Personal loans are a popular financial tool for individuals seeking funds for various purposes, from medical emergencies to home renovations. One of the critical factors to consider when opting for a personal loan is the interest rate, as it directly affects the total repayment amount. This article provides an updated comparison of personal loan interest rates offered by various banks in India as of 2025.
🔍 Top Banks Offering the Lowest Personal Loan Interest Rates
Based on the latest data, here are some of the banks offering competitive interest rates on personal loans:
- HSBC Bank: Starting at 9.99% p.a.
- Bank of Maharashtra: Starting at 10.00% p.a.
- Punjab National Bank: Starting at 10.40% p.a.
- IndusInd Bank: Starting at 10.25% p.a.
- Axis Bank: Starting at 10.49% p.a.
- HDFC Bank: Starting at 10.75% p.a.
- ICICI Bank: Starting at 10.80% p.a.
- State Bank of India (SBI): Starting at 11.15% p.a.
It’s important to note that the actual interest rate offered to an individual may vary based on factors such as credit score, income, loan amount, and tenure.
📊 Comprehensive Comparison Table
Below is a detailed table comparing personal loan interest rates and processing fees across various banks:
| Bank | Interest Rate (p.a.) | Processing Fee |
|---|---|---|
| HSBC Bank | 9.99% – 15.00% | Up to 2% |
| Bank of Maharashtra | 10.00% – 12.80% | 1% (Rs. 1,000 – Rs. 10,000) |
| Punjab National Bank | 10.40% – 17.95% | Up to 1% |
| IndusInd Bank | 10.25% – 34.05% | Up to 3.5% |
| Axis Bank | 10.99% – 22.00% | Up to 2% |
| HDFC Bank | 10.75% – 24.00% | Rs. 4,999 + GST |
| ICICI Bank | 10.80% – 16.15% | Up to 2% |
| State Bank of India (SBI) | 11.15% – 14.30% | Up to 1.50% |
| Tata Capital | 10.99% – 36.00% | Up to 5.5% |
| Yes Bank | 10.99% – 20.00% | Up to 2.5% |
| IDFC First Bank | 10.90% – 36.00% | Up to 3.5% |
| Federal Bank | 11.49% – 14.49% | Up to 2% |
| Bank of Baroda | 11.10% – 18.15% | Up to 2% |
| Bank of India | 10.85% onwards | Up to 2% |
| Indian Overseas Bank | 10.85% – 12.85% | Up to 0.50% |
| IDBI Bank | 11.00% – 15.50% | Contact the bank |
| Aditya Birla Capital | 10.99% – 30.00% | Up to 3% |
| SMFG India Credit | 11.99% onwards | Up to 6% |
| Ujjivan Small Finance Bank | 11.49% – 16.49% | At the discretion of the bank |
| J&K Bank | 12.25% – 13.25% | Up to 1% (Max Rs. 10,000) |
| Central Bank of India | 12.00% – 12.75% | Up to 1% |
| RBL Bank | 18.00% | Up to 2% |
Note: The above rates are indicative and subject to change. It’s advisable to contact the respective banks for the most current rates and terms.
Private Companies and Banks for Low Interest Rates
When it comes to securing a loan with low interest rates in India, many borrowers often look beyond public sector banks and turn to private financial institutions and NBFCs (Non-Banking Financial Companies). These private players are known for their streamlined processes, flexible eligibility criteria, and competitive interest rates. Among the top choices in this segment are Tata Capital, Piramal Finance, and other private financial institutions offering personal loans, business loans, and other credit products.
Why Choose Private Companies and Banks for Low Interest Loans?
Private financial institutions have emerged as strong contenders for individuals and businesses looking for affordable credit. Unlike traditional public sector banks that may have rigid procedures and longer approval times, private companies often focus on customer convenience and digital-first services. This means quicker disbursal, less paperwork, and customized loan options all while maintaining competitive interest rates.
Tata Capital Personal Loan
Tata Capital is a well-known name in the Indian financial market, offering a wide range of lending products including Tata Capital Personal Loan, business loans, home loans, and more. Tata Capital personal loans are designed to meet various personal needs like medical emergencies, travel, education, or even debt consolidation.
Key features:
- Interest rates starting from around 10.99% per annum
- Loan amounts ranging from ₹75,000 to ₹35 lakhs
- Flexible repayment tenure up to 72 months
- Minimal documentation and fast approval process
Tata Capital stands out for its customer centric approach, especially for salaried individuals and self-employed professionals looking for quick, hassle-free funding.
Piramal Finance Personal Loan
Piramal Finance, part of the Piramal Group, is another trusted private lender offering tailored loan solutions. Their personal loans cater to a wide range of customers, including those with limited credit history. Piramal Finance emphasizes financial inclusion and ensures loan accessibility even in semi-urban and rural areas.
Key features:
- Interest rates typically starting from 12% onwards, depending on eligibility
- Flexible loan amounts and repayment options
- Quick processing and disbursal
- EMI calculator and eligibility checker available online
Piramal also offers business loans, making it an attractive option for MSMEs and small business owners who need working capital or funds for expansion.
Business Loans from Private Lenders
Business loans from private companies like Tata Capital and Piramal Finance Personal Loan have become popular due to their ease of access, no collateral requirements (for unsecured loans), and low interest rates compared to many traditional banks. These loans are ideal for startups, SMEs, and entrepreneurs looking to grow their business or manage cash flow effectively.
Advantages:
Minimal paperwork with digital documentation
Competitive interest rates starting around 14%
Loan amounts up to ₹75 lakhs or more, depending on business profile
Quick disbursal (often within 72 hours)
📝 Key Considerations When Choosing a Personal Loan
When selecting a personal loan, consider the following factors:
- Interest Rate: Lower interest rates reduce the overall cost of the loan.
- Processing Fee: A lower processing fee can significantly reduce upfront costs.
- Loan Tenure: Longer tenures may reduce monthly EMIs but increase the total interest paid.
- Prepayment Charges: Check if the bank allows prepayment and the associated charges.
- Eligibility Criteria: Ensure you meet the bank’s eligibility requirements to avoid application rejections.
📌 Conclusion
HSBC Bank currently offers the lowest starting interest rate on personal loans at 9.99% p.a., followed closely by Bank of Maharashtra at 10.00% p.a. However, the best choice depends on individual financial profiles and requirements. It’s crucial to compare various loan aspects, including interest rates, processing fees, and other terms, before making a decision. Always consult with the respective banks or financial advisors to get personalized advice tailored to your financial situation.