Car Loan Interest Rates - HDFC, SBI, Kotak, ICICI Bank, All Banks

Last Updated 06th Apr 2020

Lowest Car Loan Interest Rates in India Apr 2020

  • Lowest car loan interest rates starting @ 9.25%.
  • Compare and get the best car loan offers from banks
  • Maximum loan tenure upto 7 years
  • Maximum loan amount based upon on road price and ex - showroom price

Car Loan Interest Rates Comparison, Lowest EMI Apr 2020, Best rates

Bank Car Loan Interest Rates Maximum Loan Amount, Max Tenure
HDFC Bank Car Loan 9.25% Fixed 100% of ex-showroom price for 7 years
SBI Car Loan 8.70% Floating 85% of on-road price for 7 years
ICICI Bank Car Loan 8.89% Fixed 100% of ex-showroom price for 7 years
Axis Bank 9.25% Fixed 90% of ex-showroom price for 8 years
IndusInd Bank 10.65% Fixed 85% of ex-showroom price for 5 years
Kotak Bank 11.50% Fixed 90% of ex-showroom price for 5 years
PNB 8.75% Floating 85% of on-road price for 7 years
Union Bank of India 8.60% Floating 85% of on-road price for 7 years
Central Bank of India 9.00% Floating 90% of on-road price for 7 years
Andhra Bank 9.40% Fixed 85% of on-road price for 7 years
IDBI Bank 9.30% Fixed 90% of ex-showroom price for 7 years
Federal Bank 9.15% Fixed 90% of ex-showroom price for 7 years
Bank of India 9.50% Floating 85% of on-road price for 7 years
Bank of Maharashtra 9.25% Floating 85% of on-road price for 7 years
Corporation Bank 9.55% Floating 85% of ex-showroom price for 7 years
Indian Bank 9.65% Floating 85% of on-road price for 7 years
OBC 9.05% Floating 85% of on-road price for 7 years
Bank of Baroda 8.90% Floating 85% of on-road price for 7 years
United Bank of India 9.10% Floating 85% of on-road price for 7 years

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 for Car Loan

Minimum and Maximum Age
  • 18 Yrs. – 65 Yrs.

Note: However, many banks require minimum age of 21 years
Loan Amount
  • Upto 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
  • Min. Rs. 18,000 per month
Employment Type
  • Salaried and Self Employed
  • Interest rates are typically in the range of 8.60% to 20.00% per annum
Minimum Work Experience
  • 1 years of total work experience
  • Business tenure should of 5 years & ITR required for at least 2 years (For Self Employed only)
CIBIL Score for Car Loan
  • 700 & more credit history
Note: Most banks avoid giving loans if you have low credit score

Lowest EMI for Car Loan

Car Loan 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 for Car loan will be high
  • Interest rate – Higher interest rate on your loan leads to high amount of EMI
  • Loan tenure – EMI on car loan reduces in case of high loan tenure

Comparison of Car Loan Interest Rates in India

  • Car Loan processing fees – Most banks charges minimum processing fees of Nil to upto Rs.3,000. To get lowest fee, comparison of car loan rates, offers and cashback applying online through MyLoanCare.
  • Car Loan insurance premium – Since these are secured loans, but it is advisable to take an insurance policy when availing a loan. However, the premium varies from bank to bank depending upon the risk coverage under various policies. So, check the loan sanction letter carefully to know the coverage and premium.
  • Car Loan prepayment and foreclosure – When you want to repay your loan partially 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 even upto 5%. So, check carefully if the low interest rate car loan you are getting comes with high prepayment or foreclosure charges. Note that some car loans cannot be repaid before time.
  • Car Loan 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 as down payment as it reduces your burden of high monthly payments.

Do’s and Don’ts while taking Car Loan

To get best and lowest car 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 interest rate car loans for high loan amount
  • Do not apply with multiple banks – Simultaneous loan applications gets recorded in your CIBIL report and can hurt your chances of getting a loan
  • Discount for tenures – Banks may offer lower rates on car loan for certain tenure
  • Your salary bank may not offer the cheapest loan – Various banks keep offering attractive schemes to acquire premium customers. Hence, salary bank may not be the best option

Checklist for Car Loan

  • Identity proof
  • Residence address and ownership proof
  • Income proof
  • Down payment dealer receipt
  • Car quotation
  • Photo identity proof
  • Bank continuity proof
  • Bank statement
  • 1 passport size photograph
  • Latest ITR
  • Investment proof if you have any Fixed Deposit, Shares, Fixed Assets, etc

Documents Required for Car Loan

Documents ID Individuals Firms, Partnerships
Signed Application Form Required
Identity Proof PAN card, Passport, Driving License, Aadhar Card, Voter id, Govt 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, SEBI
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
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

Frequently Asked Questions on Car Loan

Why do I need car loan?

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

How can I apply for car loan?

You can apply for car loan in several ways. You can directly visit the bank branch and meet the sales person, contact a car loan agent or apply online at any bank or NBFC’s website.

What is the minimum and maximum tenure of car loan?

Car loan are generally taken for a short period of time. Generally, car loan tenure is between 36 months to 84 months.

What are the charges for car loan?

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

Car loan 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 car loan 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 car Loan.

Can I apply for car loan jointly with my spouse?

Yes, you can apply for car loan jointly with a co-applicant (either be 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 car 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 of car loan?

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 car loan balance transfer and reduce your monthly burden.

Can I get top up on car loan?

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 for car loan 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.

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.

Car Loan News - Apr 2020
*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. Read More