From 8.20% to 14.95%: How car loan rates, EMIs differ across banks in May

Data shows a wide variation in interest rates, EMIs, and processing fees across various banks

Planning to take a loan to buy a car? Choosing the right lender can make a big difference in how much you finally end up paying. The data compiled by Policybazaar.com shows a wide variation in interest rates, EMIs, and processing fees across various banks in May. Here's a quick guide to help you make an informed choice.

 

Car loan rates in May

 

Interest rates for new car loans currently range from 8.20 per cent to 14.95 per cent per annum, depending on the bank and the borrower’s profile. Among the options:

 

·  Union Bank of India offers the lowest starting interest rate at 8.20 per cent , going up to 9.95 per cent .

 

 

·  Punjab National Bank (PNB) charges between 8.35 per cent and 10.20 per cent.

 

 

·  Bank of Baroda and Canara Bank offer slightly higher upper limits, reaching up to 12.15 per cent and 12.20 per cent respectively.

 

 

How EMIs differ under different interest rates?

 

For a car loan of Rs 5 lakh over 5 years, the estimated monthly EMI differs based on the interest rate:

 

·  Union Bank of India: Rs 10,186 – Rs 10,611

 

 

·  PNB: Rs 10,222 – Rs 10,673

 

 

·  Bank of Baroda: Rs 10,294 – Rs 11,160

 

 

·  Canara Bank: Rs 10,186 – Rs 11,173  Use EMI Calculator

 

 

Difference in processing fees

 

Apart from interest, most banks charge a processing fee, either as a fixed amount or a percentage of the loan. Here's what you might expect:

 

·  Union Bank of India: Up to Rs 1,000

 

 

·  PNB: Up to 0.25 per cent of loan amount (Rs 1,000–Rs 1,500)

 

 

·  Bank of Baroda: Up to Rs 2,000

 

 

·  Canara Bank: 0.25 per cent of the loan amount (Rs 1,000–Rs 5,000)

 

 

Here is a list by Paisabazaar.com of car loans offered by 20 banks with loan rates, EMIs and processing fees.

 

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	8.20-9.95	10,186 - 10,611	Up to Rs 1,000
Punjab National Bank	8.35-10.20	10,222 - 10,673	Up to 0.25% (Rs. 1,000 - Rs. 1,500)
Bank of Baroda	8.65-12.15	10,294 - 11,160	Up to Rs. 2,000
Canara Bank	8.20-12.20	10,186 - 11,173	0.25% (Rs 1,000 - Rs. 5,000)  (Processing fees are 50% waived off from 1.04.2025 to 30.6.2025 for its Retail Loan Festival)
Bank of India#	8.75-12.20	10,319 - 11,173	Up to 0.25% (Rs. 2500 - Rs. 10,000)  (50% concession in the applicable processing fee on purchasing e-Vechicles)
UCO Bank	8.10-10.75	10,162 - 10,809	0.50% (Rs 5,000)
State Bank of India	9.10-10.15	10,403 - 10,660	Rs 750 - Rs 1,500
IDBI Bank	8.65-9.45	10,294 - 10,489	Rs 2,500
Bank of Maharashtra*	8.20-12.50	10,186 - 11,249	0.25% of the loan amount (max. up to Rs. 15,000)
Indian Overseas Bank**	8.15-12.00	10,174 - 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	9.32-11.80	10,457 - 11,072	Up to 0.60% (Rs 2500 - Rs 11,000)
Federal Bank	10.40 onwards	10,722 onwards	Rs 2,000 - Rs 4,500
Punjab and Sind Bank***	8.25-14.75	10,198 - 11,829	0.25% (Rs 1,000-Rs 15,000)
Indian Bank	8.25-9.85	10,198 - 10,587	Rs. 1000
IDFC First Bank	9.99 onwards	10,621 onwards	Up to Rs 10,000
City Union Bank	14.45-14.95	11,751 - 11,882	1.25% (Min: Rs 750)
*0.25% interest rate concession for existing housing loan borrowers and corporate salary account holders.
**0.50% interest rate concession to borrowers with credit scores of 800 and above. Interest rate concession of 0.25% to borrowers having credit scores of 750-799.
***Concession of up to 50% on processing fee for PSB Apna Vahan Sugam.
#Processing fee charged is With Effect from 1st Feb 2025.
Rates and charges as of 14th May 2025.
Source: Paisabazaar.com