Personal Loan Interest Rate Trends in India

As of 2026, personal loan interest rates in India start from 9.98% p.a., owing to the repo rate being 5.25%, the lowest in the past 7 years. Lenders usually set their personal loan interest rates depending on the credit score, job profile, monthly income, EMI/NMI ratio, employer’s profile, etc. of the applicant.

Get Cashback of ₹ 1,000^* on Loan Disbursal

Valid till 30^th June '26 *T&C Apply

Instant Personal Loan

Get up to ₹50 Lakhs starting at 9.98%

By submitting this form, you have read and agree to the Credit Report Terms of Use, Terms of Use & Privacy Policy

Google Play Store

4.5_/5

15.6L Reviews

5.7cr+Satisfied Customers

65+Lending Partners

₹65k Cr+Loans Disbursed

Wide Choice

Curated offers from 30+ lenders

Quick Disbursal

Money in your account instantly

SmartMatch

Offers ranked according to eligibility

Digital Process

Hassle-free & paperless

How the RBI Repo Rate Affects Personal Loan Interest Rates

The repo rate is the interest rate at which the RBI lends short-term money to commercial banks against government securities pledged as collateral.
It helps in managing inflation and catalyse growth.
As the repo rate increases, so does the interest rate and the total loan cost, and vice versa.
The final interest rate under EBLR is determined by the external benchmark rate, spread and the credit risk premium.
Banks modify the interest rates of MCLR-based loans relatively slower that happen only on your loan reset date.

Find Best Personal Loan Offers

Sort by:

HDFC Bank

10 Second Disbursal*100% Digital Process*Quick Disbursal

Max Loan Amt.Upto ₹25L

Rate of Interest9.99% - 12.5%

Tenure upto1-5 Years

Processing Fee₹ 6,500

ICICI Bank

100% Digital Process*Quick Disbursal

Max Loan Amt.Upto ₹25L

Rate of Interest11% - 13%

Tenure upto1-5 Years

Processing FeeUpto 2%

Axis Bank

Low Processing fee

Max Loan Amt.Upto ₹40L

Rate of Interest9.99% - 17.15%

Tenure uptoUpto 6 Years

Processing FeeUpto 2%

Why Choose Paisabazaar?

Compare & Choose the Best Offer

Pre-approved Offers with Instant Disbursals

Know Your Chances of Approval

End-to-End Digital Process

Timeline of 2025 Rate Cuts and Their Impact on Personal Loan EMIs

Months	Repo rate change
January 2025	6.50%
February 2025	6.25%
April 2025	6.00%
June 2025	5.50%
August 2025	5.50%
October 2025	5.50%
December 2025	5.25%

Impact of Repo Rate Cut on Personal Loan EMI

Loan Amount	Tenure	EMI at 11% p.a. (repo rate 6.50%)	EMI at 10.75% p.a. (repo rate 5.25%)	Difference in the EMI (Rs.)
Rs. 20 lakh	5 years	Rs. 43,485	Rs. 43,236	249
Rs. 30 lakh	5 years	Rs. 65,227	Rs. 64,854	373
Rs. 40 lakh	5 years	Rs. 86,970	Rs. 86,472	208

Factors That Determine Your Personal Loan Interest Rate

Below-mentioned are the factors affecting the personal loan interest rates:

Credit Score: Applicants with a CIBIL score of 760 and above usually have higher chances of getting their personal loans approved at lower interest rates. Individuals with a low credit score can also avail personal loans, but usually at a higher interest rate.
Job and Income Stability: Salaried individuals employed with the government and private sectors are eligible for a lower interest rate as compared to self-employed individuals. Among the salaried, government employees are more likely to avail personal loans at lower interest rates due to job stability and income consistency.
EMI/NMI ratio: Keeping the EMI/NMI ratio well within the 50-55% range, including the EMI of the proposed loan, increases the loan approval chances. Applicants having a high EMI/NMI ratiomight find it difficult to get their loan approved.
Existing Relationship with the Bank: Individuals with a very good credit score and having their bank accounts/loan accounts/FD accounts with a bank or have availed a credit card from a lender are usually eligible for pre-approved offers and might be offered preferential interest rates.
Loan Amount: Applicants with a high credit score and better repayment capacity can get a higher loan amount.

Fixed vs Floating Personal Loan Rates: Which is Better in 2026?

Fixed interest rates remain constant throughout the loan tenure, whereas floating rates change with the change in the repo rate.
Individuals should always compare the rates and terms of lenders offering floating and fixed interest rates and make informed decisions accordingly.

Avail Personal Loan for
All Your Needs

Avail Personal Loan for
All Your Needs

FAQs

How does the RBI repo rate affect personal loan interest rates?

The personal loan interest rates reduce with the decline in the repo rate, and vice versa.

Is the personal loan interest rate fixed or floating in India?

Personal loan interest rates are both fixed and floating in India.

What CIBIL score is needed to get the best personal loan interest rate?

Applicants with a CIBIL score of 760 and above usually have higher chances of getting the best personal loan interest rates.

What is the minimum income required for a personal loan in 2026?

The minimum income required to avail a personal loan in 2026 is usually Rs. 25,000. However, lenders usually consider personal loan applications from individuals having their EMI/NMI ratio below 55%.

Can I prepay my personal loan? Are there any penalties in 2026?

Yes, you can prepay your personal loan. Fixed interest rates come with prepayment charges of up to 4% of the prepaid amount. On the contrary, individuals availing floating interest rates are not charged any prepayment fees.