Personal Loan Guide

Personal Loan Interest Rates in India — October 2026

Rate comparison across 20 banks, NBFCs and fintechs — sorted by lowest starting rate.

Lender data as of October 2026

Lowest Rate

9.9%

PNB & Union Bank

Average Starting Rate

11.46%

Across 20 lenders

NBFC Lowest

10.99%

Tata Capital

Fintech Lowest

15.96%

MoneyView

Interest Rate Comparison — All Lenders

Sorted by lowest starting rate · Select any lender to see full details

Swipe sideways to see all columns →

LenderInterest RateMax AmountMax TenureMin CIBILProcessing FeeDetails
Punjab National BankPSU Lowest Rate
9.9%–14.5%₹10L60 mo6501% + GSTView
Union Bank of IndiaLowest Overall Rate
9.9%–13.5%₹15L60 mo6500.5%View
9.9%–15%₹10L60 mo6500.5%View
10.49%–22%₹40L60 mo7001.5%–2%View
10.49%–23.99%₹40L84 mo700Up to 2%View
10.49%–26%₹50L60 mo700Up to 3%View
HDFC BankMost Popular
10.5%–24%₹40L60 mo700Up to 2.5% (min ₹999)View
ICICI BankHigh Limit
10.65%–16%₹50L72 mo700Up to 2.25% (min ₹999)View
10.9%–18.25%₹10L84 mo6502%View
10.99%–24%₹40L60 mo700Up to 2.5%View
10.99%–35%₹35L72 mo680Up to 2.75%View
10.99%–24%₹40L60 mo700Up to 2%View
Poonawalla Fincorp100% Digital Process
11%–29%₹30L60 mo6800–2% (NIL for select customers)View
11%–24%₹5L60 mo650Up to 3%View
Bajaj FinservLongest Tenure
11%–35%₹40L96 mo685Up to 3.93%View
11%–22%₹25L60 mo6800.5%–1%View
11.05%–15.05%₹20L72 mo6501% + GST (min ₹1,000)View
PrefrLow CIBIL OK
15%–36%₹5L36 mo6002–4%View
MoneyViewInstant Approval
15.96%–39.99%₹10L60 mo6002%View
KreditBeeNTC Welcome
17%–29.95%₹5L24 moNTC2%–6%View

Rates as of October 2026. Actual rate depends on credit profile, income, and lender assessment.

How Is Your Personal Loan Interest Rate Calculated?

Personal loans in India are priced at MCLR or repo rate + spread for banks, and at a risk-based pricing model for NBFCs and fintechs. The spread added on top reflects the borrower's risk profile.

The EMI is calculated using the reducing balance method: EMI = P × r × (1+r)ⁿ / ((1+r)ⁿ – 1), where P is the principal, r is the monthly rate, and n is the tenure in months.

Example: ₹5 Lakh loan at 11% for 36 months

Monthly EMI
₹16,370
Total Interest
₹88,920
Total Payable
₹5,88,920

Factors That Determine Your Interest Rate

CIBIL Score

High impact

The single biggest factor. Below 700 = rejection at most banks. 750+ = best rates.

Income Level

High impact

Higher income signals lower default risk. ₹50k+/month puts you in a preferred bracket.

Employer Category

Medium impact

Government employees, PSU staff, and MNC employees get preferential rates.

Existing Relationship

Medium impact

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

Loan Tenure

Low impact

Longer tenures can attract slightly higher rates due to elevated default risk.

Loan Amount

Low impact

Higher amounts sometimes qualify for marginal rate reductions via negotiation.

Fixed vs Floating Rate — What Personal Loans Use

Fixed Rate ✓ (Used by all PL lenders)

  • EMI stays constant throughout tenure
  • Easier to budget monthly expenses
  • Not affected by RBI rate changes
  • Locked in regardless of repo movements

Floating Rate (Not for personal loans)

  • EMI fluctuates with RBI policy rate
  • Common in home loans only
  • Can decrease or increase mid-tenure
  • Not offered for unsecured personal loans

Expert Tips

  • Maintain a CIBIL score of 750+ — lenders offer their best rates at this level. Check your score free on Paisawaala before applying.
  • Compare the APR (Annual Percentage Rate), not just the stated interest rate. APR includes processing fee, which can add 0.5–4% to the effective cost.
  • Apply with your salary account bank first — they typically offer 0.5–1% lower rates for existing customers.
  • A shorter tenure means less total interest paid even if the EMI is higher. Calculate both scenarios using Paisawaala's EMI calculator.
  • If you have existing savings as FD or RD, some banks offer loans against those at repo rate + 1–2%, far cheaper than unsecured personal loans.
  • Avoid balance transfer if remaining tenure is under 12 months — the new processing fee will likely exceed any interest saving.

Frequently Asked Questions — Personal Loan Interest Rates

The lowest personal loan interest rate currently available is 9.9% p.a., offered by Punjab National Bank and Union Bank of India for government employees and pensioners. Among NBFCs, Tata Capital starts at 10.99% for qualified salaried applicants.

Almost all personal loans in India come at a fixed rate of interest. This means your EMI stays constant throughout the loan tenure, making budgeting easier. Unlike home loans, personal loans are not linked to MCLR or repo rate.

Your CIBIL score is one of the biggest factors. A score above 750 typically fetches you the lowest available rate. Between 700–750, you may get a rate 1–3% higher. Below 700, some lenders will reject your application or charge significantly higher rates (above 20%).

Yes — especially if you are an existing customer with a good repayment history, have a high CIBIL score (780+), or have an ongoing salary account with the bank. Pre-negotiating before signing the agreement is key. Rates are rarely reduced mid-tenure.

All major lenders in India now use reducing balance (diminishing balance) method for personal loans, where interest is charged only on the outstanding principal. Flat rate loans, where interest is calculated on the original principal throughout, effectively have a higher cost — the equivalent reducing balance rate is roughly 1.8× the flat rate.

Yes. Each hard enquiry when a lender checks your CIBIL for a loan application reduces your score by a few points. The effect is more severe with multiple applications in a short period. Always use an eligibility checker (soft enquiry) on Paisawaala first to check where you qualify before applying.

Ready to apply?

Compare & Apply in Minutes

No impact on your CIBIL score for eligibility check

Check Eligibility — FreeCompare Lenders