Rates, Eligibility, and Top Lenders

Introduction to Personal Loans in India

Personal loans have become one of the most popular financing options in India, offering individuals quick access to funds without collateral for various needs – from medical emergencies and weddings to home renovations and debt consolidation. As of June 2025, the personal loan market in India continues to grow, with both traditional banks and digital lending platforms offering competitive products tailored to different borrower profiles.

This comprehensive guide examines all aspects of personal loans in India, including current interest rates (updated for June 2025), eligibility criteria, documentation requirements, and a detailed comparison of the best loan providers across categories. Whether you’re salaried, self-employed, a student, or an NRI, this article will help you find the most suitable personal loan option.

Current Personal Loan Interest Rates in India (June 2025)

Interest rates are the most crucial factor when choosing a personal loan. As of June 2025, rates vary significantly across lenders based on factors like credit score, income, employment type, and loan tenure.

Bank-wise Interest Rate Comparison 39

Bank/NBFC	Interest Rate (p.a.)	Processing Fee	EMI per ₹1 Lakh (5 years)
Bank of Maharashtra	9.50%-14.30%	Up to 1% (Max ₹10,000)	₹2,100-₹2,342
Canara Bank	10.45%-15.90%	Up to 0.25% (Max ₹5,000)	₹2,147-₹2,426
State Bank of India	10.30%-15.30%	Up to 1.5%	₹2,139-₹2,395
ICICI Bank	10.85%-16.65%	Up to 2%	₹2,167-₹2,466
HDFC Bank	10.90%-24.00%	Up to ₹6,500 + GST	₹2,169-₹2,877
Axis Bank	11.25%-22.00%	Up to 2%	₹2,187-₹2,762
IDFC First Bank	10.99% onwards	2%	₹2,174 onwards
Bajaj Finserv	10.00%-31.00%	Up to 3.93%	₹2,125-₹3,297
Bank of India	11.60%-16.20%	1% (₹2,500-₹15,000)	₹2,204-₹2,442

*Note: Rates are indicative and subject to change. Women borrowers often get 0.25%-0.50% concession in some banks 4.*

Factors Affecting Personal Loan Interest Rates 37

1. Credit Score: Borrowers with scores above 750 get the lowest rates (9.5%-12%), while those below 600 may pay up to 30% or get rejected 3.
2. Income Level: Higher-income individuals (₹1L+ monthly) qualify for better rates.
3. Employment Type: Government employees and those with MNCs typically get 0.5%-1% lower rates.
4. Relationship with Bank: Existing customers with good history may get preferential rates.
5. Loan Tenure: Shorter tenures (1-2 years) often have lower rates than longer ones (5+ years).

Top 10 Personal Loan Providers in India (June 2025)

1. State Bank of India (SBI) Personal Loan 39

• Interest Rate: 10.30%-15.30% p.a.
• Loan Amount: Up to ₹30 lakh
• Tenure: Up to 5 years
• Processing Fee: Up to 1.5% (Min ₹1,000; Max ₹15,000)
• Special Features: Lowest rates for government employees, quick approval for existing customers

2. HDFC Bank Personal Loan 39

• Interest Rate: 10.90%-24.00% p.a.
• Loan Amount: Up to ₹40 lakh
• Tenure: Up to 6 years
• Processing Fee: ₹6,500 + GST
• Special Features: Instant approval for pre-approved customers, doorstep service

3. ICICI Bank Personal Loan 13

• Interest Rate: 10.85%-16.65% p.a.
• Loan Amount: Up to ₹50 lakh
• Tenure: Up to 5 years
• Processing Fee: Up to 2% of loan amount + taxes
• Special Features: Same-day disbursal for eligible customers, flexible repayment options

4. Axis Bank Personal Loan 38

• Interest Rate: 11.25%-22.00% p.a.
• Loan Amount: Up to ₹40 lakh
• Tenure: Up to 5 years
• Processing Fee: Up to 2% of loan amount
• Special Features: 24×7 instant personal loan through app, minimal documentation

5. Bank of India Star Personal Loan 4

• Interest Rate: 11.60%-16.20% p.a.
• Loan Amount: Up to ₹25 lakh (36 times salary)
• Tenure: Up to 7 years (84 months)
• Processing Fee: 1% (₹2,500-₹15,000)
• Special Features: 0.50% interest concession for women, no prepayment penalty

6. Bajaj Finserv Personal Loan 29

• Interest Rate: 10.00%-31.00% p.a.
• Loan Amount: ₹20,000-₹40 lakh
• Tenure: Up to 8 years (96 months)
• Processing Fee: Up to 3.93%
• Special Features: Flexi loan facility (pay interest only on used amount), instant approval

7. IDFC First Bank Personal Loan 23

• Interest Rate: From 10.99% p.a.
• Loan Amount: Up to ₹10 lakh
• Tenure: Up to 5 years
• Processing Fee: 2%
• Special Features: High approval rate for existing customers, transparent charges

8. Moneyview Personal Loan App 27

• Interest Rate: From 10% p.a.
• Loan Amount: ₹5,000-₹10 lakh
• Tenure: 6-60 months
• Processing Fee: Varies by lender
• Special Features: Loans for low credit scores, disbursal within 24 hours

9. IndiaLends 10

• Interest Rate: 10.25%-25% p.a.
• Loan Amount: Up to ₹25 lakh
• Tenure: 1-5 years
• Processing Fee: 1.5%-6%
• Special Features: Marketplace with 50+ lenders, free credit score check

10. Bank of Maharashtra Personal Loan 9

• Interest Rate: 9.50%-14.30% p.a. (lowest in market)
• Loan Amount: Varies
• Tenure: Up to 5 years
• Processing Fee: Up to 1% (Max ₹10,000)
• Special Features: Most competitive rates for eligible borrowers

Best Personal Loan Options for Specific Needs

For Salaried Individuals 78

• Top Picks: SBI, HDFC Bank, ICICI Bank
• Eligibility: Minimum ₹15,000-₹30,000 monthly salary (varies by bank), 1+ year employment
• Documents Required:
  • Salary slips (last 3 months)
  • Bank statements (6 months)
  • KYC (Aadhaar, PAN, address proof)
  • Form 16/ITR (for some lenders) 58

For Self-Employed Professionals 57

• Top Picks: Axis Bank, ICICI Bank, Bajaj Finserv
• Eligibility: 3+ years in business, ITR of ₹2.5L+ annually
• Documents Required:
  • Business proof (GST, registration)
  • 3 years ITR with profit/loss statements
  • 6-12 months bank statements
  • KYC documents 5

Without Salary Slip/Income Proof 6

• Top Picks: EarlySalary, Fibe, MoneyTap, Nira
• Loan Amount: ₹5,000-₹5 lakh
• Interest Rate: 18%-36% p.a.
• Requirements:
  • Bank account with regular credits
  • Minimum ₹20,000 monthly income
  • Good repayment history on other apps 6

For NRIs 5

• Top Picks: HDFC Bank, ICICI Bank, Axis Bank
• Eligibility: Indian passport, overseas employment (1+ year)
• Documents Required:
  • Passport and visa copies
  • Overseas address proof
  • Employment contract
  • NRE/NRO bank statements 5

For Students 7

• Options:
  • Education loans (better choice)
  • Credit cards with parental guarantee
  • Small-ticket loans from apps like mPokket (₹45,000 max) 26

Instant Loan Apps 26

1. EarlySalary: ₹5,000-₹5L at 12%+ p.a., instant disbursal
2. KreditBee: ₹1,000-₹5L at 17%-29.95% p.a.
3. Moneyview: ₹5,000-₹10L at 10%+ p.a.
4. CASHe: ₹1,000-₹4L at 2.5% monthly (30% p.a.)
5. mPokket: Up to ₹45,000 at 48% p.a. (students/young professionals)

*Note: App-based loans have higher rates but faster approval (10 mins-24 hours) 2*

Personal Loan EMI Calculation

The standard formula for EMI calculation is:

EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
Where:

• P = Principal amount
• R = Monthly interest rate (annual rate/12)
• N = Loan tenure in months 9

Example Calculation:

For ₹5 lakh loan at 11% p.a. for 5 years (60 months):

• R = 11%/12 = 0.009167
• EMI = [500000×0.009167×(1+0.009167)^60]/[(1+0.009167)^60-1] = ₹10,871 39

Most banks and financial websites provide online EMI calculators for easy computation 3.

Documents Required for Personal Loans 58

Common Documents Across Lenders:

1. Identity Proof: PAN card, Aadhaar, Passport, Voter ID
2. Address Proof: Aadhaar, Utility bills (last 3 months), Passport
3. Income Proof:
   • Salaried: 3-6 months payslips, Form 16, 6-12 months bank statements
   • Self-employed: 2-3 years ITR, balance sheets, profit/loss statements
4. Photographs: 2-4 passport-size
5. Loan Application Form: Filled and signed

NRIs require additional documents like work permit, overseas address proof, and Indian residence proof 5.

How to Get the Best Personal Loan Deal in 2025

1. Improve Your Credit Score: Maintain 750+ by paying existing EMIs/credit cards on time 37
2. Compare Multiple Offers: Use platforms like BankBazaar, Paisabazaar to compare rates across 10+ lenders 37
3. Negotiate with Lenders: Existing customers can often get 0.5%-1% lower rates 3
4. Opt for Shorter Tenure: Reduces total interest payout despite higher EMIs
5. Watch for Hidden Charges: Processing fees (0.5%-5%), prepayment penalties (0%-5%), GST on fees 13
6. Check Pre-approved Offers: Banks offer lowest rates to pre-qualified customers (check net banking/app) 8
7. Time Your Application: Festive seasons (Diwali, New Year) often have special offers with lower rates 3

Risks and Precautions

1. High-Interest Apps: Some instant loan apps charge up to 48% p.a. – only use for genuine emergencies 26
2. Processing Fee Scams: Verify all charges are as per RBI guidelines (max 6.5% including GST) 13
3. CIBIL Impact: Multiple loan inquiries within short period can reduce score by 10-30 points 7
4. Prepayment Terms: Some banks charge 2%-5% for foreclosing before tenure ends 4
5. Fraud Apps: Only download loan apps from official Play Store/App Store with 4+ star ratings 2

Future Trends in Personal Loans (2025-26)

1. AI-Based Approvals: More lenders using alternative data (utility payments, rent history) for credit scoring 6
2. Dynamic Pricing: Interest rates personalized in real-time based on market conditions and borrower profile 1
3. Blockchain Verification: Instant KYC and document verification reducing processing time to minutes 10
4. Sachet Loans: Micro personal loans (₹5,000-₹50,000) for 7-30 days tenure gaining popularity 2
5. Green Loans: Lower rates for eco-friendly purchases like solar panels, EVs (new SBI/HDFC schemes) 9

Conclusion: Choosing the Right Personal Loan

The “best” personal loan depends on your specific requirements:

• Lowest Interest Rate: Bank of Maharashtra (from 9.5%) or SBI (from 10.3%) 9
• Highest Amount: ICICI Bank or HDFC Bank (up to ₹50L) 3
• Fastest Disbursal: Bajaj Finserv or IDFC First Bank (same-day) 23
• No Credit History: Moneyview or EarlySalary (alternative scoring) 26
• Longest Tenure: Bank of India (7 years) or Bajaj Finserv (8 years) 49

Before applying, always:

1. Check your credit score (free on apps like IndiaLends) 10
2. Use EMI calculators to assess affordability 3
3. Read all terms (especially prepayment clauses and hidden fees) 1
4. Maintain debt-to-income ratio below 50% (all EMIs ≤50% of monthly income) 7

With this comprehensive guide updated for June 2025, you’re now equipped to make an informed decision and secure the best personal loan tailored to your financial situation. Remember that timely repayments will improve your creditworthiness, ensuring access to better loan terms in the future.