Personal Loan Interest Rates- Latest Interest Rate

Stay updated with the latest interest rates for personal loans. Find the best deals and make informed financial decisions. Explore now!

10 Jun,2023 12:41 IST 2641 Views
Personal Loan Interest Rates- Latest Interest Rate

Personal loans are a type of closed-ended credit that do not require any collateral and can be consumed for a variety of purposes. The borrowed amount is to be repaid over time, typically along with interest.

Every bank levies a monetary charge on the original borrowed amount. The interest is to be paid by the borrower and typically it is expressed as an annual percentage rate. Personal loans have higher interest rates than other secured loans, primarily because there is no form of security involved in it. The higher rate of interest on personal loans acts like a compensation for the banks for bearing the risk.

It is worth mentioning that higher the rates of interest, the more expensive the loan becomes. Consequently it puts additional strain on borrowers and increases the risk of default. Hence a personal loan can be an effective source of aid only when the interest rates are favourable. For the best offers it is important to calculate the interest rate along with the processing fees and other administrative charges.

To help applicants make an informed decision, given below is a table of personal loan interest rates offered by different lenders in 2023.

Lending Institutions Interest rate (p.a)
HDFC Bank 10.50% onwards
ICICI Bank 10.75% onwards
State Bank of India 11-15%
Axis Bank 10.49% onwards
Bank of Baroda 10.90- 18.25 %
IDFC First Bank 10.49% onwards
Induslnd Bank 10.49 % onwards
Union Bank of India 11.40 – 15.50 %
Bank of India 10.35 – 14.85 %
Central Bank of India 10.95 – 12.55 %
Punjab National Bank 10.40 – 16.95 %
Yes Bank 10.99 % onwards
Kotak Mahindra Bank 10.99% onwards

*These rates keep changing. Please check the website of each lender to confirm the latest rates

The current personal loan interest rates offered by banks usually range between 8.75% and 49.5% per annum. Further, the interest rates on personal loans are based on the applicant’s profile and the lending policy of the bank.

Some Of The Factors That Affect The Interest Rate On Personal Loans Are:

• Income:

Banks mainly review the income of applicants to check their repayment capacity. While applying for a loan, the borrower has to give a letter to the bank, authorising it to run a check on his/her credit history.

• Loan Amount And Repayment Period:

Banks prefer applicants who choose a shorter repayment period. This is because for short-term loans, the loan is cleared off faster and banks do not have to face the risk of it dangling for a longer period of time.

• Nature Of Employment:

Some lenders prefer government banks, government employees, and PSU employees over self-employed individuals or those working in a private company. Similarly, the loan application of an applicant who has a past of switching jobs frequently may also counter difficulties.

• Age:

Most lending institutions prefer giving loans to individuals between 30 to 50 years. Since people above 60 years may have a limited number of working years left, they may perhaps face difficulties to secure a personal loan. Many times their loan applications must be backed up with collateral.

Here Are A Few Factors That Can Help To Get A Personal Loan At A Lower Interest Rate:

• Maintain A Good Credit Score:

A good credit score with a very low income-to debt ratio gives the applicant a higher chance of getting a better loan deal. It is also important to have a healthy mix of both secured and unsecured loan applications in the past for a decent score.

• Maintain A Good Repayment History:

The repayment history of an individual influences the credit score. Credit scores are assigned by credit bureaus that collates a month-on-month record of bill payments and loan repayment equated monthly installments (EMIs)of the past few years.

• Method Of Interest Rate Calculation:

The method of calculating the total interest payable can differ among lenders. The lender may sanction a loan either at a flat interest rate or at a reducing interest rate. Hence, one should understand the method of calculation of the interest payable because a personal loan at a flat interest rate could cost more than a personal loan at a reduced interest rate.

Individuals can also keep looking out for special offers that are offered by banks for a limited period of time during festive occasions.


Personal loans can cover a number of personal expenses like debt consolidation, home repairs, medical treatment, education, and a lot more. The interest rate on a personal loan depends on the credit history, income and occupation of the applicant.

But remember that the lender may not be ready to give a good deal if the applicant has already taken too many loans. So, it is sensible to cross examine the loan terms and interest rates on personal loans offered by different banks before making the final pick.

IIFL Finance, a reputed financial organization, offers its services across India. From IIFL Finance you can get a personal loan for a tenure that fits your needs. Also, if you have an excellent credit score and have maintained a good reputation with the bank, IIFL may offer you personal loans at reduced interest rates. But once you secure the loan, make sure to make timely payments, for better loan deals in the future.

Disclaimer: The information contained in this post is for general information purposes only. IIFL Finance Limited (including its associates and affiliates) ("the Company") assumes no liability or responsibility for any errors or omissions in the contents of this post and under no circumstances shall the Company be liable for any damage, loss, injury or disappointment etc. suffered by any reader. All information in this post is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results etc. obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. Given the changing nature of laws, rules and regulations, there may be delays, omissions or inaccuracies in the information contained in this post. The information on this post is provided with the understanding that the Company is not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. This post may contain views and opinions which are those of the authors and do not necessarily reflect the official policy or position of any other agency or organization. This post may also contain links to external websites that are not provided or maintained by or in any way affiliated with the Company and the Company does not guarantee the accuracy, relevance, timeliness, or completeness of any information on these external websites. Any/ all (Gold/ Personal/ Business) loan product specifications and information that maybe stated in this post are subject to change from time to time, readers are advised to reach out to the Company for current specifications of the said (Gold/ Personal/ Business) loan.

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