During an unanticipated financial need, most of us tend to count on banks to raise a loan that could be of any type i.e., business, car, housing and even education. What if you need money for miscellaneous expenses which do not fall under any of these categories e.g., to throw a wedding party or to go on an urgent foreign trip.
For such immediate cash requirement, one can, of course, raise a personal loan from a bank. Personal loans are usually unsecured but the banks which also give an option of secured personal loan charge a relatively lower interest rate. For instance, Karur Vysya Bank charges 11 percent per annum on secured loans and 13-14 percent on unsecured personal loan.
As a practice, banks usually charge a higher rate of interest on personal loans but the rate they charge hinges on several factors such as applicant’s credit score, relationship with the bank, category of employer (MNC/ govt/ defence, etc.), among other factors.
Here we list out the lowest interest rates charged by major banks as they reveal on their official websites.
Lowest interest rates charges by banks on their personal loans:
ICICI Bank: The second largest private lender charges 10.65 percent to 16 percent per annum on its personal loans while, its processing charges are up to 2.50 percent plus applicable taxes.
HDFC Bank: HDFC Bank, the largest private bank, charges 10.5 to 24 percent as interest rate while the processing charges are ₹4,999.
SBI: The State Bank of India (SBI) charges 12.30 to 14.30 percent for corporate applicants while the employees are CLSEs and government departments are given at 11.30 to 13.80 percent per annum. The defence employees are offered personal loans at concessional rates of 11.15 to 12.65 percent per annum.
Bank of Baroda: Private sector employees (with relationship with the bank) are offered personal loans at 13.15 to 16.75 percent per annum whereas government employees are given loans at concessional rate of 12.40 to 16.75 percent per annum.
On the other hand, private sector employees with no relationship with the bank are given loan at 15.15 to 18.75 percent per annum.
Punjab National Bank: PNB charges interest rate that varies between 13.75 to 17.25 percent per annum depending on the borrower’s credit score.At the same time, government employees are offered concessional rate of interest which varies between 12.75 percent to 15.25 percent.
Kotak Mahindra Bank: The private lender charges a minimum of 10.99 percent per annum on its personal loans. The loan processing charges can be, however, as high as up to 3 percent of loan amount plus taxes.
Axis Bank: Axis Bank charges an interest rate that varies anywhere between 10.65 percent to 22 percent per annum on its personal loans.
| Bank | Minimum interest rate on personal loan (%) |
| ICICI Bank | 10.65 |
| HDFC Bank | 10.5 |
| State Bank of India | 12.30 |
| Bank of Baroda | 13.15 |
| Punjab National Bank | 13.75 |
| Kotak Mahindra Bank | 10.99 |
| Axis Bank | 10.65 |
| IndusInd Bank | 10.49 |
| Karur Vaisya Bank | 13 |
| Yes Bank | 10.49 |
(These are minimum rates charged by banks. Source: Bank websites)
IndusInd Bank:IndusInd Bank charges personal loan that starts at 10.49 percent per annum. However, the processing charges are up to 3 percent. The loan amount could be anywhere between ₹30,000 to ₹50 lakh.
Karur Vsya Bank:Interest rate on secured loan is 11 percent per annum and 13 percent per annum on unsecured personal loans. These rates came into effect from Dec 31, 2023.
Yes Bank: Yes Bank charges an interest rate that starts with 10.49 percent per annum. The tenure is up to 72 months and the borrower can make part repayment as well. The loan can be given for up to ₹50 lakh.
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Published: 24 Jan 2024, 08:38 AM IST
