Personal loans are a popular financial option in India. Whether you want to renovate your home, manage wedding expenses, fund education, or consolidate debt, a personal loan can help. The most important thing to consider before applying is the personal loan interest rates.
In 2025, financial institutions offer competitive interest rates based on several factors. Understanding these rates is essential for making smart borrowing decisions. This guide gives you everything you need to know about personal loan interest rates in simple, easy-to-understand terms.
What Are Personal Loan Interest Rates?
A personal loan interest rate is the cost charged by a bank or non-banking financial company (NBFC) for lending money. It is typically expressed as an annual percentage rate (APR). This rate influences the total amount you’ll repay over time.
Why Interest Rates Matter
The interest rates directly impact your monthly EMI and total repayment. A small change in rate can mean thousands more or less in total cost. That’s why it’s crucial to compare rates before applying.
Factors Affecting Personal Loan Interest Rates
Here are the main factors that affect your personal loan interest rates:
- Credit Score: A good score (750 or above) usually helps you get lower interest rates.
- Income Level: Higher and stable income can reduce the interest rate.
- Loan Amount and Tenure: Larger loan amounts or longer tenures may attract higher rates.
- Employment Type: Salaried professionals often get better rates than self-employed individuals.
- Relationship with the Bank: Existing customers may get special offers or lower rates.
Average Personal Loan Interest Rates in India – 2025
Here’s a table showing the typical personal loan interest rates offered by top banks and NBFCs in 2025:
| Bank | Rate Range | Fixed | Floating | CIBIL Tiers | Women Concession | Loan Products & Limits |
|---|---|---|---|---|---|---|
| State Bank of India | 10.30% – 15.30% p.a. | ✓ | – | High CIBIL: ~10.30%; Lower score: up to 15.30% | None, but govt/PSU staff get better spreads | Xpress Credit, RTXC (Government/Defense), Pension Loan; Amounts up to ₹30 L–₹35 L; tenure up to 6 years |
| ICICI Bank | 10.80% – 16.65% p.a. | ✓ | ✓ (EBLR-linked) | Better CIBIL (~750+): ~10.80–12%; lower scores: up to ~16.65% | No specific rate cuts observed | Loan up to ₹50 L; both salaried and self-employed; fixed and floating options |
| Axis Bank | 9.99% – ~22% p.a. | ✓ (MCLR-linked) | – | Starting ~9.99% for high CIBIL; up to ~22% for lower scores | No women-specific concession found | Loan from ₹50K–₹40 L; tenure up to 84 months; quick processing tools |
| HDFC Bank | 10.90% – 24.00% p.a. | ✓ | – | Similar tiered spread based on CIBIL, generally 10.9% upwards | Offers Women Personal Loan variant | Loan up to ₹40 L; tenure up to 72 months; pre-approved options, salary and self-employed |
| PNB | ~8.80% – 17.55% p.a. | ✗ (RRLR-linked) | – | Floor rate ~8.80% for high-profile: higher spread for lower scores | No specific discount noted | Loan up to ₹10 L (~15× salary); tenure up to 5 years |
| Bank of Baroda | 10.30% – 18.20% p.a. | ✗ | – | Tiered pricing: ~10.3% for high CIBIL; higher otherwise | None seen in public info | Loans up to ₹20 L; tenure up to 7 years; varied documentation |
🔎 Snapshot Highlights
- Top Fixed-Rate Offers
- Axis Bank has the lowest fixed rate starting at 9.99%.
- PNB offers the lowest public sector rate at 8.80%, though dependent on strong CIBIL and RRLR link.
- Floating-Rate Options
- ICICI provides both fixed and floating linked to EBLR, giving borrowers flexibility.
- SBI’s fixed rate is tied to 2-year MCLR (9.05% base).
- Axis, PNB, BoB remain MCLR/RRLR-linked with floating-like rates.
- CIBIL-Driven Rates
- All lenders offer best rates (approx. 10–11%) for high CIBIL scores (>750) and decent income.
- Lower scores can push interest toward the upper band (~15–22%).
- Women Borrower Offers
- Only HDFC provides a dedicated Women Personal Loan.
- Other banks don’t have explicit women-specific rate cuts for personal loans.
- Loan Range & Tenures
- Maximum loan size ranges from ₹10 L (PNB) to ₹50 L (SBI, ICICI).
- Tenure ranges from 5 years (longest: Axis 7 years) to shorter spans in others.
✅ Recommendations
- Best for lowest rate: Choose PNB (8.80%) or Axis Bank (9.99%) if you have excellent credit and meet eligibility.
- Fixed versus Flexible: Go with ICICI Bank to access either rate type as per one’s preference.
- Women-focused product: Opt for HDFC Bank’s Women Personal Loan for dedicated features.
- Largest loan requirement: SBI and ICICI offer reliable higher loan limits.
Note: These rates may vary based on the applicant’s profile, credit score, and bank policies.
EMI Calculator
Fixed vs Floating Personal Loan Interest Rates
When choosing a loan, you’ll encounter two types of oan interest rates:
- Fixed Rate: The interest remains the same throughout the loan tenure. It offers stability and is preferred when you expect interest rates to rise.
- Floating Rate: The interest can change depending on market conditions. It might start lower than a fixed rate, but it can go up later.
For most personal loans in India, fixed interest rates are common.
How to Get the Lowest Personal Loan Interest Rates
Follow these steps to reduce your borrowing cost:
1. Check Your Credit Score
A score above 750 increases your chances of getting low loan interest rates.
2. Compare Offers
Don’t settle for the first offer. Use online tools or visit bank branches to compare.
3. Apply with a Trusted Lender
Banks where you have a long relationship or salary account may give you lower rates.
4. Avoid Too Many Applications
Each loan application triggers a hard inquiry on your credit report, which can lower your score.
5. Opt for a Shorter Tenure
Though monthly EMIs may be higher, shorter tenures usually come with better interest rates and lower overall interest paid.
Hidden Charges to Watch Out For
Besides loan interest rates, be aware of these extra costs:
- Processing Fees: Usually 1-3% of the loan amount.
- Prepayment Charges: Some lenders charge a penalty if you close the loan early.
- Late Payment Charges: Penalties applied if you miss EMIs.
Always read the fine print to understand the total cost of the loan.
Personal Loan EMI Calculation Example
Let’s say you take a personal loan of ₹5,00,000 at 12% interest for 3 years. Your EMI would be around ₹16,607. Over the tenure, you will pay a total of ₹5,97,852. That’s ₹97,852 in interest.
That’s why even a small drop in personal loan interest rates can help you save a lot.
Personal Loan vs. Credit Card Loan
While both are unsecured loans, personal loans usually have lower interest rates than credit cards. Here’s a quick comparison:
| Feature | Personal Loan | Credit Card Loan |
|---|---|---|
| Interest Rate | 10% – 24% | 24% – 42% |
| Loan Tenure | 1 to 7 years | 1 to 3 years |
| Amount | Up to ₹40 lakhs | Depends on card limit |
| Approval Time | 1 to 3 days | Instant or same day |
Choosing personal loans over credit card loans can help you save on high personal loan interest rates charged by cards.
When Is the Right Time to Apply?
Apply when you meet the following conditions:
- Your credit score is high
- Your income is stable
- You don’t have high existing debts
- You’ve compared multiple personal loan interest rates
Festive seasons, salary account offers, and pre-approved loan campaigns are often great times to apply.
FAQs
A. A good rate typically starts from around 10% p.a. in India, depending on your credit score, income, and chosen tenure. Fixed or floating, aim for the lowest APR (Annual Percentage Rate) available.
A. Most personal loans in India come with fixed rates for clear budgeting. Floating rates are less common and tied to benchmarks like the repo rate or internal indices.
A. Your rate depends on:
Credit score (higher than 750 is best)
Income and job stability
Loan quantum and tenure
Debt-to-income ratio
Type of lender (bank vs NBFC/fintech)
A. A score above 750 improves eligibility for lower rates. PSU banks often use tiered scoring templates, while NBFCs may offer better rates with higher creditworthiness
A. Tenure usually ranges from 1 to 5 years, but some lenders offer up to 6–7 years. Longer tenures mean smaller EMIs but higher total interest
A. Yes—but check your lender’s prepayment policy. Many charge a 2–5% fee if you close early, especially within the initial 6–12 months .
A. Processing charges (typically 1–5%) add to your loan cost and impact the effective APR.
A. Yes. Some lenders provide lower rates for loans taken for specific purposes like medical, education, or home renovation, as these are considered less risky.
A. Absolutely, but you typically need 2–3 years of business history, ITR/bank statements, and a strong credit background.
A. Missing EMIs can result in late fees (2–3%), a credit score hit, and even legal notices for sustained delays.
Conclusion
Understanding personal loan interest rates is crucial before you borrow. These rates determine your monthly payments and total cost. By improving your credit score, comparing lenders, and understanding the fine print, you can make smart financial choices.
Always remember: the best loan is not just the one with the lowest rate, but the one that matches your needs with manageable terms.
Take your time, research thoroughly, and borrow responsibly.