10 Best Banks for Car Loans in India

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.

  1. Amount of loan
  2. Time period within which the loan is to be paid off
  3. Income or salary

Related: If you’re looking for loan calculator and EMI rates, read this post first.

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

Best Car Loan Rates in IndiaBank 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
NRI 25 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.

Loan amount

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.

Interest rate

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.

Maximum loan

Type of Vehicle Amount
Two wheeler 1.00 lakhs
Four Wheeler 50 lakhs
Second Hand Vehicle 10 lakhs

Loan Interest

Product Amount
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.

Interest rates

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.

Loan interest

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.

Interest rates

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.

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Mani Karthik

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3 responses to “10 Best Banks for Car Loans in India”
  1. Mani Karthik

    Just ask any one who works there Mohit. Easy way to know.

  2. Mohit Singla

    Sir, Do you know any indian platform where i can submit my car loan leads and get money after Sales.

    Also i know a site cashkaro.com what he is doing i don’t know. How they are getting money ?

  3. Anand

    Which bank provides the lowest rate for car loan less than 10 Lakhs?

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