Compare personal loan interest rates with various banks

Personal loans are one of the most popular unsecured loans offered by various private and public sector banks. It helps individuals to cover their short term financial needs. Although personal loans have a higher rate of interest due to their unsecure nature, the easy availability and quick approval of the loans make it a lucrative option to arrange quick finances in the short term. Furthermore the flexibility to use the money availed through a personal loan for various needs including medical expenses, marriage, vacation, education or any other personal need makes it viable for a large majority of people.

Personal Loan and Interest Rates

Interest rates play a significant role in any loan instrument but more so in personal loan due to their higher rates compared to other secured loans. Personal loan interest rates depend on the individual profile of the borrower along with his or her repayment track record, the quantum of the loan and the tenure of the loan. As banks do not seek any security or collateral for personal loans, the high risk factor makes personal loans slightly expensive attracting a higher rate of interest. 

Calculation of Personal Loan Interest Rates:

Personal loan interest rates are calculated either on a monthly reducing basis or on an annual basis. One must always seek personal loans based on monthly recuing basis since it calculates the interest on the remaining principle amount and not on the repaid amount. Personal loan seekers must also be aware that floating interest rates is related o the base rate of the bank which fluctuates in accordance with the RBI base rate. Floating interest rates are liable to change even during the tenure of the personal loan.

The rate of interest for personal loans is also dependant on the quantum of the loan amount and the tenure for the loan. Public sector banks usually offer personal loan up to 60 times the net monthly income for salaried individuals. Personal loan for self employed individuals is available between Rs. 50,000 to Rs. 15 Lakhs. The repayment tenure for personal loans ranges between 12 to 60 months. Banks usually charge a small processing fee ranging from 2 to 2.5% of the loan amount. The processing fee is charged upfront and deducted from the loan disbursal amount.

The personal loan interest rate offered for self employed non professionals will be higher than that of salaried people and self employed professionals. This is because of the risk factor consideration by banks. 

Comparison of Personal Loan Interest Rates:

Here is a active comparison of rate of interest for various public sector and private banks offering personal loans to salaried individuals.

Bank	Rate of Interest (For Salaried individuals for special companies)	Rate of Interest (For Salaried individuals earning above Rs. 75000)	Processing Fee
HDFC Bank	13.99% - 14.75%	15.75%	0.8% - 1.75% (for Special Companies) else 2%
State Bank of India	18.50%	18.50%	2% Flat
Bank of India	15%	15%	2% of loan amount
ICICI Bank	13.49% - 14%	15.50%-16%	0.50% for special companies else 1.50% - 2.25%
Axis Bank	15%	17%	2% of loan amount