Compare Personal Loan Interest Rates in India 2021

The interest rate on your personal loan will determine your total cost of borrowing, as well as your equated monthly instalments. Before you choose a personal loan lender, it's important to compare interest rates of all banks so that you can find the cheapest personal loan best suited to your specific qualifications.

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Personal Loan Interest Rates in India

Personal loan minimum interest rates start from 8.45%. Use the table below to compare rates of the top banks and lenders in India.

Interest RateProcessing Fee
UCO BankFrom 8.45%1.00%, minimum Rs. 750
Union Bank of IndiaFrom 8.90%0.50%, minimum Rs. 500
State Bank of IndiaFrom 9.60%1.00%
Bank of MaharashtraFrom 9.70%1.00%, minimum Rs. 1000
Central Bank of IndiaFrom 9.85%Rs. 500
HSBC9.99% to 14.00%Up to 1.00%
Citibank9.99% to 16.49%Up to 3.00%
Bank of BarodaFrom 10.50%2.00%, minimum Rs. 1,000, maximum Rs. 10,000
Federal Bank10.49% to 17.99%Up to 3.00%
ICICI Bank10.50% to 19.00%2.25%
HDFC Bank10.50% to 21.00%Up to 2.50%
Kotak Mahindra BankFrom 10.75%Up to 2.50%
Indian Overseas BankFrom 10.80%Up to 0.50%
Tata CapitalFrom 10.99%Up to 2.75%
IndsuInd Bank11.00% - 31.50%2.50%
Canara BankFrom 11.25%0.50%, min Rs. 1000, maximum Rs. 5000
South Indian Bank11.45% to 14.40%2.00%
Standard CharteredFrom 11.49%Up to 2.25%
Fullerton India11.99% to 36.00%Up to 6.00%
IDBI BankFrom 12.00%1.00%
Karur Vysya Bank12.00% to 19.00%1.50%
Axis Bank12.00% to 21.00%Up to 2.00%
Bajaj FinservFrom 13.00%Up to 4.13%
Yes Bank13.99% to 16.99%Up to 2.50%
Based on minimum interest rates for eligible borrowers. Rates are subject to change.

Please note that the interest rates listed above refer to the lowest interest rates offered by each lender as per their loan scheme and concessions for eligible borrowers.

Personal Loan Interest Rate Types: Fixed or Floating?

The difference between fixed and floating interest rates can have a significant impact on your personal loan equated monthly instalments (EMIs).

A fixed interest rate on your personal loan will remain constant throughout your loan repayment period, also referred to as a loan tenure. This rate type is better for applicants who want to pay a consistent EMI and not risk any changes to their interest rate.

A floating interest rate can increase or decrease during your loan tenure at any time, which will change your total EMI. Floating rates depend on internal or external benchmarks set by your bank or personal loan lender. This rate type is better for applicants who are willing to accept the risk of market changes which determine the total amount you must pay per month.

How to Calculate Personal Loan Interest Rate

Banks and personal loan lenders will likely offer a personal loan interest rate calculator that estimates your EMI payments. Even without a personal loan EMI calculator, you can still plan your repayment schedule with the following calculations:

With the Flat Rate Method, the interest rate is calculated on the principal loan amount. This will give you an estimate of your equated monthly installments. Conversely, you can use the flat rate method to calculate the total interest you will pay over your loan tenure.

EMI = (Principal Loan Amount + Total Interest Payable) / Loan Tenure in Months


Total Interest Payable = (Principal Loan Amount x Interest Rate x Loan Tenure) / 100

With the Reducing Balance Method, interest rate is calculated on the outstanding loan amount after each EMI payment. This interest rate calculation is more accurate than the flat rate method.

P x R x (1 + R)^N / ([(1 + R)^N] -1

P = Principal Loan Amount, R = Rate of Interest on a Monthly Basis, N = Loan Tenure in Months

It's important to note that these calculations work best with a fixed rate, since it's not possible to predict changes in your personal loan EMI under a floating rate.

Interest Rates For Different Applicant Types

Personal loan interest rates vary depending on your personal profile. For example, women are eligible for concessional interest rates at many banks and other personal loan lenders.

Click below to find interest rate details about personal loans for self-employed individuals, women, pensioners and non-resident Indians (NRIs).

Personal loans for self-employed individuals have higher interest rates than salaried employees, due to the risk that comes with being self-employed. Banks prefer the stability of a salaried position and secure monthly income.

If you are self-employed, you can still avail low interest rates on your personal loan at banks like ICICI.

Read More: ICICI Personal Loan Review

Some banks and lenders offer concessional interest rates on personal loans for women. Thus, women are eligible for lower interest rates at lenders like Bajaj Finserv.

Read More: Bajaj Finserv Personal Loan Review

Personal loans for pensioners will generally have high interest rates, since banks prefer to lend to younger borrowers who have more time to repay their loan with a stable income.

If you are a pensioner, you can still avail personal loans with competitive rates from banks like SBI. SBI offers personal loan schemes for pensioners, with special benefits for Defence, Para-Military and Indian Coast Guard officials.

Read More: SBI Personal Loan Review

If you are an NRI, you will generally find higher interest rates on your personal loan than resident Indians. That being said, banks like ICICI offer specific NRI personal loan schemes with competitive rates starting at 15.49% p.a.

Read More: ICICI Personal Loan Review

Factors Affecting Your Personal Loan Interest Rates

There are many factors that determine your personal loan interest rate. Click below to find details on different factors that can result in a higher or lower interest rate on your personal loan.

Your CIBIL score and credit history are some of the most important factors in determining your personal loan interest rate.

Borrowers with high CIBIL scores are considered trustworthy, thus they will find lower interest rates than borrowers with low CIBIL scores. Likewise, if you have missed any payments for your other financial obligations, your bank will consider you to be less likely to make your personal loan EMIs on time and will charge a higher interest rate to account for that risk.

If you have a high income, banks will trust that you will be able to repay your EMIs without delay, and thus they will charge you a lower interest rate on your personal loan. While low income earners will likely avail a higher interest rate on their personal loan, they can find competitive rates at certain banks like Indian Overseas Bank (IOB).

Similarly, personal loans for salaried individuals will have the lowest interest rates, as salaried employees are considered to have a stable job profile and income. Personal loans for self-employed individuals, on the other hand, will have higher rates of interest.

Read More: IOB Personal Loan Review

Your FOIR is calculated as a ratio of your current EMIs to your income. These EMIs will include any other financial obligations like a home loan or credit card dues. To be eligible for the lowest personal loan interest rate, your FOIR must be less than 50%.

Banks provide the lowest interest rates to applicants that already have a salary account with them. If you have a salary account with HDFC, for instance, you should first look to HDFC for a personal loan.

It is still possible for you to find lower interest rates at other banks, so you should compare rates by all banks in India.

As a rule, you should not apply for a personal loan from multiple banks at the same time. Each time you apply for a personal loan, the bank will check your CIBIL score, which will show up as a negative mark on your credit report.

The highest possible credit score should be maintained at all costs, otherwise you could risk your chances of availing a low interest rate on your personal loan.

How To Get the Lowest Interest Rate On A Personal Loan

To avail the best personal loan, there are a few items you should check off your list before applying.

  • Aim for a CIBIL credit score of 700+. You can improve your score by paying off any late payments and reducing your credit utilization ratio to under 30%.
  • Reduce your FOIR by paying down your other financial obligations. If your FOIR is above 50%, banks will charge a higher interest rate on your personal loan.
  • Consider applying for a personal loan from the bank you already have a salary account with. Banks prefer to lend to borrowers that they already have a relationship with, thus you will be charged a lower interest rate on your loan.
  • Don't apply for multiple personal loans at the same time. Doing so will negatively impact your CIBIL score and leave negative marks on your credit report. You will need the highest possible credit score to avail the lowest interest rate on your personal loan.
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.