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.

Author
Recent Posts

Harshit Singh

Content Strategist at Tickertape

Hey there, I’m Harshit Singh Mahey! With eight years of experience as a Content Strategist, I’ve had the pleasure of working with a Fortune 100 company and building three successful startups from the ground up.

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.