Five Best Vehicle Loan Options: Federal Bank, Canara Bank And More

It’s a dream for many to own a car. Whether it's a sports car, sedan, or a luxury vehicle, potential car buyers can choose from a wide range of vehicles as per their budget. Although owning a car can be expensive, car loans have made it much easier.

Vehicle loans are available from banks and non-banking financial companies (NBFCs) at competitive interest rates. However, the interest rates and fees on vehicle loans may differ, depending on the bank's lending policy. Very few lenders allow financing options up to 100% of the car's on-road cost. Some banks provide vehicle loans with a maximum tenure of up to 8 years.

Let’s take a look at the five best vehicle loans in India currently available across banks, along with the associated processing fees and interest rates.

Some of the finest auto loan rates are available from the State Bank of India through its SBI New Car Loan Scheme, SBI Assured Car Loan Scheme, SBI Loyalty Car Loan Scheme and Green Car Loan for Electric Cars.

Based on daily reducing balances, SBI Bank Car Loans provide some of the lowest interest rates available. An SBI car loan can cover up to 90% of the vehicle's on-road cost.

Federal Bank Limited offers one of the attractive vehicle loans. The bank does not charge any fees for loan foreclosure. The applicable minimum take-home loan amount criterion depends on the employment and income of the borrower. Federal Bank offers free personal accident insurance for vehicle loans up to Rs 10 lakh.

Bank of Baroda is known for providing a wide range of loans, including housing, personal, gold, education, and some of the lowest interest rates on vehicle loans in India. People between 21 and 70 years of age with a minimum credit score of 725 can apply for the car loan. A maximum loan of Rs 5 crore is provided with a loan tenure of up to 7 years. This can be used to purchase MUVs, SUVs and passenger vehicles.

The Canara car loan can be availed to buy either new or second-hand four-wheelers. The Canara Vehicle auto loan is available to people who earn at least Rs 3 lakh a year. The maximum loan limit depends on the income of the borrower and the loan repayment period can extend up to 7 years. Canara Bank offers auto loans up to 90% of the vehicle cost, which includes life insurance, registration fees, invoice value and other expenses.

Axis Bank's New Car Loan is available to anyone between the ages of 18 and 65, with a maximum loan term of 8 years. Axis Bank offers a minimum loan of Rs 1 lakh and a maximum loan of 100% of the vehicle's on-road price. Axis Bank customers with Wealth Banking or Priority Banking are eligible for exclusive discounts on vehicle loans.

It is important to take into account your ability to repay the loan, bank interest rates, the type of loan you need and other factors when you take out a vehicle loan or even look for the best car loan in India.