Car Loan Interest Rates — Major Banks (2026)
Before using the calculator, enter a realistic interest rate for your profile. Here are current rates across major lenders:
| Lender | Interest Rate (p.a.) | Processing Fee |
|---|---|---|
| SBI | 8.75% – 10.50% | 0.50% of loan, max ₹10,000 |
| Punjab National Bank | 8.75% – 10.25% | ₹1,000 – ₹3,000 |
| Bank of Baroda | 8.85% – 11.50% | 0.50%, min ₹2,500 |
| HDFC Bank | 9.10% – 12.50% | Up to 0.5%, min ₹3,500 |
| ICICI Bank | 9.10% – 12.75% | ₹3,500 – ₹8,500 |
| Axis Bank | 9.10% – 13.00% | ₹3,500 – ₹7,500 |
Rates as of May 2026. Your actual rate depends on your CIBIL score, income stability, loan amount, and the car model. Higher CIBIL scores (750+) attract the lowest rates.
How Much Does Tenure Affect Your EMI?
On a ₹8 lakh car loan at 9.5% interest:
| Tenure | Monthly EMI | Total Interest Paid | Total Amount Paid |
|---|---|---|---|
| 3 years | ₹25,637 | ₹1,22,932 | ₹9,22,932 |
| 5 years | ₹16,747 | ₹2,04,820 | ₹10,04,820 |
| 7 years | ₹12,874 | ₹2,81,416 | ₹10,81,416 |
A 7-year tenure cuts your EMI by 50% compared to 3 years — but you pay ₹1.58 lakh more in interest. Use the calculator to find your own trade-off.
Car Loan Eligibility — What Lenders Check
Most banks evaluate these factors:
- CIBIL score — 750+ gets the best rates; below 650 may face rejection or higher rates
- Income — minimum ₹20,000–₹25,000/month net take-home for most banks; self-employed need 2+ years of profitable ITR
- Employment stability — salaried in a stable job for 1+ year preferred; self-employed with business vintage 3+ years
- Existing EMIs — your total EMI burden (existing + proposed) should not exceed 50%–60% of take-home income
- Age — typically 21–65 years; loan must be repaid before age 65–70
New Car vs Used Car Loans
| Factor | New Car Loan | Used Car Loan |
|---|---|---|
| Interest rate | 8.75% – 13% | 11% – 18% |
| Maximum tenure | 7 years | 5 years |
| LTV (Loan-to-value) | Up to 90% of ex-showroom price | 70%–80% of valuation |
| Processing | Simpler, dealer tie-ups | Requires inspection/valuation |
For used cars, banks typically finance vehicles not older than 5–8 years and capping the total age at loan maturity to 15 years.
Tips to Get a Lower Interest Rate
- Check your CIBIL score before applying — dispute any errors; even a 30-point improvement can save ₹10,000+ in interest
- Compare before you commit — use this calculator with the exact rates from 2–3 banks before visiting the showroom
- Negotiate with your salary account bank — existing customers often get 0.25%–0.50% lower rates
- Avoid dealer financing — dealers earn commissions on financed deals; go directly to a bank for better rates
- Opt for a shorter tenure if affordable — lower total interest cost even if the rate is the same
- Time it with year-end offers — March (financial year-end) and October–November (festive season) see rate concessions and waived processing fees