Personal loans continue to be one of the most popular financing options in India, especially for managing emergencies, consolidating debt, funding education, weddings, travel, or home improvements. In 2026, interest rates remain competitive as banks and digital lenders expand their offerings and streamline approval processes. Understanding current personal loan interest rates and how they are calculated can help borrowers save significantly on repayment costs and choose the right lender.
In 2026, personal loan interest rates in India generally range between 9.50% and 24% per annum, depending on the borrower’s credit profile, income stability, and lender policies. Public sector banks typically offer lower rates for salaried individuals with strong credit scores, while private banks and fintech lenders provide faster approvals with slightly higher rates.
Key trends shaping rates this year include:
Borrowers with strong financial profiles can secure loans closer to the lower end of the spectrum.
Several leading banks and financial institutions are offering competitive personal loan rates in 2026. While actual rates vary, the following lenders are known for attractive pricing and flexible terms:
HDFC Bank
Offers interest rates starting around 10.75% with quick digital approval for existing customers. Known for flexible tenure options and fast disbursal.
State Bank of India (SBI)
Public sector lender offering some of the lowest rates starting near 9.60% for eligible borrowers. Ideal for salaried individuals with strong credit history.
ICICI Bank
Provides instant personal loans with rates starting around 10.90%. Popular for seamless online application and quick processing.
Axis Bank
Offers competitive rates starting around 10.49% along with pre-approved loan options for select customers.
Kotak Mahindra Bank
Known for flexible repayment options and digital onboarding, with rates starting around 10.99%.
Comparing multiple lenders before applying can help secure the most affordable option.
Personal loan interest rates are not fixed for all borrowers. Lenders evaluate several factors to determine the final rate offered.
Credit Score
A credit score above 750 significantly increases the chances of getting lower rates, while scores below 650 may lead to higher rates or rejection.
Income and Employment Stability
Higher income and working with reputed organizations often result in better loan offers.
Loan Amount and Tenure
Shorter tenures generally attract lower interest rates compared to longer repayment periods.
Existing Debt Obligations
A high debt-to-income ratio can increase risk perception and lead to higher rates.
Relationship with Bank
Existing customers with good repayment history may receive preferential pricing.
Borrowers can take several steps to improve their chances of securing the lowest available rates.
Planning ahead can significantly reduce overall borrowing costs.
Understanding EMI helps borrowers plan their finances effectively.
For example, if you take a personal loan of ₹5,00,000 at an interest rate of 11% per annum for a tenure of 5 years, the monthly EMI would be approximately ₹10,870. The total interest payable over the tenure would be around ₹1,52,000.
Using an online personal loan EMI calculator can help compare scenarios and choose the best repayment plan before applying.
Both traditional banks and digital lenders offer personal loans, but there are key differences borrowers should consider.
Bank Personal Loans
Online Personal Loans
Choosing the right option depends on urgency, eligibility, and cost considerations.
Apart from interest rates, borrowers should carefully review additional charges that can increase the total loan cost.
Reading the loan agreement carefully helps avoid unexpected expenses later.
Before applying for a personal loan, consider these practical tips to make a smarter borrowing decision.
Responsible borrowing ensures financial stability and prevents future debt burden.
The lowest rates typically start around 9.50% per annum for borrowers with excellent credit scores and stable income profiles, mainly offered by public sector banks.
Banks like SBI, HDFC Bank, ICICI Bank, Axis Bank, and Kotak Mahindra Bank are popular choices due to competitive rates and reliable service.
Yes, but interest rates may be higher, and approval depends on income stability and repayment capacity.
Improving your credit score, choosing shorter tenure, and comparing lenders can help secure lower rates.
Banks usually offer lower rates, while online lenders provide faster approval. The best choice depends on urgency and eligibility.
