Car Loan Offer: If you’ve been thinking of buying a new car, now might be the perfect time to make that move. According to the latest data from Paisabazaar.com (as of October 29, 2025), public sector banks are currently leading the way with highly attractive car loan interest rates, while private banks are slightly behind in the race.
Public Banks Offer the Cheapest Deals
This October, banks like UCO Bank, Canara Bank, and Bank of Maharashtra have rolled out some of the most competitive offers in the market:
– UCO Bank is offering loans starting at an interest rate of 7.60% per annum, with zero processing fees on all car and electric vehicle loans until October 31, 2025.
– Canara Bank begins at 7.70%, with 100% waiver on processing fees valid until December 31, 2025.
– Bank of Maharashtra has also joined the festive offer bandwagon with no processing fees and rates starting from 7.70%
Other major public banks such as Union Bank, Punjab National Bank (PNB), and Bank of India are offering loans in the range of 7.80% and above. For instance, on a ₹5 lakh loan with a 5-year tenure, the EMI would range between ₹10,000–₹10,100.
Private Banks – Slightly Pricier
Private banks, though competitive, are charging a bit more:
– ICICI Bank: Interest starts at 8.50%, with processing fees up to 2%.
– HDFC Bank: Rates begin at 9.20%**, with a processing fee of 1% (₹3,500–₹9,000).
– Federal Bank and IDFC FIRST Bank start at 10% and 9.99%, respectively.
That said, many borrowers still prefer private banks for their quick loan disbursal and flexible repayment options.
Low or Zero Processing Fee Offers
Several banks are making the deal sweeter by reducing or completely waiving off processing fees:
– Central Bank of India: No processing fee until March 31, 2026.
– IDBI Bank: Zero processing fee till October 31, 2025.
– Punjab & Sind Bank: Offers up to 50% discount on processing fees for “PSB Apna Vehicle Sugam” customers.
– UCO Bank: No processing fee on car and EV loans till October 31, 2025.
What Should Borrowers Do?
With such low-interest rates and multiple fee-waiver offers, this is an excellent opportunity for car buyers. However, financial experts advise customers to compare not just interest rates, but also processing fees, loan tenure, and prepayment terms before finalizing a loan.
Whether you go with a public sector bank for lower rates or a private bank for faster service—the choice is yours. But one thing is clear: the festive season has brought some of the best car loan deals of the year!
