Car Loan Interest Rates (2024)

Car Loan Interest Rate plays a vital role in determining the affordability of your dream car’s vehicle loan. It directly impacts your EMI options and the overall cost of the loan, making it an essential factor to consider before applying for one.

Understanding Car Loan interest rates is crucial to making informed financial decisions and ensuring interest savings.

Car Loan Interest Rates and Charges

Loan Tenure	1 Yr MCLR	Spread over MCLR	Effective ROI Range	Reset	Processing Fee	Documentation Charges
Up to 36 months	9.30%	0.0%-4.80%	9.30%-14.10%	No Reset	Rs. 3500 - Rs. 12000	Rs. 700
Over 36 months	-	-	9.30%-14.10%	-	Rs. 3500 - Rs. 12000	Rs. 700

New Car Loan Charges

A New Car Loan is a type of financing banks offer for purchasing a new car. Banks provide up to 85% of the car's total value under this type of car finance. If you take a New Car Loan, the car acts as collateral, and you need to make regular EMIs to repay the loan within tenure.

In the event of EMI defaults, banks have the right to repossess the car as security. The Car Loan interest rate starts at 9.3% and the loan processing fee can range between Rs 3500 and Rs 12000 with a Car Loan stamp duty charge of Rs 700.

Banks have streamlined the entire Car Loan application process for your convenience. From application to approval and disbursement, everything can now be done online, eliminating the need for physical visits to banks.

Sr. no	Type	Charges
1	Cheque/ECS/NACH Bounce / Instrument Return Charges	Rs. 339 per instance
2	Cheque / Instrument Swap Charges	Rs. 500 per instance
3	Duplicate Statement Issuance Charges	Rs. 250 per instance
4	Duplicate Repayment Schedule Issuance Charges	Rs. 250 per instance
5	Penal Charges	^Financial Default: 8% p.a. above applicable interest rate on the overdue amount (subject to the aggregate not exceeding 24% per instance)
6	Loan Cancellation / Re-booking	Rs. 550/- per case
7	Foreclosure/Part Payment Closure	5% of the Principal Outstanding
8	Stamp Duty	At actuals
9	Issuance of Credit Report	Rs. 50/- per instance
10	Documentation Charge	Rs 700/-
11	Registration Certification Collection Charge	Rs 250/ per instance
*Goods and Services tax (GST) will be charged extra as per the applicable rates, on all the charges and fees (wherever GST is applicable). ^Financial Default includes all types of payment or financial defaults/irregularities with respect to your Loan Account. There shall be no capitalisation of Penal Charges. Pre-Payment charges are not applicable for fixed rate loans up to 50 lakhs to Micro and Small Enterprise (MSE) For more details,please click here For New Car Loan Charges

Types of Car Loan Finance Interest Rates

There are two types of vehicle loan interest rates:

1. Fixed Car Loan interest rate: A fixed interest rate remains constant throughout the loan tenure. It is unaffected by any fluctuations in the financial markets. Fixed interest rates are a go-to choice when one expects financial instability in the market.

2. Floating Car Loan interest rate: These interest rates fluctuate in sync with changes in the financial market's trends causing alterations in the base rate. If the interest rate rises or falls, your car loan EMIs may increase or decrease respectively.

Breakdown of the application process

Step 1: Begin by filling out the Car Loan application form online with your personal and financial details.
Step 2: After submitting the form, upload all necessary documents as requested and ensure they are clear and up to date for a smooth verification process.
Step 3: The bank will review your application and documents to consider your repayment capacity.
Step 4: Upon approval, the loan amount will be disbursed to help cover a significant portion of the car’s cost.

Factors affecting Car Loan Interest Rates

Credit Score: A strong credit score often leads to lower Car Loan rates. This is because lenders view high scores as an indicator of responsible financial behaviour and lower lending risk.
Loan tenure: The length of your loan term impacts the Car Loan interest rate. Shorter tenure typically comes with lower car finance rates and higher monthly payments and vice versa.
Down payment: A larger down payment reduces the lender’s risk, may secure you a lower car interest rate and decreases the overall loan amount.
Income and employment stability: A stable income and consistent employment history can help you qualify for more favourable car finance rates.

FAQS

Will the Car Loan interest rate be fixed or floating?

New Car Loan interest rates can be either fixed or floating. With a fixed interest rate, your payments remain constant through the tenure, while floating rates can fluctuate during your loan term. You can choose between the two options based on your preference for stable or variable rates for repayment.

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Car Loan Interest Rates (2024)

Car Loan Interest Rates and Charges

New Car Loan Charges

*Goods and Services tax (GST) will be charged extra as per the applicable rates, on all the charges and fees (wherever GST is applicable).

For more details,please click here For New Car Loan Charges

Types of Car Loan Finance Interest Rates

Breakdown of the application process

Factors affecting Car Loan Interest Rates

FAQS

Will the Car Loan interest rate be fixed or floating?

Does the type of car affect the loan interest rate?

Can I get a lower interest rate if I make a higher down payment?

Can I negotiate the interest rate on the car?

What is the ideal tenure for availing a Car Loan?

How does the tenure affect my new Car Loan Interest Rate?

A car loan to
zip around the city!