Owning a car is no longer a luxury, it’s a necessity. A car loan makes it easy to buy your dream car with affordable EMIs, flexible tenure, and competitive interest rates. In 2025, Indian banks and NBFCs are offering attractive car loan schemes for new cars, used cars, and even zero down payment options.
But with so many lenders, how do you decide the best car loan option?
This guide covers:
✔ Best banks offering car loans in India
✔ Latest car loan interest rates
✔ Options for used cars, no CIBIL score, and EMI calculators
✔ Tips to choose the lowest EMI car loan
✅ Types of Car Loans in India
1. New Car Loan
- Offered by almost every bank.
- Interest rates start as low as 8.5% p.a.
- Up to 90–100% financing of the car’s on-road price.
👉 Best for buying a brand new vehicle.
2. Used Car Loan (Pre-Owned Car Loan)
- Finance available for cars less than 8–10 years old.
- Loan-to-value ratio: 60–80% of the car’s price.
- Interest rates are higher than new car loans (10–14%).
👉 Best for buyers who prefer affordable second-hand cars.
3. Car Loan Without CIBIL Score
- Some NBFCs and private lenders approve loans for those with a low or no CIBIL score, but interest rates are higher.
- Guarantor or higher down payment may be required.
👉 Best for first-time borrowers or people with poor credit history.
4. Zero Down Payment Car Loan
- Some banks finance 100% of the car’s on-road price.
- Higher EMIs but less initial burden.
👉 Best for those who don’t want to pay a heavy upfront amount.
5. Car Loan EMI Calculator
Before applying, always use an EMI calculator to check how much you’ll pay monthly.
💡 Example: For a loan of ₹8,00,000 at 8.5% for 5 years, EMI ≈ ₹16,400/month.
✅ Best Banks for Car Loan in India (2025)
| Bank | Interest Rate (p.a.) | Loan Amount | Tenure | Special Feature |
|---|---|---|---|---|
| SBI Car Loan | 8.50% onwards | ₹1 lakh – ₹25 lakh | Up to 7 years | 90% financing of on-road price |
| HDFC Car Loan | 8.75% onwards | ₹1 lakh – ₹25 lakh | Up to 7 years | Instant approval for pre-approved customers |
| ICICI Bank | 8.80% onwards | ₹1 lakh – ₹20 lakh | Up to 7 years | Flexible EMI options |
| Axis Bank | 8.85% onwards | ₹1 lakh – ₹25 lakh | Up to 7 years | Zero down payment offers |
| Kotak Mahindra | 9.00% onwards | ₹1 lakh – ₹20 lakh | Up to 5 years | Low documentation |
| PNB Car Loan | 8.90% onwards | ₹50,000 – ₹20 lakh | Up to 7 years | Affordable EMI schemes |
✅ Car Loan Eligibility Criteria
- Age: 21–60 years
- Income: Minimum ₹15,000–₹25,000/month (varies by bank)
- CIBIL Score: 700+ recommended
- Employment: Salaried or self-employed
- Car Age: For used cars, usually less than 8–10 years
✅ Documents Required
- Aadhaar & PAN card
- Salary slips / ITR (for self-employed)
- Bank statements (last 6 months)
- Car quotation / RC book (for used cars)
- Passport-size photographs
✅ Tips to Get the Best Car Loan Option
✔ Compare interest rates across banks and NBFCs.
✔ Check processing fees and hidden charges.
✔ Maintain a good CIBIL score for better terms.
✔ Use a car loan EMI calculator before applying.
✔ Consider balance transfer if you find a lower rate later.
✅ FAQs
1. Which bank offers the lowest car loan interest rate in India (2025)?
SBI, HDFC, and ICICI currently offer some of the lowest interest rates starting at 8.50% p.a..
2. Can I get a car loan without CIBIL score?
Yes, some NBFCs allow this, but expect higher interest rates and down payment.
3. What is the maximum tenure for car loans in India?
Most banks allow repayment up to 7 years.
4. Can I finance a used car with a loan?
Yes, many banks and NBFCs provide used car loans, usually for vehicles up to 8–10 years old.
✅ Conclusion
A car loan is the easiest way to own your dream vehicle without paying the entire cost upfront. If you want the lowest EMI, go for SBI or HDFC. If you need flexibility, Axis Bank and ICICI offer excellent options. And if you’re buying a used car, NBFCs like Kotak and PNB are reliable choices.