Personal Loan Interest Rates in 2022

A personal loan is an unsecured loan offered by a bank or other financial organization. A personal loan is easy to borrow, especially if you have a strong credit history and all of your paperwork is in order.

Many people take out personal loans to cover unexpected expenses like medical bills or even planned expenses like weddings. Personal loans are increasingly being used by India's burgeoning middle class to fund travel plans and large-ticket consumer durable purchases.

Things to Know About Personal Loan Interest Rates

If you are salaried, working for a reputable company with no payment defaults, and have an established relationship with the bank, you may be qualified for the best personal loan rates

Banks typically charge cheaper rates for larger loan amounts and for workers who work for well-known organizations. You can compare personal loan interest rates across all banks to find the best rates for your situation.

The interest rates on these top banks' immediate personal loans range from 10.25 percent to 17.25 percent. Furthermore, if you have an existing bank account with HDFC Bank, Tata Capital, ICICI Bank, IDFC First Bank, or Axis Bank, you may be eligible for a fast disbursement of personal loans without the need to submit any paperwork.

If you are seeking an instant personal loan with a speedy disbursal within a few hours to 1-2 days, HDFC Bank, Tata Capital, ICICI Bank, IDFC First Bank, and Axis Bank are the top institutions for personal loans. 

Personal Loan Interest Rates of Major Banks

Leading Banks Rate of Interest (p.a.) Processing fee (% of the loan amount)

HDFC Bank

10.25%-21.00%

Up to 2.5%

Kotak Mahindra Bank

10.25% onwards

Up to 2.50%

ICICI Bank

10.50%-19.00%

Up to 2.5%

Axis Bank

10.25% onwards

1.5%-2%

Yes Bank

10.99% onwards

Up to 2.5%

Citibank

9.99%-16.49%

Up to 3%

IDBI Bank

8.15%-10.90%

Up to 1%

UCO Bank

10.45%-10.70%

Up to 1%

RBL Bank

14%-23%

Up to 3.5%

IDFC First Bank

10.49% onwards

Up to 3.5%

IndusInd Bank

10.49% onwards

Up to 3%

HSBC Bank

9.50%-15.25%

Up to 1%

Karur Vyasa Bank

9.40%-19.00%

Up to 1%

Federal Bank

10.44%-17.99%

Up to 3%

State Bank Of India

9.60% – 13.85%

Nil

Bank Of Maharashtra

9.45% – 11.80%

Up to 1%

Bank Of India

10.35%-12.35%

Up to 2%

Union Bank Of India

8.90% – 13.00%

Up to 0.5% 

Central Bank Of India

8.45% onwards

Up to Rs. 500

Punjab National Bank

7.90% – 14.50%

Up to 1%

Bank of Baroda

10.40%-16.00%

Up to 2%

Indian Bank

8.50% – 9.00%

Up to 1%

Personal Loan Interest Rates of NBFCs

Leading Banks Rate of Interest (p.a.) Processing fee (% of the loan amount)

Money View

15.96% onwards

1.33% onwards

KreditBee

12.24% onwards

Up to 6%

Dhani Loans

13.99% onwards

3% onwards

Bajaj Finserv

13.00% onwards

Up to 4%

Muthoot Finance

14.00% onwards

Up to 3.5%

MoneyTap

12.96% onwards

2%

Fullerton India

11.99%-36%

Up to 6%

Tata Capital

10.99% onwards

Up to 2.75%

TurboLoan by Chola

15.00%-21.00%

3%

Aditya Birla Capital

14.00%-26.00%

Up to 2%

Standard Chartered Bank

11.49% onwards

1%

PaySense

16.80% onwards

Up to 2.5%

CASHe

27.00% onwards

Up to 3%

Early Salary

18.00%

2%

StashFin

11.99% onwards

Up to 10%

Charges on Balance Transfer to Other Banks

If your present lender charges a high-interest rate, you can switch lenders without ending the transaction by using the personal loan balance transfer service

Let’s take an example: Assume you owe Rs. 5,00,000 on a personal loan with a three-year repayment period and a 15% interest rate. Your monthly EMI will be 17,333 in that situation, with a total interest payment of 1.24 lakh

If you transfer to lender B, who offers a 12% interest rate, your monthly EMI on the outstanding balance of Rs. 5,00,000 would be 16,607 per month. Consider the following table to gain a better understanding of the situation:


Existing loan amount Balance to transfer

Outstanding amount

Rs. 5,00,00

Rs. 5,00,00

Rate of interest

15%

12%

Remaining term

3 years

3 years

EMI

Rs. 17,333

Rs. 16,607

Total interest to pay

Rs. 1,23,976

Rs. 97,858

Total amount to pay

Rs. 6,23,976

Rs. 5,97,858

SAVINGS

Rs. 26,118

Thus, moving your personal loan from lender A to lender B can save you up to Rs. 726 on your monthly EMI. Furthermore, moving the debt will save you Rs. 26,118 in total interest payments. If you need more money, you can get a personal loan top-up when you transfer your balance.

Other Charges Associated with Personal Loans

Processing Fee: Personal loans are subject to processing fees in addition to interest rates. A processing fee on a personal loan is a one-time charge added to the loan amount to cover the cost of processing the application.

Foreclosure Fee: Prepayment and foreclosure fees must be paid if you want to pay off or shut your personal loan account before the end of the predetermined loan term. These fees might range anywhere from 0% to 6% of the outstanding balance.

Late Payment Fees: If you pay your personal EMI late, you will be charged a fee by the bank.

Other Charges after Loan Disbursement: Other fees levied by the bank on personal loan clients after disbursement include check bounce fees, duplicate statement fees, and loan changeover fees. These fees are not payable by all clients and are only applied when the event occurs.

Banks Processing fee (% of the loan amount) Foreclosure charges Penalty Post loan disbursement charges

ICICI

Up to 2.25%

5%

24% per annum

Cheque Bounce Charges - ₹ 400+GST Loan Cancellation Charges - ₹ 3000 + GST Other Charges - ₹ 500 + GST

Kotak Mahindra Bank

Starting from ₹ 999

Starting from  ₹ 999

3% per month

Cheque Bounce Charges - ₹. 750 Other Charges - ₹ 500+ GST

HDFC 

Up to 2.50%
Min ₹ 999

2% - 4%

2% per month

Cheque Bounce Charges - ₹ 550 Loan Cancellation Charges - Nil

IndusInd Bank

Min 0.75% to Max 1.75%

4%

₹ 150, Per EMI delay beyond 5 days

N.A

Federal Bank

0.5%
Min ₹ 500

Nil prepayment charges

N.A

N.A

Axis Bank

₹ 4,999 

For Loan Amt Approved of 10 Lacs and above-- 0% FC charges after 12 EMIs if closure through OWN FUNDS,1-12 EMI-5%, 13-24 EMI-4%, 25-36 EMI-3% & Above 36 EMI-2%

24% per annum

N.A

IDFC First Bank 

Up to 2.00%

5% foreclosure charges. Can foreclose after 3 months in case of smart personal loan

2% of the unpaid EMI or Rs 300, whichever is higher

Cheque Bounce Charges - ₹ 450 + GST Loan Cancellation Charges - Nil Additional Repayment Charges - ₹ 550 + GST Other Charges - ₹ 550 + GST

Yes Bank

Up to 2.50% 

Up to 4%

24% per annum

Cheque Bounce Charges - ₹ 750 Loan Cancellation Charges - ₹ 1000 Additional Repayment Charges - ₹ 750 + GST Other Charges - ₹ 750

Tata Capital

Up to 2.50%

Rs. 1,000 to Rs. 5,000

3% per month

Cheque Bounce Charges - ₹ 450 + GST Loan Cancellation Charges - Nil Additional Repayment Charges - ₹ 550 + GST Other Charges - ₹ 550 + GST

Personal Loan Interest Rates Related Faqs

Ans: Your earnings indicate your ability to repay a debt. A larger income indicates that you have more financial flexibility to pay back the loan on time. This indicates that your risk is low. Lenders prefer low-risk borrowers and may thus offer you a cheaper interest rate.

Ans: A strong credit score demonstrates that you are financially responsible. This lowers your risk level. If your credit score is 750 or higher, you will almost certainly be given preferred pricing.

Ans: Working with reputable companies increases your chances of having a steady job and income. Your job history also demonstrates work steadiness. This has an impact on your loan rate.

Ans: Lenders will consider your present debt load when assessing your loan application. They may not issue you a personal loan if you spend the majority of your current income repaying existing loans. Even if they do, you will be charged a high-interest rate.

Ans: Yes, you might be able to receive a cheaper interest rate than the lender advertises. Negotiation is crucial in this situation. You might be able to receive a good rate if you can haggle properly with the lender.

Ans: Another option to acquire a low-interest rate is to put up collateral. Collateral minimizes your risk greatly because it acts as a guarantee against non-payment. Keep in mind, however, that if you do not repay the loan on time, the lender may seize your assets.

Ans: If you have a credit score of at least 750 and are in good standing with the lender, you may qualify for preferred pricing. Working for a reputable company and having a strong credit history might also help you get better rates.

Ans: Yes, a personal loan with a poor credit score may be possible. You might try to acquire a better rate by applying with a co-applicant who has good credit. Another option is to secure a guarantor with strong credit.

Ans: It is always advantageous to have an existing relationship with a bank or lender. You're more likely to acquire better loan terms if you have a good relationship with your current banker. For example, you might be able to receive a better interest rate than the majority of people.

Ans: Only if your lender waives the fee or doesn't charge you for making prepayments may you avoid paying it.

Ans: Processing fees vary depending on the lender. This is either a percentage of the loan amount you ask for or a predetermined fee determined by the lender.

Ans: If you don't pay your EMI on time, your lender will charge you a late payment fee. This charge will be specified in your loan agreement. Aside from that, your credit score may also get affected if you miss your EMI payments frequently.

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