Union Bank of India has announced a reduction in interest rates on select retail loans, offering relief to customers planning to buy a house, purchase a car, or take a personal loan. The revised rates have come into effect from December 18, 2025. Following the recent easing in monetary policy, several banks have already reduced lending rates, and Union Bank has now joined the list alongside SBI, HDFC Bank and Canara Bank.

The bank has reduced interest rates across home loans, car loans and personal loans, which will directly lower EMIs for borrowers.

Union Bank has cut home loan interest rates by 30 basis points.

• New starting rate: 7.15% per annum

• Earlier rate: 7.45% per annum

This reduction will make home loans more affordable and help buyers save on monthly EMIs as well as overall interest outgo.

For customers planning to buy a new car, the bank has reduced car loan interest rates by 40 basis points.

• New starting rate: 7.50% per annum

• Earlier rate: 7.90% per annum

This move is expected to encourage vehicle purchases by lowering the cost of borrowing.

The biggest benefit has been extended to personal loan borrowers. Union Bank has slashed personal loan interest rates by a significant 160 basis points.

• New starting rate: 8.75% per annum

• Earlier rate: 10.35% per annum

This sharp cut will substantially reduce EMIs for customers taking loans for medical expenses, weddings or other personal needs.

To promote sustainable financing, Union Bank is also offering an additional 0.10% annual discount on:

• Green Home Loans

• Green Vehicle Loans

This initiative aims to encourage environmentally friendly housing and electric or green vehicle adoption.

The decision comes after the Reserve Bank of India (RBI) reduced the repo rate by 25 basis points on December 5, 2025. This was the fourth rate cut in 2025, taking the total reduction during the year to 1.25%. As borrowing costs decline, banks are passing on the benefit to customers through cheaper loans.

While these rates are among the most competitive in the market, the final interest rate will depend on the borrower’s credit profile, CIBIL score and eligibility. Customers are advised to compare loan offers and check all terms and conditions before applying.

Overall, Union Bank of India’s move is expected to ease the EMI burden and make loans more affordable for a wide range of borrowers.