Car Loan Interest Rates in 2025: Lowest to Highest
Car buyers in 2025 have plenty of financing options across public and private sector banks.
Interest rates vary depending on whether the loan is fixed or floating,
tenure, and borrower profile. Comparing different banks before applying can save thousands
over the repayment period.
Key Highlights
- 🚗 Lowest car loan rate: UCO Bank at 7.60% p.a. onwards.
- 🏦 Other PSU banks with attractive rates: Bank of Maharashtra (7.70%), Indian Bank (7.75%), Union Bank (7.80%), Punjab National Bank (7.85% floating).
- 💳 Private sector lowest rate: Indian Overseas Bank at 7.80% p.a. onwards.
- 🏢 Premium private banks like HDFC, ICICI, Axis, IDFC First start between 8.80% and 9.99%.
- ⚠️ Highest rates: Federal Bank (10.50%) and Tamilnad Mercantile Bank (9.75%).
Car Loan Interest Rates 2025 — Ordered from Low to High
Car Loan Interest Rates 2025 — Ordered from Low to High
Best Picks for 2025
- 🥇 UCO Bank — Lowest rate at 7.60% p.a.
- 🥈 Bank of Maharashtra — Competitive at 7.70% p.a.
- 🥉 Indian Bank — Affordable at 7.75% p.a.
These banks offer the most attractive starting rates, especially for borrowers with strong repayment capacity.
Public sector banks continue to dominate the low-interest loan space in 2025.
Note: Interest rates are indicative and subject to change based on applicant profile, loan amount, and bank policies.
| Bank | Interest Rate (p.a.) | Tenure |
|---|---|---|
| UCO Bank | 7.60% onwards | Up to 7 years |
| Bank of Maharashtra | 7.70% onwards | Up to 7 years |
| Indian Bank | 7.75% onwards | Up to 7 years |
| Indian Overseas Bank | 7.80% onwards | Up to 7 years |
| Union Bank of India | 7.80% onwards | Up to 7 years |
| Punjab National Bank | 7.85% (floating), 8.85% (fixed) | Up to 7 years |
| Bank of India | 7.85% onwards | Up to 7 years |
| Central Bank of India | 7.85% onwards | Up to 7 years |
| Canara Bank | 8.05% onwards | Up to 7 years |
| IndusInd Bank | 8.00% onwards | Up to 5 years |
| Karur Vysya Bank | 8.55% onwards | Up to 7 years |
| Bank of Baroda | 8.15% (floating), 8.65% (fixed) | Up to 7 years |
| South Indian Bank | 8.75% onwards | Up to 7 years |
| State Bank of India | 8.90% onwards | Up to 7 years |
| IDBI Bank | 8.30% (floating), 8.90% (fixed) | Up to 7 years |
| Axis Bank | 8.80% onwards | Up to 7 years |
| ICICI Bank | 9.15% onwards | Up to 7 years |
| Equitas Small Finance Bank | 9.00% onwards | Up to 7 years |
| Karnataka Bank | 9.05% onwards | Up to 7 years |
| HDFC Bank | 9.40% onwards | Up to 7 years |
| Bandhan Bank | 9.47% onwards | Up to 7 years |
| Tamilnad Mercantile Bank | 9.75% onwards | Up to 7 years |
| IDFC First Bank | 9.99% onwards | Up to 10 years |
| Federal Bank | 10.50% onwards | Up to 7 years |
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