Personal loan interest rates in May 2026 vary significantly across banks and non-banking financial companies (NBFCs), making it important for borrowers to compare offers before applying. Rates currently start from as low as 8.75 per cent, while processing fees, loan tenure and repayment terms can significantly affect the total cost of borrowing.

Among major lenders, Bank of Maharashtra is offering personal loans at interest rates ranging from 8.75 per cent to 13.55 per cent, while Union Bank of India offers rates between 8.90 per cent and 12.65 per cent. Private sector banks such as Axis Bank, HDFC Bank and ICICI Bank are offering personal loans from 9.60 per cent, 9.99 per cent and 9.99 per cent onwards, respectively.

Borrowers should look beyond advertised EMI offers and compare interest rates, processing charges and repayment obligations before choosing a lender. Public sector banks, including State Bank of India, Canara Bank and Punjab National Bank, offer rates based on factors such as credit score, income profile, employer category and loan amount.

HDFC Bank is offering personal loans at interest rates starting from 9.99 per cent per annum, with processing fees of up to Rs 6,500. ICICI Bank also offers loans from 9.99 per cent onwards and charges processing fees of up to 2 per cent of the loan amount. Axis Bank’s personal loan rates start at 9.60 per cent, with processing charges of up to 2 per cent.

Among public sector lenders, State Bank of India offers personal loans at interest rates ranging from 10 per cent to 15 per cent, with processing fees of up to 1.5 per cent. Bank of Baroda charges interest rates between 10.15 per cent and 18 per cent, along with processing fees of up to 2 per cent. Canara Bank offers rates between 9.70 per cent and 15.15 per cent and levies a processing fee of 0.25 per cent, subject to a minimum of Rs 500 and a maximum of Rs 2,500. Punjab National Bank’s rates range from 10.25 per cent to 16.80 per cent, while processing fees can go up to 1 per cent.

Union Bank of India and Bank of Maharashtra are among the lenders offering the lowest starting rates in the market. Union Bank’s personal loan rates range from 8.90 per cent to 12.65 per cent, with processing fees of up to 1 per cent. Bank of Maharashtra offers rates between 8.75 per cent and 13.55 per cent and charges processing fees of up to 1 per cent.

Among private banks and financial institutions, Kotak Mahindra Bank offers personal loans from 10.99 per cent onwards with processing fees of up to 5 per cent. HSBC Bank’s rates start at 9.75 per cent, while Federal Bank charges between 11.75 per cent and 18.99 per cent, with processing fees of up to 3 per cent. IndusInd Bank offers loans from 10.49 per cent onwards and charges up to 3.5 per cent as processing fees. IDFC FIRST Bank also starts at 9.99 per cent and levies processing fees of up to 3.5 per cent.

Other lenders include Bank of India, which offers rates ranging from 10.85 per cent to 16.15 per cent with processing fees of up to 1 per cent, and Indian Overseas Bank, where rates start from 10.25 per cent onwards with charges of up to 0.75 per cent. UCO Bank offers rates between 9.95 per cent and 13.20 per cent and charges processing fees of up to 1 per cent. Central Bank of India provides personal loans from 11.25 per cent onwards with processing fees of up to 1 per cent.

Among NBFCs, Tata Capital offers personal loans from 10.99 per cent onwards and charges a flat processing fee of Rs 99. Bajaj Finserv offers rates ranging from 10 per cent to 30 per cent, with processing fees of up to 3.93 per cent.

Punjab & Sind Bank, a public sector lender, offers personal loan interest rates ranging from 9.60 per cent to 13.85 per cent and charges processing fees between 0.50 per cent and 1 per cent.

Source: Bank websites. Rates and charges as on May 20, 2026.

Compare interest rates carefully: Even a small difference in interest rates can significantly impact the total repayment amount over the loan tenure. Compare offers from multiple lenders before making a decision.

Understand processing fees and charges: Processing fees can range from a flat Rs 99 to as much as 5 per cent of the loan amount. These charges directly increase the cost of borrowing.

Choose the right tenure: A longer tenure reduces monthly EMIs but increases the total interest paid. Select a repayment period that suits your financial situation.

Maintain a strong credit score: A credit score of 750 or above generally improves eligibility for lower interest rates and better loan terms.

Check for hidden charges: Review the loan agreement carefully for foreclosure charges, late payment penalties, bounce charges and other fees that may apply during the loan tenure.

Disclaimer: This is not investment advice. Do your own due diligence or consult an expert for financial planning.