The personal loan interest rate basically determines your overall loan cost. A lower rate of interest means lower interest costs and EMIs over the loan repayment tenure. Hence, applicants must compare the personal loan rates across financial institutions. Lenders factor in various facets of the applicant’s credit profile like income, credit score, employer’s profile and occupation when setting your personal loan rate.
Personal loan rate comparison offered by different financial institutions
|Lenders||Rate of interest (% p. a)||Processing charges (% of the loan amount)|
|HDB Financial Services||Up to 36 percent||Up to 3 percent|
|Cashe||27 percent onwards||Up to 1,200 or 3 percent|
|Home Credit||24 percent onwards||Up to 5 percent|
|EarlySalary||18 percent onwards||2 percent|
|PaySense||16.80 percent onwards||Up to 2.5 percent|
|MoneyView||15.96 percent onwards||Starting from 2 percent|
|Dhani loan and Services||13.99 percent onwards||3 percent onwards|
|Money Tap||12.96 percent onwards||2 percent|
|KreditBee||12.24 percent onwards||Up to 6 percent|
|Faircent||12.00 percent onwards||Up to 8 percent|
|Fullerton India||11.99 percent onwards||Up to 6 percent|
|StashFin||11.99 percent onwards||Up to 10 percent|
|Axis Bank||10.25 percent onwards||1.5 – 2 percent|
|Union Bank of India||8.90 – 13.00 percent||Up to 0.50 percent|
|Bank of Baroda||9.10 – 15.35 percent||2 percent|
|ICICI Bank||10.50 -19.00 percent||Up to 2.5 percent|
|Punjab National Bank||7.90 – 14.50 percent||Waived off till March 31st, 2022|
|HDFC Bank||10.25 – 21 percent||Up to 2.50 percent|
|SBI personal loan interest rates||9.60 – 13.85 percent||Nil|
|HSBC||9.50 – 15.25 percent||Up to 1 percent|
|Standard Chartered Bank||11.00 percent onwards||1 percent|
|Tata Capital||10.99 percent onwards||Up to 2.75 percent|
|Citibank||9.99 – 16.49 percent||Up to 3 percent|
|Muthoot Finance||14.00 percent onwards||Up to 3.5 percent|
|RBL Bank||14.00 percent onwards||Up to 3.5 percent|
|Bajaj Finserv||13.00 percent onwards||Up to 4 percent|
|IDFC First Bank||10.49 percent onwards||Up to 3.50 percent|
|Bank of Maharashtra||9.45 – 11.80 percent||Up to 1 percent|
|Federal Bank||10.49 – 17.99 percent||Up to 3 percent|
|UCO Bank||10.05 – 10.45 percent||Up to 1 percent|
|Yes Bank||10.99 percent onwards||Up to 2.5 percent|
|Indian Overseas Bank||10.00 percent – 11.00 percent||Up to 0.75 percent|
|IDBI Bank||9.50 percent – 14.00 percent||1 percent (minimum: Rs 2,500)|
|IndusInd Bank||11.00 percent onwards||Up to 3 percent|
|Central Bank of India||8.45 percent onwards||Up to Rs 500|
|Kotak Mahindra Bank||10.25 percent onwards||Up to 2.50 percent|
|Indian Bank||8.50 percent onwards||1.5 – 2 percent|
|Bank of India||9.35 – 12.35 percent||Up to 2 percent|
Important tips to get a personal loan at a lower rate of interest
Listed below are crucial points you must factor into avail lowest personal loan interest rate:
- Form and maintain your CIBIL score of 750 and above.
- Review the pre-approved offers from NBFCs, banks, SFBs (Small Finance Banks), MFIs or Micro Finance Institutions.
- Enquire with NBFCs or banks with whom you hold a loan or/and deposit account.
- Keep thorough track of the rate of interest concessions offered by lenders during the festive times.
- Approach online lending markets to review and compare the personal loan offers from different lenders.
Parameters impacting personal loan rate of interest
Lenders set the rate of interest primarily based on their fund cost and credit risk assessment of their personal loan applicants. Listed here are major parameters that can impact your interest rate on personal loan:
Credit score: Many lenders today have begun factoring in the credit score of the loan applicants when setting the rate of interest. Those with higher credit scores are generally provided personal loans at a lower rate of interest than others. Thus, try and maintain a credit score equaling 750 and above. Excellent financial habits such as repaying your credit card dues and loan EMIs by the due dates, maintaining lower CUR (credit utilization ratio) and avoiding multiple loans and credit card enquiries in a short duration can assist you in maintaining a score of 750 and above.
Income: Higher income means a higher repayment capacity for a loan. It results in reduced credit risk for lenders. Thus, many personal loan lenders provide lower interest rates on personal loans to the ones with a higher monthly income.
Employer: Many personal loan lenders factor in the applicant’s employer profile when fixing the rate of interest. Salaried are generally charged a lower rate of interest than the self-employed owing to the higher income certainty of the former. Amongst the salaried, PSUs and the government generally are provided with a lower rate of interest owing to income certainty and higher job security. Next, the applicants employed with reputed companies and MNCs are generally considered to hold higher chances to withstand economic downturns than other private sector companies.
Existing banking or lending relation with the lender: Many lenders provide personal loans at the concessional rate of interest to applicants with existing lending or banking relation with the lender. Hence, if you are planning to take up a personal loan, then you must contact the NBFCs or banks with whom you already hold an existing banking or lending relation for personal loan offers.
FAQs (frequently asked questions)
Which bank endows the lowest personal loan interest rate?
The interest rate provided by NBFCs, and banks depend upon the applicant’s credit history, salary, credit score and repayment capacity. However, public sector banks provide lower rates of interest than NBFCs and private sector banks.
How is the personal loan rate of interest computed?
A personal loan rate of interest is computed based on your credit score, income, and other eligibility parameters.
What is known as a flat personal loan rate?
A flat personal loan rate is when there is zero change in the rate of interest throughout the repayment cycle or tenure. It is computed on overall loan proceeds during the complete tenure on the principal amount.
What is reducing the personal loan rate?
A reducing rate is a way in which the interest rate is computed on the outstanding loan each month. During this rate type, the loan EMI involves interest payable on outstanding loan proceeds.