Union Bank of India has announced a reduction in interest rates on select retail loan products, effective 18 December 2025, compared to its earlier applicable rates. The bank is among the first in the sector
to react to recent monetary easing, lowering interest rates across Home Loans, Vehicle Loans, and Personal Loans to enhance affordability for retail borrowers.
Under the revised rate structure, home loan interest rates have been reduced by 30 basis points, and will now start at 7.15% per annum, as against the earlier rate of 7.45% p.a. Vehicle loan interest rates have been cut by 40 basis points, and will now start at 7.50% p.a., compared to the previous benchmark rate of 7.90% p.a. Personal loan interest rates have seen a sharper reduction of 160 basis points, with rates now starting at 8.75% p.a., down from the earlier rate of 10.35% p.a.
In addition to the base rate reduction, Union Bank of India is offering an additional concession of 0.10% per annum on eligible Green
Finance Home Loans and Vehicle Loans
The revision comes against the backdrop of easing monetary conditions during the year. The Reserve Bank of India reduced the repo rate by 25 basis points to 5.25% on December 5, 2025, marking the fourth rate cut in 2025 and taking the cumulative reduction for the year to 125 basis points. The Union government had also eased GST norms for automotive sector.
With this revision, Union Bank of India aims to support homebuyers, vehicle purchasers and personal loan customers by lowering borrowing costs while continuing to maintain prudent lending standards. The revised rates are applicable from 18 December 2025 and are subject to customer eligibility, credit profile and other applicable terms and conditions.
