If you are planning to take a personal loan in 2025, choosing one with the lowest interest rate can help you save a significant amount of money. Personal loans have become easier to access than ever before, thanks to online applications and instant approvals. However, understanding which lender offers the lowest rate and how to qualify for it is the key to making a smart borrowing decision.
What is the Lowest Interest Rate on Personal Loans in 2025
In India, several top banks and NBFCs are offering attractive personal loan interest rates starting from around 9.99% per annum. Axis Bank and IDFC FIRST Bank have introduced personal loan schemes beginning at 9.99% p.a., depending on your credit score and repayment history. ICICI Bank’s rates start at approximately 10.60% p.a., while HDFC Bank offers competitive rates for salaried and self-employed applicants. Public sector banks like the Bank of Maharashtra have even lower starting rates around 9.00% p.a. for select customers, making them among the most affordable options in 2025. These base rates, however, are indicative and vary from person to person based on their financial profile and relationship with the bank.
How Lenders Decide the Interest Rate
The rate of interest on your personal loan depends on multiple factors that determine your creditworthiness. Lenders evaluate your CIBIL score, income stability, and employment or business background before approving the loan. Borrowers with high credit scores and steady income tend to qualify for the best interest rates, as they pose a lower risk to lenders. Additionally, the loan tenure and amount you choose can affect the rate — shorter terms and smaller loans often attract better pricing. Banks also offer preferential interest rates to long-term customers who maintain good transaction history and loan repayment records.
Best Banks and Lenders for Low-Interest Personal Loans
Private and public sector banks are competing to attract borrowers with flexible repayment options and instant approval facilities. Axis Bank, HDFC Bank, and ICICI Bank continue to lead the segment with fully digital loan processes and minimal documentation. IDFC FIRST Bank and Tata Capital provide quick disbursal and transparent pricing, making them ideal for salaried professionals. Meanwhile, government-owned banks such as State Bank of India and Bank of Maharashtra remain top choices for borrowers seeking reliable service and lower base rates. Several NBFCs, including Bajaj Finserv and Shriram Finance, also offer affordable loans for self-employed individuals, with customized offers based on cash flow and credit behavior.
How to Get the Lowest Rate Possible
To secure the lowest possible interest rate, maintain a strong credit score by repaying existing loans and credit card bills on time. Keep your debt-to-income ratio low to demonstrate good repayment capacity. Borrowers with a long-standing relationship with a bank can often negotiate for a special rate or festive offer. Choosing a shorter repayment period also helps reduce the total interest paid over time. If you can provide additional security or a guarantor, some lenders may further reduce your rate since the perceived risk becomes lower.
Conclusion: Getting a personal loan at the lowest interest rate in 2025 is all about preparation and smart comparison. Evaluate your credit score, compare offers from multiple banks, and negotiate wherever possible. Even a small difference in interest rate can save you thousands over the loan term. Always read the fine print to understand processing fees, prepayment charges, and other costs before finalizing your lender.
Disclaimer: This article is intended for informational purposes only. Actual loan interest rates and eligibility criteria vary across banks and applicants. Please verify the latest terms directly from the official websites of respective banks or NBFCs before applying.