Raageshwari had a birth in Mumbai on the July 25, from a middle-class background, to Trilok Singh Loomba, a National Award winning musician and government servant, and his wife Veera. She has an elder brother, Rishabh who is a filmmaker. The Sanskrit word Raageshwari means "the queen of ragas and wife of the Lord".

Raageshwari attended the Auxilium Convent High School. As a child model, she did the rounds of numerous advertising agencies with her father. At the age of 13, she was noticed by director Shekhar Kapoor, and auditioned at a photo shoot for the lead role opposite Bobby Deol, but didn't protect the part. As a teenager, Raageshwari signed her first film as an actor, Zid (released in 1994). She took a month off from school to complete the shooting, but managed to secure a distinction in her Class X exams. She then acted in hit films, including David Dhawan's Aankhen (1993) and Main Khiladi Tu Anari (1994).

She then decided to commence herself as a musician. She recorded a scratch demo of the song Ta Ta Ra Ri Ra Ra (later the title song of her first album, Duniya), and did the rounds of music companies. However, she faced negative response from the music companies. She and her brother Rishabh then decided to go ahead and shoot the music video in Maldives. The music video became very popular and launched Raageshwari's singing career. It was followed by another video, titled Oye shava. The album went platinum in just a month after its release. Raageshwari then signed a deal with Coke to do a series of concerts all over India.

In 1998, Raageshwari released her second album, Pyar Ke Rang, in collaboration with her father and brother. The video for the title track was a spin-off on the character of Aida from Giuseppe Verdi's opera, with Raageshwari switching between the characters of Aida and a college girl. The second music video, for the song Mere Mehboob, depicted her as a young woman separated from her lover. At this point, Raageshwari also began touring the world with her dance troupe.