What is a car loan?
A car loan is a secured loan to buy a new car, where the car itself is hypothecated to the lender until the loan is fully repaid. Banks fund 85–100% of the ex-showroom or on-road price and you repay in fixed monthly EMIs over 1 to 8 years. Once the loan is closed, the lender issues an NOC and the hypothecation is removed from the RC.
Key features & benefits
- Loan up to ₹1 Cr for hatchbacks, sedans, SUVs and luxury cars
- Up to 100% funding of on-road price on select models
- Interest rates from 8.5% p.a., with concessions for electric vehicles
- Tenure up to 8 years to keep EMIs affordable
- Fast digital processing at partner dealers and pre-approved options for eligible applicants
Eligibility criteria
- Age 21–65 years (at loan maturity)
- Salaried: minimum net income of ₹20,000–₹25,000 per month and 1 year in current job
- Self-employed: 2 years of business continuity with ITR
- Credit score of 700+ for competitive interest rates
Documents required
| Purpose | Accepted documents |
|---|---|
| KYC | PAN card, Aadhaar, passport or driving licence |
| Income proof | Last 3 salary slips & Form 16 (salaried); 2 years ITR (self-employed) |
| Bank statements | Last 6 months |
| Car details | Proforma invoice / quotation from the dealer |
Interest rates, fees & charges
| Charge | Typical range |
|---|---|
| Interest rate | 8.5% – 13.5% p.a. |
| Processing fee | 0.5% – 1% of loan amount (min. ₹1,000–₹3,500) |
| Foreclosure charges | Nil – 5% of outstanding principal |
| Late EMI penalty | 2% per month on overdue amount |
| Stamp duty & RC hypothecation | As per state RTO |
Tips to get the lowest car loan rate
- Check pre-approved offers with your salary-account bank first
- Make a larger down payment (20%+) to lower the rate and total interest
- Pick the shortest tenure you can comfortably afford
- Look for EV concessions and festive-season rate offers
Car Loan from 16+ partner lenders
LoanLender compares 16 car loan offers in one place — including Axis Bank, Bank of Baroda, Bank of India, Central Bank of India, DBS Bank India, Federal Bank, HDFC Bank, ICICI Bank, IDBI Bank, IDFC FIRST Bank, IndusInd Bank, Kotak Mahindra Bank, RBL Bank, Standard Chartered, and 2 more partner banks & NBFCs. Indicative rates start from 8.5% p.a.; use filters to sort by lender, interest rate, loan amount and features before you apply. Terms are set by each lender based on your profile.