Last Updated on Jul 6, 2023 by Harshit Singh
Nowadays, buying a car has become a lot easier, thanks to the easy accessibility of the car loan. It has made it possible for many individuals to buy a car with ease. One can choose from various government and private car loans that are available in the market at the lowest interest rate. In this blog, we will cover the best car loan from banks at the lowest interest rate you can refer to.
Table of Contents
What is a car loan?
A car loan is just like any other loan which an individual borrows from banks for buying a car. Following the same structure of a normal loan, it is broken down into instalments which the borrowers have to repay in EMI.
5 banks with the best car loans with lowest interest rate
Here is the list of best banks for a car loan –
State Bank of India
State Bank of India (SBI) offers various car loan schemes. A brief list of them is mentioned below.
| Types of car loan | Interest Rate |
| i) SBI Car Loan,ii) NRI Car Loan,iii) Assured Car Loan Scheme | From 8.65% to 9.65% |
| SBI Car Loan, NRI Car Loan | From 8.65% to 9.65% (CIC Based rates are applicable) |
| SBI Green Car Loan (For Electric Cars) | From 8.60% to 9.30% |
| Certified Pre-owned Car Loan Scheme | From 11.25% to 14.75% (CIC Based rates are applicable). |
| SBI Two-Wheeler Loan | 17.75% to 19.50% p.a. |
Federal Bank
Considering the present repo rate of 6.50% per annum, the Federal bank offer the car loan at –
| Features | New Car Loan Scheme | Used Car Loan Scheme |
| Interest Rates | 11.00% p.a. onwards | 16.30% p.a. onwards |
| Foreclosure Charges | Nil | Nil |
| Repayment Tenure | Up to 84 months | Up to 84 months |
| Other Details | ||
| Loan Tenure | For new cars – 60 months For new cars (salaried individuals) – 84 months For used cars – 60 months | |
| Applicant’s Income | Minimum amount – Rs. 20,000 | |
| Insurance Cover | Free insurance cover up to Rs.10 lakh | |
| Financing | Up to 100% of car’s ex-showroom price |
Canara Bank
Canara Bank presents an enticing interest rate for car loans, accompanied by the added advantage of flexible repayment options.
| Features | New Car Loan Scheme |
| Interest Rate | 8.80% – 11.95% p.a. |
| Processing Charges | 0.25% on the total loan amount subject to a minimum of Rs.1,000 and a maximum of Rs. 5,000 |
| Loan Amount | Up to 90% of the total value which includes life tax, invoice value, registration charges, etc. |
| Repayment Period | 84 months 60 months for pre-owned cars |
| Prepayment Charges | Nil |
Bank of Baroda
Bank of Baroda offers car loans with up to 90% financing at the interest of 8.70% – 11.15%. An individual can avail the maximum loan amount of Rs.1 cr., with repayment tenure stretches up to 84 months.
Axis Bank
At Axis bank, you can get up to 100% car loan on the on-road price of the car, which is highly unusual in any other banks listed in this blog. Axis bank offers an attractive 8.75% p.a. interest rate on car loans.
The processing fee for the same is Rs. 3,500 to Rs. 5,500.
Car loan eligibility criteria
Following are the eligibility criteria that one must meet to get a car loan –
| Age | Minimum 21 yrs, Maximum 75 yrs |
| Employment Type | Salaried or Self-employed |
| Employment status | Employed/In-business for at least 3 yrs. and at least 2 yrs with current employer/business |
| Maximum loan amount | On an average financial institution pay up to 90% of the loan |
| Minimum Income | Rs. 20,000 per month |
| Tenure | Minimum – 12 months |
| Credit Score | Preferred 680 or higher |
Documents required for car loan
While applying for a car loan, following documents are required –
- 3 passport size photographs
- Complete loan application
- Proof of residence (photo copies of recent Telephone Bills/ Electricity Bill)
- Statement of bank account/ pass book for last six months
- Proof of identify (photo copies of Voters ID card/ Passport/ Driving license/ IT PAN card)
- IT returns for the three years for self-employed professionals
- Form 16/IT returns for the last two financial years for salaried employee
Conclusion
Various aspects, such as interest rate, repayment plan, loan amount, etc. are essential to evaluate before applying for a car loan. It can help you choose the best car loan available, specific to your needs.
FAQs
What is the financing rate of used cars at Canara Bank?
Canara Bank finances 60% of the price or 60% of the total value of the car after the assessment of the vehicle.
What are the benefits of a car loan?
You can easily buy a car by applying for the loan application online and select a suitable repayment plan based on the credit profile.
How to apply for a car loan in India?
You can check the list of banks that offer car loans and apply using their app or website within the comfort of your home.
As an investment fanatic, I’ve dabbled in early-stage startups, mutual funds, gold, stocks, smallcases, and real estate to identify which assets generate the highest ROI. At Tickertape, I’m dedicated to presenting my learning and providing insightful suggestions to help my readers make sound investment decision.
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