Finding the best personal loan in India means prioritizing the interest rate, which directly impacts your monthly EMI and total loan cost. With frequent changes in lending rates, an updated comparison between government and private banks for 2025 will help borrowers choose the lowest personal loan interest rates in India 2025 and make an informed, value-driven choice.
What Are Personal Loan Interest Rates?
Personal loan interest rates refer to the annual percentage cost charged by banks for borrowing money, typically ranging between 9% and 22% in India for 2025. Rates differ based on credit score, income, employment, loan tenure, and bank policies. Lower rates translate into cheaper loans and reduced financial stress.
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Government Banks: Rates Sorted Low to High
Government banks (public sector) are popular for their reliability and often more accessible lending to salaried and self-employed individuals. Here are the sorted personal loan rates for major government banks in India, 2025:
| Bank | Interest Rate Range 2025 | Processing Fee |
| Bank of Maharashtra | 9.00% – 13.80% | Up to 1% (Max Rs 10,000) |
| Punjab & Sind Bank | 9.85% – 12.90% | 0.50% – 1% |
| Central Bank of India | 9.90% – 11.80% | Up to 1% |
| Canara Bank | 9.95% – 15.40% | Up to 0.25% |
| State Bank of India (SBI) | 10.05% – 15.05% | Up to 1.5% (Rs 1,000-15,000) |
| Union Bank of India | 10.35% – 14.45% | Up to 1% (Max Rs 7,500) |
| Bank of Baroda | 10.40% – 18.10% | Up to 2% (Max Rs 10,000) |
| Bank of India | 11.10% – 16.15% | Up to 1% (Rs 250–15,000) |
| Punjab National Bank | 10.50% – 17.05% | Up to 1% |
| Indian Overseas Bank | 10.50% onwards | Up to 0.75% |
| UCO Bank | 10.20% – 13.45% | Up to 1% (Min Rs 750) |
Banks like Bank of Maharashtra, Punjab & Sind Bank, and Central Bank of India are leading choices, offering the lowest rates starting at 9%–9.85% per annum, which means lower monthly EMI payments and overall loan costs.
Private Banks: Rates Sorted Low to High
Private banks in India tend to offer faster processing and flexible solutions for a wide range of borrowers, though the rates might be slightly higher on average.
| Bank | Interest Rate Range 2025 | Processing Fee |
| HDFC Bank | 9.99% – 12.5% | Rs. 3,499–6,500 |
| Axis Bank | 9.99% – 17.15% | 1%–1.5% |
| Kotak Mahindra Bank | 9.98% – 17.20% | 1.1%–1.5% |
| IndusInd Bank | 10.35% – 16.5% | 1.3%–2% |
| ICICI Bank | 10.60% – 16.50% | Up to 2% |
| IDFC First Bank | 10.50% – 20.00% | Up to 2% |
| YES Bank | 13.00% – 16.00% | 1.5%–2.25% |
| Federal Bank | 12.00% – 19.50% | Up to 2% |
| Tata Capital | 11.99% – 13.99% | Up to 1.25% |
Among private banks, HDFC Bank and Axis Bank offer highly competitive rates starting at 9.99% onwards, comparable with public banks and attractive for salaried professionals. Kotak Mahindra Bank joins them in the sub-10% bracket for eligible applicants.
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Quick Insights: Why Interest Rate Matters
- A 1% difference in rate can mean thousands of rupees in total interest saved over the loan tenure.
- Lower rates make it possible to reduce EMI or shorten tenure, freeing up monthly cash flow.
- Government banks often appeal to risk-averse borrowers seeking stability, while private banks suit those needing fast approvals and flexible service.
Decision Guide: How to Choose Lowest Personal Loan Interest Rates in India 2025
- Compare Rates and Fees: Always review both interest rates and processing fees; some private banks offer low rates but higher one-time fees.
- Check Your Eligibility: Banks prefer borrowers with stable income and excellent credit scores; negotiate if your borrower profile is strong.
- Calculate Your EMI: Use online EMI calculators for clarity before applying.
- Additional Benefits: Some banks offer pre-payment options or insurance; assess overall package before finalizing.
Pro-Tip for 2025 Borrowers
Borrowers with government employment, high credit scores, and existing relationships with public banks may secure rates below 10%. Private bank customers should check for seasonal offers and pre-approved deals to fetch the best rate.
Final Takeaway on lowest personal loan interest rates in India 2025
In 2025, securing the lowest personal loan interest rate in India means meticulous comparison between leading government and private banks—some public banks like Bank of Maharashtra and Punjab & Sind Bank start at under 10%, while top private lenders like HDFC Bank and Axis Bank rival these rates with added speed and flexibility.
Readers are advised to start with lowest personal loan interest rates in India 2025 and evaluate personal eligibility for maximum savings on their loan journey.
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