One of the most common ways to deal with pressing financial needs is through personal loans, whether they are related to travel, education, weddings, or medical bills. The key query, however, is which bank offers the lowest interest rate on personal loans in 2025, given the wide range of interest rates offered by banks.
Let’s dissect it and learn more.
Why Evaluate Interest Rates for Personal Loans?
The interest rate has a direct effect on your monthly repayment amount (your EMI) when you take out a personal loan. Over the course of the loan, you can save thousands of rupees with even a 0.5% difference in interest rates. Therefore, before applying, it makes sense to check the bank with the lowest interest rate.
August 2025’s Lowest Interest Rates on Personal Loans
Here are some of the most affordable personal loan rates provided by leading Indian banks, based on the most recent updates:
Highlights of the Bank Starting Interest Rate (p.a.)
- Bandhan Bank ~9.47% Best for salaried borrowers, lowest rate in early 2025
- Maharashtra Bank ~9.50% competitive for a limited number of clients
- Bank of Canara 9.95 percent Among the top public banks (August 2025)
- The Axis Bank 9.99% Fast approvals and no foreclosure fees for loans with variable rates
- The State Bank of India, or SBI 10.10 percent trustworthy and dependable, beneficial to current SBI clients
With rates below ten percent, Canara Bank and Axis Bank are currently at the top of the charts in August 2025. But earlier in the year, Bank of Maharashtra and Bandhan Bank were also formidable competitors.
The Elements That Affect Your Interest Rate
Despite the fact that banks advertise “beginning rates,” the rate you receive is determined by:
- Your credit history and CIBIL score
- Your earnings and employment security
- current connection to the bank (credit card, salary account, etc.)
- Loan duration and amount
- If you have an offer that has been pre-approved
A person with a credit score of more than 750, for instance, might be eligible for the lowest bracket, whereas others might receive a higher slab.
How to Get the Best Deal
- Keep your credit score high, preferably higher than 750.
- Make several banks compete for your loan by submitting applications to them.
- Be wise when negotiating; some borrowers on forums reported that banks had lowered their rates following negotiations.
- Verify processing fees; occasionally, a slightly higher rate with no fees can prove to be more cost-effective.
- Make use of your current bank connections; holders of salary accounts frequently receive exclusive deals.
Concluding remarks
Therefore, if you’re wondering, “Which bank in India offers the lowest interest rate on personal loans?” — The response is:
- Earlier this year, Bandhan Bank and Bank of Maharashtra (between 9.47% and 9.50%).
- As of August 2025, Canara Bank and Axis Bank (about 9.95% to 9.99%).
- Even though it starts a little higher, SBI is a reliable and safe choice if you want consistency.
Always compare offers, figure out EMIs, and bargain with the bank before applying. Over the course of the loan period, a little research can save you a lot of money.
