Loans
Car loans,on the road sooner.
Many banks lend 85% to 100% of the car’s price for salaried borrowers with good credit.
In one minute
- 1
Finance up to the full on-road price
Many banks lend 85% to 100% of the car’s price for salaried borrowers with good credit.
- 2
Repay in 1 to 7 years
Most people choose 5 years — a balance between EMI and total interest.
- 3
Approval in a day or two
With complete papers, car loans are among the fastest loans to sanction.
Chapter 01
What is a car loan?
A car loan pays for a new or used car, and the car itself is the security. Until the loan is repaid, the lender’s name is recorded on the car’s registration (called hypothecation). Once you finish paying, the lender gives a no-objection certificate and you remove its name.
New-car loans typically cost about 8.5% to 11% a year; used-car loans cost more, about 11% to 16%, because older cars are worth less as security.
Chapter 02
An example
- Down payment
- ₹2 lakh
- Car loan
- ₹10 lakh
- Interest rate (illustrative)
- 9% a year
- Term
- 5 years
- Monthly EMI
- About ₹20,800
- Total interest
- About ₹2.45 lakh
Choosing 7 years instead would cut the EMI to about ₹16,100 — but add over ₹1 lakh of interest.
Chapter 03
Getting the best deal
- Compare the bank’s offer with the dealer’s finance offer — they are often different
- Ask for the total cost: rate, processing fee and any insurance bundled in
- A bigger down payment lowers both EMI and interest
- Check prepayment and foreclosure charges before signing
- Keep the car’s own insurance separate — compare prices yourself
Chapter 04
Documents you’ll need
- PAN and Aadhaar
- Salary slips or ITRs
- 6 months’ bank statements
- Car quotation / proforma invoice from the dealer
Questions
Good toknow.
Should I pay cash or take a loan?
If paying cash would empty your emergency fund, a loan is sensible. If you have surplus money earning less than the loan rate, paying more upfront saves interest.
Can I get a loan for a used car?
Yes, usually for cars up to 7–8 years old by the end of the loan, at a somewhat higher rate.
What happens when I finish the loan?
Collect the lender’s NOC and apply to the RTO to remove the hypothecation from the registration certificate. Inform your car insurer too.
Loans are provided by partner banks and NBFCs and are subject to their credit assessment, terms and conditions. Interest rates, fees and eligibility vary by lender and borrower profile. We facilitate the process and do not lend directly. Rates shown are indicative ranges; the actual rate depends on the lender and your profile. Tax benefits depend on the law in force and your personal situation. The information on this website is for general educational purposes only and does not constitute investment, tax or legal advice. Please consult a qualified professional before making financial decisions.
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