Personal loans are one of the most common ways people in India meet urgent financial needs — whether it’s medical bills, travel, tuition, wedding costs, or debt consolidation.
Choosing the right bank with low interest rates and easy eligibility can save you thousands of rupees in interest payments.
This guide will walk you through:
✅ Best banks offering personal loans in India
✅ Current interest rates in 2026
✅ Eligibility criteria
✅ Required documents
✅ Tips to get approval faster
Whether you’re a first-time borrower or planning to switch to a better loan, this article will help you choose the best option for your needs.
What Is a Personal Loan?
A personal loan is a type of unsecured loan — meaning you don’t need to provide any collateral like property or gold.
You can use this money for almost any purpose:
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Emergency expenses
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Education costs
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Home renovation
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Wedding expenses
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Travel or tour
Unlike car loans or home loans, personal loans are flexible and require fewer documents.
How Personal Loan Interest Works
Interest is the extra amount you pay to borrow money.
In India, personal loan interest rates in 2026 usually range between:
👉 10% to 18% per annum (depends on bank & your profile)
A lower rate saves you big money.
Interest on a personal loan is typically fixed, which means your EMI remains the same every month.
High search keywords to remember:
personal loan interest rate, low interest personal loan, best personal loan in India
Things to Consider Before Choosing a Bank
Before you pick a bank, keep these points in mind:
✔️ Interest rate offered
✔️ Processing fees
✔️ Prepayment charges
✔️ Required CIBIL score
✔️ Repayment tenure
✔️ Loan amount limit
A bank with slightly higher interest but low processing fees may still be cheaper overall.
CIBIL Score and Personal Loan Approval
Your CIBIL score plays a major role in loan approval and interest rate.
Generally:
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750 and above → Best chances of low interest
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700 – 749 → Good chances but slightly higher rates
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650 – 699 → Loan may be approved with high rates
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Below 650 → Higher rejection risk
Keeping your credit score high can significantly reduce your personal loan cost.
Best Banks for Personal Loans in India (2026)
Here are the top banks in India most borrowers prefer for personal loans.
1️⃣ State Bank of India (SBI)
Overview:
SBI is India’s largest public sector bank and offers some of the most competitive personal loan rates.
Interest Rates:
❤️ 10.35% – 14.25% p.a.
Eligibility Highlights:
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Salaried professionals with stable income
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Minimum age: 21 years
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CIBIL score preferably above 700
Why Choose SBI?
SBI often offers low interest and long tenures up to 5 years.
Good for: Low interest seekers & long-term comfort
2️⃣ HDFC Bank
Overview:
HDFC Bank is a top private bank known for fast processing and reliable customer service.
Interest Rates:
❤️ 10.50% – 17.50% p.a.
Eligibility Highlights:
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Salaried or self-employed professionals
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Minimum income requirement
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Good credit score needed
Why Choose HDFC?
Fast disbursal and flexible repayment options.
Good for: Quick approval & smooth customer service
3️⃣ ICICI Bank
Overview:
ICICI Bank offers personal loans with a simple documentation process.
Interest Rates:
❤️ 10.75% – 18.00% p.a.
Eligibility Highlights:
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Stable job with income proof
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Age 21 – 60 years
-
Good CIBIL score
Why Choose ICICI?
Great online application experience and transparent terms.
Good for: Digital first borrowers
4️⃣ Axis Bank
Overview:
Axis Bank is known for its tailored personal loan products.
Interest Rates:
❤️ 11.00% – 17.75% p.a.
Eligibility Highlights:
-
Salaried & self-employed applicants
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Good income and credit profile
Why Choose Axis Bank?
Flexible terms and decent processing.
Good for: Balanced interest and features
5️⃣ Kotak Mahindra Bank
Overview:
Kotak offers competitive rates, especially for existing customers.
Interest Rates:
❤️ 10.75% – 17.50% p.a.
Eligibility Highlights:
-
Existing account holders get perks
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Salary credits or regular savings
Why Choose Kotak?
Offers pre-approved personal loan options for account holders.
Good for: Bank loyal customers
6️⃣ IDFC First Bank
Overview:
IDFC often attracts borrowers with its low initial interest rate offers.
Interest Rates:
❤️ 10.99% – 16.99% p.a.
Eligibility Highlights:
-
Salaried & self-employed
-
Good credit score
Why Choose IDFC?
Simple eligibility and attractive rate options.
Good for: Borrowers seeking marketing offers
7️⃣ Punjab National Bank (PNB)
Overview:
PNB offers stable and trustworthy personal loan products.
Interest Rates:
❤️ 10.50% – 15.50% p.a.
Eligibility Highlights:
-
Salaried individuals
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Clean credit record
Why Choose PNB?
Public sector bank with strong reliability.
Good for: Conservative borrowers
8️⃣ Bank of Baroda (BoB)
Overview:
BoB personal loans come with transparent charges.
Interest Rates:
❤️ 10.40% – 15.25% p.a.
Eligibility Highlights:
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Salaried or self-employed
-
Regular income proofs
Why Choose BoB?
Good balance of interest and tenure.
Good for: Medium ticket loans
How Banks Decide Your Personal Loan Interest Rate
Banks look at several things:
✔️ CIBIL score
✔️ Monthly income
✔️ Job stability
✔️ Existing loans
✔️ Debt-to-income ratio
Higher income and excellent credit history often lead to lowest interest offers.
Documents Required for Personal Loan Approval
Having clear documents speeds up the loan process.
Common requirements:
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Identity proof (Aadhaar, PAN)
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Address proof
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Income proof (salary slips / IT returns)
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Bank statements (last 6 months)
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Employment proof
Pro tip: Keep all documents ready to avoid delays.
Pre-Approved Personal Loan Offers
Many banks send pre-approved personal loan offers via SMS or email if:
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You have a bank account with them
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Your credit score is strong
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You have a good banking relationship
Pre-approved offers often come with:
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Lower processing fees
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Faster disbursal
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Competitive interest rates
How to Get the Best Interest Rate
Here are proven ways to improve your chances of low interest:
✔️ Maintain a High CIBIL Score
Pay EMIs & credit card bills on time.
✔️ Keep Credit Utilization Low
Use less than 30% of your credit limit.
✔️ Apply to Multiple Banks
Compare rates before choosing one.
✔️ Request a Lower Rate
Negotiate with the bank if your profile is strong.
✔️ Use Salary Account Bank Offers
Existing customers often get better deals.
Personal Loan Fees You Should Know
Even if interest is low, there are other charges:
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Processing fee (1%–3% of loan amount)
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Prepayment penalty (some banks)
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Late payment fee
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GST on charges
Always read the fine print.
Public Sector Bank vs Private Bank
| Feature | Public Sector Banks | Private Banks |
|---|---|---|
| Interest Rate | Lower | Slightly higher |
| Processing Time | Slower | Faster |
| Customer Support | Traditional | Modern digital |
| Approval | Conservative | Flexible |
Choose based on your priority — cost or speed.
Loan Repayment Tips
✔️ Set up auto-debit
✔️ Pay EMIs on time
✔️ Avoid late payments
✔️ Don’t apply for too many loans
✔️ Monitor your CIBIL regularly
Good repayment behavior improves your credit score.
FAQs: Best Banks for Personal Loans in India
1. Which bank offers the lowest personal loan rate?
State Bank of India and Bank of Baroda often offer the lowest rates for borrowers with good CIBIL.
2. What is a good CIBIL score for a low interest personal loan?
A score of 750+ is considered good for lowest interest.
3. Can self-employed people get low interest personal loans?
Yes, with proper income proof and a good credit score.
4. How long does personal loan approval take?
With digital banks, approval and disbursal can happen within 24–72 hours.
5. Is it better to take a personal loan from a public or private bank?
If interest is priority → Public sector
If speed is priority → Private bank
Final Verdict
Choosing the best bank for a personal loan depends on your needs.
For low interest rates and long tenure, public sector banks like SBI, BoB, PNB are strong choices.
If you need fast processing and easy documentation, HDFC Bank, ICICI Bank, Axis Bank are excellent options.
Good financial planning and a strong credit history can help you secure the best possible personal loan deal in India in 2026.
Disclaimer
This article is for educational purposes only. Interest rates, eligibility, and terms vary by bank and borrower profile. Always check the latest details directly with the bank before applying.