5 Best Banks for Personal Loan in India

best personal loans

Recently I have come across an advertisement for a personal loan. It says “A Personal loan for every possibility. Vacation, renovation or debt consolidation – the options are endless – Instant Approval and low-interest rate.”

Hey, please don’t get me wrong, I am not here to market any types of loans. I am against a personal loan. I just want to share with you, How banks are targeting prospective customers in a trap.

As per me, one should manage finance in a manner that a situation does not arise to borrow money from anyone. But it is not always true. In life, we come across many emergency situations where we need money urgently. In such a situation of financial crisis personal loans are one which will come to your rescue.

Well, the decision of taking a personal loan is entirely up to you. But, once you have made up your mind to avail the personal loan, the next challenging task for you is to find out the best bank offering personal loan.  It is quite confusing as you will find multiple banks posting multiple lucrative offers in front of you. Apart from that, any gaps in evaluating a personal loan will cost you more money. In order to overcome these type of situation let’s take a look at 5 Best Banks for Personal Loan in India.

Also Read – Best Personal Loans – Important checklist to follow

Factors to consider while selecting personal loans –

Cost 

Cost is the prime factor of consideration while selecting a personal loan. The interest rate payable on the personal loan should be minimum. Apart from the interest rate, one should also consider processing fees, administrative expense and documentation charges. Sum up all these expenses and compare to find out a cheapest personal loan.

Convenience

The second factor for consideration is convenience. It should be easy and convenient to apply for a loan, getting disbursement, making payments of a loan and keeping track of a loan.

Processing Time

A processing time is next major factor. It is a time taken by the bank to process your request and credit your bank account with the loan amount. Ideally, it should take few hours for processing loan.

Closure

The loan should not contain any restriction on closure. If you want to close loan before due date you should have freedom to do so. In addition to that bank should not attach any prepayment penalty or restriction whatsoever.

Terms and Condition

Terms and condition of loan offer should be simple and clear. You should be able to understand them very easily. It should not contain multiple legal bindings and terms.

After going through factors of selecting a personal loan. Let’s take a look at 5 Best Banks for Personal Loan in India.

Also Read – Personal loan or Gold loan which is best option?

5 Best Banks for Personal Loan in India

  1. ICICI Bank Personal Loans

ICICI Bank is one of the best banks for availing personal loan at a low-interest rate. ICICI bank offers fixed interest rate personal loan on monthly reducing basis. ICICI bank offers loan up to 20 Lakhs without any collateral. Personal loan tenure in ICICI bank varies from 1 year to 5 years.

Salaried individual and self-employed both can avail personal loans at ICICI banks. For simplicity personal loan of ICICI bank is divided into five types namely wedding loan, holiday loan, home renovation, top up loan and fresher funding.

Interest Rate

ICICI Bank Personal Loan Interest Rate – 10.99% to 22% per annum

Other Charges

  • Loan Processing Charges – Up to 2.25% per annum plus GST
  • Prepayment Charges – 5% per annum of principal outstanding plus GST
  • Late Payment Interest – 24% per annum
  • EMI Bounce Charges – Rs.400 per bounce plus GST

Key Features

  • Selection of Loan tenure from 12 to 60 months.
  • Fixed interest loan. Interest will be charged on monthly reducing basis.
  • Auto Debit ECS facility for repayment of EMI.
  • All-purpose loan with faster approval.

Eligibility Criteria

Salaried

FactorRequirement
Age23 years – 58 years
Net SalaryMinimum Monthly Rs.17500
Total years in Job2 years
Years in Current Residence1 year

Self Employed

FactorRequirement
Age28 years – 65 years
Minimum TurnoverRs.40 Lakh for non-professional & Rs.15 Lakh for Professional
Minimum Profit After TaxRs.2 Lakh for Proprietorship Firm / Self Employed
Business StabilityIn current business for at least 5 years

 Documents Required

Salaried –

  • Proof of Identity – Passport / Driving License / PAN card
  • Proof of Residence – Utility Bill / Leave and License agreement
  • Salary Slip of last 3 months
  • Last 3 month bank statement
  • Two Passport size photos

Self Employed –

  • Proof of Identity – Passport / Driving License / PAN card
  • Proof of Residence – Utility Bill / Leave and License agreement
  • Income Proof (Audited financial for last two years)
  • Last 6 months bank statement
  • Proof of continuity of business

Also Read –  Credit Card Loan or Personal Loan – It’s your choice

  1. SBI Bank Personal Loan

SBI Bank is one of the best banks for a personal loan. SBI offers a low-interest personal loan with interest charge on daily reducing balance. SBI offers three types of personal loans namely SBI Xpress Credit Loan, SBI Pension Loan, and SBI Saral Personal Loan. SBI offers a personal loan up to 10 Lakh. However, the loan amount will be variable based on your eligibility and income documents.

SBI Xpress Credit Loan

SBI Xpress Credit Loan is for salaried people maintaining salary account with SBI. This includes central state government employee, central PSU employees and few selected corporates.

SBI Pension Loan

SBI Pension Loan is for central or state government pensioner drawing pension via SBI with age less than 76 years.

SBI Saral Personal Loan

SBI Saral Personal Loan is personal loan given for salaried and self-employed engineer, doctor, architect, MBA etc. Details about SBI Saral Personal Loan is given below.

Interest Rate

SBI Bank Personal Loan Interest rate – 10.65% to 14.65% per annum

Other Charges

  • Loan processing Fees – 2 to 3% of the loan amount + GST
  • Prepayment Charges – 3% on prepaid amount
  • Late Fess – 24% per annum

Key Features

  • Interest charged on a daily reducing balance.
  • Comparatively Less interest rate.
  • No hidden cost/administrative charges.
  • Maximum loan amount can go up to 24 time’s net monthly income.
  • Trustworthy brand with wide network of SBI branches.

Eligibility Criteria

Salaried

FactorRequirement
Age21 years – 58 years
Net SalaryMinimum Monthly Rs.15000
Total years in Job2 years
Salary Account WithSBI

Self Employed

FactorRequirement
Age21 years – 65 years
Minimum Profit After Tax21 Lakh per year
Business Account withSBI

Documents Required

Salaried –

  • ID Proof, Address Proof
  • Latest Salary Slip with Form 16
  • Two passport size photos

Self Employed

  • ID Proof, Address Proof
  • Income Proof, Balance Sheet or Income Tax Returns
  • Two passport size photos

Also Read – Stay away from Personal Loan

  1. Aditya Birla Personal Loan

Aditya Birla Personal Loan is given by Aditya Birla Capital. A personal loan by Aditya Birla is popular by name of abfl personal loan or abfl direct personal loan. ABFL provides online instant approval without any collateral.

Interest Rate

Aditya Birla Personal Loan Interest rate – 14% to 26% per annum

Other Charges

Loan processing Fees – 2% of the Loan Amount

Key Features

  • Instant Online Loan Approval
  • Flexible loan tenure 1 year to 3 years
  • Minimum paper work and no branch visit required

Documents Required

  • PAN Card
  • Aadhaar Number
  • Bank Statement one year
  • Valid Business proof one year
  1. HDFC Bank Personal Loan

HDFC Bank Personal loans are quick and convenient. HDFC Bank personal loan is given for multiple purposes including wedding, travel, home renovation, medical expenses. Flexible tenure and competitive interest rate are additional advantages of HDFC personal loan.

Interest Rate

HDFC Bank Personal Loan Interest rate – 15% to 20.99% per annum.

Other Charges

  • Loan Processing Charges – 2.5% of loan amount
  • Prepayment Charges – 2-4% of Principal Outstanding
  • Late Payment Charges – 2% per month on EMI

Key Features

  • Instant Loan approval and processing in 4 hours.
  • Personal Accidental Coverage benefit.
  • Personal Loan Security Benefit.
  • Loan Amount up to 40 Lakh.

Eligibility Criteria

Salaried and Self Employed

FactorRequirement
Age21 years – 60 years
IncomeMinimum Monthly Rs.15000
Total years in Job2 years

 Documents Required

  • Identity Proof
  • Address Proof
  • Bank Statement of 3 months
  • Latest Salary Slip along with form 16 

Read – 10 Best Banks for opening Saving Bank Account in India

  1. Axis Bank Personal Loan

Axis Bank offers a personal loan up to 15 Lakh with a minimum document and quick approval. A unique feature of Axis bank personal loan is zero charges on foreclosure and repayment. If you are sure that you will be able to close the loan quickly Axis Bank personal loan is a good option.

Interest Rate

Axis Bank Personal Loan Interest Rate – 15.5% to 24% per annum.

Other Charges

  • Loan Processing Charges – 1.5% to 2% plus GST
  • Prepayment/Forclosure Charges – NIL
  • Default Interest Rate – 24% per annum

Key Features

  • No prepayment or foreclosure charges.
  • Facility to earn additional reward via Axis eDGE Reward point program.
  • Loan Transfer facility

Eligibility Criteria

Salaried and Self Employed

FactorRequirement
Age21 years – 60 years
IncomeMinimum Monthly Rs.15000

Documents Required

  • ID Proof
  • Income Proof
  • Bank Statement
  • Residence Proof
  • Photograph
  • Signature verification proof

Comparison of Various Personal Loan Options

personal loan

Conclusion –

Whatever is your financial crisis and personal circumstances, you should compare features of all personal loans available in the market including cost factor. This will help you to take a wise decision while borrowing money. 

Article by Raviraj

Hi, I am Raviraj. I am passionate about money matters and finance. I have 12 years of rich experience in the field of financial planning, Investments & Insurance. I have written 1000+ article on this blog. If you like my efforts kindly subscribe to this blog and also let your friends know about this website by sharing.

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