Festive Season 2025: This can be a good chance for customers thinking of buying a car before festivals. Due to the festive season, many big government and private banks of the country have launched attractive offers on car loans. These include cuts cuts, discounts on processing fees and easy installments up to long periods. Big banks like Bank of Baroda, HDFC Bank, Axis Bank and Canara Bank are ahead in this race.
Interest rates on car loan
According to the website of Paisa Bazaar.com, the interest rates of Rs 5 lakh to a new car in September 2025 are between 7.60% to 9.99% on the 5 -year period. Of these, government banks are usually giving loans at a low rate, while private banks charge a little more interest.
UCO Bank is currently giving car loans at the lowest interest rate. Interest rates here start at 7.60%. At the same time, Union Bank of India and Punjab National Bank are also giving car loans at an initial rate from 7.80% to 7.85%. Talking about private banks, ICICI Bank is charging interest rate from 9.10% and HDFC Bank 9.20%. Compared to them, government banks are offering a little cheaper car loan.
Offers on processing fees
In addition to the interest rate while taking a car loan, processing fees are also an important aspect. Many banks are giving discounts on this. For example, Canara Bank has completely waived the processing fees by 30 September 2025 under its retail loan festival scheme. Similarly, IDBI Bank is also offering zero processing fees till this date.
On the other hand this fee is still applicable in some banks. State Bank of India is taking processing fees from Rs 750 to Rs 1,500. At the same time, HDFC Bank may recover a maximum of Rs 9,000 and ICICI Bank Loan Mount.
Which loan better for whom?
Bank of Maharashtra, Indian Overseas Bank and Indian Bank are also giving loans at an initial rate of about 7.70% to 7.85%. However, some private banks such as Federal Banks and IDFC First Bank have early rates 10% or more. Many banks have also given extra discounts to their current customers. For example, Bank of Maharashtra has exempted home loan customers or more than six months old account holders from 0.25% interest rate. The interest rate does not depend only on the bank. Your credit history, job stability and monthly income also play a big role in fixing the final rate of loan. But before taking a loan, it is necessary to compare the interest rate, processing fees and conditions of every bank. By making the right choice, not only EMI will be less, but the total expenses will also decrease significantly.