Top Banks Offering Low-Interest Loans in India (June 2025)
In 2025, the demand for affordable loans has never been higher. With increasing financial literacy, more Indians are actively searching for banks that offer loans at competitive interest rates. Whether it’s for personal needs, buying a dream home, expanding a business, or purchasing a new car, the importance of low-interest loans cannot be overstated.
In this article, we will discuss the top banks in India that are offering low interest rates across various loan categories in June 2025. We will cover personal loans, home loans, auto loans, and business loans so that you can make an informed decision.
Why Interest Rate Matters?
Before we dive into the list, let us quickly understand why choosing a loan with a lower interest rate is crucial:
- Lower EMI: A lower interest rate means smaller monthly installments.
- Less Financial Stress: You can repay the loan comfortably.
- Faster Repayment: Lower interest reduces the total repayment amount, allowing you to clear the loan sooner.
Top Banks Offering Low-Interest Loans in India (June 2025)
1. State Bank of India (SBI)
Personal Loan Interest Rate: 10.15% – 12.55% p.a.
Home Loan Interest Rate: 8.35% p.a. onwards
Car Loan Interest Rate: 8.75% p.a. onwards
Business Loan Interest Rate: 11.30% p.a. onwards
SBI continues to dominate the lending market with its highly competitive interest rates and wide range of loan products. Being a government-owned bank, it offers additional trust, especially for salaried individuals and first-time borrowers.
2. HDFC Bank
Personal Loan Interest Rate: 10.50% – 21.00% p.a.
Home Loan Interest Rate: 8.40% p.a. onwards
Car Loan Interest Rate: 8.75% p.a. onwards
Business Loan Interest Rate: 11.50% p.a. onwards
HDFC Bank, a leading private sector bank, offers competitive rates with quick disbursement and minimal documentation. Their home loan offers are very attractive for salaried and self-employed individuals.
3. ICICI Bank
Personal Loan Interest Rate: 10.50% – 16.00% p.a.
Home Loan Interest Rate: 8.50% p.a. onwards
Car Loan Interest Rate: 8.85% p.a. onwards
Business Loan Interest Rate: 11.75% p.a. onwards
ICICI Bank stands out with its fast digital processing and flexible repayment options. Their personal loans are especially popular among young professionals.
4. Axis Bank
Personal Loan Interest Rate: 10.49% – 21.00% p.a.
Home Loan Interest Rate: 8.50% p.a. onwards
Car Loan Interest Rate: 8.80% p.a. onwards
Business Loan Interest Rate: 12.00% p.a. onwards
Axis Bank offers customized loans with attractive balance transfer facilities. Their digital interface makes loan tracking and repayments hassle-free.
5. Bank of Baroda (BoB)
Personal Loan Interest Rate: 10.40% – 15.75% p.a.
Home Loan Interest Rate: 8.35% p.a. onwards
Car Loan Interest Rate: 8.65% p.a. onwards
Business Loan Interest Rate: 11.00% p.a. onwards
Bank of Baroda has been aggressively pricing its loans in 2025. Its home loan schemes are one of the most competitive in the market right now.
6. Punjab National Bank (PNB)
Personal Loan Interest Rate: 10.90% – 16.45% p.a.
Home Loan Interest Rate: 8.40% p.a. onwards
Car Loan Interest Rate: 8.75% p.a. onwards
Business Loan Interest Rate: 11.50% p.a. onwards
PNB, another leading government-owned bank, offers transparent policies and quick approvals, especially for salaried individuals.
7. Kotak Mahindra Bank
Personal Loan Interest Rate: 10.99% – 24.00% p.a.
Home Loan Interest Rate: 8.45% p.a. onwards
Car Loan Interest Rate: 8.90% p.a. onwards
Business Loan Interest Rate: 12.25% p.a. onwards
Kotak Mahindra Bank has carved a niche for itself by offering customized loan packages for high-income individuals and startups. Their customer support is rated among the best in private sector banks.
Government Schemes Offering Lower Interest Rates (2025)
In addition to regular banks, some government schemes also offer subsidized interest rates, especially for:
- First-time home buyers under PMAY (Pradhan Mantri Awas Yojana)
- Small businesses under MUDRA Loans
- Women entrepreneurs under Stand Up India Scheme
Key Factors That Affect Your Loan Interest Rate
- Credit Score (CIBIL): Higher scores get lower interest.
- Loan Amount: Bigger amounts sometimes come with better rates.
- Repayment Tenure: Shorter tenure may reduce the rate.
- Type of Employment: Salaried individuals often get better rates.
- Existing Relationship with Bank: Long-term customers may get discounts.
Tips to Get Lower Interest Rates
- Maintain a good credit score (700+).
- Compare rates across multiple banks.
- Negotiate if you have good banking history.
- Look for festive season offers.
- Opt for balance transfer if another bank offers better rates.
Final Thoughts
In 2025, India has a very competitive loan market. Whether you’re looking for a personal loan, home loan, car loan, or business loan, you have multiple banks offering attractive interest rates. Always compare, calculate EMI, and read the fine print before signing the dotted line.
If you plan smartly, you can get a low-interest loan that suits your financial needs perfectly.
Disclaimer: Interest rates mentioned are indicative as of June 2025 and may vary based on individual eligibility, loan amount, and tenure.
