Car Loan Interest Rates in India for 2022 Though different banks offer different procedures for availing a car loan, the basic process is the same. The first step in getting a car loan is to finalize the brand and model of the car you want to buy. Next, you need to check your eligibility for the loan. The next big step is to find out your loan amount. This will depend on how much you can pay now, how long you want the loan to last and the interest rate. You can use the EMI calculator available on banks’ websites to decide your loan amount and tenure.
Once you have decided on the car model, bank as well as the loan amount and tenure, you can start the application process. You can either visit a branch or visit the bank’s page to apply online. You have to submit income proof, age proof, identity proof and address proof. Some banks take a few seconds to approve your loan. Once approved, funds are transferred to your account immediately.
Compare Best Car Loan Interest Rates in India for 2022
- Bank of Baroda Car Loan 7.00% p.a. onwards Rs.1,500 (plus GST)
- Canara Bank Car Loan7.30% p.a. onwards 0.25% of the loan amount, with a minimum of Rs.1,000 and a maximum of Rs.5,000. subjected to
- Axis Bank Car Loan7.45% p.a. Minimum Rs.3,500 and Maximum Rs.7,000
- Federal Bank Car Loan8.50% p.a. onwards Contact the bank
- SBI Car Loan7.20% p.a. onwards New Car: Nil (Offer valid till 31st Jan 2022)
- ICICI Bank Car Loan7.90% p.a. onwards0.5% of the loan amount
Car Loan Interest Rates
- Interest Rate (Monthly reducing balance) 7.00% onwards
- Processing Fees Depends on the bank
- Loan Tenure1 year to 8 years
- Pre-closure ChargesVaries with bank
- Guarantor RequirementVaries with bank
Car Loan EMI Calculate
The Equated Monthly Installments (EMIs) you pay will depend on a few key factors.
- loan size
- loan term
- processing fee
Higher the loan amount, higher will be your EMI. Similarly, shorter the tenure of the loan, higher will be the EMI. You should check out our Car Loan EMI Calculator to find the best compromise between an affordable EMI and tenure.
Car Loan Approval
When you are looking to get funds to buy a new or used car that you have been eyeing for a while, it is better to opt for a pre-approved loan. To avail this type of loan, you can follow certain steps to get the required amount quickly.
check your credit report
You can check your credit report to verify your status in terms of credit score. A score of 750 or more can get you a lower interest rate. However, for a score of 650 to 750, the interest rate will be slightly higher. If your report is incorrect, or your score is too low, your application may be rejected.
Pay Of The Loan Amount
To get a loan to buy your dream car, you need to have a minimum monthly pre-tax income and a manageable debt-to-income ratio (DTI). While it is not usually possible to replace one’s income, you can improve your DTI by clearing all of your pending credit card debt.
To build a better credit profile, you should always pay your bills on time. If this is not possible then you can pay your bills on time at least 6 months before the loan application. If you pay your bills on time, it assures the lender that you will also repay the equated monthly installments on time. This, in turn, will help you to secure the loan easily.
Explore car loan options
There are many options available in the market through which you can get a loan to buy your new or used car. You should check the interest rates of different banks and car financing firms to check the car loan interest rates to suit your needs.
Borrow as little as possible
By paying a larger amount upfront as a down payment, you can reduce the amount you’ll need to borrow to match the price tag of the car you choose. If you borrow a lower amount, you will be in a better position to repay your loan early as a smaller loan amount means shorter EMIs or shorter loan tenure.
Additionally, the amount you will have to pay as interest to your bank or car financing organization will also be reduced.
Foreclosing a Car Loan
When you take a car loan, you can repay it in Equated Monthly Installments (EMIs) till the end of the repayment tenure. However, if you decide to pay off the outstanding loan amount before the end of your tenure, you will pre-close or prepay your loan.
Foreclosure/prepayment facility is provided by most of the lenders for a penalty fee, however some lenders may allow you to foreclose/prepay your car loan without any penalty.
If your income has increased and you want to clear your liabilities then you can foreclose your car loan. It also takes away your burden of making monthly EMI payments. Foreclosing the car loan will waive the hypothecation of the car and give you full ownership.
As stated above, some lenders may charge you a penalty on loan foreclosure. Hence, before you decide to foreclose a loan, it is a good idea to go through the clauses attached to it.
Top-Up Loan on Your Car Loan
If, after availing a car loan, you need quick or additional funds for purposes like marriage, home renovation, medical emergency, etc., you can get a top-up loan against your existing car loan. You can get up to 150% of the value of the car as a top-up loan.
Most lenders that offer top-ups on their car loans will require you to maintain a clear payment record for at least 9 months. The process of getting a top-up loan against your existing car loan is quick and requires minimal paperwork.