Personal loans are also called unsecured loans as you do not have to provide any collateral such as money, property or shares. Due to this reason, the interest rates are usually higher when compared to secured loans.

Personal loans from banks in India have different interest rates based on a few factors such as:

1 Credit score – A credit score is a 3-digit number that shows how credit worthy an individual is. The higher your credit score, the more likely you are to repay your debt on time. So, if you have a good credit score,  i.e. above 750, then the interest rates are comparatively lower as the banks view you as a low risk customer.

2 Employment – If you have a steady income and work for a reputed company which is listed by the bank, then the interest rates are usually lower. This is because the bank assesses your loan amount against your income and sees if you are capable of repaying your debts on time. 

3 Loan amount – If you’re eligible for a high loan amount, then the interest rates are generally lower in comparison. 

4 Relationship with the bank – If you are an existing customer with the bank you are borrowing from and have maintained a healthy relationship with them, then there are higher chances of getting a lower interest rate on your personal loan as you can negotiate with them for the same. 


There are a few banks that have low interest rates on personal loans. They are: 

1 Yes Bank – The interest rates at Yes Bank for a personal begin at just 10.75% and this is one of the best in the market. 

2 ICICI bank – The interest rates at ICICI bank for a personal loan start at just 10.99%.

3 HDFC bank – HDFC bank offers interest rates that begin at just 10.99% as well. 

4 Kotak Mahindra bank – The interest rates at Kotak Mahindra bank start at just 10.99% too. 

5 SBI – Interest rates at SBI start at 11%. 

To apply for a low interest personal loan, click here.