💼 Personal Loans

Personal Loan Guide India 2026 — Rates, Eligibility, EMI and Tips

By FinMandi Research Team·May 2026·✓ Updated May 2026

🔍 Reviewed by FinMandi Research Team·✓ Cross-checked against official bank and RBI sources·✓ 10+ Years Banking Experience·Updated May 2026

⚡ What this guide covers

Personal loan rates from 8.75% p.a. — which banks are lowest in 2026
Eligibility criteria: income, CIBIL score, age, employment type
How EMI is calculated — with plain-language examples
When personal loan makes sense vs gold loan vs credit card
Prepayment rules and foreclosure charges by bank type
Common mistakes that lead to rejection — and how to avoid them

Personal Loan Rates 2026 — Quick Comparison

Bank	Interest Rate	Min Salary	Max Amount	Tenure
Union Bank of India 🏅	8.75%	Rs 15,000	Rs 15 lakh	5 years
SBI Xpress Credit	9.60%	Rs 15,000	Rs 20 lakh	6 years
Bank of Baroda	9.65%	Rs 15,000	Rs 10 lakh	5 years
HDFC Bank	10.50%–24%	Rs 25,000	Rs 40 lakh	5 years
ICICI Bank	10.65%–16%	Rs 25,000	Rs 50 lakh	6 years
Axis Bank	10.49%–22%	Rs 15,000	Rs 40 lakh	5 years
Bajaj Finserv	11.00%–35%	Rs 25,001	Rs 40 lakh	8 years
Kotak Mahindra Bank	10.99%–26%	Rs 20,000	Rs 35 lakh	5 years

💡 Rates shown are starting rates for salaried applicants with a CIBIL score of 750+. Your actual rate depends on your income, CIBIL score, employer type, and the bank's internal credit assessment. Always get a final rate offer in writing before accepting.

Compare All Personal Loan Rates → Calculate Your EMI

Personal Loan Eligibility — What Banks Look For

Factor	PSU Banks (SBI, Bank of Baroda)	Private Banks (HDFC, ICICI)
Minimum Age	21 years	21 years
Maximum Age	60–65 years	60–65 years
Minimum Salary	Rs 15,000/month	Rs 25,000/month
Minimum CIBIL Score	700+	720–750+
Work Experience	1–2 years total, 6 months current job	2 years total, 1 year current employer
Max Loan-to-Income	Up to 20x monthly salary	Up to 27x monthly salary

How Your Personal Loan EMI is Calculated

Your EMI (Equated Monthly Instalment) is calculated using this formula:

EMI = P × r × (1+r)² / [(1+r)² − 1]
Where P = loan amount, r = monthly interest rate (annual rate ÷ 12), n = loan tenure in months.

Plain language example: You borrow Rs 3 lakh at 12% for 3 years. Monthly rate = 1%. EMI = Rs 9,964. You pay Rs 3,58,704 total — of which Rs 58,704 is interest. That is the real cost of borrowing.

🔐 Calculate Your Personal Loan EMI → See Prepayment Savings

Personal Loan vs Gold Loan vs Credit Card — Which is Cheapest?

Option	Rate	Collateral	CIBIL Needed	Best For
Gold Loan 🏅	8.25%–15%	Gold jewellery	Not required	Short-term emergency, have gold
Personal Loan	8.75%–24%	None	700+ needed	Larger amount, longer tenure
Credit Card EMI	14%–18%	None	700+ (card needed)	Specific purchase, short tenure
Credit Card Revolving	36%–42%	None	—	Never — most expensive option

Full comparison: Gold Loan vs Personal Loan vs Credit Card — Which is Cheapest?

Prepayment and Foreclosure — Key Rules

PSU banks (SBI, Bank of Baroda): Typically zero foreclosure charges after 6–12 months of repayment
Private banks (HDFC, ICICI, Axis): Usually 2–5% of outstanding principal as foreclosure charge
NBFCs (Bajaj, Tata Capital): Charges vary — always check the loan agreement before signing
RBI rule: For floating-rate personal loans, banks cannot charge prepayment penalty. For fixed-rate loans, they can.

Common Reasons for Personal Loan Rejection — and Fixes

Reason	Fix
CIBIL score below 700	Improve score first — takes 3–6 months. Apply with co-applicant in the meantime.
Too many recent loan applications	Wait 6 months before applying again. Each application creates a hard inquiry.
Salary below bank minimum	Try PSU banks (Rs 15K minimum) or NBFCs. Or apply for a smaller amount.
Job change within 6–12 months	Wait until you have 1 year at current employer before applying.
High existing EMI obligations	Close small loans first. Banks want your total EMIs below 40–50% of monthly income.

📊 How to Improve CIBIL Score Fast → Compare All Personal Loan Rates

Frequently Asked Questions

Most banks require a minimum CIBIL score of 700 for personal loan approval. PSU banks like SBI and Bank of Baroda may approve at 700+. Private banks like HDFC and ICICI typically want 750+ for their best rates. A score below 700 usually results in rejection from mainstream banks. NBFCs may approve lower scores but at significantly higher rates (18%+).

On a Rs 30,000 monthly salary, most banks will approve a personal loan of Rs 3 lakh to Rs 6 lakh, depending on your existing EMI obligations and CIBIL score. Banks typically allow total EMIs (including the new loan) up to 40-50% of monthly income. If you have no existing loans, you may qualify for up to Rs 6 lakh at Rs 30,000 salary. Use our Personal Loan EMI Calculator to check what EMI fits your salary.

Yes. Having an existing home loan does not disqualify you from a personal loan. However, banks will add your home loan EMI to your existing obligations and check if your total EMIs stay within 40-50% of your monthly income. The key is having enough net income after all EMIs. Your CIBIL score must also be 700+ and your payment history on the home loan must be clean.

Standard documents for salaried applicants: Aadhaar card + PAN card (identity and address proof), last 3 months' salary slips, last 6 months' bank statements, latest Form 16 or ITR, employment ID or offer letter. Self-employed applicants also need 2 years' ITR, GST registration, and business proof. Documents vary slightly by bank.

PSU banks (SBI, Bank of Baroda, Union Bank) offer lower interest rates starting at 8.75-9.60%, but have stricter documentation and slower processing (3-7 days). Private banks (HDFC, ICICI, Axis) offer faster approval (same day to 24 hours) but at higher rates starting at 10.50%+. If you need money urgently, private banks or pre-approved offers in your bank app are faster. If you can wait 3-5 days and want the lowest rate, PSU banks are better.

⚠️ Disclaimer: All information is for educational and informational purposes only. Rates shown are indicative and sourced from publicly available bank websites as of May 2026 and may have changed. FinMandi is an independent information platform, not a bank, NBFC, insurer, or registered investment adviser. Always verify directly with your bank before making any financial decision.