Many people look for interest rates when it comes to personal loans. They go with a bank providing the lowest interest charges. Loan interest rates matter but you must be aware of other charges that people usually ignore.
You should also consider other charges like processing fees, preclosure charges while taking a personal loan.
I have curated a list of 10 best banks for the personal loan considering the following parameters along with low interest rates.
- Rate of interest
- Loan amount provided by the bank
- Processing fee
- Loan tenure
- Preclosure charges
- Wide network
Let’s discuss the personal loan interest rates in detail.
Current Personal Loan Interest Rates in India 2020
| Banks | Interest Rates | Loan Amount |
| Axis Bank | 12.00% – 24.00% | Up to Rs. 15,00,000 |
| Bajaj Finserv | 11.99% – 16.00% | Upto Rs. 25,00,000 |
| Canara Bank | 12.55% – 14.60% | Max. Rs.3,00,000 |
| Citibank | 10.99% – 20.00% | Upto Rs. 30,00,000 |
| HDFC Bank | 10.75% – 21.30% | Up to 40 lakh |
| ICICI Bank | 10.99% – 18.49% | Upto Rs. 20 lakhs |
| Kotak Mahindra Bank | 10.99% – 20.99% | Upto Rs. 20 lakhs |
| Punjab National Bank | 9.55% – 12.50% | Up to Rs. 4 lakhs. |
| SBI | 11.35% – 14.60% | Up to Rs. 20 lakh |
| Yes Bank | Starting at 10.75% | Upto Rs. 40 lakhs |
Check out – Savings account interest rate
Personal Loan Interest Rate in India Details
#1. PNB Lowest Personal Loan Interest Rate
Punjab national bank offers the lowest interest rate on the personal loans. Loans starts @ 9.55% depending on various factors.
The best part is they don’t charge any money if you wanna close your loan before completing the maturity period. These charges are called preclosure charges.
PNB Lowest Personal Loan Interest Rate – 9.55% to 12.50%
Let’s look at the other important things that you must check while taking a loan.
| Loan Amount | Interest Rate | Processing Fee | Loan Tenure | Preclosure Charges |
| 15 times the monthly salary or Up to Rs. 4 lakhs | Min. – 9.55% Max. – 12.50% | 1.80% of the loan amount | Min. – 12 months Max – 60 months | Nil |
Also read – How to apply loan under MUDRA yojana
#2. SBI Personal Loan Interest Rate
The largest bank of India has recently cut their interest charges after the repo rate reduction by Reserve Bank of India. State bank of India is now offering interest rates at a rate of 11.35%.
SBI Personal Loan Interest Rate – 11.35% to 14.60%
Let’s look at other parameters as well.
| Loan Amount | Interest Rate | Processing Fee | Loan Tenure | Preclosure Charges |
| Min. – Rs. 25,000 Max. – Rs. 20 lakh | Min. – 11.35% Max. – 14.60% | 1.5% of the loan amount | Min. – 6 months Max – 72 months | 3% on prepaid amount |
#3. HDFC Personal Loan Interest Rate
HDFC is among the most popular banks in India and it offers attractive rates of interest on personal loans. They offer flexible preclosure charges based on the tenure of loan completed.
HDFC Personal Loan Interest Rate – 10.75% to 21.30%
| Loan Amount | Interest Rate | Processing Fee | Loan Tenure | Preclosure Charges |
| Min. – Rs 50,000 Max. – 40 lakh | Min. – 10.75% Max. – 21.30% | 2.50% of the loan amount | Min. – 12 months Max – 60 months | 13-24 months – 4% of principal outstanding, 25-36 months – 3% of principal outstanding Above 36 months – 2% of principal outstanding |
Check out – Latest PPF interest rates
#4. Axis Bank Personal Loan Interest Rate
Axis bank personal loans are good for people, who know they can close loan in advance in the near future. Because Axis bank offers zero charges on loan preclosure. That would save you good amount of money.
Axis Bank Personal Loan Interest Rate – 12% to 14%
Other details are as follows.
| Loan Amount | Interest Rate | Processing Fee | Loan Tenure | Preclosure Charges |
| Min. – Rs. 50,000 Max. – Rs. 15,00,000 | Min. – 12% Max. – 24% | 1.5% to 2% of the loan amount | Min. – 12 months Max – 60 months | Nil |
#5. ICICI Personal Loan Interest Rate
ICICI is another bank that has reduced interest rates along with SBI. You get better interest rates than others but ICICI has fixed high fees on pre closure charges that are 5%.
ICICI Personal Loan Interest Rate – 10.75% to 19.50%
Let’s have a look at the other important details.
| Loan Amount | Interest Rate | Processing Fee | Loan Tenure | Preclosure Charges |
| Min. – Rs. 50,000 Max. – Rs. 20,00,000 | Min. – 10.75% Max. – 19.50% | up to 2.25% of the loan amount | Min. – 12 months Max – 60 months | 5% on principal outstanding |
#6. Bajaj Finserv Personal Loan Interest Rate
Bajaj Finserv is the largest NBFC in India offering easy credit to people especially in the consumer products segment. You can easily get loan for consumer products like smartphone, electronics, TV, washing machine and similar items.
Bajaj Finserv charges a little higher than banks but that is also because you are getting loan instantly. So it is beneficial in case of urgency.
Bajaj Finserv Personal Loan Interest Rate – 12.99%
| Loan Amount | Interest Rate | Processing Fee | Loan Tenure | Preclosure Charges |
| Up to 25,00,000 | 12.99% | up to 4.13% of the loan amount | Min. – 12 months Max – 60 months | 4% on principal outstanding |
#7. Yes Bank Personal Loan Interest Rate
Yes bank is another bank that offers low interest rates. Yes bank is famous for its faster loan approval. You just have till online application form.
Yes Bank Personal Loan Interest Rate – 10.75%
| Loan Amount | Interest Rate | Processing Fee | Loan Tenure | Preclosure Charges |
| Min. – Rs. 1.00.000 Max. – Rs. 40,00,000 | 10.75% | up to 2.50% of the loan amount | Min. – 12 months Max – 60 months | 4% on principal outstanding |
#8. Canara Bank Personal Loan Interest Rate
Major benefit of personal loan in Canara bank is no pre closure charges. You can end a loan prematurely without burning holes into your pocket.
Canara Bank Personal Loan Interest Rate – 12.99%
| Loan Amount | Interest Rate | Processing Fee | Loan Tenure | Preclosure Charges |
| Up to 25,00,000 | 12.99% | up to 0.50% of the loan amount | Min. – 12 months Max – 48 months | Nil |
#9. Citibank Personal Loan Interest Rate
Citibank offers a decent interest rate on a personal loan. You can get a loan for the maximum of 5 years.
Citibank Personal Loan Interest Rate – 10.99% to 20%
Let’s look at the details.
| Loan Amount | Interest Rate | Processing Fee | Loan Tenure | Preclosure Charges |
| Up to 25,00,000 | Min. – 10.99% Max. – 20.00% | up to 0.5% of the loan amount | Min. – 12 months Max – 60 months | 4% on principal outstanding |
#10. Kotak Mahindra Personal Loan Interest Rate
Kotak mahindra offer attractive interest rate on personal loan. You can take loan for a maximum of 5 years period.
Kotak Mahindra Personal Loan Interest Rate – 10.99%
| Loan Amount | Interest Rate | Processing Fee | Loan Tenure | Preclosure Charges |
| Up to 15,00,000 | 10.99% | up to 2.5% of the loan amount | Min. – 12 months Max – 60 months | 5% on principal outstanding |
Also read – Detailed guide on Pradhan Mantri Awas Yojana
Personal Loan Interest Calculator
To complete a calculation, you’ll need several pieces of information:
- The interest rate
- Duration of loan lasts
- The loan balance you’re paying interest on (also called the principal)
- The monthly payment
Interest deducted would be calculated as-
P*r* (1+r)^n/([(1+r)^n]-1)
In the above formula,
P = Loan amount.
r = Rate of interest per month.
n = tenure in month.
For example, If you have a loan of Rs. 1,00,000 at 10% interest rate and the time period is 1 year (12 months), interest would be calculated as
(1,00,000 x 10% (1+10%)^12) / ((1+10%)^12)-1) = Rs. 5,492
Thus, one year interest would be Rs. 5,492.
FAQs
#1. Can I and my wife jointly apply for a personal loan?
Yes, you can apply jointly. Personal loan can be applied to a single applicant or together with a co-applicant (jointly).
Provided that the co-applicant should be a family member like your spouse or parents. Banks put you in high bracket category because of a co borrower that enables you to avail of a larger loan amount.
Be assure that your co-applicant shouldn’t have a poor cibil history, because that would affect the chances of your loan application approval.
#2. Can my CIBIL score affect my loan approval?
The CIBIL Score plays an important role in the loan application approval. Whenever you apply for a loan, your lender (either a bank or financial company) first analyzes the credit score of the applicant. Lender can reject your application if it finds low credit score.
#3. What CIBIL score is considered as good?
750+ credit score is considered a good score. So make sure that you cibil score should never falls below 750. Always pay your EMIs on time. If you use credit card, pay full credit card bills before due date to improve your credit score.
#4. What documents are required for a personal loan application?
You have to produce the following proofs while applying for a loan application.
- Identity proof like Voter card, Aadhar card, driving license
- Residence proof like Aadhar card, passport or domicile certificate
- Last 3 months salary slip if salaried
- Last 6 months bank statement if self-employed
- A passport-sized photograph.
Banks may also ask for additional documents like Form-16, appointment letter, or company ID proof.
#5. Are there any additional charges while repaying loan?
The additional charges are applicable in two cases either you default or SWAP (change the repayment mode or bank account). Generally, SWAP charges are Rs 500 but may vary from bank to bank.
Conclusion
Now you would be able to decide which bank is most suitable for you to apply for a personal loan. Always check the documentation properly and seek explanations from the lender in case of any doubt. Secondly, try to pay your monthly installments in time to avoid adverse effect on the CIBIL score.
Let me know which is your favorite bank for a personal loan and why.
