Personal Loan Interest Rates
Personal Loan Interest Rate in India Oct 2019
4th October 2019 – RBI cuts repo rate by 25 bps to 5.15%
| Interest Rate | 10.50% onwards |
| Processing Fee | Upto 2% of loan amount |
| Loan Tenure | Upto 5 years |
| Lowest EMI Per Lakh | ₹ 2,149 for 5 years |
| Prepayment Charges | Nil to upto 5% |
- Paperless Approval from HDFC Bank, Tata Capital, RBL Bank, Citibank, ICICI Bank
- Option to get direct call from IndusInd Bank
- Check Best Offers starting @10.50%*
- Watch which is the best personal loan
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Personal Loan Interest Rates Comparison, Best Personal Loan Rates
| Bank | Personal Loan Interest Rates | Processing Fee |
|---|---|---|
| SBI Personal Loan | 12.50% | In the range of 2% to 3% |
| HDFC Bank Personal Loan | 10.75% | Upto 2.50% Min Rs. 1,999 |
| ICICI Bank Personal Loan | 11.25% | Starting from 0.99%, Up to 2.25% |
| Bajaj Finserv | 11.99% | Starting from 1.50%, Up to 3% |
| Citibank | 10.50% | Upto 0.5% |
| IDFC First Bank | 11.50% | 1 - 1.5% |
| Axis Bank | 11.25% | 1.50% to 2.00% |
| Tata Capital | 10.99% | Flat fee of Rs. 1499*, Upto 2.50% |
| Fullerton India | 13.99% | Min 2% |
| IndusInd Bank | 11.00% | Min 1% to Max 2.50% |
| Kotak Bank | 10.50% | Upto 2.5% |
| RBL Bank | 13.99% | Upto 2% |
| IIFL | 12.99% | 1 - 2% |
| HDB Financial | 13.99% | Upto 2% of loan amount |
| PNB | 12.00% | 1.8% + taxes |
| Andhra Bank | 11.55% | Case to Case |
| Yes Bank | 10.99% | Starting at 0.99%, Up to 2% |
| Union Bank of India | 12.70% | 0.5%, Min Rs. 500 |
| Bank of Baroda | 11.60% | 2%, Min Rs. 250 |
| Syndicate Bank | 13.40% | 0.5%, Min Rs. 500 |
| Standard Chartered Bank | 10.99% | 1.00% |
| Bank of Maharashtra | 15.10% | 1%, Min Rs. 1,000 |
| Canara Bank | 13.00% | 0.50% |
| Muthoot | 14.00% | 2.5-3.5% |
| Corporation Bank | 12.95% | 1.5%, Min Rs. 500 |
| Karur Vysya Bank | 13.90% | 0.40% |
| Federal Bank | 11.49% | 0.5%, Min Rs. 500 |
| Indian Overseas Bank | 12.70% | Rs. 204 per lakh |
| Indian Bank | 11.05% | 0.5%, Min- Rs. 508 |
| Allahabad Bank | 13.15% | 1.06%, Min- Rs. 1068 |
| IDBI Bank | 13.20% | 1% |
Personal Loan
Personal loans are unsecured loans available for both salaried and self-employed borrowers to help meet their general personal or private expenses that are urgent and immediate in nature. Unsecured loans are loans without any security that can be availed quickly. The rate of interest on personal loans is higher than that on secured loans. There are multiple personal loan providers in India which offer cheap and quick loans. You need a new loan only if:
- You are in the midst of a financial crisis and need immediate funds.
- You do not have a collateral to take a secured loan.
- You do not have time to go through detailed documentation and loan process.
- You need a short term loan of not more than five years.
Benefits of taking a personal loans are : -
- Unsecured in nature with no requirement of collateral or a security
- Fast turnaround with loan approval in as quick as a few hours. Banks now offer instant personal loans as well.
- Minimum documentation with approval based on basic KYC, quick background checks, CIBIL score and income proofs
How to Get the Best Personal Loan Interest Rates?
As per the current rates, Citibank, Kotak Bank offers the lowest interest rate of 10.50%. You can get best personal loan depending upon the company you are working with, loan amount you have applied for and your repayment capacity. Higher the loan amount, lower will be the rate of interest.
HDFC Bank, Tata Capital, RBL Bank, Citibank, ICICI Bank are the best banks for personal loan, if you are looking for an instant personal loan with in 1-2 days. The interest rates of these banks are in the range of 10.5% to 18%. These loans providers offer online lending process. You can get instant personal loan approval from these banks online at MyLoanCare and check eligibility without having to submit paper documents. Post approval, in case you are an existing bank account holder or existing loan customer of HDFC Bank, Tata Capital, RBL Bank, Citibank, ICICI Bank, you may be eligible for instant disbursement without any documents. In other cases, you may upload a few documents on mobile app or submit them physically to a bank loan officer who will visit you at your place before loan disbursement.
To get lowest personal loan interest rate online, read the do’s and don’ts mentioned below.
| Do’s | Don’ts |
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Compare Personal Loan Interest Rates of All Banks
You should do a detailed comparison of personal loan interest rates and charges of all banks before chosing the best bank for personal loan.
- Interest rates for personal loans: Banks launch attractive schemes with low interest rates on a regular basis, especially for individuals working with large reputed companies. Rate of interest varies based on the categorisation of your company in the internal categories of banks which can vary from bank to bank. Hence, always check for personal loan offers from multiple banks to get the cheapest rates
- Personal loan processing fees – Most banks charge a processing fees of Rs. 999 to upto 2% of loan amount, whichever is higher. Since these loans are short tenure loans, higher processing fees can result in significantly high cost on loans. Hence, it is important to compare the All Inclusive Rates (AIRs) for personal finance loans to compare and shortlist the top offer. Get detailed comparison on interest rate, processing fees and attractive cash back offers by applying online through MyLoanCare.
- Insurance premium - Since these are unsecured loans, banks request the borrower to take an insurance policy when availing a loan. However, the premium varies from bank to bank depending upon the risk coverage under various policies. So, check the loan sanction letter carefully to know the coverage and premium. You may also want to do a comparison of various insurance policies to be able to choose a policy which gives you adequate coverage at lowest premium.
- Personal loan prepayment and foreclosure – Nobody wants to keep paying interest on a loan when you have surplus money available to repay it. Sometimes you may want to repay a part of your loan before time which is called part prepayment. In case you decide to pay the entire loan amount before time, it is called foreclosure. Banks typically levy prepayment or foreclosure charges on personal loans ranging from nil to up to 5%. So, check carefully if the low interest rate personal loan you are getting comes with high prepayment or foreclosure charges. Some banks, might not allow you to prepay your loans before few months and the same needs to be considered while taking a loan.
Quick Guide on Personal Loan
- Purpose: Some of the basic purposes for which this loan is granted include vacation or travel, higher education, wedding, medical treatment, credit card payment and many more. Banks specify the purpose for which they are willing to grant this loan.
- Key Features:
- Age of the borrower: Loan available for both salaried and self-employed profesionals within the age group of 21 and 60 years
- Loan Amount: In the range of ₹ 50,000 to ₹ 75 Lakh.
- Loan Tenure: Can range from 3 to 72 months.
- Interest rates: Personal Loan Interest Rates starting from 10.50%.
- Personal Loan EMI: Lowest EMI of ₹ 2,149 per lakh.
- Work Experience: Up to 3 years of total experience.
- Processing Fees: Up to 2% of loan amount.
- Documents Required: Address Proof, Identity Proof, Income Documents.
- Special Schemes: Banks offer customized personal loan interest rates and schemes for salaried borrowers working in government, defense, private or MNC companies. Banks offer personal loan to self employed professionals like Doctors, CA, CS, Architects. Top banks has also launched special loan schemes to pensioners up to an age of 76 years.
Watch this video to know the best personal loan for you.
How to Improve Your Chances of Getting a Personal Finance Loan
These loans are mostly unsecured in nature, banks have a pre decided set of rules (credit policies). Many loan applications get rejected as the borrower do not fulfil the basic set of rules of banks for approval of personal loan. Hence, it is important that the borrower works on improving his or her chances of getting a loan using some simple tips.
- Calculate your credit score and improve it - Always check and calculate your credit score before applying for loan. Credit bureaus operating in India such as CIBIL, Equifax, Experian and CRIF High Mark usually help in providing personalised credit report within 24 hours of applying. Low credit score implies that there are higher chances of defaulting on loan payments whereas a high score not only increases the chances of getting loan approval but also getting low interest personal loan rates for borrowers. So, it’s necessary to improve your score above 750 to get the loan approved.
- Identify options for bad credit loans - In case your credit score is less than 750, you might want to wait for a few months and work on improving your credit score. However, if you are not in a position to wait, you should look for NBFCs or banks that provide loan for a lower credit score as well. In such situations you can also take gold loan or loan against fixed deposits which do not take into account your past credit score.
- Identify the right product for you - You should carefully compare and select the right bank for loan as different banks have different interest rates and eligibility criteria. Always, make a personal loan comparison for interest charges and other loan terms such as tenure, foreclosure charges and other hidden charges before finalising the loan. Approaching banks through online market places may provide you a quick and detailed comparison of key loan offers and help you make the right choice.
- Avoid multiple loan applications - Sometimes, customers in a hurry to get a loan, apply for a loan with multiple banks to improve their chance of getting a loan on time. However, applying for multiple personal loan applications increases the probability of the loan being rejected as each query gets captured in your credit report and multiple queries can adversely impact your CIBIL score.
- Try to keep a gap of minimum 6 months between personal loan applications - Most of the banks do not grant a new loan to a borrower who has availed an unsecured personal loan in the last six months. In such cases, banks may doubt that you will not be able to bear the burden of additional EMI payments. There should always be a gap of 6 months between two loan applications.
- Be honest and provide accurate information - Always be honest by providing accurate details to the bank. This makes the process easy and convenient for both lenders and customers. Lenders verify the information provided by you. They also call to confirm your personal data and if they feel it’s incorrect, they may reject the loan application.
- Maintain job stability - Lenders require that the customer has at least two years of work experience in a particular job. So, avoid switching jobs if you want to improve your chances of getting a personal loan.
- Apply for a loan amount based on your repayment capacity - Before applying for loan; determine the loan amount that you will be able to repay in future. Use online eligibility calculators to calculate your loan amount eligibility. Requesting for loan amount higher than your eligibility might increase the chances of rejection of the loan application. Banks also calculate the ratio of fixed expenses to income ratio of a potential borrower to estimate the amount of loan that can be serviced by the potential borrowers. Lower the ratio, higher the chances of loan being approved.
Last, but not the least. Practice a healthy credit discipline regimen to maintain a healthy score and improve the chances of getting a loan. This regimen includes paying EMIs on time (every late payment reduces your credit score), restricting the number of credit cards, reducing the limit usage on credit cards, resort to taking a secured credit, wherever possible and regularly checking your credit report to ensure timely course corrections.
So, follow the above tips to get your loan application being approved easily and reduce the chances of rejection.
Documents Required for Personal Loan
| Documents Required | Individuals | Firms, Partnerships |
|---|---|---|
| Signed Application Form | Required | Required |
| Identity Proof | PAN card, Passport, Driving License, Aadhar Card, Voter id, Govt issued i-card | PAN card, Passport, Driving License, Aadhar Card, Voter id, Govt issued i-card |
| Certificate and Proof of Business Existence | PAN , sales tax/ excise/ VAT/ service tax registration, Copy of partnership deed, Trade license, certificate of practice, registration certificate issued by RBI, SEBI | |
| Address Proof | Passport, Driving License, Election ID card, Electricity/ Telephone/ Mobile bill/ bank statement (not more than 3 months old) | Bank statement, utility bill, Registry copy, lease or rent agreement, TAN allotment letter |
| Age Proof | PAN card, Passport, Driving License, Voter id card, Birth certificate, Employee ID card (only for PSU/ Government employees), School/ college leaving certificate | PAN card, Passport, Driving License, Voter id card, Birth certificate, Employee ID card (only for PSU/ Government employees), School/ college leaving certificate |
| Income Proof | Last 2 years Form 16, last 6 months salary slip, last 6 months' bank account statement showing salary credit | Last 2 years ITR, last 6 months bank account statement |
| Maximum Annual Percentage Rate (APR) | 10.50% to 22% |
| Representative example of the total cost of the loan, including all applicable fees |
Here is an illustration of the total cost of the loan:
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FAQs on Personal Loan
HDFC Bank, Citibank, Kotak Bank are the best banks for taking a personal loan based on their current personal loan rates as they offer interest rate in the range of 10.50% to 10.75%.
Why do I need Personal loan?This loan is usually taken to meet short term needs. Generally the purpose of this loan is to pay off credit card debts, family vacation, wedding, medical emergency, etc. Personal loan rates are mostly fixed and higher than other loan types. So, loan should be taken only in case of emergencies. Also, you should have a plan that you can make all your repayments on time. If you have a low CIBIL score, then you should not apply in multiple banks for loan as each rejection will drop your CIBIL score.
I want personal loan. How can I get a personal loan?You can apply in several ways. You can directly visit the bank branch and meet the sales person, contact a loan agent or apply online at any bank or NBFC’s website. You can also compare interest rates of all banks, apply for loan and get personal loans online approval at MyLoanCare. You can also chose to apply for personal loan from private lenders to get best loan offers.
Can I apply personal loan in my hometown?Yes, you can apply personal loan online in your home town provided you have sufficient income to pay the EMIs on time and have good credit history. You can also compare personal loan offers for different cities at MyLoanCare.
What is the minimum and maximum tenure of personal loan?These are generally taken for a short period of time. Generally, the loan tenure is between 12 months to 60 months.
What are the charges for personal loan?In addition to rate of interest, banks charge the following two fees on personal loans.
- Processing fee: This fees is charged when you apply for a loan. The processing fee can range between 2 – 3% of the loan amount and can be negotiated down, if you bargain. It also helps, if you approach the bank through an online market place like myloancare.in, as we negotiate with the bank on your behalf and also, offer attractive cash backs on sanctioned loans. Sometimes, we also get to offer exclusive loan schemes on behalf of the banks such as nil processing fees for our valued customers.
- Pre-closure fee: This fees is charged when you decide to close your loan before the completion of loan tenure. Banks imposes this penalty to cover the loss it can incur due to premature closing of a fixed rate loan. Prepayment penalty can range up to 5% of the loan amount. You need to read the terms and conditions of your loan agreement carefully to check on the prepayment clause and ensure that it is not too strict compared to market benchmarks. Banks are also open to revise the prepayment clauses if negotiated and discussed by the borrower or his loan care representative.
CIBIL score ranges from 300 to 900. A score of 750 and above is considered as good score to get personal loan. Higher the credit score, higher the chances to get loan application approved.
Do I need to open a bank account to service my personal loan?Yes, you need to have at least one functional bank account in your name. It is even better if you have an account with the same bank from which you would like to get a loan.
Can I apply for personal loan jointly with my spouse?Yes, you can apply jointly with a co-applicant (either be your spouse or your parents). This helps you to increase your eligibility and you can also avail for a higher amount of loan as your co-applicant’s income also gets added to your income and that total is taken into consideration for calculating the loan amount you will be eligible for.
Does it affect my co-applicant if I default in personal loan?Yes, if you fail to pay the loan on time then it will also affect your co-applicant as default in loan will affect his/her CIBIL rating as well.
What are the main factors that affect interest rate of personal loan?As these are unsecured loans so they have higher rate of interest. Personal loan interest rates vary for different loan amount, company category and net income. High income and good company profile can lend you high loan amount at low interest rate. Personal loan rates for government employee and defence personnel may be different from that for private salaried employees.
Can I do balance transfer on personal loan?Yes, if you are getting higher rate of interest and paying higher EMI than other banks, then you can opt for personal loan balance transfer and reduce your monthly burden.
Can I get top up on personal loan?Yes, you can get top up loan but terms and conditions vary from bank to bank.
How can I prevent rejection of my personal loan application?Banks or NBFCs give loan to those borrowers about whom they are sure that he/she can repay the loan. You need to know few details if you don’t want your application to get rejected:
- In this case, if you have a spouse who is also working, you can add her as a co-applicant to boost the combined salary levels.
- Clear your old debts first so that your leverage levels come down.
- You can also balance transfer your existing loans so that the rate of interest on loans can come down and additional loan can be availed.
- If your loan application is rejected due to a low CIBIL score, you can opt for loans where a CIBIL check is not required. Regular repayment track record on this loans can actually improve your CIBIL score. You can also try taking a loan from lenders which lend to borrowers with a low CIBIL score. However, the rate of interest offered by these lenders are generally higher than those offered by banks.
Yes, you can make payments from outside India through net-banking or online banking facility provided by banks.
Can I get a personal loan for pensioner if I have a pension account with one of the leading private banks in India?There are several private as well as public sector banks which offer loan to pensioners.You can get loan of up to 10-20 times of your monthly pension.
What are the benefits of part prepayment of a loan?Part prepayment allows to you utilize any surplus income you have towards repaying your loan and hence, decrease your fixed expenses burden. It also allows you to reduce the total interest cost of a loan by either decreasing your EMI or reducing your loan tenure. Banks allows prepayment and foreclosure after a few initial months. However, as personal loans are fixed rate loans, banks typically charge a prepayment penalty of 2-5% over prepaid principal amount. It is important to understand the cost implications of prepayment, before taking a loan as well as before taking a decision to prepay.
Can I get a personal loan with a bad credit score?Yes, you may be eligible for qualifying a personal loan even with a low CIBIL score. But, the lenders may charge a higher rate of interest on your loan and may ask you to apply for loan along with a co-applicant to improve your credit worthiness.
What are the tax benefits available on personal loans?Personal loans have no explicit tax benefits but you may sometimes get a tax exemption, based on the purpose of personal loan. If you take a personal loan for home renovations and/or down payment, you may be eligible for Income Tax deduction under Section 24 of Income Tax Act. This tax benefit available only on the interest paid on the loan and not for the principal amount. Similarly, if you have taken the personal loan for meeting your business expenses, you can claim the interest paid on such loans against your taxable income, thus reducing your tax liability.
Do I need to contact financial institution directly, if I take a personal loan from www.myloancare.in?If you decide to take a loan through www.myloancare.in, you are not required to contact the bank directly. Our company representative will process your application with the bank and will regularly stay in touch with you until your loan get sanctioned. The bank officials may call your for checks and documentation, but our assigned loan officer will assist you at each step of the loan process.
Do lending institutions change interest rates after sanction of loan?Usually, personal loans are given at fixed interest rates and hence banks do not change these rates after sanction. However, if you have opted for a floating interest rate, the rate of interest will be reset at regular intervals by the bank in response to fluctuations in market interest rates.
Nowadays, almost all banks offer attractive schemes on Personal Loan at competitive rates with many customer friendly features. You can do rates comparison, check your eligibility, calculate EMI, apply online and get the best Personal Loan rates. MyLoanCare helps you throughout the loan process from the day you apply to the time you get disbursement. You can register with us, track your loan status on a regular basis and get an option to earn attractive cashbacks and refer and earn benefits.
- Apply Personal Loan Online
- Compare Personal Loan Interest Rates
- Check Personal Loan Eligibility
- Calculate Personal Loan EMI
- Personal Loan Application
- Personal Loan Offers in Your City
- Personal Loan for Self Employed
- Personal Loan for Government Employees
- Tax Benefit on Personal Loan
- MyLoanCare Personal Loan Guide
- Marriage Loan
- Travel, Vacation Loan
- Instant Loans
- Doctor's loan
- Personal Loan Reviews
- Personal Loan Documents
- Personal Loan Balance Transfer
