During an unforeseen financial need, many individuals often tend to keep count on banks to increase a loan which could be of any of the following types such as business, car, housing as well as even education. In a certain case, if a person requires money for additional expenses that might not fall under any of the mentioned categories e.g., to host a wedding party or to go on an urgent foreign trip.
For an immediate cash need, one can, for obvious reasons, raise a personal loan from a well-established bank. Personal loans are generally unsecured but the banks that also offer an option of secured personal loans charge a relatively decreased interest rate. For instance, Karur Vysya Bank is a well-established bank that charges 11 percent per annum on secured loans and 13-14 percent on unsecured personal loans.
For the reason of practice, banks usually charge an increased rate of interest on personal loans however the rate they charge hinges on multiple factors such as the applicant’s credit score, maintaining a relationship with the bank, category of the employer (MNC/ govt/defense, etc.), among other various factors
Here we enlist out the reduced interest rates charged by major banks as they generally reveal on their official websites.
Lowest interest rates charged by banks on their loans:
ICICI Bank: The second largest private lender charges 10.65 percent to 16 percent per annum on its loans whereas its processing charges are up to 2.50 percent plus applicable taxes.
HDFC Bank: HDFC Bank, the largest private bank, charges a 10.5 to 24 percent interest rate while the processing charges are ₹4,999.
SBI: The State Bank of India (SBI) charges about 12.30 to 14.30 percent for corporate applicants whereas the employees are CLSEs as well as the government departments are given at 11.30 to 13.80 percent per annum. The defense employees are generally offered personal loans at reasonable or concessional rates of 11.15 to 12.65 percent per annum.
Bank of Baroda: Private sector employees (with a relationship with the bank) are provided personal loans at 13.15 to 16.75 percent per annum whereas government employees are given loans at a concessional rate of 12.40 to 16.75 percent per annum.
On the other side, private sector employees with no relationship with the bank are given loans at 15.15 to 18.75 percent per annum.
Punjab National Bank: PNB charges an interest rate which varies between 13.75 to 17.25 percent per annum depending on the borrower’s credit score. At the same time, government employees are reduced a concessional rate of interest which varies between 12.75 percent to 15.25 percent.
Kotak Mahindra Bank: The private lender usually charges a minimum of 10.99 percent per annum on its loans. The loan processing charges can be, however, increased by up to 3 percent of the loan amount plus taxes.
Axis Bank: The Axis Bank charges a personal loan interest rate that differs anywhere from 10.65 percent to 22 percent per annum on its loans.
IndusInd Bank: IndusInd Bank is very reputed and charges a personal loan often beginning at 10.49 percent per annum. But the processing charges are up to 3 percent. The loan amount could be anywhere between the amount of ₹30,000 to ₹50 lakh.
Karur Vsya Bank: The interest rate on secured loans is 11 percent per annum and 13 percent per annum on unsecured personal loans. Such rates came into effect on Dec 31, 2023.
Yes Bank: Yes Bank often charges an interest rate that starts at 10.49 percent per annum. The tenure is up to 72 months as well as the borrower can usually make part repayment as well. Such a loan can be given for up to ₹50 lakh.