SBI vs HDFC Bank vs PNB vs Axis Bank And Others, Which Gets Lower Interest Rates? 

Owning a car has become more accessible than ever, thanks to competitive car loan interest rates offered by leading banks in India. Whether you’re eyeing a sleek sedan, a robust SUV, or an eco-friendly electric vehicle, understanding the latest car loan interest rates is crucial for making an informed financial decision. This blog post dives deep into the car loan offerings from top banks like State Bank of India (SBI), HDFC Bank, Punjab National Bank (PNB), Axis Bank, and others, providing you with the most up-to-date data for 2025. We’ll compare interest rates, processing fees, loan tenures, and special schemes to help you choose the best car loan for your needs.

Why Compare Car Loan Interest Rates?

Car loans are a popular financing option in India, with over 70% of new car purchases funded through loans. The Reserve Bank of India (RBI)’s recent repo rate cut to 6% in April 2025 has prompted banks to lower their lending rates, making car loans more affordable. However, interest rates, processing fees, and eligibility criteria vary across banks, impacting your equated monthly instalments (EMIs) and overall loan cost. By comparing car loan interest rates from top banks like SBI, HDFC Bank, PNB, and Axis Bank, you can secure the cheapest car loan in India and save significantly over the loan tenure.

Car Loan Interest Rates in 2025: An Overview

As of April 2025, car loan interest rates in India start as low as 8.45% per annum, with repayment tenures extending up to 8 years. Banks offer both fixed and floating interest rates, allowing borrowers to choose based on their financial preferences. Some lenders provide up to 100% on-road funding, covering the vehicle’s ex-showroom price, registration, insurance, and accessories. Additionally, green car loans for electric vehicles often come with slightly lower rates, typically 0.10–0.15 basis points less than standard loans.

Here’s a detailed comparison of car loan interest rates from SBI, HDFC Bank, PNB, Axis Bank, and other prominent lenders in 2025.

1. State Bank of India (SBI) Car Loan Rates

SBI, India’s largest public sector bank, is known for its competitive car loan schemes and widespread accessibility. In 2025, SBI offers some of the lowest car loan interest rates, particularly for borrowers with high credit scores.

• Interest Rates: 9.10% to 10.15% per annum (fixed rate, linked to one-year MCLR).
• Green Car Loan (Electric Vehicles): 9.10% to 10.15% per annum.
• Loan Amount: Up to 90% of the on-road price.
• Tenure: Up to 7 years.
• Processing Fees: 0.25% to 0.50% of the loan amount.
• Eligibility: Individuals aged 21–67 years with a minimum net monthly income of ₹20,000 (salaried) or ₹3 lakh ITR (self-employed).
• Special Features: No prepayment penalties, simplified documentation, and quick disbursal within 2 days.

Why Choose SBI? SBI’s car loans are ideal for salaried individuals and those with excellent credit scores (above 800), as they offer lower rates for such profiles. The bank’s extensive branch network ensures easy access to loan services across India.

2. HDFC Bank Car Loan Rates

HDFC Bank, a leading private sector lender, is renowned for its customer-centric approach and flexible repayment options. In 2025, HDFC Bank offers competitive car loan rates with attractive festive season offers.

• Interest Rates: 9.40% onwards (Rack Interest) per annum (fixed rate, varies by car segment and borrower profile).
• Loan Amount: Up to 100% on-road funding for select car models.
• Tenure: 1 to 7 years.
• Processing Fees: ₹650 (documentation charges) plus stamp duty and GST; festive season offers may include zero processing fees.
• Eligibility: Minimum loan amount of ₹1 lakh; CIBIL score of 750 or above preferred.
• Special Features: Step-up EMI schemes (lower EMIs initially, increasing over time) and bullet EMI options (bulk payment every 12th EMI).

Why Choose HDFC Bank? HDFC Bank’s car loans are tailored for salaried individuals expecting income growth, thanks to its step-up EMI schemes. The bank’s quick disbursal and minimal documentation make it a top choice for urban borrowers.

3. Punjab National Bank (PNB) Car Loan Rates

PNB offers some of the lowest car loan interest rates in 2025, making it a strong contender among public sector banks. Its schemes are designed for both salaried and self-employed borrowers.

• Interest Rates: 8.50% to 9.30% per annum (floating rate, linked to repo rate).
• Loan Amount: Up to 100% of the ex-showroom price or 90% of the on-road price.
• Tenure: Up to 7 years.
• Processing Fees: Occasionally waived during promotional offers; otherwise, 0.25% of the loan amount.
• Eligibility: Credit score of 680 or above; minimum net monthly income of ₹20,000.
• Special Features: Zero prepayment charges, green car loan schemes, and flexible repayment options.

Why Choose PNB? PNB’s low interest rates and zero prepayment penalties make it attractive for borrowers planning to repay early. Its green car loan scheme is ideal for electric vehicle buyers.

4. Axis Bank Car Loan Rates

Axis Bank is a preferred choice for private sector borrowers seeking quick loan approvals and competitive rates. In 2025, Axis Bank offers car loans with festive season perks like zero processing fees.

• Interest Rates: 9.40% to 14.05% per annum (fixed rate, based on CIBIL score and car segment).
• Loan Amount: Up to 100% on-road funding.
• Tenure: 1 to 7 years.
• Processing Fees: ₹3,500 to ₹12,000 (may be waived during festive offers).
• Eligibility: CIBIL score of 751 or above; minimum loan amount of ₹1 lakh.
• Special Features: Quick loan approval within hours, prepayment options, and customer-friendly processes.

Why Choose Axis Bank? Axis Bank’s fast disbursal and festive season offers make it ideal for borrowers needing urgent financing. Its high loan-to-value ratio is perfect for those seeking full funding.

5. Other Notable Banks for Car Loans in 2025

In addition to SBI, HDFC Bank, PNB, and Axis Bank, several other banks offer competitive car loan rates in 2025. Here’s a quick look:

• ICICI Bank:
  • Interest Rates: 9.10% to 11.25% per annum (fixed or floating).
  • Loan Amount: Up to 100% on-road funding.
  • Tenure: Up to 7 years.
  • Special Features: Pre-approved loans for existing customers, minimal paperwork.
• Canara Bank:
  • Interest Rates: 8.45% to 11.95% per annum.
  • Loan Amount: Up to 90% of the on-road price.
  • Tenure: Up to 7 years.
  • Special Features: Green car loan schemes for EVs.
• Bank of Baroda:
  • Interest Rates: 8.90% to 12.15% per annum.
  • Loan Amount: Up to 90% of the on-road price.
  • Tenure: Up to 7 years.
  • Special Features: Flexible repayment terms.
• Union Bank of India:
  • Interest Rates: 8.80% to 10.45% per annum.
  • Loan Amount: No ceiling.
  • Tenure: Up to 7 years.
  • Special Features: Green car loans for EVs.

Factors Affecting Car Loan Interest Rates in

Several factors influence the interest rate you’re offered on a car loan:

1. Credit Score: A CIBIL score above 750–800 can secure lower rates, as it indicates lower risk to lenders.
2. Loan Amount and Tenure: Higher loan amounts or longer tenures may attract slightly higher rates.
3. Income and Stability: Stable income and employment history reassure lenders, potentially lowering rates.
4. Down Payment: A higher down payment reduces the loan amount, often leading to better rates.
5. Type of Car: New cars typically have lower rates than used cars; electric vehicles may qualify for green loan discounts.
6. Bank Relationship: Existing customers with savings accounts or prior loans may receive preferential rates.

How to Choose the Best Car Loan

To select the best car loan, consider the following tips:

1. Compare Interest Rates: Use online EMI calculators to compare EMIs across banks like SBI, HDFC, PNB, and Axis Bank.
2. Check Processing Fees: Look for festive season offers with waived or reduced fees.
3. Evaluate Tenure: A longer tenure reduces EMIs but increases total interest; choose a tenure that balances affordability and cost.
4. Assess Eligibility: Ensure you meet the bank’s income and credit score requirements to secure the lowest rates.
5. Explore Green Loans: If buying an electric vehicle, opt for green car loans from PNB, SBI, or Canara Bank for lower rates.
6. Negotiate: A good credit score and strong bank relationship can help you negotiate better terms.

Final Thought

India’s car loan market is highly competitive, with banks like SBI, HDFC Bank, PNB, and Axis Bank offering attractive interest rates starting at 8.45% per annum. SBI and PNB stand out for their low rates and green car loan schemes, while HDFC Bank and Axis Bank excel in flexible EMIs and quick disbursals. By comparing interest rates, processing fees, and eligibility criteria, you can secure the cheapest car loan in India tailored to your financial needs.

Before applying, use an EMI calculator to estimate your monthly payments and check for festive season offers to maximize savings. Whether you’re a salaried professional or a self-employed individual, the right car loan can make your dream car a reality without straining your finances.

Disclaimer: Interest rates and fees are subject to change. Always verify the latest rates on the official websites of SBI, HDFC Bank, PNB, Axis Bank, or other lenders before applying.