Car Loan Interest Rates Bank Wise
Car Loan Interest Rates Bank Wise
S
sushanta
6 April 2026·3 min read
2
Car Loan Interest Rates Bank-wise in India (2026)
Buying a car is a dream for many people in India, and car loans make it easier to turn that dream into reality. Today, almost every major bank offers car loans with competitive interest rates, flexible tenure, and quick approval. However, interest rates vary by bank, which is why comparing options before choosing a loan is very important.
In this guide, we will look at car loan interest rates bank-wise in India, along with factors that affect the interest rate and tips to get the lowest possible rate.
Car Loan Interest Rates Bank Wise (2026)
Below is a comparison of car loan interest rates offered by major banks in India.
| Bank Name | Interest Rate (Starting From) |
|---|---|
| State Bank of India | 8.75% – 9.90% |
| Punjab National Bank | 7.50% – 8.40% |
| Canara Bank | 7.45% onwards |
| Bank of Baroda | 7.65% onwards |
| Indian Overseas Bank | 7.55% onwards |
| HDFC Bank | 9.00% onwards |
| ICICI Bank | 9.10% onwards |
| Axis Bank | 9.25% onwards |
| Federal Bank | 8.30% onwards |
Used Car Loan Interest Rates
Interest rates for used cars are usually higher than new car loans because the vehicle has already depreciated in value.
| Bank | Used Car Loan Interest Rate |
|---|---|
| State Bank of India | 11% – 14% |
| Punjab National Bank | 8.65% – 10.45% |
| ICICI Bank | 11% onwards |
| Axis Bank | 13% – 15% |
| South Indian Bank | 11% onwards |
Factors That Affect Car Loan Interest Rates
Banks calculate the interest rate based on several factors:
1. Credit Score
Your CIBIL score plays a major role in determining the interest rate.
A score above 750 usually qualifies for the lowest rates.
2. Loan Tenure
Car loan tenure typically ranges from 1 year to 7 years.
Longer tenure means lower EMI but higher overall interest payment.
3. Income and Employment
Banks check your salary, business income, and job stability before approving a loan.
4. Loan Amount
Higher loan amounts may come with stricter eligibility checks.
5. New Car vs Used Car
New car loans generally have lower interest rates, while used car loans carry higher rates.
Example EMI Calculation
Suppose you take a ₹10 lakh car loan at 8.5% interest for 7 years.
Your monthly EMI will be approximately ₹15,600.
Over the entire tenure, the total interest paid will be around ₹3.1 lakh.
Tips to Get the Lowest Car Loan Interest Rate
Follow these simple tips to get the best deal on a car loan:
- Maintain a CIBIL score above 750
- Compare multiple banks before choosing a loan
- Opt for a shorter tenure if possible
- Negotiate interest rates with the bank
- Apply through a trusted car buying platform
How CarBhartics Helps You Get the Best Car Loan
Platforms like CarBhartics help customers compare car prices, financing options, and insurance before buying a vehicle.
Through CarBhartics.com, buyers can:
- Compare car loan options from different banks
- Get assistance in loan approval
- Choose the best financing option for their budget
- Complete the car buying process with expert guidance
Conclusion
Car loan interest rates in India start from around 7.45% per year, but the final rate depends on your credit score, bank selection, and loan tenure. Comparing multiple banks before taking a loan can help you save a significant amount of money over time.
If you are planning to buy a new car, always evaluate financing options carefully and choose the loan that offers the best balance between EMI and total interest cost.