It would be wise to borrow from a lender offering relatively low rates with short terms as personal loan interest rates are among the highest (higher tenure, higher interest expense). Banks also offer the lowest interest rates to customers with outstanding credit scores.
Banks offering lowest personal loan interest rates
| banks | personal loan amount | tenure | ROI (%) |
| IDBI Bank | >=25000 more | 12 – 60 months | 8.90% – 14.00% |
| Punjab National Bank | up to 10 lakhs | up to 60 months | 9.35% – 15.35% |
| Indian Bank | >=50000 more | 12 – 36 months | 9.40% – 9.90% |
| Karur Vysya Bank | up to 10 lakhs | 12 – 60 months | 9.40% – 19.00% |
| state Bank of India | >=25000 more | 06 – 72 Months | 9.80% – 12.80% |
Compliance ETIG; Data as of June 23, 2022
Fixed or floating interest rate
While applying for the loan, one must confirm with the lender whether the interest rate being offered is fixed or temporary. The change in the bank’s MCLR will not affect your Equivalent Monthly Installment (EMI) amount once the interest rate is fixed. Additionally, keep in mind that because personal loans are unsecured, their interest rates are generally much higher than the interest charged on home loans or loans secured by gold.
Who provides personal loan
Although one can ask friends and family for personal loans, lending organizations such as banks and non-banking financial corporations (NBFCs) offer personal loans in a more organized and ‘on-tap’ format. Apart from NBFCs like Tata Capital and Bajaj Finserv, banks including State Bank of India (SBI), HDFC Bank also offer personal loans.
Personal loan charges
The bank or NBFC will charge for processing, stamp duty and other statutory costs when you apply for a personal loan. Each lender has a different set of fees.
Additionally, a lender has the right to collect pre-closure or pre-payment charges. Check out the various costs that may be incurred before accepting the loan from the lender.
personal loan tenure
Lending institutions like banks often offer personal loans for a maximum tenure of five years. However, the tenure may differ from one lender to another.
Important FAQs on Personal Loan as per SBI
1. What are my loan limits?
A. Minimum loan amount:-
Term Loan: Rs 25,000
Overdraft: Rs.5.00 lakh: Overdraft will be subject to monthly reduction in the drawing power so that the drawing power becomes nil in 72 months
B. Maximum loan amount:-
20.00 lakhs subject to 24 times Net Monthly Income (NMI) and applicable EMI/NMI = 50% for all categories [except employees of Govt. Aided Schools where it is 12 times Gross Monthly Income (GMI)]
2. What are the important documents that I need to provide?
A. You only need to submit the following documents along with the loan application form:
Latest passport size photographs – 2
Copy of identity card issued by the employer
bank account
Last 6 months salary slip or latest Form 16 (in case of Income Tax payee)
(a) Permanent Account Number (PAN).
(b) At least one copy of the Officially Valid Documents (OVD) mentioned below as proof of identity and current address:
I. Passport
second driving license
iii. proof of having aadhar number
iv. Voter ID card issued by the Election Commission of India
v. Job card issued by NREGA duly signed by an official of the State Government
v. Job card issued by NREGA duly signed by an official of the State Government
vi. Letter issued by National Population Register containing details of name and address
3. Do I have to promise any kind of security?
a. No security is required.
4. How is the repayment schedule?
A. The maximum repayment period is 6 years or the remaining period of service (whichever is less).