One of the most preferred loan products by borrowers is a personal loan. Usually, the processing is quick and disbursement within 5 – 7 working days that makes the entire loan journey convenient.
You can avail a personal loan to meet multiple financial needs. These loans are offered by various banks and financial institutions, including NBFCs.
However, to avail a personal finance, you must compare interest rates offered by different lenders to choose a lower rate. Significantly, interest rates on personal loan range between 10.25% and 20.00% per annum.
|Bank||Min Interest Rate (p.a)||Processing Fee|
|SBI Bank||10.25%||Up to 1%|
|Kotak Mahindra Bank||10.30%||Up to 1%|
|HDFC Bank||10.50%||Up to 1%|
|ICICI Bank||10.75%||Up to 1%|
|IDFC First Bank||10.49%||Up to 1.15%|
|Axis Bank||10.50%||Up to 1%|
|Yes Bank||10.50%||Up to 1%|
|IndusInd Bank||10.49%||Up to 1.75%|
|Bank of Baroda||10.49%||Up to 1.15%|
|Punjab National Bank||11.00%||Up to 1.25%|
|Karur Vysya Bank||11.15%||Up to 1.75%|
|Standard Chartered||12.00%||Up to 2%|
|South Indian Bank||10.25%||Up to 1.50%|
|Tata Capital||11.99%||Up to 2%|
|Fullerton India||12.50%||Up to 2%|
|HDB Financial||12.49%||Up to 2%|
|RBL Bank||14.00%||Up to 1%|
|Incred Financial||20.00%||Up to 4%|
|Hero Fincorp||20.00%||Up to 4%|
Personal Loan Interest Rate
Both salaried individuals and self-employed individuals can apply for personal loans. However, interest rates for salaried are lower than self-employed individuals.
If you are looking to avail personal loans, here are some tips that will help you to get low-interest rates as given below:
Maintain Credit Score Above 750- A Credit score is a 3-digit numerical that represents your repayment capacity on a loan. The credit score is an important factor that is taken into consideration by lenders at the time of offering loans. A higher Credit score not only makes you eligible to get a loan quickly but also helps in availing lower interest rates.
Keep an Eye on Loan Offers- During festive occasions, various banks and financial institutions provide loan offers to their customers for a limited period. Therefore, applying for personal loans at such times will make you get a lower interest rate as compared to ordinary days.
Build Relationship with Lender- If you are not satisfied with your current lender rates as offered by a different lender, you can open a bank account with your preferable bank 6 months to 1 year before you approach for a loan, it will allow you to negotiate interest rates and get better deals.
Pay off Existing Debts- Usually, banks or financial institutions check whether the applicant is running any existing loan to ensure his/her repayment capacity. In such a scenario, lenders charge higher rates due to the risk of default to lower you must pay off your existing debts.
Compare Interest Rate- One of the easiest ways to avail a personal loan at lower rates, before you apply for any lender, it is essential to compare the personal loan interest rate which is offered by multiple lenders. By doing so, you can able to compare the offering to get low rates.
Also Read:- Difference Between Secured Loan vs Unsecured Loans
Income - Income is one of the core factors that is taken into consideration by the lender at the time of offering loans. Applicants with a lower annual income may have to pay higher interest while higher-income helps to get lower interest rates.
Employer Details - Working for a reputed organization makes the lender offer lower rates as the job seems secure. Hence, his/her repaying loan is assured without paying any default.
Age of Applicant - The age of applicant can affect the rates, applicants nearing retirement age are most likely to pay higher interest rates.
Credit Score – Credit score has the potential to decide your interest rate on personal loans. If you have a CIBIL score is below 700 you might face a higher rate.
|Floating Interest Rates||Fixed Interest Rate|
|Due to fluctuation in the market interest rates can change.||Interest rates remain the towards the entire loan tenure.|
|Difficult to plan a budget with a floating rate||Easy to plan & maintain finance within budget.|
|EMI payable is likely to change during the repayment period||EMI payables remain constant till the loan is paid off|
|No charges for prepaying loan earlier||The Lender will charge a certain amount for prepayment of loan|
The benefit of opting for fixed interest rates is knowing the exact amount that you will pay throughout the loan period. However, if you don’t mind a fluctuation in interest rates, you choose floating rates wisely.
Also Read:- Benefits of using Personal Loan EMI Calculator