IOB Personal Loan Review: Interest Rates, Eligibility, Apply

IOB Personal Loan Review: Interest Rates, Eligibility, Apply

IOB's personal loan offerings are best for low-income borrowers seeking small loans and high-income individuals seeking long-term loans.

Good for

  • Individuals seeking a personal loan with a tenure longer than 5 years
  • Low-income individuals
  • Borrowers applying for loan with 100% collateral security

Bad for

  • Prospective borrowers seeking a personal loan of more than Rs. 15 lakh
  • Individuals seeking a personal loan with a tenure of less than 12 months

Editor's Rating


The Indian Overseas Bank (IOB) offers two personal loans that are particularly attractive to two types of borrowers. First, its IOB Royal Personal Loan has the longest tenure available in India, making it worth considering for those individuals that are interested in long-term loans. The bank also has a low minimum income requirement (Rs. 5,000 per month) for its other personal loans, making a good option for those with modest incomes. Additionally, Women that seek a personal loan that requires 100% collateral security should also consider IOB due to the lower interest rates that it offers these borrowers. Otherwise, IOB's rates are not particularly competitive with other lenders in India.

Summary of IOB's Personal Loans
Loan Tenures of up to 7 years
Small loan amounts: up to Rs. 5 lakh (Rs. 15 for IOB Royal Personal Loan)
Interest Rates: 11.95% to 13.70%
Discounted Rates for Women (0.5%) Borrowers applying with 100% security collateral (1%)

Table of Contents

What Makes IOB Personal Loans Stand Out to Borrowers

IOB's personal loans are great for low-income borrowers, due to its low minimum monthly income requirement of Rs. 5,000 and relatively low floating interest rate of 11.95%. It is even more competitive for individuals that are willing and able to give 100% collateral security for their loan and women borrowers, offering these borrowers 1.0% and 0.5% interest rate deductions. One drawback of these loans is that the bank's maximum loan size is just Rs. 5 lakh, which may deter those that seek a larger personal loan.

Estimated Cost of IOB's Personal Loans

Duration (Years)Processing FeeEffective Interest RateMonthly PaymentTotal Cost
11.01%11.95%Rs. 4,441Rs. 3,845
21.01%11.95%Rs. 2,353Rs. 7,010
31.01%11.95%Rs. 1,660Rs. 10,293
41.01%11.95%Rs. 1,316Rs. 13,692
51.01%11.95%Rs. 1,111Rs. 17,208
*Assuming monthly income of Rs. 5,000, loan of Rs. 50,000, total cost includes processing fee

The bank is also a good option for high-income individuals that prefer a long-term personal loan. This is because it has the longest tenure option of any personal loan in India with loans of up to 7 years in duration. However, this loan comes with a minimum income requirement of Rs. 75,000 per month and a maximum loan size of Rs. 15 lakh, which can be limiting for those with moderate incomes or those that seek very large loans. Additionally, individuals that seek loans of 1 to 5 years are may be able to find more competitive rates from other lenders. This is because borrowers that choose the IOB Royal loan are charged 12.95% for loans of less than 4 years and 13.7% for loans of more than 4 years.

Estimated Cost of IOB Royal Personal Loans

Duration (Years)Processing FeeEffective Interest RateMonthly PaymentTotal Cost
11.01%12.95%Rs. 89,294Rs. 81,626
21.01%12.95%Rs. 47,518Rs. 1,50,540
31.01%12.95%Rs. 33,670Rs. 2,22,216
41.01%13.40%Rs. 27,176Rs. 3,15,459
51.01%13.40%Rs. 23,113Rs. 3,97,781
61.01%13.40%Rs. 20,445Rs. 4,83,072
71.01%13.40%Rs. 18,575Rs. 5,71,273
*Assuming borrower with net monthly salary of Rs. 75,000, loan of Rs. 10 lakh, total cost includes processing fee

Who Can Apply: Eligibility Criteria

Consider this if have a relatively low monthly income or need a loan with a duration of more than 5 years

Required Monthly Income Rs. 5,000, Rs. 75,000
Min. Loan Amount Unknown
Max. Loan Amount Rs. 5 lakh, Rs. 15 lakh
Processing Fee 1.01% - 1.1%
Loan Tenure 12 to 60/84 months

IOB has relatively minimal eligibility requirements compared to other lenders in India. It offers loans to individuals under 60 years old that earn at least Rs. 5,000 per month. This makes it a great option for borrowers with lower incomes. However, its IOB Royal Personal Loan has a much stricter income requirement of Rs. 75,000 per month, as well as a minimum age requirement of 25 years. Applicants interested in IOB's Royal Personal Loan are eligible for loans of up to Rs. 15 lakh, while individuals interested in the bank's standard personal loan are eligible for financing of 10 times their gross salary or 90% of the cost of article they plan to purchase whichever is less. However, the total loan amount is capped at Rs. 5 lacs.

Other Charges and Fees

IOB Charges a processing fee of 1.01% to 1.10%, which is much lower than the fees of its competitors which tend to charge 2% to 3%. The bank does not provide additional details regarding fees related to its personal loans on its website. However, other personal lenders in India typically charge fees for late payments, bounced cheques and cheque swapping. We recommend that borrowers enquire about fees before applying for personal loans in order to understand how to minimise their total cost of borrowing.

Processing Fee1.01% to 1.10%
Early Payment FeeN/A

How to Apply: Application Process

If you are interested in applying for one of IOB's personal loans you will have to fill out an application form. IOB does not specify which documents that it requires for personal loan applications, but most lenders in India require that applicants submit documents proving their identity, residence and income.

Documents Typically Required for Personal Loan Applications

  • Proof of Identity & Address: KYC-PAN, copy of passport, voter ID card, driving license or Aadhaar
  • Proof of Income: Salary slip or bank statement for last 3 months
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William Hofmann

William is a Product Manager at ValueChampion, focusing on banking and SMEs. He previously was an Economic Consultant at Industrial Economics Inc.