Car Loan Interest Rates June 2026: In June 2026, car loans in India are being offered at rates starting around 7.45% in comparison listings, and some market reports earlier in 2026 showed deals as low as 7.35%. The final rate is not the same for everyone. Banks and finance companies look at credit score, income, loan amount, repayment time, and the borrower’s overall profile before giving an offer.
Important Points About Loan Against Shares Interest Rate to Know
Do Not Look at Interest Rate Alone
A low interest rate can look nice at first, but the full loan cost matters more. Some lenders also charge extra fees. For example, SBI lists processing fee charges from 0.40% of the loan amount plus GST for some car loan schemes, while HDFC Bank shows charges such as payment return fees and NOC fees on its car-loan page. That means a loan with a slightly higher rate can sometimes still be cheaper overall if the fees are lower.
A car loan should also fit the buyer’s budget. Long loan tenures can reduce the monthly EMI, but they usually increase the total interest paid over time. Lenders also say the rate can move up or down based on the borrower’s credit strength and repayment capacity. Tata Capital, for example, says its car loan rates start from 9.49% per annum for new car finance and the final rate depends on the customer’s credit score, income, loan amount, and tenure.
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Car loan interest rates in June 2026: Bank-wise comparison
| Name of Banks/NBFCs | Interest rate (%) p.a. | EMI ( ₹) | Processing fee |
|---|---|---|---|
| Union Bank of India | 7.50-10.00 | 10,019 – 10,684 | Up to ₹1,000 |
| Punjab National Bank | 7.60-10.70 | 10,043 – 10,797 | Up to 0.25% ( ₹1,000- ₹1,500) |
| Bank of Baroda | 7.60-11.35 | 10,043 – 10,959 | Up to ₹2,000 |
| Canara Bank | 7.45-11.45 | 10,007 – 10,984 | 50% waiver on 0.25% ( ₹1,000- ₹5,000) |
| Bank of India | 7.60-12.55 | 10,043 – 11,262 | Up to 0.25% ( ₹2,500- ₹10,000) |
| UCO Bank | 7.35-10.00 | 9,983 – 10,624 | 0.5% (Max. ₹5,000) |
| State Bank of India | 8.80-9.85 | 10,331 – 10,587 | ₹1,500- ₹4,000 |
| IDBI Bank | 7.75-9.30 | 10,078 – 10,452 | ₹2,500 |
| Bank of Maharashtra* | 7.45-11.75 | 10,007 – 11,059 | 0.25% ( ₹1,000- ₹15,000) |
| Indian Overseas Bank | 7.55-12.00 | 10,031 – 11,122 | Nil |
| ICICI Bank | 8.40 onwards | 10,234 onwards | Up to 2% |
| HDFC Bank | 8.15 onwards | 10,174 onwards | Up to 0.5% ( ₹3,500- ₹8,000) |
| Karnataka Bank | 8.12-11.62 | 10,167 – 11,026 | Up to 0.60% ( ₹2,500- ₹11,000) |
| Federal Bank | 7.65-9.00 | 10,055 onwards | 1% ( ₹1,000- ₹50,000) |
| Punjab & Sind Bank** | 7.50-14.00 | 10,019 – 11,634 | 0.25% ( ₹1,000- ₹15,000) |
| Indian Bank | 7.50-9.65 | 10,019 – 10,513 | ₹1,200 |
| IDFC FIRST Bank | 8.99 onwards | 10,377 onwards | Up to ₹10,000 |
| Central Bank of India | 7.60-9.30 | 10,043 – 10,452 | 0.50% ( ₹2,000- ₹20,000) |
Source: Paisabazaar.com
Note: EMI is based on a ₹5 lakh loan for 5 years. Rates as of 24 June. Bank of Maharashtra and Punjab & Sind Bank offer eligible concessions on interest rates and processing fees
Five Things to Check Before Taking a Loan
- Look at the full cost, not only the interest rate. Add processing charges, paperwork costs, and any hidden fees to your mind before saying yes.
- Try to keep a strong credit score cause cleaner credit record usually gives better loan offers and a score above 750 is a good sign.
- Choose the tenure carefully. A shorter loan means a bigger EMI but less interest in the end. A longer loan gives a smaller EMI but a bigger total bill.
- Read every loan term before signing. Check prepayment rules, foreclosure charges, late payment penalties and any limits on early closure.
- Borrow only what you can handle comfortably. The best car loan is not the one that looks fancy. It is the one that sits safely inside your monthly budget and does not squeeze you later.
