Need money for an urgent expense but don’t want to pay a very high interest rate?
A personal loan can help in such situations, but it is usually more expensive than loans such as home or education loans. That’s why comparing interest rates before applying is important.
If you have a good CIBIL score, especially 750 or above, and a stable income, you may have a better chance of getting a personal loan at a competitive rate.
Several banks and NBFCs are offering personal loans at relatively lower interest rates in 2026. Here’s a look at some of the options.
Banks Offering Personal Loans at Lower Interest Rates
The interest rate offered to you may vary depending on your credit score, income, employer, loan amount and other factors.
Some of the lenders mentioned in the available rates are:
Bank of Maharashtra: 8.75% to 13.55%
Union Bank of India: 8.75% to 12.55%
Mahindra Finance: 8% to 25%
Central Bank of India: 9.85% to 11.65%
Canara Bank: 9.70% to 15.15%
Axis Bank: Starting at 9.99%
ICICI Bank: Starting at 9.99%
IDFC First Bank: Starting at 9.99%
HDFC Bank: Starting at 9.99%
Kotak Mahindra Bank: Starting at 9.99%
HSBC Bank: Starting at 9.75%
Remember that the starting rate is not necessarily the rate every customer will receive.
Interest Rates and Processing Fees Compared
The interest rate is not the only cost you should look at when taking a personal loan.
Banks and NBFCs may also charge a processing fee, which can add to the overall cost of borrowing.
| Lender | Interest Rate (per year) | Processing Fee |
|---|---|---|
| Axis Bank | Starting at 9.99% | Up to 2% |
| Bank of India | 10.85%–16.15% | Up to 1% |
| Canara Bank | 9.70%–15.15% | Up to 0.5% |
| Central Bank of India | 9.85%–11.65% | Up to 1% |
| Federal Bank | 12%–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 and interest rates can change, check the lender’s latest terms before applying.
What Decides Your Personal Loan Interest Rate?
You may see a bank advertising a low starting rate, but your final rate can be different.
One of the biggest factors is your CIBIL score. A score of 750 or above can improve your chances of getting better loan terms.
Your salary and employment history also matter. A stable job and regular income can make you a stronger applicant.
The bank may also consider your existing loans, repayment history and overall financial profile.
Don’t Forget the Processing Fee
Many borrowers focus only on the interest rate and overlook the processing fee.
Depending on the lender, the fee can be a percentage of the loan amount or a fixed amount.
This fee is separate from the interest you pay on the loan.
For example, even if two lenders offer similar interest rates, the one with a lower processing fee could have a lower overall borrowing cost.
Documents You May Need
The exact requirements vary from one lender to another, but applicants may be asked to provide documents such as:
Aadhaar card or another identity proof
PAN card
Address proof, such as an electricity bill
Salary slips or income proof
Bank statements
Other documents related to employment or income
Before applying, check the lender’s document requirements and eligibility conditions.
Compare Before You Borrow
A personal loan can provide quick access to money, but it can also become expensive if the interest rate and fees are high.
Don’t choose a lender only because it advertises the lowest starting rate.
Compare the interest rate, processing fee, loan tenure, EMI and other charges before making a decision.
A strong credit score and stable income can also help you negotiate or qualify for better loan terms.
