Cheapest Interest Rate on Personal Loans: Public Sector Banks Reign Supreme

Strategic Insights -

Public sector banks continue to offer lower interest rates on loans across categories, making them the most attractive option for borrowers. The cheapest personal loan from a state-owned lender is offered by Union Bank of India at an interest rate of 8.9 percent per annum, followed closely by Punjab National Bank at 8.95 percent. In contrast, private sector banks like Federal Bank and HDFC Bank top the list as the costliest, offering interest rates of 10.49 percent and 10.5 percent respectively. This disparity highlights the significant difference between public and private sector bank interest rates, with eight out of ten banks on the list being government banks.

Key Takeaways:

  • The cheapest personal loan is offered by Union Bank of India at an interest rate of 8.9 percent per annum.
  • Punjab National Bank offers the second-cheapest loan at 8.95 percent, followed closely by other public sector banks.
  • Private sector banks like Federal Bank and HDFC Bank are the costliest, offering interest rates of 10.49 percent and 10.5 percent respectively.
  • Eight out of ten banks on the list are government banks, highlighting the dominance of public sector banks in offering lower interest rates.
  • The interest rates mentioned in the table are indicative and may vary depending on the banks' terms and conditions.
  • Borrowers with a low credit score may be charged a higher rate due to being perceived as a risky borrower.
  • The list is based on data compiled by Bankbazaar.com from the websites of listed (BSE) public and private banks as on February 4, 2021.

Statistics:

  • The cheapest interest rate difference between public and private sector banks is 159 basis points.
  • Union Bank of India offers the cheapest personal loan at 8.9 percent per annum.
  • Punjab National Bank offers the second cheapest loan at 8.95 percent.
  • The costliest private sector banks are Federal Bank and HDFC Bank, offering interest rates of 10.49 percent and 10.5 percent respectively.
  • Eight out of ten banks on the list are government banks.

Sources:

  • Bankbazaar.com
  • Union Bank of India
  • Punjab National Bank
  • Federal Bank
  • HDFC Bank
  • Contify.com