12 Banks That Provide Low Interest Personal Loans of 5 lakh

Low Interest Personal Loans

Personal loans are convenient since you can use them to meet financial obligations, whether for work, personal, or business reasons, makes loans an essential necessity. They also help to cover a range of costs, like weddings, home improvements, and vacations. Currently, depending on a number of variables, personal loan rates can range between 8% and 36%. Rates frequently change from one lender to the other, and people with better credit score are usually able to get the best deals.

A traditional bank or an online lender provides online application options for low-interest personal loans. Within a few business days of submitting your application and receiving approval, you should have the money in your account.

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How to Get a Low Interest Personal Loan

Getting a low interest personal loan does not entirely depend on the lender. The following are some tips to get low interest personal loan as lenders analyze numerous factors related to the borrower to determine the best personal loan interest rates:

  • Keep your credit score above 750 out of 900 by making your payments on time.
  • Make sure you have a regular source of income that fits into your financial plan.
  • Look for personal loan products that have already been approved by banks and NBFCs.
  • Apply for a loan only from a reputable financial institution.

Factors that Affect Personal Loan Interest Rates

Before choosing a personal loan, you need to be aware of all of the factors that affect interest rates on loans. The influencing factors include:

Personal Earnings:

The primary factor that influences personal loan interest rates in India is income, either monthly or annually. A person with a higher monthly income is more likely to be approved for a loan by lenders because it indicates that they will have sufficient funds to repay the personal loan. The chances that the lender will provide you with the personal loan with the lowest interest rate increases with your income.

Credit Score:

Your ability to pay back a loan or other credit-related bills is represented by your credit score. You are offered the lowest interest rate loans based on your payment history in the past. Personal loan interest rates are significantly impacted by having a high credit score (greater than 750 out of 900). The chances of receiving the lowest personal loan interest rates increases with credit score.


Lenders analyze the borrowers based on how stable their source of income is. Lenders will see it as a positive sign if you are a salaried employee for a well-known company because you will have a steady career and consistent income.

A business with a high turnover rate or a steady source of income is preferable for self-employed individuals. The interest rate on the personal loan will be lower if you have cash on hand.

Factors affecting the loan:

Lenders charge interest based on things like the amount of the loan and how long it will last. Your chosen loan amount will have a high interest rate if it is large. However, a loan with a long term will have lower interest rates on personal loans. To get the best interest rate, you need to adjust these two things.

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Banks That Provide Low Interest Personal Loans

Let’s look at the top 12 Indian banks that provide low interest personal loans.

  • Personal loans up to Rs 5 lakh with a five-year repayment term from Bank of Maharashtra have the lowest interest rates at 8.9%. The EMI, or equated monthly payment, will amount to Rs 10,355.
  • Personal loans of Rs 5 lakh with a five-year term from the state-run Bank of India carry an interest rate of 9.75%. The EMI amounts to 10,562 rupees.
  • Personal loans from the private lender YES Bank carry an interest rate of 10%. A loan of Rs 5 lakh with a five-year repayment term has an EMI of Rs 10,624.
  • The Bank of Baroda, which is owned by the government, has a 10.2% interest rate. The EMI amounts to 10,673 rupees.
  • Allahabad Bank – Provides loan at 8.40 to 12.90 percent interest rate. The EMI of a five-year loan for a loan amount of Rs 1 lakh can range between Rs 2,047 to Rs 2,270 per month.
  • Punjab National Bank offers a low interest rate on personal loans – only 9.8 per cent. If you want Rs 5 lakh for five years, you need to pay only Rs 10,574 per month.
  • Personal loans from private lender Federal Bank carry an interest rate of 10.49 percent. IndusInd Bank and IDFC Bank both offer Rs 5 lakh loans with the same interest rates and a five-year repayment term. It will cost Rs 10,744 to pay the EMI.
  • Personal loans from Indian Bank carry an interest rate of 10.3%. In this instance, the EMI amounts to Rs 10,697.
  • Central Bank of India offers personal loans at 9.85% to 10%. Also, if the loan amount is Rs 100,000 and the tenure is 5 years, the EMI will be between Rs 2,177 and Rs 2,214.
  • State Bank of India charges 10.5% interest rate on personal loans up to Rs 5 lakh. The EMI amounts to Rs 10,759.

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The Money Club - Alternative To Low Interest Personal Loans

Money Club is India’s best AI-powered online chit fund platform that allows you to borrow money at the time of need at low interest rates and without any paperwork.

Chit funds allow you to borrow money as well as save your money. In a chit fund scheme, a group of people periodically contribute to the chit value and the amount collected is given to the person who is selected either through lucky draw or auction. You can invest small amounts every day, every 3 days, 15 days or monthly and get high returns on your investment.

Download The Money Club App and be ready with emergency funds for any financial emergency. Be smart; avoid the pitfalls of borrowing at high costs from money lenders and other financial channels. Borrow with lesser hassles.

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