Car Loan Offer: Want to buy a new car on installment this Diwali? Find out which bank offers the cheapest loan

Car Loan Offer: Buying your own car is a big dream for middle class families. On the auspicious occasion of Diwali, most of the people like to bring a new car or something new to their home. If you are planning to buy a new car this Diwali, the major banks of the country have come up with great car loan offers to make this dream come true. This festive season, customers are being offered a huge discount on the initial cost along with lower interest rates. This can significantly reduce the burden on the pocket of common people.

Banks open their boxes on festivals

On the occasion of Diwali 2026, State Bank of India (SBI), Indian Bank, Bank of India to HDFC Bank are busy wooing customers. According to data from BankBazaar.com till October 23, introductory interest rates on car loans at some banks have come down to 7.55 to 7.75 per cent per annum. In addition to interest, customers are getting rebates in processing fees. Apart from this, foreclosure charges are also being waived for early closure of the entire loan. However, all these benefits will be subject to the respective bank’s own terms and conditions.

These government banks are providing loans without processing fees

Loan processing fee is an additional cost when buying a new car, but many public sector banks have completely waived it. There is no processing fee on car loan in Bank of Maharashtra. Here the interest rate is 7.70 to 12 percent, on which the monthly EMI for a 5-year loan of Rs 5 lakh will be Rs 10,067 to 11,122.

Similarly, Indian Bank is also providing loans at zero processing fee. Its interest rate starts at 7.75 percent, with monthly installments of Rs 10,031 to 11,034. Indian Overseas Bank also has no processing fee. Here, according to the interest rate of 7.80 to 12 percent, the monthly installment will be between Rs 10,090 to 11,122. While the Central Bank of India has completely waived the processing fee till 31 December 2026. The EMI for a loan of Rs 5 lakh at 7.75 to 9.55 percent interest in this bank will be between Rs 10,078 to 10,513.

Where to get car loan at cheap interest?

When it comes to the lowest introductory interest rates, Punjab & Sindh Bank is at the forefront. This bank is providing car loan at an interest rate of 7.55 percent to 14.30 percent per annum. Here, for a loan of Rs 5 lakh for 5 years, the EMI will be between Rs 10,031 to Rs 11,712 per month. The bank charges a processing fee of 0.25 percent (Rs 1,000 to Rs 15,000) of the loan amount.

This is followed by Canara Bank and UCO Bank, where the introductory interest rate is 7.70 percent. At Canara Bank, the EMI will be Rs 10,067 to 11,047 at 7.70 to 11.70 per cent interest, while the processing fee is Rs 1,000 to 5,000 (0.25 per cent). At UCO Bank, installments at 7.70 to 10.25 percent interest are Rs. 10,067 to 10,685, for which the processing fee is 0.5 percent (maximum Rs. 5,000). The interest rate at Union Bank of India is 7.75 to 10.25 percent, where the EMI will be between Rs 10,078 to 10,685. A maximum processing fee of Rs 1,000 is charged here.

How much installment will be in big private banks including SBI, PNB

Other major government and private banks in the country have also fixed their rates for 5 years on loans up to Rs 5 lakh. Interest rates on car loans at State Bank of India (SBI) range between 8.45 to 9.50 percent. The monthly installments here range from Rs 10,246 to Rs 10,501, while the processing fee ranges from Rs 500 to Rs 2,000. At Punjab National Bank (PNB), the EMI will be between Rs 10,102 and 10,859 at an interest rate of 7.85 to 10.95 percent. Its processing fee is Rs. 1,000 to Rs. 1,500 (up to 0.25 percent).

At Bank of Baroda, at an interest rate of 7.85 to 11.55 percent, you have to pay an installment of Rs 10,102 to 11,009 per month, where the processing fee is up to Rs 2,000. Whereas in Bank of India, the EMI will be between Rs 10,102 to 11,262 at 7.85 to 12.55 percent interest. This bank charges a processing fee of 2,500 to 10,000 (0.25 percent).

As for private banks, interest rates at HDFC Bank start at 8.25 percent, with an initial EMI of Rs 10,198. Banks may charge a processing fee of Rs 3,500 to Rs 8,000 (up to 0.5 per cent). Interest rates at ICICI Bank start at 8.40 percent. The monthly installment here will start from Rs 10,234, while the processing fee can go up to Rs 8,500. However, the interest rate at which customers will ultimately get the loan will be determined after looking at their earnings, credit score and ability to repay the loan.