Personal Loan Interest Rates in India — 2026

Personal loan interest rates in India currently start at 8.9% p.a. (Punjab National Bank and Union Bank of India) and go up to about 40% p.a. at some fintech lenders. The rate you are offered depends mainly on your credit score, monthly income, employer and existing debt.

Use the table below to compare starting rates, maximum loan amounts, tenure, minimum CIBIL score and processing fees side by side, then check your own eligibility before you apply.

Check Your EligibilityFree · No impact on CIBIL score

Lowest Rate

8.9%

Punjab & Union

Average Starting Rate

11.31%

Across 20 lenders

NBFC Lowest

9.99%

Poonawalla Fincorp

Fintech Lowest

15%

Prefr

Interest Rate Comparison — All Lenders

Sorted by lowest starting rate. Select a lender for full details.

Interest Rate Comparison — All Lenders
Lender	Interest Rate	Max Amount	Max Tenure	Min CIBIL	Processing Fee
Punjab National BankLow PSU Rate	8.9%–14.5%	₹10 lakh	60 months	650	1% + GST
Union Bank of IndiaLowest Rate	8.9%–13.5%	₹15 lakh	60 months	650	0.5%
Canara Bank	9.9%–15%	₹10 lakh	60 months	650	0.5%
Poonawalla FincorpLowest NBFC Rate	9.99%–29%	₹30 lakh	60 months	680	0–2% (NIL for select customers)
Axis Bank	10.49%–22%	₹40 lakh	60 months	700	1.5%–2%
IDFC FIRST Bank	10.49%–23.99%	₹40 lakh	84 months	700	Up to 2%
IndusInd Bank	10.49%–26%	₹50 lakh	60 months	700	Up to 3%
HDFC BankMost Popular	10.5%–24%	₹40 lakh	60 months	700	Up to 2.5% (min ₹999)
ICICI BankHigh Limit	10.65%–16%	₹50 lakh	72 months	700	Up to 2.25% (min ₹999)
Bank of Baroda	10.9%–18.25%	₹10 lakh	84 months	650	2%
Kotak Mahindra Bank	10.99%–24%	₹40 lakh	60 months	700	Up to 2.5%
Tata Capital	10.99%–35%	₹35 lakh	72 months	680	Up to 2.75%
Yes Bank	10.99%–24%	₹40 lakh	60 months	700	Up to 2%
Hero FinCorp	11%–24%	₹5 lakh	60 months	650	Up to 3%
Bajaj FinservLongest Tenure	11%–35%	₹40 lakh	96 months	685	Up to 3.93%
Federal Bank	11%–22%	₹25 lakh	60 months	680	0.5%–1%
State Bank of IndiaGovt Employee Favourite	11.05%–15.05%	₹20 lakh	72 months	650	1% + GST (min ₹1,000)
PrefrLow CIBIL OK	15%–36%	₹5 lakh	36 months	600	2–4%
MoneyViewInstant Approval	15.96%–39.99%	₹10 lakh	60 months	600	2%
KreditBeeNTC Welcome	17%–29.95%	₹5 lakh	24 months	No minimum	2%–6%

Last reviewed August 2026. Actual terms depend on your credit profile and the lender's assessment. GST at 18% applies on fees.

How Is Your Personal Loan Interest Rate Calculated?

Banks price personal loans using an internal benchmark (such as MCLR or an external benchmark like the repo rate) plus a spread. NBFCs and fintechs use risk-based pricing. In both cases, the spread you pay reflects how risky the lender thinks your profile is.

Your EMI is calculated on a reducing balance: EMI = P × r × (1+r)ⁿ / ((1+r)ⁿ – 1), where P is the loan amount, r is the monthly interest rate and n is the number of months.

Example: ₹5 lakh loan at 11% p.a. for 36 months

Monthly EMI: ₹16,369
Total interest: ₹89,297
Total payable: ₹5,89,297

Factors That Decide Your Interest Rate

CIBIL score

High impact

The single biggest factor. Below 700 most banks decline; 750+ unlocks the best rates.

Income level

High impact

Higher income means lower default risk. ₹50,000+ a month usually puts you in a preferred bracket.

Employer category

Medium impact

Government, PSU and large listed-company employees typically get lower rates.

Existing relationship

Medium impact

Salary-account holders and existing customers often get 0.5–1% lower rates.

Loan tenure

Low impact

Longer tenures can carry slightly higher rates because risk rises over time.

Loan amount

Low impact

Larger loans sometimes leave room to negotiate a small rate reduction.

Fixed vs Floating Rate — What Personal Loans Use

Fixed rate (used by almost all personal loans)

EMI stays the same for the whole tenure
Easier to budget every month
Not affected by RBI repo rate changes

Floating rate (rare for personal loans)

EMI changes with the benchmark rate
Common in home loans
Can rise or fall during the tenure

Expert Tips

1Keep your CIBIL score at 750 or above — lenders reserve their best rates for this band.
2Compare the total cost (APR), not just the headline rate. Processing fees add 0.5–4% to the real cost.
3Start with the bank where your salary account is — existing customers often get lower rates.
4A shorter tenure means less total interest, even though the EMI is higher.
5If you have fixed deposits, a loan against FD is usually far cheaper than an unsecured personal loan.

Frequently Asked Questions — Personal Loan Interest Rates

What is the lowest personal loan interest rate in India in 2026?

The lowest starting rate in our comparison is 8.9% p.a., offered by Punjab National Bank and Union Bank of India, mainly to government employees and pensioners. Among NBFCs, Poonawalla Fincorp starts at 9.99% p.a. for strong profiles. Your actual rate depends on your credit profile.

Is a personal loan interest rate fixed or floating?

Almost all personal loans in India carry a fixed rate, so your EMI stays the same throughout the tenure. Unlike home loans, they are rarely linked to a floating benchmark.

How does my CIBIL score affect my personal loan interest rate?

A score above 750 typically gets the lowest available rate. Between 700 and 750 you may pay 1–3% more. Below 700, many banks decline the application and NBFCs or fintechs may charge 20% or more.

Can I negotiate a lower personal loan interest rate?

Yes, especially if you have a score of 780+, a long relationship with the bank, or a salary account with it. Negotiate before signing the loan agreement — rates are rarely reduced after disbursal.

What is the difference between flat rate and reducing balance rate?

With a reducing balance rate, interest is charged only on the outstanding principal. With a flat rate, interest is charged on the original amount for the whole tenure, so the effective cost is much higher — roughly 1.8 times the quoted flat rate.

Does applying to multiple lenders hurt my credit score?

Yes. Each formal application triggers a hard enquiry, and several in a short period can lower your score. Compare offers through a soft-check service like RateCut first, then apply where you are most likely to be approved.

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Figures last reviewed August 2026 and shown for information only. Interest rates, fees and eligibility are set by each lender and depend on your credit profile — confirm the final terms in the lender's Key Fact Statement before you sign. RateCut is a loan marketplace, not a lender.