Car Loan Interest Rates Comparison | Features, Eligibility & Documents

Even the journey of the thousand miles begin with one step so if you seeking one step, we are here for you. Today, buying your dream car has become easier because more and more lender is coming up with eye-catching pecuniary options. Now a person with the salary of Rs 20000 can also fulfill his dream of buying a car as now the lenders has provided the facility of EMI, which mean that the portion of interest and principal is add on to it each month from your pocket.

Note, the tenure for the maximum loan for a new cars is seven years, while for used cars it is 5 years. Any individual, be it salaried, self-employed, businessmen or professionals can avail a car loan from banks and non-banking finance companies (NBFCs) across India.

Car Loans Interest Rates

This is one thing that one always looks for and more interested to know before applying for the loan from different banks. Usually, the Interest rates are resolute based on the lending rates of the lender. Car loan interest rate can either be fixed or floating. With fixed rate, the rate of interest remains the same and the rate of the interest will changes when the loan is given on a floating rate. All floating rate car loans are subject to revision of MCLR by banks from time to time. The floating rate can thus be an add-up of the MCLR or the same. Check below to find out the interest rates of different lenders.

Table Showing Interest Rates, EMI and Others of Different Car Loan Lenders

Lenders LoanTenureInterest RatePer Lac EMIMax. Loan Amount Processing FeeForeclosure Charges
State Bank of India (SBI)┬áCar Loan7 years for new car 5 years for old car9.20%-9.25% p.a. for new car, 12.65% p.a. for old carRs. 1,619-1,622 for new car, Rs. 2,257 for old carUp to 85% of the on-road price for new car, Up to 2.5 times of net annual income for old car NIL for new car, 0.50% of the loan amount plus GST for old car
Minimum- Rs. 450 + GST
Maximum-Rs. 9,100 + GST
Nil
HDFC Bank
Instant Apply
7 years for new car, 5 years for old car11.50%-13.75% p.a. for new car,
14.50%-17.50% p.a. for old car
Rs. 1,739-1,860 for new car ,Rs. 2,353-2,512 for old carUp to 90%-100% of on-road price for new car,
Up to 80% of the valuation of old car, limited to 3-6 times of your net annual income
Rs. 2,825-5,150 for new car,
2% of the loan amount plus Rs. 200 or Rs. 5,200 whichever is lower for old car
3%-6% of the principal outstanding on a given date.
No foreclosure allowed before 6 months from the date of loan disbursement.
ICICI Bank7 years for new car,
5 years for old car
10.75%-12.75% pa. for new car
15.50% p.a. for old car
Rs. 1,699-1,806 for new car
Rs. 2,405 for old car
Up to 100% of ex-showroom price of new car
Up to 80% of the valuation of old car
Rs. 2.500-5,000 for new car
2% of the loan amount or Rs. 6,000, whichever is lower, for old car
5% of principal outstanding on a given date.
No foreclosure allowed before 6 months from the date of loan disbursement.
Axis Bank
Instant Apply
7 years for new car
5 years for old car
11.00%-12.00% p.a. for new car
14.50%-16.25% p.a. for old car
Rs.1,712-1,765 for new car
Rs. 2,353-2,445 for old car
Upto 85% of on-road price of new car
Upto 90% of valuation of old car
Rs. 3,500-5,500 for both new & old cars5%-10% of the principal outstanding after 180 days from the date of disbursement.
No foreclosure allowed before 6 months from the date of loan disbursement.
Kotak Mahindra Bank7 years for new car
5 years for old car
11.50%-13.50% p.a. for new car
15%-21% p.a. for old car
Rs. 1,739-1,846 for new car
Rs. 2,379-2,705 for old car
Upto 90% of the ex-showroom price of new car
Upto 90% of the valuation of old car
As applicable by the bank5.75% of the principal outstanding plus GST

Car Loan Eligibility Criteria

This means the amount of loan that you will get on purchase of your dream car. The eligibility criteria are different by different lenders and usually different for salaried, businessman and self employed people.

LimitationSalariedSelf-employed
Age  The age should be between 21-60 years Age.The age should be between 21-65 years Age.
IncomeA minimum annual income of Rs. 1, 80,000 is required.A minimum annual income of Rs. 1, 80,000 is required.
Job/Business StatusYou should have working experience of at least 2 years and should have minimum one year experience with current organization.If in business the minimum 2 years required for the ongoing business.

Factors Affecting Car Loan Eligibility

Monthly Income– Monthly salary or business income is an important factor that will decide the limit of your loan. If you have higher monthly income then you will get higher loan on that.

Age– Car loan eligibility is based on age as well. Even though the age criteria differs across different banks and NBFCs, but usually the lenders give loan to people with an age of 18-65 years

Car Value– The loan amount eligibility is depend  on the car’s road price (Ex-showroom price+RTO+Insurance+Accessories, if any). Banks will pay out car loan at about 85%-90% of the on-road price. If you are buying a used car, then the loan amount eligibility will be about 80% of the valuation of the vehicle as charged by the assessment officer appointed by the lender. But do not buy a car with over 4-5 years in use as most of the lenders will be unwilling to invest on such vehicles.

Car Model Type– Your loan amount eligibility can be prejudiced by the model you opt for. As car is a devalued asset, banks can give you a higher loan for a vehicle having a greater resale value as compared to the one with a lesser resale value.

Credit History– Credit history is also important fort the endorsement of your car loan application and following to its disbursal.  If you have a good earning but have poor credit history then also you will be not entitled for a car loan. So, keep in mind to maintain a good CIBIL score preferably 750 and above to get the car loan approved from most lenders.

Employment Status for Salaried– If you are a salaried professional, you must have worked for atleast 2 years with a year of experience with the existing employer for a smooth car loan approval.

Business Longevity for Self- employedSelf-employed professionals or businessmen all have to be in the same line of business for a minimum of 2-3 years to get the approval  for a car loan.

Relationship with Lender-Your and lender good  relationship will depend how much you will get loan at competitive interest rates.

Category of Your Employer-If you are working on topmost companies then your eligibility for approval will be increase vice versa

Documentation

ProofsSalariedSelf-employed
Age & Identity ProofPassport Copy/PAN Card/ Voter ID card, Photo Driving License with birth date (laminated, recent, legible)/Photo ration card with DOB/Employer certificate/ID/School/College Leaving CertificatePassport Copy/PAN Card/ Voter ID card, Photo Driving License with birth date (laminated, recent, legible)/Photo ration card with DOB/Employer certificate/ID/School/College Leaving Certificate
Income ProofForm 16 for last 2 years, Latest Salary Slip, 6-month bank statementIT returns for the last 2 years along with audited balance sheet, P&L account statement for 2 years, Shop & establishment act certificate / sales tax certificate / SSI registered certificate / copy of partnership
Residence ProofLatest Telephone Bill/ Electricity Bill/Property Tax Receipt/Passport/ Voter IDLatest Telephone Bill/ Electricity Bill/Property Tax Receipt/Passport/ Voter ID
Signature Verification ProofPassport copy/PAN CardPassport copy/PAN Card
Passport Size PhotographsApplicableApplicable

Features & Benefits

  • Funding available upto 80%-100% of ex-showroom or on-road price of the car
  • Loan amount available upto 80% of the valuation of old car
  • Easy Documentation
  • Fast Processing
  • Flexible Repayment Options
  • Hassle-free & Transparent Process
  • Quick Approval

How to Apply for Car Loan?

Approval of loan can be done either online or visiting the nearest branch.

The easiest method is to apply online. You just require to visit the official website of bank or NBFC. Apply for car loan on the link given then submit the required details along with a scanned copy of the relevant documents for the processing of your car loan application. Other way is that you have to visit the branch and submit the required documents. The moment you submit your details, the lender will start investigating all your details whether you are eligible for loan. If everything will be fine, your loan will be approved and your dream to buy car is fulfilled.

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