The festive season sees a spike in personal loan demand, with top banks offering discounted interest rates and waiving processing fees for borrowers with good credit scores. People often take out personal loans to finance travel and shopping during festivals, while others use them to cover emergency expenses like medical bills or unexpected job loss.
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A personal loan is an unsecured loan that doesn't require collateral, but this increases the lender's risk. To mitigate this, lenders carefully assess applicants' creditworthiness by considering factors like credit score, income, occupation, and employer profile. Due to the higher risk, personal loan interest rates are typically high, so borrowers should exercise caution when applying. As per data compiled by Bankbazaar, these are the banks offering the cheapest personal loans with interest rates starting in the range of 9.99-13.75 percent for five-year loan tenure.
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Public sector lender the State Bank of India offers the cheapest interest rate on personal loans starting at 10.10 percent. The equated monthly installment (EI) on a Rs 5-lakh loan with a five-year repayment period amounts to Rs 10,648.
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Starting at 10.5 percent, Punjab National Bank offers personal loans of Rs 5 lakh for a repayment tenure of five years. The EMI will be Rs 10,747.
Union Bank of India levies an interest rate starting from 10.75 percent on personal loans. The EMI on a Rs 5-lakh loan with a five-year repayment period is Rs 10,809.
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Bank of Baroda levies an interest rate starting from 10.90 percent on personal loans. The EMI on a Rs 5-lakh loan with a five-year repayment period amount to Rs 10,846.
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Starting at 13.75 percent, Canara Bank offers personal loans of Rs 5 lakh for a repayment tenure of five years. The EMI will be Rs 11,569.
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Private sector lender Axis Bank charges an interest rate starting from 9.99 percent on personal loans. The EMI on a Rs 5-lakh loan with a five-year repayment period is Rs 10,621.
ICICI Bank levies an interest rate starting from 10.6 percent on personal loans. The EMI on a Rs 5-lakh loan with a five-year repayment period is Rs 10,772.
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HDFC Bank charges an interest rate starting from 10.9 percent on personal loans. The EMI on a Rs 5-lakh loan with a five-year repayment period is Rs 10,846.
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Kotak Mahindra Bank levies an interest rate starting from 10.99 percent on personal loans. The EMI on a Rs 5-lakh loan with a five-year repayment period amounts to Rs 10,869.
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Starting at 11.25 percent, Yes Bank offers personal loans of Rs 5 lakh for a repayment tenure of five years. The EMI will be Rs 10,934.
