What you need to know
New car loan rates start at 7.45% – 7.60% at PSU banks with repo-linked pricing and 8.15% – 8.95% at private banks. The RBI repo rate is 5.25%, so floating car loans are cheaper than a year ago. Your actual rate depends mostly on your credit score, then on income, employer, tenure and car model.
Rates by bank
| Lender | Interest rate (p.a.) | Processing fee | Tenure | EMI per ₹1 lakh* | Rates as of |
|---|---|---|---|---|---|
| Canara Bank Car LoanPublic sector bank | 7.45% – 15.00% | 0.25% of loan (min ₹1,000, max ₹5,000) + GST; 50% waiver from 1 Jul to 30 Sep 2026 | Up to 84 months (7 years) | ₹2,001 | 12 Dec 2025 (official range) |
| Bank of Baroda Car LoanPublic sector bank | 7.60% – 11.30% | Up to ₹10 lakh: ₹1,500 + GST; above ₹10 lakh: ₹2,000 + GST; ₹500 + GST for government / PSU employees | Up to 84 months (7 years) | ₹2,009 | Sep 2026 (official page, undated) |
| PNB Car LoanPublic sector bank | 7.60% – 9.70% | 0.25% of loan (min ₹1,000, max ₹1,500) + GST | Up to 84 EMIs (7 years) | ₹2,009 | Sep 2026 (aggregator; RLLR 1 Jul 2026) |
| Union Bank of India Car LoanPublic sector bank | 7.60% – 10.00% | ₹1,000 + GST (aggregator); often waived for electric vehicles | Up to 84 months (7 years) | ₹2,009 | 24 Jul 2026 |
| HDFC Bank Car LoanPrivate sector bank | 8.15% onwards | Up to 0.5% of loan (min ₹3,500, max ₹8,000) per BankBazaar; ClearTax shows 1% (min ₹3,500, max ₹9,000) — plus GST | 12 – 84 months | ₹2,035 | 18 Aug 2026 (aggregator) |
| ICICI Bank Car LoanPrivate sector bank | 8.40% onwards | Up to ₹8,500 + GST | 12 – 84 months | ₹2,047 | 1 Jun 2026 |
| SBI Car LoanPublic sector bank | 8.40% – 9.35% | Up to ₹5 lakh: ₹500 (salaried) / ₹750 (others); ₹5 – 10 lakh: ₹1,000 / ₹1,250; above ₹10 lakh: ₹1,500 / ₹2,000 — all + GST | Up to 7 years (Green Car Loan up to 8 years) | ₹2,047 | 16 Sep 2026 |
| Axis Bank Car LoanPrivate sector bank | 8.95% – 11.75% | ₹3,500 – ₹5,500 + GST | 12 – 96 months (up to 8 years) | ₹2,073 | Sep 2026 (aggregator) |
* At the lowest rate for 5 years. Starting rates go to borrowers with strong credit scores and income; your rate depends on your profile. Sources and dates on each lender page — confirm with the lender before applying.
What decides your rate
Union Bank ranges from 7.60% (825+) to 10.00% (below 650).
ICICI charges 10.25%+ below 36 months vs 8.40% for 36+ months.
EV loans are cheaper: SBI Green 25 bps lower; Union Green Miles from 7.50%.
BoB 0.25% off for home-loan customers; SBI Loyalty Car Loan.
Credit score and rate
| Lender | Credit score | Rate |
|---|---|---|
| Union Bank of India Car Loan | 825 and above | 7.60% (EBLR − 0.40%) |
| Union Bank of India Car Loan | Below 650 | 10.00% (EBLR + 2.00%) |
| SBI Car Loan | 800 and above (3 – 5 year loan) | 8.40% |
| SBI Car Loan | Lower score bands | Up to 9.35% |
| Bank of Baroda Car Loan | Minimum 701 to be eligible | 7.60% – 11.30% floating by profile |
| ICICI Bank Car Loan | Priced by CIBIL and car model | 8.40% onwards |
On ₹8,00,000 for 5 years, the gap between 7.60% and 10.00% is about ₹55,754 in extra interest.
Benchmark rates
| Benchmark | Rate | Note |
|---|---|---|
| RBI repo rate | 5.25% | Unchanged at the 5 Aug 2026 policy (neutral stance) |
| SBI EBLR | 7.90% | Repo + 2.65% (effective 15 Dec 2025) |
| SBI 1-year MCLR | 8.70% | Effective 15 Sep 2026 |
| HDFC Bank 1-year MCLR | 8.35% | Effective 7 Sep 2026 |
| PNB 1-year MCLR | 8.80% | Effective 1 Sep 2026 |
| Canara Bank 1-year MCLR | 8.75% | Effective 12 Jun 2026 |
Cost of a higher rate
| Rate | EMI | Total interest | Extra vs lowest rate |
|---|---|---|---|
| 8.00% | ₹16,221 | ₹1,73,267 | ₹0 |
| 8.50% | ₹16,413 | ₹1,84,794 | ₹11,527 |
| 9.00% | ₹16,607 | ₹1,96,401 | ₹23,134 |
| 10.00% | ₹16,998 | ₹2,19,858 | ₹46,591 |
| 11.00% | ₹17,394 | ₹2,43,636 | ₹70,369 |
₹8,00,000 for 5 years.
Frequently asked questions
Will my floating car loan rate fall if the repo rate falls?
Yes, repo-linked (EBLR/RLLR) loans reset within the bank’s reset period — usually quarterly — after a repo change.
For information and comparison only. Loan terms, rates and rules change — confirm with the lender and read the Key Facts Statement before borrowing.