September has seen a wider range of personal loan rates offered by lenders across India, with the cheapest deals still largely determined by individual credit scores and financial profiles, highlighting ongoing disparities in borrowing costs.
September’s personal loan market is offering borrowers a wider spread of rates, but the cheapest deals still depend heavily on individual credit profiles. In one comparison published by ZeeBiz, the lowest advertised rate among the lenders surveyed was 8.75% a year, while several large banks, including SBI, HDFC Bank, Axis Bank and ICICI Bank, were listed from 9.99%. Other market round-ups published this month put the floor slightly higher, at 8.90%, underlining how the headline rate can shift depending on the source and the lender data used.
For a five-year loan of Rs 5 lakh, the monthly repayment at 8.75% comes to about Rs 10,319, rising to roughly Rs 10,621 at 9.99%, according to the ZeeBiz calculations. Bank of Maharashtra was shown with a starting rate of 8.75%, alongside processing fees of up to 1% capped at Rs 10,000. HSBC Bank’s rates started at 9.75%, while Axis Bank, HDFC Bank, ICICI Bank, IDFC FIRST Bank and Kotak Mahindra Bank were all listed at 9.99% or above, with fees ranging from 2% to 5% or fixed caps, depending on the lender.
SBI was quoted at a starting rate of 10%, with a processing fee of up to 1.5%, while Bank of Baroda’s range ran from 10.15% to 18%. IndusInd Bank was listed from 10.35%. The comparisons also showed that the cost of borrowing rises quickly when rates move only a fraction of a percentage point: on a Rs 1 lakh loan, the monthly repayment varied from about Rs 2,064 at the lowest rate to more than Rs 2,539 at the top end of Bank of Baroda’s range.
Lenders typically price personal loans according to the borrower’s credit score, income, employment history, existing debt and repayment record. A CIBIL score of 750 or more is often treated as a strong sign of credit quality, and can improve the chances of being offered a better rate, but the final offer still depends on the bank’s assessment. Borrowers are also being urged to look beyond the interest rate and check processing fees, prepayment charges and other costs before deciding.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
