Car loan interest rates in India vary from bank to bank (Unlike personal loans. See top banks offering personal loans for NRIs here.). These rates are determined by the bank and are frequently updated from time to time. Let’s take a look at different interest rates provided by banks in India today and what are the banks that offer the best interest rates. As such it’s not possible to give an accurate analysis but interest rates are determined on the following factors.
- Amount of loan
- Time period within which the loan is to be paid off
- Income or salary
Related: If you’re looking for loan calculator and EMI rates, read this post first.
In this article…
Best banks for car loans in India
Here is a list of some of best car loan interest rates available in India as of today.
1. Bank Of India Star Vehicle Loan Scheme
Bank of India offers loans for the purchase of 2 wheelers, four wheelers and second hand vehicles too. Here salaried employees, Professionals, Self-employed are all eligible for loan. NRI’s can also avail but it has to be taken with the resident Indian. Companies, Partnership Firms, Proprietary concern can also apply but HUF is not eligible for this loan.
Maximum limit of loan
|Type of Vehicle||Loan limit|
|Indian Vehicles||25 lakhs|
|Foreign vehicles||75 lakhs|
|Companies and corporate entities||100 lakhs|
Rate of interest
|Type of Vehicle|
|New Vehicle-maximum repayment within 7 years||Base Rate Plus 0.45% presently 10.65 % ,p.a at monthly rests|
|Second Hand Vehicle-maximum repayment within 3 years||Base Rate Plus 1.25% presently 11.45 % p.a at monthly rests|
|Two wheelers-maximum repayment within 5 years||Base Rate Plus 4.00% presently 14.20 % p.a at monthly rests|
2. SBI Car Loan Scheme
SBI car loan scheme offers loans for the purchase of new passenger cars, Multi Utility Vehicles (MUVs) and SUVs. You can make the payments within a period of 7 years with no advance EMI and low interest rates. The interest is calculated on daily reducing balance and applicants can also avail the optional life cover.
Rate of interest
|Tenure||Rate of interest|
|All tenures||0.95% above Base Rate, i.e. 10.95% p.a.|
|Net annual income|
|Up to 10 lakh||LTV 85% of ‘On Road Price’ of car (includes registration, insurance and Extended Warranty/ Total Service Package/ Annual Maintenance Contract/ cost of accessories)|
|More than 10 lakh||85% on “ex-showroom price” or 80% on “On-road price”, whichever selected by the borrower|
3. Canara Mobile Loan Scheme from Canara Bank
This is a good vehicle loan scheme for two wheelers, four wheelers and used cars. All salaried, business and professionals are eligible for this loan. Companies, Partnership Firms, Proprietary concern can also apply but HUF is not eligible for this loan.
For the purchase of new car, Canara bank will provide you a loan up to 90% of the on road price.
For new vehicles, bank will provide loan up to 90% of the total value inclusive of invoice value, life tax, registration charges, insurance premium and other accessories.
For second hand vehicles not older than 5 years it provides 75% of the agreed price or 75% of the value of the car, as assessed by an automobile engineer or Rs.6 lakh whichever is lower.
For two wheelers the salaried officials get 80% of the total value inclusive of invoice value, life tax, registration charges, insurance premium and other accessories or to the extent of 50% of their annual net income in the immediate previous year, whichever is less.
For non-salaried officials get 75% of the total value inclusive of invoice value, life tax, registration charges, insurance premium and other accessories or to the extent of 50% of their annual net income in the immediate previous year, whichever is less.
|Tenure||Rate of intrest|
|Minimum 10% margin & repayment period of more than 36 months||10.70%|
|Minimum 10% margin & repayment period of 36 months or less||10.70%|
|Minimum 50% margin irrespective of repayment tenure||10.70%|
4. Punjab National Bank’s Car Loan Rates
Punjab National Bank offers loans for the purchase New Car, Multi Utility Vehicle (MUV)/ Sports Utility Vehicle (SUV) and even old vehicles which are not older than 3 years. Individuals with salary of 20000 and more can apply for loans and even the income of the spouse or parent can be added. Even business concerns, corporates as well as non-corporates are also eligible for this loan.
In the case of new vehicle repayment of the loan with interest must be made in 84 Equated Monthly Installments. While old vehicles loan amount with interest is to be in 60 Equated Monthly Instalments. From the year 2014 the base rate of the loan is 10.25%.For car loans you can choose a floating interest rate or fixed interest rate as per your choice
|Floating rate of interest||Interest|
|With collateral security up to 7 years||BR+0.25%, presently, 10.50%.|
|For less than 3 years||BR+1.00%, presently, 11.25%|
|For 3 years and above||BR+1.50%, presently, 11.75%|
|Fixed rate of interest|
|Up to 7 years||BR+0.40%, presently, 10.65% (Fixed with a reset clause of 3 years)*|
5. Cent Vehicle Car Loan Scheme from Central Bank of India
The Central Bank of India offers loans for the purchase of new two wheeler or four Wheeler like Car, Jeep, Utility Vehicle, SUV, electric car. All salaried individuals between the age of 18-65 years can apply for this loan. Even corporates or business concerns can also apply for this loan. No personal guarantee is needed up to 5 lakhs. Individuals earning an annual income up to Rs.5.00 lakh the Net Take Home Pay/Income should not be less than 35% of Gross Monthly Salary/Income.
|Type of Vehicle||Amount|
|Two wheeler||1.00 lakhs|
|Four Wheeler||50 lakhs|
|Second Hand Vehicle||10 lakhs|
|Two wheeler/Four Wheeler||Base Rate + 0.40%|
|Four Wheeler||Base Rate + 1.50%|
|For 36 month repayment period in fixed rate||Base Rate + 0.40%|
6. Allahabad Bank’s Car Loan Rates
The Allahabad Bank offers loans for the purchase of new vehicle or second hand vehicles not more than three years. This loan is available for salaried professionals, retired individuals, firm or companies. If the loan is above 20 lakhs there is a requirement of a mortgage of a property or a guarantee. The repayment of the loan can be availed for maximum time of 84 months in case of individuals and 60 months in case of firms, companies.
For pre-owned cars it’s available for a maximum time of 60 months. Loan is offered for a new vehicle is 15% of the cost of vehicle on Road which includes onetime registration + first time Road tax & insurance charges etc. For pre-owned vehicles it is fixed at o 85% of the “Agreed Purchase Price” or 60% of the Valuation of the Vehicle, whichever is lower.
|Type of vehicle||Rate of interest|
|New vehicle||BR + 0.50% (i.e. 10.70%)*|
|Pre-owned vehicles||BR + 0.75% (i.e.10.95%)*|
7. IDBI Bank’s Car Loan Scheme
IDBI Bank offers you loans for cars, SUV and high end bikes. Loans are offered to salaried and self-employed professionals. High end bikes costing up to 1.2lakhs can also be availed. Loans can be repaid in period of 7 years and can be paid in easy installments. They are easy to avail and processing of these loans are done quickly. Eligibility of this loan is 18-70 years and they should have an annual income of 180000.
|For All Loan Amounts||10.60% (BR+0.35%)|
|Auto Loan Combo Offer For Existing Home Loan Borrowers||0.25% concession on Auto Loan ROI (Card Rate) subject to Base Rate|
8. Axis Bank’s Car Loan Rates
Axis bank offers attractive interest rates on Car Loans and they are easy to avail. They are available up to 1 lakh for a period of 1-7 years. Loans can be availed by salaried and self-employed individuals, proprietorships, HUF, Partnership firms, Limited Liability Partnership Firms, Trusts, Societies and Companies. Car loans are offered at an interest of 11.25% and is available for people who have been employed for up to 1 year. They should have an income of at least 2.4 lakh annually and they are required to submit their ITR too.
9. Federal Bank Car Loan Rates
Federal Bank offers hassle free car loans at very attractive interest rates. These loans are offered to four wheeler, two wheeler as well as used cars. For women loan applicant’s special discounts are also offered. Loans can be availed for new vehicles for 84 months and used vehicles up to 60 months. You can choose loans on floating or fixed rate basis.
Personal Car Loan (floating rates) Base Rate + 1.10% to 2.10%
Personal Car Loan (fixed rates) 11.65% to 13.15%
10. Vijaya Bank Car Loan Rates
Vijaya bank offers loans for purchase of cars and two wheelers. It is offered to individuals within the age group of 21 and 70 years. Loan is given to Permanent Employee of State/Central Govt., Public/Joint Sector Undertaking, Private Establishment or Reputed Company. Pensioners as well as self-employed professionals are entitled for the car loan. Applicants are entitled to 85% of the cost/invoice of new vehicle while 70% of the market value of used vehicle. The loan is availed for a period of up to 84 months. The interest on loans is Base Rate+ 0.55 = 10.65% p.a.
Check out home loan rates from top banks in India.
What are your plans?
Drop in comments below.