A personal loan is one of the most versatile financial tools available to Indian borrowers. Whether you need funds for a medical emergency, a wedding, home renovation, debt consolidation, or a dream vacation — a personal loan gives you instant access to cash without requiring any collateral. But with dozens of banks and NBFCs competing for your business in 2026, choosing the right lender at the right interest rate can save you tens of thousands of rupees over the loan tenure.
In this comprehensive guide, we compare the best personal loan interest rates in India in 2026 — covering top public sector banks, leading private banks, and popular NBFCs — so you can make the smartest borrowing decision possible.
Why Personal Loan Interest Rate Matters More Than You Think
Most borrowers focus only on whether their loan gets approved. But the interest rate you’re offered can make an enormous difference to your total repayment cost. Consider this: on a ₹5 lakh personal loan for 3 years, the difference between a 12% and an 18% interest rate translates to over ₹50,000 in additional interest payments. On a ₹10 lakh loan, that gap widens to over ₹1 lakh.
In 2026, personal loan interest rates in India range from as low as 10.50% per annum for top-tier borrowers at leading banks to as high as 24% to 36% at some fintech lenders targeting high-risk profiles. Understanding where you fall in this spectrum — and how to negotiate a better rate — is what this guide is all about.
Public Sector Banks: Lowest Personal Loan Rates in 2026
Public sector banks generally offer the most competitive personal loan interest rates, especially for salaried government employees, defense personnel, and existing account holders with strong credit profiles.
State Bank of India (SBI) remains one of the top choices for affordable personal loans. SBI’s personal loan interest rates start from 11.15% per annum for eligible salaried borrowers under its flagship “SBI Xpress Credit” scheme. Loan amounts go up to ₹35 lakh with repayment tenures of up to 6 years. Existing SBI account holders with a salary credit history enjoy priority processing and pre-approved offers.
Bank of Baroda offers personal loans starting from 10.90% per annum — one of the most competitive rates among all public sector banks. The bank’s digital personal loan product allows end-to-end online processing with minimal documentation.
Punjab National Bank (PNB) and Canara Bank offer rates in the range of 11.00% to 13.50%, with special concessions for women borrowers, central government employees, and pensioners.
Union Bank of India provides personal loans from 11.20% onwards, with higher loan amounts available for borrowers with strong repayment histories and salary accounts within the bank.
While public sector banks offer the lowest rates, they typically have stricter eligibility norms and slower processing times compared to private lenders.
Private Sector Banks: Best Balance of Speed and Rate
Private banks have invested heavily in digital infrastructure, making personal loan approvals faster than ever — often within hours for pre-approved customers. Here are the standout performers in 2026:
HDFC Bank is one of India’s most popular personal loan providers, offering rates starting from 10.85% per annum for pre-approved customers. HDFC’s “10-second personal loan” for existing customers with strong profiles is one of the fastest disbursals in the industry. Loan amounts go up to ₹40 lakh.
ICICI Bank offers personal loan interest rates starting from 10.85% to 16.00% depending on the borrower’s credit score, income, and employer category. ICICI’s instant personal loan for salaried customers is available 24/7 through its iMobile app.
Axis Bank provides personal loans from 11.25% per annum, with a streamlined digital application process and disbursals within 24 to 48 hours for eligible customers. The bank offers flexible tenure options from 12 to 60 months.
Kotak Mahindra Bank offers competitive rates starting from 10.99%, with a fully paperless process for salaried individuals earning above ₹25,000 per month. Kotak is particularly attractive for self-employed professionals with strong ITR filings.
IndusInd Bank and Yes Bank offer rates in the range of 10.49% to 18.00%, depending heavily on the applicant’s CIBIL score and monthly income. IndusInd is known for flexible repayment options and minimal foreclosure charges.
NBFCs and Fintech Lenders: Fast Approval but Higher Rates
Non-Banking Financial Companies and fintech platforms have democratized personal lending in India — but this convenience typically comes at a cost. Interest rates at NBFCs are generally higher than banks, but they compensate with faster approval, relaxed eligibility, and accessibility for self-employed borrowers or those with moderate credit scores.
Bajaj Finserv is India’s largest NBFC personal loan provider, offering loans up to ₹40 lakh with interest rates starting from 11.00% per annum. Bajaj’s Flexi Loan facility allows borrowers to withdraw and repay funds multiple times within the sanctioned limit — a unique feature that reduces effective interest costs for borrowers who don’t need the full amount upfront.
Tata Capital offers personal loans at rates starting from 10.99%, with a smooth digital journey and loan amounts up to ₹35 lakh. Tata Capital is especially popular among self-employed individuals and small business owners.
Fullerton India and Muthoot Finance cater to borrowers across the credit spectrum, with rates ranging from 11.99% to 24.00% depending on risk profile.
KreditBee, MoneyTap, Navi, and PaySense are fintech lenders offering instant personal loans, often within minutes, for amounts ranging from ₹10,000 to ₹5 lakh. Interest rates at these platforms range from 16% to 36% per annum — significantly higher than banks — but they serve a large segment of borrowers who are either new to credit or have limited banking history.
Personal Loan Interest Rate Comparison Table 2026
| Lender | Starting Interest Rate | Max Loan Amount | Processing Time |
|---|---|---|---|
| Bank of Baroda | 10.90% p.a. | ₹20 lakh | 2–4 days |
| HDFC Bank | 10.85% p.a. | ₹40 lakh | Same day |
| ICICI Bank | 10.85% p.a. | ₹50 lakh | Same day |
| Kotak Mahindra | 10.99% p.a. | ₹40 lakh | 24 hours |
| SBI | 11.15% p.a. | ₹35 lakh | 2–3 days |
| Bajaj Finserv | 11.00% p.a. | ₹40 lakh | Same day |
| Tata Capital | 10.99% p.a. | ₹35 lakh | 24 hours |
| KreditBee | 16.00% p.a. | ₹5 lakh | Minutes |
Key Factors That Determine Your Personal Loan Interest Rate
Lenders don’t offer the same rate to every applicant. Several factors influence the rate you’re ultimately offered:
Your CIBIL score is the most critical factor. Borrowers with scores above 750 consistently receive the lowest rates, while scores below 700 often result in either higher rates or outright rejection. Maintaining a strong credit score is the single most effective way to reduce your borrowing cost.
Your employer and income stability matter significantly. Employees of top-rated companies, PSUs, and government departments are considered low-risk and receive preferential rates. Self-employed individuals typically pay slightly higher rates due to income variability.
Existing relationship with the lender plays a role too. If you hold a salary account, home loan, or fixed deposit with a bank, you are far more likely to receive pre-approved offers at competitive rates.
Loan tenure and amount also influence pricing. Shorter tenures and higher loan amounts from verified borrowers sometimes attract better rates due to faster capital recovery.
How to Get the Lowest Personal Loan Rate — Practical Tips
Getting the best possible rate requires preparation and strategy. First, check and improve your CIBIL score before applying — even a 20 to 30-point improvement can unlock a meaningfully lower rate. Second, compare offers across at least 3 to 5 lenders using aggregator platforms before submitting any formal application. Third, negotiate with your existing bank — relationship customers regularly receive rate discounts not advertised publicly. Fourth, avoid applying to multiple lenders simultaneously as hard inquiries hurt your score and signal desperation to lenders. Finally, opt for a shorter tenure if your monthly budget allows — it reduces the total interest burden even if EMIs are higher.
Final Verdict: Which Lender Should You Choose?
For the lowest interest rate, Bank of Baroda, HDFC Bank, and ICICI Bank lead the pack in 2026. For fastest disbursal, HDFC’s instant loan and Bajaj Finserv’s same-day processing are hard to beat. For self-employed borrowers, Tata Capital and Kotak Mahindra Bank offer the most flexible eligibility norms. For small emergency loans, fintech platforms like KreditBee or Navi provide the quickest access — but always read the fine print on rates and fees.
Whatever your need, the key is to compare before you commit. A few hours of research today can save you lakhs over the life of your loan.
Disclaimer: Interest rates mentioned are indicative and subject to revision. Please verify current rates directly with the respective lender before applying.