Car loan rates starting at 7.6%: Check best offers and EMI here

Public banks lead with car loan rates from 7.6%, while private lenders charge higher with limited fee waivers and concessions

If you’re planning to buy a new car, it might be a good time to compare loan options. According to data compiled by Paisabazaar.com (as of October 29, 2025), public sector banks continue to offer some of the lowest car loan rates, while private lenders are keeping rates slightly higher. Here’s a look at where borrowing costs currently stand.

 

Public sector banks lead with lowest rates

Among major lenders, UCO Bank, Canara Bank, and Bank of Maharashtra are offering some of the most attractive deals this October.

 

UCO Bank has the lowest starting rate at 7.60 per cent, with no processing fee on all car and electric vehicle loans till October 31, 2025.

 

 

Canara Bank follows closely with rates from 7.70 per cent and a 100 per cent waiver on processing fees till December 31, 2025.

 

Bank of Maharashtra too has waived processing charges under its festive offer, offering rates starting at 7.70 per cent.

 

Other major public sector lenders such as Union Bank of India, Punjab National Bank, and Bank of India are offering car loans starting around 7.80 per cent, which translates into EMIs of roughly Rs 10,000 to Rs 10,100 on a Rs 5-lakh loan for five years.

   

Private banks slightly pricier

   

Private sector lenders are quoting higher rates compared to their public counterparts.

 

ICICI Bank’s car loans start from 8.50 per cent, with processing fees of up to 2 per cent of the loan amount.

 

HDFC Bank offers loans at 9.20 per cent onwards, with charges of up to 1 per cent (Rs 3,500– Rs 9,000).

 

Federal Bank and IDFC FIRST Bank are among the higher range, starting at 10 per cent and 9.99 per cent respectively.

 

For borrowers prioritising quick disbursal and flexible repayment options, these banks could still be worth considering despite the marginally higher rates.

 

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 7.95-9.10 10,126 - 10,403 NIL till 31.10.2025 Bank of Maharashtra* 7.70-12.00 10,067 - 11,122 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 No processing fees till 31.03.2026 *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 29th October 2025. Source: Paisabazaar.com

   

Waivers and festive concessions sweeten deals

 

Several banks are currently running fee waivers and concessions to attract borrowers

 

Central Bank of India has no processing fees till March 31, 2026

 

Punjab and Sind Bank is offering a 50 per cent concession on fees for its PSB Apna Vahan Sugam customers

 

IDBI Bank is also extending a zero-processing-fee offer till October 31, 2025

   

What it means for borrowers

 

With most public sector banks offering car loans below 8 per cent, borrowers stand to benefit from competitive EMIs and limited fees. However, it’s important to factor in not just the interest rate but also processing charges, tenure flexibility, and prepayment conditions before finalising a loan.