With more Indians opting for personal vehicles, the demand for car loans continues to grow. In September 2025, banks and NBFCs have updated their car loan interest rates to reflect changes in lending policies, inflation, and repo rates. For buyers planning to purchase a new car this month, understanding the updated car loan interest rates 2025 and how they affect your EMI is crucial. This article provides a clear EMI comparison table to help you make an informed decision before signing any loan agreement.
Current Car Loan Interest Rate Trends in September 2025
Car loans remain one of the most popular financing options in India, with banks competing to offer attractive rates. The average car loan interest rate in September 2025 ranges between 8.10% to 10.50% for salaried applicants and 8.40% to 11.00% for self-employed individuals. Factors such as credit score, loan amount, repayment tenure, and relationship with the bank play a big role in determining the final rate.
Major Banks and Car Loan Interest Rates – September 2025
Here is a snapshot of car loan interest rates from leading banks in September 2025:
| Bank / Lender | Interest Rate (p.a.) | Processing Fee | Loan Tenure Range |
|---|---|---|---|
| State Bank of India (SBI) | 8.25% – 9.00% | Up to ₹1,500 | 1 – 7 years |
| HDFC Bank | 8.40% – 9.50% | 0.5% of loan amount | 1 – 7 years |
| ICICI Bank | 8.75% – 10.00% | ₹2,999 onwards | 1 – 7 years |
| Axis Bank | 8.60% – 9.90% | ₹3,500 or 1% (max cap) | 1 – 7 years |
| Punjab National Bank | 8.10% – 9.20% | 0.35% of loan amount | 1 – 7 years |
| Kotak Mahindra Bank | 8.50% – 9.80% | Up to ₹6,000 | 1 – 7 years |
| NBFCs (avg.) | 9.20% – 11.00% | Higher than banks | 1 – 5 years |
EMI Comparison Table – September 2025
To understand the real impact of these rates, here’s an EMI comparison table for a loan of ₹10 lakh over 5 years (60 months).
| Interest Rate | EMI (per month) | Total Payable (Principal + Interest) |
|---|---|---|
| 8.25% | ₹20,375 | ₹12,22,500 |
| 8.75% | ₹20,541 | ₹12,32,460 |
| 9.25% | ₹20,708 | ₹12,42,480 |
| 9.75% | ₹20,876 | ₹12,52,560 |
| 10.25% | ₹21,044 | ₹12,62,640 |
| 10.50% | ₹21,128 | ₹12,67,680 |
This table highlights how even a small difference in interest rates significantly impacts your total repayment over the loan period.
Factors Influencing Car Loan Rates in September 2025
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Credit Score: Applicants with a score above 750 enjoy the lowest rates.
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Income Stability: Salaried professionals often get better deals than self-employed applicants.
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Loan Tenure: Shorter tenures generally attract lower interest but higher EMIs.
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Down Payment: A higher down payment reduces loan amount and interest burden.
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Relationship with Lender: Existing customers of banks often get preferential rates.
Tips to Get the Best Car Loan in September 2025
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Compare offers from at least 3–4 banks before finalizing.
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Negotiate processing fees; many banks offer festive discounts in September.
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Opt for auto-debit EMI payment to avoid penalties and improve creditworthiness.
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Use EMI calculators to plan repayment before applying.
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Consider refinancing options if rates drop further in the coming months.
Conclusion
The car loan interest rate update for September 2025 shows moderate stability compared to earlier months, with leading banks offering loans in the 8.10%–10.50% range. For buyers, the key lies in comparing interest rates, understanding the total repayment burden through EMI tables, and choosing a lender that offers flexibility. With the festive season approaching, this is also a good time to look out for limited-time offers from banks and NBFCs.
FAQs
What is the average car loan interest rate in September 2025?
The average rate is between 8.10% and 10.50%, depending on the bank and applicant profile.
Which bank offers the lowest car loan interest rate in September 2025?
Punjab National Bank and SBI are offering some of the most competitive rates starting at 8.10%–8.25%.
How much EMI will I pay for a ₹10 lakh car loan in September 2025?
At an 8.25% rate for 5 years, the EMI is around ₹20,375 per month. At 10.50%, it goes up to ₹21,128 per month.
Do NBFCs offer higher car loan rates than banks?
Yes, NBFCs generally charge higher rates, averaging between 9.20%–11.00%, though they provide quicker approvals.
Can I reduce my EMI in September 2025?
Yes, by opting for a longer tenure, increasing your down payment, or transferring your loan to a lender offering lower rates.
Click here to know more.