compare all charges.
  • Discounts While the bank/financial institution might have set a high interest rate for you, you can negotiate with them to get a lower rate. Lenders will often offer discounts to customers who are already clients or have maintained good relationships with them.
  • Special Offers: Certain lenders may charge you a lower interest rate during festive occasions.

How to Calculate EMI on Your Loan?

To calculate your EMI, you can use the Personal loan EMI calculator provided by BankBazaar. To calculate the monthly EMI, you’ll need to enter the loan amount and repayment term, as well as the interest rate and processing fee.

Personal Loan Interest Rate

Personal loan interest rates are between 7.90% and 49% p.a. 4.9% p.a. The interest rate on your loan will be determined based on the amount you borrowed, your credit score, and the length of your repayment term. The interest rate for your loan may be lower if you have good credit and a good relationship.

Formula to Calculate Personal Loan EMI

EMI = [PxRX(1+R)^N]/[(1+R)^N-1], wherein P represents the loan amount, R is the interest rate charged per month, and N indicates the total number of monthly installments.

Illustration

Mr. Mehta is a 33-year-old IT engineer who wants to get a personal loan for his wedding expenses. He plans to apply for a loan amounting to Rs.10 lakh and repay the loan in 36 months. He anticipates paying 14% per annum in interest. For the loan.

He will then need to go to a bank/NBFC website or a website with an EMI calculator to calculate the EMI of the personal loan. Then he will need to enter the loan amount of Rs.10 lakh, the term of the loan, which is 36 months, and the interest rate, which is 14% per annum.

The EMI payable of Rs.34,178 per month will be displayed after you enter these details. The total amount payable is Rs.12 30,395, and the interest payable is Rs.2,30 395 in his case.

It is essential to consider the interest rate on your loan. We’ve collected some common questions that borrowers often ask about their loan interest rates.

What are some of the other fees levied by lenders?

Other than the loan rate, there may be additional costs that you have to pay. The following are some of these:

  • Processing fees – to process your application
  • Verification fees – to verify your background and other parameters
  • Taxes imposed by the government – GST
  • Late payment fees – if your EMIs are not paid on time
  • Prepayment fees – If you wish to prepay a portion of your loan,
  • Foreclosure fees – If you need to close your loan before the schedule,

How is my prepayment fee calculated?

Prepayment fees are usually calculated in one of two ways.

  • A percentage of the amount that you wish to prepay
  • A portion of the principal amount remains at the time you prepay.

Some lenders may charge you a fixed fee for this facility.