Taking a loan has become a common financial decision today, whether it is for higher education, medical expenses, home renovation, or buying a car. However, when the loan amount is as high as ₹7 lakh, even a small difference of 0.5% in interest rate can result in a major difference in total repayment over the years.

In India, State Bank of India (SBI), the country’s largest public sector bank, and HDFC Bank, a leading private sector lender, are among the most preferred choices for personal and car loans. Both banks offer competitive interest rates, but their loan structures, processing speed, and additional charges differ significantly.

Let’s understand where a ₹7 lakh loan becomes cheaper in 2026.

Interest Rate Comparison (Expected Rates in 2026)

Loan interest rates are not fixed for everyone. They depend mainly on your credit score (CIBIL), income stability, and employment type.

SBI (State Bank of India):
SBI is widely known for offering lower interest rates, especially to salaried individuals and government employees. If your salary account is with SBI, you may get additional concessions.

• Personal Loan Interest: approx. 10.05% – 15.05%

• Car Loan Interest: starts around 8.80%

HDFC Bank:
HDFC Bank focuses on speed and customer convenience. Applicants with a CIBIL score above 750 often receive better offers.

• Personal Loan Interest: approx. 9.99% – 12.50%

• Faster approvals and minimal paperwork

EMI Calculation on a ₹7 Lakh Loan (5 Years Tenure)

Let’s assume a personal loan tenure of 5 years (60 months):

Scenario 1 – Interest Rate 10.50%

• Monthly EMI: approx. ₹15,048

• Total Interest Paid: ₹2,02,880

Scenario 2 – Interest Rate 11.50%

• Monthly EMI: approx. ₹15,391

• Total Interest Paid: ₹2,23,460

👉 A difference of just 1% interest results in over ₹20,000 extra payment over five years.

Processing Fees and Other Charges

Interest rate is not the only cost involved in a loan.

SBI Charges:

• Processing fee: up to 1% of loan amount or maximum ₹15,000

• Often waived during festive or special campaigns

HDFC Bank Charges:

• Processing fee usually ranges from ₹3,500 to ₹9,000

• Special offers available for existing customers

Which Bank Should You Choose?

Choose SBI if:

• Your priority is lower interest rate

• You are a government employee or long-term salaried professional

• You are comfortable with slightly longer processing time

Choose HDFC if:

• You need instant loan approval

• You prefer a fully digital, hassle-free experience

• Your credit score is strong and documentation is limited

Final Verdict

Before taking a ₹7 lakh loan, always compare offers from both banks. Your credit score is your biggest advantage—the higher it is, the better terms you can negotiate. Even a small difference in interest rate can save you thousands of rupees in the long run.