Overview
- Rate Range: Car loan interest rates span 7.60% to over 14%, with UCO Bank at the lowest (7.60%) and Punjab and Sind Bank at the highest (up to 14.25%).
- EMI Examples: For a ₹5 lakh, 5-year loan, EMIs start at ₹10,043 (UCO) and reach ₹11,699 (Punjab and Sind); SBI offers 8.75% for ₹10,319 EMI.
- Processing Fees: Waivers from UCO, SBI, IDBI, and Canara Bank till year-end; others charge 0.25%-2%, with concessions from Maharashtra and Central Bank.
- Festive Perks: Limited-time fee waivers and concessions from banks like Canara (till Dec 2025) and Central Bank (till Mar 2026).
- Lender Tips: Balance rates, EMIs, and fees; public banks for low costs, private for speed; time loans for seasonal deals.
- Market Context: Amid Diwali demand and GST 2.0 cuts, competitive rates fuel India’s 2.5M projected vehicle sales in 2025.
- Key Takeaways: Compare offers; public sector for value, private for convenience; seasonal timing saves on fees.
Latest Car Loan Rates in India: Competitive Options Amid Festive Buzz
New Delhi, October 24, 2025 – With Diwali igniting car buying fever, banks are offering competitive car loan rates from 7.60% to over 14%, with EMIs for a ₹5 lakh, 5-year loan starting at ₹10,043. According to PaisaBazaar.com, public sector banks lead with low rates, while private lenders provide faster disbursals. Amid GST 2.0 cuts and festive concessions, borrowers can save big—here’s a breakdown to help you navigate.
Latest Car Loan Rates in October
Interest rates vary widely: UCO Bank offers the lowest at 7.60%, followed by Canara Bank and Bank of Maharashtra (7.70%). Punjab and Sind Bank tops at 14.25%. For a ₹5 lakh loan, EMIs range from ₹10,043 (UCO) to ₹11,699 (Punjab and Sind). SBI’s flat 8.75% yields ₹10,319 EMI.
Processing Fees and Special Offers
Fees differ: UCO and SBI waive entirely; Canara offers a 100% waiver till Dec 2025. Private banks like ICICI (up to 2%) and HDFC (up to 1%) charge more. Festive perks from Maharashtra (no fee) and Central Bank (till Mar 2026) add value.
The latest car loan rate table in October
| 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 Rs 1,000 |
| Punjab National Bank | 7.80-9.70 | 10,090 – 10,550 | Up to 0.25% (Rs. 1,000 – Rs. 1,500) |
| Bank of Baroda | 8.15-11.60 | 10,174 – 11,021 | Up to Rs. 2,000 |
| Canara Bank | 7.70-11.70 | 10,067 – 11,047 | 100% waiver till 31.12.2025 |
| Bank of India | 7.85-12.15 | 10,102 – 11,160 | Up to 0.25% (Rs. 2,500 – Rs. 10,000) |
| UCO Bank | 7.60-10.25 | 10,043 – 10,685 | NIL on all car & electric vehicle loans till 31.10.2025 |
| State Bank of India | 8.75 | 10,319 | NIL |
| IDBI Bank | 8.30-9.15 | 10,210 – 10,416 | NIL till 31.10.2025 |
| Bank of Maharashtra* | 7.70-12.00 | 10,067 – 11,122 | Up to 0.25% of the loan amount (max. up to Rs. 15,000) No processing fee under festive offer) |
| Indian Overseas Bank | 7.80-12.00 | 10,090 – 11,122 | 0.50% (Rs 500 – Rs 5,000) |
| ICICI Bank | 8.50 onwards | 10,258 onwards | Up to 2% |
| HDFC Bank | 9.20 onwards | 10,428 onwards | Up to 1% (Rs. 3,500 – Rs. 9,000) |
| Karnataka Bank | 8.97-11.66 | 10,372 – 11,037 | Up to 0.60% (Rs. 2,500 – Rs. 11,000) |
| Federal Bank | 10.00 onwards | 10,624 onwards | Rs. 2,000 – Rs. 4,500 |
| Punjab and Sind Bank** | 7.75-14.25 | 10,078 – 11,699 | 0.25% (Rs. 1,000 – Rs. 15,000) |
| Indian Bank | 7.75-9.85 | 10,078 – 10,587 | Rs. 1,000 |
| IDFC FIRST Bank | 9.99 onwards | 10,621 onwards | Up to Rs. 10,000 |
| Central Bank of India | 7.85-9.45 | 10,102 – 10,489 | 0.50% of loan amount (Rs. 2,000 – Rs. 20,000) (No processing fees till 31.03.2026) |
*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.
Rates and charges as of 22nd October 2025.
Choosing the Right Lender
For buyers, the final choice should balance interest rates, EMIs, and processing charges. Those looking for a low upfront cost might prefer banks waiving processing fees, while others prioritizing lower long-term interest could opt for lenders with lower rate bands.
Key Takeaways
Public sector banks still offer competitive rates and EMI options.
Private banks offer convenience and quicker disbursal but at slightly higher costs.
Seasonal and festival offers can significantly reduce processing fees, so timing the loan application could save borrowers a substantial amount.
For anyone planning to buy a car in India, it pays to compare multiple offers carefully, factoring in interest rate, EMI, processing fees, and tenure before committing to a lender.
Source: business-standard.com
Read more about Car Loans
Also Read
