Public sector banks (SBI, Bank of Baroda): 8.5–10% p.a. — best rates but slower processing. Private banks (HDFC, ICICI, Axis): 9–12% p.a. — faster processing, more flexible. NBFCs (Bajaj Finance, Tata Capital): 10–15% p.a. — easiest approval, highest rates.
Manufacturer financing schemes: 0% or very low interest during festive periods — worth considering if available on your chosen car.
Financial advisors generally recommend keeping your car EMI at or below 15% of your monthly take-home salary. At this level, the loan remains manageable even if your expenses increase.
Example: If your monthly take-home is ₹60,000, keep your car EMI under ₹9,000. At 9% interest for 5 years, this allows a loan of roughly ₹4.3 lakh.
Most lenders finance up to 90% of on-road price. Putting down 20–30% reduces your loan amount and total interest significantly. Never put down less than 10% — most banks won't lend 100% of the car value anyway.
Processing fee: 0.5–2% of loan amount — negotiate this down or request a waiver. Prepayment penalty: Some lenders charge 2–5% if you repay early — choose a lender without prepayment charges. Insurance: Dealer-arranged insurance is often overpriced — get quotes directly from insurers like HDFC Ergo or Bajaj Allianz.
Use our free quiz to find the right car for your budget — then compare loan offers before visiting the dealership.
Take the Free Car Quiz →