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Interest Rates for Personal Loans
- Easy & flexible repayment options
- Easy application process with quick sanctions
- Online EMI calculator for quick calculations
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What is Personal Loan Interest Rates?
Factors Affecting Personal Loan Interest Rates
Credit Score
A high credit score signals reliability to lenders and can help you get lower personal loan interest rates.
Income and Employment Stability
Stable income and employment history make you eligible for personal loans with low interest rates, as lenders perceive lower risk.
Loan Amount and Tenure
Larger loans or longer repayment tenures may attract slightly higher personal loan rates due to increased risk.
Existing Debt Obligations
High existing debt can lead to higher interest, as lenders see more risk in lending to heavily indebted borrowers.
Lender Policies
Different banks and NBFCs have varying interest rate structures, so comparing offers helps identify the personal loan minimum interest rate available to you.
How Is Personal Loan Interest Rate Calculated?
Reducing Balance Method
Interest is calculated on the outstanding principal each month. This method is common for most personal loans and helps reduce total interest paid over time.
Flat Rate Method
Interest is calculated on the original principal throughout the loan tenure. While simpler, it often results in higher total interest compared to reducing balance loans.
Effective Rate
The effective interest rate considers all fees and charges along with the principal, providing a realistic picture of the total borrowing cost.
EMI Formula
EMI = [P × r × (1+r)^n] ÷ [(1+r)^n – 1] Where P = Loan amount, r = monthly interest rate, n = number of months. This formula applies when calculating EMIs based on personal loan rates.
Personal Loan Interest Rates for 2024
Loans up to 12 months
| Interest is calculated on the Short Term Reference Rate (STRR). |
| STRR w.e.f. from March 1, 2026 is 19.45% p.a. |
For Self Employed Non Professional
| Interest is calculated on the Long Term Reference Rate (LTRR). |
| LTRR w.e.f. from March 1, 2026 is 20.45% p.a. |
Fees and Charges for Personal Loan
| Charge Type | Amount |
|---|---|
| Cheque Return charges | ₹500 + GST per instance |
| Default Penal charges | 3% of the pending amount per month |
| Charges for cancellation of Loan | 4% of loan amount disbursed + applicable taxes |
| CIBIL report retrieval fees | ₹100 + GST per instance |
| Charge for Exchanging PDCs / ECS | ₹750 + GST per instance |
| Loan reschedule charges | ₹5000 + GST per instance |
| Stamp Duty | As per Actual if applicable |
| Insurance Premium | As per Actual, if applicable |
| Pre-closure Quote | ₹1000 + GST per instance |
| Any other charges | As per Actual, if applicable |
| Part - Pre-Payment Charges | Charges:
A) Nil Charges - If Part prepayment is equal to 20% of the total disbursed amount in a year B) 3% + GST on Remaining Loan amount - If part payment is greater than 20% of the total disbursed Conditions: A) No pre-payment is allowed in the first 6 months from the date of disbursement B) Part Pre-Payment amount should be equal to OR greater than a total of 3 EMIs. C) Part-prepayment is allowed only once in the first year of loan tenure. |
| Foreclosure Charges |
4% of the Principal outstanding amount + GST
Condition: Foreclosure is allowed only after 12 months from the date of loan disbursal. |
How to Reduce Personal Loan Interest Rates
Good credit score
Improve your credit score. A high score shows that you are creditworthy and reduces default risk. As such, lenders tend to offer borrowers with high scores lower interest rates.
Negotiation
You can negotiate Personal Loan interest rates with the lender. You can get a lower interest rate if you have a high credit score and favourable eligibility parameters.
Shorter tenure
Choosing a shorter repayment tenure does not alter the interest rates, but it reduces your overall interest outgo on the loan. As the interest component reduces, you can save on repayments.
ABC Of Calculators
Your estimated EMI amount
₹ 0Total Interest
₹ 0Total Payout
₹ 0You are eligible for a loan of
₹ 0*EMI @ 9% Interest Rate
₹ 0*
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ABC Of Personal Loan