Car & Vehicle Loan

Lowest Car Loan Interest Rates: Which Bank and Who Qualifies

Bank of Maharashtra's 7.45% is the lowest published car loan rate (17 Sep 2026), then Canara 7.50%, Union and BoB 7.60%, PNB 7.65%.

Written by Ananya Iyer

Updated on 17 September 2026·6 min read

On this page8 sections

Credsir Car & Vehicle Loan guide cover with a percent icon

The lowest car loan interest rate published by a major Indian bank on 17 September 2026 is 7.45% a year, from Bank of Maharashtra, for salaried borrowers with a CIBIL score of 800 or more. Canara Bank (7.50%), Union Bank of India, Bank of Baroda (both 7.60%) and PNB (7.65%) come next, all on floating rates.

Only borrowers who meet each bank’s conditions get these floor rates. The table below shows what each bank asks for.

Lowest car loan interest rates by bank

Bank	Lowest new car rate	Who gets it	Rate type
Bank of Maharashtra	7.45%	Salaried, CIBIL 800 or more (non-salaried 7.55%)	Floating
Canara Bank	7.50%	Woman borrower, loan above ₹15 lakh, top internal credit rating (other borrowers 7.55%; 7.90% on loans up to ₹15 lakh)	Floating
Union Bank of India	7.60%	Salaried with CIBIL 800 or more; any borrower with 825 or more	Floating
Bank of Baroda	7.60%	Best credit profile; minimum score 701; 0.05% more without group credit life insurance	Floating
Punjab National Bank	7.65%	CIBIL 750 or more, or any woman borrower whatever her score	Floating
State Bank of India	8.40%	CIC score 800 or more, loan term 3–5 years (8.35% under its Loyalty scheme)	Fixed
Axis Bank	8.90%	Best profile	Fixed, no reset
HDFC Bank	9% (rack rate)	Depends on loan amount, tenure and CIBIL score	Check sanction letter

Rates are from each bank’s rate page, checked 17 September 2026. HDFC Bank’s published rack rate is not the lowest it charges: its car loans in April–June 2026 carried rates from 7.60% to 14.00%, averaging 8.63%. For the full range at each bank, see our car loan interest rates page.

Lowest rates for electric cars

Electric cars get a small discount at most public sector banks.

Item	Details
Union Bank of India	7.50% for CIBIL 800 or more, against 7.60% for a petrol or diesel car.
PNB	7.60% for CIBIL 750 or more, against 7.65%.
Canara Bank	7.80% on loans up to ₹15 lakh, against 7.90%.
Bank of Maharashtra	a 0.25 percentage point concession, but not below its 7.45% floor.
SBI Green Car Loan	8.30% to 9.35%, against 8.40% to 9.35%.

Our page on electric vehicle loans covers the other terms.

What decides whether you get the lowest rate

Item	Details
Credit score.	At Bank of Maharashtra, a salaried borrower pays 7.45% with 800 or more, 7.75% at 750–775, 8.05% at 700–749 and 9.60% at 650–699.
Salaried or self-employed.	Non-salaried borrowers pay 0.05 to 0.20 percentage point more for good scores at Union Bank and Bank of Maharashtra.
Loan size.	Canara Bank charges less on loans above ₹15 lakh: 7.50% against 7.90% for a woman borrower with the same rating.
Tenure.	SBI adds 0.10 percentage point for loans longer than five years.
Existing relationship.	Bank of Baroda takes 0.25 point off for existing home loan borrowers with a clean record. Bank of Maharashtra gives 0.25 point off to existing home loan, MSME and corporate salary customers, subject to its floor.
Security.	Bank of Baroda cuts its rate by 0.50 point if you pledge liquid security, such as a fixed deposit, worth at least half the loan.
Women borrowers.	PNB gives women 7.65% whatever their credit score. Canara Bank’s women’s rate is 0.05 point lower.

How much the lowest rate saves

On an ₹8 lakh loan over 7 years:

Rate	Monthly EMI	Total interest
7.45%	₹12,251	₹2,29,075
7.60%	₹12,310	₹2,34,052
8.40%	₹12,629	₹2,60,836
9.00%	₹12,871	₹2,81,186
10.00%	₹13,281	₹3,15,600

Getting 7.45% instead of 9% saves about ₹52,000 over seven years. A 5-year term at 7.45% costs ₹1,60,681 in interest, so a shorter loan saves more than a small rate cut. Try your own numbers in the EMI calculator.

The lowest rate is not always the cheapest loan

Fees and exit charges can outweigh a small rate gap. Compare these before you sign:

Bank	Processing fee	Closing the loan early
Bank of Baroda	₹1,500 + GST up to ₹10 lakh; ₹2,000 + GST above	Floating, individual: nil
HDFC Bank	Up to 0.5%, minimum ₹3,500, maximum ₹8,000	5% of principal outstanding on loans from 1 December 2025
Axis Bank	Up to 2% + GST	5% of principal outstanding + GST
Kotak Mahindra Prime	3% + ₹7,500 documentation	5.21% in the first half of the tenure; 3% after

Under RBI rules, lenders cannot charge a prepayment fee on a floating-rate loan taken by an individual for personal use. That makes a floating loan cheaper to close early or move to another lender. Bank of Baroda’s fixed-rate car loans are also free to prepay after two years.

How to get the lowest car loan rate

Check your CIBIL score and correct any errors; most floor rates need 750 or 800.
Start with the bank where you hold a home loan or salary account, and ask for its relationship concession.
Ask each bank for its rate for your score, loan amount and tenure, not the headline rate.
Ask whether the rate is fixed or floating, and what closing the loan early costs.
Get the Key Fact Statement from two or three banks and compare the annual percentage rate, which includes fees.
Compare the bank quote with any manufacturer or dealer scheme on the total cost, not the EMI.

Read more on the credit score needed for a car loan.

Frequently asked questions

Which bank has the lowest car loan interest rate?

Among the banks checked on 17 September 2026, Bank of Maharashtra, at 7.45% for salaried borrowers with CIBIL 800 or more. Canara Bank offers 7.50% to women borrowers on loans above ₹15 lakh.

What is the lowest car loan interest rate in India today?

7.45% on a floating rate, and 7.50% for an electric car at Union Bank. The lowest fixed rate found is SBI’s 8.30% on its Green Car Loan.

How much interest rate for a car loan should I expect?

With a score of 750 or more, about 7.45% to 9% at the banks checked. HDFC Bank’s average car loan rate in April–June 2026 was 8.63%.

Is the lowest car loan rate available to everyone?

No. Floor rates need a high credit score, and some also depend on salaried status, loan size or tenure.

Do women get a lower car loan rate?

At PNB, women get 7.65% whatever their credit score. Canara Bank charges women 0.05 percentage point less.

Is a floating or fixed car loan cheaper?

Floating is cheaper at the banks checked today: PNB charges 7.65% floating against 8.65% fixed for a score of 750 or more. A floating rate can rise if the RBI raises the repo rate, now 5.25%.

Sources

Retail interest rates — Bank of Maharashtra (checked 17 Sep 2026)
Rates of interest for retail lending schemes linked to RLLR — Canara Bank (checked 17 Sep 2026)
Rate of interest for retail lending schemes w.e.f. 24.07.2026 — Union Bank of India (checked 17 Sep 2026)
Baroda Car Loan — Bank of Baroda (checked 17 Sep 2026)
Interest rates on retail advances — Punjab National Bank (checked 17 Sep 2026)
Auto loans interest rates — State Bank of India (checked 17 Sep 2026)
Car loan interest rates and charges — Axis Bank (checked 17 Sep 2026)
Car loan interest rates and charges — HDFC Bank (checked 17 Sep 2026)
Car loan fees and charges — Kotak Mahindra Bank (checked 17 Sep 2026)
Pre-payment Charges on Loans Directions, 2025 — Reserve Bank of India (checked 17 Sep 2026)

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