A molten salt natural circulation loop (MSNCL) has been setup to study the steady-state, transient, and stability characteristics of molten nitrate salt, mixture of sodium nitrate, and potassium nitrate in 60:40 ratios by weight. Natural circulation experiments in a temperature range of 290 °C–600 °C have been performed. A semi-analytical linear model was derived for stability analysis of rectangular natural circulation loops with conventional localized surface heating and cooling. The developed model includes the effect of wall thermal inertia, variable internal heat transfer coefficient, finite secondary side heat transfer coefficient at cooler, and heat losses for predicting the stability map. These effects are incorporated considering their significant role in modeling high-temperature molten salt-based natural circulation systems. The developed model has been first validated with the experimental data of water loop available in literature. The developed model is then validated with the experimental data generated in MSNCL. Validation of in-house developed nonlinear model has also been performed against the same experimental data. The comparison of both linear and nonlinear stability analysis with the experimental data shows good agreement and articulates the importance of various parameters which have been included in the developed model.