Personal loans are one of the most searched financial products in India. From medical emergencies and weddings to travel and debt consolidation, millions of borrowers rely on instant personal loans every year. However, personal loan interest rates differ widely across banks, and choosing the wrong lender can cost you thousands of rupees in extra interest.
This detailed guide compares personal loan interest rates of all major banks in India, explains how rates are decided, and shows you how to secure the lowest personal loan interest rate in 2026.
What Is a Personal Loan?
A personal loan is an unsecured loan offered by banks and NBFCs without collateral. Since there is no security, lenders charge a higher interest rate compared to home loans or car loans. The rate depends on your credit profile, income stability, employer category, and repayment history.
Personal Loan Interest Rates Comparison – All Major Banks (2026)
Below is the latest comparison of personal loan interest rates offered by top Indian banks and lenders.
Which Bank Offers the Lowest Personal Loan Interest Rate?
Banks advertise low “starting” interest rates, but only borrowers with excellent profiles qualify.
Lowest Starting Rates (Best Credit Profiles)
Axis Bank HDFC Bank Bank of Maharashtra SBI
Best for Salaried Professionals
HDFC Bank ICICI Bank Axis Bank
Best for Government Employees
SBI PNB Canara Bank
Factors That Decide Your Personal Loan Interest Rate
Banks do not offer the same interest rate to everyone. These factors matter the most:
Credit Score
A score above 750 attracts the lowest rates. A low score increases both interest and rejection risk.
Monthly Income
Higher and stable income signals better repayment capacity, which reduces interest rates.
Employer Type
Employees of reputed private companies, MNCs, or government organizations receive better rates.
Existing Relationship
Banks offer discounted rates to existing customers with salary accounts or credit cards.
Loan Amount and Tenure
Shorter tenure usually means lower total interest paid.
Personal Loan EMI Example (High-Intent Search)
If you take a ₹5 lakh personal loan at 11% interest for 5 years, your EMI will be around ₹10,870, and total interest paid will exceed ₹1.5 lakh.
Even a 1% higher interest rate can increase your repayment by tens of thousands of rupees.
How to Get the Lowest Personal Loan Interest Rate
Maintain a credit score above 750 Avoid multiple loan applications Choose pre-approved offers Negotiate processing fees Compare banks before applying
Never accept the first offer without comparison.
Hidden Charges You Must Check
Many borrowers focus only on interest rates and ignore additional charges:
Processing fee GST on fees Prepayment charges Foreclosure penalties Late payment fees
Always read the loan agreement carefully.
Is a Personal Loan Better Than a Credit Card?
Personal loans have lower interest rates than credit cards. Credit cards charge up to 36–42% annually, while personal loans usually stay between 9.5% to 18% for good profiles. For large expenses, personal loans are cheaper and safer.
Final Verdict: Which Personal Loan Is Best in 2026?
There is no single “best bank” for everyone. The best personal loan depends on your credit score, income, and relationship with the lender. However, Axis Bank, HDFC Bank, ICICI Bank, and SBI consistently offer competitive interest rates and fast approvals.
Always compare offers before applying. A smart comparison can save you thousands.
Frequently Asked Questions (FAQs)
What is the minimum personal loan interest rate in India?
Currently, rates start from around 9.50% per annum for top borrowers.
Can I get a personal loan with a low credit score?
Yes, but at a higher interest rate.
Is personal loan interest fixed or floating?
Most personal loans have fixed interest rates.
Can I prepay my personal loan?
Yes, but some banks charge prepayment penalties.
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