A personal loan is a type of unsecured loan provided by banks or financial institutions, without the need for collateral. The interest rates for these loans are influenced by several factors, particularly your credit score and financial history. Securing a personal loan is relatively straightforward if you have a solid credit record and your documentation is complete.
The funds obtained from a personal loan can be utilized for numerous needs such as covering medical expenses, financing weddings, or paying for travel.
Personal Loan Interest Rates of Major Banks
Before you take out a personal loan, you should check the interest rate of various banks and opt for the most affordable option. Here is a list of top banks in India and their interest rates as well as processing fees –
Personal Loan Interest Rates of Public Sector Banks
| COMPANY | RATE OF INTEREST | PROCESSING FEE |
| Bank of Baroda (Floating) | 11.40% to 18.75% | Nil to 2% |
| Bank of India | 10.85% to 14.75% | 0.50% to 1% |
| Bank of Maharashtra | 10% to 12.80% | 1% |
| Canara Bank | 8.55% to 11.15% | Nil |
| Central Bank of India | 12% onwards | 1% |
| Indian Overseas Bank | 10.85% to 13% | 0.40% to 0.50% |
| Punjab and Sind Bank | 10.75% to 13.50% | 0.50% to 1% |
| Punjab National Bank | 11.40% to 16.95% | Up to INR 500 |
| State Bank of India | 11.15% to 14.30% | Nil to 1.50% |
The interest rates on personal loans are accurate as of May. 6, 2024.
Source: Forbes Advisors
Personal Loan Interest Rates of Private Sector Banks
| COMPANY | RATE OF INTEREST | PROCESSING FEE |
| Axis Bank | 10.75% to 22% | Up to 2% |
| CSB Bank (Unsecured) | 10.25% to 22% | Up to 1% |
| Federal Bank (Fixed RoI) | 11.49% to 14.49% | As applicable |
| HDFC Bank | 10.75% to 24% | Up to INR 5,000 |
| ICICI Bank | 10.65% to 16% | Up to 2.50% |
| IDBI Bank | 13.25% onwards | 1% |
| IDFC First Bank (Fixed RoI) | 10.75% to 36% | Up to 3.5% |
| IndusInd Bank (Q3 2023-24) | 10.25% to 26% | Up to 3.5% |
| Karnataka Bank | 13.43% onwards | As applicable |
| Karur Vysya Bank (Unsecured Fixed RoI) | 13.15% to 14.15% | 0.50% |
| Kotak Mahindra Bank | 10.99% onwards | Up to 3% |
| South Indian Bank | 14.80% onwards | Up to 2% |
| Tamilnad Mercantile Bank | 14.10% to 16.20% | 1% |
The interest rates on personal loans are accurate as of May. 6, 2024.
Source: Forbes Advisors
How is personal loan EMI calculated?
Your EMI is determined in part by the loan amount, loan period, and payment schedule. Having the appropriate amount, simple EMIs, and adjustable duration all contribute to determining the best loan for an individual. The overall cost of the loan is determined by the interest rate and the processing charge. When choosing a loan, do consider these considerations.
EMI or equated monthly instalments are an important part of a loan. It is the intervallic instalment amount that you pay to clear your loan.
Three factors determine your EMI:
- The loan amounts
- The interest rate
- The tenure
Factors Influencing Personal Loan Interest Rates in India
- CIBIL Score: CIBIL Score is a number depicting your credit history, rating, and report, and ranges from 300 to 900. The closer your score is to 900, the better your credit rating is.
- Occupation: The source of income affects the interest rate, where banks offer different rates for salaried individuals and self-employed individuals.
- Income: Higher income levels can help you obtain a personal loan at a lower interest rate, as lenders feel more confident about your ability to repay.
- Debt-to-Income Ratio: When you have a low level of debt as compared to your yearly earnings there are fewer chances of defaulting which means you will get enough money to pay your EMI.
- Age: Applicants who are younger and have more time left before retirement may be given lower interest rates compared to people who are nearer this point in their lives.
Considering the interest rates and processing fees of various banks is crucial when selecting a personal loan. Factors such as credit score, occupation, and income significantly influence the rates offered, guiding borrowers to the best financial decision.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. The information is based on various secondary sources on the internet and is subject to change. Please consult with a financial expert before making investment decisions.
