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Best Banks for Low Interest Personal Loans in India

Submitted by admin on May 28th, 2026

Some Indian banks are providing personal loan interest rates as low as 9.99% for the borrowers who have good credit profiles in 2026. The public sector banks are gaining customers with lower interest rates and clear charges, and private banks are shifting into faster and digital processing.

State Bank of India (SBI)

State Bank of India is one of the most preferred options to avail cheap personal loans. SBI provides competitive rates of interest particularly for salaried persons and those who have existing accounts with the bank. The bank is known for its clear policies and reduced processing costs as compared to a lot of private lenders.

HDFC Bank

HDFC Bank is a preferred bank for personal loans with instant approval and fast disbursal. If a customer is already with a company and meets the repayments standards, they can be approved in mere minutes via digital banking services.

The bank provides loans with a high loan amount and flexible loan tenure. Due to convenience and quick processing, many borrowers opt to take the loan from HDFC despite the slight fee as compared to PSU banks. Generally, the interest rates begin at 9.99% for eligible customers.

IDFC FIRST Bank

One of the best personal loan lenders is IDFC FIRST Bank. The bank provides the best rates as low as approximately 9.99% and no foreclosure fees in many instances.

Bank of Baroda

Another trusted public sector bank bank boasting affordable personal loans is Bank of Baroda.

The bank is reputable with the reasonability of the interest rate and the overall loan cost as well. Bank of Baroda’s affordability and accessibility make it a popular choice among borrowers. It is particularly appealing for salaried people who are seeking on-hand EMIs.

Kotak Mahindra Bank

Kotak Mahindra Bank offers competitive interest rates and offers quick online processing. The bank is ideal for borrowers who are looking for flexible loan terms and paperwork.

Kotak’s ease of digital loan application process is also a major draw for salaried individuals in metros.

Personal loan interest rates can be affected by a variety of factors.

Though the banks are offering low starting rates, the interest rates are dependent on various factors such as:

• Credit score
• Monthly income
• Employment stability
• Existing debts

Good relationships with the bank 1/1000000

• Loan tenure

The borrowers with CIBIL score above 750 are likely to get the best loan offers and quicker loan approvals.

• To obtain the lowest personal loan rate, follow these tips.
• To increase the likelihood of obtaining a personal loan rate that is low:
• Maintain a good credit rating!
• Before applying for a loan, shop around and compare lenders.
• Don’t make several applications in a short time.
• If it’s within your financial means, opt for a shorter period of repayment.
• Utilize salary-account relations for better offers

The internet is also a resource that offers many finance discussions that recommend banks over loan apps or unknown fintech loan providers, generally, banks offer lower and clear rates of interest.

Final Thoughts

The right bank to borrow from for a low interest personal loan depends on the user’s profile and requirements for the loan. SBI and Bank of Baroda are best for affordability and trust, whereas, the best bank to avail of fast approvals and convenience of digital is HDFC and IDFC FIRST Bank.