Car loans are a go-to option for people looking forward to bringing home their dream car or upgrading to a new model. To support such aspirations, the market offers a huge range of borrowing options and suitable financing options. Making this option even better are customized loans from lenders like the State Bank of India and Axis Bank. These are aimed at meeting the needs of customers from different income groups.
Car Loan: Interest Rate
The most important aspect of a loan from the borrower’s point of view is the interest rate. In India, these rates start from 8.45 per cent per annum. Meanwhile, the repayment tenure can be extended up to 8 years. Depending on the lender, people seeking a car loan can cover up to 100 per cent of the car’s on-road price.
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Car Loan: Floating vs Fixed Interest Rate
Car loan interest rates can either be fixed or floating. A fixed interest rate stays the same throughout the duration of the loan. Fixed interest rates are not impacted by changes in the interest rates set by the lender. In contrast, a floating interest rate is one that is continually adjusted in accordance with changing trends in the financial market.
Latest Car Loan Interest Rate 2025
| Name of the Bank | EMI for Rs 1 lakh for 7 years | Interest Rate (p.a.) |
|---|---|---|
| State Bank of India | Rs 1,614 onwards | 9.10% p.a. onwards |
| HDFC Bank | Rs 1,629 onwards | 9.40% p.a. onwards (Rack Interest) |
| Punjab National Bank | Floating: Rs 1,584 onwards Fixed: Rs 1,634 onwards |
Floating: 8.50% p.a. onwards Fixed: 9.50% p.a. onwards |
| Axis Bank | Rs 1,629 onwards | 9.40% p.a. onwards |
| Bank of India | Rs 1,596 onwards | 8.75% p.a. |
| Karnataka Bank | Rs 1,611 onwards | 8.88% p.a. onwards |
| IDBI Bank | Floating: Rs 1,599 onwards Fixed: Rs 1,619 onwards |
8.80% p.a. onwards (floating) 9.20% p.a. onwards (fixed) |
| Canara Bank | Rs 1,581 onwards | 8.45% p.a. onwards |
| ICICI Bank | Rs 1,614 onwards | 9.10% p.a. onwards |
| Indian Overseas Bank | Rs 1,589 onwards | 8.60% p.a. onwards |
| South Indian Bank | Rs 1,596 onwards | 8.75% p.a. onwards |
| Federal Bank of India | Rs 1,609 onwards | 9.00% p.a. onwards |
| Union Bank of India | Rs 1,581 onwards | 8.45% p.a. onwards |
| Bank of Baroda | Fixed: Rs 1,611 onwards Floating: Rs 1,617 onwards |
Fixed: 8.80% p.a. onwards Floating: 9.15% p.a. onwards |
| Karur Vysya Bank | Rs 1,627 onwards | 9.35% p.a. onwards |
Car Loan Eligibility Criteria
The eligibility criteria for obtaining car loans can differ across banks, but the general requirements typically include certain standard conditions. Applicants should be between the ages of 18 and 75 and must have a net monthly income of at least Rs 20,000. Additionally, they are expected to have been employed with their current employer for a minimum of one year. Eligible individuals can be either self-employed or salaried professionals working for private enterprises or government agencies.