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
- 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
| Factor | Requirement |
| Age | 23 years – 58 years |
| Net Salary | Minimum Monthly Rs.17500 |
| Total years in Job | 2 years |
| Years in Current Residence | 1 year |
Self Employed
| Factor | Requirement |
| Age | 28 years – 65 years |
| Minimum Turnover | Rs.40 Lakh for non-professional & Rs.15 Lakh for Professional |
| Minimum Profit After Tax | Rs.2 Lakh for Proprietorship Firm / Self Employed |
| Business Stability | In 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
- 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
| 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 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
- 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
| 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
Read – 10 Best Banks for opening Saving Bank Account in India
- 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
| 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
Comparison of Various Personal Loan Options
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.
