EV vs. Non-EV Car Loan Rates in 2025: Which One Saves You More?

2025-06-23

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Ranveer Singh

EV vs. Non-EV Car Loan Rates in 2025: Which One Saves You More?

Auto Loan Interest Rates for EVs in 2025
EMI Comparison Example
Loan Tenure and Amount
Final Verdict - Which One Should You Get?
Conclusion

The Indian auto sector is undergoing a sea change, and it is not just what we drive — but the way we are financing it. Banks, too are opening up special, lower-interest car loans for the buyers of electric vehicles (EVs) as it gets increasingly popular. But are loans for EVs cheaper than loans for traditional internal combustion engine (ICE) vehicles in fact? So, let’s dig in and take a look at what’s really happening with EV vs. Non-EV car loan rates in 2025, and which will actually make a difference to your wallet.

Auto Loan Interest Rates for EVs in 2025

And as the governments continue to push for sustainable mobility, end user loans for EVs are enjoying preferential treatment at banks and NBFCs.

Average EV Loan Interest Rates:

State Bank of India (SBI): 8.15% p.a. for it.

HDFC Bank: 8.25% – 8.60% p.a.

Union Bank of India: Starting at 8.10% p.a.
ICICI Bank: 8.30% – 8.55% p.a.

Non-EV (Petrol/Diesel) Car Loan Rates

Conventional vehicle loans still ruled the roost but carried a bit more in interest rates when compared with EV loans.

Average ICE Vehicle Loan Interest Rates:

SBI: 8.45% – 9.00% p.a.
HDFC Bank: 8.60% – 9.10% p.a.
Punjab National Bank: 8.55% – 9.25% p.a.
Axis Bank: 8.75% onwards

EMI Comparison Example

Let’s compare a ₹10 lakh loan over 5 years:

EV Loan @ 8.20%: ₹20,347/month

Non-EV Loan @ 8.80%: ₹20,679/month

That’s a savings of ₹332/month or nearly ₹20,000 over 5 years.

Loan Tenure and Amount

Both EV and Non-EV loans typically offer a tenure up to 7 years.

Loan amount depends on on-road price, but many banks now finance up to 100% for EVs, including accessories like home chargers.

Final Verdict - Which One Should You Get?

If you want to do your part in reducing the interest you pay and take advantage of green incentives and think about long-term sustainability, an EV car loan is the right thing to do in 2025. It is the lower EMIs and the possible tax breaks in the future that give the thumbs up to electric vehicles.

But if range anxiety or charging infrastructure are still keeping you from making the leap, then traditional car loans, cars that aren't EVs are still a viable and accessible path to financing a vehicle.

Conclusion

Now, however, with car finance options that are more accessible to more people, and with it being just as much about being sustainable as it is about driving, 2025 is an ideal time to think about the financial benefits of choosing an electric vehicle. Whether you choose an EV or not, stay reasonable and think in the long term when purchasing a car.