Car loans become cheaper: Here is what's various lenders are offering

Understanding loan terms of various companies is vital for financial planning and saving

Car loans are set to become cheaper as lenders rework their offers after the Reserve Bank of India on April 9 announced a 25-basis-point (bps) cut in the repo rate, reducing it from 6.25 per cent to 6 per cent.

 

If you have your eye on a high-end SUV or a budget hatchback, understanding loans and payment installments can help you in financial planning. What follows is a list of new car loan rates and terms of leading banks.

 

New Car Loan Rates

 

Indian Overseas Bank offers interest rates starting at 8.15 per cent, translating to equated monthly installment (EMI) of Rs 10,174 onwards for a loan amount of Rs 5 lakh over a tenure of 5 years.

 

 

Canara Bank offers interest rates between 8.20 per cent and 12.20 per cent; it will mean EMIs ranging from Rs 10,186 to Rs 11,173 for a loan of Rs 5 lakh over 5 years.

 

Bank of Maharashtra offers interest rates between 8.20 per cent and 12.50 per cent, it will mean EMIs ranging from Rs 10,186 to Rs 11,249 for a Rs 5 lakh loan over 5 years.

 

Punjab National Bank offers interest rates from 8.35 per cent to 10.20 per cent, translating to EMIs ranging between Rs 10,222 and Rs 10,673 for a Rs 5 lakh loan over 5 years.

 

UCO Bank offers interest rates between 8.35 per cent and 11.00 per cent, which translates to EMIs from Rs 10,222 to Rs 10,871 for a Rs 5 lakh loan over 5 years.

 

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

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	8.45-10.20	10,246 - 10,673	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	8.80-12.45	10,331 - 11,236	0.50% (Rs 2,500 - Rs. 10,000)
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	8.35-11.00	10,222 - 10,871	NIL
State Bank of India	9.10-10.15	10,403 - 10,660	Rs 750 - Rs 1,500
IDBI Bank	8.80-9.60	10,331 - 10,525	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***	8.50-15.00	10,258 - 11,895	0.25% (Rs 1,000-Rs 15,000)
Indian Bank	8.60-9.85	10,282 - 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 16th April 2025.
Source: Paisabazaar.com