Kuchh Baat Aapke Interest Ki Login

Car Loan Interest Rates

Last Updated 21st Sep 2017

Car Loan Calculator India

Interest Rate Starting @ 9.25%
Check Best Offers
Processing Fee Min 0.22 %
Prepayment charges NIL
Loan Tenure 7 years
Loan to Value Upto 100%
  • Get car loan online at fixed and floating rates
  • Maximum loan amount depends upon either on road price or ex-showroom price of the car
  • Apply for loan online and avail attractive cashback up to Rs. 1,000
  • Get best car loan rates for both salaried and self employed individuals
Apply Car Loan @ 9.25%*
Rs.
Rs.
+91

Car Loan Interest Rate Comparison, Lowest EMI Sep 2017, Best rates

Bank Car Loan Interest Rates* Lowest EMI per lakh for Max Tenure, Maximum Loan Amount
Andhra Bank 9.20% Fixed Rs. 1,619 for 7 years, 85% of on-road price Explore More Apply Now
Axis Bank 11.00% - 12.00% Fixed Rs. 1,712 for 7 years, 95% of ex-showroom price Explore More Apply Now
Bank of India 9.35% Floating Rs. 1,627 for 7 years, 85% of on-road price Explore More Apply Now
Bank of Maharashtra 9.20% Floating Rs. 1,619 for 7 years, 85% of on-road price Explore More Apply Now
Central Bank of India 8.90% Floating Rs. 1,604 for 7 years, 90% of on-road price Explore More Apply Now
Corporation Bank 9.15% - 9.90% Floating Rs. 1,617 for 7 years, 85% of ex-showroom price Explore More Apply Now
Federal Bank 9.92% - 10.52% Fixed Rs. 1,656 for 7 years, 90% of ex-showroom price Explore More Apply Now
HDFC Bank (4.3/5.0) 9 Users 9.25% Fixed Rs. 1,622 for 7 years, 100% of ex-showroom price Explore More Apply Now
ICICI Bank 10.75% - 12.75% Fixed Rs. 1,699 for 7 years, 100% of ex-showroom price Explore More Apply Now
IDBI Bank 9.95% Fixed Rs. 1,658 for 7 years, 90% of ex-showroom price Explore More Apply Now
Indian Bank 9.95% Floating Rs. 1,658 for 7 years, 85% of on-road price Explore More Apply Now
IndusInd Bank 10.65% - 15.50% Fixed Rs. 2,157 for 5 years, 85% of ex-showroom price Explore More Apply Now
Kotak Bank 11.50% - 13.50% Fixed Rs. 2,199 for 5 years, 90% of ex-showroom price Explore More Apply Now
OBC 8.45% - 8.95% Floating Rs. 1,581 for 7 years, 85% of on-road price Explore More Apply Now
PNB 8.50% - 8.95% Floating Rs. 1,584 for 7 years, 85% of on-road price Explore More Apply Now
SBI 9.20% - 9.25% Floating Rs. 1,619 for 7 years, 85% of on-road price Explore More Apply Now
Tamilnad Mercantile Bank 11.30% - 11.55% Floating Rs. 2,189 for 5 years, 85% of on-road price Explore More Apply Now
Union Bank of India 9.00% Floating Rs. 1,609 for 7 years, 85% of on-road price Explore More Apply Now
United Bank of India 9.35% - 10.45% Floating Rs. 1,627 for 7 years, 85% of on-road price Explore More Apply Now

Car Loan Rates

In today’s world, owning a car is not a luxury, but a necessity. Not having a car of your own restricts you and your family from living life to the fullest- going to work, outing for leisure or maintaining a good social and professional life. With growing number of institutions that offer vehicle loans, owning a car is no longer just a dream. Loans are available for new cars as well as used cars which enable you to buy your car and pay the borrowed amount through easy monthly EMIs.

Additional benefits of availing a car loan
  • A loan is secured against the car itself. There is no need to mortgage any other asset to procure a loan.
  • You get to use the car while paying for it in affordable and low installments.
  • Low vehicle loan rates enable you to invest your surplus savings in alternate investments with high interest rates.

Car Loan Eligibility Check

You may be eligible for car loan in India from one or more banks if you meet the following eligibility conditions:

Eligibility Criteria

Minimum and Maximum Age 18 years – 65 years
Note: However, many banks require minimum age of 23 years
Loan Amount Up to Rs. 50 lakhs. Some banks give maximum loan upto Rs. 1 crore
Note: Loan amount depends upon the value of the car and the EMI you can pay
Net Monthly Income Minimum Rs. 18,000 per month
Employment Type
  • Available for salaried, self employed and businessmen
  • Interest can range from 9.25% to 20.00%
Minimum Work Experience
  • Salaried: a minimum of 1 year of total work experience
  • Self Employed: business existence of minimum 5 years
  • ITR of minimum 2 years
CIBIL Score CIBIL 700 & more
Note: Most banks avoid giving loans if you have low credit score

Car Loan Eligibility Calculator

This MyLoanCare calculator uses your monthly income to estimate the amount of loan amount you will be eligible from banks. Important factors that determine your loan eligibility are:

  • How much EMI can you comfortably pay every month while still meeting your household expenses? In case you pay any existing EMIs on other loans or pay house rent, the same will reduce your eligibility
  • What is the loan tenure you would prefer and is available to you? Car finance are available for a period of 3 to 7 years. Loans are available for a longer tenure on new car as compared to used car.
  • CIBIL Score - Good CIBIL Score indicates good repayment record. Bad CIBIL Score will result in either loan at higher interest rate or rejection of the loan application. For vehicle loans, the required CIBIL Score is at least 700.

Your loan eligibility is also a function of interest rates of car. Higher interest rates may reduce your loan eligibility with the same income levels as interest constitute a higher proportion of the EMI. You can calculate your eligibility with car loan calculator to know the amount you should apply for.

Lowest EMI for Car Finance

EMI is the amount that you pay every month to the bank or financial institution in order to repay your loan. EMI is composed of both principal amount and interest component. Interest component on your EMI is higher in early months and reduced with each EMI. Car Loan EMI Calculator helps you to calculate your monthly EMI at desired interest rate for a particular tenure.

Car Loan EMI depends upon loan amount, interest rate and loan tenure

  • Loan amount – If you apply for a high loan amount, then your EMI will be high
  • Interest rate – Higher interest rate on your loan leads to high amount of EMI
  • Loan tenure – EMI reduces in case of high loan tenure

Car Loan Interest Rates Comparison

  • Processing fees – Most banks charge processing fees of Rs. 250 to up to Rs. 20,000. To get the lowest fee, comparison of vehicle loan rates, offers and cashback applying online through MyLoanCare.
  • Insurance premium – It is mandatory to take a car insurance policy to cover any damages to the car in case of an accident. However, the coverage and premium of various insurance policies can be different from each other. The insurance policy bundled with your car purchase might not necessarily be the best insurance policy. Hence, it is advisable to compare the insurance terms, before choosing an insurance policy for your car.
  • Prepayment and foreclosure – When you want to repay a partial amount of loan before time, it is called part prepayment. In case you decide to pay the entire loan amount before time, it is called foreclosure. Banks typically levy prepayment or foreclosure charges in such situations and these can range from Nil to Upto 5%. So, check carefully if the low interest rate car loan you get comes with high prepayment or foreclosure charges. Note that some loans cannot be repaid before time.
  • Down payment – Banks offer car loan either at 80% of on-road price or 100% of ex-showroom price. However, 80% of on-road is almost equivalent to 95% of ex-showroom price. You are advised to fund maximum down payment as it reduces your burden of high monthly payments.

Do’s and Don’ts

To get best and lowest vehicle loan interest rates online, read the do's and don’ts mentioned below.

Do’s Don’ts
Check best discount and offers– Always check current offers and car loan interest rates offered to employees of large reputed companies Do not apply for loan amount more than what you are eligible for– Applying for an amount higher than your eligibility may lead to rejection of your loan application
Compare car loan rates based on loan amount– Some banks offer lowest car loan interest for high loan amount. Loan amount can vary by the value of the car used for calculating LTV. Banks may use the on road price or ex showroom price as the value of car and both, result in significant differences in the loan amount offered Do not apply with multiple banks – Simultaneous loan applications gets recorded in your CIBIL report and can hurt your chances of getting a loan
Carefully decide on which type of insurance would be necessary - Comprehensive, Third Party, or Zero Dep insurance. Check and compare the cost, coverage and claim settlement ratio. Do not rely only on the dealer - The loan offered by your dealer may not be the lowest interest rate or best loan. Evaluate other options. Check with your salary bank as well as compare offers from various banks on our online platform.

Why do you need a car insurance?

It is essential and advisable to buy a car insurance cover with any new car purchase to cover charges of accidental damages to the car. However, there are multiple types of car insurance available, which needs a thorough evaluation of various factors such as cost, coverage and claim settlement ratios. Online car insurance are offered at 8-10% discount and hence, might reduce the cost of policy.

  • Third Party Insurance: It covers the damages occurred to a third party vehicle due to collision or accident. The damage to property and injuries to other people are covered. Such coverage is essential these days as the cost of repairing cars is substantially high. This type of insurance doesn’t cover any damages to your vehicle.
  • Comprehensive Car Insurance: This type has a wider coverage with risks of accident and damages to your vehicle as well as the third party car. Comprehensive car insurance has a higher car premium compared to third party insurance cover
  • Zero Dep Cover: It offers complete insurance without factoring in depreciation. This implies that after collision, you receive the entire cost from the insurer. However, the premium is high in Zero Dep Cover.
Factors affecting car insurance premium

There are broadly four types of factors that affect the insurance premium of your vehicle. These are:

  • Location Risks: Premiums are generally higher if the area of registration is an urban area, located near highways, highly populated areas or high theft prone areas.
  • History of claim: If you have claimed the insurance, then the premium is likely to go up the following year.
  • Vehicle: Higher premiums are sought for heavy vehicles like SUVs, commercial vehicles and vehicles run on diesel. For renewal of the policy, the age of the vehicle and its depreciation impact the premium amount.
  • Driver: The driver is considered in terms of his age and profession for the premium to be decided. Generally, cars with multiple drivers drive the premium up.
How to reduce the cost of vehicle insurance?

Here are a few tips that you can follow to lower the cost of your vehicle insurance:

  • Voluntary Deductions: Petty claims over small damages can be paid out of the pocket of the vehicle owner which leads the premium amount being reduced up to thirty per cent.
  • Security Features: Some cars come with enhanced security systems. These systems include anti theft alarms which make it less probable for the vehicle to be stolen. Hence, you are likely to get a discount on your premium for such equipped cars.
  • No Claim: If you take no claim on your insurance, your premium can reduce by half in the following year! This is a bonus for your good driving year after year.
Be Careful!

Some areas which must be paid attention to before choosing a cover:

  • Value of the vehicle: Sometimes people reduce the Insured Declared Value (IDV) of the car to get a lower premium. In such cases, is an accident happens the car could be totally written off on account of the low IDV. A policy that offers maximum IDV, even if it means a higher premium is the best in terms of benefit for the cost.
  • Policy Lapse: Make sure your insurance is renewed on time because the insurance provider only gives a grace period of one week.
  • Claim settlement Ratio: This is the ratio of number of policy claims approved by the insurer and total number of policy claims received by them. Higher the ratio more is the reliability of the insurer. Make sure to research on the same before deciding on your insurer. LIC is the best in this regard, followed by MaxLife, Birla SunLife, etc.

5 questions to ask your Car Loan agent

  • What is the loan amount eligibility based on your income and the car or SUV or MUV model you are planning to buy? Is the loan available on ex-showroom price or on the road price?
  • What is the EMI amount and loan tenure per Rs. 1 lakh loan amount?
  • What are the processing charges payable?
  • Can you make prepayment of the vehicle loan? If yes, are there are charges and restrictions on when and how much you can pay?
  • What is the interest rate? Is it a flat rate or reducing rate? Is the EMI payable in advance or at end of month?

Car loan jargon you must know when comparing loans of different banks:

  • Ex-showroom price is the price of the car including excise duty but excluding local duties and statutory charges.
  • On road price is the price you pay for the car including the ex-showroom price and cost of registration, insurance, octroi, municipal entry tax, road tax and any accessories. The on road price tends to be 15-25% more than the ex-showroom price and may vary from city to city.

Caution - Note that a car loan of 80% of on road price is likely to be more than 95% of ex showroom price.

Schemes under Car Loan related to EMI and interest

EMI in arrears scheme – This is a standard method of paying EMI where the interest for a month (and principal repayment) is payable at or after the end of the month.

  • Advance EMI scheme – Under this scheme, you pay interest and EMI at the beginning of the month. So, each month, you pay interest on amount that you have already repaid to the bank at the beginning of the month.

Caution – In case your bank charges EMI in advance, the EMI amount should be about 1% lower than that in case of EMI in arrears. For those interested in more precise figures, EMI per Rs. 1 lakh loan amount on a 5 year car loan at 10% rate of interest as per EMI in arrears method comes to Rs. 2,125 while that as per EMI in advance method comes to Rs. 2,107.

  • Zero interest scheme (also called 0% finance scheme) – This is one of those free lunches scheme that actually doesn’t exist. So, beware of schemes that claim to offer zero interest. It is likely that the car company is offering a subvention scheme whereby the interest is paid by it to the bank upfront. Now, you could always ask the car dealer for the same amount as a cash discount. It’s like padding up the price of the car for the interest amount and marketing it under a nice name.
  • Flat rate of interest scheme – In this method, you pay interest on the entire principal amount of loan till maturity. So, on a loan of Rs. 5 lakhs at 10% for 5 years, you would have to pay back a total of Rs. 5 lakhs plus interest of Rs. 50,000 a year, that is a sum total of Rs. 7,50,000. The EMI in this case would be Rs. 12,500.
  • Reducing balance scheme - In this method, you pay interest on the amount outstanding each month. With each EMI, the balance principal amount keeps reducing. So, on a Rs. 5 lakh loan at 10% for 5 years, you would have to pay back a total of Rs. 5 lakhs plus interest on reducing basis which comes to Rs. 1,37,411 or Rs. 6,37,411 including principal. The EMI in this case would be Rs. 10,624, a good 15% less than that for a flat rate scheme.

Caution – Never get hoodwinked with the low rate of interest offered on a flat rate scheme. A flat rate of 10% is equal to an interest rate of 18.7% on reducing rate basis on a 5 year car loan.

Steps to take a car loan

  • Credit Score: As is obvious, your credit score is very crucial in determining what rate you’re offered on your loan and whether you will even get the loan in the first place! Your credit score is based on your credit report of the past. It’s a good idea to know your credit score.
  • Review your Budget: Figure out how much you can realistically afford to pay each month as your loan EMI. Vehicle loans come in short to long tenures wherein longer the term is, lesser is your monthly payment. But a longer term means you owe more than the vehicle is worth for longer.
  • Factor Insurance and other costs: Insurance costs and maintenance costs are not covered in your loan amount. It is, however, very important to decide on those funds. Consult with your insurance agent and the lender both, on how the total cost of insurance, maintenance and monthly EMI affect your budget.
  • Pre-Approval: It is advised to check with various different sources for the best deal for you. A pre-approval will work for you for a certain time period and for a certain amount of money. You can spend up to that pre-approved amount on your car. Even if you do not have a great credit score, you can still get the loan but for a higher interest rate. It should be take care of that the whole process in over in 14 days. Some credit scorers might penalize you for too many inquiries into your credit history.
  • Choosing Vehicle: Once pre-approved you can go ahead and choose a car of your dreams. One of the benefits of getting pre-approved is that you can focus on negotiating the best deal. The dealers may try to talk you into longer termed loans which will cost you more in the long run. In case of a used car, first confirm that the loan you apply covers the option of buying a car from a private party, generally, there are restrictions on the age of the used car and interest may be a little higher
  • Paperwork: Once the vehicle is chosen, price negotiated and the budget is decided, the lender would require your documents to finalize the sale. The add-ons such as extended warranty would be offered to you by the auto dealer. These must be carefully researched upon.
  • Paying off: After the sale, the payment schedule is informed to you. It is advised to have an account online so that you can check your balance and make payments with convenience.

Almost all vehicle loan lenders allow you to pay the loan before its maturity without any penalty.

Documents Required

Documents required for acquiring a car loan vary from lender to lender and one cannot do without submitting the rights documentation which is the established proof of your identity, age, income and address.

Documents ID Individuals Firms, Partnerships
Signed Application Form Required Required
Identity Proof PAN card, Passport, Driving License, Aadhaar Card, Voter id, Government issued i-card PAN card, Passport, Driving License, Aadhaar Card, Voter id, Government issued i-card
Certificate and Proof of Business Existence PAN , sales tax/ excise/ VAT/ service tax registration, Copy of partnership deed, Trade license, certificate of practice, registration certificate issued by RBI
Address Proof Passport, Driving License, Election ID card, Electricity/ Telephone/ Mobile bill/ bank statement (not more than 3 months old) Bank statement, utility bill, Registry copy, lease or rent agreement, TAN allotment letter
Age Proof PAN card, Passport, Driving License, Voter id card, Birth certificate, Employee ID card (only for PSU/ Government employees), School/ college leaving certificate PAN card, Passport, Driving License, Voter id card, Birth certificate, Employee ID card (only for PSU/ Government employees), School/ college leaving certificate
Income Proof Form 16, last 3 months salary slip, last 3 months' bank account statement showing salary credit Last 2 years ITR, last 3 months bank account statement
Car Quotation Quotation of cost of the car selected from the dealer Quotation of cost of the car selected from the dealer

Frequently Asked Questions

Why do I need car loan?

These loans are usually taken to buy a new car or used car, given at fixed rate. If you have a low CIBIL score, then you should not apply in multiple banks as each rejection will drop your CIBIL score.

How can I apply?

There are multiple ways to do that. You can directly visit the bank branch and meet the sales person, contact a loan agent or apply online at any bank or NBFC’s website. You can also compare interest rates of all banks online at MyLoanCare and apply for car loan.

What are the extra charges?

Apart from rate of interest, there are two types of charges being charged by the banks.

  • Car loan processing fee: This is charged when you apply for the loan. The processing fee charged is upto Rs. 3,000 of the loan amount and could be reduced if you can bargain.
  • Car loan pre-closure fee: This is charged when you close your loan before the completion of loan tenure. Prepayment penalty charged may be up to 5% of the outstanding amount.
Is CIBIL Score for car loan important?

CIBIL score is very important. Good CIBIL score indicates good repayment record and hence banks can offer you higher loan amount at low rate of interest for car loan. Bad CIBIL Score will result in either loan at higher interest rate or rejection of the loan application. So, make all your payments on time and maintain your CIBIL in order to get best rates.

What is ex-showroom price and on road price?
  • Ex-showroom price is the price of the car including excise duty but excluding local duties and statutory charges.
  • On road price is the price you pay for the car including the ex-showroom price and cost of registration, insurance, octroi, municipal entry tax, road tax and any accessories. The on road price tends to be 15-25% more than the ex-showroom price and may vary from city to city.
Do I need to open a bank account to service my car loan?

Yes, you need to have at least one functional bank account in your name to get a car loan. It is even better if you have an account with the same bank from which you would like to get a loan.

Can I apply jointly with my spouse?

Yes, you can apply for loan jointly with a co-applicant (either your spouse or your parents). This helps you to increase your eligibility. Hence you may get higher loan amount as your co-applicant’s income also gets added to your income. In co-applicant cases, the total income is taken into consideration for calculating the eligibility.

Does it affect my co-applicant if I default in loan?

Yes, if you fail to pay the loan on time then it will also affect your co-applicant. Default in loan will affect his/her CIBIL rating as well.

What are the main factors that affect interest rate?

Interest on car loan depends upon factors like down payment, loan tenure, credit report and your net income. High income with good CIBIL and maximum down payment can lend you loan at low interest rate.

Can I do balance transfer on car loan?

Yes, if you are getting lower rate of interest, then you can opt for balance transfer and reduce your monthly burden.

Can I get top up?

Yes, you can get car loan top up but terms and conditions varies from bank to bank.

How can I prevent rejection of my loan application?

Banks or NBFCs give car loan to those borrowers about whom they are sure that he/her can repay the loan. You need to know few things if you don’t want your application to get rejected:

  • Job stability or occupation stability is important. You need to be stable in your current job as too many job changes can impact negatively at the time of loan approval
  • You should not be having too many loans running at one time. Banks can reject your application if you are already paying too many EMI’s at same time.
  • Don’t give your landline number for tele-verification if you know that nobody is there at home when you are at work. A typing mistake in apartment number can also put negative impact on lenders.
  • Last but not least, practice strong credit discipline. Even a single delay in payment of your dues on other loans may adversely affect your CIBIL score and hence, your chances of getting a loan.

Banks or lenders keep on adding these small things and reject your loan application.

What should I do if my car loan application gets rejected by bank?

Some possible reasons why your application gets rejected are already running multiple loans and hence a bank may be in doubt about your repayment ability of a new loan.

  • In this case, if you have a spouse who is also working, you can add him/her as a co-applicant to boost the combined salary levels.
  • Clear your old debts first so that your leverage levels come down.
  • Balance transfer of your existing loans so that the rate of interest on loans can come down and additional loan can be availed.
Can I get a loan for the full cost of my car?

Typically, banks loans only up to 80% to 90% of the total cost of the vehicle. However, there are a few banks that may cover the entire cost of the car.

What is the car loan repayment tenure?

The tenure generally ranges from 3 years to 7 years, depending upon the loan amount and customer's repayment capabilities.

Is a guarantor mandatory for a new car loan?

In case you are unable to meet the eligibility criteria set by the lender, then a guarantor is mandatory.

What is the minimum amount of loan we can apply for?

In most cases, you can apply for a minimum loan of Rs. 1 Lac.

Is there a provision to pre-pay the entire loan amount?

A small fee in the form of pre-payment penalty will be chargeable by the bank, but yes, it is allowed to pre pay the loan amount and save vital interest payments. This however is subject to a minimum period for which the loan must be held which is usually 6 months.

Are all cars financed by the loan institutions?

All small to medium sized cars, Sport Utility Vehicles (SUV) and Multi Utility Vehicles (MUV) usually come under the car loans finances available in India.

Can additional loan be availed over my allotted second-hand car loan?

Refinancing option or borrowing an additional loan over an allotted second-hand car loan is offered by most lenders. Ideally, 80%- 85% of the car's valuation amount can be availed.

Why MyLoanCare???

Nowadays, banks give various offers on Car Loan to give the best rates to individuals. To get Car Loan with lowest interest rate and lowest EMI, compare new rates and offers of all banks at MyLoanCare. You can do rates comparison, check your eligibility, apply online and get the cheapest rate on Car Loan. MyLoanCare helps you throughout the loan process from the day you apply to the time you get complete disbursement. You can even track your loan status after getting registered with us. MyLoanCare make it easy for you to get hassle free Car Loan with ultimate cashback and refer and earn benefits. So, apply for Car Loan today and enjoy the benefits.


Check
Lowest EMI
Check
Car Loan Eligibility
*Terms and conditions apply. Credit at sole discretion of lender subject to credit appraisal, eligibility check, rates, charges and terms. Information displayed is indicative and from collected from public sources. MyLoanCare is an independent professional service provider and is not related to the government or government bodies or any regulator or any credit information bureau in any way. Information carried at this website is not and should not be construed as an offer or solicitation or invitation to borrow or lend. The Company does not undertake any liability with respect to the correctness of the content, information and calculations. Information is subject to change without notice. By submitting your query or using any tools or calculators, you authorize MyLoanCare to share your information with lender(s), consent for such lender(s) to access your credit information report and contact you regarding your query overriding your number being in National Do Not Call Registry. This is a free service and no charges are payable by the borrower to MyLoanCare. The Company may receive remuneration from lenders for services provided to them.