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Personal Loan Interest Rates

Personal Loan Rate of Interest in 2022

Last Updated 22nd May 2022

  • Current personal loan interest rates start @10.25% Check Best Offers
  • Compare personal loan rates of different banks to get the best offer from HDFC Bank, Tata Capital, ICICI Bank, IDFC First Bank, Axis Bank
  • Get a personal loan based on your eligibility at the best rates using a personal loan eligibility calculator online.
Bank Name Rates EMI Per Lakh
ICICI Bank 10.25% ₹ 2,137 for 60 months
HDFC Bank 10.25% ₹ 2,137 for 60 months
Kotak Bank 10.45% ₹ 2,558 for 48 months
Axis Bank 10.49% ₹ 2,149 for 60 months
IndusInd Bank 10.49% ₹ 2,149 for 60 months
Apply for Personal Loan @ 10.25%* Get upto ₹ 1,000* Voucher

Compare Personal Loan Interest Rate of all Banks in 2022

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Bank Name Interest Rates Processing Fee
SBI Interest Rates
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9.60% Nil
HDFC Bank Interest Rates
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10.25% Upto 2.50% Min ₹ 999
ICICI Bank Interest Rates
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10.25% upto 2.25% of the loan amount
Bajaj Finserv Interest Rates
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12.99% Starting from 1.50%, Up to 3%
IDFC First Bank Interest Rates
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10.49% Upto 2.00%
Axis Bank Interest Rates
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10.49% Rs.4,999
Tata Capital Interest Rates
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10.49% Upto 2.50% of Loan Amount
Fullerton India Interest Rates
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11.99% 2%
IndusInd Bank Interest Rates
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10.49% Min 0.75% to Max 1.75%
Kotak Bank Interest Rates
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10.45% Starting from Rs.999

Personal Loan Rate of Interest: Details

As per the current rates, HDFC Bank, ICICI Bank offers interest rate starting at 10.25%. The lowest personal loan rates have fallen by 0.15% from the previous rates and are applicable from 20 April, 2021. You can be eligible to get personal loan best rates if you are salaried, working in a reputed company with no payment defaults and have an existing relationship with the bank. Typically, banks charge lower rates for a higher loan amount and for employees working with large and reputed companies. You can compare personal loan interest all banks to get the best rates based on your eligibility.

HDFC Bank, Tata Capital, ICICI Bank, IDFC First Bank, Axis Bank are the best banks for personal loans, 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 loans of these top banks are in the range of 10.25% to 17.25%. Further, if you are an existing bank account holder or existing loan customer of HDFC Bank, Tata Capital, ICICI Bank, IDFC First Bank, Axis Bank, you may be eligible for an instant disbursement without the need to submit any documents for personal loans.

Types of Personal Loan Interests

There are two types of interest rates applicable on a personal loan:

  • Fixed-Rate of Interest: As the name suggests, under a fixed rate of interest, the rate of interest and the amount of EMI remains constant throughout the tenure. While the borrowers can easily plan their budget for the long term, fixed rates are generally 1% - 2% higher than the floating rate of interest.
  • Floating Rate of Interest: Under the floating rate of interest, the rates are linked to internal benchmarks of the lending institutions and do not remain the same throughout the loan tenure. As a result, there is either a change in loan tenure or an increase/decrease in the EMI amount of personal loans.

Interest Rates for Different Applicants

Interest Rate for Salaried Employee

Both salaried and self-employed professionals like doctors, CAs etc can apply for a personal loan. However, the interest rates on personal loan for salaried employees are is less than that for self-employed professionals. Top banks that provide competitive rates for salaried employees is given below:

Bank Interest Rate Processing Fee Maximum Loan Amount
ICICI Bank 10.25% - 22.00% upto 2.25% of the loan amount ₹ 30 Lakh
HDFC Bank 10.25% - 22.00% Upto 2.50% Min ₹ 999 ₹ 75 Lakh
Kotak Bank 10.45% - 17.99% Starting from Rs.999 ₹ 50 Lakh
Axis Bank 10.49% - 17.25% Rs.4,999 ₹ 25 Lakh
IndusInd Bank 10.49% - 20.00% Min 0.75% to Max 1.75% ₹ 25 Lakh
Tata Capital 10.49% - 17.99% Upto 2.50% of Loan Amount ₹ 25 Lakh
Federal Bank 10.49% - 17.99% 0.5%, Min Rs. 500 ₹ 10 Lakh
IDFC First Bank 10.49% - 22.00% Upto 2.00% ₹ 40 Lakh

Apart from salaried individuals, self-employed professionals with a stable source of income can also apply for a personal loan. The list of top lenders providing the best personal loan interest rates for self-employed are listed as follows:

Bank Interest Rate Processing Fee
ICICI Bank 10.50% -10.50% Rs. 1999
Yes Bank 10.50% -10.50% Rs. 1499
HDFC Bank 10.85% -10.85% Rs. 499
Bank of Baroda 11.05% -14.10% Upto 2%, Min Rs. 1,000 and Max Rs. 10,000
Corporation Bank 11.20% -15.00% Upto 0.75%, Min Rs. 5,000

Current Rates of Interest for Pensioners

Various government banks such as SBI and PNB provide concessional interest rates on a personal loan for pensioners with rates starting at 9.75% The best personal loan rates for salaried employee starts at 10.25% and can even be cheaper if you borrow from the same bank where you hold the pension account.

Personal Loan Rates for Women

To boost financial independence among the women in the country, many top lenders provide discounted rates to women borrowers. Leading lenders that offer special personal loan schemes for women at best rates are:

Bank Interest Rate Processing Fee
ICICI Bank 10.25% -22.00%upto 2.25% of the loan amount
HDFC Bank 10.25% -22.00%Upto 2.50% Min ₹ 999
Kotak Bank 10.45% -17.99%Starting from Rs.999
Axis Bank 10.49% -17.25%Rs.4,999
IndusInd Bank 10.49% -20.00%Min 0.75% to Max 1.75%

Instant Personal Loan Interest Rates

Today, almost all top banks in India offer instant personal loans with a completely online process, quick disbursal and competitive interest rates starting at 10.25%. The best part is that you do not need to visit a branch even once to get a loan. Top lenders with instant interest rates are listed as follows:

Bank Name Interest Rate on Instant Loans Processing Fee
SBI9.60% to 15.65% Nil
HDFC Bank10.25% to 22.00% Upto 2.50% Min ₹ 999
ICICI Bank10.25% to 22.00% upto 2.25% of the loan amount
Citibank10.99% to 18.99% Upto 0.5%
Bajaj Finserv12.99% to 15.50% Starting from 1.50%, Up to 3%

Balance Transfer Rates to Other Bank

In case you are paying high interest to the current lender, you may switch the lender without closing the loan through the personal loan balance transfer facility.

Illustration: Suppose you have an outstanding balance on a personal loan of ₹ 5,00,000 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. Consider the table below to understand the same further:

Parameters Existing Loan Balance Transfer
Outstanding Loan Amount ₹ 5,00,000 ₹ 5,00,000
Interest Rates 15 % 12 %
Remaining Tenure 3 years 3 years
EMI ₹ 17,333 ₹ 16,607
Total Interest Payout ₹ 1,23,976 ₹ 97,858
Total Amount Payable ₹ 6,23,976 ₹ 5,97,858
Savings - ₹ 26,118

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.

Methods & Formula to Calculate Interest Rates on Your Personal Loan

Interest Calculation on Personal Loan can be done using flat rate or reducing balance method. All leading banks and NBFCs in India calculate the interest rate on personal loans using the reducing balance method which is a more transparent method of calculation and recommended by RBI. A flat rate of interest is always costlier than a loan taken on reducing balance at the same rate as explained in the table below where interest outgo on a loan taken on a flat rate of 14% is 1.8 times that on a personal loan taken on a reducing rate of 14%.

The mathematical formula for personal loan interest calculation is as follows:

  • Flat Rate Method: Interest is calculated on the entire principal amount
    EMI = (Principal + total interest payable) / loan tenor in month
    Where Total Interest Payable = Principal x Interest Rate x Loan Tenure/100)
  • Reducing Balance Method: Interest is calculated on the outstanding principal amount
    EMI= [P x R x (1+R)^N]/[(1+R)^ (N-1)]
    Where P = Principal Amount
    R = Rate of Interest
    N = Loan Tenure in months

The functioning of the above-mentioned methods can be understood with the help of the following table:

Parameters Flat Rate Method Reducing Balance Method
Loan amount ₹ 6,00,000 ₹ 6,00,000
Tenure 60 months 60 months
Rate of Interest 14 % 14 %
Monthly EMI ₹ 17,000 ₹ 13,961
Total Interest Payout ₹ 4,20,000 ₹ 2,37,627
Savings - ₹ 1,82,373

How to Get a Personal Loan at Minimum Interest Rate?

As personal loans are unsecured loans, banks consider several factors before deciding to sanction the personal loan minimum interest rate. Keep in mind the following factors that affect personal loan rate to get best interest rate:

  • 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 companies. The reputation and rating of the organization you are currently working for also help you grab a decent interest rate on personal loans.
  • Compare bank offers for various loan amounts:- Some banks offer low interest rates at a higher loan amount. Thus you must compare bank offers for varying loan amounts. Always compare bank offers for varying loan amounts.
  • Check for rates at various loan tenure:- Banks may offer lower rates on personal loans for certain tenure and, you must opt for tenures with lower interest rates.
  • Apply for a 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 calculate your eligibility before applying for a personal loan to reduce chances of rejection.
  • Avoid multiple bank applications:- Don’t apply for a personal loan with multiple lenders as it impacts your credit score and eventually also reduces your chances of approval of loans at lower rates.
  • Look beyond the offer from your salary bank:- Various banks offer attractive schemes to acquire premium customers. Hence, the offer from your salary bank may not be the best option. In case you are an old customer of the lender via a savings or investment account, then it is likely that you will be eligible for pre-approved personal loans at concessional rates.
  • Maintain a good credit score:- All personal loan lenders ensure lending loans to an individual with a good credit score of 700 and above. In case of a relatively low credit score, you may either get a personal loan at a high rate of interest or may not get it all.

Factors Affecting Personal Loan Rate of Interest in 2022

The factors below affect latest personal loan interest rates in banks:

  • Income: If you have a stable source of income, then banks might offer you a lower interest rate as you can repay the dues on time. On the other hand, lower annual income leads to a higher interest rate on a personal loan.
  • Employer Details: Working for a reputed organisation means that banks and NBFCs are more likely to offer you a reasonable interest rate.
  • Nature of the Employment: The interest rates to applicants may be further based on whether you are self-employed or salaried.
  • Age: Your age also plays a determining factor in deciding the loan rates. Individuals who are nearing the retirement age may be charged a higher interest rate.
  • Relationship with the Loan Provider: If you have a good existing relationship with the bank, then you would be offered best rate of interest for a personal loan.
  • CIBIL: Your CIBIL score is also one of the crucial factors that helps the financial institution to decide the rate of interest. If you have a CIBIL of 650 or above, then you may get a best interest rates on a personal loan.

Processing Fees and Other Charges

  • Processing Fees:- Along with Interest Rates, banks also charge processing fees on a personal loan. A processing fee on a personal loan is a one-time fee levied on the loan amount to process the application.
  • Foreclosure Charges:- If you want to prepay or close your personal loan account before the predetermined loan tenure, you need to bear fees for prepayment & foreclosure. These charges can range from nil to up to 6% of the outstanding balance.
  • Late Payment Charges:-  Banks also charge a penalty on late payment of EMIs if you delay your Personal EMI.
  • Other Charges after loan disbursal: -  A few other charges that the bank levies on personal loan customers post disbursement can include cheque bounce charges, fees for duplicate statements or loan switch fees. These charges are not to be paid by all customers and are applicable only when that event happens.
Bank Name Processing Fee Foreclosure Charges Penalty Charges Post Loan Disbursement
ICICI Bank upto 2.25% of the loan amount 5% 24% per annum Cheque Bounce Charges - ₹ 400+GST
Loan Cancellation Charges - ₹ 3000 + GST
Other Charges - ₹ 500 + GST
HDFC Bank Upto 2.50% Min ₹ 999 2 - 4% 2% Cheque Bounce Charges - ₹ 550
Loan Cancellation Charges - Nil
Kotak Bank Starting from Rs.999 Starting from Rs.999 3% per month Cheque Bounce Charges - ₹. 750
Other Charges - ₹ 500+ GST
Axis Bank Rs.4,999 For Loan Amt Approved of 10 Lacs and above-- 0% FC charges after 12 EMIs if closure through OWN FUNDS,1-12 EMI-5%, 13-24 EMI-4%, 25-36 EMI-3% & Above 36 EMI-2% 24% per annum N.A
IndusInd Bank Min 0.75% to Max 1.75% 4% Rs 150/- , Per EMI delay beyond 5 days N.A
Tata Capital Upto 2.50% of Loan Amount Rs. 1,000 to Rs. 5,000 3% per month Cheque Bounce Charges - ₹ 450 + GST
Loan Cancellation Charges - Nil
Additional Repayment Charges - ₹ 550 + GST
Other Charges - ₹ 550 + GST
Federal Bank 0.5%, Min Rs. 500 Nil prepayment charges N.A N.A
IDFC First Bank Upto 2.00% 5% foreclosure charges. Can foreclose after 3 months in case of smart personal loan 2% of the unpaid EMI or Rs 300 whichever is higher Cheque Bounce Charges - ₹ 400
Loan Cancellation Charges - 1% of the loan amount
Additional Repayment Charges - ₹ 500
Other Charges - ₹ 500
Yes Bank Upto 2.50% Up to 4% 24% per annum Cheque Bounce Charges - ₹ 750
Loan Cancellation Charges - ₹ 1000
Additional Repayment Charges - ₹ 750 + GST
Other Charges - ₹ 750
Standard Chartered Bank 1.00% 5% charges before 12 months, 4% charges after 12 months N.A N.A

FAQs

What is the personal loan interest rate today?

As per the current rates, ICICI Bank, HDFC Bank offers the lowest interest rate of 10.25%. However, the current rate of interest for a personal loan may vary based on your income and loan amount. Apply for a personal loan that you are eligible for to get the best rates. Other banks that offer low personal loan rates are Axis Bank, IndusInd Bank.

Which one provides a personal loan at a lower rate of interest – Govt. Banks, Private Banks or NBFCs?

Typically, private banks like ICICI Bank and HDFC Bank offer best personal loan rates starting at 10.25%. Currently, most of the government banks do not offer unsecured personal loans except for loans provided under government schemes and hence are not a very popular choice. NBFCs typically have a higher interest rate compared to private banks for personal and are best suited for customers who are unable to meet the stricter eligibility criteria of private banks.

Can banks change the interest rate during the loan tenure for a personal loan?

No, in India all personal loans are fixed rate loans given their short tenure of 2 years to 5 years and hence, the rates does not change during the loan tenure. Always check for the type of interest that your bank is levying while sanctioning your loan to avoid surprises at a later date and to avail cheapest personal loan interest rate.

What is the average interest rate on personal loans?

All bank personal loan interest rates range between 10.25% to 36.00%. The personal loan interest rate of different banks will vary based on factors such as your credit score, your income, the company you are employed with, your age at the time of applying for the loan, etc.

Is there any relationship discount on personal loan interest?

If you have an existing relationship with the bank and have cleared all your dues on time, banks may give you a preferential interest rate. However, if you have a bad CIBIL and do not meet other eligibility criteria, you may not be able to avail of any relationship discount on personal loan interest.

Can I get a personal loan without interest?

No, all personal loans from a bank or NBFCs, whether secured or unsecured, are not provided without interest and hence you cannot get a personal loan less interest rate.

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Personal Loan News - May 2022
  • 2022-05-13 : Punjab National Bank Increases Personal Loan Rates
    The bank has increased the rates by 40 basis points, and after the revision, the bank offers personal loans starting from 8.85% to 14.85%.
  • 2022-05-13 : South Indian Bank Posts all-time High Net Profit in Q4
    The Bank has posted an all-time high net profit of ₹272 crores for Q4 in FY 22 against ₹6.79 crores during the corresponding period of the previous year.
  • 2022-05-13 : Ujjivan Small Finance Bank Profit Falls by 7% for Q4
    The bank has reported a 7 percent fall in its net profit to Rs 126.5 crore. Earlier, the bank had posted a net profit of Rs 136 crore in the same quarter of the preceding fiscal year 2020-21.
  • 2022-05-12 : Indian Bank Revises Personal Loan Rates
    Indian Bank has increased the rates on personal loans, and as a result, the bank offers the lowest rates starting at 8.90% to upto 9.40%.
  • 2022-05-10 : Canara Bank Hikes Personal Loan Interest Rates
    The bank has increased the lowest personal loan rates from 12.40% to 12.80%.
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