Personal loans: Check out banks that offer the lowest interest rates on a Rs 5-lakh loan

A personal loan is an unsecured loan that requires no collaterals. The absence of collateral in personal loans leads lenders to take a cautious approach while evaluating personal loan applicants. Lenders consider multiple factors, such as credit scores, monthly income, occupation profiles, and employer profile, among others, of the applicants to evaluate creditworthiness. You could apply for a personal loan if you need money for emergency purposes such as sudden and uninsured medical expenses, situations arising out of job loss, and so on. Be cautious though; interest rates on personal loans are high. As per data compiled by Bankbazaar, these are the banks offering the cheapest personal loans with interest rates in the range of 9.47-12.40 percent.

Private sector lender Bandhan Bank offers the cheapest interest rate on personal loans starting at 9.47 percent. The equated monthly installment (EMI) on a Rs 5-lakh loan with a four-year repayment period amount to Rs 12,455.

Starting at 10.49 percent, IndusInd Bank offers personal loans of Rs 5 lakh for a repayment tenure of four years. The EMI will be Rs 12,690.

HDFC Bank levies an interest rate starting from 10.75 percent on personal loans. The EMI on a Rs 5-lakh loan with a four-year repayment period is Rs 12,750.

Private sector lender ICICI Bank charges an interest rate starting from 10.8 percent on personal loans. The EMI on a Rs 5-lakh loan with a four-year repayment period is Rs 12,760.

Bank of India levies an interest rate starting from 10.85 percent on personal loans. The EMI on a Rs 5-lakh loan with a four-year repayment period amounts to Rs 12,770.

Axis Bank, Kotak Mahindra Bank, IDFC First Bank and Yes Bank levy an interest rate starting from 10.99 percent on personal loans. The EMI on a Rs 5-lakh loan with a four-year repayment period is Rs 12,805.
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India's largest bank, the State Bank of India, charges an interest rate starting from 11.15 percent on personal loans. The EMI on a Rs 5-lakh loan with a four-year repayment period is Rs 12,840.

Government-owned Bank of Baroda offers an interest rate starting from 11.4 percent for personal loans. The EMI on a Rs 5-lakh loan with a four-year repayment period is Rs 12,900.

Union Bank of India levies an interest rate starting from 11.75 percent on personal loans. The EMI on a Rs 5-lakh loan with a four-year repayment period amount to Rs 12,980.

Canara Bank levies an interest rate starting from 11.95 percent on personal loans. The EMI on a Rs 5-lakh loan with a four-year repayment period amount to Rs 13,025.

Public sector bank Punjab National Bank charges an interest rate starting from 12.4 percent on Rs 5-lakh personal loans with four-year tenures. The EMI will amount to Rs 13,130.

A note from Bankbazaar.com: Interest rates on personal loans from the top 14 banks by unsecured assets are considered. Interest rates for eligible borrowers only. Data has been collected from the respective banks' websites as on May 24, 2024. Banks are listed in ascending order on the basis of interest rates — the bank offering the lowest interest rate on the personal loan is placed at the top and the highest at the bottom. EMI is calculated on the basis of the interest rate mentioned in the table for Rs 5 lakh loan with a tenure of four years (processing and other charges are assumed to be zero for EMI calculation).