Personal loans are one of the easiest ways to raise cash for emergencies and other miscellaneous expenses. It's readily available to both salaried and self-employed individuals. In India, almost all commercial banks, NBFCs (Non-Banking Financial Corporations), and even digital lenders offer personal loans. However, there are considerable variations in terms of interest rates from one lender to another. Hence, it's crucial to compare the interest rates offered by different banks before you apply for a personal loan.
To simplify the task, here in this guide, we list out the interest rates for personal loans from leading banks and other NBFCs. You can use this list to evaluate lenders and pick the right one who offers you the better deal.
Compare Personal Loan Interest Rates of Banks for 2020
Here is a list of the interest rates offered by leading banks for personal loans. However, note that the actual interest rate provided to you may be slightly higher or lower, depending on your creditworthiness and other factors.
|Name of the Bank||Personal Loan Interest Rate|
|Andhra Bank||11.55% - 13.05%|
|Axis Bank||12% - 24%|
|Bank of Baroda||10.50% - 12.50%|
|Bank of Maharashtra||10.85% - 11.85%|
|Canara Bank||11.65% to 13.70%|
|Citibank||Starts from 9.99%|
|Corporation Bank||10.75% - 12.25%|
|Federal Bank||11.49% - 17.99%|
|HDFC Bank||10.75% - 21.30%|
|ICICI Bank||11.25% - 22%|
|IDBI Bank||9.20% - 11.25%|
|Indian Overseas Bank||Starts from 9.6%|
|IndusInd Bank||11% - 31.50%|
|Karur Vysya Bank||15% - 19%|
|Kotak Bank||Starts from 10.75%|
|Punjab National Bank||9.95% - 14.40%|
|RBL Bank||14% - 23%|
|SBI Bank||10.85% - 12.85%|
|Standard Chartered Bank||10.99% - 19.99%|
|Tamilnad Mercantile Bank||14.70%|
|Union Bank of India||12.30% - 13.40%|
Compare Personal Loan Interest Rates of NBFCs/Digital Lenders for 2020
|Name of the Lender||Personal Loan Interest Rate|
|Aditya Birla Capital Limited||14% - 26%|
|Bajaj Finserv||Starts from 13%|
|Cashbean||Up to 33%|
|Cashkumar||18% to 24%|
|Cashe||Up to 3% per month|
|Credy||1 to 1.5% of Loan Amount Per Month|
|Earlysalary||24% - 30%|
|Flexsalary||Up to 36%|
|Faircent||Up to 30%|
|Fullerton India||12.99% - 36%|
|IIFL||Starts from 13.50%|
|Indiabulls Dhani||Starts from 13.99%|
|Indifi||Starts at 1.5% per month|
|Kreditbee||10.99% - 18%|
|Lazypay||Starts from 18%|
|Loantap||Starts from 18%|
|Lendbox||11.49% - 36%|
|MI Credit||Starts at 1.35% per month|
|MoneyTap||13% to 18%|
|Money View||Starts from 1.33% per month|
|Paysense||1.4% - 2.3% per month|
|Qbera||11.99% - 35.99%|
|Realme PaySa||11% - 24%|
|RedCarpet||2% - 3% per month|
|Shubh Loans||18 – 30%|
|Shriram City Union Finance||Depends on the schemes selected by the borrower|
|Smart coin||20 – 36% APR|
|Stashfin||11.99% - 59.99% APR|
|Tata Capital||Starts from 10.99%|
*Note that these rates are subject to change at the discretion of the lender. So, make sure to check with your preferred lender for the latest rate applicable to you.
Personal Loan Interest Rate Types
The interest rate for personal loans can either be:
A fixed-rate of interest
With fixed rates, the rate of interest remains the same for the entire tenure of the loan. As a result, the EMI remains the same for the whole loan repayment period. This helps borrowers plan the regular monthly expenditure for the duration of the loan term.
Floating rate of interest
With floating rates, the interest rate of the loan fluctuates depending on prevailing market conditions. Consequently, your EMI increases or decreases during the loan tenure.
Factors that affect Personal Loan Interest Rates
While lenders publish their interest rates, the actual interest rates offered to borrowers depend on several other factors like:
The credit score and history of the borrower
The credit history and credit score determine the creditworthiness of the borrower. Generally, lenders prefer borrowers with high credit scores. Higher your credit score, better are the chances of loan approval and lower are the interest rates charged.
The income of the borrower
Lenders prefer borrowers with higher incomes, as it indicates higher repayment capacity. Generally, lenders with high revenues can avail personal loans with lower interest rates.
Debt to income ratio
Ideally, the debt to income ratio of the borrower should not exceed 30%. Lenders prefer borrowers with lower DTI ratio as it indicates higher repayment capability. The lower your DTI lower will be the interest rate charged.
Multiple loan applications
When borrowers apply for personal loans with multiple lenders, lenders consider them as credit hungry. Additionally, when various lenders request your credit score simultaneously, it harms your credit score. So, while applying for a personal loan, do your research, compare interest rates of lenders, and then apply only with your preferred lender.
A pre-existing relationship with the lender
Lenders give preference for borrowers who are existing customers. For instance, if you have a fixed deposit or savings bank account with the lender, you can avail personal loans at lower interest rates compared to the interest rates charged to non-customers.
Tips to secure Personal Loans at Lower Interest Rates
Try to maintain a good credit score. Higher your credit score, lower is the interest charged.
Reduce your debt-to-income ratio. Lower the DTI, lower is the interest rates.
Compare loan eligibility and interest rates offered by different lenders and choose lenders who provide the best deal.
While selecting lenders, approach your regular banker, as you’re likely to avail better interest rates, due to your existing relationship with the bank.
Additionally, lenders offer special interests for specific categories of borrowers like women, pensioners, first-time applicants, etc. Check if you qualify for any of these categories to apply for personal loans at reduced interest rates.
Compare Interest Rates before applying for a Personal Loan
Personal loans come in quite handy in various situations. Though they are readily available, the interest rates can overburden you. So, make sure to shop around, do your homework, and compare the interest rates offered by different lenders before you sign the deal.