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  • Car Loan Interest Rates 2019

    There are several lenders who offer car loans in India. The interest rates for the car loans in India start at as low as 7.05% 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 9.00% - 9.70% Rs.1,609
    ICICI Bank 9.30% - 12.85% Rs.1,624
    Indian Overseas Bank 9.15% Rs.1,617
    Jammu Kashmir Bank 11.25%* Rs.1,725
    Canara Bank 8.80% - 9.45% Rs.1,599
    UCO Bank 15% Rs.1,930
    Allahabad Bank 8.85% - 11.10% Rs.1,601
    HDFC Bank 9.10% - 15.50% Rs.1,642
    Syndicate Bank 9.10% - 9.35% Rs.1,614
    Karur Vysya Bank 9.55% - 10.65% Rs.1,637
    South Indian Bank 9.50% Rs.1,634
    IDBI Bank 9.30% - 9.90% Rs.1,624
    Yes Bank 9.75%* Rs.1,647
    Karnataka Bank 9.25% to 10.50% Rs.1,622
    Federal Bank of India 9.15% Rs.1,617
    Corporation Bank 9.50% - 10.00% Rs.1,634
    Punjab and Sind Bank 8.95% Rs.1,606
    City Union Bank 14.50% Rs.1,902
    Tamilnad Mercantile Bank 10.45% - 11.70% Rs.1,683
    Punjab National Bank 8.90% - 9.35% Rs.1,604
    Union Bank of India 9.05% Rs.1,611
    Oriental Bank of Commerce 9.05% - 9.15% Rs.1,611
    Andhra Bank 7.50% Rs.1,534
    Central Bank of India 7.05% Rs.1,512
    Lakshmi Vilas Bank 8.10% Rs.1,564
    United Bank of India 8.95% - 9.00% Rs.1,606

    Updated on - 20 Nov 2019

    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 8.95% Up to Rs.75 lakh Rs.500 to Rs.20 lakh
    Bank of Maharashtra 9.1% to 11.1% Up to 36 months of salary or pension As applicable
    Union Bank of India 9.10% Up to Rs.125 lakh 0.5% of loan amount Max: Rs.15,000
    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 9.30% to 9.90% Rs.1,000
    Axis Bank 9.05% to 11.30% Rs.1 lakh onwards Rs.3,500 to Rs.5,500
    Andhra Bank 9.45% Max: Rs.25,000 to Rs.50 lakh For Loan for women borrowers: Up to Rs.5 lakh 1% of loan amount Min: Rs.1,000 Max: Rs.25,000
    State Bank of India 9.00% to 9.70% Up to 48 times of monthly income Rs.1,000 to Rs.1,500 + GST
    Jammu And Kashmir Bank– Fixed Rate 9.85% to 10.35% Up to 3 times net annual income or 36 months net monthly salary 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 9% to 9.65% 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 9.15% 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 9.65% Up to Rs.200 lakh 0.23% of loan amount Max: Rs.10,236
    Bank of Baroda 8.95% onwards Up to Rs.100 lakh 0.5% of loan amount Max: Rs.10,000
    Bank of India Car Loan 9.50% Individuals-Up to Rs.50 lakh Companies-Up to Rs.100 lakh Rs.500

    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

    • Toyota Finance Car Loan
      "Really cool loan"
      0.5 5.0/5 "Blown Away!"
      My car loan was taken from Toyoto finance because the interest rate is very less and the process is very easy. They have provided the loan within two days. Interest rate was 9.99% and the processing fee was nil. I have chosen the tenure period of 5 years. I have made the down payment of Rs. 10 lakhs. Total cost of the car is Rs. 23 lakhs in that i got the loan amount of Rs. 13 lakhs. I'm paying the EMI amount of Rs. 28000.
      Was this review helpful? 0
      , bangalore
      Reviewed on Nov 18, 2019
    • ICICI Bank
      ICICI Bank Car Loan
      "Very much happy"
      0.5 5.0/5 "Blown Away!"
      I have gone for a car loan in ICICI BANK, they have approved and sanctioned the loan within 24hours based on my savings account experience. So far, I have completed 9months and the total tenure is 3years. The interest rate is reasonable. They waived off the processing fee since a Privilege customer.
      Was this review helpful? 3
      , chennai
      Reviewed on Nov 15, 2019
    • Cholamandalam Finance Car Loan
      "Best Service"
      0.5 5.0/5 "Blown Away!"
      I have taken car loan which was taken through cholamandalam finance .This was referred by car showroom dealer and the car model was Maruti Suzuki Swift.The rate of interest and the processing fee was nominal .The agent gave all the information about the loan process and within 4 days got the loan amount.
      Was this review helpful? 6
      , pune
      Reviewed on Nov 12, 2019
    • SBI Car Loan
      "Fast approval loan"
      0.5 5.0/5 "Blown Away!"
      Taken my car loan 4 months back. I have bought the loan amount of Rs. 10 lakhs and they have sanctioned the loan immediately and the documentation process was simple and good. Within 1 day, they have processed the loan. They have provided me a interest rate of 8% and i have chosen the duration of 120 months.
      Was this review helpful? 6
      , hyderabad
      Reviewed on Nov 12, 2019
    • SBI Car Loan
      "Low Interest rates"
      0.5 5.0/5 "Blown Away!"
      Bought my car loan from State bank of India its because of less interest rate when i compared with others. I got the loan amount of Rs. 3 lakhs and i haven't paid any down payment. I have paid the EMI amount of Rs. 10000 per month. I have selected the tenure period of 3 years.
      Was this review helpful? 4
      , new delhi
      Reviewed on Nov 10, 2019
    • Kotak Car Loan
      "Good Loan Service"
      0.5 5.0/5 "Blown Away!"
      My car loan was taken from Kotak Mahindra and i never had a chance to speak with their customer care because the amount is auto deducted from my account. Based on the eligibility, kotak mahindra bank has given me a car loan. The provided interest rate is nominal for me.
      Was this review helpful? 1
      , bangalore
      Reviewed on Nov 10, 2019
    • SBI Car Loan
      "Good Service"
      0.5 4.0/5 "Great!"
      I have state Bank Of India car loan,the rate of interest was very nominal .I have got the loan amount sanctioned on time without any delay .Each and every details was clearly shared by the agent .I have submitted the required documents and i am comfortable with the service.
      Was this review helpful? 1
      , chennai
      Reviewed on Nov 09, 2019
    • HDFC Bank Car Loan
      "Good 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 nominal .Each and every details about this loan was clearly shared by the agent.I have got the loan amount on time without any hassle .This was a paperless approval and i am comfortable with the service so far.
      Was this review helpful? 1
      , gurgaon
      Reviewed on Nov 09, 2019
    • IDBI Car Loan
      "Reliable and affordable"
      0.5 5.0/5 "Blown Away!"
      I have taken a car loan from IDBI bank and from the day one , I didn't face any issue and they are very responsive. Earlier my friend used their services and he recommended me and i tried it then it work it out. Within 1 day, they have sanctioned the loan and the interest rate is affordable.
      Was this review helpful? 4
      , nellore
      Reviewed on Nov 07, 2019
    • Kotak Car Loan
      "Good bank to apply for a car loan "
      0.5 5.0/5 "Blown Away!"
      On 5 years before I was taken a car loan with KOTAK MAHINDRA BANK, I got a chance to apply through showroom. The amount which was provided 2L tenure period of 2 years. Rate of interest was nominal and processing fee of 3K. I use to get a remainder message on time. Now I closed the loan and received NOC letter as well. For an EMI paid for 7890 rupees.
      Was this review helpful? 6
      , chittoor
      Reviewed on Nov 04, 2019
    • Axis Bank Car Loan
      "Best Service"
      0.5 4.0/5 "Great!"
      I am using Axis Bank car loan which was directly taken through Bank.Still this loan is active,The card model was of 2019 and it was Maruti Wagon R,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 and so far completed 6 EMI.
      Was this review helpful? 8
      , kochi
      Reviewed on Nov 04, 2019
    • HDFC Bank Car Loan
      "Excellent "
      0.5 5.0/5 "Blown Away!"
      Recently, I availed a car loan from HDFC BANK because I like this bank and all transactions are done with them. They have given me so many options on the net banking for the pre approved loan which is good but this time, have approached the executive directly and I bought a MARUTI SWIFT new car. I have paid nearly 2L as down payment. The interest rate is 9.25%.
      Was this review helpful? 4
      , visakhapatnam
      Reviewed on Nov 03, 2019
    • IndusInd Bank Car Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      One year before I have taken a car loan from INDUSIND BANK which was applied through showroom. The loan amount was sufficient and tenure period of 5 years. Once all verification done they have sanctioned the amount within one week. The rate of interest was nominal only. The car model which I bought is HYUNDAI.
      Was this review helpful? 4
      , coimbatore
      Reviewed on Oct 31, 2019
    • HDFC Bank Car Loan
      "Good bank"
      0.5 5.0/5 "Blown Away!"
      I had chosen my car loan from HDFC. When i was bought the car, my friend is working in HDFC so he only recommended me and the showroom people also had a tie up with HDFC only. One of my friend already took HDFC car loan so i took it from them. They have offered me a interest rate which is nominal. I pay the EMI amount of Rs. 8000.
      Was this review helpful? 3
      , bangalore
      Reviewed on Oct 30, 2019
    • HDFC Bank Car Loan
      "Interest rates can be reduced"
      0.5 5.0/5 "Blown Away!"
      HDFC people are transparent on the loan service and whatever they said, they have sanctioned the same. There is no hidden charges. They explained about the processing fee, interest rates everything at the initial stage very clearly. I did a little survey and i found that HDFC people are genuine so i got the car loan from HDFC. The process was well managed right from the day 1 and end of the loan. They were behaved very professionally.
      Was this review helpful? 4
      , pune
      Reviewed on Oct 29, 2019
    • SBI Car Loan
      "Good Service"
      0.5 4.0/5 "Great!"
      I have taken a car loan with SBI on 11 months before which was suggested by my friend who he is an agent. EMI paying for 11,600 rupees. They have given for 7 lakhs and 13 thousands tenure of 7 years. Within one week loan got sanctioned. The car model is TATA Nexon.
      Was this review helpful? 12
      , goalpara
      Reviewed on Oct 28, 2019
    • Axis Bank Car Loan
      "Best service"
      0.5 5.0/5 "Blown Away!"
      I had a Pre-approved car loan with AXIS Bank, according to my salary I was eligible for Rs. 7 lakhs and rate of interest is 10% but I took only Rs.3.5 lakhs with the interest rate of 9.5% after insisting them to reduce. I took loan before 1 year and opted for the model Maruthi suzuki Celerio. The documents required was only 3 months salary slip and the Aadhar copy.
      Was this review helpful? 6
      , imphal
      Reviewed on Oct 26, 2019
    • SBI Car Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      From SBI taken a car loan on 2 months before, through showroom suggested for this loan. With interest of 9.5% nominal. They have given for 5 lakhs tenure period of 7 years. IDV of 5.5 lakhs with some discounts given for 5 lakhs. For a processing fee of 2 thousands.
      Was this review helpful? 11
      , hyderabad
      Reviewed on Oct 23, 2019
    • Sundaram Finance Car Loan
      "Good Loan Service"
      0.5 4.0/5 "Great!"
      Purchased the car loan from Sundaram Finance. In the year of 2016, i took this loan. Interest rates are nominal in Sundaram. I got the loan amount of Rs. 5 lakhs and i have done the down payment of Rs. 2 lakhs. I have already closed the loan because the tenure period is only 2 years.
      Was this review helpful? 8
      , hyderabad
      Reviewed on Oct 23, 2019
    • HDFC Bank Car Loan
      "Good Response from HDFC"
      0.5 5.0/5 "Blown Away!"
      HDFC car loan was actually referred by my friend. I purchased the loan amount of Rs. 6.5 lakhs in that i made a down payment of Rs. 2 lakhs. Processing fee was Rs. 2000 approximately. I have chosen the tenure period of 7 years. I have been paying the EMI amount of Rs. 10500 per month.
      Was this review helpful? 7
      , bangalore
      Reviewed on Oct 23, 2019
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