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 personal loan is particularly attractive to low income earners and borrower seeking a small personal loan up to Rs. 5 lakhs.

Summary of IOB's Personal Loans
Loan Tenures of up to 5 years
Small loan amounts: up to Rs. 5 lakh
Interest Rates: From 10.80%

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 10.80%. 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
10.50%11.95%₹10,821₹ 1,32,357
20.50%11.95%₹10,821₹ 2,62,214
30.50%11.95%₹10,821₹ 3,92,071
40.50%%11.95%₹10,821₹ 5,21,928
50.50%11.95%₹10,821₹ 6,51,785
*Assuming monthly income of Rs. 5,000, loan of Rs. 5 lakhs and 5 year tenure, 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.

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%
Interest Rate Type Floating
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. 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 0.50%, which is much lower than the fees of its competitors which tend to charge 2.00% to 3.00%. 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. Our financial analysts recommend that borrowers enquire about fees before applying for personal loans in order to understand how to minimise their total cost of borrowing.

Processing Fee0.50%
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 Singapore, helping consumers and SMEs find the best banking products through comprehensive analysis of data. He previously was an Economic Consultant at Industrial Economics Inc, where he conducted a variety of research and economic analyses. He graduated from University of Vermont with degrees in Economics and Psychology. His work has been featured on a variety of major media such as the Straits Times, the Business Times, the Edge, DailySocial, the Entrepreneur and more.