Why Interest Rates Matter in Personal Loans

The interest rate on a personal loan directly affects your Equated Monthly Installments (EMIs) and total repayment cost. Even a 1% difference in interest can mean thousands of rupees over the loan tenure. That’s why it’s critical to compare rates before you apply.

Some key factors influencing personal loan interest rates include:

• Your credit score (CIBIL)
• Income and employment status
• Loan amount and tenure
• Relationship with the lender (existing customer benefits)
• Type of institution – Bank vs NBFC

Top Banks Offering the Lowest Personal Loan Interest Rates in 2025

Let’s begin with the most trusted and competitive banks offering low-interest personal loans in India this year.

1. HDFC Bank Personal Loan

• Interest Rate: 10.25% p.a. onwards
• Loan Amount: ₹50,000 to ₹40 lakhs
• Tenure: Up to 5 years
• Processing Fee: Up to 2.5% of loan amount

Why Choose: HDFC Bank offers one of the lowest starting interest rates for salaried individuals. It also provides instant loan approvals for pre-approved customers via net banking and mobile apps.

2. ICICI Bank Personal Loan

• Interest Rate: 10.50% p.a. onwards
• Loan Amount: ₹25,000 to ₹50 lakhs
• Tenure: 1 to 6 years
• Processing Fee: Up to 2.5%

Why Choose: Fast disbursal (within 3 seconds for eligible users), low interest, and zero prepayment charges after 12 EMIs make ICICI a popular choice in 2025.

3. SBI (State Bank of India) Personal Loan

• Interest Rate: 10.55% p.a. onwards
• Loan Amount: Up to ₹20 lakhs
• Tenure: Up to 6 years
• Processing Fee: Up to 1.5%

Why Choose: As India’s largest public sector bank, SBI provides attractive rates for government employees and pensioners. Plus, there are no hidden charges.

4. Axis Bank Personal Loan

• Interest Rate: 10.49% p.a. onwards
• Loan Amount: ₹50,000 to ₹40 lakhs
• Tenure: Up to 5 years
• Processing Fee: Up to 2%

Why Choose: Offers competitive interest rates for salaried professionals and self-employed individuals. Digital KYC makes the process quick and hassle-free.

5. Kotak Mahindra Bank Personal Loan

• Interest Rate: 10.99% p.a. onwards
• Loan Amount: ₹50,000 to ₹25 lakhs
• Tenure: 1 to 5 years
• Processing Fee: Up to 2.5%

Why Choose: Known for fast loan approval, minimal paperwork, and exclusive offers for corporate employees and existing account holders.

Top NBFCs Offering the Lowest Personal Loan Interest Rates in 2025

NBFCs are often more flexible than traditional banks and have made personal loans accessible to a broader audience, including freelancers, gig workers, and self-employed professionals.

6. Bajaj Finserv Personal Loan

• Interest Rate: 11.00% p.a. onwards
• Loan Amount: Up to ₹40 lakhs
• Tenure: 1 to 7 years
• Processing Fee: Up to 3.94%

Why Choose: Bajaj Finserv is a leader in fast personal loan disbursals with minimal documentation. Their Flexi Loan feature helps reduce EMIs by paying interest-only during the initial period.

7. Tata Capital Personal Loan

• Interest Rate: 10.99% p.a. onwards
• Loan Amount: ₹75,000 to ₹35 lakhs
• Tenure: 1 to 6 years
• Processing Fee: Up to 2.75%

Why Choose: Offers flexible EMI options and instant approvals for digitally verified users. Ideal for those seeking quick loans with custom repayment plans.

8. Fullerton India Personal Loan

• Interest Rate: 11.99% p.a. onwards
• Loan Amount: Up to ₹25 lakhs
• Tenure: 1 to 5 years
• Processing Fee: Up to 3%

Why Choose: Offers loans even with low or moderate credit scores, especially for Tier 2 and Tier 3 cities. The app-based process is completely paperless.

9. Indiabulls Dhani Personal Loan

• Interest Rate: 12.00% p.a. onwards
• Loan Amount: Up to ₹15 lakhs
• Tenure: 3 to 60 months
• Processing Fee: 1% to 3%

Why Choose: Quick disbursement via the Dhani app and interest-free options for short-term loans under ₹1 lakh make it ideal for small urgent needs.

10. Paysense Personal Loan

• Interest Rate: 12.00% p.a. onwards
• Loan Amount: ₹5,000 to ₹5 lakhs
• Tenure: 3 to 60 months
• Processing Fee: 2.5% to 4%

Why Choose: Best for new-to-credit borrowers, freelancers, or low-income individuals with limited credit history. Instant online eligibility checks.

Comparison Table: Lowest Personal Loan Interest Rates in 2025

Tips to Get the Lowest Personal Loan Interest Rate

1. Maintain a High Credit Score: A CIBIL score above 750 gives you better bargaining power.
2. Compare Lenders Online: Use platforms like Fincrif, BankBazaar, or PaisaBazaar to check rates.
3. Choose a Shorter Tenure: Lower tenures usually mean lower interest costs.
4. Negotiate If You're an Existing Customer: Banks offer better rates to loyal customers.
5. Time Your Application Right: Apply during festive seasons or year-end offers when banks slash rates.

 In 2025, both banks and NBFCs are competing hard to offer the most affordable personal loans. While big banks like HDFC, ICICI, and SBI continue to dominate with trust and scale, NBFCs like Bajaj Finserv and Tata Capital are making loans more inclusive and accessible.

Before signing the dotted line, always compare interest rates, check hidden charges, read the fine print, and assess your repayment capacity. A low-interest personal loan can save you thousands — but only when managed wisely.