July Drives: Car Loan Rates Range from 7.60% to 14.25%, Public Banks Lead on Affordability

Image Source: Business Standard

As monsoon car purchases pick up, July 2025 brings a wide spread of car loan interest rates across Indian banks, ranging from 7.60% to 14.25% per annum. Borrowers are advised to compare not just rates but also processing fees and concessions before signing up.

Public Sector Highlights:

UCO Bank offers the lowest starting rate at 7.60%, with EMIs from ₹10,043 for a ₹5 lakh, 5year loan.
Canara Bank provides 7.70–11.70% rates and a 100% processing fee waiver under its Retail Loan Festival until September 30.
Union Bank of India and Punjab National Bank offer competitive rates between 7.80–9.70%, with nominal fees up to ₹1,500.

Private Sector Snapshot:

ICICI Bank starts at 9.10%, with processing fees up to 2% of the loan amount.
HDFC Bank begins at 9.20%, charging 1% (₹3,500–₹9,000) in fees.
Federal Bank and IDFC First Bank start at 10.40% and 9.99%, respectively, with higher EMIs and charges.

Key Considerations:

Relationship discounts: Bank of Maharashtra offers 0.25% rate concessions for existing home loan customers.
EMI variance: For a ₹5 lakh loan over 5 years, EMIs range from ₹10,043 (UCO Bank) to ₹11,699 (Punjab and Sind Bank).
Processing fees can swing from ₹750 to ₹11,000 depending on lender and concessions.

Bottom Line: Public banks offer affordability and fee waivers, while private lenders provide speed and flexibility—borrowers must weigh priorities carefully.

Sources: Business Standard, Policybazaar.com, Economic Times, BankBazaar.