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Introduction

Buying a car is an ardent desire for a lot of people. So much thought and planning goes into it before the purchase is made. While it's easy to find the right vehicle for your family, more effort is needed to find the best lender for your car loan.

Deciding whether you should go for a hatchback or an SUV, a manual transmission or an auto-drive, a diesel or petrol variant, is easy as there are many tools to help you select the right car that suits your and your family’s needs. However, settling on the right lender for the most affordable car loan is a real challenge. India has 100s of lenders selling different car loan products that give you attractive features. Yet, one needs to be patient and evaluate all the considerations before agreeing to go for the lender.

HDFC Bank offers car loans to consumers to buy their dream car. Customers can avail up to 100% of the vehicle's on-road price, up to a limit of Rs.3 crores, on a wide variety of car types and brands. You will also get a flexible repayment term of up to 7 years. The New Car Loans can be used to buy new cars, vans, jeeps, SUVs or MUVs for private use, while used car loans allow you to purchase an old car or jeep that is not more than 5 years old.

HDFC Bank Car Loans – A Snapshot

Hdfc Bank Car Loan Interest Rates

Features

New Car Loan

Used Car Loan

Interest rates

7.50% - 15.56%

9.40% - 22.68%

Loan tenure

Up to 7 years

Up to 5 years

Processing fee

1% of Loan Amount subject to minimum of Rs.5000 and maximum of Rs.10000

1% of Loan Amount subject to minimum of Rs.5000 and maximum of Rs.10000

Loan amount

Up to 100% of the ex-showroom price subject to a maximum of Rs.3 crores

Up to 100% of the car’s valuation subject to a maximum of Rs.2.5 crores

Foreclosure Charges

No foreclosure allowed within 6 months from date of availing the car loan

6% of Principal Outstanding for pre-closures within 1 year from 7th EMI

5% of Principal Outstanding for pre-closures within 13-24 months from 1st EMI

3% of Principal Outstanding for pre-closures post 24 months from 1st EMI

No foreclosure allowed within 6 months from date of availing the loan

6% of Principal Outstanding for pre-closures within 1 year from 7th EMI

5% of Principal Outstanding for pre-closures within 13-24 months from 1st EMI

3% of Principal Outstanding for pre-closures post 24 months from 1st EMI

Part Pre Payments

Part-payment is allowed subject to completion of 12 EMIs

Part payment will be allowed twice only during loan tenure. Part payment is allowed only once a year. At any point of time, part payment will not increase beyond 25% of Principal Outstanding.

5% on the part payment amount in case part prepayment is within 13-24 months from 1st EMI

3% on the part payment amount in case part prepayment is post 24 months from 1st EMI

Part-payment is allowed subject to completion of 12 EMIs

Part-payment will be allowed only twice during the loan tenure, and is allowed only once per year. At any point of time, part-payment will not increase beyond 25% of Principal Outstanding

5% of the part-payment amount in case part prepayment in within 13-24 months from 1st EMI

3% on the part-payment amount in case part prepayment is post 24 months from 1st EMI

Eligibility Criteria for HDFC Bank Car Loans

HDFC Bank Car Loans are available for the following people:

Salaried Individuals:

  • This covers workers of private limited corporations, employees of public sector undertakings, including central, state and local governments.
  • Individuals who are at least 21 years of age at the time of filing for a loan and not more than 60 years of age at the completion of the loan term.
  • Individuals who have worked for at least 2 years and for the same employer for at least 1 year.
  • Those who earn a minimum of Rs. 3 lakhs per year, including the income of the spouse or co-applicant.
  • Individuals who use a cell phone or post-paid phone

Self Employed Individuals and Professionals (Sole Proprietorship):

  • This involves self-employed sole proprietors in the manufacturing, trading or service industry
  • Individuals who are at least 21 years of age at the time of filing for a loan and no more than 65 years of age at the completion of the loan term
  • Those that have been in operation for at least 2 years
  • Should at least make Rs. 3 lakhs a year

Self Employed Individuals and Professionals (Partnership Firms):

  • This includes self-employed partners in the manufacturing, trading or utility sector
  • Those with the minimum turnover of Rs. 3 lakhs in a year

Self-employed Individuals and Practitioners (Private Limited Companies):

  • This involves people who own a private company in the manufacturing, shipping or services industry.
  • Must be making a profit of Rs. 3 lakhs a year

Self Employed Individuals (Public Limited Companies):

  • This includes directors in public limited companies that are in the business of manufacturing, trading or services
  • Should be earning at least Rs. 3 lakhs per annum

Factors Affecting HDFC Car Loan Interest Rates

The bank doesn't give every borrower the same interest rate. HDFC Bank Car Loan interest rates differ on the basis of a few factors, such as age, income, employer, credit score, etc. Here is a look at the most significant factors that impact the interest rates for your car loan at HDFC Bank:

Credit Score

Your credit report is a major factor in determining your car loan interest rate. A good credit score means that your history of repayment is good. Higher loan amounts and lower interest rates are guaranteed. A higher credit score is used by banks as an indication of the creditworthiness. This greatly changes the eligibility of your loan amount and your interest rate.

Income

A higher salary means that the debt is repaid on time. Banks offer better lending rates to persons with higher incomes. Banks still prefer salary earners over self-employed people, since wages mean that the account gets daily cash flow. However, self-employed professionals have an edge over salaried workers since they earn more than they do.

Your Age

The age of the borrower plays an important role during the car loan application process. The younger the creditor, the greater the number of years he would have to repay the loan. Car loans will be made available to people who are 21 years of age. Unlike older candidates, loan sums and interest rates are very favourable for younger-generation applicants.

Vehicle Model and Age

In the event of a car loan, the vehicle will serve as collateral. In the event of not getting the EMIs, the bank or NBFC will seize the car. The model and age of the vehicle are then weighed when setting interest rates. New cars from a reputable manufacturer have lower interest rates relative to older models. Used cars often come with high interest rates as the value of the car depreciates with age.

Type of Employment & Employer

Employment with a reputable company would certainly get you a decent deal on interest rates on your HDFC Bank Car Loan. In authorizing the loan, several banks have a list of accredited employers and reputable bodies to which they refer. Employment in these companies guarantee the security of work and the flow of income to bankers. You are also allowed to seek an offer of higher car loan amounts and lower interest rates.

Relationship with the lender

Preference is often extended to bank clients with a long-term relationship, relying on the fact that their credit record is easier to view. If you are an old HDFC Bank customer, the bank will be able to review your account history, any recent credit or credit card charges and your general financial status. Therefore, on deposits, the committed customer is granted preferential interest rates.

Adding a co-applicant

If you have another earning member of the family, you can add them to the loan as a co-applicant so that their income is also taken into account while processing your application for car loans. If both of your income is entered, the result is a higher repayment potential and thus a lower interest rate.

Amount of down payment

While HDFC Bank gives you up to 100% of the vehicle's ex-showroom cost as a loan value, if you can make a higher down payment, you can negotiate better interest rates. Higher down payments mean lower debt balances and greater repayment potential. Banks are actively searching for low-cost lending consumers to reduce their default credit risk. So when you offer a higher down payment, you have a shot at having a lower interest rate.

Existing liabilities and investments

Last but not least, your current loans and obligations play an important part in assessing the eligibility of your car loan and interest rates. If you have current obligations, the repayment potential would be limited. This is perceived to be a high risk plan for the lender. It would also place more pressures on the cash flow. Therefore, an individual with a very low or no current liability is a preferred candidate for any bank.

Why should you choose your car loan from HDFC Bank?

  • Get custom made car loans to suit your requirements
  • Get different Car Loan schemes like Flexible Repayment Schemes, Step Up Options, Balloon EMI Options and more
  • Zero foreclosure charges to give you an enhanced car loan experience
  • Get top-up loans after a period of 9 months
  • Get car loan amounts of up to Rs.3 crores to get your dream car
  • Use ZipDrive Instant Car Loan process, exclusively for HDFC Bank customers, just from your NetBanking login
  • Get DivaLoan scheme specifically tailored for women applicants
  • Get funding for a comprehensive insurance package for your new car
  • User the HDFC Bank’s New Car Bazaar or the Autopedia Mobile App for buying assistance

HDFC Bank Car Loan Interest Rates FAQs:

1. Is there any benefit by adding my wife, who is an employee with a reputed MNC, as my co-applicant on the car loan application?

Very much. Adding a co-applicant increases your chance of getting competitive interest rates on your HDFC Bank Car Loan. Also, a reputed employer can get you additional preference.

2. Can I foreclose my HDFC Bank Car Loan?

Yes, you can foreclose your HDFC Bank Car Loan without any prepayment penalty. You can also make part pre-payments into your HDFC Bank Car Loan account for a nominal fee.

3. Does HDFC Bank ask for any collateral or guarantee to sanction a car loan?

Hypothecation of the purchased vehicle and bank’s charge registered with the RTO serves as the primary security for car loans. So there is no need for any additional security or collateral. However, it finally depends on the discretion of the bank.

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