A car loan could be useful if you are looking forward to owning your dream vehicle or upgrading your existing one. For those planning to buy their first car, the wide range of borrowing options offers suitable financing options.
The best part is that most of the leading lenders, from State Bank of India to HDFC Bank, are offering customised loans to meet the needs of customers from different income groups. Car loans in India can be availed at interest rates starting at 8.45% per annum. The repayment tenure can extend up to 8 years. Depending on the lender, a loan could cover up to 100% of the car's on-road cost.
Car loan interest rates may be fixed or floating in nature. A fixed interest rate does not change during the loan tenure. Fixed interest rates remain unaffected even after a revision in the interest rates by the lender.
On the contrary, a floating interest rate represents a rate that is constantly adjusted in response to shifting financial market trends.
Latest Car Loan Interest Rates Comparison 2025
Here is a comparison list of some of the leading car loan options for 2025, highlighting the terms and initial interest rates:
| Name of the Bank | EMI for Rs 1 lakh for 7 years | Interest Rate (p.a.) | ||
|---|---|---|---|---|
| State Bank of India | "Rs 1 | 614 onwards" | 9.10% p.a. onwards | |
| HDFC Bank | "Rs 1 | 629 onwards" | 9.40% p.a. onwards (Rack Interest) | |
| Punjab National Bank | "Floating: Rs 1 | 584 onwards Fixed: Rs 1 | 634 onwards" | "Floating: 8.50% p.a. onwards Fixed: 9.50% p.a. onwards" |
| Axis Bank | "Rs 1 | 629 onwards" | 9.40% p.a. onwards | |
| Bank of India | "Rs 1 | 596 onwards" | 8.75% p.a. onwards | |
| Karnataka Bank | "Rs 1 | 611 onwards" | 8.88% p.a. onwards | |
| IDBI Bank | "Floating: Rs 1 | 599 onwards Fixed: Rs 1 | 619 onwards" | "8.80% p.a. onwards (floating) 9.20% p.a. onwards (fixed)" |
| Canara Bank | "Rs 1 | 581 onwards" | 8.45% p.a. onwards | |
| ICICI Bank | "Rs 1 | 614 onwards" | 9.10% p.a. onwards | |
| Indian Overseas Bank | "Rs 1 | 589 onwards" | 8.60% p.a. onwards | |
| South Indian Bank | "Rs 1 | 596 onwards" | 8.75% p.a. onwards | |
| Federal Bank of India | "Rs 1 | 609 onwards" | 9.00% p.a. onwards | |
| Union Bank of India | "Rs 1 | 581 onwards" | 8.45% p.a. onwards | |
| Bank of Baroda | "Fixed: Rs 1 | 611 onwards Floating: Rs 1 | 617 onwards" | "Fixed: 8.80% p.a. onwards Floating: 9.15% p.a. onwards" |
| Karur Vysya Bank | "Rs 1 | 627 onwards" | 9.35% p.a. onwards |
Eligibility For Obtaining a Car Loan
The eligibility criteria for obtaining car loans may vary from bank to bank. The standard criteria are as follows:
- Applicants must be between the ages of 18 and 75
- A net monthly income of at least Rs 20,000 is required.
- A minimum of one year of employment with the current employer.
- Must be self-employed or salaried, working for a private enterprise or a government agency.
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