Personal loans can be a smart way to reach your financial goals when used responsibly. However, they are not created equally. Your loan terms and the overall borrowing experience highly depend on the lender you work with. Therefore, choosing the right loan provider is crucial.
Need a personal loan and don't know where to start? Here's the list of the 10 best loan providers to turn to in India. Whether you need money fast, have a less-than-perfect credit score, or seek a reliable solution at a low rate, we have an option to offer.
10 Best Personal Loan Providers in India as of June 2024
- State Bank of India – Best for affordable interest rates and repayment flexibility.
- Axis Bank – Best for easy approval with no extensive paperwork.
- Mahindra Finance – Best for special loan terms for existing customers.
- MoneyView – Best for personal loans with almost instant approval.
- HDFC Bank – Best for affordable loan options with quick disbursement.
- Indian Overseas Bank – Best for borrowers with a stable source of income.
- Canara Bank – Best for personal loan options available completely online.
- Punjab National Bank – Best for covering emergency needs.
- Finance Buddha – Best for quick loan processing and free loan advice.
- Cholamandalam – Best for entirely digital and paperless personal loans.
1. State Bank of India – Best for Affordable Interest Rates and Repayment Flexibility
State Bank of India offers various personal loan options with some of the lowest interest rates on the market. SBI loans come with annual rates as low as 8% to 10.60%. Loan amounts can be up to Rs. 20 lakh, and the maximum repayment period is 7 years. Thanks to this, borrowers can get affordable financing for their major purchases and comfortably repay what they owe in fixed EMIs. Still, the bank applies certain minimum CIBIL score criteria. To qualify, you need to have a credit score of at least 650.
2. Axis Bank – Best for Easy Approval with No Extensive Paperwork
Personal loans offered by Axis Bank are known for their smooth application process, which involves no extensive paperwork. With their help, you can get up to Rs. 40 lakhs at a rate of 10.99% p.a. to 21% p.a. The repayment terms are very adaptable and can be up to 84 months. Borrowers also note their easy online approval process, which usually takes about 30 seconds. However, a score of at least 750 is typically required to get favorable loan terms.
3. Mahindra Finance – Best for Special Loan Terms for Existing Customers
Mahindra Finance is a top non-banking financial company in India. Its personal loans provide the flexibility to choose tenure from 6 to 18 months with minimal documentation and disbursement in a few days. The service typically offers small loans of up to Rs. 1.75 lakhs. However, its current customers can get up to Rs. 6 lakhs with zero documentation and choose a tenure from 12-36 months.
The company also allows its customers to get upfront information about personal loan benefits, interest rates, fees, and repayment terms before they commit. This transparency helps borrowers be fully informed about what they are going into.
4. MoneyView – Best for Personal Loans with Almost Instant Approval
MoneyView is a financial company that allows you to get approved for a loan in just 10 minutes with no paperwork. Its personal loans can be up to Rs. 10 lakhs and are repaid with affordable EMI within 3 to 60 months. The company provides 100% transparency, allowing borrowers to check interest rates, total repayment, and terms beforehand, leaving no room for doubt or surprises. The average interest rate offered is 16% p.a.
The service says an applicant must either have a minimum CIBIL score of 650 or a minimum Experian score of 650. However, borrowers with lower scores can still get a loan based on the company's credit assessment model that takes into account your solvency.
5. HDFC Bank – Best for Affordable Loan Options with Quick Disbursement
HDFC Bank is a trusted financial institution that provides quick personal loans you can access in as little as 2 business days. Interest rates typically range from 10.50% to 21% p.a, making these products quite affordable. The loan amount can be up to Rs. 15 lakh with a maximum repayment period of 5 years. More than that, the bank has exclusive loan offers for applicants who are women and government employees.
Pre-approved HDFC Bank customers in just a few seconds, while other borrowers may need to wait for about 4 working days. Please note that HDFC Bank typically approves borrowers with credit scores of at least 700.
6. Indian Overseas Bank – Best for Borrowers with a Stable Source of Income
Indian Overseas Bank offers loans of up to Rs. 15 lakhs with repayment terms of up to 84 months. Interest rates usually range from 10.85% p.a. to 13.00% p.a. However, its loans are only meant for PSU employees, the government, reputed private firms, and other companies.
7. Canara Bank – Best for Personal Loan Options Available Completely Online
At Canara Bank, borrowers can access multiple personal loan options. Some of them, such as Canara My Money, can be obtained completely online 24/7 with no physical visit to a branch. The bank also offers several specialized options, such as teacher's personal loans. They are perfect for those who are new to the teaching field and are out of work for some reason at the moment.
The interest rate is quite steep, usually about 12.40% p.a. The maximum loan amount is INR 3 lakh or gross salary for 10 months, whichever is less. Most loans offered by the bank come with no prepayment penalties, allowing you to save money on interest if you repay what you owe early.
8. Punjab National Bank – Best for Covering Emergency Needs
Punjab National Bank can help you cover your immediate expenses due to its quick disbursement times. It offers a personal loan at a reasonable interest rate of 10.4% p.a. to 14.25% p.a. It even has a doctor's delight personal loan scheme of up to INR 20 lakh and also serves retired borrowers and self-employed individuals who can demonstrate steady income. A maximum tenure is 84 months, allowing you to adjust your EMIs to your monthly budget.
The amount you can borrow ranges from Rs. 50,000 to Rs.10 lakh or 20 times the monthly net income, whichever is less. The minimum credit score required is 650. Borrowers can also apply with guarantors to increase their approval chances.
9. Finance Buddha – Best for Quick Loan Processing and Free Loan Advice
This service is becoming popular due to its useful loan advice and quick application processing. Finance Buddha is not just a lender. It's a comparison website where you can pre-qualify in minutes, get several offers, and choose the one that better meets your needs and expectations. The company offers loans at competitive interest rates ranging from 10.50% - 24.00 % p.a. The maximum repayment period is 5 years. Customers can get up to Rs. 5 lakhs, provided that their income is high enough for such an amount.
The service only works with trusted lending partners, ensuring you will get a fair offer from leading market players.
10. Cholamandalam – Best for Entirely Digital and Paperless Personal Loans
Cholamandalam offers unsecured loans for both businesses and individuals. The company is known for its paperless digital application process, instant processing, and same-day money deposits. However, the interest rates start at 15% p.a. onwards, and the maximum loan amount is only Rs. 3 lakh. The maximum repayment period is 3 years.
Cholamandalam accepts borrowers with a 675+ credit score. Its loans can suit those who need money quickly to cover emergency needs.
What Is a Personal Loan
A personal loan is a financing option designed for various individual needs. Borrowers can use them for various purposes, from home improvements to vacation financing. Personal loans have flexible repayment terms, allowing people to split the entire loan cost into several affordable monthly installments (EMIs). This makes them easier to manage and provides the ability to influence the size of your monthly payment by choosing a longer or shorter repayment term.
Personal loan interest rates in India usually range from from 9.99% to 24% p.a. but some options may come with APRs as high as 44%. The amount you can borrow is usually up to Rs. 50 lakhs but some lenders may offer higher sums. The repayment period usually spans from 1 to 5 or 7 years.
While personal loans are reliable borrowing options offering fair terms, they usually come with strict requirements. Most lenders set certain credit score and income minimums and may also require extensive paperwork to support your application details.
How to Choose the Right Personal Loan Lender?
Each lender may set its own terms and requirements, contributing to the diversity of personal loans. Therefore, it's recommended to do thorough research before settling on one loan provider. The guide below will help you make an informed decision:
- Estimate the lender's eligibility requirement. By doing this, you will save time and discard options with the criteria you don't meet.
- Pre-qualify from several companies. Many banks and NBFCs now allow borrowers to submit a preliminary application form to see the potential loan terms they can get. This process doesn't affect a borrower's credit score and gives a better understanding of what they are going into.
- Compare loan terms. Pay attention to interest rates, repayment terms, available loan amounts, and any other factors that can affect your borrowing experience.
- Review the lender's website. Pay attention to whether all the required information is outlined, review the lender's license, and make sure the service fully discloses its loan rates and terms.
- Read customer reviews. The experience of previous customers can help you avoid pitfalls and ensure the lender you deal with is trusted and legitimate.
- Ask about extra fees. Make sure you understand all the costs associated with your loan, as well as the conditions that cause them. Some extra charges may include processing fees, prepayment penalties, and late payment fees.
What to Pay Attention to When Comparing Loan Offers
Choosing the right lender is crucial for your smooth borrowing experience. However, there are a few more factors you need to look at before going into debt. Here are several considerations that contribute to your responsible borrowing practice:
- Check your credit score. Knowing your credit rating is crucial to have an idea of your current credit shape. This will also allow you to understand whether you meet a lender's minimum credit score requirement. You can check your credit by visiting the official CIBIL website;
- Determine how much money you need. Don't borrow more than your loan purpose requires. Although it may be tempting at some point, especially if a lender approves you for a higher amount, this unnecessary debt will lead to more interest paid over time;
- Make sure you can afford the loan. Evaluate your income and mandatory expenses, such as rent, utility bills, insurance, regular needs, and other debts you already have. Then, look at what remains after you make all these payments and make sure the amount is enough to cover the EMI of your potential loan;
- Review the terms carefully. Read your loan agreement carefully and ask questions if you don't understand something. Look at an interest rate, extra fees, your repayment schedule, and any other information that may affect your loan cost;
- Consider repaying your loan early. By doing this, you can save money on interest. Early repayment may come in the form of one extra payment within a year or involve paying more than minimum on a monthly basis. Just make sure your extra payments go toward your loan principal. Also, ask the lender about prepayment penalties in advance.
Bottom Line
The lender you deal with significantly affects your overall borrowing experience. Therefore, you can thoroughly assess all the options available and choose the one that better meets your needs. We've created a list of the top 10 lenders in India to make things easier for you. Still, you need to do your research, paying special attention to the lender's requirements, interest rates, repayment tenure, and loan amounts available. Also, make sure you borrow money for a good reason and can comfortably repay the loan. All these will make your journey smooth, helping you reach your financial goals.