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🚗Compare New Car Loans

Finance your dream car — up to 100% on-road funding • Rates from 8.30% - 14%

Step 1: Employment Details

What is a New Car Loan?

A car loan is a secured loan where the vehicle serves as collateral until the loan is fully repaid. The bank holds the vehicle's RC (Registration Certificate) until you complete all EMI payments. Car loans typically cover 80-100% of the vehicle's on-road price.

A car loan helps you finance the purchase of a new car with banks funding up to 100% of the on-road price. Interest rates start from 8.30% p.a. in 2026, with tenures up to 7 years. Most banks offer instant approval for pre-approved customers.

New Car Loan Interest Rates 2026 — Bank-wise Comparison

Compare the latest new car loan interest rates across India's top banks and NBFCs. Rates updated March 2026.

Bank / NBFCInterest Rate (p.a.)Max AmountProcessing FeeTenure
SBI8.30% - 12.30%₹1 CrNilUp to 7 years
HDFC Bank8.50% - 14.00%₹1 Cr₹3,000-₹8,000Up to 7 years
ICICI Bank8.50% - 12.00%₹80 Lakh₹3,500-₹6,500Up to 7 years
Axis Bank8.60% - 14.00%₹1 Cr₹3,500Up to 7 years
Bank of Baroda8.45% - 12.40%₹50 Lakh₹1,475Up to 7 years
Kotak Mahindra8.70% - 12.00%₹75 Lakh₹5,000Up to 7 years

* Rates are indicative and subject to change. Actual rate depends on CIBIL score, income, and bank policies.

New Car Loan Eligibility Criteria

💼 For Salaried Individuals

  • ✓Age: 21-65 years
  • ✓Minimum income: ₹15,000/month
  • ✓CIBIL score: 700+
  • ✓Work experience: 1+ years

🏢 For Self-Employed

  • ✓Age: 21-65 years
  • ✓Business vintage: 2+ years
  • ✓Minimum income: ₹2.5 lakh/year
  • ✓IT returns: 2 years
Check Your Eligibility Now →

Documents Required for New Car Loan

  • 📄PAN Card & Aadhaar Card
  • 📄Income proof (salary slips or IT returns)
  • 📄Bank statements (6 months)
  • 📄Address proof
  • 📄Proforma invoice of the vehicle
  • 📄2 passport-size photographs

Tips to Get the Best New Car Loan Deal

  1. Negotiate with the dealer for the best on-road price before applying for the loan
  2. SBI offers zero processing fee on car loans — compare this with other banks
  3. Consider a 3-5 year tenure instead of 7 years to reduce total interest cost
  4. Get pre-approved from your bank before visiting the showroom for better negotiating power

Frequently Asked Questions — New Car Loan

What is the lowest car loan interest rate in 2026?+
SBI offers the lowest car loan rates starting at 8.30% p.a. with zero processing fee. HDFC and ICICI follow at 8.50% p.a. Existing bank customers often get 0.25-0.50% lower rates.
Can I get 100% car loan financing?+
Yes, some banks like SBI and HDFC offer up to 100% on-road price financing for select car models and customer profiles. However, most banks fund 80-90% of the on-road price, with the remaining as down payment.
Is car insurance mandatory for car loan?+
Yes, comprehensive car insurance is mandatory when you take a car loan. The bank requires this to protect their asset. You can choose your own insurance provider, but the bank must be listed as the hypothecation holder.
Can I prepay my car loan without penalty?+
Yes, as per RBI guidelines (Oct 2023), no prepayment charges can be levied on floating-rate car loans. For fixed-rate loans, charges of 2-5% may apply. It is always advisable to prepay when you have surplus funds to save on interest.
What is a good EMI-to-income ratio for a car loan?+
Your total EMI obligations (including the car loan) should not exceed 40-50% of your net monthly income. For a car loan specifically, keep the EMI under 15-20% of your monthly salary. This ensures comfortable repayment and lower risk of default.
Should I buy or lease a car?+
For personal use, buying with a car loan is usually better as you own the asset after the tenure. Leasing is more suitable for corporates or those who change cars every 2-3 years. Car loan interest rates (8-12%) are typically lower than lease costs.

New Car Loan by Bank

Compare new car loan offers from specific banks with detailed features, pros & cons.

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SBI

8.30% onwards

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HDFC Bank

8.50% onwards

Related Tools & Resources

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EMI Calculator

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Eligibility Check

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CIBIL Score