Car Loan - With interest rates as low as 7.25% p.a.
| Bank Name | Car Loan Interest Rates | Processing Fee |
|---|---|---|
| Bank of Baroda Car Loan | 7.25% p.a. onwards | 0.50% of loan amount up to a maximum of Rs.10,000 plus GST |
| Canara Bank Car Loan | 7.30% p.a. onwards | 0.25% of the loan amount, subject to a minimum of Rs.1,000 and a maximum of Rs.5,000 |
| Axis Bank Car Loan | 7.45% p.a. onwards | Minimum of Rs.3,500 and maximum of Rs.7,000 |
| Federal Bank Car Loan | 8.50% p.a. onwards | Contact the bank |
| SBI Car Loan | 7.70% p.a. onwards | New Car: Nil (offer valid until 31 January 20) |
| ICICI Bank Car Loan | 7.90% p.a. onwards | 0.5% of the loan amount |
Updated on 16 Sep 2021
| Car Loan Details | |
|---|---|
| Interest Rate (Monthly reducing balance) | 7.25% onwards |
| Processing Fees | Depends on the bank |
| Loan Tenure | 1 year to 8 years |
| Pre-closure Charges | Varies with bank |
| Guarantor Requirement | Varies with bank |
Note:The interest rates will differ from one bank to another. This makes it critical to compare the interest rates before choosing a loan to apply for.
It is vital that you maintain a good credit score when you apply for a car loan. Apart from the loan getting approved quicker, lenders will offer low interest rates if your credit score is good. No security or collateral is required when availing a car loan. The car acts as the security.
| Key USP | Bank | Features |
|---|---|---|
| Loans for Luxury Cars | HDFC |
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| 100% On-Road Financing | ICICI Bank |
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| Designed for professionals and agriculturalists with no Income Proof | State Bank of India |
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| Small Loans | Axis Bank |
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| Free Personal Accident Insurance | Federal Bank |
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| Low-Interest Rates for Used Cards and New Cars | Canara Bank |
|
The car loan eligibility criteria can be different for different banks. The common criteria are as follows:
To prove your eligibility, you’ll need to provide certain documents. Though this too is specific to different lenders, the common documents will be:
| Identity proof (any of the following) |
|
| Address proof (any of the following) |
|
| Proof of income |
|
Note: Make sure you check exactly what documents the lender wants. The documents required can change depending on your situation too. The documents required to take a used car loan are the same as above.
| Steps | Requirement | Inference |
|---|---|---|
| Apply for a car loan | Compare all offers available | To find the loan that offers you the highest loan amount and the most affordable interest rate |
| Submit Income Proof | Bank Statement (last 6 months) Pay-Slips (last 3 months) IT- Returns (last 2 years) | Lender wants to establish your ability to repay the loan |
| Submit Proof of Address and Identity | PAN Card, Voter’s ID, Aadhaar Card, Passport, etc. | Lender wants to establish your nationality, identity, and permanent address |
| Credit History | PAN Card | Lender wants to check your past credit records and establish if you can be trusted to make regular repayments |
| Information About Vehicle | Sales Receipts from the showroom from where the vehicle was purchased | Lender must confirm that the deal was affected as intended |
| Proof of Insurance and Driving License | Copies of the vehicle’s Motor Insurance and your Driving License | Lender must establish that all laws and protocols are followed with regards to the purchased vehicle. |
When it comes to a big purchase – for example a car, we often resort to loans for the financing of the same. Both personal loans and car loans are two of the biggest and most common financing options that are availed by consumers.
A personal loan can be used for any purpose. There are no bindings in the case of personal loans. However, car loans are particularly available for car purchases. To have a better understanding, you can check the pros and cons of both the products.
Pros:
Cons:
Pros:
Cons:
However, it is advised that you compare different loan products and then choose the one that suits your requirements.
The Equated Monthly Installments (EMIs) that you will pay will depend on a few key factors.
The higher the loan amount, the higher your EMI will be. Similarly, the shorter the loan tenure the higher the EMI. To find the best compromise between an affordable EMI and duration you should check out our car loan EMI calculator.
The following table explains the do’s and don’ts when choosing the right car loan:
| Do’s | Don’ts |
|---|---|
| Compare - BankBazaar.com can help you compare the various car loan options available to you. | Eligibility - Do not apply for a loan amount that exceeds your eligibility, as this will result in the rejection of your loan application. |
| What’s the Interest? – Choose a loan that offers you the best interest rate along with the loan amount you need. | Multiple Applications - Do not apply with multiple banks as this will have a negative impact on your credit score. |
| Keep it Simple – Choose the car before applying for the loan and make sure the cost of the car fits your budget. | If your application is rejected, don’t continue to keep apply at different banks. Chances of rejection will rise. |
| Hidden Fees and Charges - Sometimes what appears as obvious will have a hidden component. Be aware of the hidden fees and charges concerning the car loan. | Relying on the Dealership for loans - The loan that the dealer offers may not have the best interest rate. So, check the other options. |
| Special offers – There could be special offers available when you are applying for your loan. Make sure you take advantage of them | Don’t pick a car with a high service cost because you already have the EMI and the insurance premiums to pay. |
| Insurance – Check the insurance premium for the car as this is a recurring cost. |
According to financial experts, it is always recommended to opt for a short-term loan in case you have bad credit. Even though the monthly payments will reduce, the interest rates will be much higher for long-term loans. The interest rates are usually high in case you have bad credit, and long-term loans will further increase it. Negative equity is another risk that comes with long-term loans as well. Negative equity comes into effect when the value of the car is lower than the loan amount. The chances of the car needing repairs during the loan duration also increase. Over a duration of time, wear and tear occur and there are chances of major repairs which could increase the costs as well.
When it comes to car loans in India, in general, the following features and benefits are offered. Note that, the following is a generalized look at the advantages offered by car loans. Individually, car loan lenders may have highly customized and specialized offerings for their customer base.
When you want to receive funds to purchase the new or used car that you have been eyeing for a while, it is better that you opt for a pre-approved loan. To avail such a loan, you can follow a few steps to quickly receive the required funds.
To create a better credit profile, you should always pay your bills on time. If that is not possible then you can make timely payment of your bills at least 6 months prior to the loan application. If you pay your bills on time, it assures the lender that you will also repay the Equated Monthly Installments (EMIs) on time. This, in turn, will help you secure a loan easily.
When you take a car loan, you can repay it in equated monthly instalments (EMIs) till the end of the repayment tenure. However, if you decide to pay off the outstanding loan amount before your tenure ends, you will be foreclosing or prepaying your loan. The foreclosure/prepayment facility is offered by most lenders for a penalty fee though some lenders may allow you to foreclose/prepay your car loan without charging you any penalty.
You can foreclose your car loan if your income has increased and you wish to clear off your liability. It also takes away your burden of having to make monthly EMI payments. Foreclosing a car loan will release the hypothecation on the car and give you full ownership.
As stated above, some lenders may charge you a penalty on loan foreclosure. Hence, before you decide to foreclose a loan, it is a good idea to go through the clauses associated with it carefully.
If, after taking a car loan, you need quick or additional funds for purposes such as a wedding, home renovation, medical emergency, etc., you can get a top-up loan on your existing car loan. You can avail up to 150% of the car’s value as a top-up loan. Most lenders that offer a top-up on their car loans will require you to maintain a clear payment record for at least 9 months. The process to avail a top-up loan on your existing car loan is quick and requires minimal paperwork.
Some of the banks that offer top-up on their car loans are HDFC Bank, Axis Bank, ICICI Bank, and Kotak Mahindra Bank.
When you take a new loan to pay off the outstanding balance on your existing car loan, it is known as car refinancing. You can choose to refinance your car loan if you wish to replace your current loan with better features such as low interest rates, extended repayment tenures, etc., or simply to change the terms of your current loan. The most common reason why people refinance their car loans is to save money. When refinancing a car loan, you can avail a new loan that offers lower interest rates which, in turn, will save you money. You can also lower the equated monthly instalments (EMIs) by choosing a longer repayment tenure with a new lender through car refinancing.
Car refinancing is a good idea when there has been a drop in interest rates since you took the original car loan, your financial condition has improved, you are unable to bear the burden of high EMIs, and if you feel you did not get a good deal on your car loan the first time around. However, refinancing on a car loan does not make sense when you have already made a substantial repayment of your original loan, your car value has depreciated, the prepayment penalties are high, and when you have plans to apply for new loans in the future as refinancing may impact your credit score negatively.
In India, buying used cars are very popular. There are various finance options also available in case you wish to buy a pre-owned car. Most Non-Banking Financial Companies (NBFCs) and banks offer loans for pre-owned cars. However, various points must be considered before buying a used car on loan. It is important that you compare the interest rates offered by various banks and NBFCs before selecting one. The loan tenure must also be chosen wisely. Even though the EMI amount will reduce for longer tenures, the interest rates would increase. The rate of interest for used car loans range between 8.8% and 17%. It is vital that you check the processing fees that are being levied as well. Few NBFCs and banks charge a high processing fee.
If you have taken a car loan to purchase an Electric Vehicle (EV), you can now enjoy a tax rebate of Rs.1.5 lakh on the interest paid. This was announced in the latest Union Budget (2019-20) by Finance Minister Nirmala Sitharaman and is a part of the government’s efforts to stimulate the adoption of environment-friendly mobility solutions. If you have purchased an electric vehicle, you will be able to avail a benefit of about Rs.2.5 lakh during the entire term of the loan. The government has also slashed the tax rates on electric vehicles to 5% from the earlier 12%.
Financing and leasing are two methods through which people can get a new car. In both cases, the car owner/lessee would have to make monthly payments. The bank/leasing company would have a stake in the vehicle as well.
There are several differences between car leasing and car purchase through a loan. Listed below are some of the differences:
With the automobile industry expanding at a rapid pace and with more and more car manufacturers establishing their bases in India, buying a car has become a hassle-free procedure. Car prices in India vary depending on the segment of the car purchased and with the additional features provided by the manufacturer. BankBazaar offers a comprehensive list of car prices across various models of cars sold in India. Be it a hatchback, sedan, luxury sedan, SUV or MUV, we equip you with the necessary pricing information to help you decide on the right car suited for your needs and current financial situation.
Car dealerships in India are committed to providing quality services across all areas of car servicing and maintenance. Majority of the car dealers in India have tie-ups with the automakers to impart training to their technicians in maintenance, diagnostics, system check, etc. Staff training and expanding the facilities is a continuous process taken up by dealers to ensure that customers receive the best value for the money they pay. Right from the sale of brand-new cars and used cars to periodic maintenance and customer support, the dealership outlets offer a wide variety of services. Nowadays, most dealers list out their services online to ensure a seamless customer experience without requiring face-to-face interactions.
The maximum amount of loan that you can avail to buy a car will vary from lender to lender. Most banks offer financing up to 90% of the on-road price of the car but there are some banks such as HDFC Bank, ICICI Bank, etc., that offers financing for up to 100% of the car’s on-road price.
Yes, you can prepay the entire car loan and save on vital interest payments in the future. However, most banks will allow the pre-payment option after you have chalked off 6 months on your loan tenure. Plus, you will be expected to pay a small fee as pre-payment penalty that will be dependent on the leftover loan amount.
Unless otherwise specified, almost all small to medium sized cars, Commercial Vehicle Loan, Sports Utility Vehicles (SUV), and Multi Utility Vehicles (MUV) come under the purview of car loans available in India. However, as mentioned, refer to the loan brochure for exceptions to this rule.
Almost all car loan products available in India are secured loans, with the procured vehicle itself acting as the customary security. Most lenders in India will not insist upon any guarantors; however, if your annual income does not match up to the expected requirement, then you may be expected to sign-up a co-applicant and/or guarantor.
Repayment tenures usually range from 12 months to 84 months (1-7 years).
Just like with most loans, a high credit score above 750 is ideal. But you can still apply for a loan if your credit score is above 600. Remember, if your score is too low, your application may be rejected.
Yes. Some banks will offer lower interest rates to applicants with high credit scores. Likewise, borrowers with low credit scores will have to bear higher interest rates.
When you apply for a car loan, lenders will look for a credit score of at least 750. Below this score, lenders may be reluctant to lend to you as it indicates your low repayment capacity. Some banks may offer you a car loan despite your low credit score but they may charge a higher interest rate.
Before you apply for any car loan, ensure that you explore all the options available. Once you explore, you will get an idea about the benefits offered by various lenders on their car loans. Compare the benefits offered and pick a lender that fits your requirements. Whether it is a bank or a car dealership, pick the one that offers better interest rates.
Yes. Many top lenders such as SBI, HDFC Bank, ICICI Bank, etc., offer loans to buy used cars. These lenders offer car loans for up to 85% of the car’s value provided that the car is not more than 5 years old. Used car loans can be repaid in a maximum of 7 years.
One of the most important factors that lenders consider before offering you a car loan is your credit score. As stated above, a credit score of above 750 can fetch you lower interest rates and other benefits. The other factors that lenders look for when you apply for a car loan are your employment status, residence and job stability, income, debt-to-income ratio, etc.
The amount of EMI (equated monthly instalments) that you will be paying towards your car loan will depend on the interest rate, loan amount, and the repayment tenure you choose. You can calculate the EMI by using the EMI Calculator tool available on the BankBazaar website. For example, let us suppose that you avail a car loan of Rs.1 lakh at an interest rate of 12% for a tenure of 5 years. Using the tool, we calculated the EMI and found it to be Rs.2,224.
Making a higher down payment will mean that you will need to avail a lower loan amount to buy a car. When you avail a lower loan amount, there are chances that banks or lenders may offer you a car loan at lower interest rates. This is simply because if the loan amount is lower, the repayment will be quicker. So, though there is no hard and fast rule to how much down payment you should make, a higher down payment will ensure that your debt liability is lesser.
If your credit score is above 750, you can negotiate with the banks to offer you a car loan at a lower interest rate. Many lenders will let you negotiate on the interest rates since your high credit score is an indication of your high repayment capacity. Some lenders may also offer you a waiver on the processing fee if you have a good credit score.
Disclaimer*:
BankBazaar reserves the right to modify, add or discontinue the terms and conditions at any time without any notice.
Kia Seltos gets a fresh trim with the X-Line variant launch. Previewed at the Auto Expo of 2020, Kia launched the Seltos X-Line at the starting price of Rs.18.10 lakh for the diesel variant and Rs.17.79 lakh for the petrol variant. This car can be booked via Kia's website and dealer network. The Seltos X-Line model offers 1.5-litre turbo-diesel and 1.4-litre turbo-petrol engines. Seltos X-Line sports Indigo Pera leatherette upholstery in interiors and has ‘Xclusive Matte Graphite’ paint on the exterior. Also, it has ‘Xclusive Piano black’ (gloss black) finish on the front and rear skid plates, a shark-fin antenna, outside rear-view mirrors, faux exhaust on the rear bumper, and tailgate garnish.
6 September 2021
Powered by a 120hp, 1-litre turbo petrol engine, Hyundai has launched the i20 N line at a starting price of Rs.9.84 lakh in India. The racy car is available in four mono-tone and two dual-tone colour options. The complete black interior along with red highlights give it a racy look. There are 6 airbags, a rear-view parking camera, Tyre Pressure Monitoring System (TPMS), Electronic Stability Control (ESC), automatic headlamps, Vehicle Stability Management (VSC), and Hill Assist Control (HAC) as basic safety features. Also, the i20 N line has voice recognition enabled with an updated Bluelink app having 16 free over-the-air map updates.
3 September 2021
Tata Motors has introduced the Punch, the first SUV that is built on the Agile Light Flexible Advanced Architecture (ALFA-ARC). The car will make its debut during the festive season. The company claims that the SUV is for next-generation customers and comes with no compromises. The car comes with a high sitting position that allows you to drive the car anywhere. All the expected features are present in the Tata Punch. The SUV has a never-before-seen presence, great attention to detail, and delivers a fashionable, stylish, and dynamic urban SUV.
30 August 2021
In September 2020, the XT+ variant of the Harrier was launched by Tata Motors. However, the car was available only in the manual transmission variant. The company has now launched the XTA+ variant of the Harrier. The car will be available at a price starting from Rs.19.14 lakh. Apart from the Harrier, the XTA+ variant of the Safari has been launched at an ex-showroom price of Rs.20.08 lakh. Both models will be powered by a diesel engine. The Safari will rival the likes of the MG Hector Plus and Hyundai Alcazar, while the Tata Harrier will rival the likes of the Hyundai Creta and Kia Seltos.
19 August 2021
Tata Motors is looking to hike the prices of passenger vehicles from next week. The main reason for the increase in prices is the rise in the costs of materials such as steel. The company is looking to increase the prices of the Safari, Harrier, Nexon, and Tiago. According to the President Passenger Vehicle Business Unit of Tata Motors, the prices of previous metals and steel have increased significantly over the last one year. The increase in the prices has had a financial impact of about 8-8.5%. However, the company has passed on around 2.5%. Earlier in July, Maruti Suzuki increased the prices of the CNG variants and the Swift was increased by up to Rs.15,000.
31 July 2021
The facelift variant of the Hyundai Creta has been spotted testing. The car is expected to launch in late 2022 or early 2023. The current variant of the vehicle was launched in India in March 2020. The Creta has become the best-selling SUV in India. The new car looks very similar to the Hyundai Tucson. The new car is expected to come in both the petrol and diesel variants in the country. The car will compete against the likes of the Tata Harrier, MG Hector, Skoda Kushaq, and Kia Seltos.
30 July 2021
Land Rover has recently launched the facelifted version of the Discovery SUV in India and the price of the car starts at Rs.88.06 lakh (ex-showroom, India). The Discovery is available in 2 trims namely – Discovery and Discovery R-Dynamic. These are further categorised into 3 variants namely – S, SE, and HSE.
The new facelifted Discovery is offered in 3 engine options out of which 2 are petrol and one is diesel. The 2.0 litre four cylinder petrol engine churns out 300 hp of max power and 400 Nm of peak torque. The 3.0 litre six cylinder petrol engine, on the other hand, juices out 360 hp of max power and 500 Nm of peak torque. The diesel mill is a 3.0 litre inline 6 cylinder unit that churns out 300 hp of max power and 650 Nm of peak torque. All the engine variants are mated with a 8-speed torque converter automatic gearbox.
27 July 2021
Korean automaker Hyundai has finally lifted the veils off the Elantra N. the Hyundai Elantra N is performance version of the sedan which was long overdue. The car is based on the latest generation of the outgoing Hyundai Elantra sedan in the international market.
The current gen of the car, that is the seventh gen Elantra is yet to go on sale in India. Under the hood of the Hyundai Elantra N is a 2.0-litre, 4 cylinder, turbocharged petrol engine which churns out 276 hp of max power and 392 Nm of peak torque. The engine is mated with a 6-speed manual gearbox or an optional 8-speed wet dual clutch transmission system. The fore-wheel drive sedan can clock 0 to 100 kmph in just 5.3 seconds. The car also comes with electronically adjustable suspension system to further boost the performance.
26 July 2021
Mahindra has launched the new Bolero Neo in India at an introductory price which starts at Rs.8.48 lakh (ex-showroom). The new Bolero is a reworked TUV300 which has been placed in the line-up of the automaker as more upmarket variant of the Bolero range.
The car is powered by a 1.5 litre diesel engine that churns out 100 hp of max power and 260 Nm of peak torque. The engine is mated with a 5-speed manual gearbox and does not come with an automatic gearbox option at present. The car is available in 3 variants, namely the N4, the N8, and the N10. The prices for the N4 start at Rs.8.48 lakh, while the N8 and the N10 start at Rs.9.48 lakh and Rs.9.99 lakh, respectively. The prices mentioned here are ex-showroom prices.
24 July 2021
Ford is set to launch the latest entrant model of the Figo hatchback in India. The new Ford Figo is a petrol variant which comes with an automatic gearbox option. The car will get a 6 speed torque converter automatic gearbox which will be mated with the 1.2 litre petrol engine which is also found under the hood of the Ford EcoSport.
The engine churns out 96 hp of max power and 119 Nm of peak torque. The Figo was available in a similar combination earlier in 2015 wherein it was powered by a 1.5 litre four cylinder petrol and was mated with a dual-clutch automatic gearbox to make 110 horses. The facelifted variant replaced the gearbox with a torque converter unit. The new Ford Figo automatic will be locking its horns against the likes of the Maruti Swift and the Hyundai Grand i10 Nios.
23 July 2021
On 12 July 2021, Maruti Suzuki India announced that they have increased the prices of the Swift and CNG variants by up to Rs.15,000. According to the manufacturer, the increase in the prices was due to several input costs. The prices will be effective from 12 July 2021. Before the hike, the ex-showroom price of the Swift was between Rs.5,73 lakh and Rs.8.27 lakh. The Ertiga , Eeco, Wagon-R, S-Presso, Celerio, and Alto are available in the CNG variant and come with an ex-showroom price ranging between Rs.4.43 lakh and Rs.9.36 lakh.
17 July 2021
Hyundai has removed four variants of their Venue Turbo and two other diesel-powered SUV. However, the automobile company also launched two new trims called S(O) and SX(O) Executive.
The Turbo’s new entry will cost more by Rs.30,000 and the corresponding diesel variant will be priced by Rs.1.07 lakh more.
The SUV will still come with three engines as before which is two petrol and a diesel.
Hyundai Venue will be sold the prices between Rs.6.92 lakh and Rs.11.73 lakh which is the ex-showroom for Delhi price.
In May 2021, Hyundai Venue’s celebrated two years of its existence in India. To celebrate this achievement, the automobile company issued a few changes to the SUV’s variants, and discontinued its previous six variants, while simultaneously launching S(O) and SX(O) Executive.
15 July 2021
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