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  • Car Loan Interest Rates 2020

    There are several lenders who offer car loans in India. The interest rates for the car loans in India start at as low as 8.30% p.a. Based on your credit rating, you can avail a car loan which finances up to 100% of the on-road price of the car. The EMIs on your car loan can be as low as Rs.1,512 per month.
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    Car Loan Interest Rate Comparison for All Banks with Lowest EMI for 7 Years

    Name of the Bank Interest Rate (p.a.) Lowest EMI per lakh for 7 years
    State Bank of India 8.65% - 12.10% Rs.1,591
    ICICI Bank 9.30% - 12.85% Rs.1,624
    Indian Overseas Bank 8.70% Rs.1,617
    Jammu Kashmir Bank 11.25%* Rs.1,725
    Canara Bank 8.50% - 11.05% Rs.1,584
    UCO Bank 8.60% Rs.1,589
    Allahabad Bank 8.30% - 9.75% Rs.1,601
    HDFC Bank 9.50% - 10.25% Rs.1,642
    Syndicate Bank 9.10% - 9.35% Rs.1,614
    Karur Vysya Bank 9.45% - 10.55% Rs.1,637
    South Indian Bank 12.15% - 13.15% Rs.1,773
    IDBI Bank 9.20% - 9.80% Rs.1,624
    Yes Bank Contact the bank -
    Karnataka Bank 9.09% - 10.94% Rs.1,613
    Federal Bank of India 9.25% Rs.1,617
    Corporation Bank 8.50% - 9.00% Rs.1,634
    Punjab and Sind Bank 8.70% Rs.1,606
    City Union Bank 14.50% Rs.1,902
    Tamilnad Mercantile Bank 10.35% - 11.60% Rs.1,683
    Punjab National Bank 9.00% Rs.1,609
    Union Bank of India 8.60% - 8.70% Rs.1,611
    Oriental Bank of Commerce 8.30% - 8.75% Rs.1,574
    Andhra Bank 8.80% Rs.1,534
    Central Bank of India 9.00% - 9.15% Rs.1,609
    Lakshmi Vilas Bank 9.95% Rs.1,658
    United Bank of India 8.60% - 8.75% Rs.1,606

    Updated on - 21 Feb 2020

    Car Loan Interest Rate
    Car Loan Interest Rates

    Types of Car Loan Interest Rates - Fixed and Floating

    Car loan interest rates can be fixed or floating in nature. A fixed interest rate refers to a rate which remains constant throughout the loan tenure. Factors like market fluctuations do not affect fixed interest rates. On the other hand, a floating interest rate is a type of rate that keeps getting modified as per changing trends in the financial market.

    The differences between the two types of rates are explained in the table given below:

    Fixed interest rate Floating interest rate
    Interest rate is higher Interest rate is lower
    EMIs will remain constant EMIs will change according to MCLR changes
    Comes with lower risk Comes with higher risk
    Easy to prepare budgets with these rates Tough to maintain budgets as rates keep changing
    Offers security to borrowers Offers savings to borrowers
    Good for a short loan tenure (3 to 10 years) Good for a long loan tenure (20 to 30 years)
    • Fixed interest rates: When the financial market is not performing too well, borrowers generally look at fixed interest rates. You can ideally fix an interest rate for your auto loan as per your convenience. It is wise to go for a fixed interest rate if you feel that there may be an increase in the interest rates anytime soon or if you feel that the financial market may not go down lower than a particular level.
    • Floating interest rates: These rates are cheaper than fixed interest rates. Floating rates change according to changes in market trends. When the base rate or the MCLR changes, a floating interest rate gets affected. Hence, when the rate goes up, your car loan EMIs may increase and this can be a hassle for you. However, when the rate goes down, you can enjoy savings over a long period. The main drawback related to floating interest rates is that you cannot stick to your personal financial plans effectively as the rates can change from time to time.

    New Car Loan Interest Rates Comparison Offered by Top Lenders

    Name of the Lender Interest Rate (p.a.) Loan Amount Processing Fee
    Central Bank of India 9.00% - 9.15% Up to Rs.75 lakh Rs.500 to Rs.20 lakh
    Bank of Maharashtra 9.35% - 10.10% No upper limit 0.25%
    Union Bank of India 8.60% - 8.70% Up to Rs.125 lakh 0.25% to 0.50% of the loan amount
    Allahabad Bank 8.8% to 11.05% Up to 3 times of monthly income/salary 0.50% of loan amount Max: Rs.8696
    IDBI Bank 8.85% - 9.45% Up to Rs.25 lakh -
    Axis Bank 9.05% to 11.30% Rs.1 lakh onwards Rs.3,500 to Rs.5,500
    Andhra Bank 8.80% Up to 70% of net salary 1% of loan amount
    State Bank of India 8.65% - 12.10% Up to 48 times of monthly income Rs.1,000 to Rs.1,500 + GST
    Jammu And Kashmir Bank– Fixed Rate 11.25% Rs.50 lakh 0.5% of loan amount Min: Rs.500
    Jammu And Kashmir Bank Car Loan – Floating Rate 9.6% to 10.1% Up to 3 times net annual income or 36 months net monthly salary 0.5% of loan amount Min: Rs.500
    Canara Bank Car Loan 8.50% - 11.05% Up to 90% of the car's value 0.25% of loan amount Min: Rs.1,000 Max: Rs.5,000
    Federal Bank Car Loan 9.25% Up to 100% of the car's ex-showroom price Rs.1,500 to Rs.2,500
    Yes Bank Car Loan 9.25% onwards Up to Rs.500 lakh Up to 1% of loan amount or Rs.10,000, whichever is lower
    Indian Bank Car Loan 8.85% - 9.20% Up to Rs.200 lakh 0.23% of loan amount Max: Rs.10,236
    Bank of Baroda 8.65% - 10.40% Up to Rs.100 lakh 0.5% of loan amount Max: Rs.10,000
    Bank of India Car Loan 8.60% - 9.20% Rs.200 lakh 0.25% of loan amount

    Used Car Loan

      Lenders have different interest rates set for used car loans which depend on a lot of factors such as the age of the vehicle, loan tenure, etc. Get to know more about Pre-owned auto loans.

    • Credit Score – If you have a credit score of above 750, lenders are likely to offer you a car loan at a low interest rate. This is because a healthy credit score gives an indication to the lender that lending to you is less risky since you have been sincere about your past repayments as indicated by your score. So, if you want a lower interest rate on your car loan, it is a good idea to keep your credit score at healthy levels. Having a good credit score may also fetch you additional benefits such as quick approvals, pre-approved offers, etc.
    • Repayment Tenure - The repayment tenure you choose for your car loan will impact your interest rate. If you choose a longer tenure, your EMIs will be lower but you will be paying higher interest over the loan tenure. On the other hand, if you choose a shorter tenure, though the EMIs will be higher, you will be able to clear the loan sooner. Lenders will typically charge a lower interest rate on the car loan if you choose a shorter tenure simply for the fact that the loan will be cleared faster.
    • Loan Amount – The amount of car loan that you avail will affect the interest rate charged on your car loan. If you opt for a higher loan amount, you may get a lower interest rate and vice versa. This will, however, vary from lender to lender.
    • Relationship with the lender – Lenders with whom you have a good relationship, in terms of payments and other transactions, may offer car loans at lower interest rates. Hence, before you approach other lenders for car loans, ensure that you check the interest rates offered by your existing lender.
    • Income – If your income is on the higher side, you may enjoy the benefit of a lower interest rate as a higher income indicates higher repayment capacity.

    FAQS on Car Loan Interest Rates

    Can I negotiate with the lender for lower interest rates on my car loan?

    If you have a good credit score, higher income, and a good relationship with the bank, you can negotiate for a lower interest rate on car loans. However, this will solely lie at the discretion of the bank whether to honour the request or not.

    Will the interest rate on car loans be fixed or floating?

    Lenders offer both fixed and floating rates of interest on car loans. As the names suggest, fixed interest rates would mean that the interest rate will be fixed throughout the loan tenure, and floating interest rates would mean that the interest rate will vary based on different factors. Before you avail a car loan, check with the lenders what kind of interest rates they offer and pick the one that suits your requirements.

    I have a credit score of 700. Will it affect my car loan eligibility or the interest rates I pay on my car loan?

    When you apply for a car loan, the first thing that lenders look for is your credit score. Most lenders prefer lending to someone with a credit score above 750. With your score, it may be a bit difficult for you to get a car loan and if you do manage to get one, you may be charged a higher rate of interest.

    Will I get a lower interest rate if I make a higher down payment?

    If you make a higher down payment, you will need to avail a lesser amount as a car loan. In such cases, you may be able to get a lower interest rate since you will be repaying the loan quicker.

    Does any lender offer special interest rates on car loans for women borrowers?

    Yes. There are some lenders who offer a concession on car loan interest loans for women borrowers. One such bank is State Bank of India (SBI) which offers an interest rate that is lower than the one offered to other borrowers. Currently, the car loan interest rate is 9.60% for male borrowers while for women borrowers it is 9.55% for new cars. However, these special interest rates are only applicable to borrowers who are eligible for the Loyalty Car Loan Scheme.

    Does the type of car affect the car loan interest rate?

    The interest rate on a car loan is not directly affected by the type of car but may depend on the cost of the car. For example, luxury cars may have a lower interest rate as the amount of loan tends to be higher. Having said that, some lenders may charge a higher interest loan on higher loan amount availed.

    Will my car loan interest rate be lowered if I make a prepayment?

    Yes. If you make a prepayment, there are chances that the lender will offer you a lower interest rate because when you make a prepayment, the overall loan amount reduces. However, before you prepay your loan, understand the process completely as there may be some penalty that lenders will charge you. Also, whether you should make a prepayment or not will depend on factors such as the interest rate, stage of loan payment you are at, etc.

    How can I get a car loan with a lower interest rate?

    If you have a high credit score (above 750), make a higher down payment, choose a shorter repayment tenure, and have a steady source of income, you can negotiate with the lenders to offer you a lower interest rate on a car loan. Most lenders will be happy to acknowledge your request. However, before you negotiate with other lenders, make sure you check with your existing lender. As they are already aware of your transaction history, there are high chances of them acknowledging your request.

    Should I go for a fixed or floating rate of interest?

    If you choose a car loan with a fixed interest rate, the interest that you will be paying will remain unchanged throughout the loan tenure. However, if you go for a floating rate of interest, the interest that you will be paying may be higher or lower based on the increase or decrease in the interest rate. A fixed interest rate is recommended if you feel that there are chances of the interest rate increasing in the future and you do not want to take any risks.

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    Car Loan Interest Rate Reviews

    • Kotak Car Loan
      "Late fee & cheque bounce high interest rate need to decrease"
      0.5 5.0/5 "Blown Away!"
      I have taken a car loan from KOTAK Bank and the loan amount was Rs. 4L i have made a down payment of Rs. 1.25L. The rate of interest was okay and i am paying EMI 9100 with the tenure of 3 years. For cheque bounce they are charging Rs. 900 for the delay payment charges Rs. 1000. I am not getting any reminder, i have purchased car model Maruthi ECHO.
      Was this review helpful? 1
      , pondicherry
      Reviewed on Feb 18, 2020
    • Corporation Bank
      Corporation Bank Car Loan
      "Easy loan approval"
      0.5 5.0/5 "Blown Away!"
      I have taken a car loan from CORPORATION Bank. The loan amount was Rs. 3L and i made down payment of Rs. 70k and the rate of interest was nominal. I have purchased a car model HYUNDAI. The documentation was good and given to the bank itself. Customer service was good, within a week i got this loan.
      Was this review helpful? 0
      , bangalore
      Reviewed on Feb 17, 2020
    • review Car Loan
      "Worst ever bank and unprofessional support"
      0.5 0.5/5 "Unacceptable"
      Bank when need to give loan, they will commit fake things, but in reality they re very unprofessional. They are having guns at their support and charging fake charges by various medium. Never go with this bank else you are going to pay to much for nothing.
      Was this review helpful? 0
      , ahmedabad
      Reviewed on Feb 17, 2020
    • HDFC Bank Car Loan
      "Satisfied loan"
      0.5 4.0/5 "Great!"
      HDFC bank is ready to provide the full loan amount for my car loan since i have a savings account with HDFC its easy to do the repayment also. I got the loan amount of Rs. 4.5 lakhs and they have offered me a interest rate of 11%. The amount is automatically deducted from my account.
      Was this review helpful? 0
      , jaipur
      Reviewed on Feb 16, 2020
    • TVS Credit Services Car Loan
      "Easy loan approval"
      0.5 5.0/5 "Blown Away!"
      I have taken a car loan from TVS CREDIT for the past 1 month back. The loan amount was Rs. 1.30L and i have made a down payment of Rs. 1L. I have taken a used car and the card model was 2013. The service and an interest rate was good they have given 9.5%. The loan got approved by 3 days and processing fee was deducted by Rs.5K.
      Was this review helpful? 0
      , mysore
      Reviewed on Feb 14, 2020
    • Axis Bank Car Loan
      "Easy loan approval"
      0.5 4.0/5 "Great!"
      I have taken a car loan from AXIS Bank and the loan amount was Rs. 9L. Standard rate of interest and i am paying Rs. 16k with the tenure of 5 years. I have made a down payment of Rs. 2.50L and i have purchase car model Mahendra. I given all my documents to the showroom itself.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Feb 14, 2020
    • Kotak Car Loan
      "Very Good Service"
      0.5 5.0/5 "Blown Away!"
      I have taken car loan through Kotak Mahindra Bank .The process was very smooth and not yet faced any issues .The car model was 2015 and the name of the car is Maruti Suzuki Celerio .The rate of interest and the processing was not an issue. Everything is good to me so far and i am satisfied with the service .
      Was this review helpful? 1
      , jaipur
      Reviewed on Feb 13, 2020
    • Axis Bank Car Loan
      "Convenient Loan"
      0.5 5.0/5 "Blown Away!"
      Dealer from the car showroom offered me a car loan from Axis bank. Documentation process was fine and they have provided me a nominal interest rates. I have selected the duration of 5 years and i pay the EMI amount of Rs. 16000. The EMI amount is automatically deducted from my account directly.
      Was this review helpful? 0
      , new delhi
      Reviewed on Feb 13, 2020
    • Sundaram Finance Car Loan
      "Good service"
      0.5 5.0/5 "Blown Away!"
      I have taken car loan directly through Sundaram finance .The car model was Maruti Suzuki Swift Dzire .The rate of interest and the processing fee was minimal.This loan was sanctioned on time without any hassles .I am paying the premium on EMI system and not having any penalty, if pay the premium on delay .
      Was this review helpful? 0
      , kochi
      Reviewed on Feb 12, 2020
    • Cholamandalam Finance Car Loan
      "Interest rate was high"
      0.5 4.0/5 "Great!"
      I have taken a car loan from CHOLAMANDALAM FINANCE. The loan amount was Rs. 5.80L initially i paid Rs. 75k now i completed this loan. I have purchased Maruti Swift Dzire and all the documents given to the executive and i received this loan within 3 days, rate of interest was high 17%.
      Was this review helpful? 1
      , kochi
      Reviewed on Feb 12, 2020
    • SBI Car Loan
      "Good service"
      0.5 3.0/5 "Satisfactory"
      I have taken car loan directly through SBI. The car model was 2019 and the name of this car was Volkswagen Vento .The rate of interest and the processing fee was very high and there was no processing fee .I have got all the details about the loan process very clearly and paying the premium on EMI basis .I have closed this loan successfully without any discrepancy.
      Was this review helpful? 2
      , kochi
      Reviewed on Feb 10, 2020
    • ICICI Bank Car Loan
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      I have taken car loan directly through ICICI Bank.The vehicle name is Hyundai I 10 and the rate of interest and the processing fee was nominal .This loan was taken through bank directly and everything was good to me so far.I am paying the premium on EMI basis .According to my concern the process was very convenient.
      Was this review helpful? 0
      , surat
      Reviewed on Feb 08, 2020
    • HDFC Bank Car Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      I have taken a car loan through HDFC Bank directly .The vehicle name is Hyundai Verna and the rate of interest and the processing fee was medium .This loan is still active and will be closing within 9months .This loan was sanctioned immediately without any hassle. I am happy with the service.
      Was this review helpful? 0
      , indore
      Reviewed on Feb 07, 2020
    • HDFC Bank Car Loan
      "Very Good Service"
      0.5 5.0/5 "Blown Away!"
      I have applied for car loan directly through HDFC bank.This loan is still active and the vehicle name is Tata Nexon.The rate of interest and the process fee was medium .The loan got sanctioned on time .The process was fine and I really got good cooperation from bank end.
      Was this review helpful? 2
      , meerut
      Reviewed on Feb 06, 2020
    • HDFC Bank Car Loan
      "Easy loan approval"
      0.5 5.0/5 "Blown Away!"
      My car loan was purchased from HDFC Bank because that time this is the only company who were ready to provide the car loan to me. I have made the down payment of Rs. 2 lakhs and the total cost of the car is Rs. 6 lakhs. . I have purchased Maruti Flair.
      Was this review helpful? 1
      , noida
      Reviewed on Feb 06, 2020
    • HDFC Bank Car Loan
      "Best Service"
      0.5 5.0/5 "Blown Away!"
      I have taken car loan directly through HDFC Bank. The rate of interest and the processing fee was very less .I have got this loan on time without any hassle.The loan details was clearly explained by the agent and its still active and there was no drawbacks faced.
      Was this review helpful? 3
      , bangalore
      Reviewed on Feb 01, 2020
    • IndusInd Bank Car Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      I have taken car loan through INDUSIND Bank directly.The loan amount was 3.5L for the tenure of 5 years . The rate of interest and the processing fee are nominal .This loan was sanctioned on time without any difficulties. The process was smooth and quick .I am satisfied with the service so far.
      Was this review helpful? 3
      , kolkata
      Reviewed on Jan 31, 2020
    • Axis Bank Car Loan
      "Good Loan Service"
      0.5 5.0/5 "Blown Away!"
      Based on my eligibility, they have provided me a pre-approved car loan from AXIS bank and the loan amount taken was Rs. 8L. My salary account with this bank even though they have collected all my documents. They have offered me a interest rate of 19% and the processing fee was Rs. 3000. I paid the down payment of Rs. 1.50L.
      Was this review helpful? 1
      , kochi
      Reviewed on Jan 30, 2020
    • review Car Loan
      "Good service"
      0.5 4.0/5 "Great!"
      I have taken car loan through Shriram City union finance direclty .The rate of interest was nominal and the car name was Maruti Suzuki Swift Dzire .This loan is still active and availed the loan amount of 5 lakhs for the tenure of 4 years .The loan process was clealry shared by the agent wiothout any discrepancy .
      Was this review helpful? 0
      , chennai
      Reviewed on Jan 29, 2020
    • ICICI Bank Car Loan
      "Good loan "
      0.5 5.0/5 "Blown Away!"
      I took ICIC Bank car loan directly through Bank. Still this loan is active, the car model was 2015. I have got this car loan on exact time frame . Each details about this loan process was clearly shared by the agent. The rate of interest was nominal 10.25% and so far paying Rs.4302 as an EMI.
      Was this review helpful? 3
      , kolkata
      Reviewed on Jan 29, 2020
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