Comparing Interest Rates Of Personal Loan Providers In India

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Personal Loan Interest Rate

While looking at all the personal loan offers available, it’s important to find out how much interest you’ll be charged by your lender in order to obtain your total loan amount. Each bank and lender has their own set of interest rates and other associated fees (such as processing fees, foreclosure charges, and so on) that one must be aware of before choosing a lender.

Personal Loan Rates in India | October 2019

Below is a list of where you can compare personal loan interest rates India which have been updated for the month of October 2019. The interest rate for personal loan starts from 10% onwards, which varies on factors such as credit score, income, age, loan amount, repayment capacity, employment history, and relationship with lender

Citibank10.50%Up to 3%Up to 4%
HDFC10.75%Up to 2.5% (min. Rs. 2,999 and max. Rs. 25,000)2% - 4%
State Bank of India12.05%0-1% + GST3% on prepaid amount
HSBC10.75%Up to 1%Up to 3.75%
Bank of India12.20%Up to 2% (min. Rs. 1,000 and max. Rs. 10,000)Nil
Axis Bank15.75%Up to 2%Nil
Kotak Mahindra Bank10.99%Up to 2.5% + GST5%
IndusInd Bank11.25%Up to 2.5%4%
Yes Bank10.75%Up to 2.5% (min. Rs.999 + GST)Up to 4%
Bank of Baroda11.70%Up to 2% (min. Rs. 1,000 and max. Rs. 10,000)Nil
Standard Chartered10.89%Up to 3%1%- 5%
Dhanalaxmi Bank11%Up to 2.5% (min. Rs. 1,250)2%
Punjab National Bank10.45%Up to 1.8% (min. Rs. 270) + GST2% on outstanding amount
Central Bank of India11.55%Rs. 500As per the lender
Bank of Maharashtra12.7%1% (min. Rs. 1,000)As per the lender
Andhra Bank11.75%Rs. 400/lakh2% on amount paid
RBL Bank15.5%Up to 3%Up to 5% of outstanding principal
IDFC First12%Up to 3.5%5%
Canara Bank13%1% (min. Rs. 250)Nil
Karnataka Bank13.15%0.5%2%
Tata Capital10.99%Nil4.5%
Federal Bank10%Up to 3% (min. Rs. 500)0% - 3%
Corporation Bank12.9%1.50% (min. Rs. 500)Nil
Indian Overseas Bank11.90%Up to 0.50%Nil
Vijaya Bank12.75%0.75%As per the lender
City Union Bank12%1.25%As per the lender
Karur Vysya Bank12%Up to 1% (min. Rs. 100)As per the lender
HDBFS14%Up to 2%2% - 4%
J & K Bank12.45%Up to Rs. 500 + GSTNil
Tata Capital10.99%Nil4.5%
InCred16%2% - 5%Varies on lender
SMFG India Credit11.99%Up to 6.5%0% - 7%
IDBI Bank12%1%0% - 2% of outstanding amount
Bajaj Finserv12.99%Up to 3.99%4% of outstanding amount
Ujjivan Small Finance15.6%Up to 2% (min. Rs. 2,000)1% - 2%
IndusInd Bank11.25%Up to 2.5%4%
South Indian Bank11.60%Up to 2%2% - 4%
Nainital Bank11.95%As per the lenderAs per the lender
IDBI Bank12%1%0% - 2% of outstanding amount
OBC11%Up to 1% + GSTNil

Things to Check Before Finalizing Personal Loan

When you compare personal loans, there are several things that need to be considered before selecting your loan provider:

Eligibility Criteria: All banks and NBFCs that provide personal loans have their own specific eligibility criteria. To get a higher chance of loan approval, It’s important to ensure you meet the eligibility criteria of the lender, which include age, income, location, and CIBIL score.

Processing Fee: When your loan gets approved, your lender will levy a one-time processing fee, which typically ranges between 1.5% - 3%, depending on the lender. Since processing fee will increase the loan amount, it’s important to check and know what the fee would be for each lender.

Pre-Closure Charges: If you repay your outstanding balance before the completion of your loan repayment tenure, your bank may charge pre-payment or pre-closure fees. Ensure to find out how much this fee is while doing personal loan compare research.

Other Fees: It’s highly important to note that while a particular lender may levy a higher interest rate, you could stand to save a lot on the overall loan cost if the other associated costs are low. In addition to processing fee and pre-closure fees, the other costs include:

  • Loan cancellation
  • Default charges
  • Stamp duty
  • Duplicate statement issuance charge
  • Cheque/EMI bounce charge
  • GST

Offers & Discounts: While banks and NBFCs generally have a fixed interest rate, you can try to negotiate with them to provide a lower rate. If you have an excellent CIBIL score, credit history, and are financially stable, you might be able to secure a better interest rate. Some lenders may also offer lower interest rates during festive seasons.

How Interest Rate on Personal Loan is Determined

Credit Score: One of the most important factors that determine your interest rate is your credit score, since it is a prime indicator of your creditworthiness. A credit score of 750+ is considered excellent. Borrowers with a higher credit score will have a lower interest rate, and those with a low score will be levied a higher interest rate. It’s safe to say that credit score has the most weightage on determining your interest rate. Therefore, be sure to check your credit score regularly and work on improving it.

Credit history: A borrower’s credit history is comprised of the amount of credit they have availed in the past, their repayment habits, and defaults. Having a positive credit history also increases one’s credit score and chances of getting a lower interest rate.

Income: Another important factor that has weightage on your interest rate is your monthly salary. Borrowers that earn a higher salary are a lower risk to the lender, and therefore may receive a lower interest rate, and vice versa.

Relationship with the lender: When applying for a loan, an existing customer of a bank or NBFC may get a lower interest rate, as long as they have a positive relationship with the lender. However, this is completely at the lender’s discretion and not all existing customers will be offered attractive interest rates.

Personal Loan Interest Rate FAQs

How does my salary determine the interest rate for personal loan?
Your salary is indicative of your repayment capacity. A higher salary denotes a better financial capacity to repay your loan in a timely manner, and also reduces the risk of default. Lenders generally prefer to borrowers with low risk profiles, which is why salary is a determining factor on your interest rate.
How does my work experience and history determine my interest rate for personal loan?
Employment is one of the ways that lenders can assess your risk profile. If you work with a reputed company, it means you are more likely to have a steady job and stable income source. The length of your employment history also demonstrates the level of your job security, which in turn, impacts your interest rate.
How can I get a low interest rate on my loan?
To get a low interest rate, ensure that you meet all the eligibility criteria of the lender. Aside from this, ensure that you have a good credit score and are stable with your job and finances.
I have a bad credit score. Can I still get a good interest rate?
Yes, there can be a possibility for getting an affordable interest rate with a bad credit score if you apply with a co-applicant having a good score. Another option is to apply with a guarantor who has good credit.

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