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:
HDFC Bank
- Interest rates begin at 10.50% and go upwards
- Flexible tenures up to 60 months
- You can check your eligibility in under 60 seconds
- If you are a pre-approved HDFC Bank customer your loan is disbursed in 10 seconds. If not, it is disbursed in under 4 hours.
- You can apply for your loan instantly online.
- Click here to know more about HDFC Bank Personal Loans
ICICI Bank
- Personal loans have interest rates at 10.50% onwards
- Loans of up to Rs.25 lakhs
- Flexible tenures of up to 60 months
- Automatic repayment of EMI can be done every month if you set up ECS, PDC or auto-debit.
- You have minimum documentation that is very easy & simple.
- More details on ICICI Bank Personal Loans
IndusInd Bank
- Interest rates start at 10.49% and move upwards
- Tenures from 1 year to 5 years
- Rs.30,000 to Rs.25 lakhs are given for personal loan amounts
- Funds are disbursed very quickly
- The application process is very fast
- IndusInd Bank Personal Loans – Full Details
RBL Bank
- Interest rates from 14% onwards
- Tenures of 12 to 60 months are available.
- Rs.1 Lakh to Rs.20 Lakhs are given for personal loan amounts
- Documentation is simplified and quick.
- RBL Bank Personal Loans – Click Here!
Apart from banks, there are also NBFCs that offer personal loans such as Tata Capital, Shriram City & Bajaj Finserv.