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Canara Bank is a state-owned bank which was established back in 1906. The bank boasts of a substantial domestic network with more than 5000 branches across India. It has its headquarters in Bangalore, Karnataka and is known for its customer-centric policies. Through its hundred-year presence in the banking sector, Canara Bank has grown exponentially across the length and breadth of the nation. The bank has expanded its presence globally with offices in London, Hong Kong, Moscow, Shanghai, Doha, Dubai, and New York

Canara Bank offers a wide range of banking products and services that cater to various segments of society. One such is the Canara bank car loan. Here, we will discuss Canara Bank’s car loan and highlight the interest rates on offer.

Vehicle Loan Type

Women Borrowers

Other Borrowers

Four Wheeler Loans

Ranges from 7.30% to 7.45%

Ranges from 7.35% to 7.50%

Two Wheeler Loans

Ranges from 10% to 10.15%

Ranges from 10.05% to 10.25%

Canara Bank Car Loan Fees and Other Charges

Canara Bank Car Loan Interest Rates



Processing Fee

0.25% of the total loan value is charged as processing fee. However, the processing fee will be a minimum of Rs. 1,000 and the cap is of Rs. 5,000.


Depending on the value of the car, 80%, 85%, and 90% of the on-road rate of the car are offered as car loan.

Foreclosure charges

There are no foreclosure charges in case the loan is closed before maturity.

Factors Influencing Canara Bank Car Loan Interest Rates & Eligibility

  • Focus on good credit score: Individual applicants with a good credit score have higher chances of car loan approval and interest rates. A credit score of 750 or higher will give the lender an impression that the applicant is in a position to repay the loan amount on time.
  • Opt for a lesser loan amount: Banks often easily approve car loans which are low in value. This makes the banks comfortable in offering the loan and also at very reasonable interest rates.
  • Minimal Duration: Individuals who select a shorter loan tenure can secure the car loan at lower interest rates. Thus, individuals should choose a shorter loan tenure while borrowing a car loan. This increases the chances of getting loan approval easily as the individuals will then repay the loan faster.
  • Low debt-to-income ratio: Banks often verify an individual’s debt-to-income ratio before approving a loan. If an individual has a substantial balance between income and expenses, there are higher chances of getting a loan at a lower interest rate.

Let’s Understand Car Loans Better

A car loan helps you to buy a car by making the payment for the total price in monthly instalments rather than paying the entire price at once. Under a car loan, the bank or the lending institution pays the total amount of your car and you can then pay the bank/lender in equal monthly instalments or EMIs which include an interest fee.

Loans are generally offered against some security, however, under a car loan, the car is used as a security or collateral. Thus, in case you fail to make timely EMI payments to the bank, your car will be repossessed by the bank for recovering the debt. Before sourcing a car loan, you should estimate the cost of the loan by including factors like the interest, credit scores, personal income, down payment and all the terms & conditions.

How to choose a car loan?

Here are some of the points you can follow while choosing a car loan:

  • If you have decided to purchase a car and are looking for financing assistance, you can begin by assessing your present financial situation and chalk out a rough budget for paying off the car loan.
  • You may also want to check your eligibility for seeking a car loan. 
  • Make sure to check your credit score from a reputed credit score provider. This is a critical aspect which is used by most banks and lending institutions while assessing an applicant’s eligibility and risk-factor for a car loan.
  • If your finances are well-organised, you can compare different car models that fit within your budget and chalk out the loan details (loan period, EMIs, interest, down payments etc.) with your preferred bank.

Buying a car requires a substantial amount of planning and execution, right from arranging the finances to choosing the right model. Once you decide to get yourself a car, the immediate aspect that comes to mind is the lending institution which can be approached for seeking a loan. This is because paying the entire value of the vehicle in a single payment could disturb your finances. Thus, the aim should be to get a higher loan amount at a lower interest, with minimal processing fees & related charges. Canara Bank provides all of this and at attractive interest rates to make the process of buying a car easy for you.

Features and Benefits of Canara Car Loan

The key features and benefits of Canara bank’s car loan are as stated below:

  • Low-interest rates.
  • No hidden fees or charges levied.
  • Minimal processing fees.
  • Flexible monthly instalment schedule as per the customer’s convenience. The loan is available for a maximum duration of 84 months.
  • You can avail a car loan for new cars and also for used cars.
  • The loan is available for all kinds of cars and is not dependent on the car model or manufacturer.
  • The loan tenure for used cars is a maximum of 60 months.
  • The bank does not levy any foreclosure charges in case individuals want to close the loan before the maturity date.
  • The bank offers finance to cover the majority of the car’s value. This makes it easy for an individual to purchase a car.

Eligibility criteria

Mentioned below are the eligibility criteria for availing Canara bank car loan:

  • Self-employed individuals or professionals who work for reputed organisations are eligible to avail Canara bank’s car loan.
  • Hindu Undivided Families (HUFs) are not eligible to apply for a car loan with Canara Bank.
  • Reputed companies and organisations are eligible to apply for a car loan with Canara Bank.
  • When it comes to salaried employees, the requirement for minimum gross salary per year is Rs. 3 lakhs. However, the minimum in-hand salary after considering the car loan instalment should be at least Rs. 12,000 or 25% of the individual’s in-hand salary.
  • Other individuals also need to have a minimum gross annual income of Rs. 3 lakhs as per Income Tax Returns filed. The average yearly income of the applicant should be a minimum of Rs. 2.5 lakhs in the past 3 years.

Loan Application Form for Canara Bank Car Loan

There are generally two options available while applying for a car loan. Applicants can either make the application online and physically submit a filled in application form by visiting the nearest Canara bank branch. It is often convenient to go for the online mode since it can even be done from one’s mobile or computer at home. Applicants must ensure to fill in all the relevant details and submit the completed form along with supporting documents for further processing of the loan application.

Documents Required

Here is the list of documents that have to be submitted for availing a car loan from Canara Bank:

  • Duly filled in application form has to be submitted.
  • 2 recent passport-size photographs of the applicant.
  • Salary slips of last 3-months' or payslips must be submitted.
  • Address proof such as telephone bill, water bill, electricity bill, LPG bill, Driving License, or Aadhaar card must be submitted.
  • Bank statement of last 6 months.
  • Income Tax Returns of the previous 3 years or Form 16.
  • ID proof such as Permanent Account Number (PAN) Card, Aadhaar Card, Voter ID, or Passport must be submitted.

Loan Contribution

Depending on the vehicle cost, the loan contributions from the bank and the individual could vary. Mentioned below are the loan contributions that are generally made by the bank and the individual as per the car’s price:

Car Cost

Individual’s contribution (%)

Loan contribution by Canara Bank (%)

Maximum Rs. 10 lakhs



Above Rs. 10 lakhs and below Rs. 25 lakhs



Above Rs. 25 lakhs



Canara Bank provides 80%, 85%, or 90% of the car’s on-road price depending on the car’s value. If it’s a new vehicle, the loan offered includes insurance premium, registration charges, life tax, invoice value, and other such accessories.

Used Car Loans at Canara Bank

Canara Bank offers user car loans as per the below-mentioned conditions:

  • The user car should not be more than 5 years old.
  • The loan tenure is a maximum of 60 months.

Maximum 75% of the car’s value or the agreed price is financed by the bank. The actual car value has to be accessed by a certified automobile engineer and has to be a maximum of Rs. 15 lakhs.

Car Loan Repayment

Canara Bank offers a convenient loan repayment schedule to individuals who have applied for a car loan. In case of loan for new cars, the loan tenure offered is a maximum of 84 months, and for used cars, the loan tenure is a maximum of 60 months.


1. What type of vehicles can be financed using a Canara Bank car loan?

Different types of four-wheelers like cars, vans and jeeps can be financed using Canara Vehicle Loan. The vehicle can be either new or pre-owned.

2. Is other income considered while determining the income eligibility of an applicant for Canara bank car loan?

The income of spouse, income from investments, or rental income is considered while determining the income eligibility of applicants. However, the bank relies on documentary evidence for such income to be considered.

3. How does Canara bank conduct interest calculation on a car loan?

Interest calculation on a car loan is done on a daily reducing balance basis.

4. As a car loan applicant with Canara bank, can I prepay my loan?

Yes, it is possible to prepay your car loan sourced from Canara bank. The bank does not levy any prepayment fees for such payment.

5. How do I approach Canara bank to avail a car loan?

If you looking to source a car loan from Canara bank, here are the options you can use:

  • Go to the Canara Bank website to check for details.
  • Call up the Canara Bank customer care at 1800 425 0018.
  • Give a missed call to 09268592685. You will receive an SMS with details of the car loan.
  • You can also visit the nearest Canara Bank branch for getting details on the car loan.

6. Do I need to provide any security while taking a car loan from Canara Bank?

In a car loan, the car itself becomes the security which is taken by the bank against the car loan. The vehicle is hypothecated to the bank till the time loan repayment is completed.

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