A personal loan is an unsecured type of loan that is given by banks for personal expenses like home renovation expenses, holiday expenses, credit card bills, medical expenses, wedding expenses, etc. In this kind of loan, one doesn’t have to give anything as collateral security.

personal loan interest rates in india
Personal Loan Interest Rates in India

Personal Loan Interest Rates Comparison in India

BankLoan RateProcessing Fee
Allahabad Bank13.15%1.06%, Min- Rs. 1068
Andhra Bank11.55%Case to Case
Axis Bank11.25%1.50% to 2.00%
Bank of Baroda11.60%2%, Min Rs. 250
Bank of India11%1% of the loan amount
Bank of Maharashtra15.10%1%, Min Rs. 1,000
Canara Bank13.00%0.50%
City Bank10.99%Upto 0.5%
Corporation Bank12.95%1.5%, Min Rs. 500
Federal Bank11.49%0.5%, Min Rs. 500
HDFC10.75%Upto 2.50% Min Rs. 1,999
ICICI11.25%Starting from 0.99%, Up to 2.25%
IDBI Bank13.20%1%
Indian Bank11.05%0.5%, Min- Rs. 508
Indian Overseas Bank12.70%Rs. 204 per lakh
Indusind Bank10.75%Upto 2.5% of the loan amount
Karur Vysya Bank13.90%0.40%
Kotak10.50%Upto 2.5%
SBI12.50%In the range of 2% to 3%
Standard Chartered10.99%1.00%
Union Bank of India14.40%0.50% of the total Loan
Yes Bank10.99%Starting at 0.99%, Up to 2%

Personal Loan Guide

Here are the steps to getting a personal loan.

Step 1: Fill up the application form either online or by visiting the branch office. Along with the application form, you have to give 2 passport-sized photographs and the required documents.

Step 2: After receiving the application, your credit score will be checked.

Step 3: Now the submitted documents will be verified by the verification team. They will send a representative to your home for checking the address. They will also send a representative to your office to check whether you are really working there or not.

Step 4: If the verification team gives a green signal for the further process, then the processing team will make the loan agreement having all the terms and conditions which you will be required to sign. After signing of the agreement, the loan amount will be credit in your account within 24 hours.

Documents required

Salaried EmployeeSelf Employed
Government Approved Identity Proof like Voter’s ID, Passport, Driving License, and Pan CardGovernment Approved Identity Proof like Voter’s ID, Passport, Driving License, and Pan Card
Address Proof like ration card, electricity bill or your passportAddress Proof like ration card, electricity bill or your passport
Last three months of the bank’s statement
Last three months of the bank’s statement
Employment certificateEducational documents
Last three months’ salary slipsBusiness Continuity documents
ITR fillings ITR fillings 

Factors affecting interest rates

Following are the factors that affect interest rates on Personal loans.

CIBIL Score

If you are having a CIBIL score of 750, then you can get the personal loan with ease. Also if you are having a score of more than 750 like say 800, then you can get the personal loan at a low-interest rate. The reason for this is that having a good CIBIL Score indicates your good repayment capacity. Hence the banks are ready to give loans to such individuals.

Income

As nothing is required to be kept as collateral for getting the loan, the bank will grant a low-interest rate loan depending on the stability of your income. If you are having a good source of income and if that income is high then you can get the low-interest rate personal loan very easily.

Company Category

The company where you work at also determines your success of getting a low-interest rate personal loan. The bank has divided the companies into 5 categories namely- 

Category A- It consists of top 1000 companies.

Category B- It consists of multinational companies

Category C- It consists of smaller companies

Category D- It consists of companies having a strength of 100 employees.

Generally higher the category, easier it will be to get a personal loan having a low-interest rate.

Bank’s Old Customer

If you are an old customer of the bank then you might get a personal loan at a low-interest rate. They do this so as to retain their old valued customers.