Car loan interest rates at major Indian banks start at about 7.60% p.a. for new cars. Bank of Baroda and PNB both publish 7.60% floors, SBI’s regular car loan runs from 8.40% to 9.35%, and HDFC Bank quotes a rack rate from 9%. Where you land depends on your credit score, the loan tenure and whether the car is electric.
New-car rates cluster tightly between lenders, so the differentiator is rarely the headline number — it is the processing fee, the funding percentage and whether the quoted rate is subvented by the manufacturer for a specific model and month.
| Typical new car loan rate | 8.5 – 12 % p.a. |
|---|---|
| What it means | Manufacturer-subvented schemes can sit below this for specific models. |
as of 2026-08-15 · Lender rate cards · reported
Car loan interest rates in all major banks
| Bank | New car loan rate | What the bank publishes |
|---|---|---|
| SBI | 8.40% – 9.35% | SBI Car Loan and Assured Car Loan; Green Car Loan for electric cars 8.30% – 9.35%; page updated 16 Sep 2026 |
| Bank of Baroda | 7.60% – 11.30% | Floating, BRLLR-linked (BRLLR 7.90% from 6 Dec 2025) |
| PNB | 7.65% – 9.70% (floating) | 7.60% for electric cars with a score of 750 or more; fixed-rate option 8.60% – 10.70% |
| HDFC Bank | From 9% (rack rate) | APR on auto loans in April–June 2026: 7.64% – 17.92%, average 8.78% |
| Canara Bank | 7.45% – 15.00% | Range across contracted Canara Vehicle loans, effective 12 Dec 2025 |
Checked on each bank’s official rate page on 17 Sep 2026. Rates change often; confirm with the bank before you apply.
What to know
Your credit score sets the band. At PNB, a score of 750 or more gets 7.65% on a regular new car loan, 700–749 pays 8.70%, and 681–699 pays 9.70%. SBI also prices its car loans by credit score, from 8.40% at the top down to 9.35% for scores of 650–699. Read credit score needed for a car loan before you apply.
Subvented schemes are real but conditional. A manufacturer funds a rate buy-down on a particular model, usually to clear inventory, and it often cannot be combined with the cash discount you were also being offered. Ask explicitly what the price is with the subvented rate versus with the discount and your own bank’s finance — they are frequently close, and occasionally the “special rate” is the more expensive option. Put both quotes through the EMI calculator before you sign anything.
Electric vehicles attract concessional rates from several lenders under green-loan programmes: SBI’s Green Car Loan starts at 8.30% and PNB charges 0.05 points less on e-vehicles. Worth asking for by name, since it is not always offered unprompted.
Fees differ more than rates. HDFC Bank charges up to 0.5% of the loan amount as a processing fee, with a minimum of ₹3,500 and a maximum of ₹8,000, and GST applies on top of fees at every bank.
Frequently asked questions
What is the car loan interest rate in all banks?
Published new-car rates at major banks start at 7.60% (Bank of Baroda, PNB) and run to about 11.30% at Bank of Baroda for weaker profiles. SBI charges 8.40%–9.35% and HDFC Bank quotes from 9%.
Which bank has the lowest car loan interest rate?
Rates cluster closely across the major new-car lenders, so the cheapest option depends on your profile, the model and whether a manufacturer subvention applies that month. Compare the all-in cost including processing fee and GST rather than the headline rate.
Are car loan rates fixed or floating?
Both exist. Bank of Baroda and PNB publish floating rates linked to their repo-based lending rate, and PNB also offers a fixed rate at a higher price. Your sanction letter states which type you have.
Do electric cars get a lower car loan rate?
Often, yes. SBI’s Green Car Loan starts at 8.30% against 8.40% for a regular car loan, and PNB’s e-vehicle rate is 7.60% against 7.65%.
Is a used car loan more expensive?
Yes. Used car loans typically cost several percentage points more, with a shorter tenure and a lower funding percentage. SBI’s certified pre-owned car loan, for example, runs from 10.45% to 15.60%.
Can I prepay a car loan?
Usually, subject to a lock-in and a foreclosure charge that varies by lender. Check the sanction letter — car loans are frequently written at fixed rates, where the RBI protection on floating-rate loans does not apply.
Sources
- Lender published rate cards — as of 2026-08-15
- Auto loan interest rates — State Bank of India (checked 17 Sep 2026)
- Retail loans interest rates — Bank of Baroda (checked 17 Sep 2026)
- Interest rates on retail advances — Punjab National Bank (checked 17 Sep 2026)
- Car loan interest rates and charges — HDFC Bank (checked 17 Sep 2026)
- Interest rate range on loans — Canara Bank (checked 17 Sep 2026)
- Minutes of the MPC meeting, 3–5 August 2026 — Reserve Bank of India (checked 17 Sep 2026)
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