Mumbai: Union Bank of India has announced a significant reduction in interest rates on select retail loan products. Effective December 18, 2025, the move makes home loans, vehicle loans, and personal loans more affordable for customers. The bank is among the first in the sector to respond to recent monetary easing by the Reserve Bank of India.
Revised Rates for Home, Vehicle, and Personal Loans
Under the new structure, home loan interest rates have been cut by 30 basis points and now start at 7.15 percent per annum, down from 7.45 percent earlier. Vehicle loans have seen a reduction of 40 basis points, now starting at 7.50 percent per annum instead of 7.90 percent.
Personal loans have received the sharpest cut of 160 basis points, with rates beginning at 8.75 percent, compared to the earlier 10.35 percent.
Additionally, the bank is offering an extra 0.10 percent per annum concession on eligible Green Finance home and vehicle loans, encouraging sustainable borrowing.
Context of the Revision
This rate cut follows easing monetary conditions in 2025. The Reserve Bank of India lowered the repo rate by 25 basis points to 5.25 percent on December 5, marking the fourth cut of the year and a total reduction of 125 basis points.
The government has also eased GST norms for the automotive sector, supporting vehicle purchases.
Affordable Borrowing for Customers
Union Bank of India aims to help homebuyers, vehicle purchasers, and personal loan borrowers by reducing their cost of borrowing while maintaining prudent lending standards. The reduced rates are subject to customer eligibility, credit profile, and other terms and conditions.
This step is expected to boost retail credit demand and make borrowing more accessible across India.