Buying a car is a significant financial decision, and finding the right bank for a car loan based on your financial profile is equally important. One should consider several factors before choosing a bank for a car loan, including interest rates, loan tenures, processing fees and approval timelines. The loan’s interest rate and tenure depend on the lender and the applicant’s credit score and financial profile.
Several banks offer car loans at competitive interest rates, which can make it confusing to choose the right one for your requirements. Here, we have listed the top 10 banks in India offering the best car loans in 2026.
Disclaimer: A lower CIBIL score may result in a higher car loan interest rate, while a higher score can help you get a lower rate. If you have a pre-approved car loan, the interest rate can be fixed or floating, depending on the lender and the terms of the loan.
It’s important to note that the starting interest rate mentioned below were applicable at the time of writing and are subject to change. Contact the respective bank or refer to its official website for latest rates and detailed terms and conditions.
Top 10 Banks For Car Loan in 2026
| Bank | Interest Rate | Tenure |
| Canara Bank | Floating: 7.45% p.a onwards | Up to 7 Years |
| Bank of Maharashtra | Floating: 7.45% p.a onwards | Up to 7 Years |
| UCO Bank | Floating: 7.45% p.a onwards | Up to 7 Years |
| Union Bank of India | Floating: 7.45% p.a onwards | Up to 7 Years |
| Indian Bank | Floating: 7.50% p.a onwards | Up to 7 Years |
| Indian Overseas Bank | Floating: 7.55% p.a onwards | Up to 7 Years |
| Punjab National Bank | Floating: 7.60% p.a onwards; Fixed: 8.60% p.a onwards | Up to 7 Years |
| Bank of Baroda | Floating: 7.60% p.a onwards; Fixed: 8.50% p.a onwards | Up to 7 Years |
| Bank of India | Floating: 7.60% p.a onwards | Up to 7 Years |
| Central Bank of India | Floating: 7.60% p.a onwards | Up to 7 Years |
Important Things To Know
Fixed Vs Floating Car Loan Interest Rates
In India, car loans are available with two types of interest rates – Fixed and Floating. A fixed interest rate remains the same throughout the loan tenure, which means the monthly EMIs does not change. However, the staring rate are relatively higher than floating interest rate.
Floating rates keep varying with the lender’s benchmark rate, which is usually linked to the RBI repo rate or MCLR. As a result, the monthly EMI can change during the loan tenure.
Types of Car Loans
Banks offer different kinds of car loans including new car loan, used car loan, loan against car, green car loan, car loan balance transfer and top-sup loan on car loan.
A new car loan offers financing of up to 100% of the vehicle’s on-road price, while used car loans pay can finance up to 80-85% of the vehicle’s price, with tenure of up to 5 years. Select banks also offer exclusive loan schemes for electric, hybrid and other green mobility vehicles. These schemes offer lower interest rates and longer tenures than the standard new car loans.