Nil preclosure charges, and a fully digital journey for salaried applicants
Figures published by Federal Bank as of 3rd August 2026. Indicative, not an offer.
Federal Bank prices personal loans from 12.00% to 22.50% p.a. and sanctions up to ₹25 lakh directly, or ₹50,000 to ₹5 lakh over one to five years through its digital partner channel. The distinguishing term is preclosure: Federal charges nothing to close the loan early, which over a five-year term can be worth considerably more than a slightly lower headline rate elsewhere.
The digital journey is built for salaried applicants and asks for little more than a PAN and an Aadhaar. The age window closes at 55, tighter than most, and the bank does not lend to self-employed applicants on this product.
Federal publishes a genuine band rather than an "onwards" figure, so the range you see is the range that is actually offered.
| Product or borrower segment | Interest rate |
|---|---|
| Salaried, direct from the bank | 12.00% p.a. onwards |
| Digital partner channel | 12.50% p.a. onwards |
| Upper end of the band | 22.50% p.a. |
| Federal Bank salary account holders | Concessional pricing on request |
Opens at 12% p.a., the lowest rate Federal Bank publishes. Raise it to see what a weaker bureau score would cost you.
Reducing-balance interest, the same basis the lender quotes on. The interest figure is what the loan adds to the amount you borrow.
Early instalments are mostly interest. The principal only starts falling quickly in the closing years, which is why prepaying early saves so much more than prepaying late.
| Year | Principal paid | Interest paid | Balance |
|---|
With no preclosure or part-payment charge, a bonus or a windfall can go straight against the principal. Most lenders on this panel charge between 2% and 5% for the same move.
The partner journey verifies income from bank statements pulled with consent, which keeps the document list to two identity papers for most salaried applicants.
Both ends of the range are stated, so the worst case is visible before you apply rather than after underwriting.
The ₹50,000 floor makes it usable for a modest requirement that a larger bank would not bother pricing.
Processing and foreclosure charges routinely outweigh a small difference in rate. Read these against the rate table above.
Meeting these is what gets the file assessed. Where you land inside the rate band is decided separately, by your bureau record.
Every rate you check and every offer you compare credits coins to your wallet, and they convert 1:1 into rupees.
On a ₹5 lakh loan closed two years into a five-year term, a 4% foreclosure charge on the outstanding would be roughly ₹13,000. Federal charges none of it.
The tenure has to finish before the cap, so a 53-year-old applicant is effectively limited to a two-year term. Applicants close to the cap generally get better terms elsewhere.
Not on this product. Bajaj Finance, Tata Capital and Shriram Finance on the same panel all assess self-employed income.
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