Bank Loan — Complete step-by-step guide to getting a bank loan in Pakistan in 2025: types (home, car, personal, agricultural), interest rates, bank-by-bank examples, eligibility, and how to apply. (Includes updated rates & tips.)

Bank Loan in Pakistan: Step-by-Step Guide for 2025

With so many banks, Islamic vs conventional products, variable interest/markup formulas, and changing benchmarks like KIBOR, finding the right Bank Loan in Pakistan can be mind-boggling! This guide (updated on 9th of August, 2025) breaks everything down step-by-step so you can compare average interest/markup rates, find out how to apply for specific loan types (house loan, car loan, agriculture loan, personal loans, and SME, etc.), and improve the odds of approval.

Bank Loan: Why understanding types and rates matters (at a glance)

Things to Know Before applying, this is what you have to know: the role of Bank Loan pricing in Pakistan depends on:

Type of credit (housing, car, personal, agricultural, SME).

Is it interest-bearing or profit/markup (in case of Islamic product).

KIBOR / PKRV, declared lending rate policy of the bank, and spread of the bank over the benchmark (if applicable).

Leading Pakistani banks publish products pages and lending/profit rate schedules — for example, HBL & Meezan Bank had detailed rate sheets and product pages showing fixed/ variable rates, margins etc. (HBL, Meezan Bank)

Bank Loan: Types of loans commonly offered in Pakistan

1. Bank Loan — Home / Housing Loan                                                                     Intended for the purchase, construction, or substantial renovation of a home. Most terms will generally fall between 5 to 25 years. Conventional home financing charges a  quote markup/interest, while Islamic uses profit-sharing or rent-to-own (Ijara/Diminishing Musharaka) structures. Prices in this case: HBL has quoted floating rental/mark-up (floating 12.50% for a year reference, and fixed 13.67% for a few fixed tenures on Islamic home finance), whereas Meezan has tied pricing with KIBOR + margin (e.g., KIBOR + 4.00%, with floor/cap conditions). Product Disclosure is always provided at the time of application.
2. Bank Loan — Car / Auto Loan
   Lower tenures (1–5 years) and on average, finance around 60–80% of the vehicle value. The Islamic car financing could be Ijarah/Car Ijarah. Fixed tenures, Meezan reported car financing profit rates include ~13.45%–13.70% (fixed profit rates,) which can go quite higher depending on PKRV/KIBOR movements (variable). HBL and Allied Bank also provide car finance facilities with financing up to 70% and competitive markups. (Meezan Bank, HBL, Allied Bank)
3. Bank Loan — Personal Loan
   For salary holders or salaried professionals, there are some Unsecured loans. Tenures of 12–48 months are typical, and the amounts vary by bank; HBL and Standard Chartered offer unsecured personal loans with flexible tenures and eligibility-based limits. Rates vary widely and will often be among the highest for bank loans because of unsecured risk. (HBL, Standard Chartered Bank)
4. Bank Loan — Agricultural Loan
   Working capital and seasonal production loans for farmers. State-owned and commercial banks offer tailored products with special documentation requirements and sometimes subsidized or scheme-based rates (including government programs). Sindh Bank and other regional banks list agricultural loan products targeted at farming communities. Government schemes (e.g., concessionary or mark-up subsidized programs) may also be available seasonally. (sindhbank.com.pk, loanscheme.com.pk)
5. Bank Loan — Business / SME Loan
   Short-term working capital, term finance, and structured trade finance. Pricing depends on sector, collateral, and tenor; many products have declared lending-rate bands. HBL’s declared lending rates spreadsheet shows sector-wise declared rates that can help estimate costs for business loans. (HBL)
   

Bank Loan in Pakistan: Representative interest/markup examples (2025 snapshots)

Note: Rates change frequently. Always check the bank’s product disclosure and the date on the rate sheet. The examples below are representative and were taken from bank product pages and rate documents published in 2025.

• HBL (Home Finance / Islamic)

Floating rental rate example 12.50% (one year floating) Fixed rental example 13.67% (03years fixed) for HBL Islamic Home Finance product pages. (HBL)

• Meezan Bank (Home & Car Shariah-compliant)

Home financing is often priced as KIBOR + 4.00% (with floor and cap terms). Car Ijarah fixed profit rates are around 13.45%–13.70% depending on tenure; variable profit rates can be much higher. (Meezan Bank)

• Allied Bank (Car Finance)

Offers car finance with competitive markups, financing up to PKR 3 million and up to 70% of the car price (specific markup/interest varies by borrower profile and tenure). (Allied Bank)

• Declared Lending Rate documents (HBL)

Bank levels declared lending schedules help understand the banded rates for different economic sectors useful for business loan pricing benchmarking. (HBL)

These examples should be used only for comparison; exact pricing at application may differ depending on KIBOR/PKRV, your credit profile, collateral, and bank promotions.

Bank Loan in Pakistan: How to apply — step-by-step (general process)

1. Decide on loan type & bank

Choose conventional versus Islamic products and shortlist 2 to 3 banks (compare product pages and rate sheets). (HBL, Meezan Bank)

1. Check eligibility

salary or self-employed income, age limits, credit history, and minimum monthly or annual income. Each bank’s product page lists eligibility criteria. (HBL, Standard Chartered Bank)

1. Prepare documents

Typically, CNIC, proof of income (salary slips or tax returns), bank statements, property documents (for mortgage), vehicle invoice (for car), and farming documents (for agricultural loan). Bank product pages list document checklists. (HBL, sindhbank.com.pk)

1. Apply online or visit a branch

Many banks (HBL, Meezan, Standard Chartered, Allied Bank, etc.) offer online application forms or mobile-app applications. Upload documents and request a provisional offer. (HBL, Standard Chartered Bank)

1. Bank assessment

Credit check, affordability assessment, valuation (property/vehicle), and collateral/security verification. Expect follow-up calls or branch visits. (HBL)

1. Acceptance & disbursement

Sign the facility letter and security documents. Disbursement timelines vary: car loans are usually faster (days to weeks), home loans can take several weeks (due diligence, valuation, registration). (HBL)

Bank Loan in Pakistan: Specifics — How to apply for a Home Bank Loan

• Pre-application: Get a home financing eligibility estimate using the bank’s home loan calculator (most banks provide one). (HBL, Meezan Bank)
• Documents: CNIC, salary slips/ITRs, bank statements, proof of property (title, sale agreement, NOC), utility bills, and completed application form. (HBL)
• Valuation & Registration: The bank usually orders a valuation report and requires registration of the mortgage/charge at the relevant land registry. This adds legal costs and time. (HBL)

Bank Loan: Specifics — How to Apply for a Car Bank Loan

• Choose a vehicle & get a proforma invoice

The bank will need the vehicle invoice and dealer details. (HBL, Allied Bank)

• Finance amount

Banks typically finance 60–80% of the car value; tenure up to 5 years is common. (HBL, Allied Bank)

• Quick turnaround

Car financing usually has faster processing than housing; expect conditional approval within days if documentation is in order. (HBL)

Bank Loan: Specifics — How to Apply for an Agricultural Bank Loan

• Eligibility & documentation

Proof of land/farm, crop plan, input costs, CNIC, and a bank account; warranty depends on program. Rural and regional banks often have dedicated agriculture loan desks. (sindhbank.com.pk)

• Government schemes

Every so often, concessionary schemes (low or zero mark-up) are launched. Check with your local branch and government announcements for current offerings. (loanscheme.com.pk, sindhbank.com.pk)

Bank Loan: Important documents checklist (common across loans)

• CNIC / NICOP for foreigners or expatriates
• Salary slips (last 3 months) or employer letter, or audited accounts for self-employed
• Bank statements (3–6 months)
• Property paperwork or vehicle invoice, or farm proof (depending on loan)
• Proof of residence (electricity bills)
• Tax returns / NTN (if applicable)

Banks publish their document checklists on product pages; review them carefully before applying. (HBL)

Bank Loan: Tips to improve approval chances & get better pricing

1. Improve credit profile

Maintain on-time payments on existing loans and credit cards.

1. Increase down payment / provide stronger collateral

Lowers bank risk and can get you a lower markup.

1. Compare Islamic & conventional offers

Sometimes, effective rates differ, consider fees, Takaful (insurance), and trackers. (Meezan Bank)

1. Negotiate with the bank

Banks sometimes offer promotional rates, especially for salaried customers with salary accounts.

1. Watch benchmarks (KIBOR/PKRV)

Many products are priced over KIBOR; when KIBOR falls, variable pricing may become cheaper (and vice versa). Use bank-published product disclosures and declared rate schedules to estimate future exposure. (HBL, Meezan Bank)

Bank Loan: Where to check live rates and finalize your decision

Always use:

• The bank’s official product page and profit or markup disclosure (e.g., HBL, Meezan, Allied, Standard Chartered). (HBL, Meezan Bank, Allied Bank, Standard Chartered Bank)
• The bank’s declared lending rate or profit rate files (published periodically) for sector-wise benchmarking. (HBL, Meezan Bank)
• Government / State Bank announcements or special schemes (for subsidized agricultural or SME financing). (loanscheme.com.pk)

Bank Loan: Final checklist before signing

• Confirm effective rate (APR-like disclosure if provided), including all fees (processing, legal, valuation, Takaful/insurance).
• Understand variable vs fixed pricing, repricing frequency, and any floor/cap clauses. (Meezan Bank)
• Ask for a clear repayment schedule and early-repayment penalties (if any).
• Keep copies of all signed documents and disbursement confirmations.

COMPARISON OF LOANS FROM THREE DIFFERENT BANKS

For better understanding, let us compare three typical Bank Loan offers for a Home Loan in Pakistan for 2025. Have a look at their EMI and effective cost table for a PKR 50 lakh home loan over 15 years (180 months).:

1. HBL Islamic Home Finance (Floating & Fixed)
2. Meezan Bank Easy Home (Variable with floor/cap & Fixed)
3. State Bank-backed “Mera Pakistan Mera Ghar” (MPMG) affordable scheme

Rates & Features Overview

HBL Islamic Home Finance

• Floating rental rate: 12.50% for the first year (HBL)
• Fixed rental rate: 13.67% for the first 3 years (HBL)

Meezan Bank Easy Home

• Fixed rate: 12.49% for the first 3 years (salaried customers) (Meezan Bank)
• Variable pricing: KIBOR + 3.00% p.a. thereafter; floor 8.00%, cap 30.00% (Meezan Bank)

SBP MPMG Scheme

• First 5 years: 3.00%
• Next 5 years: 5.00%
• Remaining 5 years: KIBOR + 250 bps (0.3%); assuming current KIBOR at 18% to total 20.5% per annum. (State Bank of Pakistan)

Estimated EMI Comparison Table

Note: These are estimated figures using standard loan formulas (assuming equal monthly installments). Exact EMIs may vary depending on down-payment, fees, and variation in KIBOR during tenure.

• Lowest EMI: The SBP’s MPMG scheme offers the lowest estimated EMI at ~PKR 60,100, thanks to exceptionally low fixed rates in early years.
• Islamic Fixed vs Floating: Meezan’s fixed at 12.49% nearly matches HBL’s floating at 12.50%, placing both in a similar EMI range (PKR 63500–63600).
• Post-Fixed Variable Risk: Meezan’s variable period could spike costs if KIBOR rises (subject to floor/cap). HBL’s floating may also adjust, depending on periodic resets.
• HBL Fixed Option: Offers short-term certainty but will increase overall EMI slightly (~PKR 67k) until resetting occurs.

What you can do next

• Use the bank’s home loan calculators (Meezan’s Easy Home Calculator (Meezan Bank) or HBL’s product page) to input your exact loan/down-payment amount.
• Confirm current KIBOR for up-to-date variable scenarios, and check whether MPMG is still available and whether you qualify (e.g., income limits, NAPHDA vs non-NAPHDA tiers) (State Bank of Pakistan).
• Choose the loan that aligns with your long-term cost tolerance: lower early EMI (MPMG), predictable short-term (HBL/Meezan fixed), or possibly lower long-term if KIBOR falls (HBL floating).

Bank Loan: Conclusion — make your application count

A Bank Loan in Pakistan can be a powerful tool for purchasing a home, a car, expanding your farm, or growing your business. The key is to compare offers, understand whether Islamic or conventional financing suits you better, and confirm the exact markup, interest, and fees at the time of application. Use the bank product pages and declared rate schedules to get the most accurate, up-to-date numbers, and remember to factor in affordability (monthly EMI/installment) before signing.