Choosing the best bank for a personal loan in India depends on several factors such as interest rate, processing fees, loan amount, approval speed, and repayment flexibility. With banks and NBFCs offering competitive personal loan products in 2026, borrowers have more choices than ever.
This detailed guide explains which bank is best for a personal loan, compares top lenders, and helps you select the right option based on your financial profile.
What Is a Personal Loan?
A personal loan is an unsecured loan offered by banks and financial institutions for purposes such as medical expenses, weddings, travel, education, or debt consolidation. Since no collateral is required, approval is mainly based on credit score, income stability, and repayment history.
Top Banks for Personal Loans in India (2026)
1. HDFC Bank – Best Overall Personal Loan
Why it stands out
- Competitive interest rates for salaried professionals
- High loan amounts
- Fast digital approval for existing customers
Key features
- Interest rate: starts around 9.99% p.a.
- Loan amount: up to ₹40 lakh
- Tenure: up to 6 years
- Processing fee: usually ₹5,000–₹6,500
Best for: Salaried individuals with strong credit scores and stable income
2. State Bank of India – Most Trusted Public Sector Option
Why it stands out
- Government-backed credibility
- Competitive rates for salaried and pensioners
- Transparent charges
Key features
- Interest rate: starts around 10.10% p.a.
- Loan amount: up to ₹20–25 lakh
- Tenure: up to 6 years
- Lower processing fees than private banks
Best for: Risk-averse borrowers who prefer PSU banks
3. Axis Bank – Best for Quick Processing
Why it stands out
- Fast approval and disbursal
- Fully online application
- Good balance between rate and service
Key features
- Interest rate: starts around 9.99% p.a.
- Loan amount: up to ₹40 lakh
- Tenure: up to 5 years
- Digital KYC and paperless process
Best for: Borrowers needing quick access to funds
4. IDFC FIRST Bank – Lowest Fees & Transparency
Why it stands out
- Zero foreclosure charges
- Clear pricing with minimal hidden costs
- Strong digital experience
Key features
- Interest rate: starts around 9.99% p.a.
- Loan amount: up to ₹10–15 lakh
- Tenure: up to 5 years
- No prepayment penalty
Best for: Borrowers planning early repayment
5. ICICI Bank – Reliable Large Private Bank
Why it stands out
- Wide branch network
- Good customer service
- Flexible repayment options
Key features
- Interest rate: starts around 10.45% p.a.
- Loan amount: up to ₹50 lakh
- Tenure: up to 6 years
- Online account management
Best for: Existing ICICI customers and high-income professionals
6. Bajaj Finance – Fastest Personal Loan Disbursal
Why it stands out
- Instant approval for eligible customers
- Minimal documentation
- Flexible EMI options
Key features
- Interest rate: starts around 10% p.a.
- Loan amount: up to ₹25 lakh
- Tenure: up to 5 years
- Higher processing fees compared to banks
Best for: Urgent cash needs and self-employed borrowers
Comparison Table: Best Personal Loan Banks in India
| Bank / Lender | Starting Interest Rate | Max Loan Amount | Processing Speed |
|---|---|---|---|
| HDFC Bank | 9.99% | ₹40 lakh | Fast |
| SBI | 10.10% | ₹25 lakh | Moderate |
| Axis Bank | 9.99% | ₹40 lakh | Fast |
| IDFC FIRST Bank | 9.99% | ₹15 lakh | Fast |
| ICICI Bank | 10.45% | ₹50 lakh | Fast |
| Bajaj Finance | 10% | ₹25 lakh | Very Fast |
Eligibility Criteria for Personal Loans
Most banks follow similar eligibility rules:
- Minimum age: 21 years
- Maximum age at loan maturity: 58–65 years
- Credit score: 750+ recommended
- Stable income and employment history
- Minimum monthly income as per bank norms
How to Choose the Best Bank for a Personal Loan?
Consider these factors before applying:
- Interest rate (lower rate = lower EMI)
- Processing fees and hidden charges
- Prepayment and foreclosure penalties
- Loan amount and tenure flexibility
- Approval and disbursal time
Bank vs NBFC: Which Is Better?
Banks
- Lower interest rates
- More regulated
- Slightly slower approval
NBFCs
- Faster approval
- Flexible eligibility
- Slightly higher interest and fees
Final Verdict
There is no single best bank for everyone, but:
- Best overall: HDFC Bank
- Most trusted PSU: SBI
- Fast approval: Axis Bank, Bajaj Finance
- Lowest extra charges: IDFC FIRST Bank
Your credit score, income, and urgency ultimately decide the best lender for you.
Pro Tip for Borrowers
Always compare interest rate + processing fee + foreclosure charges, not just the EMI. A slightly lower EMI with high fees can cost more in the long run.
Rajil M P is a seasoned banking professional with over eight years of experience in the Indian banking sector. He has successfully completed the JAIIB and CAIIB examinations conducted by the Indian Institute of Banking & Finance (IIBF), reflecting his strong academic foundation and practical expertise in banking, finance, and risk management. He is the founder and editor of IndianBanker.com, a trusted platform focused on banking news, exam preparation, financial updates, and practical tools for banking aspirants, professionals, and informed readers. Drawing from real-world banking experience, Rajil simplifies complex topics such as interest rates, loans, deposits, RBI policies, and government schemes, making them easy to understand and apply.
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