Car Loan Interest Rates in India (Nov 2025): Find the Best Offers, EMI Plans & Smart Tips
Buying your dream car just got easier!
In November 2025, major Indian banks and NBFCs have revised their car loan interest rates, starting as low as 7.6% per annum. Whether you’re purchasing a new car or upgrading to a premium model, understanding the latest car loan trends can help you save thousands on EMIs.
This post breaks down the latest car loan offers, rate comparisons, eligibility tips, and smart ways to reduce interest burden — all in one place.
Latest Car Loan Interest Rates in India – November 2025
| Bank / Lender | Interest Rate (per annum) | Loan Tenure | Processing Fee |
|---|---|---|---|
| State Bank of India (SBI) | 7.60% – 8.45% | Up to 7 years | ₹1,500 – ₹2,000 |
| HDFC Bank | 7.75% – 8.80% | Up to 7 years | 0.5% of loan amount |
| ICICI Bank | 7.70% – 8.60% | Up to 8 years | ₹2,500 |
| Axis Bank | 7.90% – 8.75% | Up to 7 years | ₹3,000 |
| Punjab National Bank (PNB) | 7.65% – 8.50% | Up to 7 years | ₹1,000 – ₹1,500 |
| Kotak Mahindra Bank | 8.00% – 9.00% | Up to 7 years | ₹2,000 |
Note: Interest rates are indicative and may vary based on credit score, loan amount, and bank policies.
Why Car Loan Rates Matter in 2025
2025 marks a competitive lending season in India’s auto finance market. As EV (Electric Vehicle) adoption grows and consumer demand rebounds post-pandemic, banks are offering attractive car finance schemes with lower EMIs and flexible repayment options.
Lower interest rates translate to:
- Reduced total cost of ownership
- Easier EMI management
- Higher affordability for mid-range and luxury vehicles
Factors That Affect Your Car Loan Interest Rate
Before you apply, understand what determines your car loan rate:
- Credit Score (CIBIL): A score above 750 ensures lower rates.
- Employment Type: Salaried professionals often get better terms than self-employed individuals.
- Loan Tenure: Shorter tenures come with lower interest.
- Car Type: EVs and new models attract better offers.
- Banking Relationship: Existing customers often get special concessions.
Trending: Electric Vehicle (EV) Car Loans in 2025
As India shifts toward clean mobility, many lenders now offer special EV car loan schemes with 0.25% lower rates and no processing fees.
Banks like SBI Green Car Loan and HDFC EV Finance are leading this movement.
EV loans come with benefits such as:
- Government-backed tax incentives (up to ₹1.5 lakh under Section 80EEB)
- Lower maintenance cost vehicles
- Eco-friendly finance options
How to Calculate Your EMI Smartly
A quick EMI example:
- Loan amount: ₹10 lakh
- Tenure: 7 years
- Interest: 7.6%
Your EMI ≈ ₹15,480/month
Use online EMI calculators or your bank’s mobile app to estimate precise repayments.
Car Loan Comparison – Banks vs. NBFCs
| Parameter | Banks | NBFCs (Non-Banking Financial Companies) |
|---|---|---|
| Interest Rate | Lower (7.6%–9%) | Slightly higher (8%–10%) |
| Approval Time | 2–4 days | 24–48 hours |
| Flexibility | Moderate | High (custom tenures) |
| Customer Service | Better post-loan support | Faster onboarding |
Pro Tip: If you need quick approval for a used car or EV, NBFCs can be faster — but always compare effective interest cost (EIR).
The 2025 Outlook: Will Car Loan Rates Go Up or Down?
With the RBI maintaining its repo rate at 6.5%, car loan rates are expected to stay stable till mid-2026. However, as inflation eases and banks compete for retail borrowers, interest rates may dip further to 7.4% for top-tier borrowers.
That makes late 2025 an ideal window to finance your dream car at record-low rates.
1. What is the current car loan interest rate in India (Nov 2025)?
Car loan rates start at 7.6% per annum, depending on your bank, credit profile, and loan tenure.
2. Which bank offers the lowest car loan rate in India right now?
Currently, SBI and PNB offer the lowest starting rate of 7.6% for new car loans.
3. Are car loan rates different for electric vehicles (EVs)?
Yes. EV loans often come with a 0.25% lower rate and additional tax benefits.
4. Can I get a car loan without a salary slip?
Self-employed applicants can apply using business income proof or IT returns, though rates may be slightly higher.
5. Should I choose a fixed or floating interest rate?
Fixed rates are ideal when market rates are expected to rise, while floating rates help when rates are stable or falling.
Expert Tips to Get the Best Car Loan Deal
1. Compare Before You Commit:
Use online car loan calculators to compare EMIs across banks.
2. Negotiate Processing Fees:
Many banks waive off charges for long-term or high-ticket customers.
3. Check Seasonal Offers:
Festive months like Diwali and Christmas 2025 come with limited-time interest rate drops.
4. Maintain a Healthy Credit Score:
A 50-point increase can save up to ₹30,000 in total interest over 7 years.
5. Opt for Part Prepayment Options:
Choose banks that allow free prepayment to reduce loan tenure.
Conclusion:
With rates starting at 7.6%, November 2025 is the perfect time to explore car loans in India. Whether through banks or NBFCs, smart comparison, credit discipline, and negotiation can help you drive home your dream car — without breaking your budget.
