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 to take a personal loan is entirely up to you. But, once you have made up your mind to avail of a personal loan, the next challenging task for you is to find the best bank offering personal loans. 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 types of situations let’s take a look at the 5 Best Banks for Personal Loans in India.
Factors to consider while selecting personal loans
Cost
Cost is the prime factor of consideration when selecting a personal loan. The interest rate payable on the personal loan should be a minimum. Apart from the interest rate, one should also consider processing fees, administrative expenses, and documentation charges. Sum up all these expenses and compare them to find out the cheapest personal loan.
Convenience
The second factor for consideration is convenience. It should be easy and convenient to apply for a loan, get disbursement, make payments of a loan, and keep track of a loan.
Processing Time
Processing time is the next major factor. It is the time taken by the bank to process your request and credit your bank account with the loan amount. Ideally, it should take a few days or 24 hours to process the loan.
Closure
The loan should not contain any restriction on closure. If you want to close the loan before the due date you should have the freedom to do so. In addition to that bank should not attach any prepayment penalty or restriction whatsoever.
Terms and Condition
Terms and conditions 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 the factors of selecting a personal loan. Let’s take a look at the 5 Best Banks for Personal Loans in India.
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5 Best Banks for Personal Loans in India
ICICI Bank Personal Loans
ICICI Bank is one of the best banks for availing personal loans at a low interest rate. ICICI bank offers fixed interest rate personal loans on a monthly reducing basis. ICICI bank offers loans up to 20 Lakhs without any collateral. Personal loan tenure in ICICI Bank varies from 1 year to 5 years.
Salaried individuals and self-employed both can avail of personal loans at ICICI banks. For simplicity, personal loans from ICICI Bank are divided into five types namely wedding loans, holiday loans, home renovation, top-up loans, and fresher funding.
Interest Rate
ICICI Bank Personal Loan Interest Rate – 10.80% to 16.15% per annum
Other Charges
- Loan Processing Charges – Upto 2 % of loan amount – Non Refundable
- Prepayment Charges – 3% on the principal outstanding amount. NIL after 12 EMI is paid
- Late Payment Interest – 5% per annum will be charged on the overdue EMI until repayment
- EMI Bounce Charges – ₹ 500 per bounce
Key Features
- Selection of Loan tenure from 12 to 60 months.
- Fixed interest loan. Interest will be charged on a monthly reducing basis.
- Auto Debit ECS facility for repayment of EMI.
- All-purpose loan with faster approval.
Eligibility Criteria
Salaried
| Factor | Requirement |
| Age | 20 years – 58 years |
| Net Salary | Minimum Monthly ₹ 30,000 |
| Total years in Job | 2 years |
| Years in Current Residence | 1 year |
Self Employed
| Factor | Requirement |
| Age | 23 years – 65 years |
| Minimum Turnover | ₹ 40 Lakh for non-professional & ₹ 15 Lakh for Professional |
| Minimum Profit After Tax | ₹ 2 Lakh for Proprietorship Firm / Self Employed |
| Business Stability | In current business for at least 3 years |
Documents Required
Salaried –
- Proof of Identity – Aadhaar Card / 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 finances for last two years)
- Last 6 months’ bank statement
- Proof of continuity of business
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SBI Bank Personal Loan
SBI Bank is one of the best banks for a personal loan. SBI offers a low-interest personal loan with an interest charge on a 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 of 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 accounts with SBI. This includes central state government employees, central PSU employees, and a 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 Xpress Flexi
SBI Xpress Flexi is an an Overdraft Personal Loan product for all Salaried customers having Monthly salary of ₹50000/- & above.
Interest Rate
SBI Bank Personal Loan Interest rate – 11.35% to 14.50% per annum
Other Charges
- Loan processing Fees – 2 to 3% of the loan amount + GST
- Prepayment Charges – 3% on prepaid amount
- Late Fees – 24% per annum
Key Features
- Interest is charged on a daily reducing balance.
- Comparatively Less interest rate.
- No hidden costs/administrative charges.
- Maximum loan amount can go up to 24 times net monthly income.
- Trustworthy brand with a wide network of SBI branches.
Eligibility Criteria
Salaried
| Factor | Requirement |
| Age | 21 years – 58 years |
| Net Salary | Minimum Monthly Rs.15000 |
| Total years in Job | 2 years |
| Salary Account With | SBI |
Self Employed
| Factor | Requirement |
| Age | 21 years – 65 years |
| Minimum Profit After Tax | ₹ 21 Lakh per year |
| Business Account with | SBI |
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
Aditya Birla Personal Loan
Aditya Birla Personal Loan is given by Aditya Birla Capital. A personal loan by Aditya Birla is a popular name for 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 – 2.36 % 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
HDFC Bank Personal Loan
HDFC Bank Personal loans are quick and convenient. HDFC Bank personal loan is given for multiple purposes including weddings, travel, home renovation, and medical expenses. Flexible tenure and competitive interest rates are additional advantages of HDFC personal loans.
Interest Rate
HDFC Bank Personal Loan Interest rate – 10.75% to 24% per annum.
Other Charges
- Loan Processing Charges – ₹ 4999 + GST
- 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
| Factor | Requirement |
| Age | 21 years – 60 years |
| Income | Minimum Monthly Rs.15000 |
| Total years in Job | 2 years |
Documents Required
- Identity Proof
- Address Proof
- Bank Statement of 3 months
- Latest Salary Slip along with form 16
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Axis Bank Personal Loan
Axis Bank offers a personal loan of up to ₹ 15 Lakh with a minimum document and quick approval. A unique feature of Axis Bank personal loans 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 – 11.25% to 24% per annum.
Other Charges
- Loan Processing Charges – 2% + GST
- Prepayment/Foreclosure Charges – NIL
- Default Interest Rate – 24% per annum
Key Features
- No prepayment or foreclosure charges.
- Facility to earn additional rewards via Axis eDGE Reward point program.
- Loan Transfer facility
Eligibility Criteria
Salaried and self-employed
| Factor | Requirement |
| Age | 21 years – 60 years |
| Income | Minimum Monthly Rs.15000 |
Documents Required
- ID Proof
- Income Proof
- Bank Statement
- Residence Proof
- Photograph
- Signature verification proof
Conclusion –
Whatever is your financial crisis and personal circumstances, you should compare the features of all personal loans available in the market including the cost factor. This will help you to make a wise decision while borrowing money.
