Best Personal Loans
in India — May 2026

As of May 2026, the RBI repo rate stands at 5.25% — held unchanged since the December 2025 cut. Over 2025, the RBI cumulatively cut rates by 125 basis points (1.25%). This has directly pushed bank lending rates down. Personal loan starting rates that were 10.50%–11% in early 2025 have now dropped to 8.75%–9.99% at major lenders. If you took a floating-rate loan earlier, check whether your bank has passed on the benefit — you may be eligible for a rate revision request.

Most major banks require a CIBIL score of 700–720 minimum. A score of 750+ is considered ideal — it unlocks sub-11% interest rates and the highest loan amounts. If your score is 650–699, only NBFCs and fintech lenders (at 20–36% p.a.) will typically approve your application. Below 650, very few options exist outside predatory lenders. You can improve your score in 6–12 months by paying all EMIs and credit card bills on time, reducing credit utilisation below 30%, and not applying for new credit frequently.

The maximum personal loan in India in 2026 is ₹50 lakh, offered by ICICI Bank for high-income, high-credit-score applicants. Most banks cap at ₹35–40 lakh. The actual amount sanctioned depends on your net monthly income (typically 12–24× your monthly salary), FOIR ratio, CIBIL score, and the lender's internal credit policy. For example: a person earning ₹60,000/month with 750+ CIBIL and no existing loans may qualify for ₹10–15 lakh from most banks.

Yes. SBI, PNB, Axis Bank, and several NBFCs accept applicants with a minimum net salary of ₹15,000/month. Government employees at this income level have the best chances due to job stability. At ₹15,000/month, your maximum EMI should be around ₹7,500 (50% FOIR), which qualifies you for roughly ₹2–3 lakh at a 3-year tenure. Fintech lenders like Navi and MoneyView approve from ₹12,000/month but at higher interest rates (18–36% p.a.).

Yes. Most lenders allow full prepayment after completing a minimum of 6–12 EMIs. Prepayment charges vary: SBI charges nil for salaried borrowers; HDFC and ICICI charge 2–3% of the outstanding principal; Bajaj Finserv charges up to 4% + GST. Part-payment is also allowed at most banks (minimum ₹5,000 or equivalent). Note: RBI regulations permit prepayment without penalty on floating-rate loans for individual borrowers, but most personal loans are fixed-rate, so lenders legally charge these fees. Always read the sanction letter before signing.

Yes — in two ways. (1) A hard inquiry (every formal application) reduces your CIBIL by 5–10 points temporarily. Applying to 5 lenders simultaneously can reduce it by 25–50 points and also signals credit-hungry behaviour to lenders. (2) Once the loan is disbursed and you start repaying on time, your score recovers and typically improves over 12–18 months. Strategy: use eligibility checkers (soft inquiries) on comparison sites first, then apply to only 1–2 lenders that match your profile.

Generally no — but there are three exceptions: (1) Home renovation: Interest up to ₹30,000/year deductible under Section 24(b) if funds used for home improvement. (2) Business use: Full interest deductible as a business expense under Section 37. (3) Investments: If loan funds are used to purchase assets (stocks, property), interest may be deductible against investment income. For personal consumption (travel, wedding, medical), no tax benefit applies. Consult a CA or use our Income Tax Calculator for guidance.

FOIR (Fixed Obligation to Income Ratio) is the share of gross monthly income going toward all fixed EMI obligations. Formula: (Sum of all EMIs including proposed new loan) ÷ Gross Monthly Income × 100. Most banks require FOIR below 50–55%. Example: You earn ₹60,000/month and already pay ₹8,000/month in a car loan EMI. You want a personal loan with ₹15,000/month EMI. Your FOIR would be (8,000 + 15,000)/60,000 = 38.3% — comfortably within limits. If FOIR exceeds 55%, lenders will reduce the loan amount or reject the application.

A balance transfer involves moving your outstanding personal loan to another lender offering a lower interest rate. In 2026, this is particularly worthwhile if you took a loan at 14–16% in 2023–24 and can now refinance at 10–11%. Example: Outstanding ₹3 lakh at 15% with 24 months left → transfer to 10.5% → saves approximately ₹18,000 in interest. Factor in the processing fee (1–3%) of the new lender. Break-even is usually within 3–6 months. Axis Bank and Bajaj Finserv actively promote balance transfer offers in 2026.