When financial needs arise be it in the form of education, home renovation, medical emergencies, business requirements or travel iterations wherein choosing the right lender makes the world of difference. India’s personal loan market has witnessed a massive growth thanks to digital banking, RBI-regulated NBFCs and fintech platforms such as CreditMitra which makes it easy, transparent and instant approvals on your loans.

But with many banks and NBFCs offering personal loans, customers always face these question:

• Which lender is best for personal loan?
• Which lender offers the lowest interest rate & quick approval on loan?
• Which among bank or NBFC should i choose

This guide for 2026 answer to all these questions. We compare the top banks and NBFCs against each other, explain to you the strengths of the these banks and help you make the smartest choice.

1. Banks vs NBFCs – Which is better for Personal Loans?

Let’s understand the difference between banks and NBFCs.

Banks:

Banks usually offer:

• Lower interest rates to those with strong credit profiles
• Increased amounts of loan (up to 50 lakh)
• Longer repayment tenures
• Greater reliability from more stringent regulations

However:

• Approval can be slower
• To qualify in more stringent
• Self-employed applicants sometimes have a hard time qualifying

NBFCs:

NBFCs are known for:

• Faster approvals
• Flexible eligibility
• Better for low to moderate incomes profile
• Good for persons self employed, gig fixers, small business owners
• Minimal documentation

However:

• Interest rates can be slightly higher
• Loan tenure may be shorter

 In simple words: Banks=low rates but strict. NBFCs = Quick loans & easy approval.

 2. Best Banks for Personal Loans in India (2026)

Let’s break down the leading banks in terms of interest rates, loan features, loan approval time, and who they’re best suited for.

1. HDFC Bank

HDFC Bank is still one of the leading personal loan providers in India due to its extensive network and easy digital loan experience.

Key Highlights

• Interest Rate starts from 10% & varies according to profile
• Loan Amount up to 40 lakh
• Approval time is 10 minutes for pre-approved customers
• Tenure is 12-60 months

Best For

• Salaried employees
• High-income borrowers
• Low-risk profiles (CIBIL 720+)
• People seeking direct high amounts of loans at low-rate

2. ICICI Bank

Known for great digital processing in addition to flexible loan options.

Highlights

• Interest Rate is approx 11-14%
• Loan Range is 25,000 – 50 lakh
• Approval often within hours
• Tenure is up to 72 months

Best For

• Salaried & self-employed, stable income
• Borrowers who are looking for flexible loans
• Applicants that want to process digitally, very quickly

3. Axis Bank

Axis Bank is strong in urban India where very customised loans are provided.

Highlights

• Interest rate is around 10 to 17 %
• Loan amount is up to 40 lakh
• Features: Part-payment is available & als Top-up option.
• Approval is faster for existing customers

Best For

• Urban professionals
• First-time borrowers
• Applicants who want Flexible EMI Options

4. Kotak Mahindra Bank

Kotak Banks provides digital-first loans with minimal or zero paperwork.

Highlights

• Interest Rate is approx 10-17%
• Loan Amount is 50,000 – 30 lakh
• Special: digital disruptive interaction.

Best For

• Salaried professionals
• Individuals who are looking for fast, entirely online disbursement

5. State Bank of India (SBI)

SBI is the most trusted bank for the public sector employees.

Highlights

• Interest Rate is approx 10-15%
• Loan Amount is up to 35 lakh
• Tenure is up to 7 years
• Special Schemes are for Central / State Govt employees

Best For

• Government employees
• Salaried people looking to pay less in interest
• Those who prefer the safety of PSU bank

3. Best NBFCs for Personal Loans in India (2026)

NBFCs have gained enormous popularity because they offer high speed in disbursing loans, flexibility in the selection criteria, and low documentation requirements.

1. Bajaj Finserv

One of the largest NBFCs of India offering quick disbursal and easy eligibility.

Highlights

• Interest Rate: Beginning around 11 -16%
• Loan Amount: Up to [?]25 lakh
• Processing: < 24 hours
• Special: Flexi loan option

Best For

• Self-employed
• First-time borrowers
• People with the need for quick approval

2. Tata Capital

A customer first NBFC with a reputation of flexible EMI structures.

Highlights

• Interest Rate is approx 11 – 17%
• Loan Amount is between 75,000 – 25 lakh
• Features: No security, easy documentation.

Best For

• Salaried: with moderate income
• Borrowers who are looking to avail lower EMIs
• People who require mid-range loans

3. Fullerton India

Great option for those who suffer from a lack of documentation.

Highlights

• Interest Rate is approx 12 -22 %
• Loan Amount is  50,000 – 25 lakh
• Approval with relaxed eligibility. Its good for tier-2 & tier-3 cities

Best For

• Self-employed individuals
• People who have Lower CIBIL Score
• Borrowers from semi-urban areas

 4. Side by Side Comparison: Banks & NBFCs

This is a very easy comparison to make your choice:

Feature	Banks	NBFCs
Interest Rate	Lower (10%–15%)	Moderate (11%–24%)
Approval Time	Moderate	Very Fast
Documentation	Strict	Flexible
Loan Amount	Higher (up to ₹50L)	Moderate (up to ₹25L)
Eligibility	Strict	Relaxed
Best For	Salaried, high CIBIL	Self-employed, urgent need

5. Which Type of Lender Should you Use? (Simple Guide)

Choose a Bank If:

• You have a high CIBIL score (700+)
• You want to have lower interest rates
• You want a large loan amount
• Do not need same day disbursal

Choose an NBFC If:

• You need urgent money
• You have lower/mixed CIBIL
• You are self-employed
• You want to be able to be flexible on eligibility.

 6. How CreditMitra helps you

CreditMitra helps you with:

• Checking eligibility without impacting on credit score
• See personalized loan offers
• Apply online in minutes

• Instant loan approval through an RBI-registered NBFC
• Track EMI, payments & expenses
• Improve your credit score

Whether you are salaried, or self-employed, CreditMitra makes sure that you get the best loan available for you.

 7. Final Verdict

So choosing between banks and NBFC would not have to be confusing.

Pick a Bank for:

• Lower interestHigher loan amount
• Longer tenure
• Stable income applicants

Pick an NBFC for:

• Fast approval
• Lower documentation
• Self-employed flexibility
•  Quick cash needs
  

With CreditMitra, you get best offers from leading RBI registered NBFC. No confusion. No guesswork. Just smart – transparent, digital – first finance.