If you are planning to take a loan, the first thing you must understand is the personal loan rate of interest because even a 1% difference can cost or save you tens of thousands of rupees over the loan tenure.
Personal loan interest rates range from 9.99% to 26% per annum across banks and NBFCs, depending on your credit score, monthly income, employer category, and repayment history.
This guide covers everything in one place – latest bank wise personal loan interest rate comparison, CIBIL score impact, RBI repo rate connection, foreclosure charges, and proven tips to get the lowest personal loan interest rate possible.
If you need funds urgently without documents, also check our guide on urgent cash loan without salary slip.
What Is Personal Loan Rate of Interest?
A personal loan rate of interest is the annual cost of borrowing that a bank or NBFC charges on the amount you borrow. Since personal loans are unsecured loans — meaning no collateral is required — lenders price the rate based on your creditworthiness. The higher your creditworthiness, the lower the rate you get.
Most banks use the monthly reducing balance method — interest is calculated only on the remaining principal after each EMI, not the original loan amount. This is different from a flat rate, where interest is charged on the full principal throughout the tenure. Always confirm with your lender whether the rate quoted is reducing balance or flat rate.
There are two types of personal loan interest rates:
- Fixed Interest Rate – The rate stays the same throughout the loan tenure. Your EMI does not change. This offers predictability and is easier to budget.
- Floating Interest Rate – The rate changes with RBI's repo rate or bank's MCLR. Your EMI can go up or down. Rarely used in personal loans but seen in some NBFCs.
Most personal loans come with a fixed interest rate, so what you see when you apply is what you pay throughout.
Current Personal Loan Interest Rate
As of April 2026, personal loan interest rates start from 9.99% p.a. and go up to 26% p.a. Lenders evaluate your repayment capacity — income, existing liabilities, and job stability — before deciding your rate. Salaried borrowers with CIBIL score above 750 typically get rates between 10.40%–13%. Self-employed borrowers pay 12%–24% depending on their credit profile. Low CIBIL score holders may face rates of 20%–24% or outright rejection. Use our free Loan Eligibility Calculator to know your exact eligibility before applying.
Personal Loan Interest Rate – All Banks Comparison
Below is the most updated bank personal loan interest rate comparison table. This covers all major public sector banks, private banks, and NBFCs as of April 2026.
If you need a small amount quickly, you can also explore our list of fastest instant loan apps in India that disburse money within minutes.
| Bank / Lender | Interest Rate p.a. | Loan Amount | Tenure |
|---|---|---|---|
| IDFC FIRST Bank | 9.99% – 24% | ₹10,000 – ₹10,00,000 | 6 – 60 months |
| HDFC Bank | 10.40% – 24.16% | ₹50,000 – ₹50,00,000 | 12 – 60 months |
| ICICI Bank | 10.45% – 22% | ₹50,000 – ₹50,00,000 | 12 – 72 months |
| Axis Bank | 10.49% – 22% | ₹50,000 – ₹40,00,000 | 12 – 60 months |
| Kotak Mahindra Bank | 10.99% – 24% | ₹50,000 – ₹40,00,000 | 12 – 60 months |
| SBI | 11.15% – 15.40% | ₹25,000 – ₹20,00,000 | 6 – 72 months |
| Bank of India | 11.10% – 14.85% | ₹50,000 – ₹25,00,000 | 12 – 60 months |
| Bank of Baroda | 11.60% – 17.95% | ₹50,000 – ₹20,00,000 | 12 – 60 months |
| Punjab National Bank | 11.80% – 15.35% | ₹50,000 – ₹20,00,000 | 12 – 60 months |
| Federal Bank | 11.99% – 17.49% | ₹50,000 – ₹40,00,000 | 12 – 60 months |
| IndusInd Bank | 10.49% – 24% | ₹30,000 – ₹50,00,000 | 12 – 60 months |
| Yes Bank | 10.70% – 24% | ₹1,00,000 – ₹40,00,000 | 12 – 60 months |
| Bajaj Finance | 10.99% – 26% | ₹30,000 – ₹40,00,000 | 12 – 96 months |
| Tata Capital | 10.99% – 24% | ₹75,000 – ₹35,00,000 | 12 – 72 months |
| Muthoot Finance | 14% – 22% | ₹50,000 – ₹15,00,000 | 12 – 60 months |
| Mahindra Finance | 14% – 26% | ₹50,000 – ₹10,00,000 | 12 – 60 months |
Note – Rates updated as of April 2026. Actual rates depend on individual credit profile. Always confirm with the lender before applying.
Pro Tip – Before you finalise any bank, use our Free EMI Calculator to compare monthly payments at different interest rates side by side. A 1% rate difference on a ₹5 lakh loan can mean ₹800 more every month.Which Bank Has Lowest Personal Loan Interest Rate?
If your goal is to find the lowest personal loan interest rate, here are the top 4 banks to check first:
1. IDFC FIRST Bank (Starting 9.99% p.a.)
IDFC FIRST Bank offers the lowest personal loan interest rate at 9.99% per annum for eligible borrowers. Their FIRSTmoney product gives loans from ₹10,000 to ₹10 lakh with flexible tenure up to 60 months. Even first-time borrowers with limited credit history have a decent chance of approval here.
2. HDFC Bank (Starting 10.40% p.a.)
HDFC Bank is ideal for existing customers. If you hold a salary account or a credit card with them, you may get a pre-approved offer with rates starting at 10.40%. Disbursal happens in as little as 10 seconds for pre-approved customers.
Processing fee is capped at ₹6,500 + GST regardless of loan amount, which is a plus for larger loans.
3. ICICI Bank (Starting 10.45% p.a.)
ICICI Bank offers instant personal loan interest rate deals starting at 10.45% with tenures up to 72 months, one of the longest among private banks.
Salary account holders often get instant disbursal within minutes of applying through the iMobile app. Their reducing balance calculation also keeps the actual interest cost lower than it looks on paper.
4. SBI Personal Loan Interest Rate (Starting 11.15% p.a.)
The SBI Bank personal loan interest rate starts at 11.15% p.a. — one of the most competitive among PSU banks. It is ideal for government employees, defense personnel, and pensioners.
SBI's Xpress Credit scheme offers rates from 11.15% for salary account holders. Processing fee is just 1.50% and part prepayment is allowed after 6 months without heavy penalties. For small Aadhaar-based loans, check our guide on small cash loans on Aadhaar card.
5. Kotak Mahindra Bank Personal Loan Interest Rate (Starting 10.99% p.a.)
The Kotak Mahindra Bank personal loan interest rate starts at 10.99% p.a. Kotak is known for quick digital processing and pre-approved offers for existing customers.
A Kotak Mahindra Bank ₹50,000 personal loan at 10.99% for 24 months gives an EMI of approximately ₹2,326 per month with total interest of around ₹5,824.
6. Mahindra Finance Personal Loan Interest Rate
Mahindra Finance primarily serves rural and semi-urban borrowers. The Mahindra Finance personal loan interest rate ranges from 14% to 26% p.a. depending on borrower profile and location.
It is a strong option for tier 2 and tier 3 city borrowers where major banks have limited reach. Minimum salary required is ₹15,000 per month and only Aadhaar and PAN are needed.
Lowest Personal Loan Interest Rate for Government Employees
Banks treat government employees as the lowest risk borrowers due to guaranteed monthly income, job security, and pension benefits. Here is what top banks offer for government employees:
| Bank | Interest Rate for Govt Employees | Special Scheme | Loan Amount |
|---|---|---|---|
| SBI | 11.15% p.a. onwards | SBI Xpress Credit | ₹20,00,000 |
| PNB | 11.40% p.a. onwards | PNB Personal Loan for Govt Employees | ₹20,00,000 |
| Bank of Baroda | 11.60% p.a. onwards | Baroda Personal Loan | ₹20,00,000 |
| HDFC Bank | 10.40% p.a. onwards | Special salary account offer | ₹50,00,000 |
| ICICI Bank | 10.45% p.a. onwards | Pre-approved govt employee offers | ₹50,00,000 |
| Canara Bank | 12.05% p.a. onwards | Canara Budget Scheme | ₹10,00,000 |
Always apply first through the bank where your salary account is held. Many PSU banks offer an additional 0.25% to 0.50% rate concession for salary account holders.
Defense personnel and police officers often get even lower rates through dedicated schemes. Use our Loan Eligibility Calculator to check how much you qualify for.
Factors That Affect Personal Loan Interest Rate
Banks do not give the same personal loan rate of interest to everyone. Several factors decide what rate you personally get. Understanding these helps you prepare before applying.
1. CIBIL Score and Credit History
The single biggest factor. Lenders assess your credit history — payment track record, defaults, and credit utilisation — through your CIBIL score. A score above 750 gets you the best rate. Below 650, expect rejection or rates above 20%. Even a 50-point improvement can reduce your rate by 1–2%. See the full CIBIL score impact table further below.
2. Monthly Income and Minimum Salary
Salaried people earning ₹50,000+ per month get preferential rates. Lower-income applicants (₹20,000–₹30,000/month) pay 2–3% more. Self-employed borrowers pay 1–2% more than salaried at the same CIBIL level. Minimum salary required: HDFC/ICICI need ₹25,000/month, Bajaj Finance ₹20,000, SBI ₹15,000.
3. Employer Type and Company Category
Where you work matters. If you work for a government body, PSU, MNC, or a large listed company, you qualify for the lowest rates. Employees of startups, small firms, or unregistered businesses usually get higher rates, sometimes 3 to 4% more than top-tier employees.
4. Loan Amount, Tenure, and Interest Rate Link
Very small loan amounts (under ₹50,000) sometimes attract slightly higher rates due to processing costs. Loans in the ₹2–10 lakh range usually get the most competitive pricing.
Shorter tenures (12–24 months) attract marginally lower rates than longer ones (48–60 months). Choosing the wrong tenure can cost you lakhs extra in interest over time.
5. Your Existing Bank Relationship
Banks reward loyalty. If you have a savings account, salary account, fixed deposit, or previous loan with a bank, you have a much better chance of negotiating a lower rate. Many banks offer 0.25–0.50% rate cuts to existing customers with clean repayment history.
6. FOIR – Fixed Obligation to Income Ratio
Banks calculate your FOIR (Fixed Obligation to Income Ratio) — also known as the debt-to-income ratio — before deciding your personal loan interest rate. FOIR is the percentage of your monthly income already committed to existing EMIs. If you already have a home loan, car loan, or credit card dues, your FOIR goes up.
Most banks want your FOIR to stay below 50% after adding the new personal loan EMI. If your FOIR crosses 55–60%, either your loan gets rejected or you get a higher rate due to perceived risk. Ideally, keep all EMIs combined within 40% of your monthly take-home salary to qualify for the best rates.
7. Borrower Age and Job Stability
Most banks prefer borrowers between 23 to 58 years of age for personal loans. Younger borrowers with a shorter employment history may attract slightly higher rates. Banks also check how long you have been with your current employer. A job stability of at least 2 years with the same employer is considered a positive signal and can help you negotiate a better rate.
CIBIL Score and Personal Loan Interest Rate – Full Impact
Your CIBIL score tells banks how responsible you are with credit. Here is how it directly impacts your rate.
| CIBIL Score Range | Loan Approval Chances | Typical Interest Rate |
|---|---|---|
| 800 and above | Excellent, Fastest Approval | 9.99% – 11% p.a. |
| 750 – 799 | Very Good | 11% – 13% p.a. |
| 700 – 749 | Good | 13% – 17% p.a. |
| 650 – 699 | Average, Higher Scrutiny | 17% – 21% p.a. |
| Below 650 | Difficult, Often Rejected | 21% – 24%+ p.a. |
A CIBIL score above 750 is the single fastest way to get a lower rate. Pay all EMIs and credit card bills on time, keep credit utilisation below 30%, and avoid multiple loan applications at once. Even a 50-point score improvement can drop your rate by 1–2% and save you thousands over the loan tenure.
Pro Tip – If your score is below 650 and you urgently need funds, check our complete list of best loan apps for bad CIBIL score.How Interest Rate Affects Your Personal Loan EMI
Even a 1% rate difference matters a lot. Here is how EMI changes on a ₹5 lakh loan for 3 years at different interest rates:
| Interest Rate | Monthly EMI | Total Payment | Total Interest Paid |
|---|---|---|---|
| 10% p.a. | ₹16,134 | ₹5,80,824 | ₹80,824 |
| 12% p.a. | ₹16,607 | ₹5,97,852 | ₹97,852 |
| 15% p.a. | ₹17,332 | ₹6,23,952 | ₹1,23,952 |
| 18% p.a. | ₹18,076 | ₹6,50,736 | ₹1,50,736 |
| 24% p.a. | ₹19,619 | ₹7,06,284 | ₹2,06,284 |
As you can see, at 24% vs 10%, you pay almost ₹1.26 lakh more in interest on the same ₹5 lakh loan over 3 years. This is why getting the lowest personal loan interest rate matters so much. Always use our Free EMI Calculator to calculate the full picture before committing to any lender.
EMI Formula – EMI = [P x R x (1+R)^N] / [(1+R)^N – 1], where P = Principal, R = Monthly interest rate (Annual rate ÷ 12 ÷ 100), N = Tenure in months. Skip the math — use our free Personal Loan EMI Calculator to get your exact EMI instantly.RBI Guidelines on Personal Loan Interest Rate
Many people ask – does RBI set personal loan interest rates? The answer is no, not directly. But the RBI plays a huge indirect role. Here is how it works.
- RBI sets the Repo Rate, which is the rate at which it lends to banks. When repo rate goes up, banks raise their lending rates. When it falls, loan rates usually drop.
- Banks use MCLR (Marginal Cost of Funds based Lending Rate) as a base to price their loans. Personal loan rates are set above MCLR based on the borrower's risk profile.
- RBI mandates that banks must clearly disclose the Annual Percentage Rate (APR), which includes all charges, not just interest. This protects borrowers from hidden costs.
- RBI's guidelines also restrict banks from charging unfair prepayment penalties on floating rate loans.
- NBFCs are regulated by RBI under a separate framework but are also bound to disclose their Annual Percentage Rate (APR) clearly before loan disbursement.
- RBI's Fair Practices Code requires every lender to communicate the interest rate, processing fee, and all other charges in writing before you sign the loan agreement.
How to Get the Lowest Personal Loan Interest Rate
Getting the best rate is not luck — it takes preparation. Here are the most effective steps you can take.
Step 1 – Improve Your CIBIL Score Before Applying
If your score is below 750, spend 3–6 months improving it before applying. Pay bills on time, reduce existing debt, and avoid new credit inquiries. This one step alone can save you 2–4% on your rate which means thousands of rupees saved over the loan tenure.
Step 2 – Compare Personal Loan Interest Rates Across Multiple Banks
Never apply to just one bank. Get quotes from at least 4–5 lenders. Use our free EMI Calculator to compare total repayment across different rates side by side. Always compare total repayment amount, not just the monthly EMI.
Step 3 – Negotiate Interest Rate With Your Existing Bank
Your existing bank already knows your transaction history and income pattern. This gives them confidence. Interest rate negotiation works best with your own bank — many offer 0.25–0.50% rate reductions to existing account holders. You can also negotiate a processing fee waiver. Always start here and then use competitor quotes to bargain further.
Step 4 – Choose the Right Loan Amount and Repayment Tenure
Borrow only what you genuinely need. Shorter tenures (24–36 months) attract slightly better rates and result in much lower total interest paid.
Step 5 – Apply During Bank Festive Offers for Lower Rates
Banks run special loan campaigns during Diwali, New Year, and financial year-end (March). These limited-period offers can give you 0.5–1% lower rates. Subscribe to bank newsletters or check their websites in October–December and March–April for such offers.
Step 6 – Add a Co-Applicant to Improve Loan Eligibility
Adding a co-applicant with a strong credit score and stable income can significantly improve your rate, especially if your individual profile is average. This works well for married couples where both are salaried. The combined income also increases the maximum loan amount you qualify for.
Why Different People Get Different Personal Loan Interest Rates
Almost all major banks and NBFCs use risk-based pricing — this means your personal loan rate of interest is decided individually based on your profile. Two people in the same company taking the same loan amount can get completely different rates. Here is what banks actually check:
- Credit Bureau Score – CIBIL, Experian, or Equifax score is the primary input — pulled instantly when you apply
- Banking behaviour – Average monthly balance, salary credit regularity, and outward bounce history in your bank account
- Loan amount as percentage of income – Borrowing more than 10x your monthly salary usually triggers a higher rate
- Enquiry history – Multiple loan applications in the last 6 months signal desperation and push rates up
- Repayment history – Even one 30-day delay on any past loan in the last 12 months can add 1–2% to your offered rate
Understanding this model helps you see exactly what banks look at. Before you apply, research your eligibility so you know where you stand and which lender is most likely to offer you the best rate.
Fixed vs Floating Rate – Almost all personal loans have a fixed interest rate, meaning your EMI stays the same throughout the tenure. Floating rates are rare in personal loans and are more relevant for home loans.How to Reduce Personal Loan Interest Rate and Save Money
Even after you have taken a loan, there are ways to reduce the total interest you pay.
- Make part prepayments whenever you have extra money. Even a single extra payment per year significantly reduces your principal and the interest calculated on it.
- Opt for a balance transfer if another bank offers a rate at least 1.5–2% lower. For example, transferring a ₹3 lakh outstanding balance from 18% to 14% saves approximately ₹680 per month in EMI. Always check the processing fee on the new loan first to confirm the net saving is worth it.
- Choose a shorter EMI tenure when you refinance. A lower tenure at a lower rate saves maximum interest.
- Avoid missing EMIs at all cost. Late payment charges add up to 8% extra per annum on the overdue amount and can destroy your CIBIL score, making future loans more expensive.
- Check for loyalty rate reset after 12 months of clean repayment. Call your bank and request a rate revision. Most banks quietly offer this to good borrowers who ask for it.
Top 10 Best Personal Loan Apps With Low Interest Rate
If you prefer applying for a personal loan at low interest rate through your phone, several RBI-registered apps offer competitive rates with instant disbursal. Below are the top 10 personal loan low interest rate apps compared on rate, loan amount, tenure, and Play Store rating.
| Loan App | Interest Rate p.a. | Loan Amount | Tenure | Rating |
|---|---|---|---|---|
| Navi | 9.9% onwards | ₹10,000 – ₹20,00,000 | 3 – 72 months | ⭐ 4.5 |
| KreditBee | 12% – 28.5% | ₹6,000 – ₹10,00,000 | 3 – 24 months | ⭐ 4.4 |
| MoneyTap | 13% – 36% | ₹3,000 – ₹5,00,000 | 2 – 36 months | ⭐ 3.9 |
| Aditya Birla Capital | 10.99% – 30% | ₹50,000 – ₹40,00,000 | 12 – 84 months | ⭐ 4.3 |
| PaySense | 14% – 36% | ₹5,000 – ₹5,00,000 | 3 – 60 months | ⭐ 3.0 |
| Kissht | 14% – 36% | ₹35,000 – ₹5,00,000 | 3 – 72 months | ⭐ 4.6 |
| Paytm Personal Loan | 12% – 35% | ₹10,000 – ₹5,00,000 | 3 – 24 months | ⭐ 4.2 |
| mPokket | 0% – 4% per month | ₹500 – ₹50,000 | 61 – 120 days | ⭐ 4.1 |
| StuCred | 0% | ₹1,000 – ₹30,000 | 30 days | ⭐ 4.0 |
| CASHe | 27% – 33% | ₹1,000 – ₹4,00,000 | 3 – 18 months | ⭐ 4.3 |
Among all apps, Navi offers the lowest personal loan interest rate starting at 9.9% p.a. — ideal for borrowers with a CIBIL score above 700. For a detailed review of each app, read our full guide on best personal loan app.
Personal Loan Prepayment and Foreclosure Charges
Before you take a personal loan, always check the foreclosure and prepayment charges. These fees can reduce the benefit of repaying your loan early. Here is what major lenders charge:
| Bank / Lender | Foreclosure Charges | Part Prepayment Charges | Allowed After |
|---|---|---|---|
| IDFC FIRST Bank | 0% (after 3 months) | Nil | 3 months |
| HDFC Bank | 2.5% + GST on outstanding | 2.5% + GST | 12 months |
| ICICI Bank | 3% + GST on outstanding | Not allowed | 12 months |
| Axis Bank | 2% + GST on outstanding | 2% + GST | 12 months |
| SBI | Nil (after 6 months) | Nil | 6 months |
| Bajaj Finance | 4.72% + GST on outstanding | Not allowed (Flexi allowed) | 1 EMI paid |
| Tata Capital | 2.75% + GST on outstanding | 2.75% + GST | 6 months |
IDFC FIRST Bank and SBI offer the most borrower-friendly foreclosure terms. If you plan to repay early, these two lenders give you the most flexibility without extra cost.
Conclusion -
The personal loan rate of interest starts from 9.99% and varies based on your creditworthiness, income, and bank. A strong CIBIL score, stable employment, and proper comparison across lenders are the three things that give you the best rate.
Remember the interest rate is not the only cost. Always check the processing fee, prepayment charges, and Annual Percentage Rate (APR) before signing. Borrow only what you need, compare before you apply, and read the full cost — not just the EMI.
Personal Loan Rate of Interest – FAQs
1. What is the personal loan rate of interest in 2026?
Rates start from 9.99% p.a. (IDFC FIRST Bank) and go up to 26%. Average for salaried borrowers with good credit is 12%–15%.
2. Which bank has the lowest personal loan interest rate?
IDFC FIRST Bank at 9.99% p.a. is the lowest, followed by HDFC Bank (10.40%) and ICICI Bank (10.45%) for eligible borrowers.
3. How does CIBIL score affect personal loan interest rate?
Score above 750 gets 9.99%–13%. Between 650–750 gets 13%–20%. Below 650 means rejection or 20%+ rates.
