If you are planning to take a personal loan in 2025, finding the best interest rate is the key to reducing your overall repayment cost. With competition growing among banks and NBFCs, borrowers in India now have access to some of the lowest personal loan rates ever offered. Whether you are a salaried professional or self-employed, comparing interest rates across lenders can help you save thousands of rupees over the loan tenure.
Best Personal Loan Interest Rates in India 2025
In 2025, several top Indian banks are offering attractive personal loan schemes with rates starting under 10 percent per annum. Axis Bank and HDFC Bank both offer personal loans starting at 9.99% p.a., making them two of the most competitive options in the private banking sector. ICICI Bank’s personal loan rates begin from 10.60% p.a., while Bajaj Finance offers loans starting at 10% p.a. for eligible customers with strong credit scores. Among public sector lenders, the Bank of Maharashtra stands out with one of the lowest rates at around 9.50% p.a. for select salaried applicants. These rates are indicative and can vary depending on the borrower’s profile, income stability, credit score, and existing relationship with the bank.
How Banks Determine Your Loan Rate
Every bank or financial institution calculates personal loan interest based on your risk profile. Applicants with a high CIBIL score, regular income, and stable employment history are offered the lowest rates. Those with limited or poor credit history might receive slightly higher rates due to increased risk. Banks also consider your debt-to-income ratio, existing loans, and repayment history before finalizing the offer. Additionally, shorter tenures and smaller loan amounts often qualify for better interest rates since the risk for the lender is lower.
Best Banks for Low-Interest Personal Loans
Private banks like Axis Bank, HDFC Bank, and ICICI Bank remain popular choices for borrowers seeking flexible loan tenures and digital approval processes. IDFC FIRST Bank and Tata Capital also provide quick online disbursals with competitive rates. Among government-owned institutions, State Bank of India, Bank of Baroda, and Bank of Maharashtra are preferred for their reliability and transparent terms. NBFCs such as Bajaj Finserv and Shriram Finance offer additional flexibility for self-employed individuals, along with pre-approved offers for existing customers.
How to Get the Lowest Possible Rate
Maintaining a strong credit score above 750 is the most effective way to qualify for the lowest personal loan interest rates in India. Paying existing EMIs and credit card bills on time helps strengthen your profile. Borrowers with a salary account in the same bank can often negotiate for a lower rate or processing fee waiver. Comparing offers through online platforms like Paisabazaar or BankBazaar can help you identify limited-time or festive rate discounts from different lenders. Applying for a shorter tenure and smaller loan amount also reduces the total interest payable over time.
Conclusion: The best personal loan interest rate in India depends on your financial discipline, credit score, and lender relationship. While Axis Bank, HDFC Bank, and the Bank of Maharashtra currently offer some of the lowest base rates, you should always compare multiple lenders before applying. A small difference in the interest rate can lead to major savings over the entire repayment period.
Disclaimer: This article is intended for informational purposes only. Personal loan interest rates are subject to change based on individual eligibility, lender policy, and market conditions. Always verify the latest details directly from the bank’s official website before applying.