Lowest Personal Loan Interest Rates in India 2025: Compare Top Banks and NBFCs Lending Rate

Personal Loan Interest Rates from Leading Banks and NBFCs

The latest personal loan interest rates offered by top banks and NBFCs are provided in the table below for easy reference and comparison.

Finding the Best Personal Loan Rates

Interest rates for personal loans vary between banks and financial institutions. There are several factors that impact the available rate for a specific loan, including but not limited to the applicant’s credit history, employment type, and income.

One lender may advertise a very low rate for government employees, whereas another lender will advertise better rates for applicants demonstrating strong or stable income or repayment capabilities.

Experts recommend that borrowers compare interest rates offered by competing lenders before applying for a loan, as this simple exercise can save tremendous amounts over the length of the loan. An interest rate that is even just a few basis points less than the competition could add up to considerable savings in EMI and total interest out.

Key Factors Influencing Personal Loan Interest Rates

Personal loan interest rates are affected by a multitude of factors pertaining to the cost of funds for the lender and the financial position of the borrower. Below are the major factors that affect the way lenders set personal loan interest rates:

Why Credit Profile is the Most Important

Ultimately, the borrower's credit profile will dictate eligibility and interest rates on their loan. Borrowers who have a solid history of payments and credit history are much more likely to access lower rates. Lenders perceive these borrowers as safe, reducing the lender’s credit risk and allowing the lenders to offer better loan terms.

Consumers with credit scores below 700 may have difficulty obtaining loans from the mainstream banks and large NBFCs because those lenders prefer borrowers with strong credit profiles. But there are specialised NBFCs that will consider borrowers with weaker credit profiles. These lenders may approve much smaller amounts, and will generally charge higher rates of interest to compensate for the increased credit risk.

FAQs

How can I get the lowest interest rate on a personal loan?

To get the lowest rate feasible, try to keep your credit score (over 750), income stability, and see what multiple banks and NBFCs are offering on an application like Upstox before applying.

What factors determine personal loan interest rates?

Interest rates are determined by a variety of things, including the factors of credit score, income, occupation type, stability of employment, and the relationship the borrower has with the lender.

Do salaried and self-employed applicants get the same interest rates?

No, typically salaried employees, especially those employed by government or PSU, will receive lower interest rates compared to a self-employed person, who will pay a slightly higher rate, which is more of a factor of their variable income situation.

Can my relationship with a bank help me get better loan rates?

Yes, the ability to stay on the books and be a long-time customer of the bank matters as they give preference rates or pre-approved loans at lower rates to the existing customer with salary accounts, deposits, or credit cards.

What happens if I have a low credit score?

Low-credit-score (below 700) applicants may find it difficult to receive loan approval from banks. Some NBFCs may offer a loan, however the amounts may be smaller and the interest rate higher.

Can income level affect my personal loan interest rate?

Yes, generally, higher and more consistent monthly income levels are viewed as lower risk borrowers, and lenders tend to offer lower interest rates than if it were the opposite situation and the borrower had lower income levels.

Why should I use a loan comparison platform?

Loan comparison platforms allow borrowers to compare their personal loan offers from 30+ lenders in one place to help borrowers compare their most aesthetically appealing and affordable loans based on their eligibility levels.