Union Bank of India has announced a reduction in interest rates for home, vehicle, and personal loans, effective December 18, 2025. This move is aimed at making borrowing more affordable for retail customers, aligning with the recent monetary easing by the Reserve Bank of India (RBI).

Home Loans:

The bank has slashed home loan interest rates by 30 basis points, bringing the starting rate down to 7.15% per annum from the previous 7.45%. These rates are effective as of December 18, 2025. Interest rates for home loans can range from 8.80% to 12.65% depending on the loan and the applicant's profile. Borrowers with CIBIL scores below 700 may be charged an additional risk premium of 0.10%.

Vehicle Loans:

Vehicle loans have seen a more significant reduction of 40 basis points, now starting at 7.50% per annum, compared to the earlier 7.90%. For green finance options on vehicle loans, an extra concession of 0.10% per annum is available. Interest rates for new car loans is 8.40%, while used car loans have an interest rate of 10.75%. Several factors like income, loan tenure, credit score, and down payment are considered when fixing the interest rate on vehicle loans.

Personal Loans:

Personal loans have witnessed the most substantial rate cut, with a significant 160 basis points reduction. The new interest rates now begin at 8.75%, a considerable decrease from the previous 10.35%. Union Bank of India offers personal loans to customers for needs like marriage, higher education, or the purchase of consumer goods, with attractive interest rates starting from 10.70%. However, interest rates for personal loans can range anywhere between 11.50% to 24% per annum, depending on factors such as credit standing, repayment history, salary, and occupation.

This rate cut follows a reduction in the repo rate by the Reserve Bank of India (RBI). On December 5, 2025, the RBI lowered the repo rate by 25 basis points to 5.25%, 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, further supporting vehicle purchases.

Union Bank of India's EBLR (External Benchmark Lending Rate) as of December 18, 2025, is 8.00%, which is the RBI Repo Rate (5.25%) plus a spread (2.75%).

These revised rates aim to provide financial relief and encourage borrowing among retail customers, reflecting the bank's responsiveness to the evolving economic landscape and the monetary policy adjustments.