Personal Loan: Which bank offers the cheapest personal loan? Learn the details
Personal Loan Interest Rates 2025: Bank of Maharashtra, SBI, HDFC, ICICI – Check Who Offers the Cheapest Loan
If you are planning to manage urgent expenses without pledging any collateral, a personal loan can be one of the most convenient financial solutions. In India, several public and private sector banks are offering attractive personal loan schemes with affordable interest rates and flexible repayment options. However, the final rate you receive largely depends on your credit history, income stability, and repayment capacity.
At present, Bank of Maharashtra is offering the most competitive personal loan in the market. The interest rate starts at 9.50% per annum, making it the cheapest option among major banks. For example, if you borrow ₹5 lakh for a tenure of 5 years, your monthly EMI will be around ₹10,501. This makes it a highly appealing choice for salaried professionals looking for low-cost borrowing.
The country’s largest public sector lender, State Bank of India (SBI), is another strong option. The bank offers personal loans at rates starting from 10.30%. On a ₹5 lakh loan, the EMI works out to approximately ₹10,697. However, borrowers should factor in the processing fee, which can be up to 1.5% of the loan amount (minimum ₹1,000 and maximum ₹15,000). Despite the additional charges, SBI remains one of the most reliable names due to its wide network and transparent lending policies.
Private sector leaders HDFC Bank and ICICI Bank also provide quick personal loans with minimal documentation.
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HDFC Bank: Interest rates start from 10.90%, with an EMI of around ₹10,846 on ₹5 lakh. The processing fee is capped at ₹6,500.
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ICICI Bank: Offers loans from 10.85% interest, with EMIs of about ₹10,834. Processing charges can go up to 2% of the loan amount.
Both banks are known for fast disbursement and digital loan approval processes, making them a preferred choice for urban customers.
Kotak Mahindra and Axis Bank-
Kotak Mahindra Bank: Interest rate starts at 10.99%, with EMI of about ₹10,869. However, the processing fee is the highest among peers, going up to 5% of the loan amount.
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Axis Bank: Charges an interest rate of 11.25%, translating into an EMI of ₹10,934. Processing fees are capped at 2%.
Apart from the top banks, several others are offering competitive personal loan products:
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Tata Capital: Interest rate of 11.60%, EMI around ₹11,021, and processing fees up to 4%.
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Bank of India: Loan rates start from 11.99%, with a relatively low processing fee of 1%.
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Punjab & Sind Bank: Interest begins at 10.35%, with EMI around ₹10,710. Processing fees range between 0.50% and 1%.
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Canara Bank, UCO Bank, and Central Bank of India also provide personal loans at similar rates, keeping the competition tight among public sector lenders.
While interest rate is the most critical factor, borrowers should also pay attention to processing fees, EMI affordability, and repayment flexibility. Even a small difference in rates can help save a significant amount over the loan tenure.
Additionally, maintaining a good credit score (750 or above) increases your chances of securing a lower interest rate. Lenders view high credit scores as a sign of responsible repayment behavior, often rewarding such customers with cheaper loans and faster approval.
If you are looking for the cheapest personal loan in 2025, Bank of Maharashtra stands out with the lowest starting rate of 9.50%. However, other banks like SBI, HDFC, and ICICI remain trusted options with strong service networks. Before applying, it’s essential to compare interest rates, EMIs, and hidden charges to select the most cost-effective loan for your needs.