Best Banks for Personal Loan in India

10 Best Banks for Personal Loan in India

Personal loans help you in a sudden financial crunch but you have to bear high interest rates. You should consider the factors below while deciding the best bank for getting a low-interest personal loan. 

  • Interest rate
  • Processing fee
  • Prepayment penalty/Foreclosure fee
  • Maximum loan allowed
  • Other conditions like CIBIL score, employment status

You can take a personal loan either from a bank or a microfinance company like Bajaj Finserv. In this article, we are discussing only the 10 best banks for personal loans in India based on the above parameters. I have found Punjab National Bank had the lowest interest rates (9.60% onwards) and low processing fees (0.90% onwards) as well, which makes it an amazing deal.

Before digging deep into the personal loan offers, let’s have a look at the documents required.

You need to keep handy documents given below before applying for a personal loan-

  • Identity proof & address proof like passport, voter card, driving license, or Aadhar card
  • PAN Card
  • Bank statement of previous 3 months or Passbook of previous 6 months
  • Two latest salary slips or current dated salary certificate with the latest Form 16

Note – If you have a pre-approved loan, you don’t have to present any document.

Top 5 Best Banks for Personal Loan in India – Quick Comparison

I have ranked the top 5 banks for personal loans based on low-interest rates.

RankingBank NameRate of InterestProcessing Fee
1Punjab National Bank8.95% to 14%0.90% to 1.5%
2State Bank of India9.60 to 13.85%3%
3UCO Bank10.05% or 10.30% onwardsNil
4HDFC Bank10.50% to 21%2.5%
5Bank of Baroda10.50% to 12.50%2.%

10 Best Banks for Personal Loan in India

#1. Punjab National Bank 

PNB is the second largest public sector bank in India after SBI which offers the lowest interest rates on personal loans.

You get personal loan amount disbursed in 2 ways – 

  • An overdraft – you can take the required cash as a loan and repay within 6 months. Interest charged on the no. of days you took the loan
  • A term loan – you repay the loan as fixed EMI for the loan tenure.

The customer can select any one option from these two.

PNB Personal Loan Types and Details

Loan TypeLoan DetailsLoan AmountInterest RateLoan TermProcessing FeeDocument ChargesPrepayment penalty/Foreclosure charges
Personal Loan for PublicGovt. Employees with Salary A/c in PNBMax -50 Lakh8.95% to 14%Up to 5 years1% of the loan amount Rs. 270 to Rs. 450Nil
Doctor’s DelightPersonal loan for DoctorsMax – 15 Lakh8.95% to 14%Up to 7 years0.90% of the loan amount Rs. 450Nil
Loan scheme for PensionersPensioners with pension A/c in PNBMax – 20 Lakh8.95% to 14%Up to 5 years1.5% of the loan amount Rs. 500Nil

PNB has also offered 3 COVID treatment loans as shown below –

PNB Personal Loan for COVID treatment

Loan TypeLoan DetailsLoan AmountInterest RateLoan TermProcessing FeeDocument ChargesPrepayment penalty/Foreclosure charges
PNB Sahyog RIN COVIDGovt. Employees with Salary A/c in PNBMax -3 Lakh8.50%Up to 5 yearsNilNilNil
PNB Aabhar Rin COVIDCOVID treatment loan for pensionersMax – 3 Lakh8.50%Up to 5 yearsNilNilNil
PNB COVID SurakshaSelf-employed with a gross annual income of Rs. 3 lakhMax – 1 Lakh8.50%Up to 5 yearsNilNilNil

#2. State Bank of India

State Bank of India was among the first banks to launch a personal loan for COVID treatment (called SBI Kavach loan) with a lower interest rate and no processing fee or prepayment charges.

Apart from that SBI offers 3 other personal loans as discussed below –

  • SBI Xpress Credit – For employees whose salary account is in SBI
  • SBI Quick – For employees not having salary account in SBI
  • SBI Pensioner Loan – For retired people having a pension account in SBI. We’ll discuss this in detail later

A. SBI Personal Loan Types and Details

Loan TypeLoan DetailsLoan AmountInterest RateLoan TermProcessing FeePrepayment penalty/Foreclosure charges
SBI KAVACH Personal LoanFor COVID treatment of self or family memberMin – 25,000
Max – 5 Lakh
8.50%Up to 5 yearsNilNil
SBI Xpress CreditFor a salaried person with min. Monthly income – Rs. 15,000Min – 24,000
Max – 20 Lakh
9.60% to 13.85%Up to 6 years1.5% of the loan amount up to Rs. 15,0003%
SBI Quick Personal Loan1.5% of the loan amount up to Rs. 15,000Min – 25,000
Max – 20 Lakh
10.85% to 12.85%Up to 6 years1.5% of loan amount up to Rs. 15,0003%

B. SBI Pensioner Loan

Since SBI has 3 slabs for pensioner loans, let’s discuss them separately. 

Eligible Age Max Loan AmountInterest RateLoan TermProcessing FeePrepayment Penalty
Below 7214.00 lakh9.75% to 10.25%Up to 5 years1.5% of the loan amount up to Rs. 15,0003%
72 – 74 years12.00 lakh9.75% to 10.25%Up to 4 years1.5% of the loan amount up to Rs. 15,0003%
74 – 76 years7.50 lakh9.75% to 10.25%Up to 2 years1.5% of the loan amount up to Rs. 15,0003%

#3. UCO Bank

UCO Banklow-interest offers low-interest rates for women (starting at 10.05%) and also has a low processing fee of 1% (min. Rs. 750). But you have a minimum CIBIL score of 750.

Another benefit of UCO bank is you don’t have to pay prepayment charges in case you have got an annual bonus and you want to repay the loan amount in advance. 

UCO Bank Personal Loan Details

Loan DetailsLoan AmountInterest RateLoan TermProcessing FeePrepayment penalty/Foreclosure charges
A person with minimum monthly salary Rs. 30,000 Min – 50,000
Max – 20 Lakh
For Men – 10.30%
For Women -10.05% 
Up to 5 years1% of the loan amount (Min. Rs. 750)Nil

#4. HDFC Bank

HDFC Bank is popular for providing instant loans to its loyal customers. You get a quick approval within 10 seconds for pre-approved customers. 

Even if you don’t have any pre-approval, you can still get loan approval within 4 hours. And the Loan amount is disbursed the same day. 

HDFC bank provides insurance cover on your loan amount by paying some extra charges. In case of any mishap to the borrower, your family doesn’t have to pay the outstanding amount.

HDFC Bank Personal Loan Details

Loan TypeLoan DetailsLoan AmountInterest RateLoan TermProcessing FeePrepayment penalty/Foreclosure charges
HDFC Personal LoanMinimum monthly income Rs. 25,000 Min – 25,000
Max – 40 Lakh
10.50% to 21%Up to 5 years2.5% of the loan amount up to Rs. 25,0002% to 4%

#5. Bank of Baroda

India’s 3rd largest public sector bank offers low-interest rates without any limited monthly income. But you must be an old, loyal BOB customer.

BOB also offers a COVID treatment loan at a 10.10% interest rate and a very low processing fee of Rs. 500. 

Bank of Baroda Personal Loan Details

Loan DetailsLoan AmountInterest RateLoan TermProcessing FeePrepayment penalty/Foreclosure charges
COVID LoanMax – 5 lakh10.10%Up to 5 yearsRs. 500Nil
Personal loan for salaried or self-employedMin – 50,000
Max – 10 Lakh
10.50% to 12.50%Up to 5 years2% of the loan amount up to Rs. 10,000Nil

#6. ICICI Bank

ICICI Bank’s personal loan has two types – personal loan and flexicash scheme.

A. Personal loan

ICICI personal loan is a regular unsecured loan that you can apply for if your monthly salary is Rs. 30,000 or above. 

The minimum loan amount is 25K and you can take a loan for up to 72 months. 

ICICI is also very quick in loan disbursal and you get the loan approved & the amount transferred to your account within 24 hours.

You can apply for a personal loan for emergencies, marriage, vacation, or even home renovation.

ICICI Bank Personal Loan Details

Loan DetailsLoan AmountInterest RateLoan TermProcessing FeePrepayment penalty/Foreclosure charges
Minimum monthly salary Rs. 30,000 Min – 25,000
Max – 25 Lakh
10.50% to 19%Up to 6 years2.5% of the loan amount 5%

B. Flexicash Scheme

Flexicash scheme is for salaried persons who can take an advance loan against their salary account, and pay it back within 1 year. 

Flexicash is ideal if your salary is going to be credited in a couple of days but you need urgent money. Flexicash interest is charged daily, so you won’t have to pay interest for the full month. 

For Example, if you have a FlexiCash limit of Rs 1,00,000 with an ROI of 12.20% and you use Rs 10,000 for an urgent expense. If you repay Rs 10,000 after 15 days, you have to pay interest around Rs 50.14.

However, you have to pay a processing fee of Rs. 1999 and renewal fee of Rs. 1999 if you continue for the next year.

Flexicash scheme details

  • Processing Fee & Renewal Fee – Rs. 1999
  • Interest  rate – 12% to 14% per year (added on daily basis)

#7. Axis Bank

Axis Bank is among those banks that give you personal loans even if your monthly income is as low as Rs. 15,000.

But you have to pay a slightly higher interest rate which is a minimum of 12%. The processing fee is also a bit on the higher side at 2.5% of the loan amount

Axis Bank Personal Loan Details

Loan DetailsLoan AmountInterest RateLoan TermProcessing FeePrepayment penalty/Foreclosure charges
Minimum monthly income Rs. 15,000Min – 50,000
Max – 15 Lakh
12% to 21%Up to 5 years2.5% of the loan amount 2% to 5%

#8. Yes Bank

Yes Bank offers you customer-friendly dealing as you get doorstep personal loan delivery that is highly convenient at the time of this pandemic. Along with, loan approval and disbursal within a couple of hours on the same day.

The bank offers you a loan of up to 40 lakh depending on your monthly salary and CIBIL score. 

Yes Bank Personal Loan Details

Loan DetailsLoan AmountInterest RateLoan TermProcessing FeePrepayment penalty/Foreclosure charges
Minimum monthly salary Rs. 30,000 Min – 1 lakh
Max – 40 Lakh
10.99%Up to 5 years2.5% of the loan amount 2% to 4%

#9. IndusInd Bank

The IndusInd bank also offers a low interest rate that starts at 10.49%. You get a loan for a minimum of Rs. 50,000 that may go up to Rs. 15 lakh. 

The minimum salary you should be having is Rs. 25,000 per month. The prepayment charges are high as it is approximately at 4% of the outstanding principal.

IndusInd Bank Personal Loan Details

Loan DetailsLoan AmountInterest RateLoan TermProcessing FeePrepayment penalty/Foreclosure charges
Minimum monthly salary Rs. 25,000 Min – 50,000
Max – 15 Lakh
10.49% to 31.50%Up to 5 years3% of the loan amount 4% of the principal outstanding

#10. Kotak Mahindra Bank

Kotak Mahindra Bank offers you various hassle-free services to get personal loans such as personal loans through chat. 

In which you have to fill your details on their chat section and you’ll get an approval within a few seconds if you meet their requirements like CIBIL score, minimum monthly income and dealing with the bank.

You also get low-interest rates than other peers in the industry at 10.75%. The processing fee is high, which is 2.5% of the principal amount.

Kotak Mahindra Bank Personal Loan Details

Loan DetailsLoan AmountInterest RateLoan TermProcessing FeePrepayment penalty/Foreclosure charges
Minimum monthly salary Rs. 25,000 Min – 50,000
Max – 20 Lakh
10.75% onwardsUp to 5 years2.5% of the loan amount 3% to 5%

Final Thoughts

Punjab National Bank has the lowest interest rates of 9.60% onwards along with lower other charges that make it an ideal choice for personal loans. 

We suggest UCO bank on the 2nd number because their second-lowest interest rates after PNB, especially women get a very low initial interest rate of Rs. 10.05% annually.

You can opt for HDFC bank which has a faster loan approval and disbursal. 

If you need a loan for COVID treatment, go with SBI bank for their ZERO processing fee and prepayment charges and lower interest rates of 8.50% per year.