Introduction
When you need funds for an unexpected expense, a planned purchase, or an important financial requirement, a personal loan can be a convenient option. However, interest rates can vary significantly across lenders and loan applications, potentially increasing the overall cost. Choosing a loan with a lower interest rate may help reduce your repayment burden and make it easier to manage your finances. In this blog, we explore some of the popular low-interest loan apps in India, along with their benefits and potential risks, and share important factors to consider when choosing the right option for your financial needs.
What Actually Counts as a 'Low' Interest Rate in India?
A personal loan with an interest rate starting from 9.99% p.a. can fall into the lower end of the rates available in the market. However, the interest rate is only one part of the borrowing cost. Processing fees, GST, foreclosure charges and late-payment penalties can increase the overall cost of the loan. It is also important to check whether the advertised rate is an interest rate or APR, as APR can include additional borrowing costs. Before applying, compare the rate, fees, repayment period and total amount payable rather than choosing a loan based on the headline rate alone.
Low Interest Loan Apps: Comparison
Interest rates can vary across loan apps based on the lender, loan amount, tenure, and borrower profile. The table below compares some popular loan apps based on these factors.
| Loan App/Platform | Interest Rate | Loan Amount | Tenure | Processing Fee |
|---|
| NoBroker InstaCash | Starting from 12.99% p.a.* | Rs. 5,000 to Rs. 10,00,000 | 3 months to 5 years | Starting from 2%* + GST |
| Buddy Loan | Starting from 9.99% p.a.* | Rs. 10,000 – Rs. 35 Lakh | 6 months to 5 years | Starting from 0.5%* of loan amount |
| KreditBee | Starting from 12% p.a.* | Rs. 6,000 to Rs. 10 lakh | 6 to 60 months | Starting from 4.7%* + GST |
| Stashfin | Starting from 0%* after 30 days; it may vary | Starting from ₹10,000 to ₹5 lakh | 3 to 48 months | Platform fee: 2.85%* + GST; Transaction fee: 3%* + GST |
| Fibe (EarlySalary) | Starting from 18% p.a.* | Up to Rs. 10 lakh | 3 to 36 months | Starting from 2%* + GST |
| CASHe | Starting from 20% p.a.* | Rs. 15,000 to Rs. 2 lakh | 3 to 18 months | Starting from 2.5%* + GST |
| LazyPay | Starting from 15% p.a.* | From Rs. 3000 to Rs. 5 Lakh | 3-24 months | Starting from 2%* |
| Piramal Finance | Starting from 12.14% p.a.* | Rs. 50,000 to Rs. 25 lakh | 9 to 60 months | Up to 5%* + applicable taxes |
| Moneyview | Starting from 14% p.a.* | From Rs. 5000 to to Rs. 10 Lakhs | Up to 60 months | Starting from 2%* |
| Olyv | Starting from 1.5% p.m* (approx. 18% p.a.*) | Rs. 500 to Rs. 5 Lakh | 2 - 24 Months | Starting from 2%* |
MobiKwik | Starting from 17.99%* | Up to Rs. 15 Lakh | 3 - 72 months | Starting from 2%* + GST |
| PaySense | Starting from 14% p.a.* | Rs. 5,000 to Rs. 5 lakh | 3 - 60months | Up to 2.5%* + GST |
Note: Interest rates, loan amounts, fees, tenure and eligibility criteria are subject to change and may vary based on the lender, lending partner and borrower profile. The rates mentioned are indicative and should not be considered guaranteed offers. Always check the lender’s official terms and applicable charges before applying.
Low-Interest Loan Apps Overview
Low-interest loan apps can offer a convenient way to access funds digitally. Here is an overview of some loan apps, their indicative rates, and key features to help you understand what each option offers.
NoBroker InstaCash
- It offers a digital credit solution for eligible borrowers seeking funds for personal or emergency expenses.
- Interest rates start from 12.99% p.a. for eligible borrowers.
- You would need a CIBIL score above 700 or an Experian score above 750.
- The process includes profile completion, KYC verification and e-mandate setup.
Buddy Loan
- Buddy Loan is a digital loan platform that connects you with multiple lending partners that are RBI-authorised.
- You will have access to multiple personal loan options based on your eligibility.
- A borrower who meets the preferred lender’s criteria may receive the 9.99% p.a. starting rate.
- The loan will be sanctioned within 3 minutes to 48 hours, allowing immediate access to the funds.
- The current eligibility information lists CIBIL 750+ as the benchmark for personal loans, while its app listing says some lending partners may consider applicants with CIBIL 650+, offering a lower loan amount.
KreditBee
- KrediBee is one of the leading lenders providing personal loan options for various financial needs, including emergencies, travel and other expenses.
- It also offers products such as business loans, two-wheeler loans, loans against mutual funds and loans against property.
- You should be 21+ years old and have a minimum income of Rs. 10,000.
- Personal loan interest rates currently range from 12% to 27.5% p.a.*
- Part-prepayment and foreclosure charges are up to 5% of the principal amount prepaid or outstanding, plus GST may be applied.
- The first day of EMI bounce charges will be 4% of the overdue principal or Rs. 500, whichever is lower, and the charges will be 36% per annum on overdue principal for delays of 2 to 180 days.
Stashfin
- You can benefit from 0% interest for up to 30 days and zero foreclosure charges.
- You should have a credit score of 730 or above, but it may vary depending on other eligibility.
- The application process generally involves digital registration and verification with a PAN card, Aadhaar card, and bank documents.
- Fibe provides personal credit solutions for planned and emergency financial requirements.
- Fibe's current personal loan rates start from 18% p.a.
- Fibe also uses alternate scoring beyond CIBIL for loan approvals and also accepts applications from individuals who are new to credit.
- The loan can be foreclosed without any charges, in accordance with applicable terms and conditions.
- A charge of Rs. 500 or 3% of the overdue EMI amount, whichever is higher, may apply for each delay in monthly EMI payment.
CASHe
- CASHe is a digital lending platform offering personal and short-term credit solutions.
- It offers an interest rate starting at 1.667% per month, subject to applicable eligibility and loan terms.
- A delayed interest charge of 3% per month (36.50% per annum) can be charged for overdue amounts after the payment due date.
- They may offer eligible users access to a pre-approved credit line, allowing them to borrow funds based on their approved limit and applicable terms.
LazyPay
- LazyPay provides eligible users with digital credit options for purchases and other financial requirements.
- They offer buy-now pay-later credits where you can complete your purchase quickly with a simplified checkout process.
- You can pay for your purchase up to 15 days later, subject to the applicable terms and eligibility.
Piramal Finance
- Piramal Finance is a financial services provider offering personal finance and other credit options.
- Personal loan rates currently start from 12.14% p.a. in accordance with eligibility.
- For pre-closure and part-payment, a fee of 3% of the principal amount plus applicable taxes may be applied.
- A fee of Rs. 750 may be charged if the loan repayment instrument is dishonoured.
- If you are cancelling after loan disbursal or cheque handover, you may be charged Rs. 3,000, along with due interest and applicable taxes.
Moneyview
- Moneyview is a digital financial platform that offers access to personal loan options.
- Eligible borrowers may receive the 14% p.a. starting rate.
- An interest charge of 2% per annum may be applicable on overdue EMI amounts.
- Part payments are not allowed, but you may foreclose the loan after a minimum of 3 EMIs have been paid.
- For tenures of 7–18 months, foreclosure is allowed after 6 EMI payments, while for tenures exceeding 18 months, it is allowed after 12 EMI payments.
- If your cheque bounces, a charge of Rs. 500 may be levied for each cheque bounce.
Olyv
- Olyv is a digital lending platform offering personal credit solutions to eligible borrowers.
- Foreclosure and prepayment charges can be up to 4% + GST of the principal or outstanding amount
- Penalty charges can be up to 36% per annum if you miss an EMI.
- A notable feature of Olyv is its focus on providing smaller-ticket credit options, which can be useful for borrowers seeking relatively low loan amounts.
MobiKwik
- MobiKwik is a digital financial platform that provides access to personal loans through its lending partners.
- The loan can be cancelled within 3 days of withdrawal by repaying the principal amount, without any cancellation fee.
- After 3 days, the loan can be foreclosed by paying a 3% fee on the outstanding principal.
PaySense
- PaySense is a digital lending platform that provides access to personal loan options through its lending partners.
- Eligible borrowers may receive the 14% p.a. starting interest rate and can reach up to 36% p.a., while the disclosed APR can reach 40% after applicable costs.
- A flat penalty of Rs. 500 plus applicable GST may be charged for delayed EMI payments.
- Foreclosure is available after the first 3 EMIs and will be subject to a 4% charge on the outstanding amount.
Reducing Balance vs. Flat Interest Rate — Why It Matters
The interest rate can result in different borrowing costs depending on how it is calculated. With a reducing balance rate, interest is charged on the outstanding loan amount, so the interest component decreases as you repay the principal. With a flat interest rate, interest is calculated on the original loan amount throughout the tenure, even though you are gradually repaying the principal. Here is a quick look to differentiate between both types of interest.
| Basis | Reducing Balance Rate | Flat Interest Rate |
|---|
| Interest calculation | On the outstanding principal | On the original loan amount |
| Interest component | Decreases with each repayment | Remains based on the initial principal |
| Overall cost | Generally lower for the same stated rate | Generally higher for the same stated rate |
| Common use | Personal and other retail loans | Some short-term and consumer financing products |
Here is an example to understand it better:
Suppose you borrow ₹1,00,000 at 12% p.a. for one year. Under a flat rate, the interest would be ₹12,000 for the year. Under a reducing-balance method, interest is calculated on the outstanding principal as you repay it, so the total interest would be lower.
This is why you should not compare loan offers using the interest rate alone. Make sure to check whether the rate is flat or reducing, along with the APR, processing fee and other charges, before deciding which loan costs less.
Who Can Get a Low-Interest Personal Loan?
The interest rate offered on a personal loan depends on several factors related to your financial profile and lenders’ policies. Here are a few criteria that may help you secure the loan:
- Good Credit Score: A CIBIL score of 700–750+ can improve your chances of getting rates around 9.99% p.a. Higher scores may make you eligible for more competitive offers.
- Stable Income: If you have a steady and sufficient income ranging from Rs. 15,000 to Rs. 25,000 or more, this may assure lenders of your ability to repay the loan.
- Employment Status: If you are salaried with stable employment or self-employed with a consistent income, this may increase your chances of repaying the loan.
- Good Repayment History: Your history of repaying loans and credit card debt on time can improve your chances.
- Financial Commitments: Lower existing debt and financial liabilities can indicate repayment ability, which may positively impact the loan application.
- Eligibility Criteria: Make sure factors such as age, income, employment type, credit score, and residency requirements match your eligibility.
Documents Required for Loan Apps
The documents required when applying for a loan through an app may vary by lender and loan amount. Here are some commonly requested documents and details:
- PAN Card: Required for identity verification and financial checks.
- Aadhaar Card: Used to verify your identity.
- Address Proof: Required to confirm your current residential address.
- Employment Details: Information about your employer, occupation, or employment status may be required depending on the lender.
- Income Proof: Salary slips, bank statements, or other income documents required to confirm your financial status.
- Bank Account Details: Required for loan disbursal and EMI repayment.
Benefits and Risks of Low Interest Loan Apps
| Benefits | Potential Risks |
|---|
| Lower interest rates can reduce the overall cost of the loan. | Check for hidden charges such as processing fees, late payment charges, and other applicable fees, which can increase the total cost. |
| You can apply for a loan online without visiting a physical branch. | Review the app's permissions and privacy policy before sharing personal information. |
| Many apps allow you to check your eligibility within a short time. | You should verify whether the app works with a regulated bank or NBFC. |
| Most loan applications require a simplified digital documentation process. | Applying with several lenders within a short period can result in multiple credit enquiries. |
| You can choose from different loan amounts and repayment tenures. | Some of the loans may have shorter tenures, resulting in higher monthly repayments. |
How does NoBroker Instacash work?
Looking for a personal loan through a digital platform? NoBroker InstaCash lets eligible borrowers apply for amounts between ₹5,000 and ₹10 lakh. Depending on your profile and the applicable lending partner, interest rates can range from 12.99% to 29.99% p.a. Loans come with repayment periods of up to 5 years, while the processing fee may range from 2% to 4% + GST. The final rate, loan amount and tenure offered are determined after assessing your eligibility.
How to Apply
- Start your application through the NoBroker app or InstaCash platform.
- Enter the requested personal, KYC and employment details.
- Complete the eligibility check and view the loan terms offered to you.
- Submit the required documents and complete the e-sign process.
- After successful verification and approval, the sanctioned amount is transferred to your registered bank account.
NoBroker facilitates NoBroker InstaCash - the loan itself is provided by our lending partners, not NoBroker directly. Read our privacy policy →
Frequently Asked Questions
Q. What are low interest loan apps? Ans: Low interest loan apps are digital lending platforms that help eligible borrowers access personal loans at comparatively lower interest rates.
Q. Are low interest loan apps safe to use? Ans: Yes. But you need to choose apps that clearly disclose the lender, interest rate, fees, terms and repayment conditions and avoid apps that request unnecessary permissions or personal information.
Q. What documents are required to apply through a loan app? Ans: Depending on the lender or banker, you may need documents such as PAN, Aadhaar or other identity proof, address proof, income details and bank statements.
Q. Do low interest loan apps charge processing fees? Ans: Some lenders may charge processing fees and other applicable charges; make sure to check the loan agreement and fee details before accepting an offer.
Q. How quickly can I get a loan through a low interest loan app? Ans: The processing and disbursal time varies depending on the lender, verification process and your eligibility.
Q. What is considered a low interest rate for a personal loan in India? Ans: A personal loan rate of around 9.99% p.a. is generally considered lower in India. The rate offered depends on factors such as your credit score, income, employment profile, loan amount and tenure.
Q. Why do some “low-interest” loan apps charge high rates? Ans: Based on the applicant's credit profile, income or repayment history, they may receive higher interest rates. Additional costs such as processing fees, GST, late-payment charges and foreclosure fees can also increase the overall cost of borrowing.
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Manu is an ardent admirer of literature who weaves the magic of words to spark transformations. Combining her love for literature with an intrigue for actionable wisdom, she embarks on an extraordinary journey into the realm of real estate. Through her captivating writing, she aspires to empower and inspire, leaving an indelible mark of hope and purpose in the lives of readers.
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