Ahead of the 2025 festive season, several banks, including Bank of Baroda, HDFC Bank, Axis Bank, and Canara Bank, have announced car loan offers. Deals
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include reduced interest rates, concessions on processing fees, and longer tenure options.
According to data from Paisabazaar, public and private banks offer interest rates ranging from 7.6% to 9.99% on a new car loan of ₹10 lakh for a five-year term. Public-sector banks like UCO Bank is offering the lowest car loan interest rates, starting as low as 7.60% for a ₹5 lakh loan over five years. Private lenders, including ICICI Bank and HDFC Bank, typically have higher starting rates.
However, it is important to note that the final interest rate for any applicant depends on their credit score, income, and the bank's specific eligibility criteria. Rates and offers are subject to terms and conditions, and applicants should verify details with the respective lenders.
Latest car loan rates in September (Rates and charges as of September 24, 2025)
| NEW CAR LOAN-RATES AND CHARGES | |||
| Name of Lender | Interest rate (%) p.a. | EMI (Rs) Loan amount-5 lakh Tenure-5 years | Processing fee (% of loan amount) |
| Union Bank of India | 7.80-9.70 | 10,090 - 10,550 | Up to ₹1,000 |
| Punjab National Bank | 7.85-9.70 | 10,102 - 10,550 | Up to 0.25% (₹1,000 - ₹1,500) |
| Bank of Baroda | 8.15-11.60 | 10,174 - 11,021 | Up to ₹2,000 |
| Canara Bank | 7.70-11.70 | 10,067 - 11,047 | 0.25% (₹1,000 - ₹5,000) (100% waiver on processing fee under Retail Loan Festival from 01.07.2025 to 30.09.2025) |
| Bank of India | 7.85-12.15 | 10,102 - 11,160 | Up to 0.25% (₹2,500 - ₹10,000) |
| UCO Bank | 7.60-10.25 | 10,043 - 10,685 | 0.50% (₹5,000) |
| State Bank of India | 8.80-9.90 | 10,331 - 10,599 | ₹750 - ₹1,500 |
| IDBI Bank | 8.30-9.15 | 10,210 - 10,416 | ₹2,500 (Zero processing fee till 30.09.2025) |
| Bank of Maharashtra* | 7.70-12.00 | 10,067 - 11,122 | Up to 0.25% of the loan amount (max. up to ₹15,000) |
| Indian Overseas Bank | 7.80-12.00 | 10,090 - 11,122 | 0.50% (₹500 - ₹5,000) |
| ICICI Bank | 9.10 onwards | 10,403 onwards | Up to 2% |
| HDFC Bank | 9.20 onwards | 10,428 onwards | Up to 1% (₹3,500 - ₹9,000) |
| Karnataka Bank | 8.95-11.64 | 10,367 - 11,031 | Up to 0.60% (₹2,500 - ₹11,000) |
| Federal Bank | 10.00 onwards | 10,624 onwards | ₹2,000 - ₹4,500 |
| Punjab and Sind Bank** | 7.75-14.25 | 10,078 - 11,699 | 0.25% (₹1,000 - ₹15,000) |
| Indian Bank | 7.75-9.85 | 10,078 - 10,587 | ₹1,000 |
| Central Bank of India | 7.85-9.45 | 10,102 - 10,489 | 0.50% of loan amount (₹2,000 - ₹20,000) |
| IDFC FIRST Bank | 9.99 onwards | 10,621 onwards | Up to ₹10,000 |
*0.25% interest rate concession for existing home loan borrowers and other existing customers having at least 6 months of relationship with the bank.
**Concession of up to 50% on processing fee for PSB Apna Vahan Sugam.
