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 Loan	Tenure	Interest Rate	Per Lac EMI	Max. Loan Amount	Processing Fee	Foreclosure Charges
State Bank of India (SBI) Car Loan	7 years for new car 5 years for old car	9.20%-9.25% p.a. for new car, 12.65% p.a. for old car	Rs. 1,619-1,622 for new car, Rs. 2,257 for old car	Up 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 car	11.50%-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 car	Up 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 Bank	7 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 cars	5%-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 Bank	7 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 bank	5.75% 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.

Limitation	Salaried	Self-employed
Age	The age should be between 21-60 years Age.	The age should be between 21-65 years Age.
Income	A minimum annual income of Rs. 1, 80,000 is required.	A minimum annual income of Rs. 1, 80,000 is required.
Job/Business Status	You 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- employed–Self-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

Proofs	Salaried	Self-employed
Age & Identity Proof	Passport 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	Passport 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 Proof	Form 16 for last 2 years, Latest Salary Slip, 6-month bank statement	IT 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 Proof	Latest Telephone Bill/ Electricity Bill/Property Tax Receipt/Passport/ Voter ID	Latest Telephone Bill/ Electricity Bill/Property Tax Receipt/Passport/ Voter ID
Signature Verification Proof	Passport copy/PAN Card	Passport copy/PAN Card
Passport Size Photographs	Applicable	Applicable

Features & Benefits

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.