Best Personal Loans in India 2021

Personal loans can be used for education, weddings, home renovation, and consumer products, amongst other purposes. To minimise your total cost of borrowing, you need to compare personal loan interest rates, processing fees and other charges, and loan tenures. Use our research team's guide to help you find the best personal loan based on your needs and specific qualifications.

Table of Contents

Our Top Picks for the Best Personal Loans in India

To find the best personal loans for you, we analysed interest rates, processing fees, tenures and personal loan eligibility of over 35 banks and lenders. The following list represents low interest personal loans in India that have exceptional loan features.

Interest RatesProcessing FeeLoan AmountTenure
IDFC First Bank9.20% - 34.00%Up to 3.50%Rs. 1 lakh - 25 lakhs1 to 5 years
Bank of Maharashtra9.70% - 10.70%1.00%Up to Rs. 10 lakhs5 years
Central Bank of IndiaFrom 9.85%Rs. 500Up to Rs. 10 lakhs4 years
Citibank9.99% - 16.49%Up to 3.00%Rs. 10,000 - 30 lakhs3 months to 5 years
UCO BankFrom 10.05%1.00%Rs. 10,000 - 10 lakhs5 years
Bank of BarodaFrom 10.50%2.00%Rs. 50,000 - 10 lakhs5 years
HSBC Bank10.50% - 17.84%1.00%Up to Rs. 15 lakhs6 months to 5 years
State Bank of India (SBI)10.60% - 12.60%1.00%Rs. 25,000 - 20 lakhs6 months to 6 years
HDFC Bank10.75% - 21.30%Up to 2.50%Rs. 50,000 - 40 lakhs1 to 5 years
Kotak Mahindra Bank10.99% - 24.00%Up to 2.50%Rs. 50,000 - 20 lakhs5 years
Indian Overseas BankFrom 10.80%Up to 0.50%Up to Rs. 5 lakhs1 to 5 years
Union Bank of India10.90% - 12.00%0.50%Up to Rs. 15 lakhs5 years
Tata CapitalFrom 10.99%2.75%Rs. 75,000 - 25 lakhs1 to 6 years
Yes Bank10.99% - 24.00%Up to 2.50%Rs. 1 lakh - 40 lakhs1 to 5 years
IndusInd Bank11.00% - 31.50%2.50%Rs. 50,000 - 15 lakhs1 to 5 years
ICICI Bank11.25% - 21.00%2.25%Rs. 50,000 - 20 lakhs1 to 5 years
Bank of IndiaFrom 11.85%2.00%Rs. 10,000 - 10 lakhs3 years

Best Small Personal Loan

Consider this if you are seeking a small personal loan

Min. Loan Amount Rs. 10,000
Max. Loan Amount Rs. 30 lakh
Processing Fee Up to 3.00%
Interest Rate Type Fixed
Loan Tenure 3 to 60 months

Citibank not only has the best small personal loan in India, but it also has the best short term personal loan.

Most banks have a minimum loan quantum of Rs. 1 lakh, but not all borrowers want to take out such a large personal loan. At Citibank, you can borrow as little as Rs. 10,000 and as much as Rs. 30 lakhs.

Additionally, Citibank's loan tenures range from 3 months to 5 years, which is unique considering most banks have a minimum tenure of one year. For borrowers who plan to pay down their personal loan in advance and do not want to be charged high prepayment penalties, short term loans are the best option to minimise the total cost of borrowing.

Whether you are a salaried borrower or self employed, you are eligible for low interest rates beginning at 9.99%. Citibank's interest rates are amongst the top 5 lowest of the banks we analysed, so you should consider the lender if you are seeking a cheap personal loan.

A potential drawback is Citibank's processing fee, which is 3.00% of the total loan amount. While this is considered higher than the standard 1.50% to 2.50%, Citibank interest rates and other features still make it one of the best personal loans to consider.

Read our full review

Duration (Months)Processing FeeEffective Interest RateEMITotal Cost
13.00%9.99%₹3,38,899₹ 3,68,899
23.00%9.99%₹3,38,899₹ 7,07,798
33.00%9.99%₹3,38,899₹ 10,46,697
Based on an Rs. 10 lakh personal loan over a 3 month tenure. Total cost includes processing fee, interest payable, and principal loan amount. Processing fee does not include GST or state tax.

Best Personal Loan for Students

Consider this if you need to finance education costs

Required Monthly Income Rs. 15,000
Min. Loan Amount Rs. 25,000
Max. Loan Amount Rs. 20 lakhs / 24 times NMI
Processing Fee 1.00%
Interest Rate Type Fixed
Loan Tenure 6 months to 6 years

Personal loans for students are not easy to find, since many banks have eligibility criteria which excludes younger borrowers. Since personal loan lenders have a minimum income and age requirement, it's best if your parent, family member, or other guarantor applies for a personal loan on your behalf.

Amongst the lenders we analysed, State Bank of India (SBI) offers one of the best personal loans for students. However, it's important to note that students or their parents must comply with SBI's personal loan eligibility criteria:

  • Minimum Age Requirement: 21 years old.
  • Minimum Income Requirement: Rs. 15,000 per month.
  • Job Position: Salaried.
  • Salary Account Holder: SBI interest rates are lower for SBI customers.

Since students are not likely to have high income or credit history, they will often be charged higher personal loan interest rates. This is why SBI interest rates are particularly strong for students, as the rate range starts low at 9.60%. Further, if a student applies with a co-applicant who has a higher income or good CIBIL score, they can avail the lowest personal loan interest rates from SBI.

In addition to low rates, students will benefit from SBI's loan tenure maximum of 6 years. The longer you have to pay off your home loan, the smaller your equated monthly instalments will be. Since most banks have a personal loan tenure maximum of 5 years, SBI's personal loan option stands out as a top option for students.

The maximum loan amount that a student can borrow from SBI is Rs. 20 lakhs, which is more than enough for public and government higher education costs. However, if you are seeking more than this amount, consider HDFC Bank or Yes Bank for your personal financing needs.

Read our full review

Duration (Months)Processing FeeEffective Interest RateEMITotal Cost
11.00%9.60%₹ 36,650₹ 4,59,794
21.00%9.60%₹ 36,650₹ 8,99,588
31.00%9.60%₹ 36,650₹ 13,39,382
41.00%9.60%₹ 36,650₹ 17,79,176
51.00%9.60%₹ 36,650₹ 22,08,970
61.00%9.60%₹ 36,650₹ 26,58,764
Based on an Rs. 20 lakh personal loan over a 6 year tenure. Total cost includes processing fee, interest payable, and principal loan amount. Processing fee does not include GST or state tax.

Best Personal Loan for Salaried Employees

Consider this if you are a salaried employee and seek a competitively priced loan

Max. Loan Amount Rs. 10 lakh
Processing Fee Rs. 500 + GST
Interest Rate Type Floating
Loan Tenure 48 months

Central Bank of India's Cent Personal Loan Scheme charges one of the 3 lowest interest rates on the market for salaried employees, starting as low as 9.85% p.a. Unlike many banks, Central Bank of India does not require you to hold a salary account with them, which makes it the best option for borrowers seeking the lowest rate regardless of their relationship to the lender.

Under the Cent Personal Loan scheme, you can avail a personal loan up to Rs. 10 lakhs, with a loan tenure maximum of 4 years. Your interest rate will be decided based on your risk category — for instance, if you fall under the medium risk category, interest rates start from 10.05% p.a. Additionally, Central Bank of India charges Rs. 500 + GST in processing fees, which is especially low compared to the standard market fee of 1.00% or more of the total loan amount.

Read our full review

Duration (Years)Processing FeeEffective Interest RateEMITotal Cost
1₹ 5009.85%₹ 25,291₹ 3,03,987
2₹ 5009.85%₹ 25,291₹ 6,07,474
3₹ 5009.85%₹ 25,291₹ 9,10,961
4₹ 5009.85%₹ 25,291₹ 12,14,448
Based on an Rs. 10 lakh personal loan over a 4 year tenure. Total cost includes processing fee, interest payable, and principal loan amount. Processing fee does not include GST or state tax.

Best Personal Loan for Self-Employed

Consider this if you are self-employed and seek the lowest personal loan interest rates

Required Monthly Income Rs. 15,000
Min. Loan Amount Rs 75,000
Max. Loan Amount Rs. 25 lakh
Processing Fee 2.75%
Interest Rate Type Fixed
Loan Tenure 12 to 72 months

While there are many competitive loan options for for self-employed individuals, the Tata Capital Personal Loan offers the lowest minimum rate at 10.99% p.a. While most banks reserve the best personal loan benefits for their salary account holders, Tata Capital provides generous personal loan benefits to self-employed individuals.

A self-employed borrower can avail up to Rs. 25 lakhs with a loan tenure maximum of 6 years. Your interest rate is determined by personal loan eligibility criteria, including your income, CIBIL score, and age. It's important to note that you will have to make at least Rs. 15,000 per month to be eligible for a Tata Capital Personal Loan.

Despite lower interest rates, the Tata Capital Personal Loan charges a relatively high processing fee up to 2.75% of the total loan amount. Even so, self-employed individuals will find the lowest total cost of borrowing at Tata Capital.

Read our full review

Duration (Years)Processing FeeEffective Interest RateEMITotal Cost
12.75%10.99%₹ 47,572₹ 6,33,369
22.75%10.99%₹ 47,572₹ 12,04,238
32.75%10.99%₹ 47,572₹ 17,75,107
42.75%10.99%₹ 47,572₹ 23,45,976
52.75%10.99%₹ 47,572₹ 29,16,845
62.75%10.99%₹47,572₹ 34,87,714
Based on an Rs. 25 lakh personal loan over a 6 year tenure. Total cost includes processing fee, interest payable, and principal loan amount. Processing fee does not include GST or state tax.

Best Personal for Low Income Earners

Consider this if you are a low income earner in need of a personal loan

Required Monthly Income Rs. 5,000
Max. Loan Amount Rs. 5 lakh
Processing Fee Up to 0.50%
Interest Rate Type Floating
Loan Tenure 12 to 60 months

For low income earners, one of the best personal loan options is from Indian Overseas Bank. The IOB Personal Loan charges interest rates starting from 10.80% p.a. and the minimum income requirement for eligibility is only Rs. 5,000 per month.

The maximum loan amount you can avail with a IOB Personal Loan is Rs. 5 lakhs. Additionally, you are eligible for up to a 5 year loan tenure to repay this loan amount back to the bank.

Compared to most lenders who will charge more than 1.00% in processing fees, you will find a much lower fee for the IOB personal loan at only 0.50% of the total loan amount. Overall, if you are a if you are a low income earner seeking a small personal loan, IOB offers the best interest rates and processing fees in the market.

Read our full review

Duration (Years)Processing FeeEffective Interest RateEMITotal Cost
10.50%10.80%₹ 10,821₹ 1,54,857
20.50%10.80%₹ 10,821₹ 2,84,714
30.50%10.80%₹ 10,821₹ 4,14,571
40.50%10.80%₹ 10,821₹ 5,44,428
50.50%10.80%₹ 10,821₹ 6,74,285
Based on an Rs. 5 lakh personal loan over a 5 year tenure. Total cost includes processing fee, interest payable, and principal loan amount. Processing fee does not include GST or state tax.

Best Personal Loan for Women

Consider this if you are a woman and seek concessional interest rates

Required Monthly Income Rs. 10,000
Min. Loan Amount Rs. 10,000
Max. Loan Amount Rs. 10 lakh
Processing Fee 1.00%, minimum Rs. 750
Interest Rate Type Floating
Loan Tenure Up to 60 months

Women can apply for a personal loan from any bank, but there are some lenders like UCO Bank that offer special personal loan benefits to women only. The UCO Cash Personal Loan for Women charges a concessional interest rate starting from 10.05% p.a.

The UCO Cash Personal Loan allows you to borrow up to Rs. 10 lakhs, with a maximum loan tenure of 5 years. Additionally, processing fees for the UCO Personal Loan are charged up to 1.00% of the total loan amount — a relatively low fee compared to other banks and lenders who can charge up to 3.00%.

It's important to note that you must hold a salaried position, as well as be a salary account holder with UCO Bank before applying for a personal loan. This could be a drawback if you are a self-employed woman, but if you are looking for personal loan interest rates tailored to your personal profile, consider UCO Bank.

Read our full review

Duration (Years)Processing FeeEffective Interest RateEMITotal Cost
11.00%10.05%₹ 21,272₹ 2,65,260
21.00%10.05%₹ 21,272₹ 5,20,520
31.00%10.05%₹ 21,272₹ 7,75,780
41.00%10.05%₹ 21,272₹ 10,31,040
51.00%10.05%₹ 21,272₹ 12,86,300
Based on a. Rs. 10 lakh personal loan over a 5 year tenure. Total cost includes processing fee, interest payable, and principal loan amount. Processing fee does not include GST or state tax.

Best Personal Loan for Pensioners

Consider this if you are a pensioner in need of a personal loan

Max. Loan Amount Up to 5 lakhs, depending on scheme
Processing Fee 2.00%, maximum Rs. 2000
Interest Rate Type Floating

The Bank of India Star Pensioner Loan Scheme charges interest rates as low as 9.35% p.a. to pensioners and retired employees who hold a salary account with the branch.

Whether through a secured or unsecured loan, pensioners can borrow up to Rs. 5 lakhs and even apply for more than one loan if in need of additional funding. Processing fees are relatively high at 2.00% of the total loan amount, but BOI sets a minimum Rs. 500 and maximum Rs. 2000 to reduce the total cost of borrowing.

The maximum age for BOI Personal Loan eligibility is 75 years. If you exceed this age limit, you are considered a senior citizen and can avail up to Rs. 1 lakh from the BOI Star Pensioner Loan Scheme. Additionally, you won't have to pay any processing fees.

Read our full review

Duration (Years)Processing FeeEffective Interest RateEMITotal Cost
1₹ 20009.35%₹ 10,464₹ 1,27,572
2₹ 20009.35%₹ 10,464₹ 2,53,144
3₹ 20009.35%₹ 10,464₹ 3,78,716
4₹ 20009.35%₹ 10,464₹ 5,04,288
5₹ 20009.35%₹ 10,464₹ 6,29,860
Based on a. Rs. 5 lakh personal loan over a 5 year tenure. Total cost includes processing fee, interest payable, and principal loan amount. Processing fee does not include GST or state tax.

How to Choose a Personal Loan

There are many factors to consider when choosing a personal loan. In order to minimise your total cost of borrowing, charges like your personal loan interest rate and processing fee should be as low as possible. Additionally, you should consider factors like loan amount, loan tenure, and loan schemes in order to avail the best home loan option for your financing needs.

Read More: How to Find the Best Loan

Am I Eligible for a Personal Loan?

Before you apply for a personal loan, you first have to make sure that you are eligible for one. Your personal loan eligibility is determined by your credit history, job profile, and age, amongst other factors. Your bank or personal loan lender will consider all of these factors before deciding if, and how much, loan amount you are eligible for.

Many banks offer personal loans to salaried employees only. For self-employed eligibility, you will have to find specific personal loans tailored to your financial situation. Similarly, banks will offer personal loan schemes to low-income earners, pensioners, NRIs, and other types of applicants.

Read more: Personal Loan Basics

How to Apply for a Personal Loan

When you apply for a personal loan, you will have to fill out an application online or in person. You may find that your loan lender is willing to negotiate from the advertised interest rate, which highlights the importance of comparing several rates before choosing a lender.

Below, you will find examples of required documents needed to complete your personal loan application.

Examples Documents Required for Personal Loan Application

Required DocumentSalaried ApplicantNon-Salaried Applicant
Proof of IdentityPassport, Drivers License, PAN
Proof of AddressPassport, utility bill
Proof of IncomeBank statement, Salary accountAudited financials, bank statement

FAQ

A personal loan is an unsecured loan that can be used for weddings, higher education, travel, consumer products and more. You do not need to put down collateral for a personal loan, but you will find higher interest rates than home loans, for instance.

A good interest rate on a personal loan is below 11.67%. Depending on your personal loan eligibility, you may be offered higher interest rates than this. If this is the case, you can review our guide on how to avail the lowest interest rate on your personal loan.

SBI personal loan interest rates start from 9.60% p.a. SBI interest rate ranges vary, though, depending on your specific qualifications. For example, if you are a Defence, Para-Military or Indian Coast Guard official, you can avail an SBI personal loan with interest rates between 10.60% and 11.10% p.a.

Many factors determine your personal loan interest rate including: your CIBIL score and credit history, job position and income, age, and relationship with the lender.

To get the lowest personal loan interest rate, you should aim to have a CIBIL score of 700+, as well as a low credit utilization ratio and fixed obligation to income ratio (FOIR). You should also consider applying for a personal loan from a bank that you already have a salary account with.

It's important that you do your research beforehand, so that you don't apply to multiple lenders at the same time. Applying to more than one personal loan lender could negatively impact your credit score.

Methodology

In order to identify the top personal loans in India, we researched and analysed more than 60 loans from 35 lenders, which are listed in our table below.

Lenders Reviewed in ValueChampion's Study
Aditya Birla CapitalAxis BankBajaj FinservBank of Baroda
Bank of IndiaBank of MaharashtraCanara BankCentral Bank of India
CitibankCredyFederal BankFullerton India
HDB Financial ServicesHDFC BankHSBC BankICICI Bank
IDBI BankIDFC First BankInCredIndia Infoline
Indian BankIndian Overseas BankIndusInd BankKarur Vysya Bank
Kotak Mahindra BankLoanTap Financial TechnologiesRBL BankSBI
South Indian BankStandard CharteredTamilnad Mercantile BankTata Capital
UCO BankUnion Bank of IndiaVijaya BankYes Bank

After gathering interest rate, fee and other various data from these banks, we created an algorithm that compares the cost of borrowing of each loan. Our calculations include mandatory processing and administrative fees, interest costs and applicable promotions. We did not include fees for late or early payments, based on the assumption that the borrower would make timely payments. Because banks offer loans of various tenures and advertise ranges of interest rates, we calculated borrowing costs based on all possible scenarios in order to develop our list above.

Natalia Sanchez-Kumar

Natalia Sanchez-Kumar is a Junior Research Analyst at ValueChampion, specialising in loans in India. She is a History graduate of New York University and has worked in the area of social impact, Future of Work and socio-technological research in the US and India. She has co-authored policy proposals alongside the International Labour Organisation in Sri Lanka and the Maldives, as well as hosted a data privacy conference with Facebook in New Delhi.