Festive lenders are advertising car-loan rates from 7.75% and fee waivers for Diwali 2026, but the rate in an advertisement is not the same as the final cost for every borrower. The offer a buyer can actually use will depend on the lender, credit profile, loan tenure, vehicle and charges shown in the written quote.
Moneycontrol reported on 27 Oct 2026 that a BankBazaar comparison of lender websites, using data available on 23 Oct, found car-loan offers from Indian Bank, State Bank of India, Kotak Mahindra Bank and HDFC Bank. Indian Bank’s own festive page also advertises its IND Digi Vehicle Loan from 7.75% per annum and says individuals have nil pre-payment charges for the listed new-car, new two-wheeler and used-car scheme.
Key takeaways
- The 7.75% starting rate is an advertised entry point, not a universal rate for every applicant.
- Moneycontrol reported festive concessions across four lenders, but the applicable terms need to be confirmed in the lender’s quote.
- TransUnion CIBIL says the average passenger-vehicle loan reached ₹8.2 lakh in H1 2026 and the average tenure reached 62 months.
- On an illustrative ₹8.2 lakh loan over 62 months, a 0.90 percentage-point rate gap changes the calculated interest by about ₹22,035 before fees.
- Processing fees, GST, foreclosure terms, insurance and fuel costs can outweigh a small headline-rate difference.
What the Diwali car-loan offers say
The current festive coverage points to a common pattern: lenders are using a mix of starting rates, fee waivers and repayment concessions rather than one uniform national offer. Moneycontrol’s 27 Oct report said Indian Bank’s advertised starting rate was 7.75% per annum, while the same comparison listed concessions from SBI and Kotak Mahindra Bank and a separate starting-rate offer from HDFC Bank. Those were reported as lender offers based on website data available on 23 Oct, so the date, applicant category and validity matter.
Indian Bank’s own festive page provides a primary source for the 7.75% starting figure. Its current personal-segment rate page lists the IB Vehicle Loan range at 7.75% to 9.10%, which reinforces the difference between a starting rate and the rate that may apply after credit and product-specific assessment. A buyer comparing an advertisement with a sanction letter should therefore check whether the quoted rate is fixed or floating, what score band it assumes and whether the vehicle is new or used.
SBI’s live auto-loan page gives a useful comparison point. It lists new-car rates from 8.55% to 9.50%, with the page showing 8.65% for a borrower with a CIC score of 800 or above and a term longer than five years. This is not a promise of an offer; it is the lender’s published schedule accessed on 28 Oct 2026 and illustrates why the borrower profile and tenure must sit beside any advertised festive rate.
Why the EMI matters more than the headline
Vehicle loans are becoming larger and longer. TransUnion CIBIL’s 13 Oct 2026 report says the average passenger-vehicle loan reached ₹8.2 lakh in H1 2026, 49% higher than in H1 2019, while the average repayment tenure increased by five months to 62 months. India Today also cited the ₹8.2 lakh average and 62-month tenure in its 26 Oct 2026 review of festive loan offers.
The following calculation uses those reported averages to show the effect of the rate alone. It assumes a reducing-balance loan, no down-payment adjustment, monthly instalments and no processing fee, GST, insurance or other charge. The figures are illustrative, not a quote from either lender.
| Illustrative rate basis | Monthly EMI | Total interest over 62 months | Published basis |
|---|---|---|---|
| 7.75% per annum | ₹16,092 | ₹1,77,708 | Indian Bank festive starting rate; Moneycontrol comparison, 23 Oct data |
| 8.65% per annum | ₹16,447 | ₹1,99,743 | SBI rate shown for CIC score 800+ and term above five years; page updated 15 Oct 2026 |
The 8.65% example is about ₹355 more per month and about ₹22,035 more in total interest than the 7.75% example. A longer tenure can reduce the monthly payment, but it generally increases the total interest; a fee waiver affects the upfront bill and may not compensate for a higher rate across five years.
What to check in the written quote
1. Rate type and eligibility
Ask whether the quoted rate is fixed for the full term or floating, and what credit score, income, vehicle type and tenure assumptions are attached to the starting figure. Do not treat a rate shown in a campaign banner as the final rate until it appears in the lender’s offer or sanction document.
2. Total borrowing cost
Compare the annualised cost, processing fee, GST, documentation charges, hypothecation charges and any mandatory bundled product. SBI’s current processing-fee schedule lists new-car fees from ₹500 plus GST to ₹2,000 plus GST depending on the loan amount and whether the borrower is salaried, so a fee waiver can be useful but needs to be weighed against the rate and other charges.
The car-loan comparison guide covering KFS, APR, EMI and fees explains the fields that can be placed side by side before a decision is made.
3. Tenure, pre-payment and running costs
Check the foreclosure and part-prepayment clauses, including any minimum holding period. Also add the cost of keeping the vehicle on the road: the fuel-cost calculator can estimate a route or monthly fuel bill,
Because fuel is a recurring ownership cost, live fuel prices provide the current pump-rate reference for the selected location.
What changes now for buyers
There is no single Diwali car-loan rate that applies to every Indian buyer. The fresh reports show that lenders are competing through a combination of starting rates and concessions, while lender schedules continue to disclose profile-based pricing and charges. The practical next step is to obtain the written quote, record the rate date, calculate the full repayment, and compare it with the cost of fuel, insurance and maintenance over the same period.
Sources
- Moneycontrol — Car loan offers: These banks are offering lower interest rates and waivers on processing fees — 27 Oct 2026
- India Today — Diwali loan offers look tempting. How do you know if you’re really saving? — 26 Oct 2026
- Indian Bank — This Festive Season Bring Happiness To Your Home With Indian — accessed 28 Oct 2026
- Indian Bank — Personal Loan Interest Rates — accessed 28 Oct 2026
- State Bank of India — Auto / Vehicle Loans Interest Rates — page updated 15 Oct 2026
- State Bank of India — Processing Fees — accessed 28 Oct 2026
- TransUnion CIBIL — Rising Car Prices and Aspirational Consumer Choices Drive Higher Auto Loan Sizes — 13 Oct 2026
This article is for general information only and is not financial, insurance or legal advice.
