SBI v/s HDFC: Increasing inflation and changing lifestyles have made borrowing a crucial part of people’s financial planning. People are increasingly taking out larger loans to fund expenses like education, medical treatment, home renovations, or vehicle purchases. Especially when the loan amount is up to Rs. 7 lakh, even a small difference in interest rates can mean thousands of rupees in the long run. In India, people often compare major banks like State Bank of India and HDFC Bank when seeking loans, as both are considered strong in their respective fields.
Before borrowing, it’s important to consider not only the interest rate but also aspects like processing time, additional fees, and customer convenience. This trend is expected to continue in 2026, with public sector banks focusing on lower interest rates, while private banks will focus on faster service and digital processing.
Status of Loan Interest Rates in 2026
Loan interest rates in India are not the same for all customers. This primarily depends on credit score, job stability, and monthly income. Public sector banks typically offer lower interest rates to customers with stable incomes. Private banks, on the other hand, offer attractive offers to customers with good credit scores.
For the State Bank of India, personal loan interest rates are expected to range from 10.05% to 15.05%. Car loan rates can start around 8.80%. Individuals with salary accounts with this bank may receive additional benefits in some cases.
With HDFC Bank, the estimated personal loan interest rate can range from 9.99% to 12.50%. This bank is known for its fast loan approvals and minimal paperwork. Customers with a good credit score can benefit from these benefits.
The Real Impact of EMI on a Loan of Rs. 7 Lakh
If someone takes out a loan of Rs. 7 lakh for 5 years, or 60 months, the difference in interest rates can have a significant impact. For example, if the interest rate is 10.50 percent, the EMI could be approximately Rs. 15,048, resulting in a total interest payment of just over Rs. 2 lakh. However, if the interest rate rises to 11.50 percent, the EMI could reach approximately Rs. 15,391, resulting in a total interest payment of over Rs. 2.2 lakh. This means that a mere 1 percent increase in interest rates could result in a difference of over Rs. 20,000.
Processing Fees and Hidden Expenses
Simply looking at the interest rate is not enough when taking a loan. Processing fees and other charges often increase the total cost. State Bank of India typically charges a processing fee of approximately 1 percent of the loan amount, with a maximum limit of approximately Rs. 15,000. Discounts may also be available during festivals or special offers.
Processing fees at HDFC Bank typically range between ₹3,500 and ₹9,000. Sometimes, special discounts are offered to long-term customers.
Which Type of Customer to Choose: Which Bank?
If a customer prioritizes low interest rates and has a stable job, a public sector bank may be a better option. However, if a person needs a quick loan and prefers a completely digital process, a private bank may be more convenient. A good credit score also increases the likelihood of receiving a better offer from a private bank.
How to Make a Final Financial Decision
Before taking a loan, it’s important to compare offers from at least two banks. The stronger the credit score, the lower the interest rate. Even a small interest rate difference on a long-term loan can result in significant savings. Proper comparison and timely decisions can lead to a better financial situation in the future.