Low Interest Personal Loans: Which Bank Offers the Best Rates?

Compare personal loan interest rates and processing fees from top banks in August 2025. Find the best offers based on your credit score, income, and loan term.

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Varying Personal Loan Interest Rates

Personal loans are a popular choice for those needing quick cash. In August 2025, leading banks offer flexible loan options with attractive interest rates and processing fees. Since the Reserve Bank of India cut the repo rate by 0.5% in June 2025, banks have reduced their lending rates. However, the rate you get will vary depending on your credit score, income, and loan term. Below is a list of personal loan interest rates and processing fees from leading banks in August 2025.

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Which Bank Charges How Much Interest?!

• Canara Bank 9.95% – 15.40%
• Axis Bank 9.99% – 22.00%
• Union Bank of India 10.35% – 14.45%
• Bank of Baroda 10.40% – 18.20%
• ICICI Bank 10.60% onwards
• State Bank of India 10.10% – 15.10%
• HDFC Bank 10.90% – 24.00%
• Kotak Mahindra Bank 10.99% onwards

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Factors Affecting Personal Loan Interest Rates

Credit Score: Borrowers with credit scores above 730 generally get better rates. Income: Salaried individuals working in reputed companies or stable self-employed individuals get better pricing.

Processing Fees and Other Charges: A lower processing fee significantly reduces upfront costs. Loan Term and Amount: Shorter terms reduce total interest but increase monthly installments (EMI). Higher loan amounts can sometimes fetch better terms.

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Tips for Choosing the Right Personal Loan

Compare Interest Rates and Fees: A slightly higher interest rate can be offset by a lower processing fee. So, consult with financial advisors before choosing any loan product. Check Prepayment and Foreclosure Charges: Those looking to prepay should look for loans with low or zero foreclosure penalties.

Use Online EMI Calculators: Ensure your monthly installments don't exceed 40% of your monthly income. Read the Terms and Conditions Carefully: Understand late payment fees, part-payment charges, and eligibility criteria beforehand.

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Borrow Wisely!

Personal loans carry inherent risks of high-interest costs. So, it's crucial to borrow cautiously after carefully comparing interest rates, fees, and service quality and thoroughly assessing your repayment capacity. For more details, visit the banks' official websites or consult financial advisors.