Best Banks For Personal Loan In India

Best banks for a personal loan in India

A personal loan falls under the category of unsecured loan, which does not require any security. Anyone employed or self-employed can use it. It can help you overcome financial problems such as medical emergencies, paying credit card bills, travel, financing a new business, improving your credit score, etc. When you choose a personal loan, the loan amount you take depends entirely on your eligibility and EMI .

But it should be chosen only when there is a financial emergency because a personal loan has high-interest rates. And it must be repaid within 3 to 6 months.

One should know that a personal loan should be used appropriately. If you abuse the benefits of your loan, you may never be able to get another loan approved. To get a loan approved, you need to have a good CIBIL score and a well-maintained credit history.

When you decide to choose a personal loan, you should look through all the schemes and offers that you can get on a personal loan from different banks and go for the best bank.

Some of the best banks for loans in India that offer personal loans are:

1) State Bank of India

Personal loans offered by SBI are provided to everyone, whether in an organization or self-employed, but there is a requirement that the person should have been in that job for at least 2 years.

SBI offers a personal loan in three different categories. They are:

i) SBI Xpress Credit Personal Loan:

This type of personal loan is provided to employees who work in specific sectors and have salary accounts in SBI Bank.

The sectors that fall under are the educational institutions of national repute, central and state governments, quasi-government, central and for-profit state PSUs, and some specific corporates who are in a relationship with the bank in terms of business.

 

Details Effective interest rate Loan amount
Term loan 12.05% p.a. and beyond Rs.25 000 onwards
Overdraft 12.55% p.a. and beyond Rs.5 lakh and beyond

 

Key benefits

  • Loans can be repaid over a period of 5 years
  • A second loan can be taken by lenders

Eligibility for Xpress Credit Personal Loan

  • The monthly income should be Rs.5,000.
  • The EMI/NMI ratio (Net Monthly Income) should not be above 50%.

ii) SBI pension loan:

This loan is provided to employees who are under central, state government or are Defense pensioners.

Eligibility for SBI Pension Loan:

  • The employee should withdraw his pension through the SBI bank
  • He must not be more than 76 years old.
  • The EMI (Equated Monthly Installments) or NMP (Net Monthly Pension) should not be above 50% for each pensioner. For family pensioners, the EMI or NMP should not be above 33%.

 

Effective interest rate Loan amount
12% p.a. Rs.25 000 onwards

 

Key benefits

  • Pensioners do not have to pay a processing fee.

iii) SBI Xpress Power Personal Loan:

This loan is available to employees working under Central and State Government, Quasi Government, Defense Establishment, PSUs, Educational Institutions of National Reputation and Selected Graded Corporate.

Details Effective interest rate Loan amount
Term loan 12.15% p.a. and beyond Rs.25 000 onwards
Overdraft 12.65% p.a. and beyond Rs.5 lakh and beyond

Key benefits

  • Nominal processing fee
  • No salary account with SBI required

The pre-requisites for SBI Xpress power personal loan are:

  • Monthly income of Rs 50,000.
  • It is not necessary to have a salary account with the bank.
  • The interest rates of SBI personal loan start from 11.30 percent to 15.5 percent.

 

Advantages of choosing SBI personal loans:
  • The requirement for a minimum monthly income is really low.
  • There are three categories/types of loans available.
  • The bank has an extensive network spread all over India so that people can easily avail the services.

 

Loan scheme Processing tip Advance payment levy Criminal interest
Xpress credit 1% of the loan amount 3% on the prepaid amount 2% p.a.
Xpress Power 1% of the loan amount NUL 2% p.a.
SBI Pension 0.5% of the loan amount 3% on the prepaid amount 2% p.a.

 

The documents they ask for to process your loan are:

  • Application form
  • Pan card
  • ID proof
  • Address proof
  • Recent salary slip and salary account statement for the last 6 months.
  • Audited or certified ITR for the last two years.
  • Your salary or pension account number from SBI

2) HDFC BANK

This personal loan is available to both earning and self-employed populations across corporate and government institutions. You can borrow an amount from Rs 50000 to 40 lakhs. And because they are one of the best banks for a loan, they don’t ask for any collateral. After the processing is completed, the amount is credited to your account within 4 hours. And if you already have an account with HDFC Bank, your loan is approved within 10 seconds. However, personal loans have a higher interest rate, HDFC Bank’s personal loan rates start from 11.25% and go up to 21.50%.

 

Advantages of choosing HDFC Personal Loan:
  • Pre-closing costs are lower than other banks.
  • Hassle-free repayment options.
  • Much less documentation is required.
  • No collateral or security is required.
  • Borrowers can also use an optional insurance cover.

The eligibility criteria to opt for this loan:

  • The loan is available only to employees registered under Pvt. Ltd, PSU including the state and central and local governments.
  • The borrower must be between 21 and 60 years old.
  • He should have had the job for at least the last 2 years.
  • The minimum monthly income of the employee should be Rs 15,000.
  • Residents of Mumbai, Bengaluru, Delhi, Hyderabad, Chennai, Ahmedabad, Kolkata, Pune and Cochin must have a minimum income of Rs.20,000 per month.

 

Loan Processing Fee Up to a maximum of 2.5% of the loan amount, subject to a minimum fee of Rs.1,999 and a maximum fee of Rs.25,000
Prepayment/Partial payment costs
  • loan term between 13 – 24 months – 4% of the outstanding principal
  • loan term between 25 – 36 months – 3% of the outstanding principal
  • loan term if more than 36 months – 2% of the outstanding principal
Arrears EMI interest 2% per month will be charged on the principal or EMI in arrears
Check exchange fee Rs.500
Amortization schedule fee Rs.200
Check bounce charges Rs.550 per event

 

The documents you will need to apply for this loan: 

  • Application form
  • A government-issued ID proof
  • A valid address proof
  • Bank statement of last 3 months
  • Recent pay slip
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3) Axis Bank Personal Loan

Another best bank for a loan, Axis bank offers personal loans with no foreclosure charges.

You can make your loan repayments in 60 months or even if you want to settle the loan amount before the term, there will also be no prepayment costs on the loan.

The interest rate on loan starts from 15.75 percent to 24%. You can get a maximum loan amount of 15 lakh rupees and a repayment term of 60 months.

 

Advantages of opting for Axis bank personal loan:
  • No prepayment charges.
  • No part payment costs.
  • Fast processing.
  • Documents required are much less.

To be eligible for this loan, you must:

  • Be a government employee, or Pvt. Ltd or a deserving doctor.
  • Must be 21 years or older.
  • And a maximum age of 60 years.
  • Have a minimum monthly salary of Rs 15000
  • Your credit score must be over 750.

 

Interest rate 15.75% total 24% p.a.
Loan amount Rs.50,000 tot Rs.15 lakh
Processing tip 1.5% to 2% p.a. of the loan amount + VAT
Prepayment NIL ( Repayment term varies from 12 to 60 months.)

 

The documents you will need to apply for this personal loan:

  • Application form.
  • Your picture.
  • A government-issued ID proof
  • A valid address proof
  • Age proof.
  • Proof of income.
  • Bank statement.
  • Proof of signature verification.

4) Bajaj Finserv

This loan is provided only to the people who earn a monthly income.

You will have to apply for this loan online, and you will get instant approval. After processing, the loan amount is credited to your account within 24 hours.

The lowest interest rate offered is 12.99%. You can borrow a loan amount of up to Rs 25 lakh . You can also make a pre-closing payment just after the first EMI.

 

Benefits of opting for Bajaj Finserv Personal Loan:
  • Instant approval.
  • Flexible employment period
  • Fast processing.
  • Pre-approved offers
  • No hidden charges
  • Loan amount credited within 24 hours.
  • Can also make repayments after the first EMI.

To be eligible for this loan, you must:

  • Must be between the age of 23 to 55 years.
  • Have a monthly income of around Rs 25,000 to 35,000.

 

Interest rates 12.99% further
Processing Fee Up to 3.99% of the loan amount
Refusal levy Rs. 600 – 1200 per refusal
penalty pension 2% of EMI amount per month or Rs. 200 per month, whichever is higher.
Secure Fee
(for online approvals only)
Rs. 4 499

 

The documents you will need to apply for this loan:

  • Online Application Form.
  • Your employee ID proof.
  • KYC documents.
  • Your pay slip.
  • Bank statement of your salary account for the last 3 months.

5) Bank of Baroda

Among the best banks for a loan, the loan given by Bank of Baroda is provided to both earn monthly income and earn money. The maximum loan amount offered is Rs. 10 lakh and make your repayments up to 60 months.

 

Advantages of opting for Bank of Baroda Personal Loan:
  • No prepayment charges for a personal loan after the initial period of 6 months.
  • You can also take a loan of a low amount.
  • Personal loans to pensioners and ex-defence personnel too.

To be eligible for this loan, you must:

  • The maximum age requirement for paid employees is 21 years to 60 years.
  • Maximum age requirement for self employed staff is 21 years to 65 years.
  • The employee must have a job or business for at least 1 year.
  • Insurance agents must have been in business for at least 2 years.

 

Interest rate 11.35% to 16.35%
Processing Fee Rs.1,000 to Rs.10,000
Pre-closing fee Within 6 months – 6% of principal outstanding
after six months – nil
Loan term 4 years
Minimum loan amount Rs.1 lakh Semi-urban and rural areas: Rs.50,000
Maximum loan amount Rs.10 lakh Semi-urban and rural areas: Rs.5 lakh

 

The documents you will need to apply for this loan:

  • Application form.
  • A government-issued ID proof
  • A valid address proof
  • Bank statement of the last 6 months.

6) Standard Chartered Bank

Standard Chartered Bank has the lowest interest rates on personal loans from 11.99% to 21% , and you can get a loan amount of up to 30 lakhs.

Advantages of opting for Standard Chartered Bank personal loan :
  • Lower interest rate.
  • Loan amount up to 30 lakh.
  • No security required.
  • Easy online processing.
  • The personal loan offers a tenure period ranging from 12 months to a maximum of 60 months.

To be eligible for this loan, you must:

  • Between that age of 21 to 58 years.
  • Must earn a minimum salary of Rs. 22 000 per month.
  • Must have work experience of at least 1 year.

 

Type of fees Cost applies
Interest rate 11.99% further
Processing tip Up to 3% of the loan amount
Prepayment charges
  • 0-12 Months: 5% of the Principal Outstanding
  • 12-24 Months: 4% of the Principal Outstanding
  • 25-36 Months: 2% of the Principal Outstanding
  • More than 36 Months: 1% of the Principal Outstanding
Late payment fees Rs. 495
Interest on arrears 2% per month
* Exchange charges Rs. 500

 

The documents you will need to apply for this loan: 

  • Application form.
  • A government-issued ID proof
  • A valid address proof
  • Bank statements for the last 3 months.

7) Citibank

This loan is mainly beneficial for employees who earn monthly income. These employees can get a personal loan at a low-interest rate than the self-employed class. Their interest rates start at 10.99% and go up to 18.99%.

 

Advantages of choosing Citibank personal loan:
  • Lower interest rate.
  • Loan amount up to Rs 25,000 to 30,00,000.
  • Fast processing and approval.
  • Loan amount credited within 48 hours.
  • Repayment options from 12 to 60 months.
  • There are no charges for late payments.
  • With Citi Bank’s personal loan, the decision time is 4 hours after the individual applies through ‘Click 4 Call’.

To be eligible for this loan, you must:

  • Be a gainful employee, self-employed or a business owner.
  • Age limit for the salaried individuals should be 23 years to 60 years, and for self-employed professionals should be 25 years to 65 years.
  • Rs.25,000 per month for salaried applicants, and Rs.5 lakh in gross annual receipts for self-employed professionals.
  • Existing Citibank customers for extra benefits.

 

The documents you will need to apply for this loan: 

  • A government-issued ID proof
  • A valid address proof
  • Proof of your age.
  • Length of employment/business continuity.
  • Proof of income and occupation.

8) ICICI Bank

In the list of best banks for loans, the loan amount that you can avail through an ICICI Bank personal loan is up to Rs 20 lakhs that too, without any collateral or security. Their interest rates start from 11.50% and go up to 19.25%.

Attractive benefits are offered to existing account holders with the bank. The documents required for them are minimal, and they are already eligible for the loan. The repayment term offered is up to 60 months.

 

Advantages of opting for ICICI Bank Personal Loan:
  • Lowest interest rate.
  • Loan amount credited to your account within 72 hours.
  • No security required.
  • Flexible repayment terms.

To be eligible for this loan, the requirements are:

  • Employees earning a monthly income must be between 23 and 58 years old.
  • Self-employed must be 25 years old (for doctors) and 28 years (for self-employed individuals) to 65 years.
  • Salaried employees must earn a minimum income of Rs. 17,500.
  • Self-employed individuals must have a minimum turnover of Rs. 15 to 40 lakhs.
  • Salaried employees must have been in a job for at least 2 years.
  • At least 3 years for doctors and 5 years for professionals in their current business.

 

Maximum loan amount Rs.20 lakh
Tenure 12 months to 60 months
Interest rate 11.50% further
Processing Fee Up to 2.25% p.a. of the loan amount + VAT
Prepayment charges 5% p.a. of the principal amount outstanding + VAT
Loan cancellation charges Rs.3 000 + AVB

 

Other charges and fines:

 

Additional interest on late payment 24% p.a.
Refund mode exchange cost Rs.500 per transaction + GST
EMI rejection charges Rs.400 per refusal + GST

 

The documents you will need to apply for this loan: 

  • Application form
  • A government-issued ID proof
  • A valid address proof
  • Proof of your age
  • Rear statement
  • Length of employment/business continuity
  • Proof of income and occupation

9) Kotak Mahindra Bank

This personal loan is for everyone, whether salaried or self-employed individuals. The loan amount can be extended up to Rs. 15 lakhs from Rs. 50,000. The interest rates on loan start from 11.25% and go up to 19.99%.

 

Advantages of opting for Kotak Mahindra Bank Personal Loan :
  • Fast loan approval.
  • Flexible and affordable interest rates.
  • Minimal documentation process.
  • Maximum loan allowed up to Rs. 25 lakhs.
  • Flexible repayment options, ranging from 1 to 5 years.
  • Payout with money in your account within 48 hours.

To be eligible for this loan, you must:

  • An employee of MNC, Public or PVT.LTD Company.
  • Must be between the ages of 21 to 58 years.
  • Have a monthly income of Rs. 20,000.
  • The borrower must be a Graduate.
  • He/she must be in a job for at least a year.
  • Must be a resident of a city for at least one year.

 

Schedule of Charges Tariffs
Processing of Charges up to 2.5% of the loan amount + VAT
Dishonor Rs. 750 per case (incl. GST)
Collection costs 30% of dishonor charges + overdue interest
No certificate Rs.500 + AVB
Exchange cost (replacement of PDCs) Up to Rs. 500 per Swap per Instance+ GST ​​and other applicable statutory charges
Prepayment Interest / Exclusion Fee Lock-in period for 12 months. After 12 months, 5% foreclosure charges + GST ​​on principal outstanding

 

The documents you will need to apply for this loan: 

  • Your ID proof.
  • Your address proof.
  • Bank statements for the last 3 months.
  • Income details.
  • Salary slips for last 3 months.
  • 2-3 passport size photo.

10) TATA CAPITAL

This finance institute offers loans up to Rs 25 lakh. The tenure for Tata Capital personal loans can be extended up to 60 months, hence you can have low EMIs. The interest rates start from 11.25% and rise to 19.75%.

 

Advantages of opting for Tata Capital Personal Loan:
  • No processing fees.
  • Very little documentation and paperwork.
  • Repayment period starts from 12 months and extends up to 60 months.
  • Loan amount starts from Rs 75000 to Rs 25,00,000.

To be eligible for this loan, you must:

  • Be between 21 and 60 years old.
  • Must earn a minimum of Rs 15000 per month.
  • Must have the job for at least 6 months.
  • Have a work experience of a minimum of 1 year.

 

Interest rate 11.25% further
Loan processing costs Up to 2.5% of the loan amount + VAT
Prepayment
  • No partial prepayment is allowed in the first 6 months.
  • Advance payment is allowed only once a year.
  • There must be a gap of a minimum of 6 months between two-part payments.
Partial prepayment charges
  • Partial prepayment is applicable after repayment of 6 EMIs without any penalty or additional fee.
  • A fee of 2% of the amount paid plus GST applies above 25% of the outstanding principal.
Penal interest/ Additional interest 3% on the overdue amount per month + VAT
Post-dated checks Rs. 850 + AVB
Refusal levy Rs. 600 for each cheque/payment instrument/ ECS Dishonor + GST
Cancellation charges 2% of the loan amount or Rs. 5750, whichever is higher + GST
Instrument exchange costs Rs. 550 + AVB
Exclusion cost No foreclosure is allowed in the first 6 months. 4.5% of the principal outstanding at the time of foreclosure + GST

 

The documents you will need to apply for this loan: 

  • Your ID proof.
  • Your address proof.
  • Income proof.
  • Salary slips from the last 3 months.
  • Employment certificate.

11) JA Bank

YES Bank promises to be the best bank for a loan, and it offers personal loans from Rs 1 lakh to Rs 40 lakhs. Their interest rates start at 10.75%, and they don’t ask you for any collateral.

Your approval chances can be known in 60 seconds through an online eligibility calculator. It takes 5 days for the verification and processing to be done, after which the loan amount is credited within a few hours.

 

Advantages of choosing JA Bank personal loan:
  • Personal loan amount up to Rs 40 lakhs.
  • Minimum age limit should be 21 years and maximum age should be 60 years.
  • Online eligibility calculator.
  • Low interest rates.

To know if you are eligible for this loan, you can use the online eligibility calculator. And the information you need to provide for the calculation is:

  • Your age.
  • Your monthly income.
  • PAN number.
  • Contact details.
  • Employer details.
  • Work history.
  • Address proof/residence details.
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Interest rate 10.75% further
Loan term 12-60 months
Loan processing costs Up to 2.50% of the loan amount subject to a minimum of Rs. 999/- plus VAT
Prepayment charges Prepayment is allowed only after 12 EMIs. 2% plus VAT on partial prepayment amount paid.
Exclusion cost
  • 13-24 months –4% of principal outstanding
  • 25-36 months – 3% of principal outstanding
  • 37-48 months – 2% of principal outstanding
  • >48 months nil
Duplicate no due certificate or NOC Rs. 250 per event
Leave payment cost 24% per annum on the outstanding amount from the default date

 

The documents you will need to apply for this loan: 

  • Application form.
  • Your ID proof.
  • Your address proof.
  • Income details.
  • Bank statements for the last 3 months.
  • Last 3 months salary slip.

All banks interest rates:

 

Name Interest rate
(min)
Interest rate
(maximum)
Processing fee
_
Pre-closing charge
_
SBI 11,30% 11,30% Up to 2.5% 3%
HDFC Bank 11,25% 21,50% Up to 2.5% 2-4%
As Bank 15,75% 24% 1.5 to 2% NUL
Bajaj Finserv 12,99% THAT Up to 3.99% 4%
Bank of
Baroda
11,35% 16,35% Rs.1,000 to Rs.10,000 NUL
SCB 11,99% 21% 3% 1-5%
Citibank 10,99% 18,99% 0,50% – 3,00% 4%
ICICI Bank 11,50% 19,25% Total 2.25% + AVB 5% + AVB
Kotak Bank 11,25% 19,99% Up to 2.5% 5%+ service tax
Tata capital 11,25% 19,75% Up to 2.5% of the loan amount + VAT 4,5%
I Bank 10,75% THAT Up to 2.5% 2-4%

 

COMPARISON OF ALL THE BANKS WITH THE BENEFITS PROVIDED AND THE INTEREST RATE:

You can take personal loans to help with your financial emergencies. This provides the flexibility to use the funds where you want. You can know your EMI, which means your equivalent monthly installments and other important things through a personal calculator before opting for a personal loan and also pre-plan your repayments according to your earnings.

There are many financial reasons that a personal loan can help you with. It can be used for any small or large purpose.

As:

  • To consolidate multiple debts: An individual can choose to apply for a personal loan to help him manage financial emergencies and debts and repay them without any delay.
  • Credit Score: The credit score plays a big role when it comes to loans and credit cards. If you don’t have a well-maintained credit score, a personal loan can help you build one.
  • To pay off credit card dues: You can clear your entire credit card dues by taking a personal loan at a very low-interest rate. A lower interest rate will help you lower the number of repayments you have to make on your card each month.
  • To finance new business: You can apply for a personal loan for the purchase of new equipment, taking a place or commercial building on lease for setting up your business and daily business activities, you can use the amount of money that you get out of your personal loan for any purpose. A personal loan is easier and faster to use than business loans.
  • For renovating your home: Rather than buying a new home, rebuilding and renovating your old home is a much better option as it requires less funds. This is the situation when a personal loan can help you meet your needs.
  • Paying for unforeseen medical expenses: Personal loans that can be availed in less time are one of the best choices during medical emergencies. You should take personal loan when you urgently need money for medical expenses.
  • Higher Education Abroad: You can pay your fees, books, accommodation and every other expense with the help of a personal loan.
  • Take a dream vacation: If you want to travel abroad and visit other countries, taking a personal loan to pay for your travel expenses is the right option. You can get one as soon as possible if your credit score is well maintained.
  • To pay for personal events like wedding: A personal loan can help to bear the wedding expenses instead of choosing to spend all your savings on it.

You can take a personal loan to cover expenses in many situations as it is easy to avail without any inconvenience. It has low interest rates and is therefore a wise option to choose to finance your needs.

So, the above banks are the best banks for a loan in India that offer the best personal loans with the best benefits and easy processing. There are several other factors that a personal loan depends on, such as:

  • Your CIBIL Score: Gives information about your repayment capacity. So it is a must that you have a well-maintained credit score.
  • Employment Status: If you are a salaried employee, it means that you definitely get your salary every month. This helps the bank believe that you will be able to make the repayments on time each month.

But since in the case of self-employed people, banks fear to take any risk. This is why they have higher interest rates than people who earn a monthly income.

  • Relationship with the bank: Having an old relationship with the bank increases the chances of your loan application being approved.
  • Employer Reputation: If you work in a top-rated company, your interest rates are automatically lowered.
  • Your monthly income: The more you earn, the more financially stable you are, and thus there are greater chances that you will make the repayments on time.

The loan amount you take determines your interest rate and repayment term.

In many cases, your repayment capacity greatly affects your loan eligibility. Several other factors do as well. When you submit your application for a personal loan, the lender or bank or the financial institution will check whether you are financially able to make repayments on time, ie the agreed term. Your credit score, outstanding loans, current earnings and continuity of income are thoroughly checked by your lender.

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