Personal Loan for Diwali 2026: Bank Rates From 9.99%, Processing Fees and Cheaper Alternatives
Personal loan interest rates at India’s large banks start at 9.99% a year at ICICI Bank and Axis Bank, 10.00% at SBI, 10.50% at HDFC Bank and 10.99% at Kotak Mahindra Bank, according to their websites on 3 October 2026. Those are starting rates. The average rate ICICI Bank actually charged on personal loans disbursed in April to June 2026 was 11.45%, SBI’s mean for the same quarter was 11.54%, and Axis Bank’s was 13.07%. If you are weighing a personal loan for Diwali, the rate you are offered, the processing fee and the timing around RBI’s 7 October policy decision will matter more than the headline number.
This guide compares bank rates and fees, checks whether any festive fee waivers are on offer, and sets out cheaper ways to fund festival spending.
Personal loan interest rates at major banks, October 2026
| Bank | Rate range (per year) | Mean rate, Apr–Jun 2026 | Processing fee | Prepaying a fixed-rate loan |
|---|---|---|---|---|
| SBI (Xpress Credit) | 10.00%–15.00% | 11.54% | 1.50%, minimum ₹1,000, maximum ₹15,000, plus GST | Check sanction letter |
| HDFC Bank | From 10.50% | Not on the page we checked | Not listed on its offers page | Check sanction letter |
| ICICI Bank | 9.99%–16.50% | 11.45% | Up to 2% plus taxes | 3% of principal outstanding; nil after 24 EMIs |
| Axis Bank | 9.99%–22% | 13.07% | Up to 2% plus GST | 3% up to 36 EMIs, 2% after; 25% of principal a year free after 12 EMIs |
| Kotak Mahindra Bank | From 10.99% | Not on the page we checked | Up to 5% plus taxes | Check sanction letter |
| Bank of Baroda | 10.15%–17.50%, by category and CIBIL score | Not on the page we checked | 1%–2% plus GST; nil for government employees with a BoB salary account | Fixed and floating options |
Sources: SBI’s personal loan rate page (rates effective 15 December 2025, page updated 28 September 2026) and processing fee page; ICICI Bank’s rate page; and the personal loan pages of HDFC Bank, Axis Bank, Kotak Mahindra Bank and Bank of Baroda. Axis’s disclosure shows loans disbursed in April–June 2026 ranging from 8.75% to 21.55%.
The gap between the starting rate and the mean is the useful part when you shop for a personal loan for Diwali. Most borrowers do not get the starting rate. Banks price on credit score, income, employer and existing loans. Kotak’s page, for example, says scores above 750 are likely to qualify for its lowest rates.
Are there festive processing fee waivers on a personal loan for Diwali this year?
Not on the personal loan pages we checked on 3 October. HDFC Bank’s festive offers page lists personal loans “@10.50% onwards”, up to ₹40 lakh over 12 to 60 months, and calls the rate a limited-period offer. The 50% processing fee discount on the same page applies to business loans, gold loans and commercial vehicle loans, not personal loans. SBI’s processing fee page shows the standard 1.50% for Xpress Credit. Bank of Baroda waives the fee only for government employees with a BoB salary account.
Offers can appear later in October, and pre-approved offers inside banking apps sometimes carry lower fees than the public page. Those are worth a look if you bank with a lender already, but read what the offer actually waives.
Fee waiver or lower rate: which saves more?
A lower rate usually beats a waived fee on anything but a small, short loan. Take a ₹3 lakh personal loan for three years.
| Offer | EMI | Total interest | Fee incl. GST | Total cost | Effective annual cost |
|---|---|---|---|---|---|
| 11% with a 2% processing fee | ₹9,822 | ₹53,578 | ₹7,080 | ₹60,658 | About 12.7% |
| 12% with no processing fee | ₹9,964 | ₹58,715 | Nil | ₹58,715 | 12.0% |
Our calculation: the 11% loan looks cheaper, but once the fee is taken out of the amount you receive, it costs about ₹1,900 more over three years. That is why the annual percentage rate (APR) is the number to compare. RBI’s Key Facts Statement rules require lenders to give every retail borrower a KFS with the APR, which includes “interest rate and all other charges”, plus a repayment schedule. The KFS must stay valid for at least three working days for loans of seven days or longer, so you have time to compare two banks’ offers side by side.
EMI on a personal loan for Diwali: ₹2 lakh to ₹5 lakh over three years
| Loan amount | EMI at 10% | EMI at 12% | EMI at 15% | Interest at 15% |
|---|---|---|---|---|
| ₹2 lakh | ₹6,453 | ₹6,643 | ₹6,933 | ₹49,590 |
| ₹3 lakh | ₹9,680 | ₹9,964 | ₹10,400 | ₹74,386 |
| ₹5 lakh | ₹16,134 | ₹16,607 | ₹17,333 | ₹1,23,976 |
A ₹5 lakh personal loan for Diwali at 15% costs over ₹1.2 lakh in interest over three years, almost a quarter of the amount borrowed.
Does the RBI meeting on 7 October change anything?
The repo rate is 5.25%, and eight of ten economists polled by Business Standard expect a 25 basis point hike at the meeting, as we reported in our RBI policy October 2026 preview. ICICI Bank, Axis Bank and Kotak Mahindra Bank say their personal loans carry fixed rates, and ICICI’s page says the rate “stays constant throughout the tenure”. A hike would not change the rate on a fixed loan already sanctioned. Banks could, however, price new loans higher after it.
Floating rates work differently. Bank of Baroda offers both, and RBI’s pre-payment charges directions bar lenders from charging pre-payment fees on floating-rate loans to individuals for non-business purposes, for loans sanctioned or renewed on or after 1 January 2026. A floating loan can be repaid early without penalty if you get a bonus, but its rate can rise with the repo. For a fixed loan, the bank’s foreclosure terms apply, such as ICICI’s 3% until 24 EMIs are paid.
Who is eligible for a festive personal loan?
Bank of Baroda’s published criteria give a fair idea of what banks look for. Applicants must be at least 21, and the loan must end by age 60 for salaried borrowers or 65 for others. Salaried applicants need a year of continuous service, and the self-employed a year in business. Loan amounts run from ₹1 lakh to ₹15 lakh in metro and urban areas. The bank also caps total deductions, including the new EMI, at a share of gross monthly income that ranges from 40% to 70% depending on income for most borrowers.
Your credit score shapes both approval and price. If you are unsure where you stand, our explainer on the CIBIL score needed for a personal loan covers the cut-offs lenders tend to use. Each application can add a hard enquiry, so compare offers through pre-approved checks or the KFS rather than applying at five banks at once.
Cheaper alternatives to a personal loan for Diwali
| Option | What it costs | Works best for |
|---|---|---|
| Gold loan | Usually below personal loan rates; HDFC Bank lists 50% off the processing fee as a festive offer | Short-term needs when you own gold you won’t need to sell |
| Loan or overdraft against your own FD | Bank of Baroda charges 1% over the FD rate | Keeping an FD intact while borrowing for a few months |
| No cost EMI on one large purchase | Processing fee plus GST on interest, often a few hundred rupees | A single phone, TV or appliance bought on a card |
| Saving until Dhanteras on 6 November | Nothing | Planned spending that can wait five weeks |
Gold loans are secured, which is why they cost less, but the lender can sell the gold if you default. Our gold loan guide covers RBI’s loan-to-value limits and what a gold price fall means for borrowers. For a single gadget, read about the hidden charges in no cost EMI before choosing it over a loan.
Personal loans now make up a growing share of household borrowing in India, which we looked at in personal loans now 34% of household debt. A festive loan repaid over three years will still be on your statement next Diwali, so size it by what the EMI leaves of your monthly salary after rent and existing EMIs.
FAQ: personal loan for Diwali
Which bank has the lowest personal loan interest rate right now?
ICICI Bank and Axis Bank advertise rates from 9.99%. The rate you get depends on your profile, and the April–June averages were 11.45% at ICICI and 13.07% at Axis.
Is there a processing fee waiver on personal loans this Diwali?
Not on the bank pages we checked on 3 October. HDFC Bank’s festive fee discount covers gold, business and commercial vehicle loans.
Should I take the loan before the RBI decision on 7 October?
Depends on whether you need it at all. If you do, a fixed rate sanctioned before a possible hike stays the same for the tenure, but banks may not reprice new loans immediately either.
Can I prepay a personal loan without charges?
Only in some cases. Floating-rate personal loans sanctioned from 1 January 2026 carry no pre-payment charges under RBI rules; fixed-rate loans follow the bank’s terms.
Disclaimer: Rates and fees are from bank websites on 3 October 2026 and can change without notice; EMI figures are our calculations, and your sanction letter and Key Facts Statement are the final terms.
