Mid-Dec car loan rates start at 7.45%: Top lenders' offers and EMIs

Public sector banks are offering the most competitive entry-level interest rates on five-year car loans

Car loan rates in December are largely unchanged from the previous month, making lender comparison essential for anyone planning a new purchase. Data compiled by Paisabazaar.com shows that interest rates for five-year car loans of Rs 5 lakh start from 7.45 per cent at the lowest end and go up to 14 per cent for select borrowers.

 

Below is how rates and charges currently stack up.

 

Most large public-sector banks offer the most competitive entry-level rates.

 

-Bank of Maharashtra offers the lowest starting rate at 7.45 per cent, with EMIs beginning around Rs 10,007 for a five-year, Rs 5 lakh loan.

 

-UCO Bank follows closely with a starting rate of 7.60 per cent, and EMIs from Rs 10,043, with zero processing fees, including for electric vehicle loans.

 

-Canara Bank offers 7.70 per cent onwards, and has waived processing charges until December 31, reducing upfront costs for borrowers.

 

-Other major state-run lenders such as Union Bank of India, Punjab National Bank, Indian Bank, and Punjab and Sind Bank also fall within the 7.5–7.8 per cent starting range. EMIs at these lenders typically begin at around Rs 10,019–10,090.

 

Borrowers should also note special concessions: Bank of Maharashtra extends a 0.25 per cent rate cut for existing home loan customers, while Punjab and Sind Bank offers a 50 per cent fee concession under its Apna Vahan Sugam scheme.

 

Private banks have higher starting rates

 

-ICICI Bank: 8.50 per cent onwards, with EMIs starting from Rs 10,258.

 

-HDFC Bank: 9.32 per cent onwards, one of the highest starting points among large lenders, with EMIs from Rs 10,428.

 

-IDFC FIRST Bank: 9.99 per cent onwards, with maximum processing fees up to Rs 10,000.

 

-Federal Bank’s rates start at 10 per cent, while some NBFC-linked products may go higher depending on credit profile.

 

Processing fees make a meaningful difference

While interest rates drive long-term cost, upfront charges vary sharply:

 

-Zero-fee offers from UCO Bank, Canara Bank, and Central Bank of India (until March 31, 2026) can reduce immediate outflow significantly.

 

-Private banks typically levy higher processing fees: ICICI Bank charges up to 2 per cent of the loan amount, whereas HDFC Bank charges up to 0.5 per cent.

 

What borrowers should keep in mind

 

Compare both interest rates and processing fees, as low EMIs may be offset by high upfront costs.

 

-Check for limited-period waivers, especially at public sector banks. 

-Existing customers may qualify for preferential pricing, particularly at banks offering relationship-based concessions.

 

In a soft-rate environment with wide pricing dispersion, careful lender comparison remains the most effective way to secure a cost-efficient car loan.