Owning a car is not just about luxury anymore—it’s a necessity for comfort, convenience, and lifestyle. But with car prices rising, most people prefer car loans to finance their purchase. A car loan in India allows you to buy a new or used car by paying in affordable EMIs.
The key factor when choosing a car loan is the interest rate. Even a small difference of 0.5% can save you thousands over the tenure. This blog covers everything about the best car loan interest rates in India 2025, including top banks, NBFCs, eligibility, EMI calculators, and more.
1. Best Car Loan Interest Rates in India
The best car loan interest rates in India 2025 start from 8.50% p.a. depending on the bank, customer profile, and loan amount. Public sector banks generally offer lower rates, while private banks provide faster approvals and digital convenience.
2. SBI Car Loan Interest Rate 2025
State Bank of India offers affordable car loans under SBI Car Loan Scheme.
- Interest Rate: 8.50% – 9.80% p.a.
- Loan Amount: Up to 90% of on-road price
- Tenure: 7 years
- Benefits: Low processing fee, women borrower concessions
3. HDFC Car Loan Interest Rate 2025
HDFC is known for quick approvals and wide reach.
- Interest Rate: 8.70% – 10.25% p.a.
- Loan Amount: Up to 100% of ex-showroom price
- Tenure: 7 years
- Digital documentation available
4. ICICI Bank Car Loan Interest Rate 2025
ICICI offers competitive car loan deals with flexible repayment.
- Interest Rate: 8.75% – 10.50% p.a.
- Loan Amount: ₹1 Lakh – ₹50 Lakhs
- Tenure: Up to 7 years
- Pre-approved offers for ICICI customers
5. Axis Bank Car Loan Interest Rate 2025
Axis Bank provides quick approvals with minimal documentation.
- Interest Rate: 8.80% – 10.60% p.a.
- Loan Amount: ₹1 Lakh – ₹40 Lakhs
- Tenure: 1 – 7 years
6. Kotak Mahindra Car Loan Interest Rate 2025
Kotak Mahindra Bank offers flexible EMI options.
- Interest Rate: 8.90% – 10.75% p.a.
- Loan Amount: ₹1 Lakh – ₹30 Lakhs
- Tenure: Up to 7 years
7. PNB Car Loan Interest Rate 2025
Punjab National Bank provides affordable rates for new cars.
- Interest Rate: 8.60% – 10% p.a.
- Loan Amount: 85% – 90% of on-road price
- Tenure: Up to 7 years
8. Bank of Baroda Car Loan Interest Rate
BOB’s Car Loan Scheme is among the lowest in India.
- Interest Rate: 8.50% – 9.75% p.a.
- Loan Amount: ₹2 Lakhs – ₹50 Lakhs
- Tenure: Up to 7 years
9. Federal Bank Car Loan Interest Rate
Federal Bank offers competitive car loan options.
- Interest Rate: 8.70% – 10.25% p.a.
- Tenure: 7 years
- Low processing fees
10. Lowest Car Loan Interest Rate in India
Currently, SBI and Bank of Baroda offer the lowest car loan interest rates starting from 8.50% p.a.
11. Used Car Loan Interest Rates in India
For used cars, the interest rates are slightly higher.
- Average Interest: 10% – 14% p.a.
- Loan Amount: ₹1 Lakh – ₹25 Lakhs
- Tenure: 1 – 5 years
12. Car Loan Eligibility Criteria in India
Eligibility factors include:
- Age: 21–65 years
- Minimum income: ₹20,000 per month (varies by bank)
- Employment: Salaried or self-employed
- Credit Score: 700+ preferred
13. Car Loan EMI Calculator India
Example calculation:
- Loan: ₹8 Lakhs
- Tenure: 5 years
- Interest: 9% p.a.
- EMI: ~₹16,600
14. Compare Car Loan Offers Online
Websites like BankBazaar, PaisaBazaar, and PolicyBazaar allow users to compare car loan rates, EMI options, and processing fees.
15. Best Bank for Car Loan in India
In 2025, the best banks for car loans are:
- SBI (Lowest rates)
- HDFC (Fast approvals)
- ICICI (Wide coverage)
- Bank of Baroda (Affordable schemes)
16. Car Loan for Salaried Employees in India
Salaried professionals can get loans faster with salary slips and bank statements. Many banks offer special discounts to government employees.
17. Car Loan for Self-Employed in India
Self-employed individuals can also avail car loans, but banks may ask for ITR (Income Tax Returns) and business proof. NBFCs are more flexible in such cases.
18. Government Car Loan Schemes India
Government-backed schemes may offer special loans for electric vehicles (EVs) with subsidized interest rates to promote green mobility.
Case Studies / Examples
Example 1:
Ramesh, a salaried employee, took an SBI Car Loan of ₹10 Lakhs at 8.6% for his SUV purchase. The low interest saved him ₹50,000 compared to private banks.
Example 2:
Priya, a self-employed fashion designer, availed a HDFC Car Loan of ₹15 Lakhs with digital documentation, getting approval within 24 hours.
FAQs on Best Car Loan Interest Rates
Q1. Which bank has the lowest car loan interest rate in 2025?
👉 SBI and Bank of Baroda offer the lowest, starting at 8.50% p.a.
Q2. Can I get a 100% car loan?
👉 Yes, HDFC and ICICI finance up to 100% of ex-showroom price.
Q3. What is the tenure for car loans in India?
👉 Usually 1–7 years.
Q4. Are car loan rates fixed or floating?
👉 Mostly fixed, ensuring stable EMIs.
Q5. Can I prepay my car loan?
👉 Yes, but prepayment charges may apply in private banks.
Conclusion
The best car loan interest rates in India 2025 start from 8.50% p.a., with SBI and Bank of Baroda being the most affordable. For quick approvals, private banks like HDFC and ICICI are better. Always compare offers, calculate EMIs, and check eligibility before applying.
