Best Bank for Personal Loan in 2025 — Compare All Banks

Complete guide to pick the lowest-rate personal loan in India (banks, NBFC offers, eligibility, documents, calculator & tips).

Quick summary

In 2025 the "best" bank depends on your profile: salary/customer relationship, CIBIL score, required loan amount and tenure. Large banks (HDFC, SBI, ICICI, Axis) often provide the best combination of low interest, trust and grievance redressal — especially for existing customers with pre-approved offers. NBFCs and fintechs provide speed and flexible eligibility. Always compare APR, processing fees and total EMI before you decide.

What makes a bank the "best" for a personal loan?

When choosing the best bank, prioritize these factors (not just the headline rate):

  • Effective interest / APR — interest + fees annualised.
  • Processing fee and whether it's waived for existing customers.
  • Pre-approved offers — often lowest rate for existing customers.
  • Turnaround time — how quickly loan disburses after approval.
  • Customer service & grievance redressal.
  • Flexibility: prepayment, balance transfer, part-prepayment charges.

Top banks & trusted lenders to consider (2025)

Below are banks and large NBFCs commonly considered best-in-class for personal loans — summary followed by details:

HDFC Bank — strong for salaried & pre-approved offers

Why consider: Consistent pricing, quick disbursal for pre-approved customers, good customer service, flexible tenures.

Pros: Competitive rates for existing customers, good digital experience.
Cons: Processing fee sometimes applies; stricter underwriting for new customers.

SBI (State Bank of India) — trust & lowest rates for many

Why consider: Often offers very competitive rates, extensive branch network, good for salaried customers and government employees.

Pros: Trustworthy, wide reach, stable interest slabs.
Cons: Slower turnaround for new applications compared to fintechs.

ICICI Bank — fast, digital and flexible

Why consider: Good digital verification, instant offers, flexible balance transfer options.

Pros: Quick digital disbursal, frequent pre-approved deals.
Cons: Rates vary more by profile; may be higher for new customers.

Axis Bank — competitive for young professionals

Why consider: Attractive offers for salaried customers, easy top-ups and balance transfers.

Pros: Good for salaried & young professionals.
Cons: Slightly higher processing fees sometimes.

Kotak Mahindra Bank — attractive pricing & flexibility

Why consider: Competitive rates, focus on digital onboarding and easy top-ups for existing customers.

Bank of Baroda / Punjab National Bank — good public sector options

Why consider: Public-sector banks sometimes have lower rates for specific salary segments and long-standing customers.

Bajaj Finserv, Tata Capital, Fullerton India (NBFCs)

Why consider: NBFCs often have more flexible eligibility, faster disbursal and innovative products (top-ups, flexible EMI); but watch APR and fees.

Note: Specific rates and offers change frequently. Use live bank calculators or official portals to check the exact rate available to your profile before applying.

Comparison table — sample ranges (illustrative)

The table below shows common ranges in 2025 — your rate depends on profile, salary, CIBIL score and relationship with the bank.

Bank / LenderSample Interest Rate (p.a.)Processing FeeLoan AmountTenure
HDFC Bank10.50% – 22%0.5%–2% (may waive)₹50k–₹40L12–72 months
SBI9.50% – 21%0.5%–2%₹25k–₹20L12–84 months
ICICI Bank10.65% – 23%0.5%–2%₹50k–₹25L12–72 months
Axis Bank10.49% – 24%1% or slab₹50k–₹25L12–60 months
Kotak Mahindra10.25% – 22%0.5%–2%₹50k–₹25L12–60 months
Bajaj Finserv (NBFC)11% – 26%0%–2%₹10k–₹25L3–60 months

Eligibility & Documents — what banks usually ask

General eligibility for salaried applicants:

  • Age: 21–58 (varies by lender)
  • Minimum in-hand salary: ₹12,000–₹25,000 (depends on bank)
  • Minimum work experience: 6 months to 1 year in current job
  • CIBIL score: 650+ preferred for best rates

Common documents (salaried):

  • Identity proof (Aadhaar / PAN / Passport)
  • Address proof (Aadhaar / Utility bill / Passport)
  • Salary slips (last 3 months) or Form 16
  • Bank statements (3–6 months)
  • Recent passport photo, signed application

Self-employed applicants: ITRs (2 years), audited accounts, GST/Invoices, business registration etc.

Pro tips to get the lowest rate

  • Use pre-approved offers: If your bank shows a pre-approved offer in netbanking, it’s often the cheapest.
  • Improve credit score: Pay cards/EMIs on time, keep utilization low — a 50–100 point score improvement can reduce rates significantly.
  • Shorter tenure: A shorter tenure usually means lower interest rate slabs.
  • Negotiate processing fee: Many banks waive processing fee for relationship customers.
  • Consider balance transfer: Move high-rate existing loans to a lower-rate bank with balance transfer offers.
  • Add a co-applicant or security: If possible, a co-applicant with better profile reduces rate.

EMI Calculator — quick check

Enter loan amount, interest rate and tenure to estimate EMI and total payment.

Frequently Asked Questions (FAQs)

Q1 — Which bank gives the lowest personal loan rates?
A1 — It depends. For many customers SBI/HDFC/Kotak pre-approved offers are among the lowest. Your exact rate depends on salary, CIBIL score, tenure and relationship with the bank.
Q2 — Should I choose a bank or NBFC?
A2 — Banks offer stability and often lower APR for good profiles; NBFCs/fintechs are faster and more flexible for thin-file customers. Compare APR and total cost.
Q3 — Can I negotiate the rate?
A3 — Yes. Existing customers can often negotiate; show a competitor offer or ask for processing fee waiver.
Q4 — When is balance transfer worth it?
A4 — Consider balance transfer if new rate + transfer/processing costs reduce your total interest over remaining tenure.
Q5 — What credit score do banks expect?
A5 — Typically 650+ for competitive rates; 700+ for the best rates. Lower scores may still get loans from NBFCs at higher rates.

Action plan — how to pick the best bank for your profile (quick 6-step)

  1. Check pre-approved offers in your bank’s netbanking — start here.
  2. Run soft eligibility checks on 2–3 banks (no hard enquiry).
  3. Compare APR, total EMI & processing fee — not only headline rate.
  4. Ask for amortization schedule and prepayment/foreclosure terms.
  5. Negotiate processing fee / request waiver if you have a relationship.
  6. Choose the lender that gives the lowest total cost (EMI + fees + charges).

Red flags — avoid these

  • Unsolicited apps promising “0% interest” or unrealistic offers.
  • Advance payment demanded to unlock a loan.
  • No registered company address or unclear lender identity.
  • Excessive app permissions that are unrelated to loan processing.
  • Harsh penalty clauses not clearly displayed in the agreement.

Final thoughts — what matters most

There is no single "best bank" for everyone. The best choice is the lender that gives you the lowest total cost (APR) while meeting turnaround, customer service and transparency expectations. For many salaried borrowers, established banks with pre-approved offers win on cost and reliability. For thin-file or urgent cases, NBFCs and fintechs may be faster — but read APR, fees, and terms carefully.

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Disclaimer

This page provides informational content only. Interest rates, fees and eligibility criteria change frequently and vary by applicant profile. Always verify current rates and terms directly on the lender's official website or branch. All Finance Store is not a lender — we provide comparative information and guidance only.

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