Personal loan interest rates and applicable charges
| Type of fee | Applicable charges |
| Rate of interest | 11% to 32% p.a. |
| Processing fees | Up to 3.93% of the loan amount (inclusive of applicable taxes). |
| Flexi Fee | Term Loan – Not applicableFlexi variant – A fee will be deducted upfront from the loan amount (as applicable below)Up to Rs. 1,999/- for loan amount less than Rs. 2,00,000Up to Rs. 3,999/- for loan amount from Rs. 2,00,000 to Rs. 3,99,999Up to Rs. 5,999/- for loan amount from Rs. 4,00,000 to Rs. 5,99,999Up to Rs. 7,999/- for loan amount from Rs. 6,00,000 to Rs. 9,99,999Up to Rs. 8,999/- for loan amount from Rs. 10,00,000 to Rs. 14,99,999Up to Rs. 9,999/- for loan amount from Rs. 15,00,000 to Rs. 19,99,999Up to Rs. 10,999/- for loan amount from Rs. 20,00,000 to Rs. 24,99,999Up to Rs. 11,999/- for loan amount from Rs. 25,00,000 to Rs. 29,99,999Up to Rs. 12,999/- for loan amount of Rs. 30,00,000 and above*All the Flexi charges above are inclusive of applicable taxes*Loan amount includes approved loan amount, insurance premium, and VAS charges. |
| Bounce charges | Rs. 700 – Rs. 1,200 per bounce. “Bounce charges” shall mean charges for non-payment of instalment (s) on their respective due dates due to dishonour of payment mandate or non-registration of the payment mandate or any other reason |
| Pre-payment charges | Full PrepaymentTerm Loan: Up to 4.72% (inclusive of applicable taxes) on the outstanding loan amount as on the date of full prepayment.Flexi Term Loan (Flexi Dropline): Up to 4.72% (inclusive of applicable taxes) of the total withdrawable amount as per the repayment schedule as on the date of full prepayment.Flexi Hybrid Loan: Up to 4.72% (inclusive of applicable taxes) of the total withdrawable amount as per the repayment schedule as of the date of full prepayment.Part-prepaymentTerm Loan: Up to 4.72% (inclusive of applicable taxes) of the principal amount of the loan prepaid on the date of such part-prepayment.Not Applicable for Flexi Term Loan (Flexi Dropline) and Flexi Hybrid.*Foreclosure will be processed post clearance of first EMI |
| Penal charge | Delay in payment of instalment(s) shall attract Penal Charge of Rs. 8 – Rs. 12 per day per instalment from the respective due date until the date of receipt of the full instalment(s) amount. |
| Stamp duty (as per respective state) | Payable as per state laws and deducted upfront from loan amount. |
| Annual maintenance charges | Term Loan: Not applicableFlexi Term Loan (Flexi Dropline): Up to 0.295% (inclusive of applicable taxes) of the total withdrawable amount (as per the repayment schedule) on the date of levy of such charges.Flexi Hybrid Loan: Up to 0.295% (inclusive of applicable taxes) of the total withdrawable amount during the initial tenure. Up to 0.295% (inclusive of applicable taxes) of total withdrawable amount during subsequent tenure. |
| Broken period interest / Pre-monthly Instalment interest | Broken Period Interest/Pre-monthly instalment Interest” shall mean the amount of interest on loan for the number of day(s) which is (are): Scenario 1: Over and above the period of 30 (thirty) days from the date of disbursement of the loan. Method of recovery of Broken Period Interest/pre-monthly instalment interest: For Term Loan: Deduct from disbursement or added in first EMI, as applicable. For Flexi Term Loan: Added to first instalment amount. For Hybrid Flexi Loan: Added to first instalment amount. Scenario 2: Less than period of 30 (thirty) days from the date of disbursement of the loan, interest on first instalment will be charged for actual number of days. |
| Switch fee | Up to 1.18% of the loan amount (inclusive of applicable taxes). Switch fee is applicable only in case of switch of loan. In switch cases, processing fees will not be applicable. |
| Cash collection handling charges | Rs. 177 (inclusive of applicable taxes) will be charged if customer opts to make payment in cash when the collection is done by the collection agents. This fee is charged only once per month, regardless of the number of payments made against multiple LANs. |
| Cash deposit charges | Customers will incur a cash deposition charge of Rs. 50 (inclusive of applicable taxes) when making cash payments at our branch offices. |
| PG facility charges | Rs. 11 (inclusive of applicable taxes) will be charged for utilizing the payment gateway to make part or full payments towards the loan through digital properties. |
Note: Additional cess if any, will be applicable to all charges according to state law.
*Terms and conditions apply.
For Micro Finance Loans, please note below:
Purchase of any non-credit product by the microfinance borrowers is purely on a voluntary basis. Minimum interest, maximum interest, and average interest are 13%, 35%, and 35.40% per annum respectively. Part-prepayment and foreclosure charges are NIL. {Average interest rate is higher than max interest rate, because maximum interest rates was reduced effective 02 May 2024 however average interest rate is computed on a volume weighted basis for last quarter (Apr’24 – Jun’24)}
What is the personal loan interest rate?
The personal loan interest rate is the cost of borrowing money, expressed as a percentage of the loan amount. Lenders determine this rate based on various factors, including the borrower’s creditworthiness, income, and the prevailing market conditions. If you meet the lender’s criteria well enough, you may be eligible for the lowest interest rate personal loan.
Interest rates for personal loans can be fixed or variable. The fixed rate remains constant throughout the loan tenure, providing predictability for monthly payments. Conversely, variable rates may fluctuate based on market changes. Typically, borrowers with higher credit scores secure lower personal loan rates. Comparing rates from different lenders is crucial to finding the most favourable terms for a personal loan, minimizing overall borrowing costs.
You can calculate the interest on personal loan with our interest calculator.
Factors affecting interest rates on personal loan
There are multiple factors that can affect your personal loan interest rate in India. It is recommended to ensure that all of the below criteria are in good health in order to avail of the loans at low-interest rates.
CIBIL Score
A high CIBIL Score indicates a clean financial track record and helps you secure a lower interest rate.
Occupation
Salaried and self-employed individuals may be offered different interest rates because of the nature of their income.
Income
Higher income helps you get a low-interest rate personal loan as lenders can be assured of repayment.
Debt-to-income ratio
Keeping this ratio low helps reduce the risk of default as you will have more funds to pay your EMIs.
Age
Younger applicants, with many earning years remaining, may receive more affordable personal loan interest rates than those nearing retirement.
Employment
Being employed at a renowned organisation can help you get a better personal loan interest rate in India as there is more income stability.
Relationship with the lender
Existing customers may get a more favourable interest rate on personal loans.
Typically, here is how credit score may affect your personal loan approval:
| Credit rating | CIBIL Score | Personal loan approval chances |
| Excellent | 800+ to 900 | Excellent chances for a loan with low interest rate |
| Good | Above 750 | Likelihood of loan approval with lower interest rates. |
| Average | From 685 to 750 | Loan may be approved, but the interest rate might be on the higher side. |
| Poor | Below 685 | Your loan application may not be approved. |
Fixed Interest Rates vs Floating Interest Rates: Which is better?
| Criteria | Fixed Interest Rate | Floating/Variable Interest Rate |
| Definition | Interest rate remains constant throughout the loan tenure. | Interest rate changes periodically based on market conditions. |
| Stability | Provides stability and predictability in loan repayments. | Repayments can vary, leading to uncertainty in budgeting. |
| Interest Rate | Typically higher than initial floating rates to hedge against market fluctuations. | Usually starts lower but can increase over time with market changes. |
| Risk | Lower risk as the rate is locked in and unaffected by market volatility. | Higher risk due to potential rate hikes, but also the potential for rate decreases. |
| Suitable For | Borrowers preferring consistent and predictable payments, useful for budgeting. | Borrowers who can handle potential payment fluctuations and are willing to take a chance on lower rates. |
| Flexibility | Less flexible; prepayments or changes may incur penalties. | More flexible; often allows for early repayment with fewer or no penalties. |
| Market Conditions Impact | Unaffected by changes in market interest rates. | Directly impacted by market interest rate movements. |
Choosing between a fixed interest rate and a floating interest rate depends on individual preferences and financial situations. If you value stability and predictability, a fixed interest rate is ideal. However, if you can handle fluctuations and want the potential benefit of lower rates, a floating interest rate may be more suitable.
How to get the lowest interest rate on a personal loan?
To secure the lowest interest rate on a personal loan, start by improving your credit score. Maintain a good credit history by paying EMIs, bills on time and reducing outstanding debts to get better terms such as a lower rate of interest on personal loans. Compare offers from multiple lenders to find low interest personal loans. Shorten the loan term to lower the total interest paid. Negotiate with lenders to see if they can offer better rates based on your financial profile. Lastly, be aware of additional fees and charges that may impact the overall cost of the loan.
If you are looking to apply for a personal loan, here are a few tips that will help you avail cheapest rate of interest:
Improve your credit score
Having a high credit score indicates your creditworthiness, which in turn makes you eligible for the lowest personal loan interest rates offered by banks and financial institutions. Therefore, it’s advisable to check your credit score before applying for a personal loan.
Avoid late repayments
Missing loan or credit card repayments can negatively impact your credit score. Loan providers typically consider your repayment history when determining the interest rates for personal loans. Those with a history of timely payments are likely to qualify for lower interest rates.
Keep an eye for special offers
Lenders often introduce special interest rates for a limited period, especially during festive seasons. Applying for a loan during such promotional periods may allow you to secure a lower interest rate.
Compare interest rates
Before selecting a lender for your personal loan, it’s important to compare the interest rates offered by various NBFCs. This comparison ensures that you obtain a personal loan at a competitive interest rate.
Negotiate with your lender
If you have an established relationship with your bank or are a loyal customer, consider negotiating for better terms. It’s recommended to formally request lower interest rates through a written communication with your loan provider.
Personal loan interest calculation with example
For instance, Priya took a personal loan of Rs. 1,00,000 at an interest rate of 15% p.a. for a tenure of 12 months. Here, Priya’s annual interest on personal loan will be around Rs. 8,310, and her monthly EMI will be around Rs. 9,026. Borrowers can use the personal loan EMI calculator to know the interest payable for multiple loan amounts by inputting principal, interest rate, and tenure.
The formula used by a personal loan EMI calculator for calculating the equated monthly instalment (EMI) for a personal loan is given by:
EMI = [PxRX(1+R)^N]/[(1+R)^N-1]
where,
EMI is the Equated Monthly Instalment
P is the principal amount of the loan,
r is the monthly interest rate, and
n is the number of monthly instalments.
