I know it’s difficult to manage your finances smoothly because of higher costs of living.
People go for a personal loan when there is a cash crunch. It’s easy to get a personal loan for expenses like foreign vacation, renovation of your dream house, traditional Indian marriage, or any other obligation.
Disclaimer: I won’t recommend anyone to take personal loan unless it’s absolutely necessary. Reconsider your decision if you can manage your finances without a personal loan.
But if you have already made your decision but just looking for the best bank that gives best offers on personal loan then keep on reading till the end.
Unlike in other kinds of loans, in a personal loan there is no restriction on how the borrowed amount is utilized as the borrower has full freedom to use the money for any purpose except for gambling.
In general, banks do not ask for any collaterals as security while approving these personal loans. Hence these loans are quick and can be easily availed.
However, interest rate could be a hindrance since that is the main cost associated with your personal loan. The higher the interest rate the more you end repaying. Besides, there are other factors in play such as processing fees, preclosure charges, and so on.
Therefore it would be wise to choose the best bank for your personal loan by comparing interest rates, processing fees, preclosure charges, eligibility criteria, and other such important factors.
Keeping that in mind, let’s take a look at the list of 10 best banks for availing personal loan in India.
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- #1. State Bank of India Personal Loan
- #2. ICICI Bank Personal Loan
- #3. HDFC Bank Personal Loan
- #4. Kotak Mahindra Personal Loan
- #5. Axis Bank Personal Loan
- #6. CitiBank Personal Loan
- #7. Bajaj Finserv Personal Loan
- #8. Bank of Baroda Personal Loan
- #9. Standard Chartered Personal Loan
- #10. Tata Capital Personal Loan
- Comparison of Personal Loan Interest Rates in India
- Factors Affecting Interest Rate Of Personal Loan
- My Final Advice
#1. State Bank of India Personal Loan
SBI personal loan is accessible to all salaried professionals and self-employed with a minimum of 2 years standing. SBI Bank offers personal loan under four categories – SBI Xpress Credit Personal Loan, SBI Pension Loan, SBI Saral Personal Loan, and SBI Festive Season Loan.
SBI Xpress Credit Personal Loan
SBI provides Xpress credit personal loans to the employees of under noted entities maintaining salary account with SBI. The entities includes Central & State Government, Quasi-Government, Central PSUs, Educational Institutions of National Repute , and Selected Corporates who have business relationship with the Bank.
SBI Pension Loan
SBI pension loan is for persons who are Central, State Government, or Defence pensioners drawing their pension through one of the SBI branches and are not more than 76 years of age.
SBI Saral Personal Loan
SBI saral personal loan is available for any legitimate purpose to salaried persons and self employed.
SBI Festive Season Loan
As the name suggests, this loan is provided by the bank to meet any kind of festival related expenses.
SBI Personal Loan Interest Rates
Ranges from 11.85% to 15.10%
Other Personal Loan Details
Loan Amount Upto 10 Lakh
Processing Fee 2% – 3% + GST
Late Fee 24% p.a
Preclosure Charges 3%
Loan Tenure upto 48 months
No preclosure charges will be charged if the account is closed from the proceeds of a new loan account opened under the same scheme.
Why You should Apply for SBI Personal Loan
- The bank offers personal loans across various categories such as SBI Xpress Credit loan, SBI Saral Personal loan, Loan to pensioners, and SBI Festival personal loan.
- One of least preclosure charges.
- The wide network of SBI makes it a suitable loan option for people residing anywhere in the country.
- Comparatively less interest rate.
Cons of SBI Personal Loan
- Loan allowed only upto Rs 10 lakh.
Eligibility Criteria
| Eligibility | Salaried | Self Employed/Business |
| Age | 21 to 58 | 21 to 65 |
| Monthly Income/Profit | Minimum of Rs 15000 | Minimum net profit of Rs. 2 lac |
| Minimum Work Experience | 2 years | 2 years at least in current business. |
| Account needed | Required salary account with SBI | Required business account with SBI |
Documents Required
| Salaried | Self Employed/Business |
| Application Form | Application Form |
| ID Proof, Address Proof | ID Proof, Address Proof |
| Latest salary slip with form 16 | Income report with form 16 |
| 3 Month bank statement | 3 Month bank statement |
#2. ICICI Bank Personal Loan
ICICI bank offers you one of the best personal loans at attractive interest rates starting at just 10.75%. Even the interest rate is charged on a reducing balance which means that every month interest will be calculated on the outstanding loan balance as reduced by the principal repayment made in last month.
You can avail a loan upto Rs 25 lakhs without any guarantor or collateral security. The tenure of the personal loan with this bank can be as long as 60 months.
For existing ICICI Bank customers, there are attractive benefits such as reduced documentation and automatic pre-eligibility( based on your relationship with the bank via a bank account, credit card, or a loan account).
ICICI Bank Personal Loan Interest Rates
Ranging from 10.75% to 20%
Other Personal Loan Details
Loan Amount upto 25 Lakh
Processing Fee up to 2.25%
Late Fee 24% p.a
preclosure Charges 5%
preclosure Condition preclosure can be made after the payment of 12 EMIs
Why You should Apply for ICICI Personal Bank
- The interest rate is charged on a reducing balance which means every month the interest rate in calculated on the outstanding loan amount.
- Lowest interest rate of 10.75%.
- Your loan will be disbursed within 72 hours of documents submission.
Cons of ICICI Personal Loan
- High preclosure charges of 5%.
- Complex eligibility criteria.
Eligibility Criteria
| Eligibility | Salaried | Self Employed/Business |
| Age | 23 to 58 | 25 to 65 |
| Monthly Income/Profit | Minimum of Rs 17,500 (Rs.25,000 for applicants residing in Mumbai & Delhi) | Minimum net profit of Rs. 2 lac |
| Minimum Work Experience | 2 years. Also tenure should be a minimum of 1 year with current employer. | 5 years at least in current business. |
| CIBIL Score | 700+ | 700+ |
Documents Required
| Salaried | Self Employed/Business |
| Application Form | Application Form |
| ID Proof, Address Proof | ID Proof, Address Proof |
| 3 month salary slip with form 16 | 6 month Income report |
| 3 Month bank statement | 3 Month bank statement |
#3. HDFC Bank Personal Loan
You have options to borrow up to Rs 25 lakhs or up to Rs 15 lakhs in case you are self employed without having a guarantor or a collateral security.
Once the documentation is done your personal loan will be disbursed within 2 days and you can also avail an accident cover along with this loan.
HDFC Personal Loan Interest Rates
Ranging between 14.75% to 20.70%
Other Personal Loan Details
- Loan Amount – up to Rs 25 lakh (upto 15 lakh for self employed)
- Processing Fee – 2.5%
- Late Fee – 24% p.a
- Loan Tenure – upto 60 months
- Preclosure Condition – preclosure can be made after the payment of 12 EMIs
Preclosure Charges
- 13 – 24 months – 4% of the prepaid amount
- 25 – 36 months – 3% of the prepaid amount
- Greater than 36 months – 2 % of prepaid amount
Why You should Apply for HDFC Personal Loan
- After 36 months you have to pay only 2% preclosure charges which is lower than other banks.
- Zero Hidden Charges, Lowest Processing Fee, and Convenient Repayment options.
- Minimal paperwork and documentation.
Cons of HDFC Personal Loan
- Interest rate is comparatively on the higher side.
Eligibility Criteria
| Eligibility | Salaried | Self Employed/Business |
| Age | 21 to 60 | 25 to 65 |
| Monthly Income/Profit | Rs.12,000 per month (net income)
Rs.15,000 per month in Delhi, Mumbai, Chennai, Bangalore, Calcutta, Hyderabad, Ahmedabad, Pune and Cochin.
| Rs 1 Lakh per annum |
| Minimum Work Experience | 2 years. Also tenure should be a minimum of 1 year with current employer. | 5 years at least in current business. |
| CIBIL Score | 750+ | 750+ |
| Loan Amount | 25 lakh | 15 lakh |
Documents Required
| Salaried | Self Employed/Business |
| Application Form | Application Form |
| ID Proof, Address Proof | ID Proof, Address Proof |
| Latest salary slip with form 16 | Income report with form 16 |
| 3 Month bank statement | 3 Month bank statement |
#4. Kotak Mahindra Personal Loan
Earlier, Kotak bank offered personal loan only to salaried employees but now it extends personal loans to all individuals whether they are salaried or self employed.
Anyone who requires funds for sudden and unavoidable expenses like wedding, child’s education, travelling, renovation etc can avail Kotak’s personal loan. You can take personal loan in range of Rs 50,000 to Rs 15 lakh.
Kotak Mahindra Personal Loan Interest Rates
Ranging from 10.99% to 24%
Personal Loan Details
- Loan Amount – upto 15 lakh
- Processing Fee – 2.5%
- Late Fee – 3% per month
- preclosure Charges – 5%
- preclosure Condition – after 12 EMIs
- Loan Tenure – upto 60 months
Why You should Apply for Kotak Mahindra Personal Loan
- You can take a personal loan from Rs. 50,000 to Rs. 15,00,000.
- Quick approval on loan takes less than 72 hours.
- Kotak Bank offers special schemes and discounts for employees of large companies.
- You can refinance any existing personal loan with a Kotak Mahindra Bank personal loan.
Cons of Kotak Mahindra Personal Loan
- High preclosure charges.
- 3% per month late payment charges.
Eligibility Criteria
| Eligibility | Salaried | Self Employed/Business |
| Age | 21 to 58 | 21 to 58 |
| Monthly Income/Profit | Rs. 20000 per month | Rs 2 Lakh p.a |
| Minimum Work Experience | 1 years | 1 years at least in current business. |
| Minimum Education | Graduation | Graduation |
Document Required
| Salaried | Self Employed/Business |
| Application Form | Application Form |
| ID Proof, Address Proof | ID Proof, Address Proof |
| Last 3 month payslip | Last 2 years RTI |
| 3 Month bank statement | 3 Month bank statement |
#5. Axis Bank Personal Loan
Axis bank offers great features and benefits on its personal loans such as least processing fee, no prepayment, and no preclosure charges.
If you are not sure about the repayment period then axis bank is a good option for you. You will have the option to repay the loan in 60 months but even if you want to repay the loan earlier then you don’t have to bear any preclosure charges.
Personal Loan Interest Rates Axis Bank
Ranging from 15.50% to 24%
Personal Loan Details
- Loan Amount – upto 15 lakh
- Processing Fee – 1.50% to 2.0%
- Late Fee – 24 p.a
- preclosure Charges – Nil
- preclosure Condition – preclosure can be made after the payment of 12 EMIs
Why You should Apply for Axis Bank Personal Loan
- No preclosure charges.
- Least processing fee.
- Least Minimum monthly income required.
- Quick approval with minimum documents.
- You can earn reward points while applying for personal loan.
Cons of Axis Bank Personal Loan
- High Interest rate.
- More preference to salaried.
Eligibility Criteria
| Eligibility | Salaried | Self Employed/Business |
| Age | 21 to 60 | 24 to 65 |
| Monthly Income/Profit | Rs. 15000 per month | Rs 2 Lakh p.a |
Documents Required
| Salaried | Self Employed/Business |
| Application Form | Application Form |
| ID Proof, Address Proof | ID Proof, Address Proof |
| Last 3 month payslip | Last 2 years RTI |
| Signature verification proof | Signature verification proof |
#6. CitiBank Personal Loan
Citibank personal loan is specially meant for the salaried class as salaried persons can get a personal loan at a lower interest rate compared to the self employed class.
In addition, Citibank personal loan starts at the lowest rate of 10.99% especially for Citibank’s salaried borrowers employed with reputed companies.
CitiBank Personal Loan Interest Rates
Ranging from 10.99% to 17.99%
Other Specification
- Loan Amount – upto 30 lakh
- Processing Fee – upto 3%
- Late Fee – 24% p.a
- preclosure Charges – 4%
- preclosure Condition – preclosure permitted only after the payment of 12 EMIs
- Loan Tenure – 1 to 5 years
Why You should Apply for CitiBank Personal Loan
- Special interest rate for salaried persons.
- Bank charge average processing fee as compared to other banks.
- You can take a personal loan upto Rs. 30,00,000.
- Get quick approval on loan within 72 hours.
- If you are already a citibank customer, you would get rebate on interest rate.
Cons of CitiBank Personal Loan
- 4% preclosure charges.
- Minimum monthly income required Rs 25000.
Eligibility Criteria
| Eligibility | Salaried | Self Employed/Business |
| Age | 23 to 60 | 23 to 65 |
| Monthly Income/Profit | Rs. 25000 per month | Rs 2 Lakh p.a |
Documents Required
| Salaried | Self Employed/Business |
| Application Form | Application Form |
| ID Proof, Address Proof | ID Proof, Address Proof |
| Last 3 month payslip | Last 2 years RTI |
| Employment Period proof | Business period proof |
#7. Bajaj Finserv Personal Loan
Bajaj Finserv offers personal loan only to salaried professionals at very competitive rates starting from 12.49%. Besides, Bajaj Finserv has the lowest average interest rate as compared to the other banks.
In addition, the loan procedure is an entirely online process. That means you can get an instant loan granted within 5 minutes and the loan amount is disbursed within 48 hours.
Bajaj Finserv Personal Loan Interest Rates
Ranging from 12.49% onwards to maximum of 16%
Other Personal Loan Details
- Loan Amount – upto 25 lakh
- Processing Fee – 2.25% to 3%
- Late Fee – 24% p.a
- Preclosure Charges – 4%
- Preclosure Condition – preclosure can be made after the payment of first EMI
- Loan Tenure – upto 60 months
Why You should Apply for Bajaj Finserv Personal Loan
- Get loan upto Rs 25 lakhs and repay the loan within 60 months.
- No charges for partial preclosure.
- Lowest average interest rate.
- Get an instant approval and the loan amount is disbursed within 48 hours.
- You can repay loan amount even after the first EMIs.
Cons of Bajaj Finserv Personal Loan
- High preclosure charges.
- High minimum salary requirement.
- Focused only on salaried class.
Eligibility Criteria
| Eligibility | Salaried |
| Age | 25 to 55 |
| Monthly Income | Rs 30,000 to Rs 40,000 per month (varies depending upon the city you are residing in) |
Documents Required
- Identity Proof and Address Proof
- Last 2 months salary slip.
- 3 Month bank statement.
#8. Bank of Baroda Personal Loan
Bank of Baroda’s offers personal loan both for salaried and self-employed individuals. Depending upon your eligibility, your loan amount can be up to Rs. 10 lakh for a maximum tenure of 48 months.
Besides, Bank of Baroda is also a good option for those people who want to take a personal loan as small amount as Rs 20,000.
Personal Loan Interest Rates Bank of Baroda
Ranging from 11.60% to 16.60%
Other Personal Loan Details
- Loan Amount upto 10 lakh
- Processing Fee 2%
- Late Fee 24% p.a
- Preclosure Charges 6% in case within 6 months, after 6 months no charges
- Loan Tenure 4 year
Why You should Apply for Bank of Baroda Personal Loan
- No preclosure charges after the payment of 6 EMIs.
- Lowest processing fee with 2%.
- Good option for people who want to avail a small sum.
Cons of Bank of Baroda Personal Loan
- 6% preclosure charges if you repay within 6 months.
Eligibility Criteria
| Eligibility | Salaried | Self Employed/Business |
| Age | 21 to 60 | 21 to 65 |
| Minimum Work Experience | 1 years | 1 years at least in current business. |
Documents Required
| Salaried | Self Employed/Business |
| Application Form | Application Form |
| ID Proof, Address Proof | ID Proof, Address Proof |
| Last 3 month payslip | Last 2 years RTI |
| 6 Month bank statement | 6 Month bank statement |
#9. Standard Chartered Personal Loan
Standard Chartered has one of the best online personal loan services for unsecured loans in India. Bank offers personal loan for expanding your business, designing your dream home, giving your children the best education, your daughter’s wedding, or a vacation.
Bank offers loan upto Rs 30 lakh which you can repay within 60 months. Even the personal loan interest rate starts at just 10.99%
Due to its online services, Standard Chartered is my favorite bank for credit cards as well.
Standard Chartered Personal Loan Interest Rates
Ranging from 10.99% to 19%
Other Personal Loan Details
- Loan Amount Upto 30 lakh
- Processing Fee 3%
- Late Fee 24% p.a
- preclosure Charges 5%
- preclosure can be made after the payment of 12 EMIs
- Loan Tenure upto 60 months
Why You should Apply for Standard Chartered Personal Loan
- Lower interest rate starting at 10.99%
- You can take loan upto Rs 30 lakh.
- No securities, collaterals, or guarantors required.
- Easy process to apply online.
Cons of Standard Chartered Personal Loan
- High processing fee.
- High preclosure charges.
- Bank branches are not available at every where.
Eligibility Criteria
| Eligibility | Salaried | Self Employed/Business |
| Age | 21 to 58 | 21 to 58 |
| Monthly Income/Profit | Rs. 22000 per month | Rs 2 Lakh p.a |
| Minimum Work Experience | 1 years | 1 years at least in current business. |
Document Required
| Salaried | Self Employed/Business |
| Application Form | Application Form |
| ID Proof, Address Proof | ID Proof, Address Proof |
| Latest payslip | Income report |
| 3 Month bank statement | 3 Month bank statement |
#10. Tata Capital Personal Loan
Tata Capital is one of the leading non-banking financial companies in the country offers personal loans to both salaried professionals and self employed.
Tata capital offers personal loan upto Rs 25 lakh for a period upto 72 months. Tata Capital’s personal loan has several advantages including simple documentation, no collateral, and no restrictions on how to use the money.
Personal Loan Interest Rates Tata Capital
Ranging between 11.49% to 19%
Other Personal Loan Details
- Loan Amount upto 25 lakh
- Processing Fee 2%
- Late Fee 24% p.a
- preclosure Charges upto 4%
- Preclosure permitted only after 12 months
- Loan Tenure Upto 72 months
Why You should Apply for Tata Capital Personal Loan
- Minimal paperwork and documentation
- The loan amount ranges from Rs. 75,000 to Rs. 25,00,000.
- You can choose to repay over tenures ranging from 12 to 72 months.
- Least processing fee.
- Provide instant online approvals in selective cases
Cons of Tata Capital Personal Loan
- High preclosure charges.
Eligibility Criteria
| Eligibility | Salaried | Self Employed/Business |
| Age | 21 to 58 | 25 to 65 |
| Monthly Income/Profit | Rs. 20000 per month | Rs 2 Lakh p.a |
| Minimum Work Experience | 2 years | 3 years at least in current business. |
Documents Required
| Salaried | Self Employed/Business |
| Application Form | Application Form |
| ID Proof, Address Proof | ID Proof, Address Proof |
| Last 3 month payslip | Last 2 years RTI |
| 6 Month bank statement | 6 Month bank statement |
Comparison of Personal Loan Interest Rates in India
| Name | Min. Interest Rate | Max Interest Rate | Processing fee | Pre Closure charge |
| SBI | 11.85% | 15.10% | 2% – 3% | 3% |
| ICICI | 10.75% | 20% | 2.25% | 5% |
| HDFC | 14.75 | 20.70% | 2.5% | 2-4% |
| Kotak Bank | 10.99% | 24% | 2.5% | 5% |
| Axis Bank | 15.50% | 24% | 1.5-2% | Nil |
| Citi Bank | 10.99% | 17.99% | 3% | 4% |
| Bajaj Finserv | 12.49% | 16% | 2.25-3% | 4% |
| Bank of Baroda | 11.60% | 16.60% | 2% | Nil |
| SCB | 10.99% | 19% | 3% | 5% |
| Tata Capital | 11.49% | 19% | 2% | 4% |
Factors Affecting Interest Rate Of Personal Loan
Personal loan interest rates are not fixed even for customers of the same bank. The final interest rate for every personal loan application is finalised by the bank on the basis of various factors such as CIBIL score, applicant’s profession, income level, and relationship with the bank.
Let’s discuss these factors affecting the personal loan interest rates in detail
#1. CIBIL Score
CIBIL score plays the most important role when you apply for any type of loan or a credit card.
CIBIL score reflects your repayment ability. Low credit score implies that there are higher chances of defaulting on loan payments whereas a high score not only increases the chances of getting loan approval but also getting low interest personal loan rates for borrowers.
Take a look at the SBI personal loan interest rate variation due to the CIBIL score.
#2. Salaried or Self-Employed
Salaried individuals have a fixed source of income which makes banks confident about the regular payment of the EMIs & repayment of the loan amount.
Whereas in case of self- employed individuals, banks are hesitant of the ability of these individuals to pay EMIs in time.
As a result, the personal loan interest rate is cheaper for the salaried individuals than the self employed individuals.
For example, Citibank personal loan rate ranges from 12.99% to 15.75 for salaried class and 14.99% to 17.99% for the self employed class. A clear cut difference.
#3. Level of Income
Income level is always the indicator of the financial status. Higher the income level, higher will be the financial status and higher is the probability of repayment of loan.
Therefore, banks impose a certain minimum income clause in the eligibility criteria. Besides, in some cases the income level is the deciding factor of interest rate.
For example, look at the citi bank interest rate chart below
#4. Loan Amount
Interest rates could also vary due to the loan amount. Some banks fix loan amount slabs for deciding the interest rates.
To promote bigger loans, banks can reduce interest rates for customers as bigger the loan amount higher the bank’s income.
So, if you are looking for a bigger personal loan you will be able get one at a lower interest rate. See below how the interest rate varies with respect to the loan amount
#5. Employer Reputation
Employer reputation is also a contributing factor that decides the interest rate. If the borrower is working with a reputed company, there are higher chances of getting a loan at a lower interest rate.
As seen below the interest rate is varying with respect to the rating of the employer.
#6. Relationship With Bank
Your prior relation with the bank also affects the interest rate at which you can avail personal loan. If you have a good relation with the bank, there are decent chances of getting the loan at lower rates.
In general, banks charge lower interest rates for customers who have been with them for a long time.
My Final Advice
Most of the time borrowers only consider the interest rate while applying for personal loan and neglect all other fee & charges. As a result, many times borrowers end up paying a decent sum of money as charges.
Therefore, when applying for a personal loan, I advise you to keep in mind other factors as well whether it is interest rate, processing charges, preclosure charges, or any other hidden charges
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