Personal loans continue to carry relatively high interest rates across Indian banks, even as the Reserve Bank of India (RBI) lowered the repo rate by 25 basis points on April 9, 2025. While the repo rate cut is expected to reduce the cost of borrowing for banks, its immediate impact is more prominent on floating-rate products such as home loans. Personal loans, which generally come with fixed interest rates, are less sensitive to short-term changes in the repo rate.

For borrowers planning to take a personal loan, it remains crucial to compare interest rates and processing fees across financial institutions, both public and private, before applying. The rates offered can vary significantly based on factors such as credit score, income level, loan amount, and tenure.

Comparison Of Personal Loan Interest Rates Across Banks

Among private sector lenders, HDFC Bank offers personal loans at annual interest rates ranging between 10.90 per cent and 24 per cent, depending on the applicant's credit profile. The bank also levies a flat processing fee of Rs 6,500 plus applicable GST.

ICICI Bank provides personal loans with interest rates starting at 10.85 per cent and going up to 16.65 per cent, with a processing charge of 2 per cent of the loan amount plus taxes.

Kotak Mahindra Bank offers rates between 10.99 per cent and 16.99 per cent, and may charge up to 5 per cent of the sanctioned loan amount as a processing fee.

In the public sector, State Bank of India (SBI), India’s largest lender, offers personal loans with interest rates ranging from 10.30 per cent to 15.30 per cent annually.

Union Bank of India charges rates between 11.25 per cent and 14.95 per cent, while Federal Bank, a private sector player, offers loans at 11.49 per cent to 14.49 per cent.

Borrowers Advised to Compare Before Choosing

Given the wide variation in both interest rates and associated fees, borrowers are advised to thoroughly review terms and conditions across banks. While fixed-rate personal loans offer predictable EMIs, they may not immediately benefit from monetary policy easing.