State Bank of India offers personal loans of up to Rs. 20 lakh to both salaried individuals and pensioners. The interest rate for SBI personal loan starts from 9.60% and varies across the types of loans. Let us discuss key aspects of SBI personal loan interest rate including rates for various types of personal loans, the method of interest calculation and factors affecting the interest rate.
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Interest Rates for SBI Personal Loan Schemes
State Bank of India offers a wide range of personal loan variants suited to the requirements of various groups of individuals. Currently, the interest rate starts from 9.60%. Let us check the interest rate for all available schemes:
| Loan Type | Variant | Interest Rate | |
| Xpress Credit (including PAXC-Pre-Approved Xpress Credit) | |||
| Defence/ Para-Military/ Indian Coast Guard Salary Package Applicants | Term | 10.60% – 11.10% | |
| Overdraft | 11.10% – 11.60% | ||
| Other Applicants | Term | 10.60% – 12.60% | |
| Overdraft | 11.10% – 13.10% | ||
| Concession | Loan amount >= Rs. 10,00,000 | 0.5% in ROI | |
| Platinum Salary Package customers | 0.5% in ROI | ||
| Central Public Sector Enterprises (CPSEs) Considered Under ‘RATNA’ Status | 0.5% in ROI | ||
| Xpress Elite Scheme | |||
| Salaried Class | SBI Salary account holders | 9.60% – 11.10% | |
| Non SBI Salary Package account holders | 9.85%-11.35% | ||
| Xpress Credit- Non-Permanent Employees (NPES) | |||
| Salaried Class | Central and State Government, Central PSUs, State PSUs, Defence personnel and Educational Institutions of National Repute | 11.50% – 13.60% | |
| Co-operatives/institutions not covered under regular Xpress Credit loan scheme and unrated corporates | 12.25% – 13.85% | ||
Interest Rates for Other SBI Personal Loans
The following are the interest rates applicable in case a borrower opts for any other type of personal loan from SBI:
| Type of Loan | Interest Rate |
| SBI Pension Loan (including PAPNL i.e. Pre-Approved Pension Loans) | 9.75%-10.25% |
| Clean Overdraft | 15.65% |
| Xpress Credit Insta Top-up | 10.70% |
| Pre-Approved Personal Loans (PAPL) | 12.60% |
| Special Pre-Approved Personal Loan | 9.60% |
| SBI Quick Personal Loan through CLP Portal | 10.85%-12.85% |
SBI Personal Loan Balance Transfer Interest Rates
Personal Loan Balance Transfer refers to a process using which you can transfer the outstanding amount of your ongoing loan with Bank A to Bank B and save on the overall interest payout.
SBI also offers this facility to transfer your personal loan balance with some other banks to get better terms and interest rate. It is noteworthy that the interest rate in this case is not fixed, and depends on the individual applicant’s profile.
Factors Affecting Personal Loan Interest Rate
The following are some of the key factors that affect the interest rate applicable to your personal loan from SBI:
- Credit History and Score
- Current Credit Utilization Ratio
- Employer and Employment History
- Income of the applicant
- Existing relationship with SBI
How to Get Low Interest Rates on SBI Personal Loan?
The following measures constitute the key factors affecting personal loan interest rates. Thus, bear them in mind to get the best possible interest rate for your personal loan.
- Maintain a high credit score: Credit score is a direct reflection of your repayment history for all previous loans/credit cards. It ranges between 300 and 900. Higher the score, better are the chances of getting a low interest rate on your personal loan. You can check your credit score for free at Paisabazaar.com and also get tips and tricks to maintain/improve your credit score.
- Keep credit utilization ratio low: This is the ratio of credit used by the individual to the total credit limit available. Ideally, this ratio should not exceed 30% in order to get the best personal loan offers.
- Avoid making multiple loan applications simultaneously: This may portray you as credit hungry. Every time, you apply for a loan, the lender requests for your credit report. This translates to hard enquiries which significantly affect your credit score. Hence, use Paisabazaar.com to compare multiple personal loan offers on a single platform without affecting your credit score.
- Previous relationship with the bank: This may also affect SBI personal loan interest rate. For instance, if you already have a savings account or fixed deposit in good standing with the bank, you may be able to avail the personal loan at a lower rate of interest.
- Employment History: For salaried applicants, the reputation of their employer, the duration of employment as well as the type of employment also affects the personal loan interest rate. Typically government employees with a long employment history (5 years or more) tend to get the best interest rates on their personal loans.
- Maintain low fixed obligation to income ratio (FOIR): FOIR is the ratio of EMIs on your pre-existing loans and credit card dues vs. your total income. A lower FOIR means greater repayment ability and this can significantly affect the SBI personal loan interest rate being offered.
Comparison of SBI Interest Rate with Others
The following table shows the comparison for SBI personal loan interest rate vs. other lenders.
| Bank Name | Interest Rate |
| State Bank of India | 9.60% onwards |
| Citibank | 10.99% onwards |
| HDFC Bank | 12.50% onwards |
| Yes Bank | 10.00% onwards |
| IndusInd Bank | 10.49% onwards |
| Axis Bank | 10.49% onwards |
*SBI PL interest rates as updated on 6th May 2021 and are subject to change.
Method of Interest Calculation for SBI Personal Loan
Interest on personal loan can be calculated using the following two different methods:
- Flat Rate Method: In this method, interest is charged on the entire loan amount throughout the loan tenure. As a result, EMI amount remains the same for the entire repayment period.
- Reducing Balance Method: Every EMI you pay has both principal and interest components. Thus, whenever you pay an EMI, part of the outstanding principal amount is paid off while the remainder is used to pay off the interest accrued.
In the reducing balance method of interest calculation, interest is charged only on the outstanding loan principal and not the entire amount initially borrowed. As a result, the interest accrued decreases over the loan tenure, and you end up saving on the personal loan interest payable.
SBI follows the reducing balance method of interest rate calculation for personal loans. This means interest is charged on the outstanding loan principal only. Hence, you save on the interest component when you opt for a SBI personal loan.
Frequently Asked Questions (FAQs)
How have personal loan interest rates been impacted after GST?
Personal loan interest rates are not affected by GST. However, charges like processing fee and prepayment penalty now attract GST at 18% as compared to a service tax of 15% applicable during the pre-GST era.
What is the maximum loan amount with respect to SBI personal loan?
SBI offers personal loans up to a maximum of Rs. 20 lakh, which is subject to 24 times of net monthly income (NMI) and applicable EMI/NMI ratio of 50% for all categories of applicants except employees of government-aided schools.
Is SBI personal loan interest rate fixed or floating in nature?
SBI offers personal loan at a fixed rate of interest, linked to 2-year MCLR (marginal cost of funds-based lending rate) of the bank. No floating interest rate personal loans are currently provided by SBI.
What is the processing fee for SBI personal loan?
The processing fee for SBI personal loan is 1% of the loan amount plus applicable GST. Periodically, this may be waived as part of special offers.
Can I prepay SBI personal loan? Are there any charges for SBI personal loan prepayment?
Yes, you can prepay personal loan or foreclose your loan before the due date. However, this will attract a prepayment penalty of up to 3% of the prepaid amount. Please note that the penalty is not applicable if the account is closed with the help of a new loan under the same scheme.
Can I include my spouse’s income for availing SBI personal loan?
No, you cannot include your spouse’s income to your income in order to avail SBI personal loan. However, the spouse can separately apply for another loan, if he/she fits the eligibility criteria.
Can I avail SBI personal loan being a pensioner?
Yes, you can avail personal loan even if you are a pensioner. In fact SBI Pension Loan is specifically targeted at pensioners.
Please Note: SBI is not a Paisabazaar partner. Offers would be from partner Banks/NBFCs only.
