10 Best Bank for Personal Loan in India

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Are you looking for a loan? I am not asking what could be the purpose of the loan but we all need funds at some point of time and It’s quite difficult to find the best bank for a personal loan in India. If you are looking for a loan then here we have 10 best banks for a personal loan.

At some point or the other, we all need the money and what is the better way to get money than getting a loan. A loan is something that you borrow from others and meant to repay. You can take a loan from a bank or a private person or organization. I know hundreds of people who always go to a Seth and ask for money. And, he grants them the money they ask but in return, there is a huge interest involved.

And, if you need money then instead of taking a loan you can even make money online. Here I have 50 Ways to Make Money Online that work in 2019

What is Personal Loan?

A personal loan is a loan of personal sort of nature where you get instant approval with any security. It is an unsecured loan with a high rate of interests. Now, you must be wondering why any bank would grant you a loan without any security?  Yes, they do it without any security but they take a look at your credit score.

Credit score or CIBIL Score depends upon your previous loan and how you repaid them. And, if you have a good credit history you will easily get a loan with minimum documentation. In case you default the loan, the bank cannot recover it directly however they will do it anyway. But, it will also hamper your credit score very heavily. And, maybe you won’t be able to get a loan again.

The minimum loan is about Rs 50000 and may go up to 15 to 20 lakhs generally. However, some banks give personal loan even up to 40 Lakhs which are mentioned below. The maximum period allowed is 5 years.

Purpose of Personal Loan

Now before I tell you the best bank for a personal loan in India, I must tell you the purposes for which you can get a personal loan. This is necessary because banks are going to ask you the reason you need a loan for before they grant you. These are some of the purposes for which you can get a loan of personal sort of nature.

  • Vacation – If you are looking for a foreign vacation or an expensive holiday then a personal loan could be a choice to get the money. But make sure that you have arrangements to repay as you are just enjoying with a loan.
  • Home Renovation – Sometimes a loan could be a great option to renovate your home or office. It requires a sum of money that may not be readily available.
  • Wedding – We all know about weddings in India and how expensive they are. There are a lot of people spending in crores in their marriage but as a middle-class individual, you can take a personal loan for the purpose of a wedding.
  • Home Appliances – You can take a loan for buying a home appliance like a huge TV or Air Conditioner.
  • Education – Education loans are quite popular but you can even take a personal loan for education purpose too.
  • Medical Emergency – Sometimes you come across situations that are not so fortunate and you need money to cure yourself or someone you love. A loan could be a good option for such a time.
  • Balance Transfer – You can also use a personal loan for a balance transfer
  • etc.

Additional Charges

The interest they charge is a bit high but it’s not the only one charge that you have to pay. Despite the high rate of interest, banks also charge some additional charges in the form of processing fees and floating charges.

Floating charge and fixed charge are charged as pre-payment and foreclosure charges. It depends upon the bank but is generally about 2% to 3%. And, the processing fee is about 1% to 2%.

Along with all these charges, there is GST involved too.

Private Loan vs Bank Loan

One of the persons I know recently borrowed a sum of Rs 50,000 from another person I know for a monthly interest of Rs 1000. It looks easy and even its that easy to get the loan without any proof of identity or documentation. Bur, you have to understand the part of trust and closeness of parties involved in the process. Those two guys know each other and each other’s paying capacity that’s why they entered into this transaction.

But, let’s just keep this part aside and focus on the cost of the loan. The cost of a loan is Rs 1000 per month. And, if we calculate annual interest the amount comes to Rs 12000 (1000*12). So, this interest amount of Rs 12000 gives us an interest rate of 24%(12000/50000*100). It’s quite high, isn’t it?

It’s good to get6 a loan from a private lender for such a low cost. But everyone is not so lucky. I have seen people seeking a loan for a 5% interest per month meaning 60% per annum. Now, tell me if its lower rate of interest? But the good thing is that you get the cash immediately and no paperwork required but you have to pay the interest for rest of your life or maybe rest of your successors.

Personal Loan vs Credit Card

So, the good thing is to get a loan from a bank but if you are looking for the best bank for a personal loan in India then here we have a list of banks. But the other way to get a personal loan is getting a credit card.

Yes, once you get a credit card, its nothing but a form of personal loan. So, instead of getting involved in the process of getting a personal loan sanctioned, you can get a credit card. But credit card has a monthly limit and if you are getting a personal loan the amount should be the obvious reason.

And if you hate Credit cards then here I have 8 Benefits of Credit Card use that you are not aware of.

There is one more idea coming to my mind. Let’s suppose you have credit card interest to be paid and you don’t have money to do so. Here you can take a personal loan to repay the credit card interest which is a bit higher than any other form of a loan.

Best Banks for Personal Loan

#1. SBI Personal Loan

State Bank of Indis is the biggest public sector bank in India and it is the best bank for a personal loan in India. I have kept in the top of the list because firstly it’s a government bank and the rate of interest is not too high. You can get an amount of Rs 15 lakhs for a lower rate of interest here with SBI.

Types of SBI Personal Loan

  • SBI Xpress Credit Personal Loan
  • The SBI Personal Loan for Pensioners
  • SBI Xpress Power Personal Loan

These are the personal loans that SBI offers

  • Rate of Interest Charged – 11.33% to 15.55% interest
  • The loan amount that can be sanctioned – up to 15 lakhs loan
  • If you don’t pay on time – up to 24% late fees
  • loan tenure for which the amount has to be repaid – up to 60 months
  • Processing Fees – 0.50% to 1% plus GST

APPLY FOR THE LOAN

#2. ICICI Bank

ICICI Bank is the biggest bank in the private sector and the interests they charge is very low for personal loans You can get a number of Rs 20 lakhs for such a low rate.

Then the is no guarantee or collateral that they ask and instantly give you a loan.

It also offers some benefits to its existing customers in the form of a credit card or something else.

  • Rate of Interest Charged – 10.99% to 21%
  • The loan amount that can be sanctioned – up to 20 lakhs loan
  • If you don’t pay on time – up to 24% late fees
  • loan tenure for which the amount has to be repaid – up to 60 months
  • Processing Fees – up to 2.25% plus GST

    APPLY FOR THE LOAN

#3. Tata Capital Personal Loan

Tatya capital is a private sector lender and one of the most trusted too. You can get a personal loan from one of the most trusted brands immediately.

But, the biggest advantage with Tata Capital si that you can get the loan for as long as 72 months which will lower the EMI that you have to pay.

If you need huge money but a low installment then this could be a perfect choice.

  • Rate of Interest Charged – 11.25% to 19% interest
  • The loan amount that can be sanctioned – up to 25 lakhs loan
  • If you don’t pay on time – up to 24% late fees
  • loan tenure for which the amount has to be repaid – up to 72 months
  • Processing Fees – 0.5% to 2.25% plus GST

APPLY FOR THE LOAN

#4. Citibank

If you are a salaried person then Citibank could be a great option for you because they have a preference for salaried people over self-employed one.

They also charge a very low rate of interest which is one of the lowest rates that we have.

You should definitely consider Citibank as a great option to get the loan.

  • Rate of Interest Charged – 10.99% to 18.99% interest
  • The loan amount that can be sanctioned – up to 30 lakhs loan
  • If you don’t pay on time – no late fees
  • loan tenure for which the amount has to be repaid – up to 60 months
  • Processing fee – up to 3% plus GST

APPLY FOR THE LOAN

#5. HDFC Personal Loan

If you are looking for huge money in the form of a loan then HDFC could be the best option. You can get an amount from Rs 50000 to Rs 40 lakhs within a few hours

After document verification, the amount will be disbursed within 4 hours. Account-holders can get a loan in seconds only. It is one of the trusted corporations in the private sector to get a loan.

Not only the loan but you also get some sort of accidental insurance with HDFC.

  • Rate of Interest Charged – 15.50% to 21.50% interest
  • The loan amount that can be sanctioned – up to 40 lakhs loan
  • If you don’t pay on time – up to 24% late fees
  • loan tenure for which the amount has to be repaid – up to 60 months
  • Processing Fee – up to 2.5% plus GST

APPLY FOR THE LOAN

#6. Axis Bank

Axis bank is another great option to get a loan as there are no pre-payment or part-payment charges involved.

Sometimes, it happens that you are not sure about the time in which you can repay. And, then you end up paying earlier and paying addition pre-payment charges. But, that would not be the case with Axis bank as there are no charges involved in the form of pre-payment.

  • Rate of Interest Charged – 15.75% to 24% interest
  • The loan amount that can be sanctioned – up to 15 lakhs loan
  • If you don’t pay on time – up to 24% late fees
  • loan tenure for which the amount has to be repaid – up to 60 months
  • Processing fee – 1.5% to 2% plus GST

APPLY FOR THE LOAN

#7. Bajaj Finserv Personal Loan

If you are on who is in urgent need of cash then Bajaj Finserv could be a great option for you. You can do the whole process online and the loan will be disbursed within 24 hours.

And, the good thing is that they also allow you to repay the whole amount after the first installment itself. Great isn’t it? Interest charges are also quite average but processing fee is a bit high.

  • Rate of Interest Charged – 12.99% onwards
  • The loan amount that can be sanctioned – up to 25 lakhs loan
  • If you don’t pay on time – up to 24% late fees
  • loan tenure for which the amount has to be repaid – up to 60 months
  • Processing fee – up to 3.99% plus GST

APPLY FOR THE LOAN

#8. Standard Chartered Bank

Standard Chartered is another great option for those looking for a huge loan and a lower rate of interest. You can get a loan of Rs 30 lakhs and for a very low rate of interest.

Definitely, it’s a great option to get huge money at as low as around 11%.

  • Rate of Interest Charged – 10.89% to 21% interest
  • The loan amount that can be sanctioned – up to 30 lakhs loan
  • If you don’t pay on time – up to 24% late fees
  • loan tenure for which the amount has to be repaid – up to 60 months
  • Processing fee – 3% plus GST

APPLY FOR THE LOAN

#9. Kotak Mahindra

Kotak Mahindra is immensely popular maybe because of the Kotak 811 which is quite instant and no documentation.

Similarly, they give you a loan without any discrimination and that too for a lower rate of interest.

They do not discriminate people if they are salaried or self-employed.

  • Rate of Interest Charged – 10.99% to 24% interest
  • The loan amount that can be sanctioned – up to 15 lakhs loan
  • If you don’t pay on time – up to 30% late fees
  • loan tenure for which the amount has to be repaid – up to 60 months
  • Processing fee – up to 2.55 plus GST

APPLY FOR THE LOAN

#10. Yes Bank

If you want huge money then you cannot ignore the presence of Yes Bank and the rate of interest that they charge.

The loan amount could be from Rs 1 lakh to Rs 40 lakes yes for an interest that starts from 10.75%

You can calculate your eligibility within seconds and once the documents are verified and the loan gets sanctioned the amount is disbursed in a few hours.

  • Rate of Interest Charged – 10.75% onwards
  • The loan amount that can be sanctioned – up to 40 lakhs loan
  • If you don’t pay on time – up to 24% late fees
  • loan tenure for which the amount has to be repaid – up to 60 months
  • Processing fee – 2.5% plus GST

APPLY FOR THE LOAN

Best Personal Loan Interest Rates Comparison

Name Interest Rate
(Min)
Interest Rate
(Max)
Processing
Fee
Pre-closure
Charge
SBI 11.30% 15.55% Up to 1% 3%
HDFC Bank 15.50% 21.50% Up to 2.5% 2-4%
Axis Bank 15.75% 24% 1.5 to 2% NIL
Bajaj Finserv 12.99% N.A. Up to 3.99% 4%
Yes Bank 10.75% Up to 2.5% 2-4%
SCB 10.89% 21% 3% 1-5%
Citibank 10.99% 18.99% Up to 3% 4%
ICICI Bank 10.99% 21% Up to 2.25% 5%
Kotak Bank 10.99% 24% Up to 2.5% 5%
Tata Capital 11.25% 19% vary 4.5%

Eligibility for Loan

Now, the obvious question that comes is who can get a personal loan? I mean to say the eligibility criteria for getting a loan which depends upon different banks. But, altogether I can help you with what are the things that banks look into. No matter if it is the best bank for a personal loan or not but they will surely check two things.

1. Repayment Capacity

So, you know now that there is no security involved in the personal loan. But the bank has to be sure that you will return their money so they check your repayment capacity.

Your repayment capacity obviously depends upon your earnings. So what they do is check your annual income first and then your monthly salary. The minimum salary that you must earn is Rs 15000 per month and it may go up to Rs 20000 for some banks.

The repayment capacity shall be 50% of your salary only because you have a family to take care too.

2. Customer Profile

Once the bank is satisfied that you have the capacity to repay their debts, they will check your profile.

Of course, they would check your occupation and how stable your earnings are? Then your age limit which is a minimum of 21 years and maximum of 60 years but the age differs for businessmen and professionals. And, if you are seeking a loan for business it has to be operational for a minimum of 3 years.

Your credit score is one of the obvious things that they should check and list of your assets and liabilities are not to be ignored.

Then they also check the number of dependants on your earnings which could lower down your repayment capacity. And, if your spouse has good earnings then this can benefit you.

Documents Required for Loan

These are the minimum documents asked for a personal loan no matter which bank you choose and then there might be more documents required too.

  • Application Form with Photograph
  • Identity and Age Proof with Residence too
  • Bank Statement of the previous 6 Months
  • Salary Slip of the previous 3 months
  • The separate cheque for processing fees
  • Income Tax Return or Form 16

And, if the loan is for businessmen or professional, they can ask for a few more documents regarding business existence and business income.

Which is the Best Personal Loan Bank for you?

So if I have to say which is the best bank for a personal loan, I might go with any of the above banks depending upon the conditions they fulfill. As a normal person, you should check a few things before going for the best bank for a personal loan.

SBI, ICICI, Bajaj Finserv, Tata Capital and Kotak are few of the best banks for a personal loan but this may not be true for everyone. So, all you need to do is go to every bank in your location and do a bit of research.

Firstly, you should compare the rate of interest that they are charging which you can also find from the list above. That is the one way and also you can go to their office or website to get the details.

Then, I know that you are looking for a personal loan but you should consider it as a last option. This is the costliest one so why not explore other options first? You can get a home loan, education loan, or any other type of loan instead of a personal loan.

So, if you are not finding any other suitable option then get a personal loan and if it is for a small amount it would be great. Try to take a loan for as low as possible and for a lesser period of time too.

Also, you can repay your credit card debt with the help of a personal loan.

I just hope that you are considering all these options and tensions involved with a personal loan.

Which one is the “best bank for a personal loan” as per your experience and research?

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