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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 - 16 Oct 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

    • ICICI Bank Car Loan
      "Good Loan Service"
      0.5 5.0/5 "Blown Away!"
      From ICICI, i got the car loan. From the showroom side, they have processed the loan with a good offer. The interest rate is 9.75% and there was no processing fee and i had made the down payment of Rs. 3 lakhs and the loan amount is Rs. 5 lakhs. Overall, the loan process was smooth.
      Was this review helpful? 1
      , bangalore
      Reviewed on Oct 14, 2019
    • Axis Bank
      Axis Bank Car Loan
      "Good"
      0.5 4.0/5 "Great!"
      I have taken a car loan with AXIS bank on 2 months before which I got a chance through showroom to apply for a loan. For the amount of 4 lakhs for the tenure period of 5 years. The rate of interest high 11%. They have sanctioned a loan by 10 days. There was processing fee detected for 6 thousands. The car name is Hyundai Centro.
      Was this review helpful? 1
      , saharsa
      Reviewed on Oct 14, 2019
    • HDFC Bank Car Loan
      "Excellent Loan Service"
      0.5 5.0/5 "Blown Away!"
      My car loan was purchased from HDFC. In TATA motors only HDFC loan service available. After i given all the papers, they have sanctioned the loan immediately. I took the loan amount of Rs. 6 lakhs and Through ECS i'm paying the ECS. I pay the down payment of Rs. 1.75 lakhs.
      Was this review helpful? 1
      , dindigul
      Reviewed on Oct 14, 2019
    • HDFC Bank Car Loan
      "Fine Loan Service"
      0.5 5.0/5 "Blown Away!"
      For my car loan, already 19 months got over by paying EMI still 31 months are pending. I took the car loan amount of Rs. 2.95 lakhs and they have offered me interest rate of 8%. I have been paying the EMI amount of Rs. 6430. Totally i have chosen the tenure period of 5 years.
      Was this review helpful? 1
      , hyderabad
      Reviewed on Oct 13, 2019
    • Axis Bank Car Loan
      "Excellent"
      0.5 4.0/5 "Great!"
      I made down payment directly to the showroom and the balance amount was borrowed with Axis Bank to purchase the car. The customer service is very good. The rate of interest is lowest among all the banks when I took the loan. Its been 5 to 6 years ago and the experience was very smooth.
      Was this review helpful? 1
      , kanpur
      Reviewed on Oct 12, 2019
    • SBI Car Loan
      "Cheap and best"
      0.5 5.0/5 "Blown Away!"
      SBI has provided me a cheap and best loan service so i bought the car loan with them. They sanctioned the loan in 3 days. The interest rates are 8.9% which is a nominal one. SBI car loan was closed 2 years before. I have fore-closure the loan for that they have not taken any charges.
      Was this review helpful? 3
      , agra
      Reviewed on Oct 11, 2019
    • Kotak Car Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      I have taken Car Loan directly through Kotak Mahindra Bank .The model of the vehicle is Hyundai I 10,I have got the loan amount on time ,I have got all the details about the loan process very clearly .I have got this loan on paperless approval.I am really satisfied with the service .
      Was this review helpful? 4
      , hyderabad
      Reviewed on Oct 10, 2019
    • SBI Car Loan
      "Floating interest rates"
      0.5 5.0/5 "Blown Away!"
      My car loan was taken from SBI its because of the floating interest rates. They have sanctioned the loan in 4 to 5 days. I took the loan 7 years back hence i have no idea about the processing fee and down payment. The interest rate was convenient for me. I have received the NOC letter as well once i closed the loan.
      Was this review helpful? 8
      , bangalore
      Reviewed on Oct 08, 2019
    • HDFC Bank Car Loan
      "Very Good Loan service"
      0.5 5.0/5 "Blown Away!"
      Purchased the car loan from HDFC and they have approved the immediately. I got the loan amount of Rs. 6.5 lakhs and they have offered me a interest rate of 9% and I'm paying the EMI amount of Rs. 11000 for the duration of 7 years. The EMI amount is automatically deducted from my account every month.
      Was this review helpful? 5
      , hyderabad
      Reviewed on Oct 06, 2019
    • Sundaram Finance Car Loan
      "Excellent"
      0.5 5.0/5 "Blown Away!"
      I have taken a car loan with SUNDARAM FINANCE through a showroom. An executive came and collected all the documents from my end and they have sanctioned a loan for 1 lakh 60 thousands for the tenure period of 3 years. The rate of interest was 18%. The car model is alto 2014 model.
      Was this review helpful? 1
      , erode
      Reviewed on Oct 05, 2019
    • SBI Car Loan
      "Excellent"
      0.5 5.0/5 "Blown Away!"
      From SBI I have taken a car loan on 5 months before which was processed through showroom. I have provided some required documents and they have sanctioned a loan within 2 days. The amount was sufficient for the tenure period of 5 years. The rate of interest and processing fee are nominal. The car model is Mahindra CUV300 it is around 12 lakhs.
      Was this review helpful? 8
      , itanagar
      Reviewed on Oct 04, 2019
    • YES Bank Car Loan
      "Good"
      0.5 5.0/5 "Blown Away!"
      I have a four wheeler loan from Yes Bank. I have already paid 18 months emi. Rate of interest is nominal as comparison to other banks. Yes Bank customer service is very good. Emi payment is very easy. Their charges are very good. I had so pay 1200 penalty for late payment.
      Was this review helpful? 5
      , kolkata
      Reviewed on Oct 04, 2019
    • ICICI Bank Car Loan
      "Good Experience"
      0.5 5.0/5 "Blown Away!"
      Purchased the car loan from ICICI and i applied in the month of April. HDFC is not disbursing the car loan and since i have salary account with ICICI, i have chosen them. They have disbursed the loan in 24 hours. The given interest rate is 9.5% approximately. I have been paying the EMI amount of Rs. 12000 and i select the tenure period of 60 months.
      Was this review helpful? 4
      , bhopal
      Reviewed on Oct 04, 2019
    • HDFC Bank Car Loan
      "Good "
      0.5 5.0/5 "Blown Away!"
      I am using HDFC BANK credit card since 2 years. I have a limit of 1.04L and am completely happy with that. I never converted the payments into EMI. The annual fee is applicable. I have been using the card for shopping and getting good reward points but have not redeemed till now.
      Was this review helpful? 8
      , hyderabad
      Reviewed on Oct 01, 2019
    • SBI Car Loan
      "Good"
      0.5 5.0/5 "Blown Away!"
      The services and rate of interest is good with State Bank of India interms of car loan. I have purchased Grand i10 in 2015, the loan process was very simple. They have provided me 80% funding and made down payment of 1L. The loan duration is 7years for 7L.
      Was this review helpful? 12
      , visakhapatnam
      Reviewed on Sep 28, 2019
    • review Car Loan
      "Good Experience"
      0.5 5.0/5 "Blown Away!"
      I took the car loan from Tata Motor Finance, per month I used to pay the emi amount around Rs.13,000. I have taken Rs.4 lakhs of loan for the duration of four years, that experience was good. Through dealer I completed the process, the documentation was easy through their field executives.
      Was this review helpful? 7
      , hyderabad
      Reviewed on Sep 27, 2019
    • HDFC Bank Car Loan
      "Excellent"
      0.5 5.0/5 "Blown Away!"
      I have taken a car loan with HDFC bank on 2 years before which was processed through a showroom. The amount was sufficient of 3 lakhs for the tenure period of 3 years. The rate of interest was nominal. The car model was Ertiga. On monthly payment is 7 thousands.
      Was this review helpful? 6
      , hyderabad
      Reviewed on Sep 26, 2019
    • SBI Car Loan
      "SBI Loan service is good"
      0.5 4.0/5 "Great!"
      My car loan was taken from SBI because the interest rate is less and the processing fee was nominal. They have not deducted any hidden charges. I applied the loan amount of Rs. 4.5 lakhs and they have sanctioned the loan in 2 days. I have been paying the EMI amount of Rs. 7500 for the tenure period of 7 years.
      Was this review helpful? 12
      , chennai
      Reviewed on Sep 25, 2019
    • Capital First Car Loan
      "Good Service"
      0.5 4.0/5 "Great!"
      I have selected the car loan from Capital First. When i bought the car, they only approached me hence i took the loan. I have taken the loan amount of Rs. 3.5 lakhs and i have chosen the tenure period of 4 years but within 6 months, i have pre-closed the loan with some charges. They charged me 3% of pre-closure charges.
      Was this review helpful? 6
      , bangalore
      Reviewed on Sep 25, 2019
    • Ford Finance Car Loan
      "Attractive Interest rate"
      0.5 4.5/5 "Excellent!"
      I took the car loan from Ford Credit they gave me least in the market around 7.99% for the loan amount of Rs. 5 lakhs. The on road price of the car is Rs. 7 lakhs and I paid down payment of Rs. 2 lakhs, there is no processing fee from the disbursement its a best part.
      Was this review helpful? 5
      , ghaziabad
      Reviewed on Sep 23, 2019
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