Compare and Apply for Personal Loans

Personal loan interest rates offered by banks and NBFCs depend on several factors, such as the desired loan amount, credit score, income, etc.

Interest rates as of 29 September 2022

• Instant Personal Loans are approved instantly within a few minutes with none to minimal document requirements. Personal loans with instant disbursal are usually offered by banks and NBFCs to their select customers on the basis of their credit profiles.
• Short-term Personal Loans have short repayment period ranging from a few days to 12 months.
• Pre-approved Personal Loans are usually offered by banks and NBFCs to their existing customers on the basis of their credit history, income, employer's profile, etc.
• Consumer Durable Loans can be used to purchase any consumer durable items like smartphone, furniture, microwave, etc. The purchase amount gets divided into EMIs and can be repaid within the tenure decide. Some products may require a down payment or a processing fee while others may not.
• Personal Loan Balance Transfer facility allows borrowers to transfer their outstanding personal loan to a new lender for lower interest rates or better loan terms. However, transfer your outstanding personal loan only when the savings made through the transfer outweighs the cost of loan transfer.

• Personal Loan Top Up is offered to existing personal loan borrowers who need additional funds to meet their financial requirements. However, this loan facility is only offered to select existing personal loan borrowers having satisfactory loan repayment history and/or having completed a specified number of EMIs.

On the basis of its end use:

Many lenders offer personal loan variants on the basis of the end use of the loan proceeds. However, the features are usually same as the features of a regular personal loan.

• Wedding Loan (Marriage Loan): Weddings can be expensive; hence, financing wedding arrangements from one’s own resources may not be possible for everyone. A marriage loan will help you cover all of your wedding-related expenses like venue fee, jewellery purchase expenses, catering costs, etc.
• Personal loan for Education: Individuals requiring funds for pursuing higher education in India and abroad, vocational courses, etc. and are unable to get conventional education loan can avail a personal loan for higher education.
• Personal loan for Medical Emergency (Medical Loan): This type of personal loan can be used to pay for medical expenses like hospitalisation bills, medical prescription bills, surgeries, etc. This type of personal loan is best suited for individuals having inadequate or no health insurance cover.
• Personal Loan for Home Renovation: Homeowners planning to renovate, repair, reconstruct or refurnish their house properties can opt for personal loans for home improvement/ renovation. This loan is best suited for those who require are not able to avail home loan/renovation loan or the required loan amount is not big enough to justify the creation of hypothecation on the entire house.
• Travel Loan: This type of personal loan is for individuals planning to travel in India or abroad but lack adequate funds. Travel loans fund your travel related expenses from ticket costs to accommodation expenses to shopping.
• Debt Consolidation Loan: Individuals struggling with multiple debt obligations can consolidate them into a single loan taken at a reduced interest rate and/or for longer tenures. The main purpose to apply for Debt Consolidation Loan is to reduce the interest cost and EMI burden.

On the basis of applicant profile

• Personal Loan for Women: Personal Loan for women can be availed by working women to meet their personal financial requirements.
• Personal Loan for Pensioners: Banks offer pension loans to retired senior citizens and family pensioners drawing regular pension through the bank. This personal loan can be used by pensioners to fulfill various personal financial needs such as those due to children’s marriage, home renovation, unexpected medical bills, etc.
• Personal Loan for Self Employed applicants: Banks offer personal loans to self-employed professionals as well as self-employed non-professionals based on their repayment history, business vintage, income, age, etc.
• Personal Loan for Salaried applicants: Banks and NBFCs prefer sanctioning personal loans to salaried applicants, especially those working with government/PSU entities or with top corporates and MNCs. Lenders also offer personal loans at lower interest rates to salaried applicants due to their higher job security and income certainty.

• Age: 18 - 60 years
• Salary: At least Rs. 15,000 per month for salaried customers
• Income: At least Rs. 5 lakh p.a. for self-employed customers
• Credit Score: Preferably 750 and above as having higher credit scores improve chances of loan approval
• Employment Stability: At least 2 years with minimum 1 year of work experience in the same job for salaried
• Business Continuity: At least 2 years of business continuity for self-employed professionals
• Employment Type: Salaried employees working with reputed organizations, MNCs, Private and Public Limited Companies, Govt. organizations, PSUs and large enterprises

Your credit score shows how responsible you are at handling credit. Personal loan applicants with high credit scores, usually 750 and above, exhibit credit discipline and thus have higher chances of getting loan approval from banks and NBFCs. Such applicants also have higher chances of availing personal loans at lower interest rates. However, some banks and NBFCs offer personal loan to applicants having low credit score at higher interest rates. Therefore, one must check their credit scores at regular intervals. Individuals having no or low credit scores can build or rebuild their credit scores with the help of secured credit cards like Paisabazaar Step UP Credit Card.

• Identity Proof: Passport/PAN Card/ Voter’s ID/ Aadhaar Card/ Driving License
• Address Proof: Passport/ Aadhaar Card/ Lease/ Property purchase Agreement/ Utility Bills (not more than 3 months old)/ Passport/ Driving License
• Income Proof For Salaried Individuals: Salary Slips/ Bank Account Statement/ Form 16 
• Income Proof For Self-employed Professionals: Previous Years’ ITR/ P&L Statement and Balance Sheet/ Bank Account Statement
• Business Proof For Self-employed Individuals: Business Incorporation Certificate/ Professional Degree/ Certificate of Practice/ Partnership Deed/ GST Registration and Filing Documents/ MOA & AOA/ Shop Act License

By following the below-mentioned points, you can avail personal loan at comparatively lower interest rates:

Your Credit Score

Every lender checks your credit score and credit history before offering personal loan interest rates. This evaluation is performed to minimize the risk of any defaults from the borrowers. Applicants with a higher credit score are offered personal loans at comparatively lower interest rates. So, maintaining a credit score of 750 or above is always beneficial. High credit score depicts that the borrower has managed to repay the loan or credit card payments on time.

Your Monthly Income

Higher monthly income is preferred by lenders, as borrowers with high income are more likely to repay the loan in a timely manner. The affordability for the loan increases for borrowers with high monthly income. The minimum income criteria and eligibility shall vary from bank to bank.

Reputation of your Organization

The reputation of your organization and the type of employment also are vital factors in deciding the personal loan interest rates. Applicants with high job security and those working with reputed organizations shall get loans at comparatively lower interest rates. Salaried employees may be offered different interest rates, as compared to self-employed professionals. Government and PSU employees are usually offered personal loans at lower interest rates because of their secured job and regular income certainty. People working with MNCs and reputed private sector organizations are usually offered lower interest rates than other private sector organizations. 

Your Relationship with the Bank or NBFC

If you are already maintaining a good relationship with your existing bank or lender by repaying all the loans on time. Then the possibility of loan approval increases, along with the benefit of low-interest rates. Bank's existing customers shall be selected for pre-approved offers, special deals, concessional rates and much more.

• Maintain your CIBIL score above 750
• Check for inaccuracies in your credit report, as they might adversely impact your credit score and thereby, reduce the chances of loan approval (Check Your Credit Score for FREE)
• Compare the personal loan offers available from banks and NBFCs before finalizing any loan deal
• Apply for the loan from a bank/NBFC where you have the highest chances of approval
• Avoid making multiple loan applications within a short span of time

The fees and charges of personal loans usually vary from lender to lender and case to case. Some of the common fees and charges related to personal loans are as follows:

• Loan Processing Fees
• Pre-payment/Part-payment or Foreclosure Charges
• Verification Charges
• Loan Cancellation or Re-booking Charges
• Documentation Fees & Stamp Duty
• Legal and Penal Charges
• Duplicate Statement, NOC Certificate, EMI/Cheque Bounce, Swap and Late Fees, etc.

• Wide Choice: Choose personal loan offers from leading banks/NBFCs including HDFC Bank, Axis Bank, ICICI Bank, Bajaj Finserv, Tata Capital, IDFC First Bank, Kotak Mahindra Bank and more.
• Chances of Approval: Paisabazaar has a unique feature ‘chances of approval’, which will match your credit profile with the various lending criteria of banks and NBFCs, to provide customers with the chances of getting their loan application approved – Excellent, Good, Fair, Poor – against each lender.
• Pre-approved Personal Loan Offers: On the basis of credit profile, our customers get pre-approved personal loan offers from our partners. Our pre-approved personal loan offers have excellent approval rate, require minimal documentation and offer instant disbursal.
• Expert Assistance: Paisabazaar’s team of experts helps customers choose the most suited personal loan offer for their needs. Our team assists customers at each step of the loan process till disbursal.

Q. What is the minimum credit score to get a personal loan?

Ans. It depends on the eligibility criteria set by the lender. Most lenders do not specify a minimum credit score for a personal loan. Some lenders might lend to applicants with low credit score (less than 750) but the interest rate applicable is usually higher in such cases.

Also Know: How can I improve my credit score to get a personal loan?

Q. Can I cancel a personal loan after the loan amount is disbursed?

Ans. In some cases, you may cancel a personal loan after disbursal subject to the terms and conditions of the lender. Loan cancellation will lead to cancellation charges and processing fees. Please note that all banks do not allow loan cancellation once the amount is disbursed. However, you can always prepay the loan amount as per the terms and conditions of the bank and save on the interest component.

Q. What is the minimum salary required to get a personal loan?

Ans. The minimum monthly salary required to avail personal loan varies from lender to lender. However, for large lenders like private and public sector banks, the minimum income eligibility is Rs. 15,000 per month and above.

Q. Can I get a personal loan being a pensioner, if I have a pension account with one of the leading banks in India?

Ans. Yes, you can get a personal loan even as a pensioner, if you have a pension account with one of the leading banks. However, you should ensure that the bank where you receive pension funds offers personal loans to pensioners and you meet the eligibility criteria as specified by your prospective lender.

Q. Can a student apply for a personal loan?

Ans. Generally, students are not eligible for a personal loan as a stable source of income and a good credit score are necessary prerequisites. However, if you have a stable monthly income and fulfill the lender’s other eligibility criteria, you may easily avail of a personal loan.

Q. Can I get a personal loan if I have a home loan?

Ans. Yes, you can apply for a personal loan even if you already have a home loan. However, the chances of getting the loan approved will depend on whether you have adequate repayment capacity to repay the proposed personal loan.

Q. Can I get a personal loan without a salary slip?

Ans. Yes, you can get a personal loan without providing salary slips. You can submit your bank account statement/ a copy of Form 16/ employee certificate from the employer, etc. as proof of income to fulfill the eligibility criteria. However, it is always recommended to confirm the list of required documents with the lender as it may vary from one bank to another.

Q. Can I use a personal loan for marriage purposes?

Ans. Yes, you can avail personal loan to meet marriage-related expenditure as personal loans come with flexible end-use. Some lenders even provide personal loans specifically named as wedding/ marriage loans.

Q. Can I take a personal loan from two different banks at the same time?

Ans. Yes, you may avail personal loan from two different lenders at the same time. However, it is not advised to do so as it will not only affect your credit score but also increase your EMI payout. It will be better to take one personal loan of a larger amount than two personal loans of smaller amounts. This way you can pay lower EMIs for a longer tenure and also improve your credit score. Moreover, you will save upon processing fees and other loan-related charges.