For those considering a car loan, we are taking a look at some of the most competitive car loan interest rates available in the country.
Buying a car is a goal for some individuals while it is a necessity for others. Regardless of the circumstances, purchasing a car represents a significant financial commitment that can deplete your savings or require a car loan.
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Typically, car loans offer lower interest rates compared to unsecured loans, such as personal loans. When exploring options for a car loan, it is essential to compare various offerings from different financial institutions. Certain lenders may have exclusive partnerships with dealerships, which can result in expedited processing and reduced rates.
Additionally, some lenders provide pre-approved car loans to select customers or offer preferential rates to those who are existing home loan borrowers. Thus, to secure the most advantageous deal, it is crucial to evaluate the car loan options available from multiple lenders.
It is important to note that the interest rates applicable to car loans are determined by considering your credit score and income. Many banks have aligned their lending rates with credit scores. A credit score of 750 or higher can enable you to obtain a loan at more favorable interest rates, while a low credit score may either disqualify you from receiving a car loan or force you to accept a loan with a higher interest rate. Therefore, prior to applying for a car loan, it is advisable to review your credit reports.
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It is important to recognize that you will need to cover a portion of the costs yourself. Typically, lenders finance only 80% to 90% of the vehicle’s on-road price. While certain banks may offer financing for up to 100% of the car’s valuation, this is contingent upon specific terms and conditions and is not guaranteed.
Generally, lending institutions provide loans with tenors extending up to 7 years. In addition to interest rates, it is advisable to inquire about other fees, such as processing fees and repayment charges, which can differ based on the lender’s policies. For those considering a car loan, the following table lists both public and private sector banks that are currently offering some of the most competitive car loan interest rates available in the country. It also includes the indicative EMI for a new car loan of Rs 5 lakh over a tenure of 5 years.
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Interest Rates and EMIs for a New Car Loan of Rs 5 Lakh with a 5-Year Term
| NEW CAR LOAN – RATES AND CHARGES | |||
| Name of Lender | Interest rate (%) | EMI (Rs) Loan amount – 5 lakh Tenure – 5 years | Processing fee (% of loan amount) |
| Union Bank of India | 8.70 – 10.45 | 10,307 – 10,735 | NIL |
| Punjab National Bank | 8.75 – 10.60 | 10,319 – 10,772 | Up to 0.25% (Rs. 1,000 – Rs. 1,500) |
| Bank of Baroda | 8.95 – 12.70 | 10,367 – 11,300 | Up to Rs 750 |
| Canara Bank | 8.70 – 12.70 | 10,307 – 11,300 | NIL |
| Bank of India | 8.85 – 12.10 | 10,343 – 11,148 | 0.25% (Rs. 1,000 – Rs. 5,000) (Processing charges are waived off for individuals having CIBIL personal score 700 and above or -1/0) |
| UCO Bank | 8.45 – 10.55 | 10,246 – 10,759 | Nil |
| State Bank of India | 9.05-10.10 | 10,391-10,648 | NIL |
| IDBI Bank | 8.85 – 9.65 | 10,343 – 10,538 | Rs 2,500 |
| Bank of Maharashtra* | 8.70 – 13.00 | 10,307 – 11,377 | NIL |
| Indian Overseas Bank** | 8.85 – 12.00 | 10,343 – 11,122 | 0.50% (Rs 500 – Rs 5,000) |
| ICICI Bank | 9.10 onwards | 10,403 onwards | Up to 2% |
| HDFC Bank | 9.20 onwards | 10,428 onwards | Up to 1% (Rs 3,500 – Rs 9,000) |
| Karnataka Bank | 8.88 – 11.37 | 10,350 – 10,964 | 0.60% (Rs 3,000 – Rs 11,000) |
| Federal Bank | 8.85 onwards | 10,343 onwards | Rs 2,000 – Rs 4,500 |
| Punjab and Sind Bank*** | 8.85 – 10.25 | 10,343 – 10,685 | 0.25% (Rs 1,000-Rs 15,000) |
| South Indian Bank | 8.75 onwards | 10,319 onwards | 0.75% (Max: Rs 10,000) |
| IDFC First Bank | 9.60 onwards | 10,525 onwards | Up to Rs 10,000 |
| City Union Bank | 9.90-11.50 | 10,599-10,996 | 1.25% (Min: Rs 1,000) |
| *0.25% interest rate concession for existing housing loan borrowers and corporate salary account holders. | |||
| **0.50% interest rate concession to borrowers with credit scores of 800 and above. Interest rate concession of 0.25% to borrowers having credit scores of 750-799. | |||
| ***Concession of up to 50% on processing fee for PSB Apna Vahan Sugam. | |||
| Rates and charges as of 13th November 2024 | |||
| Source: Paisabazaar.com | |||
