Need quick cash for an emergency, a wedding or even a dream vacation? That's where personal loans come in. Unlike home or car loans, personal loans are unsecured, meaning you don't need to pledge any collateral.
Banks, non-banking financial companies and online lenders offer these loans, each with different interest rates, repayment terms and eligibility criteria.
Most personal loans are offered at a fixed interest rate, meaning that once you lock in a rate — say, 10% — it remains unchanged throughout the loan tenure, regardless of market fluctuations.
Some personal loans come with floating interest rates. According to an RBI directive, banks must provide borrowers with the option to switch from floating to fixed interest rates at the time of resetting the loan's interest rate.
Personal Loan Interest Rates In April 2025
Here's a breakdown of the interest rates offered by some of the top private and public sector banks for salaried borrowers:
Private Sector Banks:
HDFC Bank: 10.90% to 24% per annum | Processing Fee: Up to Rs 6,500 + GST.
ICICI Bank: 10.85% to 16.65% per annum | Processing Fee: 2% of the loan + taxes.
Kotak Mahindra Bank: 10.99% to 16.99% per annum | Processing Fee: Up to 5% of the loan + taxes.
Federal Bank: 11.49% – 14.49% per annum | Processing Fee: 1.5-2.5%.
Public Sector Banks:
State Bank of India: Starts at 10.3%| Processing Fee: 2%.
Bank of Baroda: Personal Loan interest rates are in the range of 10.60% to 15.50% per annum | Processing Fee: 2%.
Union Bank of India: 11.50% to 15.20% per annum | Processing Fee: 1%.
Why Should You Compare Interests Of Personal Loans
Comparing personal loan interest rates is essential to ensure you secure the most cost-effective borrowing option. Interest rates can vary significantly between lenders, and even a small difference can lead to substantial savings over the life of the loan.
For example, on a personal loan of Rs 10 lakh with a three-year tenure:
At 10% annual percentage rate, the total interest paid would be Rs 1.62 lakh.
At 13% APR, the total interest paid would be Rs 2.14 lakh.
This results in a difference of Rs 52,000.
And comparing interest rates also helps you understand how flexible a loan is. Some banks and NBFCs let you change your repayment schedule without heavy penalties.
To find the best loan, try pre-qualifying with multiple lenders. This won't affect your credit score but will give you an idea of the interest rates and terms you might get.
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