Personal loan interest rates play a key role in determining how much you'll repay over the life of your loan. At CredBuddha, we help borrowers compare the latest rates, understand lender requirements and make informed decisions before applying for a personal loan.
Before comparing lenders or looking for the lowest interest rate, it is important to understand how personal loan interest is calculated. Most personal loans in India are offered under either a fixed interest rate or a floating interest rate structure and knowing the difference can help you choose the right option based on your financial goals.
The fixed interest rate is a fixed amount for the complete loan tenure which means that your EMI will not change. A floating interest rate is connected to market conditions like the RBI repo rate and can go up or down, thereby impacting your overall borrowing cost over time.
The right option depends on your financial condition. Fixed rates offer stability and managed repayments, meanwhile floating rates give the opportunity to benefit if interest rates decline in the future.
| Feature | Fixed Interest Rate | Floating Interest Rate |
|---|---|---|
| EMI Consistency | Remains the same throughout the loan tenure | Can increase or decrease over time |
| Market Impact | Not affected by RBI policy changes | Directly linked to benchmark rate movements |
| Predictability | High | Moderate |
| Suitability | Ideal for stable budgeting | Suitable when rate cuts are expected |
In 2026, interest rates on personal loans in India are competitive as banks and NBFCs attempt for quality borrowers. Lenders generally provide lower rates and better terms to borrowers with good credit profiles.
The table below provides an overview of current personal loan interest rates and processing fees offered by major lenders.
| Bank / NBFC Name | Interest Rate (p.a.) | Processing Fee |
|---|---|---|
| Bank of Maharashtra | 8.75% onwards | Up to 1% |
| Axis Bank | 8.75% to 21.55% | Up to 2% |
| HDFC Bank | 9.99% to 24.00% | Up to ₹6,500 + GST |
| ICICI Bank | 9.99% to 16.50% | Up to 2% |
| IDFC FIRST Bank | 9.99% onwards | 0% to 3.5% |
| State Bank of India (SBI) | 10.00% to 15.00% | Up to 1.50% |
| Bank of Baroda | 10.15% onwards | Up to 2% |
| Punjab National Bank (PNB) | 10.25% to 16.80% | Up to 1% |
| Yes Bank | 10.85% to 21.00% | Up to 2.5% |
| Bank of India | 10.85% onwards | 1% (Min ₹2,500; Max ₹15,000) |
| Kotak Mahindra Bank | 10.99% onwards | Up to 5% |
| IDBI Bank | 11.00% to 15.50% | 1% |
| IndusInd Bank | 12.00% onwards | Up to 3.5% |
Getting a personal loan is not about selecting the right lender. If you take a few simple steps before you make your application, your chances of getting a better deal are improved.
Not every borrower receives the same interest rate. Lenders evaluate several risk factors before deciding the final pricing.
When taking a personal loan, borrowers focus on the monthly EMI. But the loan tenure selected can directly impact the total interest paid over the loan tenure.
A shorter tenure results in higher EMIs but significantly reduces the total interest cost. A longer tenure lowers monthly repayment obligations but increases the overall borrowing cost.
For example: ₹10 Lakh Personal Loan at 11.50% Interest
| Tenure | Interest Rate (p.a.) | Monthly EMI | Total Interest Cost | Total Amount Payable |
|---|---|---|---|---|
| 1 Year | 11.50% | ₹88,616 | ₹63,380 | ₹10,63,380 |
| 2 Years | 11.50% | ₹46,840 | ₹1,24,168 | ₹11,24,168 |
| 3 Years | 11.50% | ₹32,976 | ₹1,87,136 | ₹11,87,136 |
| 4 Years | 11.50% | ₹26,090 | ₹2,52,272 | ₹12,52,272 |
| 5 Years | 11.50% | ₹21,992 | ₹3,19,556 | ₹13,19,556 |
As the table shows, extending the tenure from one year to five years reduces your monthly EMI substantially.
The majority of borrowers apply for a personal loan with the first bank they come across, but that can often mean paying a higher interest rate than necessary. Interest rates on personal loans may differ between banks and NBFCs, even for borrowers with similar income, employment profiles and credit scores.
To understand the impact, consider the example below of a borrower seeking a ₹10 lakh personal loan for a tenure of 5 years. The figures are illustrative and demonstrate how different loan offers can affect your EMI and overall borrowing cost.
| Example Loan Offer | Interest Rate (p.a.) | Monthly EMI | Total Interest Payable | Total Repayment |
|---|---|---|---|---|
| Premium Relationship Offer | 9.99% | ₹21,248 | ₹2,74,880 | ₹12,74,880 |
| Preferred Banking Customer Offer | 10.50% | ₹21,496 | ₹2,93,760 | ₹12,93,760 |
| Standard Market Offer | 12.00% | ₹22,170 | ₹3,30,240 | ₹13,30,240 |
| Higher-Risk Borrower Offer | 13.50% | ₹23,018 | ₹3,81,080 | ₹13,81,080 |
As shown above, choosing a lower-rate offer can help reduce both your EMI burden and total interest cost. In this example, the difference between the lowest and highest interest rate results in savings of more than ₹1 lakh over the loan tenure.
Important Note: Personal loan interest rates may vary based on your credit score, income, loan amount and lender policies. Rates can also change due to RBI guidelines and market conditions. The information in this guide is based on available data as of June 2026. For the latest rates and personalized loan offers, connect with the CredBuddha team before applying.
Knowing your EMI before applying helps you plan your finances more effectively. Instead of manually calculating repayments, you can use CredBuddha's Personal Loan EMI Calculator to get instant estimates based on your loan amount, tenure and interest rate.
The standard EMI formula used by lenders is:
EMI = [P × r × (1 + r)n] ÷ [(1 + r)n − 1]
Where:
Interest rate is only one part of the total borrowing cost. Many borrowers overlook additional fees that can significantly impact the overall cost of the loan.
Common charges include:
Most lenders allow borrowers to make payments on loans before the original tenure ends. But prepayment or foreclosure charges may be applied, typically between 2% and 5% of the remaining principal. These charges help lenders recover a portion of the interest income they would otherwise lose in the early closure. Always check the lender's foreclosure policy while working out whether the savings are worth the charges before you make any prepayment decision.
Choosing the lender with the lowest interest rate is not the only way to find the ideal personal loan. Your credit score, income, employment profile, current finances and lender-specific qualifying requirements are some of the factors that impact the actual rate that is provided to you. Because of this, one of the best methods to lower your borrowing costs and increase your chances of approval is to compare many loan offers before applying.
At CredBuddha, we simplify this process by helping borrowers compare personal loan offers from multiple banks and NBFCs in one place. Instead of applying separately across different lenders and risking multiple hard enquiries on your credit profile, you can explore suitable options based on your financial profile and borrowing requirements.
Remember to check other factors also with the headline interest rate when selecting a personal loan. Whether you're planning a wedding, managing medical expenses, funding higher education or covering any major financial requirement, CredBuddha can help you compare, evaluate and apply for personal loan options that align with your financial goals.
Note: The interest rates shown on this page are indicative and may not reflect the exact rate offered by every lender. Please confirm the latest rate with your bank, NBFC, or local lending partner before applying for a personal loan.
