Customers who want to buy two-wheeler or four-wheeler automobiles can apply for a car loan from a bank or an NBFC (Non-Banking Financial Companies. Before applying for a car loan, customers must check out which bank has lowest interest rate on car loan.
Your monthly payments and the total amount you will pay throughout the loan time are directly impacted by the interest rate.
Several variables, including loan size, term, and credit score, affect car loan interest rates.
In this blog, we will try to figure out which bank has the lowest interest rate on car loan along with HDFC car loan interest rate, SBI car loan interest rate, Bank of Baroda car loan interest rate, and many more.
Which bank has the lowest interest rate on car loan?
India is home to many private and public banks offering car loans at different interest rates. The lowest auto loan interest rates, however, might start at 7.30% annually for the majority of banks. To find out which bank has the lowest interest rate on car loan, customers must reach out to a car dealer and compare interest rates from various banks.
The best car loan interest rate that each bank offers is discussed below. To obtain the best interest rates on their car loan, a person might go through these.
List of Interest Rates for Auto Loans at Every Bank
The top car loan interest rates for 2024 from renowned Indian banks are listed below:
| Current Interest Rates for Car Loans | |
| Canara Bank car loan Interest rate | 7.30% – 9.90% |
| Bank of Baroda car loan Interest rate | 7.35% – 7.95% |
| ICICI car loan Interest rate | 8.82% – 12.75% |
| Indian Bank car loan Interest rate | 8.20% – 8.55% |
| Union Bank Of India car loan Interest rate | 7.40% – 7.50% |
| PNB car loan Interest rate | 9.40% – 9.90% |
| Central Bank of India car loan Interest rate | 7.25% – 7.50% |
| IDBI car loan Interest rate | 8.40% – 9.00% |
| HDFC car loan Interest rate | 8.80% – 10.00% |
| Corporation Bank car loan Interest rate | 7.40% – 7.50% |
| SBI car loan Interest rate | 7.95% – 8.70% |
| UCO Bank | 7.70% – 9.30% |
Types of Interest Rates for Car Loans in India
There are two sorts of interest rates for car loans: variable interest rates and fixed interest rates.
A fixed interest rate does not change during the time of the loan. Market fluctuations do not affect these interest rates. Conversely, a variable interest rate fluctuates in reaction to developments in the financial markets.
Key Features of the SBI Car Loan Interest Rate
SBI Car Loan Interest Rate for customers ranges from 9.10% to 15.25% for a maximum term of 8 years.
The main features of the SBI car loan interest rate are mentioned below:
- SBI car loan interest rate withcompetitive EMI
- Repayment tenure of 7 years
- Provides financing on the On-Road price
- Interest is computed based on the Daily Reducing Balance
- No Advance EMI
SBI Car Loan Interest Rate: Processing fees
| Charges | SBI Car Loan Scheme |
| Processing fee | Nil |
| Financing | Up to 100% of the car’s ‘On-Road Price’ may be provided |
HDFC Car Loan Interest Rate
HDFC Car Loan Interest rate starts at 9.40% annually for new loans and 13.75% annually for used loans. The amount determines the HDFC Car loan interest rate:
- New auto loans: For loans under 10 lakh, interest rates begin at 8.25%; for loans between 10 lakh and 20 lakh, they are 8.15%; and for loans beyond 20 lakh, they are 7.90%.
- Loans for used cars: Starting interest rates are 13.75% annually.
Additional advantages of HDFC Bank Car loan Interest rate include the following:
- Duration of repayment: Repayment terms for new auto loans range from 12 to 84 months.
- The maximum loan amount for a new car is 10 crore rupees, and the maximum loan amount for a used car is 2.5 crore rupees.
- If you close the loan within six months, there are no foreclosure fees.
- Processing charges: The starting processing fee is 2,499 rupees.
Bank of Baroda car Loan Interest Rate
This is the Bank of Baroda car loan interest rate along with the various fees related to the loan.
| Bank of Baroda Car Loan Interest Rate | 8.40% p.a. and higher. |
| Processing Fees | Starts from Rs.500 plus GST |
| BLLR+ Strategic Premium + Interest Rates | 0.45% – 2.75% |
| Foreclosure Charges | 0 |
| Loan Amount | 1 crore |
| Pre-Closure Charges | Nil |
| Security/Collateral | Hypothecation of the car financed |
| Credit score | Minimum CIBIL score required – 701 |
| Margin Amount | 10% margin of the ‘on-road’ price of the car |
| Age Limit | Minimum age of the borrower – 21 years Minimum age of the co-applicant – 18 years Maximum age – Applicant/co-applicant/guarantor’s age + repayment period must not be more than 70 years |
How to Apply for a Car Loan in India?
Verifying which bank has lowest interest rate on car loan is the first step. The detailed instructions for applying for a car loan are as follows:
Check Your CIBIL Score
Verifying the applicant’s credit score, or CIBIL, is the first stage in the loan application process. For someone to be eligible for the application process, their CIBIL score must be positive. An excellent CIBIL score is one that is greater than 750. If the applicant fails the CIBIL score check, the lender may also deny the auto loan application.
Apply to lenders
When someone has looked at their credit score, it’s time to think about auto loans and lenders, which fall into the following categories:
- Nationally significant banks.
- Community banks and credit unions.
- Internet lenders who only offer auto loans.
- If purchasing a car from an online car retailer with in-house financing.
- Dealership financing or “captive” lenders are provided by automakers.
Obtain Prior Approval
Once you’ve narrowed down your search to a select few lenders, you might be able to compare offers and get interest-rate quotations. Getting the best rate is facilitated by lenders competing for your business. Furthermore, interest rate proposals for auto loans can change significantly since lenders evaluate many aspects of your credit history.
When you apply to lenders, you may be pre-qualified or pre-approved for a loan. They are different, and it is important to know what each one means.
Determine the Amount of the Auto Loan
Your preapproval offers will indicate the maximum amount you may borrow, but this is not the cost of the car you can buy. An additional 10% of your budget should be set aside for taxes and fees.
Select the Vehicle It’s time to start picking out your new vehicle now that you have financing offers and know the highest amount you can afford.
Which bank has the lowest car loan interest rate?
You can compare interest rates from several lenders and take your credit score into account to determine which bank has the lowest car loan interest rate.
An online car loan interest rate calculator is another way to determine which bank has the lowest interest rate on a car loan.
How lowest car loan interest rates are compared?
- Get a pre-approved loan: Get and compare loan rate quotations from several lenders.
- Think about your credit score: Those with high credit scores may be eligible for the lowest car loan interest rate from lenders.
- Consult your credit union or bank: A favourable rate can be available from your own bank or credit union, particularly if you have automated payments set up.
How to use a car loan EMI calculator?
Visit the website of your desired bank, open the car loan interest rate calculator, and enter the loan amount, interest rate, and tenure. After that, you will get the monthly EMI of your loan.
Which Bank has the Lowest Interest rate on Car Loan? FAQs
Q1. Which bank has the lowest interest rate on a car loan?
BIR credit solutions offer the lowest interest rate on a car loan through their partnership with top banks in India.
Q2. Can I receive a car loan with a 0% interest rate?
A higher credit score is usually required for a zero-interest loan because the lender is taking on a greater risk by providing funds without interest charges.
Q3. What is the current interest rate on a car loan by HDFC?
The current HDFC Car loan interest rate is 9.40% annually.
