MyLoanCare is a FREE of cost service for borrowers Apply Online

MyLoanCare - Baat Aapke Interest Ki

MyLoanCare Customer Ratings - 4.5/5.0 Apply Online

Car Loan Fee and Charges

Lowest Processing Fee on Car Loan

Last Updated 23rd Jun 2021

  • Car loan processing fee is a one-time fee to be paid by car loan borrowers to get the loan application processed.
  • Processing charges on car loans are not inclusive of the loan amount, but are to be paid separately.
  • Other charges on car loan are: Interest rate, preclosure fee, part-prepayment charge, late payment fee, swap charges, stamp duty, and service charges among others.
  • Service charges and interest rate are levied with GST on car loans.
  • Currently, Bank of India offers car loans at the lowest processing fee of ₹ 500, whereas SBI charges the lowest processing fee, i.e., 0.20% of the car loan amount.
  • The car loan fees and charges vary across all car loan lenders.
Apply for Car Loan @ 8.70%*

Compare Car Loans Processing Fee of All Banks 2021

Bank Processing fee as % of loan amount Minimum and Maximum processing fee
HDFC Bank 1.50 % Min.₹ 2,500 - Max. ₹ 5,000
SBI 0.20 % Min.₹ 500 - Max. ₹ 10,000
ICICI Bank 2.00 % Min.₹ 3,500 - Max. ₹ 8,500
Axis Bank Nil Min.₹ 3,500 - Max. ₹ 5,500
IndusInd Bank 5.00 % Min.₹ 2,500
Kotak Bank Nil Min.₹ 3,300 - Max. ₹ 4,750
PNB Nil Nil
Union Bank of India Nil Min.₹ 0 - Max. ₹ 1,000
Central Bank of India 0.50 % Min.₹ 2,000 - Max. ₹ 20,000
Andhra Bank 1.00 % Min.₹ 1,000 - Max. ₹ 1,000
IDBI Bank Nil Min.₹ 2,500 - Max. ₹ 2,500
Federal Bank Nil Min.₹ 1,500 - Max. ₹ 2,500
Bank of India 0.25 % Min.₹ 1,000 - Max. ₹ 5,000
Bank of Maharashtra 0.25 % Min.₹ 15,000 - Max. ₹ 15,000
Corporation Bank 1.00 % Min.₹ 1,000 - Max. ₹ 1,000
Indian Bank 0.22 % Min.₹ 0 - Max. ₹ 10,000
Bank of Baroda 0.75 % Min.₹ 2,500 - Max. ₹ 10,000
OBC 0.25 % Min.₹ 1,000 - Max. ₹ 1,500
United Bank of India Nil Nil


Car loan helps you fulfil the dream of owning a desired car without bothering much about the car's soaring prices. Banks today offer custom-fit Car Loans with even 100% financing on select vehicles, with flexible repayment tenure and pocket-friendly EMI so that the finance does not become a deterrent in owning your dream car. There are costs and charges associated with the auto loans like rate of interest, processing fee, prepayment and part payment charges among others. The fee and charges of auto loans vary from Bank to Bank, and even within a bank charges vary from one car category to another depending upon the car loan product type.

Types of Fee & Charges

Car loans consist of certain fees and charges. Some of the main fee and charges associated with this loan are mentioned below:

  • Rate of Interest: Car loan interest rate is the cost at which car loan lenders offer car loans to the borrowers based on their eligibility. Currently, car loan interest rate ranges between 8.70% to 20.00%.
  • Processing Charges: Car loan processing fee is a one-time charge to be paid by car loan borrowers to get the loan processed. The processing fee varies from Bank to Bank and is to be paid separately as it is not deductible from the loan amount. Car loan processing fee on new cars begins from ₹ 250, whereas, for used car loans, processing fee begins from, ₹ 250. Some banks even charge a NIL processing fee on car loan, for instance, Axis Bank, Federal Bank.
  • Preclosure Fee: Pre-closure or foreclosure fee on an auto loan is the amount charged by the lender when one repays the loan entirely before the end of the tenure. Preclosure of auto loan lowers the interest expenses for borrowers whereas it reduces the interest income for the Bank. The Bank charges the preclosure fee on the car loan to compensate for the interest loss. Some banks allow foreclosure without any charges, while others levy a certain charge on pre-closing the loan. The pre-closure fee of the Bank lies between Nil and 5%.
  • Part Pre-payment Charges: Part pre-payment refers to a situation wherein a customer pays in advance a certain share of his car loan before the actual due date. It also helps in reducing the interest burden. Part-payment reduces the interest income for the Bank, and the Bank charges a certain penalty against it known as pre-payment charges.
  • Charges for late payment of loans: This charge is levied on the customer when he fails to pay back EMI amount of the auto loan on the due date. There are no fixed late payments for all the banks the cost hovers around 2% per month on the outstanding instalment.
  • Miscellaneous charges: There are certain miscellaneous charges as well like, Stamp Duty, Service charges, Swap Charges, Bounce Charges, Car loan cancellation charges, GST on loan, Renewal fees, Other government taxes, Levies, etc.


What is the processing fee for a car loan?

The processing fee is the amount to be paid by car loan borrowers to get the loan processed. It is either a fixed amount or a certain per cent of the loan amount. Currently, SBI offers the lowest car loan processing fee of 0.20%. In addition to that, the Bank of India offers car loans at the lowest processing fee of ₹ 500, whereas SBI charges the lowest processing fee, i.e., 0.20% of the car loan amount.

How is the finance charge calculated on a car loan?

Finance charges over the loan can be computed by multiplying the Monthly Payment Amount by the Number of Payments, minus the Amount Borrowed. This will give the Total Amount of Finance Charges that you can expect to pay. Formula for the same is listed as follows:
Car loan Finance charge: Number of payments * Monthly payment amount - Amount borrowed

How do I end my car loan early?

You can end your car loan early by either prepaying or part paying the loan. Pre Closing a car loan means paying off the borrowed loan amount in full before the loan tenure ends. Part-paying a car loan on the other hand, denotes that you pay a part of the borrowed loan amount in order to reduce the interest and the EMI liability. While part paying and foreclosing are easy options to end car loans easily and early, it must be noted that banks usually charge a foreclosure of prepayment fee to let you avail this facility. Prepayment charges on car loans ranges from Nil to 5%.

Which finance is best for car loans?

The best finance for car loan is one that offers the lowest car loan rates. Currently, the lowest car loan rates of top banks are as follows:

Bank NameLowest Car Loan Rate
Kotak Bank6.50 %
Bank of Baroda7.25 %
Central Bank of India7.25 %

Car Loan Reviews 4.3/5  by 29 customers
MyLoanCare Service
Banks Service
Sellamuthu P, Namakkal
Reviewed on 08th Sep 2018
4 / 5 stars
HDFC Bank Car Loan Availed in Aug 2018

Fast processing, easy documents collection, interest rate is reasonable, repayment options need to iRead more...

Nimish Goswami,
Reviewed on 19th Jul 2018
5 / 5 stars
HDFC Bank Car Loan Availed in Jul 2018

Mr. Sudhir Kumar helped so much and has great knowledge about market.Read more...

Sinto Jacob, Trichur
Reviewed on 23rd May 2018
5 / 5 stars
HDFC Bank Car Loan Availed in May 2018

applied car loan through myloancare. it was fast processing and got the amount without any delayRead more...

Shiv Machaiah, Bangalore
Reviewed on 16th Mar 2018
5 / 5 stars
Axis Bank Car Loan Availed in Jan 2017

My Loan Care person was quite helpful and gave information in detail. Read more...

Arnav, Ghaziabad
Reviewed on 07th Jan 2018
4 / 5 stars
SBI Car Loan Availed in Dec-18

I got fast processing on my application. All charges were normalRead more...

Krishna Yadav, Guwahati
Reviewed on 30th Nov 2017
3 / 5 stars
ICICI Bank Car Loan Availed in Oct-18

Got over 9% interest which was okay. There was a delay in disbursalRead more...

Mohamed Yunus, Pondicherry
Reviewed on 22nd Nov 2017
5 / 5 stars
HDFC Bank Car Loan Availed in Nov 2017

Good and fast service, door step documents collection.

jagmal singh makwana, Banswara
Reviewed on 02nd Nov 2017
5 / 5 stars
HDFC Bank Car Loan Availed in Oct-17

HDFC Bank finance is good. I like good service and fast processing.Read more...

Notification ×
  • Home Loan

    Home Loan at all-time low rates starting at 6.65%. Cashback of up to ₹ 1,000.

    Apply Now
  • Personal Loan

    Instant Personal Loan starting at 10.25% with Cashback of up to ₹ 1,000 .

    Check Offers
  • Gold Loan

    Instant Gold Loan starting at 9.50% with Cashback of up to ₹ 500

    Apply Now
  • Loan Against Property

    Best Loan Against Property Offers starting @ 7.20%. Cashback of up to ₹ 1,000*.

    Apply Now
  • Business Loan

    Collateral Free Business Loan Rates starting at 14.00% with Overdraft facility.

    Apply Now
  • Fixed Deposit

    AAA rated FDs with returns as high as 6.95%.

    Invest Now
Car Loan News - Jun 2021
  • 2021-06-23 : Muthoot Fincorp acquires 54% stake in Paymatrix
    Gold loan company Muthoot Fincorp has acquired a 54% stake in Hyderabad-based fintech startup Paymatrix by buying out existing investors as part of its added focus on the digital payments segment. Muthoot Fincorp has around 2 million customers in gold loans, retail loans, small business loans, affordable housing, two-wheeler and used-car loans, money transfer, foreign exchange, insurance sales, and wealth management, through its 3,600 branches.
  • 2021-06-21 : BharatPe FY21 revenue jumps over six times to Rs 700 crore
    In the financial year 2020-21, BharatPe has witnessed a huge jump in its revenues. With the pandemic forcing more and more people and businesses to use digital transactions, it has helped the start-up earn a revenue of over Rs 700 crores, compared to just Rs 110 crores in 2019-20. The company gives small-ticket fully unsecured loans, which majorly includes personal loans, along with two-wheeler loans, car loans and other small loans, averaging at Rs 75,000 to its merchant members. The company also saw an increase in the number of merchants from 24 lakhs to 60 lakhs along with the rise in transaction value from 10 crores a month to 2.7 crores a month.
  • 2021-06-16 : Ujjivan Small Finance Bank collaborates with MoEngage
    Ujjivan Small Finance Bank has collaborated with customer engagement platform MoEngage to provide digital banking services in remote areas of the country. The aim is to build a wide presence of the bank with customers in the unserved regions through digital services.
  • 2021-06-15 : Indian Overseas Bank declared a profit of Rs 831 crore
    IOB closed the last fiscal with a net profit of Rs.831 crore as against a net loss of about Rs.8,527 crore. The total income for the year ended 31.03.2021 stands at Rs.22,525 crore as against Rs.20,766 crore for FY20. IOB plans to come up with Prompt Corrective Action to focus on loan recovery, low-cost deposits and less capital consuming advances.
  • 2021-06-14 : IDFC First Bank’s helping hand for the covid-affected families of employees
    To help the families of employees who lost their lives due to covid, IDFC First Bank is offering compensation of upto 4 times of the CTC along with a salary of two years. Along with that, the bank is also wavering the loans of such employees to reduce the burden on the employees’ family.
*Terms and conditions apply. Credit at sole discretion of lender, which is subject to credit appraisal, eligibility check, rates, charges and terms. Information displayed is indicative and collected from public sources. Read More
Please wait while your information is being processed...