RBI cuts Repo Rate: Know Which Personal Loans are Cheap Now
Personal Loan: This year, 2025, has seen a slight relief in personal loan interest rates. Since the beginning of the year, the repo rate has been cut by a total of 1.25%, making it cheaper for banks to raise funds. Along with this, lower funding and operating costs have also had an impact on loan rates. As a result, many banks are now offering personal loans with starting interest rates of around 9.75 percent to 9.99 percent per annum.
At the beginning of 2025, the starting interest rates for personal loans at most banks were 10.5 percent or higher. However, several public and private sector banks have now reduced their rates. Some banks have even lowered interest rates by nearly 2 percent, which is considered a significant reduction for unsecured loans like personal loans.
Personal loan starting interest rate:
| Bank Name | January 2025 | Current Rates |
| HDFC Bank | 10.85% | 9.99% |
| ICICI Bank | 10.85% | 10.45% |
| Kotak Mahindra Bank | 10.99% | 10.99% |
| State Bank of India | 12.60% | 10.05% |
| Axis Bank | 10.55% | 9.99% |
| Punjab National Bank | 12.50% | 10.60% |
How do banks determine personal loan interest rates? Banks consider several factors when determining personal loan interest rates. The most important factors include the customer’s credit score, existing debt, income stability, and the type of job or employer. In addition, banks also take into account their own funding costs and operating expenses.
