Qrates

Personal loan interest rates by bank in India: Comparing SBI, HDFC, ICICI and Axis

Personal loan interest rates in India currently range from 10.5% to 24% per annum. This guide compares interest rates, processing fees, and prepayment rules for SBI, HDFC, ICICI, and Axis Bank. Learn how to use the Key Fact Statement to find the real cost of your loan.

By Qrates research desk · 2026-11-11

Personal loan interest rates in India currently range from 10.5% to 24% per annum for salaried borrowers (RBI, 2026). The real cost of your loan is the Annual Percentage Rate (APR), which includes the interest rate plus processing fees and insurance costs as per the RBI 2024 circular.

Personal loan interest rates and fees at a glance (2026)

The table below compares the current interest rate ranges and processing fees for major banks. These figures apply to salaried individuals with a CIBIL score of 750 or above.

Bank Interest Rate (p.a.) Processing Fee Prepayment Rules
SBI 10.5% to 15.5% 1.5% (max ₹15,000) 3% on prepaid amount
HDFC Bank 10.5% to 24% Up to 2.5% 12-month lock-in
ICICI Bank 10.75% to 19% Up to 2.5% 3% to 6% fee
Axis Bank 10.75% to 22% 1% to 2% Varies by tenure
Kotak Mahindra 10.5% onwards Up to 3% 12-month lock-in

Interest rates for unsecured loans have remained elevated following the RBI move to increase risk weights for consumer credit in November 2023 (RBI/2023-24/85). You can check the latest RBI licence status and user-reported fees for these lenders on the Qrates lending directory.

The gap between advertised rates and the Annual Percentage Rate (APR)

The interest rate the bank shows you is not the only cost you pay. The RBI circular dated 15 April 2024 mandates that all banks and NBFCs must provide a standardized Key Fact Statement (KFS) before you sign the loan (RBI/2024-25/18).

Why the lowest rate can be misleading

A bank might advertise a low rate of 10.5% but charge a high processing fee of 3%. Another bank might offer 11% with a flat fee of ₹1,000. For a small loan, the 11% loan could be cheaper in total.

The RBI 2024 circular on Harmonisation of Instructions

The KFS must now show you the Annual Percentage Rate (APR). This figure represents the total annual cost of the loan, including interest and all mandatory fees. Lenders are prohibited from charging any fee that is not explicitly mentioned in this KFS (RBI, 2024).

Processing fees and GST: The upfront cost

Processing fees are deducted from your loan amount before the money reaches your bank account. These fees vary significantly between public and private sector banks.

SBI personal loan processing fee vs private banks

SBI caps its processing fee for Xpress Credit at 1.50% of the loan amount, with a maximum limit of ₹15,000 plus GST (SBI, 2026). In contrast, private banks like ICICI or Axis often charge a percentage of the total loan without a low rupee cap. SBI's fee cap makes it a lower-cost option for large loan amounts compared to uncapped private bank fees.

How GST adds to your loan cost

Every fee the bank charges attracts a standard 18% Goods and Services Tax (GST). If you take a ₹5 lakh loan with a 2% processing fee, the fee is ₹10,000. You will pay an additional ₹1,800 in GST, meaning you receive ₹11,800 less than your sanctioned amount.

Prepayment and foreclosure rules by bank

Foreclosure is when you pay off your entire loan balance before the tenure ends. Most private banks like HDFC and Kotak Mahindra Bank impose a 12-month lock-in period (HDFC Bank, 2026). You cannot close the loan before paying 12 EMIs.

Foreclosure fees in private banks typically range from 2% to 4% of the outstanding principal (Kotak Mahindra Bank, 2026). SBI charges a 3% prepayment fee on any amount paid before the end of the tenure (SBI, 2026). Always check the KFS for the specific "lock-in" period and the penalty for early payment.

How your CIBIL score and salary account change the offer

Banks use risk-based pricing to decide your interest rate. This means two people applying to the same bank for the same amount can get different rates.

The 750 CIBIL score threshold

To access the lowest advertised rates, banks generally require a CIBIL score of 750 or above. If your score is below 700, the bank may increase the interest rate by 2-5% or reject the application. You can monitor your score using credit score apps before applying.

Salary account benefits at HDFC and ICICI

Having a salary account with HDFC or ICICI often leads to pre-approved loan offers. These offers usually require zero documentation and provide instant disbursement. While fast, these pre-approved rates are not always the lowest available in the market.

Differences in lender types

Different lenders cater to different borrower profiles based on credit history and speed.

  • Public Sector Banks: SBI's fee cap makes it a lower-cost option for large loan amounts, though the documentation process may take longer.
  • Private Banks: HDFC and ICICI offer the fastest processing for existing salary account holders, often within 24 hours.
  • Digital-focused Banks: Kotak Mahindra Bank and Axis Bank often provide aggressive digital-only offers with competitive rates for tech-savvy users.
  • NBFCs: Lenders like Moneyview or Bajaj Finance often accept borrowers with CIBIL scores below 650, but they typically charge higher interest rates than banks. Understanding the NBFC vs bank personal loan differences is key to choosing the right lender.

Which bank has the lowest personal loan interest rate in India?

Public sector banks like SBI usually offer the lowest starting rates, often around 10.5% to 11%. However, the final rate depends on your CIBIL score and employer category.

Is 10.5% interest rate good for a personal loan?

Yes, 10.5% is currently among the lowest rates available for unsecured personal loans in India. Most private banks charge between 11% and 15% for salaried individuals with good credit.

What is the processing fee for personal loan in SBI?

SBI charges 1.50% of the loan amount as a processing fee. This is capped at a maximum of ₹15,000 plus 18% GST (SBI, 2026).

Can I close my personal loan before 1 year without charges?

Most private banks like HDFC and Kotak have a 12-month lock-in period where foreclosure is not allowed. After this period, you may still have to pay a foreclosure fee of 2% to 4%.

Personal loan lene ke liye kitna CIBIL score chahiye?

Most major banks require a CIBIL score of 750 or above to approve a personal loan at their lowest interest rates. If you have a lower score, you might need to look for a personal loan with a low CIBIL score.

How to check if a loan app is RBI registered?

You can verify the licence of any lending app by checking the loan and credit apps section on the Qrates directory. You can also learn how to check if a loan app is RBI registered to ensure your data and money are safe.

The short version

  • Always compare the APR shown in the Key Fact Statement, not just the advertised interest rate.
  • Check the foreclosure lock-in period if you plan to pay back the loan early using a bonus or savings.
  • Processing fees attract 18% GST, which is deducted upfront from your loan amount.
  • Verify the bank's licence and user complaints on the Qrates directory before sharing your personal data.

Sources

Disclaimer

Qrates is an information directory. It takes no commission from any company listed and does not recommend products. Figures are taken from the sources named and dated, and they change; check the company's own page before you decide. This is not investment, credit, insurance or tax advice for your situation.

Questions people ask

Which bank has the lowest personal loan interest rate in India?

Public sector banks like SBI usually offer the lowest starting rates, often around 10.5% to 11%. However, the final rate depends on your CIBIL score and employer category.

Is 10.5% interest rate good for a personal loan?

Yes, 10.5% is currently among the lowest rates available for unsecured personal loans in India. Most private banks charge between 11% and 15% for salaried individuals with good credit.

What is the processing fee for personal loan in SBI?

SBI charges 1.50% of the loan amount as a processing fee. This is capped at a maximum of ₹15,000 plus 18% GST (SBI, 2026).

Can I close my personal loan before 1 year without charges?

Most private banks like HDFC and Kotak have a 12-month lock-in period where foreclosure is not allowed. After this period, you may still have to pay a foreclosure fee of 2% to 4%.

Personal loan lene ke liye kitna CIBIL score chahiye?

Most major banks require a CIBIL score of 750 or above to approve a personal loan at their lowest interest rates. Some NBFCs may approve loans for scores as low as 600, but at much higher interest rates.

How to check if a loan app is RBI registered?

You can verify the licence of any lending app by checking the "Lending" section on the Qrates directory. Every app listed there includes its RBI-registered NBFC or bank partner name.

Related articles