Union Bank of India Car Loan Interest Rate November 2026: From 7.85%

Union Bank of India car loan interest rate: how the CIC score grid works

Union Bank's EBLR is 8.25%, the RBI repo rate of 5.50% plus a 2.75% spread, since 8 October 2026. Your rate is the EBLR minus or plus a margin set by your CIC score.

Who gets 7.85%

The floor is EBLR minus 0.40%, or 7.85%, for a score of 825 or above, salaried or not, and for salaried borrowers at 800 to 824. The grid then climbs to 8.45% or 8.50% at 700 to 749, 9.00% at 680 to 699, 9.75% at 650 to 679 and EBLR plus 2.00%, the 10.25% ceiling, under 650. Non-salaried borrowers pay at most 5 basis points more in any row; no score history is priced at 8.00%.

One wrinkle: the product page says a minimum CIBIL score of 700 is needed for the application to proceed, yet the grid prices scores below 650, and the bank wants a third-party guarantor under 700. Ask the branch how the two rules fit together.

Used and electric cars

A used car not older than 3 years costs EBLR plus 3.60%, or 11.85%, at a score of 700 and above, and 11.95% below it. Union Green Miles prices an electric car 10 basis points under the petrol grid in every row, 7.75% to 10.15%. The sheet also discloses the range actually charged on vehicle loans in the quarter to September 2026, 7.50% to 11.70% with a mean of 9.60%: past lending, not an offer.

What floating means for you

Your rate resets whenever the EBLR moves, as it did from 8.00% to 8.25% on 8 October after the RBI's repo rise. The RBI's 2023 reset rules then make the bank offer a higher EMI, a longer term or a mix. The upside is the exit: under the RBI's 2025 directions on pre-payment charges, a floating-rate car loan to an individual sanctioned from 1 January 2026 carries no foreclosure or part-payment charge. You may switch to fixed once, after 12 EMIs, at 1% over that day's floating rate, so 7.85% becomes 8.85%; fixed loans sit outside the ban.

The EMI, worked through

Take ₹15 lakh at 7.85%. Over 5 years the EMI is ₹30,307 and interest ₹3,18,421; over 7 years the EMI falls to ₹23,267 but interest rises to ₹4,54,460, so ₹1,36,039 more for the lighter instalment. Run any amount on the car loan EMI calculator; the car loan interest rates table ranks all 30 lenders.

Union Bank car loan processing fee and other charges

The processing fee is a flat ₹2,000 plus GST on any four-wheeler loan, which is 0.2% of a ₹10 lakh loan. Union Green Miles charges nothing to process an electric car loan.

Closing early

The bank's wording is that there's no prepayment penalty when you repay from your own verifiable funds. The RBI's 2025 directions go further on a floating-rate loan sanctioned on or after 1 January 2026: no charge on part or full prepayment, from any source, with no lock-in.

The switch to fixed, and what's missing

Switching to fixed costs ₹10,000 plus GST with up to ₹50 lakh outstanding, ₹15,000 plus GST above that. The vehicle loan page prints no documentation, late payment, swap or NOC charges. Ask for the full schedule and check it sits in the Key Facts Statement; under the RBI's KFS rules, in force since 1 October 2024, a fee missing from it cannot be charged later without your consent.

Union Bank car loan eligibility and documents

Resident Indians and NRIs can apply, alone or with up to 2 co-applicants; companies and firms can borrow for a director's or employee's car. Ages run 18 to 75. No minimum salary or income multiple is published; loan size rests on the branch's view of your repayment capacity.

The margin is fixed: at least 10% of on-road price (ex-showroom plus RTO registration, insurance and basic accessories) on a new car and 40% on a used car. On a ₹10 lakh new car that's a loan of up to ₹9 lakh; on a ₹10 lakh used car, ₹6 lakh. New-car loans have no rupee cap and run to 84 months; used-car loans stop at ₹20 lakh and 60 months, the car no older than 3 years. No moratorium is allowed.

Documents and security

No checklist is printed, so expect KYC, income proof, recent bank statements and the dealer's quotation. The car is hypothecated to the bank. An NRI needs a resident Indian guarantor; so does anyone scoring under 700. Our car loan eligibility guide runs through the usual tests.

How to apply for a Union Bank car loan

Online, the official apply button on this page takes you to the bank's own site; offline, visit a branch with your KYC and income papers or ask the dealer's finance desk whether it works with Union Bank. No turnaround time, pre-approved offer or instant-sanction variant is published, so get the sanction date in writing.

How to choose the right car loan

Pick on three numbers, not the headline floor. One, the rate for your own row and column: a non-salaried borrower at 776 to 799 pays 8.05%, not 7.85%. Two, the all-in cost: the Key Facts Statement every lender must give you before signing shows the APR with every fee folded in. Three, the reset clause: how the EMI or term changes when the EBLR moves.

Common mistakes

• Checking your score after applying. The grid spans 7.85% to 10.25%, a 2.40-point gap.
• Taking 84 months because the EMI looks light. On ₹10 lakh at 7.85%, 7 years costs ₹3,02,973 in interest against ₹2,12,281 over 5 years, so ₹90,692 more.
• Believing a dealer who promises the sanction. No bank can guarantee approval.

Who the Union Bank car loan suits, and how it compares

Union Bank suits a borrower scoring 800 or more who wants a floating rate at a public sector bank, a long term and no cap on loan size. Look elsewhere if your score is under 700, if you want a fixed rate from day one, or if you're buying used: 11.85% and a 40% margin are steep next to the lenders in our used car loan guide.

Among 30 lenders on our table, six start below 7.85% and the median floor is 8.50%, so Union Bank sits eighth, sharing its floor with three other public sector banks.

Union Bank against Indian Overseas Bank, Bank of Baroda and Punjab & Sind Bank

All four start at 7.85%; the difference is the ceiling and the fine print. Indian Overseas Bank has the tightest band, 7.85% to 8.85% off an RLLR of 8.35%, and advertises a processing fee waiver, but prints no used-car rate. Bank of Baroda runs 7.85% to 11.55%, publishes no score grid, charges ₹1,500 or ₹2,000 plus GST by loan size and offers a fixed option from 8.50%. Punjab & Sind Bank has the widest ceiling at 14.30%, funds 100% of on-road price for government and PSU staff with a salary account, and charges 0.25% of the loan, ₹2,500 on ₹10 lakh.

Between 700 and 749, Union Bank's 8.45% is a number you can hold the branch to, where Bank of Baroda prints only a range.