Personal loans have become one of the most widely used loan options today. People increasingly resort to personal loans for sudden financial needs, medical expenses, weddings, travel, or other personal needs. Banks and finance companies provide these loans without any guarantee, which is why they are called unsecured loans.

Despite the convenience, personal loan interest rates are higher than other loans, like home loans or car loans. This is because the bank does not have any security against this loan, and the risk is higher.

personal loan interest rates

Recently, many banks have reduced the starting interest rates on personal loans, and in many cases, they start at around 9.5 to 10 percent, although the final rate depends on the customer’s profile and credit score.

What is a personal loan?

A personal loan is a loan in which the bank does not require any assets or a guarantee from the customer. The bank lends a fixed amount to the customer, and the customer repays it through EMIs. This period typically ranges from 1 year to 5 years.

Since the bank has no security for this loan, the interest rate is higher. Public sector banks typically offer personal loans between 10 and 14 percent, while private banks can offer 11 to 16 percent or even higher.

Personal Loan Interest Rates of Government Banks

Interest rates at public sector banks in India are generally considered stable and reliable. Based on the most recent data, the starting interest rates for some banks are as follows:

SBI offers loans starting at around 10.05 percent, and in some cases, this rate may vary depending on the customer’s profile.

Bank of Baroda offers loans starting at 10.15 percent.

Punjab National Bank (PNB) offers loans starting at 10.25 percent.

Canara Bank offers loans starting at 9.95 percent.

The Central Bank of India offers loans starting at 10.80 percent.

Personal Loan Interest Rates of Private Banks

Private banks generally offer loans with more flexible terms, but their maximum interest rates can sometimes be higher.

HDFC Bank offers loans starting at 9.99 percent.

ICICI Bank offers loans starting at 10.45 percent.

Axis Bank offers loans starting at 9.99 percent.

Bandhan Bank offers loans starting at 9.47 percent.

Kotak Mahindra Bank offers loans starting at 10.99 percent.

Impact of RBI Policy and Interest Rates

The Reserve Bank has maintained the repo rate at 5.25 percent in February 2026, which is expected to stabilize loan and EMI rates. This means that banks’ lending rates do not experience sudden and significant changes.

Personal Loan Interest Rates

What to consider when taking a personal loan

Take a personal loan only when truly necessary. Taking a loan for hobbies or unnecessary expenses can lead to increased financial pressure in the long run.
Before taking a loan, it’s important to compare the interest rates, processing fees, and other charges of different banks, as sometimes loans with lower interest rates have higher fees.
Choosing a loan with a shorter term reduces the total interest and repays the loan faster.

About the Author

Rohit P

My name is Rohit Pal, and I have been working in the field of journalism for the past five years. During this time, I have written on a variety of topics, including business, automobiles, technology, and politics. I have worked with several major organizations and am currently working with Timesbull.

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