Need money for an emergency, wedding, education or another major expense? A personal loan can provide quick access to funds without requiring you to pledge an asset as security.
But there is one major drawback: personal loans usually come with higher interest rates than secured loans such as home or car loans.
If your CIBIL score is above 750, you may have a better chance of getting a personal loan at a competitive interest rate.
Several banks and NBFCs offer personal loans at different rates. Here are some options based on the rates mentioned for 2026.
Banks Offering Personal Loans at Lower Rates
The interest rate you actually receive depends on factors such as your credit score, income and employment profile.
Some lenders mentioned in the available rates are:
Bank of Maharashtra: 8.75% to 13.55% per year
Union Bank: 8.75% to 12.55% per year
Mahindra Finance: 8% to 25% per year
Central Bank of India: 9.85% to 11.65% per year
Canara Bank: 9.70% to 15.15% per year
Axis Bank: Starting at 9.99% per year
ICICI Bank: Starting at 9.99% per year
IDFC First Bank: Starting at 9.99% per year
HDFC Bank: Starting at 9.99% per year
Kotak Mahindra Bank: Starting at 9.99% per year
Remember, the lowest advertised rate does not mean every customer will receive that rate. Your final rate will depend on the lender’s eligibility criteria.
Personal Loan Interest Rates and Processing Fees
The interest rate is not the only cost you should check before taking a personal loan.
Banks may also charge a processing fee, which is usually deducted from the loan amount or added to the overall cost.
Here are the rates and processing fees mentioned in the information:
| Bank | Interest Rate (per year) | Processing Fee |
|---|---|---|
| Axis Bank | Starting at 9.99% | Up to 2% |
| Bank of India | 10.85% to 16.15% | Up to 1% |
| Canara Bank | 9.70% to 15.15% | Up to 0.5% |
| Central Bank of India | 9.85% to 11.65% | Up to 1% |
| Federal Bank | 12% to 22.50% | Up to 2% |
| HDFC Bank | Starting at 9.99% | Up to ₹6,500 |
| IndusInd Bank | Starting at 10.35% | Up to 3.5% |
| HSBC Bank | Starting at 9.75% | Up to 2% |
| Kotak Mahindra Bank | Starting at 9.99% | Up to 5% |
| IDFC First Bank | Starting at 9.99% | Up to 2% |
Because fees can vary based on the loan and customer, always check the lender’s latest charges before signing the agreement.
What Determines Your Personal Loan Interest Rate?
Getting a loan at a low interest rate depends on more than just the bank you choose.
Your CIBIL score is one of the key factors. A score of 750 or above can improve your chances of getting better loan terms.
Your income also matters. A stable and sufficient income can make you appear less risky to the lender.
Your job profile and employment stability can also affect the lender’s decision.
In simple terms, a strong credit profile and stable income can help you negotiate or qualify for a more competitive rate.
Don’t Forget the Processing Fee
A low interest rate may look attractive, but don’t make your decision based on the interest rate alone.
The lender may charge a processing fee, which can be around 0% to 2% in many cases, although some lenders may charge more depending on their terms.
For example, a loan with a slightly lower interest rate but a high processing fee may not always be cheaper overall.
Check the total cost of the loan, including interest, processing fees and other applicable charges, before making a decision.
Documents You May Need
The exact documents vary from one lender to another.
Generally, you may need identity and address proof such as Aadhaar, PAN or voter ID.
The lender may also ask for documents showing your income and employment status, such as salary slips, income proof and bank statements.
Before applying, check the lender’s current document requirements to avoid delays.
Check the Full Cost Before Taking a Loan
A personal loan can be useful when you need money quickly, but it should not be treated as easy or free money.
Compare the interest rate, processing fee, repayment period and total repayment amount before choosing a lender.
Most importantly, borrow only an amount you can comfortably repay. A lower interest rate is helpful, but the right loan is one that fits your monthly budget.
