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Lowest Car Loan Interest Rates in India (2026)
Updated · 10 options compared
New car loans are cheaper than personal loans because the car itself is the security. Public sector banks typically offer the lowest rates, while private banks and NBFCs compete on speed, higher funding (up to 100% of the on-road price) and dealer tie-ups.
A shorter tenure means a higher EMI but much less interest. A popular rule of thumb is 20/4/10: put down at least 20%, finance for no more than 4 years, and keep the EMI under 10% of your monthly income.
Quick comparison
| # | Name | Interest rate | Loan amount |
|---|---|---|---|
| 1 | Bank of Baroda Car Loan | 8.45% - 10.50% | Up to 90% On-road |
| 2 | Punjab National Bank Car Loan | 8.55% - 10.90% | Up to 85% On-road |
| 3 | SBI Car Loan Car Loan | 8.65% - 9.80% | Up to 90% On-road |
| 4 | HDFC Bank Car Loan | 8.75% - 11.50% | Up to 100% On-road |
| 5 | Kotak Mahindra Bank Car Loan | 8.75% - 11.00% | Up to 90% On-road |
| 6 | IDFC First Bank Car Loan | 8.75% - 12.00% | Up to 100% On-road |
| 7 | ICICI Bank Car Loan | 8.85% - 13.00% | Up to 100% Ex-showroom |
| 8 | Axis Bank Car Loan | 8.85% - 12.50% | Up to 90% On-road |
| 9 | IndusInd Bank Car Loan | 9.00% - 13.00% | Up to 100% Ex-showroom |
| 10 | Bajaj Finserv Car Loan | 9.50% - 14.00% | Up to 100% On-road |
1.Bank of Baroda Car Loan
- Interest rate
- 8.45% - 10.50%
- Loan amount
- Up to 90% On-road
- Tenure
- 12 - 84 months
- Processing fee
- ₹1,500 to ₹4,000
BoB offers among the lowest car loan rates in India starting at just 8.45%, often beating even SBI on price. Special concessional rates for women borrowers make it the top choice for female car buyers. No prepayment penalty on floating rate loans adds excellent flexibility.
- Among the lowest car loan rates
- Special rates for women borrowers
- No prepayment penalty on floating rate
2.Punjab National Bank Car Loan
- Interest rate
- 8.55% - 10.90%
- Loan amount
- Up to 85% On-road
- Tenure
- 12 - 84 months
- Processing fee
- ₹1,000 to ₹3,000
PNB's car loan has the lowest processing fees in the market starting at just ₹1,000. Special rates for existing PNB customers and the option to finance two-wheelers as well make it a versatile lending product. Simple documentation and wide branch availability across India ensure easy access.
- Low processing fee
- Special rates for existing PNB customers
- Covers new cars and two-wheelers
3.SBI Car Loan Car Loan
- Interest rate
- 8.65% - 9.80%
- Loan amount
- Up to 90% On-road
- Tenure
- Up to 84 months
- Processing fee
- Nil to ₹1,500
SBI consistently offers the lowest car loan interest rates in India, starting at just 8.65%. Zero pre-payment penalty means you can close the loan anytime without paying extra charges. The longest tenure option at 84 months keeps EMIs affordable even for expensive car purchases.
- Lowest interest rate & EMI
- No pre-payment penalty
- Financing on ex-showroom price
4.HDFC Bank Car Loan
- Interest rate
- 8.75% - 11.50%
- Loan amount
- Up to 100% On-road
- Tenure
- 12 - 84 months
- Processing fee
- ₹3,500 to ₹5,500
HDFC's ZipDrive car loan approves in just 30 minutes with doorstep documentation for your convenience. Up to 100% on-road financing means zero down payment on eligible models. The fastest and most convenient car loan in India for existing HDFC Bank customers.
- ZipDrive instant car loans
- Approval in 30 minutes
- Doorstep documentation
5.Kotak Mahindra Bank Car Loan
- Interest rate
- 8.75% - 11.00%
- Loan amount
- Up to 90% On-road
- Tenure
- 12 - 84 months
- Processing fee
- ₹3,000 to ₹5,000
Kotak's competitive rates starting at 8.75% and a fully digital application process make it a convenient choice. The part-prepayment facility lets you reduce your principal anytime without closing the entire loan. Best for existing Kotak account holders who benefit from faster approvals and better rate negotiations.
- Digital loan application process
- Competitive interest rates
- Flexible EMI options
6.IDFC First Bank Car Loan
- Interest rate
- 8.75% - 12.00%
- Loan amount
- Up to 100% On-road
- Tenure
- 12 - 84 months
- Processing fee
- ₹2,500 to ₹5,000
IDFC First offers 100% on-road financing for select models with zero foreclosure charges from day one. The fully digital application process and doorstep document pickup make it completely hassle-free. Competitive rates starting at 8.75% position it well against the larger established banks.
- 100% on-road financing for select models
- Zero foreclosure charges
- Digital application process
7.ICICI Bank Car Loan
- Interest rate
- 8.85% - 13.00%
- Loan amount
- Up to 100% Ex-showroom
- Tenure
- 12 - 84 months
- Processing fee
- Starting ₹2,500
ICICI provides instant approval for pre-approved customers with minimal paperwork and fast processing. Used car loans are also available, which many competing banks don't offer at all. The fixed interest rate option gives you complete EMI predictability throughout the entire loan tenure.
- Instant approval for pre-approved customers
- Minimal documentation
- Used car loans available
8.Axis Bank Car Loan
- Interest rate
- 8.85% - 12.50%
- Loan amount
- Up to 90% On-road
- Tenure
- 12 - 84 months
- Processing fee
- ₹3,000 to ₹5,000
Axis offers quick processing within 48 hours with doorstep document pick-up for added convenience. No prepayment charges after just 1 year of loan tenure gives good flexibility for early repayers. Used car financing is also available for pre-owned vehicles up to 5 years old.
- Quick processing in 48 hours
- Doorstep document pick-up
- No prepayment charges after 1 year
9.IndusInd Bank Car Loan
- Interest rate
- 9.00% - 13.00%
- Loan amount
- Up to 100% Ex-showroom
- Tenure
- 12 - 84 months
- Processing fee
- ₹3,000 to ₹6,000
IndusInd finances up to 100% of ex-showroom price with a remarkably quick 4-hour approval process. Top-up loans on existing car loans are available if you need additional funds down the line. Used car financing extends the options for buyers looking at quality pre-owned vehicles.
- 100% ex-showroom financing
- Quick approval in 4 hours
- Used car financing available
10.Bajaj Finserv Car Loan
- Interest rate
- 9.50% - 14.00%
- Loan amount
- Up to 100% On-road
- Tenure
- 12 - 72 months
- Processing fee
- Up to 2.50%
Bajaj Finserv stands out with 100% on-road funding for select popular car models, meaning zero down payment required. Pre-approved offers via the Bajaj app give instant eligibility confirmation. The 72-month maximum tenure is slightly shorter than banks, but rates remain competitive for the market.
- 100% on-road funding for select models
- Pre-approved offers via app
- Flexible tenure up to 72 months
How we chose
- Sorted by lowest advertised starting rate.
- Funding percentage, tenure and processing fee compared.
CardKhoj is independent and does not earn commission from banks. Rates and fees change often — always confirm the latest terms on the bank's official website before applying.
Frequently asked questions
Which bank gives the cheapest car loan?
Public sector banks such as Bank of Baroda, PNB and SBI usually have the lowest starting rates for new car loans. Check for festive offers, which often waive processing fees.
Can I get a car loan with zero down payment?
Some lenders fund up to 100% of the on-road price for strong profiles, but you will pay more interest and owe more than the car is worth for the first few years. A 10–20% down payment is safer.