Car Loan Interest Rates in India 2026: Best Banks Comparison

Quick answer: Car Loan interest rates in India in 2026 start from around 8.70% p.a. for new cars and 11.50% p.a. for used cars. Top lenders include SBI, HDFC Bank, ICICI Bank, Axis Bank and Kotak Mahindra Bank. Credvivo compares offers from 15+ partner banks and NBFCs.

How car loan interest rates are decided in 2026

Banks price car loans on a mix of: RBI repo rate, your credit score, vehicle category (new vs. used, hatchback vs. SUV vs. EV), loan-to-value ratio and tenure. Salaried borrowers with a 750+ CIBIL score, applying through their salary-account bank, almost always get the best rate.

Best car loan interest rates in India — 2026 comparison

• SBI Car Loan: 8.70% – 9.95% p.a., up to 90% on-road funding
• HDFC Bank: 8.85% – 10.50% p.a., quick digital approval
• ICICI Bank: 8.95% – 10.75% p.a., strong for premium cars
• Axis Bank: 9.05% – 11.00% p.a.
• Kotak Mahindra: 8.90% – 10.50% p.a.
• Bank of Baroda: 8.80% – 10.25% p.a.
• Used car loans (HDFC, ICICI, Kotak): 11.50% – 15.50% p.a.

Car loan EMI — what you actually pay

Typical EMI at 9.25% p.a.:

• ₹5,00,000 for 5 years → EMI ≈ ₹10,440
• ₹8,00,000 for 5 years → EMI ≈ ₹16,704
• ₹10,00,000 for 7 years → EMI ≈ ₹16,235
• ₹15,00,000 for 7 years → EMI ≈ ₹24,352

Down payment, LTV and on-road price — what to budget

Banks typically fund 80–90% of the on-road price for new cars and 70–80% for used cars. A higher down payment lowers your EMI, reduces interest outflow and improves negotiation power on the rate.

Documents required for a car loan

• PAN, Aadhaar, address proof
• 3 months salary slips and 6 months bank statement (salaried)
• 2 years ITR + business proof (self-employed)
• Vehicle quotation/proforma invoice from dealer
• For used cars: RC, valuation report, insurance copy

How to get the lowest car loan rate

1. Maintain a CIBIL score above 750 before applying.
2. Apply through your salary-account bank — they often offer 25–50 bps lower rates.
3. Compare 3–4 offers via Credvivo instead of accepting the dealer's in-house finance blindly.
4. Keep tenure ≤ 5 years where possible — total interest drops sharply.
5. Negotiate processing fees and ask for documentation/dealer DSA charge waivers.

Why borrowers prefer Credvivo for car loans

Credvivo is partnered with 15+ Banks & NBFCs and trusted by 2500+ happy customers. Our advisors compare actual sanctioned rates, push back on hidden dealer markups, and handle the file end-to-end — including used-car valuation.