Planning to buy a car in 2026? Understanding the latest car loan interest rates in India can help you save thousands on EMIs. Whether you’re buying a new or used car, banks and NBFCs offer competitive rates based on your profile, income, and credit score.
Top Banks & NBFC Car Loan Interest Rates
| Bank/NBFC | Interest Rate (p.a.) | Processing Fee |
| SBI | 8.65% – 9.85% | Up to ₹10,000 |
| HDFC Bank | 8.75% – 10.50% | Up to 1.5% |
| ICICI Bank | 8.80% – 10.75% | Up to 1.5% |
| Axis Bank | 9.00% – 11.00% | Up to 1.5% |
| Kotak Mahindra Bank | 9.10% – 11.25% | Up to 2% |
| Bank of Baroda | 8.70% – 10.50% | ₹1,500 – ₹10,000 |
| Punjab National Bank | 8.75% – 10.25% | Up to 1% |
| Canara Bank | 7.45% – 10.40% | ₹1,000 – ₹5,000 |
| Union Bank of India | 8.90% – 10.60% | Up to 1% |
| IDBI Bank | 9.00% – 10.80% | ₹2,500+ |
| Yes Bank | 9.25% – 12.00% | Up to 2.5% |
| IndusInd Bank | 9.50% – 13.00% | Up to 2% |
| Federal Bank | 9.20% – 11.50% | Up to 1% |
| IDFC FIRST Bank | 9.10% – 12.50% | Up to 2% |
| Tata Capital | 10.50% – 15.00% | Up to 3% |
| Bajaj Finserv | 10.00% – 14.50% | Up to 3% |
| Mahindra Finance | 11.00% – 16.00% | Up to 3% |
| Cholamandalam Finance | 10.75% – 15.50% | Up to 3% |
| Muthoot Capital | 11.50% – 17.00% | Up to 3% |
| L&T Finance | 10.50% – 15.00% | Up to 3% |
Factors That Affect Car Loan Interest Rates
1. Credit Score (CIBIL)
- 750+ score → Lowest interest rates
- 600–750 → Moderate rates
- Below 600 → Higher rates
2. Income & Employment
Stable salaried job or profitable business = better rates.
3. Loan Tenure
- Short tenure → Lower interest
- Long tenure → Higher total cost
4. Down Payment
Higher down payment reduces lender risk → lower interest rate.
5. Type of Car
- New cars → lower rates
- Used cars → higher rates
Also Read: Get ₹12,000 Loan on Aadhaar Card
EMI for Car Loan
Assume you take a ₹5 lakh loan at 9% interest. Let’s check out the per-month EMI. Also used the Car Loan EMI Calculator to know the exact EMI.
| Tenure | EMI (Per Month) |
| 3 Years | ₹15,900 |
| 5 Years | ₹10,400 |
| 7 Years | ₹8,000 |
Eligibility Criteria
- Age: 21–65 years
- Income: Minimum ₹15,000/month
- Employment: Salaried or self-employed
- Credit Score: 650+ preferred
- Stable job/business
Documents Required
- PAN Card
- Aadhaar Card
- Salary slips / ITR
- Bank statements (6 months)
- Car quotation
How to Get the Lowest Car Loan Interest Rate
Compare Multiple Lenders
Don’t settle for the first offer—compare banks & NBFCs.
Maintain a High CIBIL Score
Try to maintain a CIBIL score above 750 to get the best deals.
Choose Shorter Tenure
Always choose short term repayment tenure to reduce overall interest.
Negotiate with Lender
Banks often reduce rates for good profiles.
Increase Down Payment
Lower loan amount = lower interest.
Hidden Charges to Check
- Processing fee
- Prepayment/foreclosure charges
- Late payment penalty
- Loan cancellation fee
Also Read: Instant Loan Up to 3 Lakh for Self-Employed
Conclusion
Car loan interest rates in India in 2026 are highly competitive, starting from around 7.45% per annum. Choosing the right lender can save you a significant amount over time.
Before applying, compare lenders, check your credit score, and calculate EMIs carefully. Platforms like 24hrLoan make it easy to find the best deal and get quick approval.