Are Personal Loan Interest Rates Fixed or Floating?


  • Confused which to choose - fixed rate or floating rate - on a personal loan?
  • Decide based on the cost you’re likely to bear in both, so read on and choose accordingly

Personal loan interest rates are offered on both fixed and floating rate basis. The interest rate will remain the same throughout the tenure on a fixed rate loan. Whereas, the interest rates will vary as per the market movement in a floating rate loan. Since these loans are given for not more than 5 years, you may not want much fluctuation in your repayment that a floating rate can bring. That’s why many borrowers prefer a fixed rate instead of a floating rate when it comes to personal loans. But some go with floating rate loans too. So, let’s check out the list of lenders offering personal loans on both fixed and floating rates.

Apply Personal Loan @ 10.25%* Rate

Lenders Offering Personal Loans at Fixed Rate

LendersInterest RateProcessing FeeMaximum LoanMaximum Repayment Period AllowedPrepayment Charges
HDFC Bank10.25% - 17.00%NIL-2.50% of the loan amountNo maximum limit, depends much on your repayment capabilityUpto 5 YearsNIL-4% of the principal outstanding
ICICI Bank10.50% onwardsINR 999-2.25% of the loan amountUpto INR 40 LakhUpto 5 YearsUpto 5% of the principal outstanding
Axis Bank10.25% - 21.00%1.50%-2% of the loan amountUpto INR 15 LakhUpto 5 YearsNIL
Bajaj Finserv14.00% - 16.00%Upto 3% of the loan amountUpto INR 25 LakhUpto 5 Years2% of the principal outstanding
Kotak Mahindra Bank10.25% Onwards0.99%-2.50% of the loan amountUpto INR 20 LakhUpto 5 Years5% of the principal outstanding
IndusInd Bank11.00% Onwards1%-3% of the loan amountUpto INR 15 LakhUpto 5 Years4% of the principal outstanding
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Lenders Offering Personal Loans on a Floating Rate Basis

LendersInterest RateProcessing FeeMaximum LoanMaximum Repayment Period AllowedPrepayment Charges
State Bank of India (SBI)9.60% - 13.60%NIL-1% of the loan amountUpto INR 20 LakhUpto 6 YearsNIL-3% of the principal outstanding
Bank of Baroda (BoB)10.00% - 15.60%2% of the loan amount

Minimum - INR 1,000

Maximum - INR 10,000
Upto INR 10 LakhUpto 5 YearsNIL
Punjab National Bank8.95% - 14.00%Upto 1.80% of the loan amountUpto INR 10 LakhUpto 5 YearsNIL
Bank of India10.35% - 12.35%2% of the loan amountUpto INR 10 LakhUpto 5 YearsNIL
Canara Bank11.25% - 13.30%0.50% of the loan amountUpto INR 3 LakhUpto 5 YearsNIL

Note – The processing fee and prepayment charges will also include 18% Goods and Services Tax (GST) for both fixed and floating rate personal loans.

So, Which is Better – Fixed or Floating Rate Loan?

Floating rate loans often come as a better option compared to their fixed rate counterparts when it comes to long term loans such as home loans. For a short term loan like a personal loan, the benefit may either be too small or won’t exist with a floating rate system, courtesy lesser repayment period. In case the market rates rise continuously for a fairly greater length of time i.e. 1-2 years, banks will be forced to up the personal loan rate in that proportion. This will increase the interest quantum, and even if that drops when the market rates ease, the eventual benefits would feel negligible!

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So, if you don’t want the thrill of fluctuation, better opt for a fixed rate personal loan. Plus, with the floating rate, the loan tenure can increase beyond your chosen time in case the interest rates rise continuously for 1 year or so. With rates going up, the principal will occupy a far lesser proportion of the EMI, which remains the same throughout. This will leave a lot of outstanding for you to clear out, increasing the lifetime of the loan by some months and your burden at the same time. However, if you do go with a floating rate loan and see rates going up continuously, increase your Equated Monthly Installment (EMI) amount in an agreement with the concerned lender. This will not only curtail the tenure but also the interest outgo. But ensure the new EMI is within your reach.

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Personal Loan Interest Rates May 2022
Fullerton India14.00% - 24.00%
HDFC Bank10.25% - 17.00%
ICICI Bank10.50% - 17.50%
IndusInd Bank11.00% - 23.00%
Kotak Bank10.75%
RBL17.50% - 26.00%
Standard Chartered Bank11.00% - 12.50%
Tata Capital10.49% - 14.25%
Home Loan Interest Rates May 2022
Axis Bank6.75% - 7.20%
Bank of Baroda6.75% - 8.25%
Citibank6.65% - 7.40%
HDFC7.00% - 8.10%
ICICI Bank7.10% - 7.95%
Indiabulls Housing Finance Limited8.65%
Kotak Bank6.55% - 7.10%
LIC Housing6.95% - 8.15%
Piramal Capital & Housing Finance10.50%
PNB Housing Finance6.99% - 9.65%
Reliance Home Finance8.75% - 14.00%
State Bank of India/SBI6.70% - 6.90%
Tata Capital6.90% - 8.75%