Buying a car on EMI has become common, especially for salaried and middle-class families. However, choosing the right bank for a car loan can save you thousands yearly. That’s why it’s important to compare interest rates, EMI amounts, and processing fees of different banks before you apply.
We have collected the latest data (as of 7 May 2025) for car loans from central Indian banks. You will see how much EMI you will pay on a loan of Rs. 5 lakh for 5 years. This will help you choose the cheapest car loan deal.
What Decides Your Car Loan EMI?
The EMI depends on three things:
- Loan Amount – In this case, Rs. 5 lakh
- Loan Tenure – 5 years
- Interest Rate – Varies by bank
- Processing Fee – One-time charge by banks
Even a slight difference in interest rate can change your EMI by hundreds of monthly rupees. That’s why it’s smart to compare all charges and not just look at the interest rate.
Bank-wise Car Loan EMI Comparison for Rs. 5 Lakh (5-Year Loan)
Here’s a bank-wise breakdown of car loan interest rates, processing fees, and EMIs:
🟩 UCO Bank
- Interest Rate: 8.10% – 10.75%
- Processing Fee: Up to 0.50%
- EMI: Rs. 10,162 – Rs. 10,809
- Why choose? Lowest minimum EMI among all banks
🟩 Punjab National Bank (PNB)
- Interest Rate: 8.35% – 10.20%
- Processing Fee: Up to 0.25%
- EMI: Rs. 10,222 – Rs. 10,673
- Why choose? Suitable for low EMI and simple process
🟩 Indian Bank
- Interest Rate: 8.25% – 9.85%
- Processing Fee: Rs. 1,000
- EMI: Rs. 10,198 – Rs. 10,587
- Why choose? Fixed processing charge makes it transparent.
🟩 Canara Bank
- Interest Rate: 8.20% – 12.20%
- Processing Fee: Up to 0.25%
- EMI: Rs. 10,186 – Rs. 11,173
- Special Offer: 50% discount on processing fees till 30 June 2025
- Why choose? Low EMI with seasonal discount offer
🟩 Union Bank of India
- Interest Rate: 8.20% – 9.95%
- Processing Fee: Up to Rs. 1,000
- EMI: Rs. 10,186 – Rs. 10,611
- Why choose? A safe option for a low and fixed EMI range
🟩 Bank of Maharashtra
- Interest Rate: 8.20% – 12.50%
- Processing Fee: 0.25% (Max Rs. 15,000)
- EMI: Rs. 10,186 – Rs. 11,249
- Why choose? Good range, but check the total processing cost.
🟨 Bank of Baroda
- Interest Rate: 8.65% – 12.15%
- Processing Fee: Up to Rs. 2,000
- EMI: Rs. 10,294 – Rs. 11,160
- Why choose? Stable bank with an average EMI rate
🟨 Bank of India
- Interest Rate: 8.75% – 12.20%
- Processing Fee: Up to 0.25%
- EMI: Rs. 10,319 – Rs. 11,173
- Special Offer: 50% discount on processing fees for electric vehicles
- Why choose? Best for EV buyers due to the discount
🟨 State Bank of India (SBI)
- Interest Rate: 9.10% – 10.15%
- Processing Fee: Rs. 750 – Rs. 1,500
- EMI: Rs. 10,403 – Rs. 10,660
- Why choose? Trusted government bank with fair rates
🟨 ICICI Bank
- Interest Rate: Starts from 9.10%
- Processing Fee: Up to 2%
- EMI: Starts from Rs. 10,403
- Why choose? Popular private bank, but the check has high fees.
🟨 HDFC Bank
- Interest Rate: Starts from 9.20%
- Processing Fee: Up to 1% (Rs. 3,500 – Rs. 9,000)
- EMI: Starts from Rs. 10,428
- Why choose? Quick loan process, check total charges
🟥 Karnataka Bank
- Interest Rate: 9.32% – 11.80%
- Processing Fee: Up to 0.60% (Rs. 2,500 – Rs. 11,000)
- EMI: Rs. 10,457 – Rs. 11,072
- Why choose? Wide EMI range, but higher upper limit
🟥 Federal Bank
- Interest Rate: Starts from 10.40%
- Processing Fee: Rs. 2,000 – Rs. 4,500
- EMI: Starts from Rs. 10,722
- Why choose? Higher EMI, not suitable for budget loans
🟥 IDFC First Bank
- Interest Rate: Starts from 9.99%
- Processing Fee: Up to Rs. 10,000
- EMI: Starts from Rs. 10,621
- Why choose? Higher processing fee, better options available
Summary: Which Bank Offers the Best Deal?
If you’re looking for the lowest EMI, go with the following:
- UCO Bank
- Canara Bank (till 30 June 2025)
- Punjab National Bank
- Indian Bank
- Union Bank of India
If you’re buying an electric vehicle, consider:
- Bank of India – for a 50% discount on the processing fee
For those who prefer trusted names, even with slightly higher EMI:
- SBI, HDFC, ICICI – offer fast processing and good customer support
However, compare actual offers at the time of loan application, as rates can change weekly based on the RBI repo rate and bank policies.
Sources: Paisabazaar.com, State Bank of India, Canara Bank, PNB, UCO Bank, Bank of India
