Festive Car Loan Offers 2026: 8 Banks Offering Interest Rates Starting at 7.75% & Processing Fee Waivers
The festive season is one of the busiest periods for car purchases in India, with many buyers looking to upgrade or purchase a new vehicle. As a result, many banks have come up with attractive car loan offers in 2026 with low introductory rates, processing fees waived and flexible repayment options. This can help borrowers save on their overall loan costs and make buying a new car more affordable. Below we take a look at what banks are offering in the festive season including interest rates and benefits.
Indian Bank Car Loan
Indian Bank has introduced car loans with interest rates starting from 7.75% per annum during the 2026 festive season with Processing fees waived. Borrowers can apply for loans up to ₹5 crore to help fund the purchase of their new car. Repayment can be done over a period of up to 84 months (7 Years). Depending on the loan category and applicable margin requirements. Individual borrowers also benefit from nil prepayment charges, allowing them to repay the outstanding loan early without additional penalties. The car will be placed under hypothecation by the bank until the loan has been paid off in full. The final interest rate and loan amount will depend on income, credit history and ability to repay. Applicants should also account for applicable documentation, security and other charges while evaluating the overall cost of borrowing.
State Bank of India (SBI) Car Loan
State Bank of India (SBI) is offering discounted interest rates on car loans during the 2026 festive season, along with a waiver of processing fees. Standard rates for new car loans range from 8.40% to 9.35% per annum, depending on your credit score and repayment term, special festive offers for borrowers with a CIBIL score of 750 or above starts at 7.75% to 7.90%. SBI offer loans to fund up to 100% of the on road price of the car including registration and insurance via SBI YONO appa dn 85-90% offline at branch. Borrowers can repay loans over up to 7 years, with interest charged on a daily reducing balance basis. The bank also offers loans without advance EMIs and does not levy prepayment charges. However, borrowers should confirm the festive processing fee waiver and the final applicable interest rate before applying.
Kotak Mahindra Bank Car Loan
Kotak Mahindra Bank is offering a 50% discount on processing fees for car loans as part of their festive season. This offer runs from 15th September to 31st December 2026. They also advertise 0% foreclosure charges For individual borrowers using their own funds only after a specific lock-in period . Borrowers can get loans of up to 100% of the Ex-Showroom price using Kotak Mahindra Prime, the car finance subsidiary. Loans can be taken out over a period of 12 to 84 months. The Minimum loan amount is ₹1 Lakh. Interest rates will vary depending on your credit history, car type and loan term. However, borrowers should note that prepayment charges may apply under the regular loan terms, so the zero-foreclosure benefit and its eligibility conditions should be confirmed before applying.
HDFC Bank Car Loan
HDFC Bank are offering car loans with interest rates starting from 8.25% per annum as part of their Festive Treats 2026. These loans will have 0% foreclosure conditional on a mandatory lock-in period (typically 12 to 24 months), if loan closed within 12-24 month, 5-6% foreclosure penalty is applied on the remaining principal. Through the digital Xpress Car Loan facility, HDFC Bank provides instant funding up to ₹25 Lakh , while traditional offline routes offer a much higher loan ceiling of up to ₹5 Crore depending on customer profile. Loans can be taken out over a period of 12 to 84 months for standard cars and selctied electric vehicles can be loaned over longer periods. They also offer fast processing times for loans online and instant disbursement to dealerships.However, the zero-foreclosure benefit is subject to the applicable terms and conditions, including the offer's validity and repayment requirements. Borrowers should confirm the applicable rate, loan amount and foreclosure conditions before applying.
Bank of Baroda Car Loan
Bank of Baroda are offering car loans with interest rates starting from 7.85% per annum. They also offer fast online processing, faster approvals and minimal paperwork. Under the bob Green Wheels scheme, electric car buyers receive a 0.15% discount on their individually applicable baseline interest rate rather than a flat reduction from the lowest floor rate of 7.85%.The standard interest rate will depend on your credit history, loan type and repayment terms. New car loans can be obtained with floating interest rates starting from 7.85% to 11.55%. Digital car loan interest rates start at 7.85% per annum but can scale up to 10.50% to 11.25% for applicants with lower credit scores. Borrowers should compare the applicable rate, processing charges and loan tenure before choosing the financing option.
Punjab National Bank (PNB) Car Loan
Punjab National Bank (PNB) have launched their PNB Utsav Festivities 2026. They are offering full discounts on advance and processing fees for car loans from 1st October to 31st December 2026. Under the PNB Utsav Festivities 2026 campaign, both standard new car loans and electric vehicle loans feature a highly competitive starting interest rate of 7.80% per annum for women and applicants with a CIBIL score of 750 or above. Borrowers with lower credit scores may pay higher interest rates depending on the rate band. New car loans can be repaid over up to 84 months (7 years). The vehicle is hypothecated to the bank until repayment is completed. The festive fee waiver makes the offer attractive for buyers seeking to reduce their initial borrowing expenses.
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ICICI Bank Car Loan
New car loans can be obtained with interest rates starting from 8.40% per annum for repayment periods of more than 36 months and from 10.25% per annum for shorter terms of 12 to 35 months. Qualified borrowers can obtain loans of up to 100% of the on road price of the car with flexible repayment tenures extending up to 84 months (7 Years). New car loans will incur non-refundable processing fees of up to ₹8,500 plus applicable GST. Partial prepayment charges apply of 3% plus GST for loans with seasoning of up to 24 months. However, full foreclosure charges follow a tiered structure: 3% plus GST within the first year, dropping to 2% plus GST in the second year, and entirely waived after 24 months. Final interest rates fluctuate based on your CIBIL score, income tier, loan volume, and selected car model.
IDBI Bank Car Loan
New car loans can be obtained with floating interest rates starting from 7.75% per annum with rates scaling up to 9.50% depending on credit history and eligibility. As a special festive deal the bank is offering no processing fees. Loans can be obtained/fast tracked using the Express Auto Loan facility. Loans can be repaid over a flexible tenure of up to 7 years using Equated Monthly Instalments (EMIs) calculated on a reducing balance basis. IDBI Bank allow partial payments and full foreclosure penalty-free after 6 months of loan drawdown if done using your own funds. However, a foreclosure charge of 1% on the outstanding loan amount applies if you close the loan within the first 6 months or migrate the balance via an external bank transfer.
What to Consider
Borrowers should look at the effective interest rates offered by the banks rather than relying only on advertised starting rates. The final rate will depend on credit score, income, loan amount and repayment period. Processing fees, documentation, foreclosure charges and partial payment should also be considered.
Additionally, buyers should check the loan-to-value ratio to understand the required down payment. While longer repayment tenures reduce monthly EMIs, they increase the total interest payable. Borrowers should also verify the validity of festive offers and their applicable terms before applying.
Conclusion
Festive car loan offers in 2026 provide buyers with an opportunity to benefit from competitive interest rates, processing fee waivers and flexible repayment options. However, borrowers should compare the total borrowing cost, applicable charges and repayment conditions across banks before choosing a loan.