Union Bank and Punjab National Bank offer the cheapest personal loans

The festive season has just passed by and there is a good chance that you overshot your shopping budget thanks to the plethora of offers in the backdrop of the COVID-19-induced economic slowdown.

It is possible that in the quest for making the most of the offers, many might have taken personal loans or overused credit card limits.

However, unsecured loans are best avoided as they come with high interest rates. You must consider personal loans only for emergencies, after exhausting all the much-cheaper secured loan options such as loans against life insurance policies, stocks, mutual funds and even top-up home loans.

Public sector banks offer the lowest rates

If you have no choice but to opt for a personal loan, however, we have a list of banks offering cheapest personal loans for you. Union Bank of India tops of the list of cheapest lenders with 8.9 percent for a loan of Rs 5 lakh with a five-year tenure, as per data from Bankbazaar. Next on the list are Punjab National Bank (PNB) and Central Bank of India with 8.95 percent. State-owned behemoth State Bank of India (SBI) is currently charging an interest rate of 9.6 percent for a Rs 5-lakh personal loan.

Interest rates on personal loan for all listed (BSE) public and private banks have been considered for the data compilation. Banks for which data is not available on their websites are not considered. Data collected from respective banks’ websites as on November 26, 2020. Banks are listed in ascending order on the basis of interest rates – that is, bank offering lowest interest rate on personal loans is placed at top and highest at the bottom. EMI is calculated on the basis of interest rate mentioned in the table for Rs 5-lakh loan with tenure of five years (processing and other charges are assumed to be zero for EMI calculation). Interest and charges mentioned in the table are indicative and may vary depending on bank's terms and conditions