Which Bank Gives the Cheapest Personal Loan in February 2026? Here's What 10 Lenders Are Actually Offering
Kotak is offering 9.98%. SBI is at 10.05%. But most Indians are still paying 18%+ on personal loans — simply because they never compared. February 2026 has quietly become the best month to borrow cheap. Here are the 10 lenders slashing rates right now. Don’t miss this.
Choosing the wrong personal loan can cost you tens of thousands of rupees in extra interest. In February 2026, with the Reserve Bank of India having made multiple repo rate adjustments over the past year, the personal loan market in India has become more competitive than ever. Whether you’re planning a wedding, funding a medical emergency, renovating your home, or consolidating debt — knowing which lender offers the lowest interest rate is no longer optional. It’s essential.
This guide brings you verified, up-to-date data on the top 10 personal loan providers with the lowest interest rates in February 2026, along with expert tips on how to qualify for those rates and what to watch out for before you sign on the dotted line.
Why Your Personal Loan Interest Rate Matters More Than You Think
Here’s a real-world example that puts everything into perspective. Say you borrow ₹5 lakh for 4 years. At 10% interest, your total repayment would be approximately ₹6.08 lakh. At 14%, it jumps to around ₹6.62 lakh. That’s a difference of over ₹54,000 — simply because of a 4% gap in interest rate.
This is why comparing rates across lenders before applying isn’t just smart — it’s financially critical. And in February 2026, the range is wide: from under 10% to over 24% depending on the lender and your credit profile.
Top 10 Banks & NBFCs with Lowest Personal Loan Interest Rates in February 2026
Disclaimer: Interest rates listed below are indicative and sourced from official bank websites, BankBazaar, Paisabazaar, and Urban Money as of February 2026. Final rates depend on your CIBIL score, income, employment type, and lender discretion. Always verify directly with the lender before applying.
1. Kotak Mahindra Bank — Starting at 9.98% p.a.
Kotak Mahindra Bank tops our list among private sector lenders, offering the lowest starting interest rate among leading private banks. Kotak Mahindra Bank offers the lowest interest rates on personal loans among leading private sector banks, starting at 9.98% p.a.
Key Highlights:
- Interest Rate: 9.98% – 20% p.a.
- Loan Amount: Up to ₹35 lakh
- Tenure: 12 to 60 months
- Best For: High CIBIL score borrowers (750+), salaried individuals from top-tier companies
Kotak's digital-first approach means faster approvals. Existing Kotak customers with strong credit profiles often get pre-approved offers at the lowest end of the rate range.
2. HDFC Bank — Starting at 10.40% p.a.
HDFC Bank is one of the most popular personal loan providers in India, known for rapid disbursal and a fully digital application process. HDFC Bank offers a personal loan interest rate ranging from a minimum of 10.40% to a maximum of 24.16% IRR, with an average of 11.47%.
Key Highlights:
- Interest Rate: 10.40% – 24.16% p.a.
- Loan Amount: Up to ₹40 lakh
- Processing Fee: Up to ₹6,500 + GST
- Best For: Existing HDFC customers, salaried professionals with strong credit history
HDFC Bank's quick disbursal within 4 hours for pre-approved customers makes it a top choice when speed matters.
3. SBI (State Bank of India) — Starting at 10.05% p.a.
India's largest public sector bank remains a highly trusted option, especially for government employees, defence personnel, and salary account holders. SBI offers personal loan interest rates ranging from 10.05% – 15.05% p.a. depending on the credit profile of the applicants.
Key Highlights:
- Interest Rate: 10.05% – 15.05% p.a.
- Loan Amount: Up to ₹35 lakh
- Tenure: Up to 7 years
- Processing Fee: Up to 1.5% + GST
- Best For: Salaried government employees, defence personnel, existing SBI salary account holders
SBI offers a special interest rate on personal loans for Government Employees and honours Defenders — Defence, Para-Military and Indian Coast Guards — with a special interest rate. SBI's long tenure of up to 7 years keeps EMIs manageable for borrowers who need breathing room.
4. IDFC FIRST Bank (FIRSTmoney) — Starting at 9.99% p.a.
IDFC FIRST Bank's FIRSTmoney product is one of the most aggressively priced personal loan offerings in 2026. With IDFC FIRST Bank's FIRSTmoney personal loan, you have the flexibility to borrow up to ₹10 lakhs and enjoy one of the lowest personal loan interest rates starting at just 9.99% p.a. The 100% digital process, no documentation, and competitive rates makes it easier to borrow smartly.
Key Highlights:
- Interest Rate: 9.99% p.a. onwards
- Loan Amount: Up to ₹10 lakh
- Tenure: 9 to 60 months
- Zero Foreclosure Charges
- Best For: Salaried urban professionals looking for a fully digital, hassle-free experience
With zero foreclosure charges, you can repay your loan early without any additional fees — perfect for borrowers looking for flexibility.
5. Axis Bank — Starting at 9.99% p.a.
Axis Bank is a reliable private sector option offering balanced rates across different income profiles. Axis Bank offers Personal Loans with interest rates that range from a modest 9.99% p.a. to a maximum of 22% per annum.
Key Highlights:
- Interest Rate: 9.99% – 22% p.a.
- Loan Amount: Up to ₹40 lakh
- Tenure: 12 to 60 months
- Best For: Salaried individuals with strong CIBIL scores and stable employment
Axis Bank links its personal loan rates to the 3-year MCLR, which means your rate reflects broader RBI policy movements. Personal Loan interest rates vary on a quarterly basis as they are linked to the bank's MCLR rates.
6. ICICI Bank — Starting at 10.75% p.a.
ICICI Bank continues to be a strong digital lender with pre-approved personal loan offers for existing customers, often processed within minutes.
Key Highlights:
- Interest Rate: 10.75% – 16% p.a.
- Loan Amount: Up to ₹50 lakh
- Tenure: 12 to 72 months
- Best For: Pre-existing ICICI customers, salaried IT and MNC employees
ICICI's edge lies in its seamless digital experience and instant pre-approved offers available via the iMobile Pay app. For customers with 750+ CIBIL scores and salaries above ₹50,000 per month, rates can be very competitive.
7. Bank of India — Starting at 10.85% p.a.
For those who prefer a public sector bank with transparent terms, Bank of India provides a dependable option. Bank of India personal loan interest rates start from 10.85% per annum. A small difference in rate can change your monthly EMI and the total amount you repay, so it is always smart to check the latest offer before applying.
Key Highlights:
- Interest Rate: 10.85% p.a. onwards
- Multiple Schemes: Star Personal Loan, Star Mitra Personal Loan
- Best For: Existing BOI customers, salaried individuals with clean repayment history
Bank of India's CIBIL-linked pricing is transparent — a better score directly translates to a lower rate, making it ideal for disciplined borrowers.
8. Punjab National Bank (PNB) — Starting at 11.00% p.a.
PNB is a strong choice for government employees and PSU workers seeking reliable public sector lending at competitive rates.
Key Highlights:
- Interest Rate: 11.00% – 16.50% p.a.
- Loan Amount: Up to ₹20 lakh
- Tenure: Up to 60 months
- Best For: Government employees, PSU staff, existing PNB account holders
PNB's festive season offers and special schemes for women borrowers make it worth checking even if the base rate isn't the absolute lowest.
9. IndusInd Bank — Starting at 10.49% p.a.
IndusInd Bank caters to premium customers with a strong digital lending infrastructure and attractive rates for high earners.
Key Highlights:
- Interest Rate: 10.49% – 32% p.a.
- Loan Amount: Up to ₹50 lakh
- Tenure: 12 to 60 months
- Best For: High-income salaried professionals, NRIs, and existing IndusInd customers
The wide rate range signals that IndusInd strongly rewards borrowers with excellent credit profiles while charging significantly more for riskier profiles. If your CIBIL score is above 750 and your salary is high, this lender is worth approaching.
10. Tata Capital — Starting at 10.99% p.a.
Tata Capital, a leading NBFC, rounds off our top 10 list with flexible loan offerings and strong customer service.
Key Highlights:
- Interest Rate: 10.99% – 35% p.a.
- Loan Amount: ₹75,000 to ₹35 lakh
- Tenure: 12 to 72 months
- Best For: Self-employed individuals, small business owners, borrowers with non-standard income proof
Tata Capital is particularly notable for being more accommodating toward self-employed borrowers and those with slightly irregular income patterns — a segment often overlooked by traditional banks.
Quick Comparison Table: Lowest Personal Loan Interest Rates in February 2026
| Rank | Lender | Starting Rate | Max Loan Amount | Type |
| 1 | Kotak Mahindra Bank | 9.98% p.a. | ₹35 lakh | Private Bank |
| 2 | IDFC FIRST Bank | 9.99% p.a. | ₹10 lakh | Private Bank |
| 3 | Axis Bank | 9.99% p.a. | ₹40 lakh | Private Bank |
| 4 | SBI | 10.05% p.a. | ₹35 lakh | PSU Bank |
| 5 | HDFC Bank | 10.40% p.a. | ₹40 lakh | Private Bank |
| 6 | IndusInd Bank | 10.49% p.a. | ₹50 lakh | Private Bank |
| 7 | Bank of India | 10.85% p.a. | ₹20 lakh | PSU Bank |
| 8 | ICICI Bank | 10.75% p.a. | ₹50 lakh | Private Bank |
| 9 | PNB | 11.00% p.a. | ₹20 lakh | PSU Bank |
| 10 | Tata Capital | 10.99% p.a. | ₹35 lakh | NBFC |
Rates are indicative for February 2026 and subject to change.
6 Proven Strategies to Get the Lowest Personal Loan Interest Rate
Knowing who offers the lowest rates is only half the battle. The other half is making yourself an attractive borrower. Here's how:
1. Maintain a CIBIL Score of 750 or Above A high credit score indicates that you are creditworthy. Banks and financial institutions offer the lowest personal loan interest rates to applicants who have a high credit score. A score above 800 can sometimes unlock an additional 0.25% reduction.
2. Leverage Your Existing Banking Relationship If you currently have a good relationship with a loan provider — i.e., you are an existing customer of the bank or you have availed a loan in the past with all repayments done on schedule — you may be offered a preferential interest rate.
3. Apply Through Your Salary Account Bank Most banks offer pre-approved personal loans with lower rates and zero documentation to salary account holders. Always check your bank's app first.
4. Opt for a Shorter Loan Tenure Where Possible While longer tenures reduce your monthly EMI, they increase total interest outgo. A shorter tenure signals lower risk to the bank and may fetch a better rate.
5. Watch for Festive and Special Offers Certain lenders may charge you a lower interest rate during festive occasions. Banks often run limited-period offers in March (financial year-end) and during Diwali and Dussehra. February 2026 may see pre-Holi and year-end deals worth grabbing.
6. Compare Multiple Lenders Before Applying Avoid multiple loan inquiries and never accept the first offer. Multiple applications in a short period can hurt your CIBIL score. Use aggregator platforms like Paisabazaar or BankBazaar to check offers without a hard credit pull first.
What's Driving Personal Loan Rates in February 2026?
Personal loan interest rates in India don't exist in a vacuum. In 2026, personal loan interest rates are affected by borrower characteristics, online lending, and risk analysis techniques. The RBI's repo rate remains a central driver — when the repo rate falls, banks' cost of funds decreases, which eventually transmits to borrowers. With the RBI focusing on inflation management through 2025-2026, lenders have been calibrating their MCLR-linked personal loan rates accordingly.
Additionally, the rise of fintech and digital lending has intensified competition among private banks and NBFCs, pushing starting rates down for creditworthy borrowers while maintaining higher ranges for riskier profiles.
The Real Cost Beyond the Interest Rate
Before you finalize any personal loan in February 2026, always look beyond the headline interest rate. The actual cost of a Personal Loan varies depending on the amount borrowed, the applicable interest rate, the loan processing fees, stamp duty and other statutory charges, as well as the GST levied on these costs.
Processing fees typically range from 0.5% to 3% of the loan amount. On a ₹10 lakh loan, that's ₹5,000 to ₹30,000 upfront — a meaningful cost difference between lenders. Always calculate the Annual Percentage Rate (APR), not just the stated interest rate, to understand the true cost of your loan.
Which Personal Loan Should You Choose in February 2026?
For salaried private sector employees with 750+ CIBIL scores, Kotak Mahindra Bank, IDFC FIRST Bank, and Axis Bank offer the most competitive starting rates in February 2026. For government employees and defence personnel, SBI remains the gold standard with rates starting at 10.05% and special schemes with additional concessions. For self-employed individuals, Tata Capital and ICICI Bank offer more flexible eligibility criteria, though rates will be higher.
The single most important action you can take right now: check your CIBIL score for free, compare at least 3-4 lenders based on your profile, and apply through your salary account bank first. That combination can realistically save you ₹30,000 to ₹1 lakh or more over the life of your loan.
This article is for informational purposes only and does not constitute financial advice. Interest rates are subject to change at the discretion of individual lenders. Always verify current rates directly with the respective bank or NBFC before applying. The author is not a SEBI-registered financial advisor.
