Vehicle Loan

Car loan interest rates starting at just 7.30% per annum and repayment options up to 8 years, you have a variety of options to choose from to find the perfect loan for your vehicle needs. You can finance up to 90-100% of the on-road cost of your car, and even avail pre-owned car loans that are processed quickly.

Features and

All leading private and public sector banks provide car loans at competitive rates of interests. Through these loans, you can buy your dream car – whether hatchback, sedan, or luxury and pay off the loan over a period of time.

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    Makes it easy to buy a car

    As many banks provide up to 100% finance on ex-showroom price, you don’t have to wait long to buy your dream car.

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    Flexibility to choose the tenure

    Financial institutions offer car loans with a repayment tenure of up to 7 years, providing you with the flexibility to choose the duration that suits your needs.

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    Loan for buying a used car

    Many banks offer loans on used cars these days. Although the interest rate will be higher than the interest rate on new car loans and the loan-to-value (LTV) ratio will be lower than the new car loan.

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    Interest rate can be negotiated

    Unlike home loan in case of car loan you have the flexibility to negotiate the interest rate with your lender if you have a good credit score and have good relationships with the bank.

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    No collateral required

    To avail a car loan, you do not have to provide any additional collateral as your vehicle acts as security for the loan. If you are unable to make payments, the bank has the right to seize and sell the vehicle to recover the funds.

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    Flexibility to choose the payment mode

    You can choose to pay through post-dated cheques or use the auto debit facility where your equated monthly installments (EMIs) will be automatically deducted from your bank account.

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    Flexibility to choose the fixed or floating interest rate option

    The interest rate for your car loan may be either fixed or floating, and the rate you receive will depend on the type of interest rate you choose.


The eligibility criteria for a car loan may vary across different banks. However, common requirements include:

  • A minimum age of 18 years and a maximum age of 75 years

  • A minimum net monthly income of INR 20,000

  • A minimum of one year of employment with the current employer

  • A minimum of one year of employment with the current employer

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To prove your eligibility, you’ll need to provide certain documents.

  • 1. Identity proof (any of the following)

    • Aadhaar

    • Passport

    • Driving license

    • Voters ID card

  • 2. Address proof (any of the following)

    • Aadhaar

    • Passport

    • Driving license

    • Ration card

    • Utility bills

  • 3. Proof of income

    • Form 16

    • Salary slips if you are salaried

    • Latest Income Tax Returns

    • RBank statements going back 6 months


1.Can I Get 100% Funding To Buy A Car?

The maximum amount of loan that you can avail to buy a car will vary from lender to lender. Most banks offer financing up to 90% of the on-road price of the car but there are some banks such as HDFC Bank, ICICI Bank, etc., that offer financing for up to 100% of the car’s on-road price.

2. Can I Pre-Pay The Entire Loan Amount? What Are The Conditions Involved?

Yes, you can prepay the entire car loan and save on vital interest payments in the future. However, most banks will allow the prepayment option after you have chalked off 6 months on your loan tenure. Plus, you will be expected to pay a small fee as a prepayment penalty that will be dependent on the leftover loan amount.

3. What Car Models Are Financed By The Standard Car Loan In India?

Unless otherwise specified, almost all small to medium sized cars, Commercial Vehicle Loan, Sports Utility Vehicles (SUV) and Multi Utility Vehicles (MUV) come under the purview of car loans available in India. However, as mentioned, refer to the loan brochure for exceptions to this rule.

4. When Applying For The Car Loan, Do I Need A Guarantor/ Security?

Almost all car loan products available in India are secured loans, with the procured vehicle itself acting as the customary security. Most lenders in India will not insist upon any guarantors; however, if your annual income does not match up to the expected requirement, then you may be expected to sign-up a co-applicant and/or guarantor.

5. What Are The Commonly Available Car Loan Repayment Tenures?

Repayment tenures usually range from 12 months to 84 months (1-7 years).

6.What Kind Of A Credit Score Do You Need To Buy A Car?

Just like with most loans, a high credit score above 750 is ideal. But you can still apply for a loan if your credit score is above 600. Remember, if your score is too low, your application may be rejected.

7. Will My Credit Score Affect The Interest Rate?

AYes. Some banks will offer lower interest rates to applicants with high credit scores. Likewise, borrowers with low credit scores will have to bear higher interest rates.

8. What Is The Minimum Credit Score I Need To Get A Car Loan?

When you apply for a car loan, lenders will look for a credit score of at least 750. Below this score, lenders may be reluctant to lend to you as it indicates your low repayment capacity. Some banks may offer you a car loan despite your low credit score but they may charge a higher interest rate.

9. Should I Take A Car Loan From The Car Dealership Or Bank?

Before you apply for any car loan, ensure that you explore all the options available. Once you explore, you will get an idea about the benefits offered by various lenders on their car loans. Compare the benefits offered and pick a lender that fits your requirements. Whether it is a bank or a car dealership, pick the one that offers better interest rates.

10. Do Banks Offer Finance For Used Cars?

Yes. Many top lenders such as SBI, HDFC Bank, ICICI Bank, etc., offer loans to buy used cars. These lenders offer car loans for up to 85% of the car’s value provided that the car is not more than 5 years old. Used car loans can be repaid in a maximum of 7 years.

11. What Will Lenders Look For When I Apply For A Car Loan?

One of the most important factors that lenders consider before offering you a car loan is your credit score. As stated above, a credit score of above 750 can fetch you lower interest rates and other benefits. The other factors that lenders look for when you apply for a car loan are your employment status, residence and job stability, income, debt-to-income ratio, etc.

12. What Is The Lowest EMI That I Need To Pay For A Car Loan?

The amount of EMI (equated monthly instalments) that you will be paying towards your car loan will depend on the interest rate, loan amount, and the repayment tenure you choose. For example, let us suppose that you avail a car loan of Rs.1 lakh at an interest rate of 12% for a tenure of 5 years. Using the tool, we calculated the EMI and found it to be Rs.2,224.

13. How Much Down Payment Do I Need To Make To Buy A Car?

Making a higher down payment will mean that you will need to avail a lower loan amount to buy a car. When you avail a lower loan amount, there are chances that banks or lenders may offer you a car loan at lower interest rates. This is simply because if the loan amount is lower, the repayment will be quicker. So, though there is no hard and fast rule to how much down payment you should make, a higher down payment will ensure that your debt liability is lesser.

14. Can I Get A Lower Interest Rate If I Have A Good Credit Score?

loan at a lower interest rate. Many lenders will let you negotiate on the interest rates since your high credit score is an indication of your high repayment capacity. Some lenders may also offer you a waiver on the processing fee if you have a good credit score.


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