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Personal Loan Interest Rates & Charges

What is the Interest Rate on a Personal Loan?

 The interest rate on a personal loan determines the amount you need to repay as Equated Monthly Instalments (EMIs) against your loan. Personal loan interest rates are subject to fluctuations. Besides, the rates can vary for each borrower depending on factors like your CIBIL score, income, repayment capability, the amount being borrowed, loan tenure, employer’s reputation, employment nature, financial history, debt-to-income ratio, and other personal loan eligibility criteria.


The more attractive interest rates you receive, the smaller EMI you are required to pay. With Tata Capital, you can get competitive and affordable interest on personal loans. Our personal loan rates are one of the lowest in the industry, starting at just 10.99%.  

What are the current Personal Loan interest rate?

Personal loan interest rates can typically vary anywhere between 10.50% and 24% based on how you fulfil the personal loan eligibility requirements of the financial institution. However, due to the pandemic-induced economic slowdown, the current personal loan interest rates are low. Let us understand why.

In response to the countrywide financial crisis, the Reserve Bank of India (RBI) slashed the repo rate by 40 basis points, keeping it at 4%. Here, the repo rate represents the rate at which the central bank lends money to banks and NBFCs. Whenever RBI cuts down the repo rate, the costs at which financial institutions borrow reduce, translating into lower personal loan rates for borrowers.

Why are Interest Rates on Personal Loans so Important?

 Personal loan interest rates are a significant factor to be taken into consideration because it determines the total cost of the loan. Let’s see how.

Every loan EMI comprises two components- the principal and the interest. If your total interest amount is high, it will directly increase your total sum payable.

That’s because the personal loan EMI you need to pay for repaying your principal amount over the decided loan tenure is governed by the latest personal loan rates applicable. Here, a lower personal loan ROI will reduce your overall interest payout, thereby requiring you to pay smaller EMIs to the lender over the loan tenure.

How is Your Personal Loan Interest Rate Calculated?

 The personal loan interest is calculated using - flat rate and reducing balance method.

In the flat rate method, the interest paid remains fixed. The total interest payable is calculated on the loan amount borrowed throughout the loan tenure. Hence, the personal loan rates stay constant and don’t lessen even when the principal amount reduces as you pay your monthly instalments.

Contrarily, in the reducing balance method, the interest rate is calculated on the outstanding balance amount, which decreases every time you pay an EMI.

The mathematical formulae for interest on personal loan interest calculation are as follows:

Flat Rate

EMI = (Principal + total interest payable) / loan tenure in months)

Here, Total Interest Payable = Principal x Personal Loan Rate x Loan Tenure/100

Reducing Balance Method

EMI= [P x R x (1+R)^N]/[(1+R)^ (N-1)]

Where P = Principal Amount

N = Loan Tenure in months

R = Personal loan ROI or rate of Interest

What are the Factors Affecting Personal Loan Interest Rates?

 The following factors can impact your latest personal loan interest rates.

  • CIBIL score

Your CIBIL score that reflects your repayment capability plays a decisive role in securing low interest personal loans. With an excellent CIBIL rating, you can get more attractive interest rates.

  • Repayment history

Besides your CIBIL score, the lender also reviews your past credit record to determine your current personal loan interest rates. A clean credit history with no EMI defaults and disciplined payments is preferred.

  • Income

Your income significantly determines your personal loan rates. If you belong to the high-income bracket, the lender perceives you as more likely to timely repay the loan and extends more competitive interest rates.

  • Employer’s reputation

The latest personal loan interest rates that the lender offers you also depends on your employer’s reputation. If you work with a credible organisation, the lender considers you less likely to default on EMIs and offers more attractive rates.

  • Debt-to-income ratio

If you are servicing multiple loans and credit cards, and your debt burden eats up a significant portion of your monthly income, the lender can consider you a high-risk borrower. It can impact the personal loan interest rates you will qualify for.

What are the types of Personal Loan Interest Rates?

Fixed interest rate

In fixed rate loans, lenders charge you a constant personal loan rate throughout the tenure. Here, your total interest payable and EMIs remain fixed.

Floating interest rate

Floating or variable personal loan interest rates are susceptible to fluctuating economic conditions. Here, you can get low interest personal loans initially, but the lender can revise the rates as per the repo rate. Hence, your interest payable can vary throughout the tenure.

Fixed and floating rates both offer a different set of advantages. While fixed rates keep your EMIs constant, you may pay significantly lower instalments with floating-rate loans. But, if current personal loan interest rates increase suddenly, you run the risk of paying bigger EMIs in future.

Tips to Avail Personal Loan at Affordable Interest Rates

Here are a few different ways to get lower personal loan interest rates when applying for a personal loan:

  • Build and maintain a high credit score, preferably 750 or above. This will boost your creditworthiness and increase you approval rate.

  • Check for pre-approved offers from NBFCs, Small Finance Banks (SFBs), and Micro Finance Institutions (MFIs)

  • Enquire with NBFCs with whom you already have an existing loan account

  • Track personal loan rate concessions offered by lenders during festive seasons

  • Research and compare personal loan offers from various lenders

Salaried & Self Employed Interest Rate Table

Personal Loan

Salaried Any Amount 10.99%* onwards
Self Employed Any Amount 10.99%* onwards

 *Final ROI may vary based on credit checks and other parameters

Getting a low interest personal loan is preferable for reducing your interest outgo and overall costs. Availability of loans can depend on numerous factors; make sure to consider them before applying. You can also use a personal loan EMI calculator to understand to calculate your principal EMIs and interest payable and plan your repayment.  

Personal Loan Charges

Processing Fee

The processing fee is a non-refundable fee levied by lenders while processing your personal loan application. You are charged this one-time fee even if the loan does not get sanctioned. At Tata Capital, you are charged up to 2.75% of the loan amount + GST.

Penal Interest/Additional Interest

Penal interest is the rate of interest lenders charge on a delayed EMI payment. You are then required to pay the outstanding instalment inclusive of the additional interest on personal loan. The penal interest at Tata Capital is levied at 3% on the overdue amount monthly along with the GST charges.

The following miscellaneous charges are also involved under personal loans -

Miscellaneous Charges

Bounce Charges

These are those charges that are levied in case of an EMI bounce. In other words, these charges are levied when you miss a personal loan EMI payment due to inadequate funds in your bank account. At Tata Capital, you’ll be required to pay Rs. 600 for every cheque/Payment Instrument Dishonour along with the GST charges.

Mandate Rejection Service Charge

Mandate rejection service charge is the charge levied on the rejection of any of the services rendered by the lender. Tata Capital charges a nominal amount of Rs. 450 + GST.
These charges will be applicable on your EMI due date in case the account does not have an active mandate after the exhaustion of the given post-dated cheques. This charge would be applied every month until there is an Active Mandate linked to the account.

CCOD Annual Maintenance Charges

CCOD Annual maintenance charges are the charges levied on those who have chosen a flexible funding option such as Cash Credit or Overdraft. It is charged for the maintenance of the Overdraft.

At Tata Capital, 0.25% on Dropline Amount along with the GST or Rs. 1000, whichever is higher per year, will be deducted from the limit and shall be payable at the end of the 13th month.

Outstation Collection Charges

If the cheque you have issued for payment has been made to a non-local branch, lenders will levy an outstation collection charge for the collection of such cheques. Tata Capital charges Rs. 100 + GST per repayment tenure.  

Statement of Accounts

Lenders will charge a certain amount to issue your Statement of Accounts - a bank statement having a list of all transactions made from your bank account during a given period. At Tata Capital, an amount will be charged only for a hard copy, the soft copy being free of cost. For branch walk-in, you will be charged Rs. 250 + GST.  

Loan Cancellation Charges

If you wish to cancel your personal loan following the process of loan disbursement, the lender will charge a loan cancellation charge. Tata Capital levies 2% of the loan amount or Rs. 5,750, whichever is higher and the GST charges.

Instrument Swap Charges

If you wish to exchange or swap your personal loan liability or the cash flow with a different financial instrument, you can do so after paying instrument swap charges. At Tata Capital, you will be charged Rs. 550 + GST.

Duplicate Repayment Schedule

Your lender will share a repayment or amortisation schedule – a table that displays how your loan evolves over time. If, for some reason, you need a duplicate of this schedule, you can apply for a new one, available in both hard and soft copies. While the soft copy is free of charge, a certain fee will be charged for the hard copy.

 Tata Capital charges Rs. 550 and GST for a branch walk-in.

Duplicate NOC

 If you need to apply for a duplicate No Objection Certificate due to any reason, your lender will issue a new one in your name after you pay a specific fee. With Tata Capital, you will be required to pay Rs. 550 along with the GST charge.

Post-Dated Cheque Charges

If you make an EMI payment using a post-dated cheque – one in which the date mentioned is subsequent to the date in which the cheque was drawn, you will be charged a fee known as a post-dated cheque charge. Tata Capital levies Rs. 850 + GST for paying via a post-dated cheque.

Personal Loan Foreclosure & Pre-payment/Part-payment Charges

Part Payment Charges

No part payment is allowed during the first 12 months (Lock-in period).

Part Prepayment is allowed once per year and the minimum gap between two part prepayments to be six months. 

A maximum of 50% of the principal outstanding is allowed by way of part prepayment during a single year. 

A part prepayment charges of 2.5% + applicable taxes shall be applicable on amount over and above 25% of principal outstanding.


Foreclosure Charges

4.5% of the Principal outstanding at the time of foreclosure + GST 

Foreclosure charges for closing loan within 12 months will be 6.5% + GST

If foreclosed within 6 months post completing part pre-payment:

Foreclosure changes will be 4.5% of the Principal outstanding at the time of foreclosure + GST + Part pre-payment amount

Foreclosure Charges for Top-Up

2.50% on the principal outstanding at the time of foreclosure + GST

Foreclosure charges shall be levied only if new rate is lower than existing rate.

Any prepayment /foreclosure made during the Lock-in Period will attract prepayment/foreclosure charges of 4.5% + applicable taxes on the principal outstanding

Foreclosure Charges in CCOD Cases

4.5% on the Dropped down limit amount + GST 

Any prepayment /foreclosure made during the Lock-in Period will attract additional 2% over and above the prepayment/foreclosure charges mentioned in (a) above + applicable taxes on the Dropped down limit

Foreclosure Charges on Term Loan Facility

4.5% on the principal outstanding at the time of foreclosure  + GST 

In case the Borrower forecloses the Facility within 6 months after doing part prepayment, foreclosure charges of 4.5% + Applicable taxes will be levied on the principal outstanding plus part prepayment amount.

Any prepayment/foreclosure made during the Lock-in period will attract additional 2% over and above the prepayment/foreclosure charges mentioned in (a) above + applicable taxes on the principal outstanding at the time of foreclosure

Foreclosure Letter Charges

Soft Copy – Nil

Branch Walk-In – Rs. 199 + GST

Why Choose Tata Capital Personal Loan?

 At Tata Capital, we offer multi-purpose personal finance tailored to meet your unique desires and financial requirements. Get quick access to collateral-free funds at competitive personal loan rates, starting at just 10.99%. With us, you can plan your repayment as per your convenience and ability to repay. Opt for a loan amount, EMI plan, and tenure that suit you.

With years of experience under our belt, we understand your needs. We extend a hassle-free online application process, minimal paperwork requirements, and relaxed eligibility criteria to ensure a comfortable borrowing experience for you.


  • The fees/charges indicated above are subject to revision at Tata Capital’s discretion from time to time.
  • Customers who have taken a loan before 15th April 2019 need to refer to the loan agreement and schedule of charges for applicable rates.
  • For the definitions of the above charges, please refer to the Master Terms & Conditions sheet.
  • Soft copies of documents mentioned in the table above will be provided free of cost. For hard copies, please refer to the above table for the applicable fees & charges.

Personal Loan FAQs

We provide Personal Loans from a minimum of ₹ 75,000 to a maximum of ₹ 35,00,000/- depending on your eligibility.

You have the option to choose what works best for you while repaying the personal loan. You can go for the fixed amount of loan and interest or can pay higher/lower EMIs in the initial months, lower/higher EMIs at the later months depending on your income. Do check our EMI options page for more details.

Here’s why our Personal Loan is perfect for you:

  • Quick loan payment
  • No collateral or security needed
  • Minimal documentation
  • Flexible EMI plans and many repayment options

Processing fee is the one-time fee charged by lenders at the time of processing of personal loan applications. Tata Capital charges a processing fee which is equivalent to 2.5% of the principal loan amount plus GST.

Personal loan processing fee is a one-time fee, non-refundable regardless of whether or not an applicant’s loan is sanctioned. 

Tata Capital allows its customers to pre-pay their personal loan in part subject to the following conditions –

  • No part-prepayment is allowed within the first six months of loan disbursal

  • Part-payment of personal loan is allowed only once a financial year. There must be a gap of at least six months between two part pre-payments

  • A maximum of 50% of the principal outstanding is allowed by way of part prepayment during a single financial year

  • Part prepayment charges - 2.5% + applicable taxes shall be applicable on amount over and above 25% of principal outstanding

Foreclosure charges on a personal loan are charges levied on the partial or complete pre-payment of your personal loan. Such charges are levied on both regular and flexible funding (Cash Credit and Overdraft) options, even on loan top-ups.

Tata Capital levies foreclosure charges in the following ways –

  • Standard Foreclosure charges – 4.5% of the Principal outstanding at the time of foreclosure + GST

  • Foreclosure Charges for Top-Up – 2.5% on the Future Principal outstanding on existing loan + GST. These charges will only be levied if the new rate of interest is lower than the old one

  • Foreclosure charges in CCOD Cases – 4.5% on the Dropped down limit amount + GST

The following charges are involved in case of missed EMI payments for personal loan –

  • Bounce Charges of Rs. 600 per missed payment + GST – are levied in case of an EMI bounce. Meaning, if you miss an EMI payment because of insufficiency of funds in your bank account, bounce charges will be levied

  • Penal or Additional Interest of 3% overdue amount per month +GST – This is the rate of interest charged to your delayed EMI payment over and above your existing interest rate

  • Foreclosure Letter Charge of Rs. 199 + GST – If a foreclosure letter or notice is issued in your name, notifying you of a missed EMI payment, foreclosure letter charges will be levied. This charge will only be levied on a hard copy of the foreclosure notice. The soft copy is free of cost.