If you are planning to take out a personal loan, it is recommended that you compare the interest rates charged by different banks so that you can get the best deal.
The interest rate charged by a bank on a personal loan is typically a function of several factors such as the borrower’s credit score, monthly salary and current liabilities. However, each bank has its own credit policy and therefore, charges a different rate of interest.
Even if the disparity between the interest rates charged by two different banks is, say, 50 basis points, it tends to make a considerable difference in the long run. Here, we list out the interest rates charged by different banks on their personal loans:
Top 6 banks charge these rates on personal loans
HDFC Bank: The largest private bank charges interest in the range of 10.85 per cent to 24 per cent on personal loans. The processing charges are ₹6,500.
ICICI Bank: This private bank charges anywhere between 10.85 per cent and 16.65 per cent per annum. The processing charges are up to 2 per cent of the loan amount.
Kotak Mahindra Bank: This lender charges 10.99 per cent to 16.99 per cent per annum, whereas the processing charges are up to 5 per cent of the loan amount.
State Bank of India (SBI): The largest lender in India charges anywhere between 12.60 per cent to 14.60 per cent from corporate employees. There are meanwhile different rates for different category of employees.
For example, government employees are given loans in the range of 11.60 per cent to 14.10 per cent.
Axis Bank: This private bank charges interest on personal loans in the range of 10.55 per cent to 21.80 per cent.
PNB: The second largest state lender charges interest in the range of 12.50 per cent to 14.50 per cent on personal loans.
Processing charges
Apart from interest rates, borrowers are also supposed to incur another cost in the form of processing fees. This fee refers to the expense that the lender charges for handling the loan application.
This fee ranges between 0.5 per cent and 2.5 per cent of the amount being lent and is determined by the choice of lender. This fee is usually deducted at the time of loan disbursal.
(Taking a loan comes with its own risks. So, due caution is advised)