Planning to Buy a New Car? Here are the Latest Interest Rates on Car Loan

Check out the latest interest rates on car loan


With car prices climbing higher every year, financing a new vehicle has become increasingly important. The good news is that some banks now offer zero-down payment car loans, covering 100% of the on-road price for select models. This means you can drive your dream car without the immediate burden of a down payment.

However, before you rev up your engines, it’s crucial to navigate the maze of loan options available. By understanding the interest rates, processing fees, and other charges associated with car loans, you can make an informed decision and ensure your new car doesn’t become a financial burden.

Planning to Buy a New Car? Here are the Latest Interest Rates on Car Loan

Car Loan Interest Rates of Top Banks

Name of banksInterest rate (%)EMI (Rs)Processing fee
UCO Bank8.45 – 10.5510,246 – 10,759Nil
Union Bank of India8.70 – 10.4510,307 – 10,735₹1,000
Canara Bank8.70 – 12.7010,307 – 11,3000.25% (Maximum ₹2,500)
Bank of Maharashtra8.70 – 13.0010,307 – 11,3770.25% (Rs. 1,000 – Rs. 15,000)
Punjab National Bank8.75 – 10.6010,319 – 10,7720.25% (Rs. 1,000 – Rs. 1,500)
State Bank of India8.75 – 9.8010,319 – 10,554Up to ₹1,500
South Indian Bank8.75 onwards10,319 onwards0.75% (Max: ₹10,000)
IDBI Bank8.80 – 9.6010,331 – 10,525₹2,500
Bank of Baroda8.85 – 12.7010,343 – 11,300Up to ₹2,000
Bank of India8.85 – 10.8510,343 – 10,8340.25% (Rs. 1,000 – Rs. 5,000)
Indian Overseas Bank8.85 – 12.0010,343 – 11,1220.50% ( ₹500 – ₹5,000)
Federal Bank8.85 onwards10,343 onwards₹2,000 – ₹4,500
Punjab and Sind Bank8.85 – 10.2510,343 – 10,6850.25% (Rs. 1,000 – Rs. 15,000)
Karnataka Bank8.88 – 11.3710,350 – 10,9640.60% ( ₹3,000 – ₹11,000)
ICICI Bank9.10 onwards10,403 onwardsUp to 2%
HDFC Bank9.20 onwards10,428 onwards0.50% ( ₹3,500 – ₹8,000)
IDFC First Bank9.75 onwards10,562 onwardsUp to ₹10,000
City Union Bank14.45 – 14.9511,751 – 11,8821.25% (Min: ₹1,000)

Car loan interest rates are influenced by various factors. Higher income often results in better rates, especially for salaried employees, although self-employed professionals with substantial earnings can also benefit. Loan tenure impacts rates, with longer terms typically carrying higher interest due to increased risk. Younger borrowers tend to receive better terms since they have more time to repay.

Also read: Need Education Loan? Learn Interest Rates, Eligibility and More

A strong relationship with the bank, such as being a long-term client, can lead to preferred rates. The type of vehicle also matters; new cars from reputable manufacturers generally attract lower rates than older models. Adding a co-applicant can improve repayment potential and secure lower rates. Employment at a reputable company can lead to better loan conditions, and a larger down payment can help negotiate lower interest rates. Finally, existing liabilities and investments are considered; fewer liabilities often result in more favorable terms.


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