Finance
Personal Loan Guide India: Rates and Red Flags
Personal loan rates in India start at 9.99%, but most borrowers pay two to five points more than the advertised figure.
By Nina Shah · Updated · 8 min read
Short answer
What is a good personal loan interest rate in India?
Personal loan rates in India start at about 9.99% from HDFC Bank, ICICI Bank and Axis Bank, with Bajaj Finance around 11% to 13%. The starting rate is for applicants with excellent credit, and most borrowers end up paying two to five percentage points above it. A personal loan is still far cheaper than carrying a credit card balance, which effectively costs over 40% a year.
Our practical verdict
Personal loans are unsecured, which is why they cost more than a home or car loan and less than a credit card. Rates in 2026 start at about 9.99% from the large private banks, with NBFCs such as Bajaj Finance around 11% to 13%.
The important thing to understand about that 9.99% is that it is a floor, not an expectation. Lenders price on CIBIL score, monthly income, employment type and how much you already owe. Most borrowers are quoted two to five percentage points above the advertised rate. That is not a bait-and-switch, it is risk pricing, but it does mean you should compare offers rather than assume the poster applies to you.
The strongest case for a personal loan is refinancing a credit card balance. Cards in India charge 3% to 3.75% a month, which compounds to over 40% a year. Moving that to a personal loan at 11% to 16% is one of the largest guaranteed savings available to an ordinary borrower. The trap is behavioural: the card limit is now free, and if you use it again you end up with both debts.
Shortlist
Recommended options to compare
Use this as a starting list, then compare live India prices and warranty before buying.
Pick 1
HDFC, ICICI and Axis, from about 9.99%
The lowest advertised bank rates. That figure is reserved for salaried applicants with a CIBIL score above 750 and a strong income profile, so treat it as a floor rather than an expectation.
Pick 2
Bajaj Finance, about 11% to 13%
Faster approval and more flexible eligibility, priced accordingly. Reasonable if a bank has declined you, expensive if it has not.
Pick 3
Your existing bank
Often the quickest route and sometimes pre-approved, which skips documentation. Pre-approved does not mean well-priced, so still compare against at least two others.
Pick 4
A personal loan against a credit card balance
The clearest case for borrowing. Cards cost over 40% a year effectively; a personal loan at 11% to 16% is a large saving, provided you then stop using the card.
Pick 5
Loan apps and NBFCs at very high rates
Worth naming as a warning. Anything above roughly 24% a year is expensive enough that the underlying purchase is usually worth reconsidering instead.
Which option should you choose?
HDFC, ICICI and Axis, from about 9.99%
The lowest advertised bank rates. That figure is reserved for salaried applicants with a CIBIL score above 750 and a strong income profile, so treat it as a floor rather than an expectation.
Bajaj Finance, about 11% to 13%
Faster approval and more flexible eligibility, priced accordingly. Reasonable if a bank has declined you, expensive if it has not.
Your existing bank
Often the quickest route and sometimes pre-approved, which skips documentation. Pre-approved does not mean well-priced, so still compare against at least two others.
A personal loan against a credit card balance
The clearest case for borrowing. Cards cost over 40% a year effectively; a personal loan at 11% to 16% is a large saving, provided you then stop using the card.
Loan apps and NBFCs at very high rates
Worth naming as a warning. Anything above roughly 24% a year is expensive enough that the underlying purchase is usually worth reconsidering instead.
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Need the faster shortlist?
Start with our recommended options, then compare the tradeoffs that matter for your budget and workflow.
See top picksHow to decide
Pick the option around the job you need done. This is the fastest way to avoid paying for something that looks impressive but does not change your real workflow.
| Situation | Best starting point | Final check |
|---|---|---|
| HDFC, ICICI and Axis, from about 9.99% | The lowest advertised bank rates. That figure is reserved for salaried applicants with a CIBIL score above 750 and a strong income profile, so treat it as a floor rather than an expectation. | Use this as a shortlist, then verify the final details before committing. |
| Bajaj Finance, about 11% to 13% | Faster approval and more flexible eligibility, priced accordingly. Reasonable if a bank has declined you, expensive if it has not. | Use this as a shortlist, then verify the final details before committing. |
| Your existing bank | Often the quickest route and sometimes pre-approved, which skips documentation. Pre-approved does not mean well-priced, so still compare against at least two others. | Use this as a shortlist, then verify the final details before committing. |
| A personal loan against a credit card balance | The clearest case for borrowing. Cards cost over 40% a year effectively; a personal loan at 11% to 16% is a large saving, provided you then stop using the card. | Use this as a shortlist, then verify the final details before committing. |
Read the editorial notes
Be wary at the top end. Some app-based lenders charge rates above 24% a year with fees that push the effective cost higher still. At that price the question stops being which lender and becomes whether the expense can wait.
Before borrowing: 1. Check the processing fee, typically 1% to 3%, and whether it is deducted upfront. 2. Confirm prepayment terms - many lenders charge to close early or bar it for the first year. 3. Compare the total repayment, not the EMI. A longer tenure lowers the EMI and raises the cost. 4. Pull your CIBIL report first; fixing an error can move you a full rate band.
Decision shortcut
Still comparing options?
Use the table above to shortlist your best fit, then check related picks, tools, and buying guides before you make the final call.
FAQ
What is a good personal loan interest rate in India?
Anything at or below about 11% is competitive in 2026. The advertised 9.99% floor requires excellent credit and a strong salary profile. If you are quoted above 16%, compare more lenders or consider whether the expense can wait.
Why is my quoted rate higher than the advertised one?
Because advertised rates are for the strongest profiles. Lenders price on CIBIL score, monthly income, employment type and existing obligations. Most borrowers land two to five points above the headline figure, which is normal rather than a bait.
Is a personal loan better than a credit card?
Almost always, if you are carrying a balance. Credit cards charge 3% to 3.75% a month, which compounds past 40% a year. A personal loan at 11% to 16% is dramatically cheaper - the risk is treating the freed-up card limit as new spending power.
This guide is educational. Interest rates, charges and eligibility in India change frequently and vary by borrower profile, so verify current terms with the bank before applying.
Finance Guides Lead
Nina writes about everyday money decisions, credit cards, calculators, and transparent personal finance tools.
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How Choice IQ evaluated this guide
Choice IQ evaluates personal loans in India by realistic rate bands rather than advertised floors, CIBIL score impact, processing fees, prepayment terms, total repayment cost and the comparison against credit card interest.
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