Banks Offering Cheaper Car Loans to Boost Electric Vehicle Sales — Full List of Rates and Charges
As electric vehicles (EVs) continue to gain popularity, Indian banks are stepping up efforts to promote green mobility by offering special car loan schemes tailored for EV buyers. These loans come with reduced interest rates, flexible repayment options, and minimal processing charges — making it easier and more affordable for consumers to make the switch from traditional petrol and diesel vehicles to environmentally friendly electric cars.
EV Loans at Lower Rates Than Conventional Vehicles
To encourage the adoption of eco-friendly transportation, several banks in India are now providing loans for electric cars at interest rates that are 5 to 25 basis points (0.05% to 0.25%) lower than those for petrol or diesel cars. This initiative aligns with the government’s sustainable mobility goals and supports efforts toward reducing pollution and carbon emissions.
Some banks have even waived processing fees and are offering prepayment flexibility without penalties, further easing the financial burden on customers.
Banks Launch Special Offers on Key Dates
Recognizing the importance of environmental awareness, banks are rolling out limited-time offers. For instance, on World Environment Day, Punjab National Bank (PNB) introduced EV loans starting at an interest rate of 8.30%, which is 0.05% cheaper than their regular auto loan rates. In addition, the PNB One mobile app simplifies the loan application process, making it accessible and user-friendly.
Electric Two-Wheelers Attract Higher Rates
Interestingly, while four-wheeled EVs benefit from discounted loan rates, electric two-wheelers often come with higher interest rates than their petrol-powered counterparts. This is primarily due to concerns around battery lifespan and resale value. Nonetheless, banks are working to balance these risks by offering flexible terms.
Compare Before You Commit
Before opting for an EV loan, it is important to compare the interest rates, processing fees, repayment tenure, and the Loan-to-Value (LTV) ratio across different banks. A well-informed decision can lead to significant savings over the loan period.
EV Car Loan Interest Rates & Processing Fees by Bank (as of July 2025)
| Bank Name | Interest Rate (%) | Processing Fee |
|---|---|---|
| Indian Overseas Bank | 8.40 – 9.80 | As applicable |
| Bank of Maharashtra | 8.45 – 12.75 | 0.25% (₹1,000 min, ₹15,000 max) |
| Canara Bank | 8.45 – 10.20 | 0.25% (₹1,000–₹5,000) + GST |
| UCO Bank | 8.45 – 10.75 | 0.50% (up to ₹5,000) + GST |
| Union Bank of India | 8.45 – 10.20 | ₹1,000 + GST (Free for EVs) |
| Indian Bank | 8.50 – 9.75 | ₹1,000 + GST |
| Punjab National Bank | 8.50 – 9.95 | 0.25% (₹1,000–₹1,500) |
| Central Bank of India | 8.60 – 10.05 | Not disclosed online |
| Punjab & Sind Bank | 8.60 – 10.00 | 0.25% (₹1,000–₹15,000)* |
| Bank of India | 8.75 – 10.60 | 0.25% (₹2,500–₹10,000) |
| IDBI Bank | 8.80 – 10.50 | Up to ₹2,500 |
| Karnataka Bank | 8.88 – 12.11 | 0.5% (₹2,500–₹10,000) + taxes |
| Nainital Bank | 8.90 – 10.75 | Not listed online |
| CSB Bank | 8.95 – 10.75 | Not listed online |
| State Bank of India (SBI) | 9.10 – 10.15 | No processing fee |
Note: Data accurate as of July 2025. Some banks may not have disclosed complete fee details on their websites.
Additional Tips for EV Loan Applicants
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Start with your existing bank: If you already hold an account or loan with a bank, approach them first — they may offer pre-approved or preferential-rate loans.
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Loan tenure matters: A shorter loan period may increase EMI but reduce total interest outflow.
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Choose fixed or floating rates wisely: A fixed rate offers stability, while a floating rate might benefit you if interest rates fall in the future — but can also increase your EMIs if rates rise.
Final Thoughts
With the Indian government pushing toward a greener future, banks are playing a critical role by making EV financing more accessible and attractive. If you're planning to purchase an electric vehicle soon, now might be the best time to explore your options and take advantage of these cost-effective loan offers.
By comparing loan schemes across banks and choosing terms that suit your financial needs, you can contribute to a cleaner environment without stretching your budget.
