Personal loans have become a major market in Pakistan. Personal loans can be used for education, medical costs, home improvements, wedding expenses, and business investments.
Interest rates are borrowers’ primary concern, however. As inflation and costs rise in Pakistan, it is vital to find low-interest person loans.
On this blog, you’ll learn about the best banks and financial institutions in Pakistan that offer loans at competitive rates, along with their eligibility requirements, repayment terms, pros and cons, and frequently asked questions.
What is a personal loan?
Personal loans do not require collateral, unlike mortgages or car loans. Borrowers repay the loan over time in monthly installments (EMIs).
- Loan Amount: Up to 5 million PKR (depending on the bank).
- Repayment Period: 1 to 5 years.
- Interest Rate (Markup): 18% – 35% (varies by bank).
- Eligibility: Self-employed or salaried individuals.
Low-interest personal loans in Pakistan
The following banks offer personal loans with relatively low interest rates:
1. Habib Bank Limited (HBL) Personal Loan
- Loan Amount: PKR 25,000 – PKR 3 million
- Interest Rate: Starting from ~20% annually
- Tenure: Up to 5 years
- Eligibility: Individuals earning PKR 25,000 or more per month
- Features: No collateral needed, flexible repayment
2. United Bank Limited (UBL) Personal Loan
- Loan Amount: PKR 50,000 – PKR 2 million
- Interest Rate: 21%–28% annually
- Tenure: 1–4 years
- Eligibility: Pakistani citizens with at least PKR 20,000 in salary
- Features: Quick approvals and top-ups
3. MCB Bank Personal Loan
- Loan Amount: PKR 30,000 – PKR 3 million
- Interest Rate: From 22% annually
- Tenure: Up to 5 years
- Eligibility: People earning a minimum of PKR 22,000 per month.
- Features: Easy top-up and free life insurance
4. Bank Alfalah Personal Loan
- Loan Amount: PKR 50,000 – PKR 4 million
- Interest Rate: ~21%–26% annually
- Tenure: 1–5 years
- Eligibility: Employees earning at least PKR 30,000 per month.
- Features: Flexible monthly payments, early settlement options
5. Allied Bank Limited (ABL) Personal Loan
- Loan Amount: PKR 25,000 – PKR 3 million
- Interest Rate: From 20% annually
- Tenure: 1–4 years
- Eligibility: PKR 25,000 minimum monthly income
- Features: Quick processing and insurance coverage
6. Saadiq Personal Finance (Shariah-compliant)
- Loan Amount: PKR 50,000 – PKR 3 million
- Profit Rate: 18%–24% annually (Islamic, no riba)
- Tenure: Up to 5 years
- Eligibility: Salaried or self-employed with PKR 30,000+ income
- Features: Compliant with Shariah, top-up option available
Taking out a low-interest loan has many advantages.
- Lower EMIs – makes monthly payments easier
- Affordable Borrowing – reduces interest costs while managing expenses
- Faster Repayment – quicker repayment
- Access to High Loan Amounts—Some banks lend up to PKR 4 million to 5 million.
Disadvantages of Loans
- Late payment penalties are high.
- Low interest rates are restricted to high-income earners.
- Unmanaged EMIs pose a debt trap risk
Eligibility Criteria for Personal Loans in Pakistan
- Nationality: Pakistani citizen
- Age: 21-60 (varies by bank)
- Employment: Paid or self-employed
- Minimum Income: PKR 20,000 – 35,000 (dependent on bank)
- Credit History: Repayment record is good
Example of loan installments
You borrow PKR 500,000 for 3 years at a rate of 20% interest:
- Monthly Installment (EMI): ~PKR 18,600
- Total Payable: ~PKR 668,000
- Total Interest Paid: ~PKR 168,000
Frequently Asked Questions (FAQs)
1. Which bank offers Pakistan’s lowest personal loan rates?
Standard Chartered Saadiq (Islamic) offers the best rates (10%–20%).
2. How much can I borrow?
Borrowing amounts are determined by your income and the bank.
3. Is collateral required for a personal loan?
loans are unsecured loans.
4. What is the approval process like?
Usually 3–7 working days.
5. Are self-employed people eligible to apply?
Most banks allow self-employed applicants with proof of income.
6. What happens if I miss an EMI?
You can damage your credit score if you make late payments to the bank.
7. Does Islamic finance offer personal loans?
The Standard Chartered Saadiq and Meezan Bank offer Shariah-compliant financing.
8. Can I repay my loan early?
Many banks allow early settlement, but some charge a fee.
Conclusions
Low-interest personal loan options are available at banks like HBL, ABL, UBL, Bank Alfalah, and Standard Chartered Saadiq. As compared with other financing options, their interest rates usually start at 18% to 22% per year.
Loan amounts and repayment abilities determine the right loan for you. Be sure you can afford the monthly installments by comparing offers before applying.
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