Best Personal Loan In India: 10 Best Options
In this blog, you will learn what is a personal loan, how to avail the best personal loan in India, what is a personal loan repayment plan, etc.
"Banks provide payment systems, core deposit, and lending facilities that enable us to manage our day-to-day affairs."
— Chuka Umunna
When faced with an unexpected financial need, most of us rely on banks to provide us with a loan that can be of any kind, be it a business loan, car loan, home loan, or even education loan. What if you’re looking for money for things that don’t fit the above categories, such as throwing a wedding reception or going on an emergency overseas trip?
For such an urgent cash requirement, you can get a personal loan directly from the bank. Most personal loans are unsecured, but banks that offer secured personal loans charge a slightly lower interest rate.
As a rule of thumb, banks typically charge a higher interest rate on personal loans, but the interest rate varies depending on several factors, including credit score, bank relationship, and employer categories like MNC, government, defense, etc.
In this blog, we will understand what is a personal loan, how to get the best personal loan in India, what is the repayment plan for a personal loan, and many more things. All of this will ensure that you get the best personal loan in India for yourself.
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What Is A Personal Loan?
A personal loan is a type of loan that is not secured by collateral. This means that the lender does not require you to put up any assets as security for the loan. Personal loans are typically used to finance major expenses, such as consolidating debt, paying for home improvements, or going on a vacation.
Below is a list of the 10 best personal loan in India that you can choose from if you need one:
1. HDFC Bank Personal Loan
HDFC Bank is one of the largest banks in India and offers a variety of personal loan options. The bank's personal loan has a maximum loan amount of ₹40 Lakhs, a tenure of up to 5 years, and an interest rate starting at 10.5%. The bank also offers some features and benefits, such as easy documentation and quick approvals.
2. ICICI Bank Personal Loan
ICICI Bank is another large bank in India that offers personal loans. The maximum amount of the bank's personal loan is ₹40 Lakhs. The tenure of the loan is up to 72 months and the interest rate of the personal loan starts at 10.80%. The bank also provides various services and advantages, such as simple paperwork and personal loans through net banking.
3. Bajaj Finserv Personal Loan
Bajaj Finserv is a non-banking financial company (NBFC) that offers personal loans. The maximum loan amount offered by the company is ₹40 Lakhs. The tenure of the personal loan can be extended up to 8 years and the interest rate offered by the company starts at 11%.
The company also provides a range of features and advantages, including ease of documentation, instant approval, and fast loan disbursements.
4. SMFG India Credit Personal Loan
SMFG India Credit is also one of the best NBFC in India for personal loans. The maximum amount of personal loan offered by the company is ₹25 Lakhs. The tenure of the personal loan can be extended up to 60 months and the starting interest rate of the personal loan is 11.99%.
The company also provides a range of services and advantages, including personal loan solutions tailored to your needs and minimal documentation requirements.
5. IndusInd Bank Personal Loan
IndusInd Bank is a private-sector bank that offers personal loans. The maximum amount of the bank's personal loan is ₹50 Lakhs. The tenure of the loan is up to 6 years and the interest rate of the personal loan is 10.25%.
The bank also provides a variety of services and advantages, including an online loan application process and auto-repayment setup, as well as instant loan disbursements.
6. Kotak Mahindra Bank Personal Loan
Kotak Mahindra Bank is another private-sector bank that offers personal loans. The maximum amount of the personal loan that the bank offers is ₹40 Lakhs. The tenure of the loan repayment can be up to 6 years and the starting interest rate of the personal loan is 10.99%.
The bank also provides a range of features and advantages, including fast loan disbursal and tailored loan amounts.
7. State Bank of India Personal Loan
State Bank of India (SBI) is one of the largest banks in India and offers personal loans. The maximum amount of the personal loan offered by the bank is ₹30 Lakhs. The tenure of the personal loan can be extended up to 84 months and the starting interest rate of the personal loan is 11.05%.
The bank also provides a range of features and advantages, including a fast approval process, instant loan disbursement, and minimal documentation requirements.
8. Axis Bank Personal Loan
Axis Bank is a private-sector bank that offers personal loans. The maximum amount that the bank offers as a personal loan is ₹40 Lakhs. The EMI payment tenure of the loan is up to 84 months and the starting interest rate of the personal loan is 10.75%.
The bank also provides a range of features and advantages, including an easy loan application process and quicker loan approval.
9. Yes Bank Personal Loan
Yes Bank is a private-sector bank that offers personal loans. The maximum amount that the bank offers as a personal loan is ₹40 Lakhs. The EMI payment tenure of the loan is up to 60 months and the starting interest rate of the personal loan is 10.99%.
The bank also provides a variety of features and advantages, such as a straightforward online application, collateral-free personal loans, and quick in-principal approval
10. Canara Bank Personal Loan
Canara Bank is a public sector bank that offers personal loans. The maximum amount that the bank offers as a personal loan is ₹20 Lakhs. The EMI payment tenure of the personal loan can be extended up to 84 months and the interest rate of the personal loan starts at 13%.
The bank also provides a range of features and advantages, including zero processing fees and reduced balance interest rates.
As you can see, there are many great personal loan options available in India. When choosing the best personal loan in India for yourself, it's important to compare different lenders and loan terms to find the best deal for you.
| Bank Name | Loan Amount | EMI Tenure | Interest Rate |
|---|---|---|---|
| HDFC Bank | Up to ₹40 Lakhs | Up to 60 months | Starting at 10.5% |
| ICICI Bank | Up to ₹40 Lakhs | Up to 72 months | Starting at 10.80% |
| Bajaj Finserv | Up to ₹40 Lakhs | Up to 96 months | Starting at 11% |
| SMFG India Credit | Up to ₹25 Lakhs | Up to 60 months | Starting at 11.99% |
| IndusInd Bank | Up to ₹50 Lakhs | Up to 72 months | Starting at 10.25% |
| Kotak Mahindra Bank | Up to ₹40 Lakhs | Up to 72 months | Starting at 10.99% |
| State Bank of India | Up to ₹30 Lakhs | Up to 84 months | Starting at 11.05% |
| Axis Bank | Up to ₹40 Lakhs | Up to 84 months | Starting at 10.75% |
| Yes Bank | Up to ₹40 Lakhs | Up to 60 months | Starting at 10.99% |
| Canara Bank | Up to ₹20 Lakhs | Up to 84 months | Starting at 13% |
How To Get The Best Personal Loan In India?
To get the best personal loan in India, you will need to apply to a lender. The application process will vary depending on the lender, but you will typically need to provide the following information:
- Your name, address, and contact information
- Your employment information
- Your income and expenses
- Your credit score
Once you have applied for a personal loan, the lender will review your application and decide if you are eligible for a personal loan. If you are approved, the lender will provide you with a loan agreement. The loan agreement will outline the terms of the loan, including the interest rate, fees, and repayment plan.
What Is The Repayment Plan Of A Personal Loan?
When you take out a personal loan, you will need to agree to a repayment plan. The repayment plan will specify how much you will owe each month and how long you will have to repay the loan.
Most personal loans have fixed-rate repayment plans. This means that the interest rate will not change during the life of the loan. However, some lenders offer variable-rate repayment plans. With a variable-rate loan, the interest rate can change over time.
The length of the repayment plan will vary depending on the amount of money you borrow and the interest rate. Shorter repayment plans will have higher monthly payments, but you will pay less interest overall. Longer repayment plans will have lower monthly payments, but you will pay more interest overall.
What Is Personal Loan Cost?
In addition to the interest rate, there are other costs associated with personal loans. These costs can include:
1. Application Fees: The application fee is a one-time fee that is charged when you apply for a personal loan.
2. Origination Fees: The origination fee is a percentage of the loan amount that is charged when the loan is approved.
3. Late Payment Fees: Late payment fees are charged if you make a late payment on your loan.
4. Prepayment Penalties: Prepayment penalties are charged if you pay off your loan early.
What Are Personal Loan Benefits?
Personal loans offer several benefits. Let's have a look at some of the benefits of taking a personal loan:
1. Flexibility: Personal loans can be used for any purpose, so you have the flexibility to use the money for whatever you need it for. So you can use the money to pay for unexpected expenses, consolidate debt, or make a major purchase.
2. Convenience: Personal loans can be applied for and approved quickly, so you can get the money you need when you need it.
3. Competitive Interest Rates: Personal loan interest rates are typically lower than credit card interest rates, so you can save money on monthly payments.
4. Easy Repayment: Personal loans typically have flexible repayment terms, so you can choose a repayment plan that fits your budget.
What Are Personal Loan Drawbacks?
While personal loans offer many benefits, there are also some drawbacks to consider. Let us have a look at some of these drawbacks:
1. Early Repayment Penalties: Some lenders charge early repayment penalties if you pay off your loan early.
2. Debt Consolidation: If you use a personal loan to consolidate debt, you may end up paying more interest in the long run.
3. Late Fees: If you miss a payment, you may be charged a late fee.
How To Use A Personal Loan Wisely?
If you are considering taking out a personal loan, it is important to use it wisely. Here are a few tips for using a personal loan wisely:
1. Only Borrow What You Need: Do not borrow more money than you need.
2. Make Sure You Can Afford The Monthly Payments: Before you take out a personal loan, make sure you can afford the monthly payments.
3. Only Use The Loan For A Good Reason: Do not use the loan for frivolous expenses.
4. Pay Off The Loan As Quickly As Possible: The longer you take to repay the loan, the more interest you will pay.
Types Of Personal Loans
Secured vs Unsecured Personal Loans - These are the two kinds of personal loans.
1. Secured Personal Loans: This type of personal loan requires you to put up collateral, such as a car or a house, as security for the loan. If you default on the loan, the lender can take possession of your collateral.
2. Unsecured Personal Loans: This type of personal loan does not require you to put up any collateral. However, this loan is riskier for the lender, so interest rates on unsecured personal loans are typically higher than interest rates on secured personal loans.
How To Choose The Best Personal Loan In India?
When choosing the best personal loan in India, it's important to compare different lenders and loan terms. Some factors to consider include:
1. Interest Rate: The interest rate is the most important factor to consider when choosing the best personal loan in India. Make sure you compare the interest rates offered by different lenders before you choose a loan.
2. Loan Amount: The loan amount you need will depend on the purpose of the loan. Make sure you choose a loan with a loan amount that is large enough to cover your expenses.
3. Term Of The Loan: The term of the loan is the duration of time that you have to pay back the loan amount. Make sure you choose a loan term that you can afford.
4. Fees: Some lenders charge fees for personal loans. Make sure you compare the fees charged by different lenders before you choose a loan.
How To Get The Best Personal Loan In India Online?
Here are some additional tips for getting the best personal loan in India online:
1. Make Sure You Have A Good Credit Score: A good credit score will help you qualify for a lower interest rate and better terms on your loan.
2. Get Pre-approved For A Loan: This will give you an idea of how much you can borrow and what your interest rate will be.
3. Compare Different Lenders And Loan Terms: Don't just take the first loan that you're offered. Shop around and compare different lenders and loan terms to find the best deal for you.
4. Read The Fine Print: Before you sign any paperwork, make sure you read the fine print and understand all of the terms of the loan.
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Key Takeaways
- A personal loan is an unsecured loan.
- Many different lenders are offering personal loans in India, so it is important to compare rates and terms before choosing one.
- Interest rates on personal loans can vary depending on the lender, your credit score, and the loan amount.
- Personal loans typically have fixed monthly payments, so it is important to make sure you can afford the payments.
- There are some fees associated with personal loans, so be sure to factor those into your decision.
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