Looking to buy your dream car? Before you hit the road, it’s important to find the best car loan interest rate that suits your budget. Whether you’re planning to buy a hatchback, SUV, or luxury vehicle, a smart loan decision can save you thousands in the long run. In India, various banks and NBFCs offer different vehicle loan interest rates, so doing an auto loan comparison is essential.
This guide will help you explore the lowest car loan interest rate options offered by top lenders, including details on car loan interest rate across all banks and popular offers like the HDFC auto loan interest rate. With the right information in hand, you can drive home the best deal that matches your financial goals.
City-Wise Car Loan Interest Rates August 2025
|
Keyword |
Starting Interest Rate (p.a.) |
|
Car loan interest rate in Hyderabad |
8.50% |
|
Car loan interest rates Hyderabad |
8.50% |
|
Car loan interest rate in Jaipur |
8.55% |
|
Car loan interest rate in Kerala |
8.65% |
|
Car loan in Mumbai interest rate |
8.45% |
Factors That Affect Car Loan Interest Rates
When you’re applying for a car loan, understanding what influences the car loan interest rate is just as important as picking the right car. The car loan rate of interest in all banks may vary depending on several key factors. These differences can impact your overall repayment amount, so let’s break down what actually affects car loan rates in India.
1. Credit Score
Your credit score is one of the first things lenders check. A higher score (750 or above) shows that you’re reliable with repayments, which usually gets you a lower interest rate on car loan. On the other hand, a low score may lead to higher car interest rates or even loan rejection.
2. Loan Amount & Tenure
The amount you borrow and how long you take to repay it also matters. Generally, shorter tenures come with lower car loan interest rates, while longer tenures may have slightly higher rates. Similarly, some banks offer better rates on higher loan amounts.
3. Type of Car (New or Used)
The car loan interest rates in India differ based on whether you’re buying a new or used vehicle. Interest rates for new cars are usually lower, as they hold better value. Used car loans often come with higher rates due to depreciation and risk.
4. Income & Job Stability
Your monthly income and employment type influence how banks see your repayment capacity. A stable job and higher income can fetch you better car loan rates in India, especially if you have a long-term employment history with a reputed organization.
5. Relationship With the Bank
If you have a good history with a bank—like an existing savings account or previous loan with a clean repayment record—they may offer you a special deal. Some banks give loyal customers a lower car loan interest rate as part of their relationship benefits.
6. Down Payment
The higher your down payment, the lower your loan amount—and the better your chances of getting a low interest rate on car loan. This also lowers your monthly EMI and makes your loan more affordable.
7. Bank Policies
Each bank has its own policy when it comes to lending. So, when doing a car loan comparison, you’ll find that the car loan rate of interest in all banks isn’t the same. Some might be offering promotional deals, while others may charge processing fees that affect the overall cost.
By understanding these factors, you can make a more informed decision when comparing car loan interest rates India and choosing the right lender. Always read the fine print, and don’t forget to compare multiple offers to find the most affordable deal.
Best Car Loan Interest Rates in India August 2025
If you’re planning to buy a new car in 2025, getting the best car loan interest rate can help you save a lot over time. Many leading banks in India offer attractive vehicle loan interest rate options based on your profile, car type, and repayment ability. But since the rates vary, doing an auto loan comparison is essential to find the lowest car loan interest rate available.
Below is the updated list of car loan rates in India, including the HDFC auto loan interest rate and other major banks. These rates reflect the general starting point, but actual rates may differ based on your credit score and bank’s internal policies.
|
Bank Name |
Interest Rate (Starting From) |
Loan Tenure |
Processing Fee |
|
HDFC Bank |
8.50% p.a. |
Up to 7 years |
₹3,500 to ₹5,000 |
|
State Bank of India (SBI) |
8.65% p.a. |
Up to 7 years |
0.5% of loan amount |
|
ICICI Bank |
8.75% p.a. |
Up to 7 years |
₹3,000 to ₹5,000 |
|
Axis Bank |
8.60% p.a. |
Up to 7 years |
₹3,500 onwards |
|
Punjab National Bank (PNB) |
8.55% p.a. |
Up to 7 years |
0.5% of loan amount |
|
Kotak Mahindra Bank |
8.70% p.a. |
Up to 5 years |
₹2,500 onwards |
|
IDFC FIRST Bank |
8.90% p.a. |
Up to 7 years |
₹2,500 onwards |
|
Bank of Baroda |
8.60% p.a. |
Up to 7 years |
₹1,500 to ₹5,000 |
These figures give a clear snapshot of the car loan interest rate all bank offers as of 2025. By comparing these options, you can easily find a lender offering the most competitive interest rate on car loan that fits your financial plan.
Top Banks/NBFCs Offering Car Loans in India 2025
Buying a new or used car is an exciting step, but selecting the right lender is just as important. In 2025, several banks and NBFCs are offering competitive car loan interest in India, giving you plenty of options to choose from. Whether you’re looking for the car loan lowest interest rate bank or comparing used car loan rates, it’s essential to understand what each lender offers.
To help you make an informed decision, here’s a list of top lenders providing the best interest rate for car loan in India, along with their key features. This guide will also help you understand the car loan rate of interest of different banks for both new and used vehicles.
1. HDFC Bank – HDFC Car loan interest rate
- Interest Rate: Starting from 8.50% p.a.
- Loan Type: New and used cars
- Highlights: Fast approval, online documentation, and attractive offers. HDFC is one of the leading choices when it comes to auto car loan interest rates and is often listed as a car loan lowest interest rate bank.
2. State Bank of India – SBI car Loan Interest rate
- Interest Rate: Starting from 8.65% p.a.
- Loan Type: New and pre-owned cars
- Highlights: SBI offers the most transparent car loan interest rates all banks options, especially for government employees and women applicants.
3. ICICI Bank – ICICI Car Loan interest rate
- Interest Rate: Starting from 8.75% p.a.
- Loan Type: New and used cars
- Highlights: Known for quick loan disbursal and competitive car finance rates. ICICI is a good option when comparing the car loan interest rate for all banks.
4. Axis Bank – Axis Car loan interest rate
- Interest Rate: Starting from 8.60% p.a.
- Loan Type: New vehicles
- Highlights: Simple process, quick disbursal, and excellent customer service. Popular among users comparing car loan India interest rate offerings.
5. Kotak Mahindra Bank Car Loan Interest rate
- Interest Rate: Starting from 8.70% p.a.
- Loan Type: New and used cars
- Highlights: High loan eligibility and minimal documentation. A strong choice among banks with low interest rates for car loans.
6. Bank of Baroda Car Loan Interest rate
- Interest Rate: Starting from 8.60% p.a.
- Loan Type: New and used cars
- Highlights: One of the few banks offering a clear breakdown of the car loan rate of interest and low processing fees.
7. IDFC FIRST Bank Car Loan Interest rate
- Interest Rate: Starting from 8.90% p.a.
- Loan Type: New and pre-owned cars
- Highlights: Easy EMI options and digital application process. Frequently mentioned in auto loan comparisons for its convenience.
8. Tata Capital (NBFC) Car Loan Interest rate
- Interest Rate: From 9.25% p.a.
- Loan Type: New and used cars
- Highlights: Offers flexible repayment terms and customized car loan interest rates for all banks equivalent offers for non-bank borrowers.
9. Mahindra Finance (NBFC) Car Loan Interest rate
- Interest Rate: From 9.50% p.a. (approx.)
- Loan Type: New and used vehicles
- Highlights: Tailored for rural and semi-urban areas, especially for Mahindra vehicles. Offers some of the best used car loan rates in India.
10. Bajaj Finserv (NBFC) Car Loan Interest rate
- Interest Rate: Competitive (customized)
- Loan Type: New and pre-owned vehicles
- Highlights: Quick approvals, online processing, and flexibility. Known for attractive car loan interest rate of all bank level offers without being a bank.
These banks and NBFCs provide a broad range of financing options with varying car loan interest rate of all banks, helping you compare and choose based on your eligibility, loan amount, and repayment capacity. Whether you’re a salaried employee, self-employed, or a first-time car buyer, comparing the car loan rate of interest across different banks is the best way to save more in the long run.
Tips to Get a Lower Car Loan Interest Rate in India
Getting a car is a big financial decision, and securing the cheapest car loan can save you a lot in the long run. Whether you’re buying a brand-new vehicle or a pre-owned one, your goal should be to find the lowest possible car loan interest rate. With so many lenders in the market, it’s smart to do a thorough car loan comparison and follow a few strategic tips to lock in the best deal.
Here are some proven tips to help you get a better deal on your car loan interest rate, whether you’re applying online or through a bank branch:
1. Maintain a High Credit Score
Your credit score plays a major role in determining your car loan interest rate bank approval terms. A score above 750 is considered excellent and often helps you qualify for the lowest car interest rates India has to offer.
2. Compare Car Loan Rates from Multiple Lenders
Don’t just accept the first offer you receive. Do a proper auto loan interest rates comparison by checking the car loan interest rate of different banks. Use online tools to compare car loan rates side by side to see who offers the best terms based on your profile.
3. Check Present Car Loan Interest Rates
Interest rates change based on market trends. So, always check the present car loan interest rates before applying. Even a small percentage difference can result in big savings over the loan tenure.
4. Choose a Shorter Loan Tenure
While longer tenures may reduce your monthly EMI, they often come with higher car loan interest rates. Opting for a shorter tenure can help you save on total interest paid over time.
5. Negotiate With Your Bank
If you’re an existing customer with a good banking relationship, you can often negotiate a better car loan interest rate. Some banks offer preferential rates to loyal or premium customers.
6. Make a Higher Down Payment
A higher down payment reduces the loan amount and risk for the lender. This often helps in securing a lower new car loan rate of interest, and it also lowers your monthly EMI.
7. Look Out for Special Offers
During festive seasons or special promotions, many banks and NBFCs offer discounted car loan interest rate all banks. These limited-time deals can help you grab the cheapest car loan available in the market.
8. Use Pre-Approved Loan Offers
Banks and financial institutions often provide pre-approved car loans to existing customers with good credit. These usually come with competitive car loan rates comparison benefits and faster processing.
9. Choose the Right Lender
Different banks and NBFCs offer different terms. That’s why doing a proper car loan rates comparison is essential. Some lenders may have a slightly higher rate but lower processing fees, while others may offer flexible repayment options.
By following these tips, you can ensure you get the most out of your car loan without overpaying. Whether you’re checking car loan interest rate of different banks or exploring online tools to compare car loan rates, a little research can go a long way in securing the best deal.
Fixed vs Floating Car Loan Interest Rates: Which One Should You Choose?
When applying for a car loan, one of the most important decisions is choosing between fixed and floating interest rates. This choice affects how much you’ll pay in the long run. Whether you’re looking for the lowest car interest rates for a new car or checking used car loan rate of interest, understanding both options can help you pick the right one.
This guide breaks down the difference between fixed vs floating car loan interest rates, helping you make an informed decision—whether you’re buying a new vehicle in Delhi or exploring car loan interest rate Hyderabad offers.
What is a Fixed Car Loan Interest Rate?
A fixed interest rate remains the same throughout your loan tenure. From your first EMI to your last, the rate does not change.
Pros:
- Predictable monthly payments
- Easier to plan your finances
- Peace of mind in a fluctuating market
Cons:
- Might be slightly higher than floating rates
- You won’t benefit from market rate drops
Fixed rates are often chosen by borrowers who want cheap loans car with stable EMIs, especially in cities like Hyderabad where car loan interest rates Hyderabad can vary slightly by lender.
What is a Floating Car Loan Interest Rate?
A floating interest rate changes based on market conditions and repo rate adjustments. Your EMI may increase or decrease over time.
Pros:
- Can be lower than fixed rates during favorable market conditions
- Helps you save money if rates drop during your tenure
Cons:
- Monthly EMIs can fluctuate
- Harder to plan long-term budgets
Floating rates may work well if you’re taking a short-term loan or believe rates will go down. They’re commonly used for used car interest rates in flexible NBFC loan plans.
Fixed vs Floating: A Quick Comparison
|
Feature |
Fixed Interest Rate |
Floating Interest Rate |
|
Stability |
High |
Low |
|
EMI Fluctuation |
No |
Yes |
|
Best For |
Long-term planning |
Short-term savings |
|
Common Use |
New car loans |
Used car loan rate of interest offers |
|
Availability |
Most banks and NBFCs |
Selective banks/NBFCs |
Which is Better for You?
- If you want predictable EMIs and peace of mind, go with a fixed rate.
- If you’re comfortable with some risk and want to take advantage of possible rate cuts, consider a floating rate.
For first-time buyers searching for the cheapest interest rate for car loan, it’s wise to start with a car loan percentage comparison across banks. You can explore current car loan rates India based on your city and loan type (new or used).
For instance, some lenders in Telangana offer special car loan interest rate Hyderabad schemes based on your location and credit score.
Whether you’re applying for a car loan in Hyderabad or checking online for the lowest car interest rates nationwide, choosing between fixed and floating interest depends on your financial goals and risk appetite. Always compare offers, especially if you’re applying for a used car loan, to find the most cheap loans car lenders available.
Documents Required for a Car Loan in India {{year}}
Applying for a car loan in India is simple, but having the right set of documents is essential to ensure your application isn’t delayed or rejected. Whether you’re going for the lowest interest rate for car loan or exploring new vehicle interest rates, banks require proper verification to approve your loan smoothly.
Below is a complete list of the most commonly required documents by lenders offering auto loan interest rates in India.
Basic Documents Required for a Car Loan
1. Identity Proof (Any one)
- Aadhaar Card
- PAN Card
- Passport
- Voter ID
- Driving License
These are mandatory, whether you’re applying for an SBI auto loan or any other bank’s car finance.
2. Address Proof (Any one)
- Electricity bill (recent)
- Rent agreement
- Ration card
- Passport
- Aadhaar Card
Having updated address proof is important for both new car loan interest rate and used car loan approvals.
3. Income Proof
- For salaried:
- Last 3 months’ salary slips
- Last 6 months’ bank statements
- Form 16 or Income Tax Returns
- For self-employed:
- Business registration proof
- ITR of last 2 years
- Profit & Loss statements
Proper income documentation can help you access auto loan lowest rates with ease.
4. Photographs
- Recent passport-sized photos (usually 2 copies)
5. Car-related Documents
- Proforma invoice from the car dealer
- Quotation with car model details, price, and taxes
These are important to determine your car finance interest rates and finalize the loan amount.
Bank-Specific Requirements
Banks may ask for additional documents depending on the profile. For instance, while SBI auto loan may require just the basics, private banks or NBFCs might ask for additional financial documents for better loan offers and to get the lowest interest rate for car loan.
Tips to Qualify for Best Interest Rates
To avail the latest car loan interest rate or compare car loan bank rates, keep the following in mind:
- Maintain a good credit score (750+)
- Apply during festive seasons when lenders offer average car loan interest rate cuts
- Compare across lenders to get the car loan in Mumbai interest rate or in your city
- Submit all documents correctly to speed up processing
Getting a car loan is easier when you’re well-prepared. Submitting complete and accurate documents not only simplifies approval but can also help you get access to the cheapest car finance interest rates available.
What is a Car Loan EMI Calculator?
A Car Loan EMI Calculator helps you calculate your monthly EMI based on the loan amount, interest rate, and tenure, making budgeting easier.
What is the current SBI car loan interest rate?
SBI car loan interest rate typically ranges from 8.65% to 9.80% p.a., depending on the applicant’s profile and loan type.
How can I use the SBI Car Loan EMI Calculator?
You can use the SBI Car Loan EMI Calculator by entering your loan amount, tenure, and interest rate to get an accurate EMI estimate.
What is the HDFC car loan interest rate today?
HDFC car loan interest rate starts from 8.75% p.a., depending on credit score, income, and loan tenure.
Which bank offers the lowest car loan interest rate?
Banks like Punjab National Bank and Bank of Baroda offer some of the lowest car loan interest rates starting around 8.65% p.a.
How can I find the best interest rate for car loan in India using an EMI calculator?
You can use online EMI calculators to compare multiple banks and find the best interest rate for car loan in India that suits your budget.
Is there a calculator to find the best interest rate for car loan in India?
Yes, car loan EMI calculators can help you compare lenders and choose the best interest rate for car loan in India easily.
What is the ICICI Car Loan interest rate?
ICICI Car Loan interest rate generally starts at 8.75% p.a. and varies based on vehicle type and borrower profile.
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