Which bank offers the lowest personal loan interest rate?

Currently, HDFC Bank and SBI offer some of the lowest rates starting around 10.50% to 11.00% p.a. for salaried applicants with a CIBIL score above 750.

How does CIBIL score affect my interest rate?

Your credit score is the most critical factor. A score of 750+ can fetch you rates 2-3% lower than someone with a score of 650. Lenders view high scores as low-risk.

Is it better to take a loan from a bank or an NBFC?

Banks generally offer lower interest rates but have stricter eligibility. NBFCs offer faster processing and easier approval for lower credit scores, but usually at higher interest rates.

Are personal loan interest rates fixed or floating?

Most personal loans come with a fixed interest rate, meaning your EMI remains the same throughout the tenure. However, some lenders may offer floating rates linked to the repo rate.

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Personal Loan Interest Rates (2025): Compare All Banks

Last Updated: Jan 2025•6 Min Read•Live Data

Factors affecting personal loan interest rates including CIBIL score

Finding the best personal loan interest rate can save you thousands of rupees in EMIs. While rates start as low as 10.25% p.a., they can go up to 24% depending on your credit profile and the lender you choose.

This guide compiles the latest interest rates from India's top banks and NBFCs to help you make a smart choice.

Current Personal Loan Interest Rates (2025)

Bank / Lender	Interest Rate (p.a.)	Processing Fee
HDFC Bank	10.50% - 21.00%	Up to ₹4,999 + GST
SBI (State Bank of India)	11.15% - 15.30%	Nil to 1.5%
ICICI Bank	10.75% Onwards	Up to 2.5%
Axis Bank	10.49% - 22.00%	Up to 2%
Kotak Mahindra Bank	10.99% Onwards	Up to 3%
Bajaj Finserv	11.00% - 35.00%	Up to 3.93%

Note: Rates are indicative and depend on your credit score, employer category, and loan amount. Final rates are at the sole discretion of the lender.

Factors That Decide Your Rate

Why does one person get a loan at 10.5% while another pays 16%? Here are the key factors:

CIBIL Score

This is the most important factor. A score of 750 or above proves you are creditworthy, helping you negotiate the lowest rates.

Employer Status

Employees of Super-A Category companies (like TCS, Infosys, Govt) often get special low-interest offers compared to unlisted company employees.

Monthly Income

Higher income usually means higher repayment capacity. If your salary is high (e.g., > ₹50k/month), you are seen as a safer borrower.

Relationship

Existing customers (Salary Account holders) often get Pre-Approved offers with instant disbursement and preferential rates.

Calculate Your EMI

Before applying, check exactly how much you need to pay monthly based on these interest rates.

Watch Out: Flat Rate vs Reducing Balance

Sometimes agents offer a suspiciously low rate (e.g., 7-8%). Be careful! They might be quoting a Flat Rate instead of the standard Reducing Balance Rate.

Flat Interest Rate

Interest is calculated on the full principal for the entire tenure. A "10% Flat Rate" is actually equal to approx 17-18% Reducing Rate. Avoid this if possible.

Reducing Balance Rate

Interest is calculated only on the outstanding principal. This is the standard method used by banks and is beneficial for you.

Frequently Asked Questions

Conclusion: How to get the best rate?

To secure the lowest personal loan interest rate in 2025, maintain a healthy credit score (750+) and first check with your existing bank for pre-approved offers.

Always compare the APR (Annual Percentage Rate), which includes processing fees and other charges, rather than just looking at the advertised interest rate.

Fincado Research Team

Fact Checked

Our analysis is built on deep-dive research into RBI Benchmarks and lender-specific disclosures. We verify every interest rate and fee structure against real-world borrower approvals to ensure the highest level of accuracy for Indian home buyers.

Verified: Jan 2026

Methodology: Data-Driven

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