Personal Loan Interest Rate: What You Really Pay in India

When you take out a personal loan interest rate, the percentage a lender charges you to borrow money, usually expressed as an annual rate. Also known as APR, it’s the real cost of your loan—not just the monthly payment. In India, these rates can swing from 10% to over 24%, and the difference between 12% and 20% can cost you tens of thousands over the life of the loan.

Your credit score, a three-digit number banks use to judge how risky you are as a borrower. Also known as CIBIL score, it’s the biggest factor in what rate you get. A score above 750 often gets you the lowest rates. But if your score is below 650, you might pay double—or get rejected. Lenders also look at your income, existing debt, and job stability. A high salary doesn’t guarantee a low rate if you’re already juggling five loans. And don’t assume a bank will give you the same rate as your friend. Every application is scored individually.

The loan term, how long you have to pay back the loan, usually from 1 to 5 years. Also known as EMI duration, it changes your monthly payment and total cost. A longer term means smaller monthly payments, but you end up paying more in interest. A shorter term means higher payments now, but you save big later. Most people pick 3 years because it balances affordability and cost—but that’s not always the smartest move. If you can afford higher payments, cutting your term from 5 to 3 years could slash your total interest by 40%.

Some lenders hide fees in the fine print. Processing charges, prepayment penalties, and insurance add-ons can bump up your real cost. Always ask for the total cost of credit, not just the interest rate. And remember: a low rate from a new fintech app doesn’t mean it’s safe. Check if they report to CIBIL. If they don’t, your on-time payments won’t help your credit score—even if you pay perfectly.

What you’ll find below are real breakdowns of how personal loan interest rates work in India. You’ll see how people with different incomes and credit scores got their rates, what hidden fees to watch for, and how to negotiate better terms. There’s no fluff—just what actually matters when you’re signing paperwork.