Top 10 Banks for Car Loans in India 2026

10 Best Banks for Car Loan in India

Disclaimer: The rates of interest on new cars and old cars mentioned above are as of when this page was written and are subject to change. For exact rates, contact the banks or refer to their official websites.

1. State Bank of India Car Loan

• The interest rates on SBI car loan fall into the category of lowest in the market and are computed on a daily reducing balance.
• SBI gives car loans under 4 variants – SBI New Car Loan Scheme, SBI Loyalty Car Loan Scheme, SBI Assured Car Loan Scheme, and SBI Green Car Loan.
• Up to 100% of the car’s on-road price is provided as loan. This is inclusive of the registration cost, cost of accessories, extended warranty, insurance, annual maintenance, contract, etc.
• SBI offers an optional life insurance cover to its borrowers.
• The various car loan schemes offered by SBI are as follows:

1. SBI New Car Loan Scheme:

• Eligibility: Age – 21 to 70 years
• Loan tenure: Up to 7 years
• Loan amount:
• Salaried: 48x the net monthly income
• Self-employed: 4x gross taxable income
• Net profit agriculturists: 3x Net annual income

2. SBI Loyalty Car Loan Scheme:

• Eligibility:
• Current SBI home loan borrowers are eligible for this scheme.
• Minimum annual income required: Rs. 2 lakhs
• Loan tenure: Up to 7 years
• Loan amount: Will be impacted by various factors

3. SBI Assured Car Loan Scheme:

• Eligibility:
• Minimum age: 18 years, there is no upper threshold on the age
• Any income declared by applicants will be accepted.
• Loan tenure:3 to 7 years
• Loan amount:
• Minimum loan amount: Rs. 1 lakh, No cap on the maximum loan amount.

4. Green Car Loan for Electric Cars:

• Eligibility:
• Age: 21 to 70 years
• Loan tenure:3 to 8 years.
• Loan amount: contact the bank

2. HDFC Bank Car Loan

• These car loans will be tailored to meet the requirements of the borrowers.
• The loan comes with flexible repayment options
• The loan can be paid back in Step-up EMIs and Balloon EMIs.
• Borrowers who are existing customers of the bank are eligible for top-up loans. They can avail themselves of this without providing any documentation.

Key Highlights of the New Car Loan Scheme

3. ICICI Bank Car Loan

• You can get 100% of the road price as loan
• Flexible repayment durations of up to 84 months (about 7 years)
• Instant digital sanction.
• New car loans with a tenure above 36 months start at 8.5% onwards, with interest rates varying based on your CIBIL score and the car model you choose.
• Used Car Loans start at 11% per annum, with rates varying based on your CIBIL score and the vehicle segment.
• New car loans with a tenure of under 36 months start at 10.25% p.a., with rates varying based on your CIBIL score and the vehicle category.

4. Axis Bank Car Loan

• Both individuals and non-individuals can apply for this loan.
• Priority banking, private banking, and wealth banking customers of Axis Bank can enjoy special privileges on car loans.
• Waiver on documents and bank statements for the bank’s pre-approved and salaried account customers.

Key Highlights of the New Car Loan Scheme

5. Bank of Baroda Car Loan

• You can apply for this loan to purchase passenger cars, SUVs, and MUVs for private use.
• This car loan comes with preferential interest rates for individuals who have a high credit score.
• The interest rates are computed on a daily reducing balance.
• There is no penalty on the pre-closure of car loans.

Key Highlights:

6. Punjab National Bank Car Loan

• Punjab National Bank has tied up with reputed car manufacturers such as Tata Motors, Honda Cars India, Force Motors Limited, Maruti Suzuki India, and Mahindra and Mahindra to give the best car loan offers.
• Both individuals and businesses can apply for this car loan.
• Punjab National Bank offers both fixed and floating interest rates on the car loan.
• A collateral, security, or third-party guarantee must be provided to avail yourself of a PNB car loan. However, this condition is subject to a person’s financial merit.

7. Kotak Mahindra Bank Car Loan

Kotak Mahindra Bank is known for its flexible car loan products and attractive offers on used cars. It provides customized repayment options and fast processing, especially for customers with a good credit profile.

• Minimum monthly income requirement of ₹25,000 or more
• At least 1 year of continuous stay at the current residential address
• A minimum of 1 year of work experience with the present or overall employer
• Applicant must be 21 years old or above at the time of loan application

8. IDFC First Bank Car Loan

IDFC First Bank has gained popularity for its customer-friendly policies and flexible EMI structures. It offers attractive rates for borrowers with high credit scores and provides a smooth digital loan experience.

• Attractive interest rates beginning from 9.99% onwards
• Flexible repayment period of up to 10 years
• Financing available for up to 100% of the vehicle’s on-road price
• Get up to full on-road cost funding, subject to eligibility and lender terms

9. Canara Bank Car Loan

• This loan can be used to purchase new or old cars by all individuals, firms, professionals, etc. However, Hindu Undivided Families or HUFs cannot avail of this loan.
• Up to 90% of the total value of the car can be obtained as loan, and this includes the registration charges, insurance premium, life tax, and invoice value.
• You will have to pay 10%, 15%, and 20% of the loan amounts to buy a new car costing up to Rs. 10 lakhs, above Rs. 10 lakhs and up to Rs. 25 lakhs, and above Rs. 25 lakhs respectively.

10. Union Bank of India Car Loan

• You can apply for both new or old cars (Up to 3 years) with this car loan scheme.
• Companies or organizations can also apply for this loan.
• The borrower must make a down payment of 10% of the vehicle’s on-road price.
• The bank will not charge any penalties on the pre-closure of the loan.

Key Highlights of the Vehicle Loan Scheme

Factors to Consider Before Choosing the Best Car Loan Bank

Choosing the right car loan bank is just as important as selecting the car itself. A small difference in interest rate, fees, or tenure can significantly impact your total repayment amount. Before applying, evaluate the following key factors carefully to ensure you get the best deal.

1. Car Loan Interest Rate

The interest rate directly affects your monthly EMI and overall loan cost. Even a 0.50% difference can increase your repayment by thousands of rupees over the loan tenure. Always compare starting rates as well as the final rate offered based on your credit score and income profile.

2. Maximum Loan Amount & Funding Percentage

Different banks finance different portions of the car’s on-road price. Some offer up to 90% or even 100% financing for select customers or car models. A higher funding percentage reduces your upfront down payment burden and preserves your savings.

3. Loan Tenure Flexibility

Car loan tenure usually ranges from 12 months to 84 months. A longer tenure lowers EMIs but increases total interest paid, while a shorter tenure saves interest but increases monthly outflow. Choose a bank that allows flexible tenure options based on your repayment comfort.

4. Processing Fees & Hidden Charges

Many borrowers focus only on interest rates and ignore additional charges. Processing fees, documentation charges, and loan cancellation fees can add to your loan cost. Always check whether the bank offers zero or discounted processing fees during festive or special offers.

5. Down Payment Requirement

The down payment varies depending on the bank, vehicle type, and your credit profile. Banks offering lower down payment requirements help you purchase the car with minimal upfront expense. However, paying a higher down payment can reduce your EMI and total interest burden.

6. Prepayment & Foreclosure Charges

If you plan to close your loan early, check the bank’s prepayment and foreclosure policies. Some banks charge a penalty for early closure, while others allow zero foreclosure after a specific period. This factor is crucial for borrowers expecting future income growth or bonuses.

7. Eligibility Criteria

Each bank has different eligibility norms related to age, income, employment type, and credit score. Some banks are more lenient for government employees or existing customers. Choose a bank where you easily meet eligibility requirements to avoid rejection or higher interest rates.

8. Approval Time & Disbursal Speed

If you need the car urgently, approval speed matters. Banks with digital application processes, instant approvals, and faster disbursal ensure quicker vehicle delivery. A smooth and fast loan process enhances the overall buying experience.

9. Customer Service & Digital Support

Reliable customer support, online account access, EMI tracking, and easy service requests make loan management hassle-free. Banks with strong digital platforms allow you to manage EMIs, download statements, and request support online without visiting branches.

10. Special Offers & Bank Tie-Ups

Many banks have tie-ups with car dealers and manufacturers, offering benefits like lower interest rates, processing fee waivers, or insurance discounts. Checking ongoing offers can help you save money and get additional value from your car loan.

FAQs