If you’re planning a wedding, home renovation, medical treatment, or even a dream vacation, a personal loan can be a quick solution to get funds without pledging any asset. But with so many banks offering different interest rates and terms, the big question is:
Which bank offers the cheapest personal loan in 2025?
In this blog, we compare the top personal loan providers in India, including SBI, Yes Bank, HDFC Bank, ICICI Bank, Axis Bank, and more, to help you find the lowest interest rate and best loan plan suited to your needs.
💡 What is a Personal Loan?
A personal loan is an unsecured loan offered by banks and NBFCs (Non-Banking Financial Companies), typically ranging between ₹50,000 to ₹40 lakh, depending on the borrower’s income and credit score. Since no collateral is required, the interest rate tends to be higher than home or car loans.
🧾 Factors That Affect Personal Loan Interest Rates
Before we jump into the comparison, here are a few key factors that influence how much interest a bank will charge you:
- Credit Score (CIBIL Score) – Higher scores get lower rates
- Income Level – Stable and higher income leads to better deals
- Employment Type – Salaried employees with reputed companies usually get better terms
- Loan Amount & Tenure – Larger loan and longer tenure can increase or decrease the interest
- Relationship with the Bank – Existing customers may receive preferential rates
🏦 Top Banks Offering Personal Loans in 2025 (Comparison Table)
| Bank | Interest Rate (p.a.) | Loan Amount | Tenure | Processing Fee |
|---|---|---|---|---|
| SBI | 11.15% – 14.30% | ₹25,000 – ₹20 lakh | Up to 6 years | Up to 1.5% (Min ₹1000) |
| HDFC Bank | 10.75% – 21.00% | ₹50,000 – ₹40 lakh | 1 – 5 years | Up to 2.5% + GST |
| ICICI Bank | 10.50% – 16.50% | ₹50,000 – ₹25 lakh | 1 – 6 years | Up to 2.5% + GST |
| Yes Bank | 10.99% – 16.99% | ₹1 lakh – ₹40 lakh | 1 – 5 years | Up to 2% + GST |
| Axis Bank | 10.49% – 20.00% | ₹50,000 – ₹40 lakh | 1 – 5 years | Up to 2% + GST |
| Kotak Mahindra | 10.99% – 24.00% | ₹50,000 – ₹25 lakh | 1 – 5 years | Up to 2.5% + GST |
| Bajaj Finserv | 11.00% – 35.00% | ₹20,000 – ₹25 lakh | Up to 5 years | Up to 4% + GST |
| IDFC First Bank | 10.99% – 23.00% | ₹1 lakh – ₹40 lakh | Up to 5 years | Up to 2% + GST |
Note: Rates may vary depending on credit score, location, and income bracket.
🏆 Which Bank Offers the Lowest Interest Rate in 2025?
Based on the data above:
- ICICI Bank currently offers the lowest starting rate at 10.50%
- Axis Bank also starts at 10.49% but may not be available to all profiles
- SBI is the most trusted public sector bank with a competitive rate of 11.15% and minimal fees
- Yes Bank provides a great balance of low rates and higher loan amount eligibility
- HDFC and Kotak offer faster disbursal but slightly higher rates
📌 Detailed Review of Top Banks
✅ SBI Personal Loan
- Best For: Government employees, existing SBI customers
- Pros: Low processing fee, stable interest rate
- Cons: Lengthy paperwork for new customers
✅ Yes Bank Personal Loan
- Best For: Salaried professionals with good credit score
- Pros: Higher loan limits, digital process
- Cons: Strict eligibility check
✅ HDFC Bank Personal Loan
- Best For: Instant disbursal for pre-approved users
- Pros: Fast approval, minimal documentation
- Cons: High upper-end interest rates for low credit score applicants
✅ ICICI Bank Personal Loan
- Best For: Low-interest rates for salaried professionals
- Pros: Competitive interest, flexible tenure
- Cons: Strict employment eligibility
💰 Personal Loan EMI Example
Let’s say you take a ₹5 lakh personal loan for 5 years:
| Bank | Interest Rate | Monthly EMI (Approx.) |
|---|---|---|
| SBI | 11.5% | ₹10,990 |
| HDFC | 13.0% | ₹11,380 |
| Yes Bank | 11.25% | ₹10,950 |
| ICICI | 10.75% | ₹10,850 |
Even a small difference in interest rate (1–2%) can save you over ₹15,000–₹25,000 across the loan term.
📑 Documents Required for Personal Loan
- PAN Card and Aadhaar Card
- Salary Slips (last 3 months)
- Bank Statements (last 6 months)
- Address Proof
- Company ID card (for salaried) or ITRs (for self-employed)
- Passport-size photo
🧠 Tips to Get a Personal Loan at the Lowest Rate
- Improve Your CIBIL Score – Keep it above 750
- Compare Before You Apply – Don’t accept the first offer
- Negotiate – Use pre-approved offers to your advantage
- Opt for Shorter Tenure – Lower overall interest outgo
- Avoid Too Many Applications – It affects your credit profile
🔚 Conclusion: Choose Smart, Save More
Taking a personal loan doesn’t mean you have to settle for high interest rates. With careful comparison and a bit of negotiation, you can choose a bank that suits your profile best and offers the lowest EMI.
If you’re someone with a good credit score and stable income, ICICI Bank, Yes Bank, or Axis Bank may offer you the best deal. For government employees or those seeking trust and transparency, SBI is a solid option.
💡 Remember: Lowest rate isn’t everything. Look at EMI flexibility, processing fees, prepayment options, and customer service too!
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