Personal Loan Interest Rates

As per the current rates, Yes Bank offers the lowest interest rate of 10.45%.The rate at which you get a personal loan depends on the reputation of the company you work with, loan amount, your credit score and your existing banking relationship with the bank. Typically, banks charge lower rate for a higher loan amount and for employees working with large and reputed companies.

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 a quick disbursal within a few hours to 1-2 days. Interest rate on instant personal loan of these top banks are in the range of 10.5% to 17.99%. Further, if 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 an instant disbursement without the need to submit any documents for personal loans.

As mentioned above, a personal loan interest rate differs across different lenders. However, the personal loan rate may also differ across the different types of borrowers such as salaried employees, self-employed, pensioners and women borrowers. Detailed information about the varying personal loan rates against these categories is listed as follows: 

Current Personal Loan Rates for Salaried Employees

The occupation of an individual plays a major role in getting an affordable interest rate. While both salaried and self-employed professionals can apply for a personal loan, in general, salaried employees can avail the loan at a comparatively lower interest rate. This is because salaried employees have stability in their jobs with a fixed source of income. Some of the top lenders providing the lowest personal loan interest rates for salaried employees are:

Current Rates for Instant Personal Loan

Various personal loan lenders offer Instant Personal Loans to existing customers and to borrowers with good credit scores. Some of the top lenders with the lowest personal loan interest rates are listed as follows:

Latest Personal Loan Rates for Self Employed

Apart from salaried individuals, self-employed professionals with a stable source of income can also apply for a personal loan. Self-employed professionals, however, need to provide accurate proofs of business existence and income certificates to ensure the lender of the repayment capability. List of top lenders providing the lowest personal loan interest rates for self-employed are listed as follows: 

Current Personal Loan Rates for Pensioners

Various lenders such as SBI and PNB provide concessional personal loan interest rates to Pensioners in comparison to the general public. The discount on the personal loan rate could be even more when pensioners borrow the loan form the same bank when they hold the pension account. However, the lowest interest rate on personal loan is 10.45%.

Today’s personal loan rates for women

In order to boost the urge of financial independence among the women in the country, many top lenders provide discounted personal loan rates to women borrowers. The discounted rates for women borrowers may boost the employment opportunities for salaried, self-employed and entrepreneur women. Some of the top personal loan lenders with the lowest personal loan rates are:

Personal loan rates may vary across banks; thus, there is always a lender that offers the lowest personal loan interest rate. In case you feel that you are paying high interest to the lender, you may switch the lender without closing the loan through the personal loan balance transfer facility. Various Banks offer special rates on personal loan balance transfer. Currently Yes Bank offer the lowest personal loan balance transfer rate of 10.45%.

Illustration: Suppose you have an outstanding balance on a personal loan of ₹ 5,00,000 to be paid at an interest rate of 15% for a remaining tenure of 3 years. In that case, your monthly EMI would be ₹ 17,333 with a total interest payout of ₹ 1.24 Lakh. However, if you plan to switch to lender B who provides an interest rate of 12%, then your monthly EMI would be ₹ 16,607 on the outstanding balance of ₹ 5,00,000. This is further depicted in the table below:

Thus, on transferring your personal loan from lender A to lender B, you can save upto ₹ 726 on your per month EMI, which amounts to saving ₹ 8,712 per year. Further, the saving on total interest payout on transferring the loan would be ₹ 26,118 . If you want additional funds, you can avail personal loan top up at the time of balance transfer.

There are a number of factors that affect personal loan interest rates. These are listed as follows: 

• Credit score : Personal loans are unsecured loans that are offered only on the basis of a person's repayment ability. This, however, is ensured with the help of credit score.  All personal loan lenders ensure lending loans to an individual with a good credit score of 700 and above. In case of relatively low credit score, you may either get a personal loan at a high rate of interest or may not get it all.
• Income : Income is another factor that ensures the lender of the loan repayment ability of the borrower. Thus, the higher the income, the lower would be the personal interest rate. Many lenders have fixed income criteria for lending personal loans, failing to which you may not be considered an eligible personal loan borrower.
• Repayment history : A good repayment history depicts the financial discipline related to payments and repayment of loans and credit card bills. In case of any defaults in the repayment schedule, the lender may be suspicious of your abilities and may charge a higher interest rate. Thus, the credibility of your repayment history may help you grab a lower interest rate.
• Existing relationship with the bank : In case you are an old customer of the lender via a savings or investment account, then it is likely that you will be offered a lower interest rate from that bank. This is because banks often offer pre-approved personal loans at concessional rates to their existing customers, in order to maintain their relationship with the existing customers. 
• Your organization’s reputation : The reputation of the organization you are currently working for plays an important role in helping you grab a decent personal loan interest rate. This is because a renowned and stable organisation will ensure the lender of your jobs security.

As personal loans are unsecured loans, banks consider several factors before deciding to sanction the loan and offer low interest rates. Factors that have to be kept in mind when you apply for a personal loan are as follows:

• Check special offers for your company – Always check current offers and interest rates offered for the company you are working for, as banks run special schemes for employees of top corporate.
• Compare bank offers for varios loan amount – Some banks offer low interest rate at higher loan amount.
• Check for rates at various loan tenure – Banks may offer lower rates on personal loan for certain tenure and, if possible, opt for tenures with lower interest rates.
• Apply for loan amount within the limit you are eligible for – Applying for an amount higher than your eligibility may lead to rejection of your loan application. Always check eligibility for a particular amount of loan before applying.
• Avoid multiple bank application - Simultaneous loan applications get recorded in your CIBIL report and can hurt your chances of getting a loan as well as your credit score
• Look beyond the offer from your salary bank – It is not e Various banks keep offering attractive schemes to acquire premium customers. Hence, the offer from your salary bank may not be the best option.

You should do a detailed comparison of personal loan interest rates and charges of all banks before chosing the best bank for personal loan.

• Special offers for salaried employees and salaried account customers: 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.
• Processing fees – Most banks charge a processing fees of ₹ 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) or the effective rate on personal finance loans to compare and select the right offer.
• 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.
• Personal loan prepayment and foreclosure Banks typically levy prepayment or foreclosure charges on personal loans that can range from from nil to up to 5%. So, be careful to be mindful of choosing a loan with low prepayment charges as you consider low rate personal loan offers.

• 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 ₹ 9,000 to ₹ 75 Lakh.
  • Loan Tenure: Can range from 1 to 72 months.
  • Interest rates: Personal Loan Interest Rates starting from 10.45%.
  • Personal Loan EMI: Lowest EMI of ₹ 2,147 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.