Buying a car is a significant financial decision, and choosing the right loan provider can save you thousands of rupees in interest and processing fees. Whether you’re buying a new car, used car, or luxury vehicle, this guide compares the best car loan companies in India (2024) based on interest rates, eligibility, processing speed, and customer service.
Top 5 Car Loan Providers in India (2024)
1. State Bank of India (SBI) – Best for Low Interest Rates
✅ Interest Rate: 7.95% p.a. onwards (New cars)
✅ Loan Amount: Up to 90% of ex-showroom price
✅ Repayment Tenure: Up to 7 years
✅ Processing Fee: 0.35% – 0.50% of loan amount (min. ₹1,500)
✅ Special Features:
- Pre-approved loans for existing customers
- Lowest EMI options
- Flexible foreclosure policies
Best For: Buyers looking for low-interest rates & trusted government-backed loans.
2. HDFC Bank – Best for Quick Approval & Digital Process
✅ Interest Rate: 8.50% p.a. onwards
✅ Loan Amount: Up to 100% of on-road price (for select models)
✅ Repayment Tenure: Up to 8 years
✅ Processing Fee: Up to 1% of loan amount (min. ₹3,500)
✅ Special Features:
- Instant approval (within 4 hours for pre-approved customers)
- Online loan tracking
- Balance transfer facility
Best For: Salaried professionals & those who want fast processing.
3. ICICI Bank – Best for Pre-Owned Cars
✅ Interest Rate: 9.25% p.a. onwards (Used cars: 12% onwards)
✅ Loan Amount: Up to 85% of car value (used cars: 75%)
✅ Repayment Tenure: Up to 7 years
✅ Processing Fee: 0.5% – 1% of loan amount
✅ Special Features:
- Doorstep service for documentation
- Competitive used car loan rates
- Flexible EMI holidays
Best For: Buyers of used cars & those needing flexible repayment.
4. Axis Bank – Best for Low Processing Fees
✅ Interest Rate: 8.75% p.a. onwards
✅ Loan Amount: Up to 90% of car value
✅ Repayment Tenure: Up to 7 years
✅ Processing Fee: 0.5% of loan amount (min. ₹2,500)
✅ Special Features:
- No prepayment penalty after 6 months
- Instant loan approval for pre-qualified customers
- Insurance & loan bundling discounts
Best For: Cost-conscious buyers who want low fees & quick processing.
5. Tata Capital – Best for Luxury & Electric Cars
✅ Interest Rate: 8.99% p.a. onwards
✅ Loan Amount: Up to ₹1.5 Crore (for luxury cars)
✅ Repayment Tenure: Up to 8 years
✅ Processing Fee: 0.5% – 1% of loan amount
✅ Special Features:
- Special EV loan discounts
- High loan amounts for premium cars
- Customized EMI plans
Best For: Buyers of luxury cars & EVs.
Comparison Table: Best Car Loans in India (2024)
| Lender | Interest Rate (New Car) | Max Tenure | Processing Fee | Best For |
|---|---|---|---|---|
| SBI | 7.95% onwards | 7 years | 0.35% – 0.50% | Lowest interest rates |
| HDFC Bank | 8.50% onwards | 8 years | Up to 1% | Fast approval |
| ICICI Bank | 9.25% onwards | 7 years | 0.5% – 1% | Used car loans |
| Axis Bank | 8.75% onwards | 7 years | 0.5% | Low processing fees |
| Tata Capital | 8.99% onwards | 8 years | 0.5% – 1% | Luxury/EV loans |
How to Choose the Best Car Loan?
✔ Compare Interest Rates – Even a 0.5% difference can save ₹20,000+ on a ₹5L loan.
✔ Check Processing Fees – Some banks charge up to 2%, increasing costs.
✔ Prepayment Penalty – Some lenders charge 2-5% for early closure.
✔ Loan Tenure – Longer tenure = lower EMI but higher interest paid overall.
Tips to Get the Best Car Loan Deal
🔹 Improve CIBIL Score (750+ for lowest rates)
🔹 Negotiate with Multiple Banks
🔹 Check for Seasonal Discounts (Festive offers)
🔹 Opt for EMI Insurance (Covers EMIs in case of job loss/accident)
Final Verdict: Which Lender is Best?
- Lowest Interest: SBI
- Fastest Approval: HDFC Bank
- Best for Used Cars: ICICI Bank
- Low Fees: Axis Bank
- Luxury/EV Loans: Tata Capital