Indian Overseas Bank Car Loan Interest Rate November 2026: From 7.85%

Indian Overseas Bank car loan interest rate: how the grid works

Six CIC grades, each with its own spread over the RLLR. For an individual buying a non-electric car: 800 and above gets RLLR minus 0.50, so 7.85%; 775 to 799, 7.90%; 750 to 774, 7.95%; 725 to 749 and new-to-credit borrowers, 8.00%; 700 to 724, 8.10%; 680 to 699, RLLR plus 0.50, so 8.85%. Nothing is printed below 680.

The jump sits low: from 800 down to 700 the rate climbs only 0.25 points (8.10 minus 7.85), then the last grade adds 0.75 at once (8.85 minus 8.10). Electric cars get 0.05 off at every grade, 7.80% to 8.80% p.a. Used cars have no printed band; ask the branch for the figure in writing.

Floating cuts both ways. Under the RBI's 2019 external benchmark rules the rate resets at least once in three months as the repo moves (it rose 25 basis points to 5.50% on 7 October 2026). Under the RBI's 2025 directions on pre-payment charges, an individual's floating-rate car loan carries no foreclosure or part-payment fee from 1 January 2026. The 12% fixed option escapes the first and loses the second.

Now the EMI. Borrow ₹10 lakh at the 7.85% floor over 5 years: the EMI is ₹20,205 and the interest ₹2,12,281. At the 8.85% ceiling the same loan costs ₹20,686 a month, only ₹481 more (20,686 minus 20,205), because the band is so narrow. Try your own figures on the car loan EMI calculator; the car loan interest rates table shows every lender's band.

Fees and charges on an Indian Overseas Bank car loan

The service-charges schedule sets the Pushpaka processing fee at 0.50% of the loan, minimum ₹500, maximum ₹5,000, documentation included, GST extra; CIBIL charges are separate and unpriced. On ₹10 lakh, 0.50% is exactly ₹5,000, which is also the cap.

But the product page carries a full-waiver banner with no end date, so expect anything from nil to ₹5,000 plus GST and have the figure written into your Key Facts Statement; a fee missing from the KFS cannot be added later without your consent.

Prepayment costs nothing for individuals on a floating rate for non-business use: part or full, from any source, no lock-in, applied from 1 January 2026 under the RBI's 2025 directions. Fixed-rate loans sit outside that ban, the second strike against the 12% option.

A late EMI draws a penal charge of 2% on the overdue amount for the days of delay; under the RBI's 2023 penal-charge rules that is a separate fee, not a higher interest rate, and no interest accrues on it.

Who qualifies for an Indian Overseas Bank car loan

Individuals aged 18 and above, salaried or self-employed, can apply, as can companies and firms, and NRIs backed by a resident Indian guarantor. The age window is 18 to 70, and the loan must be repaid before you turn 75.

Income has two tests: take-home pay above 50% of gross salary after PF and insurance deductions, and total monthly income of at least ₹8,000. No FOIR table or maximum amount is printed. Funding is 90% of a new car's cost (₹1 lakh down on a ₹10 lakh car) and 75% of a used car's market value, with no rupee ceiling.

Tenure runs to 84 EMIs on a new car. A used car gets 84 months less its age and must be under 8 years old at closure, though the FAQ caps used cars at 5 years old; ask which rule applies.

No document list is published; expect PAN and Aadhaar or another KYC pair, salary slips or ITRs, bank statements and the dealer's quotation. Our car loan eligibility guide has the general rules.

How to apply for an Indian Overseas Bank car loan

The bank describes no online journey, no pre-approved variant and no turnaround time. The official apply button on this page takes you to the bank, where a branch pulls your CIBIL report and fixes your grade. Or walk in with the dealer's quotation, KYC and income papers. Women buyers: ask for IOB Pink Wheels, same grid, zero processing charge.

Before signing, read three lines of the Key Facts Statement every lender must give you under the RBI's KFS rule of 1 October 2024: the APR, which folds every fee into one yearly figure; the reset clause, with a choice of higher EMI or longer tenure when the RLLR moves; and the pre-payment line, which should read nil.

Common mistakes with this loan

• Quoting the FAQ's 8.85% as the starting rate; today it is the ceiling.
• Taking the 12% fixed option for peace of mind: 4.15 points above the floor (12 minus 7.85) and no free exit.
• Not checking your CIBIL score first; the 699 to 700 step alone is worth 0.75 points.
• Trusting the waiver banner instead of asking the fee.

Who it suits, and how Indian Overseas Bank compares

This loan suits a buyer with a score of 680 or better who wants a narrow band and a free exit. Its best and worst customers sit one percentage point apart; the same gap is 6.45 points at Punjab & Sind Bank (14.30 minus 7.85) and 3.70 at Bank of Baroda (11.55 minus 7.85).

Who should look elsewhere? Anyone under 680. Used-car buyers, since no used-car rate is printed here while Union Bank of India (11.85% to 11.95%) and Bank of Baroda (10.90% to 14.65%) publish theirs; our used car loan page has the rest. And government or PSU staff who want nothing down: Punjab & Sind Bank funds 100% of on-road price for salary-account holders.

How to choose the right car loan among these four

All four start at 7.85%, so compare two other things. Who gets the floor: 800 here, 825 at Union Bank (800 to 824 if salaried), 825 at Punjab & Sind, and only a 701 cut-off at Bank of Baroda. And the ceiling, the rate you might actually get: 8.85% here against 10.25%, 11.55% and 14.30% at the others. On electric cars the 7.80% floor here trails Punjab & Sind's 7.55% and Union Bank's 7.75%, but the 8.80% EV ceiling is the lowest of the four.