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Personal Loan Interest Rates in India 2024
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We all rely on loans to meet some of our financial obligations or requirements, like taking a personal loan to expand your business, or to buy a two-wheeler, etc. There are many reasons, and most require us to take a loan from any bank or financial institution. Getting a loan is not very difficult, but you do need to consider the repayment schedule and the interest you will be paying on the amount borrowed. Personal loans are unsecured loans, and the interest rates on personal loans depend on factors such as monthly income, credit score, loan tenure, etc. It is best to know the personal loan interest rates before applying for a loan so that you can make an informed decision that suits your requirements.
What is Personal Loan Interest Rate in India?
Interest rates on personal loans depend on the lending bank or financial institution, your credit score, and the current market conditions. At present, in India, these rates can be between 10.75% and 28% per annum. Customers with a good credit history often qualify for lower personal loan interest rates. So, it is very important that you maintain a good credit score by repaying existing loan instalments with interest on time and not defaulting on repayments.
Current Interest Rate on Personal Loans Provided by Banks in 2024
Personal loan interest rates are one of the major components of the overall cost of the loan, so it should be considered carefully after comparing the interest rates provided by various lenders. After comparing, you should choose the lender which is most favourable to you and your preferences. This table lists the different interest rates on personal loans provided by different banks:
| Bank | Interest Rate (p.a.) | Processing Fee |
| Yes Bank | 10.99% onwards – 20% | Up to 2.5% |
| Kotak Mahindra Bank | 10.99% and above | Up to 3% |
| ICICI Bank | 10.80% – 16.15% | Up to 2% |
| HDFC Bank | 10.75% – 24.00% | Rs.4,999 + GST |
| IndusInd Bank | 10.25% – 34.05% | Up to 3.5% onwards |
| Axis Bank | 10.99% – 22% | Up to 2% of the loan amount |
| Tata Capital | 10.99% to 36% | Up to 5.5% |
| HSBC Bank | 9.99% – 15.00% | Up to 2% |
| Aditya Birla Capital | 10.99% -30% | Up to 3% |
| IDFC First Bank | 10.90% – 36% | Up to 3.5% |
| Federal Bank | 11.49% – 14.49% | Up to 2% |
| Ujjivan Small Finance Bank | 11.49% – 16.49% | At the discretion of the bank |
| Bank of Baroda | 11.10% – 18.15% | Up to 2% |
| State Bank of India | 11.15% – 14.30% | Up to 1.50% |
| Home Credit Cash Loan | 19.2% onwards | Up to 5% |
| Indian Overseas Bank | 10.85% – 12.85% | Up to 0.50%(Above Rs.2.00 lakh up to Rs.150 Crores) |
| Bank of India | 10.85% onwards | Up to 2% |
| City Union Bank | At the discretion of the bank | 1.00% subject to a minimum of Rs.250 |
| IDBI Bank | 11.00% – 15.50% | Contact the bank |
| (Fullerton India) SMFG India Credit | 11.99% onwards | Up to 6% |
| J&K Bank | 12.25% – 13.25% | Up to 1% of the loan amount subject to a maximum of Rs.10,000 |
| Bank of Maharashtra | 10.00% onwards | Up to 1% |
| Central Bank of India | 12.00% – 12.75%. | Up to 1% |
| RBL Bank | 18% | Up to 2% |
| Punjab National Bank | 11.40%. to 17.95% | Up to 1.00% |
Current Interest Rate on Personal Loans Provided by NBFCs in 2024
Apart from banks, there are many Non-Banking Financial Companies (NBFCs) that provide personal loans to individuals for various purposes, such as wedding loans, car loans, home renovation, etc. Below is the list of interest rates on personal loans provided by NBFCs:
| Bank | Interest Rate (p.a.) | Processing Fee |
| Jupiter | 16.0% – 45.00% | Up to 3% + GST |
| Pocketly | 0% to 4% (monthly) Maximum Annual Interest Rate: 48% |
Rs. 50 + 18% GST |
| Buddy Loan | 11.99% | 0.5% to 4% of the loan amount |
| Money Tap | 13% to 18% | Starts at ₹ 199 + GST |
| True Balance | Starts at 2.4% (monthly) | 0-15% |
| Finnable | 16% to 26% | 3 to 4% |
| Navi | 9.9% onwards | Nil* |
| Bajaj Finserv | 11% to 32% | Up to 3.93% |
| LazyPay | Starts at 18% | 2% |
| FlexSalary | 18% to 54% | Rs.0.00 – Rs.1,250 (including GST) |
| Home Credit | Starts at 1.6% (monthly) | 0% to 5% |
| mPokket | 0-49% | 5-18% |
| FIBE | Starts at 16% | Starts at 2% |
| Moneyview | Starting from 10% | 2% |
| KreditBee | 17% – 29.95% | Rs.85 to up to 6.5% |
How to Get the Lowest Interest Rate on a Personal Loan?
Since personal loan interest rates mainly determine the cost of the loan, it is always a lucrative idea to opt for the lowest rate on a personal loan and save on interest costs. A few ways to get the most favourable interest rates are:
- Maintain A Good Credit Score: A high credit score shows you are regular with your repayments and proves your creditworthiness. So, maintaining a good credit score helps you get a personal loan at lower interest rates.
- Keep Updated with the Latest Offers: Most lenders offer special rates or discounts from time to time to attract customers. The festive season often has the most offers, so look out for such offers and take advantage of them.
- Compare Various Interest Rates: Since so many banks and NBFCs offer personal loans, it is best to compare the interest rates of different lenders and select the one that is most favourable to you.
- Do not Miss Any Repayment: Do not miss or default on any of your repayments, as that would negatively affect your credit score. Lenders always check your repayment cycles to determine your creditworthiness.
- Negotiate With the Lender: If you are an old and loyal customer of the bank, you can use your long-term relationship to negotiate for a better interest rate with the lender. It is wise to do so formally rather than through written communication.
Factors That Affect Personal Loan Interest Rates
There are many factors which affect the personal loan interest rates, such as:
- Borrower’s Income: Lenders consider your income when approving your personal loan. Borrowers with a high income are considered less risky and, therefore, get a lower interest rate, whereas customers with lower incomes get a higher interest rate.
- Employer: Your employer details also play a role, as a lender will offer you a lower interest rate if you work for a reputed company.
- Whether You Are Salaried or Self-Employed: Whether you are a business owner or employed at an organisation also affects the interest rates.
- Your Age: Younger people are more likely to get lower interest rates than those nearing retirement age.
- Borrower’s Relationship with the Loan Provider: If you are an old and loyal customer of the lending institution, you may be offered a lower interest rate. However, it depends on the lender whether or not they do so.
- Debt-to-Income Ratio: Your debt-to-income ratio shows how much money you earn and how much you save. Having a lower debt-to-income ratio helps you to get personal loans at lower interest rates.
- CIBIL Score: A higher CIBIL score shows a positive financial record and regular repayments, which allows the lender to offer you a lower interest rate on your personal loan.
You can use Jupiter Personal Loan EMI Calculator to instantly find out your instalment amount and interest payable!
Fixed Interest Rates Vs. Floating Interest Rates – Which is Better?
When considering a personal loan, most people are often confused about whether to opt for floating or fixed interest rates and which is better.
- Fixed Interest Rate: In fixed interest rate, the interest rate does not change during the loan period.
- Floating Interest Rate: In floating interest rates, the rates change according to market conditions.
The following table will help you compare fixed and floating interest rates:
| Criteria | Fixed Interest Rate | Floating Interest Rate |
| Rate Of Interest | Higher than floating interest rates as they factor in future market fluctuations. | Initially, rates are lower but may increase over time due to market conditions. |
| Stability | More stable, and you can predict your interest costs. | Difficult to budget repayment costs as interest changes from time to time. |
| Best Suited For | Customers who prefer planning and budgeting their finances and want consistency. | Customers who do not mind the inconsistency and want to try getting a lower interest rate in the future. |
| Associated Risk | Lower risk as the interest rate is fixed and locked for the loan tenure. | Higher risk as market conditions may become unfavourable, leading to a rise in interest rates. |
| How Do Market Conditions Affect | Market conditions have no effect on the interest rates. | Market conditions directly affect the interest rates. |
| Flexibility | It is less flexible, and prepayment of a loan may attract penalties. | More flexible, and you can repay the loan with no or lesser penalties. |
Frequently Asked Questions (FAQs)
How does my income determine my interest rate?
Your income shows your ability to repay the borrowed money, and with a higher income, the risk of non-payment is reduced. So lenders offer people lower interest rates on personal loans to people with higher incomes.
How do my employment history and experience play a role in determining the rate of interest?
Your income is stable and regular if you work with a reputed and recognised organisation. And with more work experience, the income also increases. So, if you are working with a known organisation, chances are you can avail of a lower interest rate on your personal loan.
How does my current debt level determine my interest rate?
If you are already in a lot of debt when applying for a new loan, the lender will either not sanction your loan or charge you a higher interest rate. Since most of your income is already being used to pay off your existing debts, approving a new loan becomes risky for the lender.
Can I get a low rate of interest even if my credit score is bad?
Yes, getting a low rate of interest on a personal loan, if possible, even if you have a lower credit score. You can get a co-applicant who has a higher credit score to apply for the loan with you or even ask some reliable person to become your guarantor to back you up.
Will I get a lower rate of interest if I take a loan from my existing lender?
Yes, when you have established a good relationship with your lender/banker, it helps you in getting the next loan easily and at better interest rates.
Should I always choose the lowest available interest rate?
Since interest rates determine the cost of the loan, it is always better to opt for the lowest available interest rates to reduce the cost of your loan. However, double-check and ensure that your lender is not charging hidden charges or fees.
Can banks change the interest rate during the personal loan tenure?
Banks can change the interest rate on personal loans during the tenure only if you have opted for a floating interest rate. If you have applied for a fixed interest rate, it cannot be changed during the loan period.
Are personal loan interest rates fixed or floating?
For personal loans, both fixed and floating interest rates are available. Research your options and select the one that best suits all your requirements.
How does balance transfer help you get a lower interest rate?
Personal loan balance transfer means changing your existing loan lender and transferring it to a new lender. You essentially opt for a lender that provides personal loans at lower interest rates so that you save the cost of borrowing.
How do I benefit if the interest is calculated on a daily/monthly reducing balance?
In reducing balance loans, your interest amount is reduced with each instalment you repay, and you have to pay interest only on the outstanding balance of the loan. Due to this, you benefit from the interest getting less with each instalment repaid, either daily or monthly.
What is Reducing Interest Rates?
A personal loan at a flat rate means that interest is calculated on the entire loan amount. But, when you get a personal loan at reducing interest rate, interest is calculated only on the balance due after each repayment. So, after each instalment is paid, you will only pay interest on the outstanding balance due on the loan.
Authors
Priyanka Rao
Priyanka Rao is a content strategist for Jupiter.Money, and specializes in writing on topics related to finance, banking, budgeting, salary & wages, and other financial matters. She has a passion for creating engaging content that resonates with audiences across various digital platforms. In her free time, Priyanka enjoys traveling and reading, which allows her to gain new perspectives and inspiration for her work. With a keen eye for detail and a creative mindset, Priyanka is committed to creating content that connects well with her readers, enhancing their digital experiences.
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