The rise in personal loan rates has an impact on borrowers. Personal loans are of great assistance in times of emergency or just when you need that extra financial cushion. A personal loan helps you achieve your goals without disturbing your usual financial planning too much. In December 2022, the Reserve Bank of India increased the repo rate to 6.25%. This had a ripple effect on the interest rates on bank loans.

Impact of Increase in Personal Loan Rates on Borrowers

The increase in the repo rate means an increase in floating interest rates. The increase in floating interest rates has led to a rise in EMI payments. Since floating interest rates change with repo rates, borrowers must contact the lender to inquire if there is a cap on how much the rates can increase. It is also advisable that borrowers request a change in their loan agreement to ensure a minimum increase in their monthly outflow.

In the case of fixed interest rates, there will be no change in the EMI that the borrowers are already paying.

For new borrowers, the interest rate would be higher than what it was earlier. They will have to bear the brunt of the new increased repo rate.

Factors Determining Interest Rates for Personal Loans

  1. Income – A higher income can certainly get you faster approval for loans. Lenders feel more comfortable if the applicant has a stable and regular income. Lenders will also look at the debt-to-income ratio to decide the applicant’s creditworthiness.
  2. Employment History – A stable job with a clean employment record certainly is considered by the lenders as a factor while approving a personal loan. If you work in a government office, or in a reputed private organization, the chances that your personal loan would be approved with a competitive interest rate is high.
  3. Credit Score – A higher credit score definitely helps in the easy approval of a personal loan. Lenders consider a credit score of 750+ as a good indicator of the applicant’s creditworthiness. Lenders will also approve a personal loan at a credit score lower than 750 but with a higher interest rate and other terms and conditions. A higher credit score also increases the negotiation power of the applicant.
  4. Age – If you are too young or nearing your retirement age, chances are that your personal loan application will not be easily approved. However, if you are well settled into your job for a few years and have a bright career prospect ahead, your loan application could be approved easily.
  5. Maintaining Relationship with the Bank – If you have been loyal to your existing bank, your loan approval chances will be pretty high. Also, if you have paid your previous dues with the bank in a timely manner, the bank would be willing to extend another loan at an attractive rate of interest.


Personal Loan Rates by Top Banks


Loan amount

Interest Rate

Processing fee

Payment tenure

Credit score needed

HDFC Personal loan

Up to Rs. 40 lakhs

11% to 21%

Up to Rs. 4,999

12-60 months


ICICI Personal loan

Rs. 50,000 to Rs. 25 lakhs

10.75% to 19%

Up to 2.5% + GST

12-60 months


IDFC Personal loan

Up to Rs. 1 crore

10.49% onwards

Up to 3.5%

Up to 60 months


SBI Personal loan

Rs. 24,000 to Rs. 20 lakhs

10.55% to 13.55%

1.5% + GST

6-72 months


Tata Capital Personal loan

Rs. 75,000 to Rs. 35 lakhs

10.99% to 24%

2.75% + GST



Kotak Personal loan

Rs. 50,000 to Rs. 25 lakhs

10.99% onwards


12-60 months


Citibank Personal loan

Rs. 10,000 to Rs. 30 lakhs

10.5% to 14.99%


12-60 months

Not disclosed

InCred Personal loan

Rs. 75,000 to Rs. 15 lakhs

16% to 36%

2% to 5%

12-60 months


Standard Chartered bank Personal loan

Up to Rs. 50 lakhs

11.49% onwards

Up to 2.25%

12-60 months


Bank of Baroda Personal loan

1 lakh to 20 lakhs

10.20% to 17.55%

1% to 2% + GST

48-84 months


Documents Needed for a Personal Loan

The documents required by each lender are different and may also differ on a case-to-case basis. Below is a list of common documents asked for by most lenders. Lenders may choose to ask for more documents or not ask for any documents at all at their discretion.

  1. Identity proof – Passport/Voter ID/Driving License/Aadhaar card
  2. Address proof - Passport/Voter ID/Driving License/Aadhaar card
  3. Income proof – Bank statements for the last three months/Passbook for the previous six months/Last 2 months’ salary slips/Form 16/

The Application Process for a Personal Loan via CreditMantri

  1. Go through the options available for personal loans . Click on “Know More” to check interest rates and charges.
  2. Click on “CHECK ELIGIBILITY”.
  3. Fill in details like Email ID, Mobile number, Loan amount requested, Full name as per PAN Card, Date of birth, Residence pin code, Residence city, gender, marital status, etc. 
  4. Click on “Next”
  5. Proceed to complete the rest of the application.


A change in repo rate usually does not have much of an effect on personal loan rates. However, in the floating interest rate method, the personal loan interest rate will go up with an upward change in the repo rate. New borrowers will face the maximum brunt of changes in the repo rate.

FAQ of What rising Personal Loan rates mean for borrowers

1:Are personal loans affected by changes in the repo rate?

Personal loan EMIs get affected by the repo rate if it is a floating rate of interest. For a fixed rate of interest, there is no impact.

2:Does personal loan reflect in the CIBIL™ report?

Yes, if payments are not made on time, a personal loan can hit your CIBIL™ score a bit. However, timely payments will ensure that your credit score improves over a period of time.

3:What is a good CIBIL™ score for a personal loan?

Between 720-750 is a good CIBIL™ score for getting a personal loan.