In this day and age, buying a car has become an absolute necessity for most middle-class families in India. However, it is not possible for most people to afford a car with their regular monthly income. This is one of the reasons why car loans are getting increasingly popular in the recent years. With a car loan, one can own a car simply by pay monthly instalments that fit within their budget. For many financial institutions in the country, car loan is a major product with a broad customer base.
With the huge increase in the number of takers for car loans, companies are improving their services rapidly. The processing time and loan disbursal time have come down significantly in the recent years. Most of the top banks in India take just about 24 to 48 hours to disburse the desired car loan amount. The quality of service has increased significantly too. These banks have also made it easy for customers to access loan information easily through the Internet. Among the range of financial institutions, here is a list of top 10 banks for car loan in India.
In terms of interest charges, this is one of the best car loan products available in the market right now. Union Bank of India car loan is available for both new cars as well as old cars. This loan can help fulfill your dream of owning car, and it comes with a flexible repayment term. Though this requires a guarantor to co-sign the loan amount, the range of benefits outweigh this minor downside. The application process is hassle-free, and it can be done simply by visiting the bank’s website. The notable features of Union Bank of India car loan are as follows.
| Eligibility | Minimum age 18 years and maximum age 70 years |
| Interest rate | Starts from 8.7% |
| Pre-closure charges | 2% on the average balance of the preceding 12 months |
| Processing fee | Waived till 31/3/2019 |
| Loan term | Up to 7 years |
| Loan amount offered | Up to 85% of the vehicle’s on-road price |
Among the public sector banks in the country, Central Bank of India is one of the oldest commercial banks. The bank has a range of financial products, and its car loan is one of the best in the market. The terms of the loan are quite flexible. For new cars, up to a maximum of Rs.75 lakh can be obtained as loan amount. People who wish to take this car loan can visit the bank directly and fill the application. Notable features of the loan can be listed as follows.
| Eligibility | Anyone between the ages of 18 to 65 years |
| Interest rate | Starts from 8.7% |
| Loan term | Up to 7 years |
| Loan amount offered | Up to 90% of the vehicle’s on-road price (loan amount up to Rs.20 lakh) |
HDFC is one of the largest private sector banks in India. In addition to car loan, HDFC also offers a range of services for its customers. HDFC car loan is one of the best in the market right now. The bank offers attractive interest rates and minimal documentation. The bank promises loan approval in just 30 minutes. One of the significant features of HDFC car loan is that it allows for complete paperless approval. Customers can access the information provided in the bank’s website and check their eligibility within minutes. Some of the key features of HDFC car loan are as follows.
| Eligibility | Anyone over age 21 years Maximum age is 60 years for salaried individuals Maximum age is 65 years for self-employed individuals |
| Interest rate | 9% to 10.25% depending upon on the vehicle |
| Pre-closure charges | Nil after 24 months |
| Documentation charges | Rs.600 per case |
| Loan term | Up to 7 years |
| Loan amount offered | Up to 100% of the ex-showroom price (depending upon vehicle type and models) |
As the country’s largest lender, the State Bank of India (SBI) offers a range of loan products for its customers. SBI car loan comes with plenty of unique features and aims to satisfy the requirements of its customers. The interest rate is one of the lowest in the industry, and the eligibility criteria that comes with this loan are pretty standard. One of the distinct features of SBI car loan is that there is no processing fee involved here. Moreover, there are no additional charges for pre-closure of loans. The key features of SBI car loan can be given in the following table.
| Eligibility | Anyone from age 21 to 60 years (salaried and self-employed) |
| Interest rate | 9.25% floating |
| Pre-closure charges | nil |
| Loan term | Up to 7 years |
| Processing fee | nil |
| Loan amount offered | Up to 85% of the on-road price |
India’s second largest public sector bank Punjab National Bank (PNB) offers some interesting benefits for car loans. Car loans offered by PNB comes with one of the lowest interest rate in the industry. Moreover, the loan tenure is also quite flexible for borrowers. The bank has also partnered with various car dealers and manufacturers to provide the best possible service to customers. Some of the notable features of PNB car loan are as follows.
| Eligibility | Individuals with minimum monthly income of Rs.20,000 Business corporations can also avail this loan |
| Interest rate | MCLR (8.15% for 1 year) + 0.95% (fixed) Floating interest schemes are also available. Floating rate varies based on the credit score of the individual. |
| Pre-closure/prepayment charges | Nil for floating interest rate 2% on the outstanding loan amount |
| Loan term | Up to 7 years |
| Processing fee | 1% of the loan amount (max. Rs.6,000) Waived till December 31, 2017 |
| Documentation charges | 1% of the loan amount (max. Rs.6,000) Waived till December 31, 2017 |
| Loan amount offered | Up to 85% of the vehicle’s on-road price |
IDBI is one of the top public sector banks in India. The bank offers different types of auto loans with attractive interest rates and features. The interest rate offered by this bank is one of the lowest in the country. With quick processing and easy disbursal, IDBI Bank car loan is worth looking at when you are searching for a bank to fund your dream vehicle. IDBI Bank car loan is available for both salaried and self-employed professionals. The documentation process required for availing the car loan from IDBI Bank is both simple and hassle-free. The top features of IDBI car loan can be given as follows.
| Eligibility | From 18 years to 70 years (both salaried and self-employed) |
| Interest rate | 9% for existing customers and 9.1% for new customers |
| Pre-closure charges | 1% of the outstanding loan amount |
| Processing fee | Waived during festival period |
| Documentation charges | As per actual cost |
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Oriental Bank of Commerce is one of India’s public sector banks that offer a range of loan products for customers. The bank offers car loan with many attractive features for customers. The affordable interest rates and flexible repayment terms offered by Oriental Bank makes it one of the best options to be considered when you are looking for a car loan. One of the best features of this loan is that there is no processing fee involved. Other key features of Oriental Bank of Commerce Car Loan can be listed as follows.
| Eligibility | Salaried or self-employed individuals Maximum age is 65 years for salaried individuals with pension. Age is no bar for business owners. |
| Interest rate | Up to 36 months - 10.20% Up to 84 months - 10.45% |
| Pre-closure charges | Nil |
| Loan term | Up to 7 years |
| Processing fee | Nil |
| Loan amount offered | Up to 85% of the vehicle’s on-road price |
Sundaram Finance is one of the leading non-banking finance companies in India. The company offers various financial solutions along with car loans. When it comes to car loans, Sundaram Finance offers fast and easy disbursal without any hassles. With attractive interest rates and easy repayment terms, Sundaram Finance is one of the best choices available in the market for car loans. The key features of this service can be provided as follows.
| Eligibility | Individuals (salaried and self-employed) between the ages of 18 and 65 |
| Interest rate | 9.75% to 11% (fixed) depending upon the type of the vehicle |
| Pre-closure charges | 3% of outstanding loan amount |
| Loan term | Up to 5 years |
| Loan amount offered | Up to 90% of the vehicle’s on-road price |
ICICI is one of the largest banks in India, and it offers a range of products and services for its customers. ICICI’s car loan comes with a range of attractive features and flexible repayment terms. The bank offers vehicle finance for both new cars as well as pre-owned cars. The interest rates are fixed and the monthly instalments can be calculated using the emi calculator in the official website. The website also provides plenty of information related to car loans and other services. Some of the notable features of ICICI car loan can be provided as follows.
| Eligibility | Anyone between 23 years to 70 years |
| Interest rate | 36 to 84 months - 10.75% 24 to 35 months - 12.25% Up to 23 months - 12.75% |
| Pre-closure charges | 5% of principal outstanding loan amount |
| Processing fee | Starts from Rs.2,500 |
| Documentation charges | Rs.250 |
| Loan term | Up to 7 years |
| Loan amount offered | Up to 100% of the car’s ex-showroom price |
Axis Bank is another top private sector bank in the country. In addition to car loan, the bank offers a range of loan products for its customers. Both existing and new customers can avail the car loan offered by Axis Bank. The bank promises quick processing and easy disbursal for car loans. Its official website offers extensive information about the terms of the car loan. The key features are listed as follows.
| Eligibility | 21 years to 70 years at loan maturity (salaried) 18 years to 75 years at loan maturity (self-employed) |
| Interest rate | Starts from 11% |
| Pre-closure/part payment charges | 5% of the principal outstanding |
| Processing fee | Rs.3,500 to Rs.5,500 |
| Documentation charges | Rs.300 |
| Loan term | Up to 7 years |
| Loan amount offered | 85% of the vehicle’s on-road price 95% of the ex-showroom price on select models |
The banks listed here are some of the best banks for availing car loans in India. In addition to these top 10 banks for car loan, there are many other financial service providers available in the market. With the advent of Internet, there is no shortage of information about car loans and other financial products. The sheer amount of information available on car loans could overwhelm you. However, you must choose the best car loan suitable for you by exploring all the options available. With proper research, you can easily narrow down the options to the best one suitable for your specific requirements.
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