Car Loan Interest Rates in June 2026: A Comprehensive Comparison and Guide
As of June 2026, car loan interest rates have become a crucial factor in determining the overall cost of borrowing for car buyers. With various banking institutions and NBFCs offering competitive interest rates, a thorough comparison of applicable interest rates, EMIs, tenure options, and processing charges is essential for borrowers before deciding on a car loan offer.
Car Loan Interest Rates in June 2026: A Comprehensive Comparison
The table below highlights the car loan rates and processing fees offered by various banks and NBFCs in June 2026. The interest rates range from as low as 7.35% per annum to as high as 14.00% per annum, while the processing fees vary from ₹1,000 to ₹15,000.
| 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) |
Key Considerations for Car Loan Borrowers
When selecting a car loan, borrowers should consider the following factors to ensure they get the best deal:
- Compare total borrowing cost: Check processing fees, hidden charges, documentation expenses, and other associated costs.
- Maintain a healthy credit score: A clean credit profile and a solid credit score can boost chances of securing lower interest rates and favourable car loan terms.
- Select the right loan tenure: Strategically planning the car loan and its repayment tenure is crucial to avoid higher interest payments.
- Read the terms and conditions carefully: Check prepayment charges, foreclosure rules, expenses, and restrictions before signing the car loan agreement.
- Borrow within your repayment capacity: Ensure EMI payments comfortably fit your monthly budget.
FAQs
What is the minimum credit score required for a car loan?
A minimum credit score of 750 is recommended for securing lower interest rates and favourable car loan terms.
What is the processing fee for a car loan?
The processing fee for a car loan varies from ₹1,000 to ₹15,000, depending on the lender and loan amount.
Can I prepay my car loan?
Yes, you can prepay your car loan, but check the prepayment charges and foreclosure rules before doing so.
Conclusion
With various banking institutions and NBFCs offering competitive car loan interest rates, borrowers should carefully compare the applicable interest rates, EMIs, tenure options, and processing charges before deciding on a car loan offer. By considering the key factors mentioned above and reading the terms and conditions carefully, borrowers can ensure they get the best deal and avoid higher interest payments.
