Are you looking for a personal loan? Personal loans help people meet their day-to-day obligations and expenses, and, when selected carefully, can offer borrowers affordable credit options from prominent lending institutions.
Public sector banks continue to remain a preferred choice for borrowers across the country. This is because personal loans offered by these lenders offer competitive interest rates, a seamless approval process, transparent disbursement, and government backing.
In case you wish to apply for a personal loan through leading in May 2026, here is a comparative table of the latest interest rates that you can refer to.
Personal loan interest rates – public sector banks (May 2026)
|
Bank |
Interest Rate |
|---|---|
| Bank of India | 7.10% |
| Canara Bank | 7.15% |
| Union Bank | 7.15% |
| Indian Bank | 7.15% |
| Bank of Baroda | 7.20% |
| State Bank of India | 7.25% |
| Punjab National Bank | 7.30% |
Data as on respective banks’ website on 1 May 2026; Loans up to ₹30 lakh; Actual rate may vary based on the applicant’s profile; Compiled by BankBazaar.com.
5 factors to keep in mind before locking in an interest rate
- Impact of credit score: Your current matters a lot when you submit your personal loan application. The final personal loan interest rate will be lower if your credit score is high, preferably over 750, without any recent defaults. Whereas the applicable personal loan interest rate will be higher with strict terms if you have a, i.e., any score of less than 650. You must pay heed to your current credit score and overall credit profile before locking in a personal loan.
- Processing fees, hidden charges: Given that interest rates can look lucrative and the power of persuasion deployed by prominent lenders is extremely strong, what you should not overlook is the processing fee, foreclosure charges and other hidden charges that apply to your . If in doubt, ask your lending institution for these details in writing. Don’t sign up for any loan offer without understanding this.
- Loan tenure matters: A longer tenure is bound to increase the and, in turn, the overall interest outgo. You should opt for a balanced repayment period based on your current financial health, repayment potential and overall affordability.
- Eligibility criteria: Your current salary, employment tenure, , recent defaults, if any, loan tenure, total loan amount, age, etc., are some factors that directly impact your personal loan approval chances. You must match your eligibility criteria with the loan product you wish to apply for, and get complete clarity by discussing with the customer support executive before applying.
- Fixed v floating rates: You should also understand the fundamental difference between the two, and whether the offered rate to you is fixed or floating. This directly impacts your EMI stability over time.
Public sector banks continue to offer lucrative personal loan interest rates in May 2026. This makes them a reliable borrowing option for salaried and self-employed individuals.
Still, the ultimate lending rate depends on a host of factors discussed above. Any borrowing decision must be made only after proper due diligence, careful comparison, analysis of EMIs, and consultation with a certified financial advisor.
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