Car loans start from 7.6% in August: Check fee waivers & bank deals here

Car Loan rate in August: EMIs ease for new car buyers this month as some banks cut rates to 7.6% and waive fees; festive offers and concessions could save you thousands on upfront costs.

Buying a new car in August could be slightly easier on the pocket if you shop around for the best loan deals. Data compiled by Paisabazaar.com shows that state-run lenders are keeping interest rates competitive, with some offering temporary waivers on processing fees to draw in customers.

 

Top lenders with the lowest car loan rates 

The cheapest rates currently come from UCO Bank at 7.60 per cent per annum (pa), followed closely by Canara Bank and Bank of Maharashtra at 7.70 per cent pa each. Indian Bank and Punjab & Sind Bank also start at 7.75 per cent.

 

For a Rs 5 lakh loan over five years, these rates translate into EMIs starting from around Rs 10,043 per month at UCO Bank. At the higher end of the range, rates go up to 14.25 per cent p.a. at Punjab & Sind Bank, pushing EMIs to nearly Rs 11,700.

 

Car Loan Processing fee waivers and concessions

Some lenders are trying to sweeten the deal:

 

Canara Bank: 100 per cent waiver on processing fees under its Retail Loan Festival scheme until 30 September 2025.

 

Punjab & Sind Bank: Up to 50 per cent concession on processing fees for its “PSB Apna Vahan Sugam” product.

 

Bank of Maharashtra: 0.25 per cent interest rate concession for existing home loan borrowers and long-standing customers.

 

Processing charges otherwise range from as low as Rs 500 (Indian Overseas Bank) to as high as Rs 20,000 (Central Bank of India), depending on the loan amount.

 

Private banks pricier

Private sector lenders are generally quoting higher starting rates. ICICI Bank’s new car loans start at 9.10 per cent p.a., HDFC Bank at 9.20 per cent p.a., and Federal Bank at 10 per cent p.a. These translate to EMIs upwards of Rs 10,400 for a Rs 5 lakh loan over five years.

 

Below is a table of detailed Car Loan Rate offerings by banks

 

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 Rs 1,000
Punjab National Bank	7.85-9.70	10,102 - 10,550	Up to 0.25% (Rs. 1,000 - Rs. 1,500)
Bank of Baroda	8.15-11.70	10,174 - 11,047	Up to Rs. 2,000
Canara Bank	7.70-11.70	10,067 - 11,047	0.25% (Rs 1,000 - Rs. 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% (Rs. 2,500 - Rs. 10,000)
UCO Bank	7.60-10.25	10,043 - 10,685	0.50% (Rs 5,000)
State Bank of India	8.90-9.95	10,355 - 10,611	Rs 750 - Rs 1,500
IDBI Bank	8.30-9.15	10,210 - 10,416	Rs 2,500
Bank of Maharashtra*	7.70-12.00	10,067 - 11,122	0.25% of the loan amount (max. up to Rs. 15,000)
Indian Overseas Bank	7.80-12.00	10,090 - 11,122	0.50% (Rs 500 - Rs 5,000)
ICICI Bank	9.10 onwards	10,403 onwards	Up to 2%
HDFC Bank	9.20 onwards	10,428 onwards	Up to 1% (Rs. 3,500 - Rs. 9,000)
Karnataka Bank	8.95-11.64	10,367 - 11,031	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)
*0.25% interest rate concession for existing home loan borrowers and other existing customers having atleast 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 13th August 2025.
Source: Paisabazaar.com

 

Tip: Always calculate the total cost of the loan, including interest and fees, before signing up. Even a slightly lower rate or waived fee can save you thousands over the loan term.