The Car Loan Interest Rates India 2025 are now live across leading banks and financial institutions, offering affordable borrowing options for both new and used vehicles. With the demand for personal mobility rising steadily, especially in urban and tier-2 cities, banks are rolling out competitive offers with flexible repayment plans and lower processing fees.
In 2025, both private and public sector banks have revised their bank interest 2025 slabs based on credit scores, employment status, and loan tenure. Individuals looking to buy a car — whether a compact hatchback, sedan, or SUV — can now access financing with rates starting as low as 7.25% per annum, depending on the applicant profile.
Latest Car Loan Interest Rates from Top Banks
Here’s a comparison of car loan India rates from some of the top banks as of June 2025. These rates are applicable for salaried individuals, self-employed professionals, and business owners across the country.
| Bank Name | Interest Rate (p.a.) | Loan Tenure | Processing Fee |
|---|---|---|---|
| SBI | 7.35% – 8.50% | Up to 7 years | ₹1,000 – ₹2,000 |
| HDFC Bank | 7.40% – 9.00% | Up to 7 years | 0.5% of loan amount |
| ICICI Bank | 7.50% – 9.25% | Up to 7 years | ₹3,500 or 0.5% |
| Axis Bank | 7.60% – 8.75% | Up to 5 years | ₹3,500 flat |
| Punjab National Bank | 7.25% – 8.30% | Up to 7 years | ₹1,500 – ₹2,000 |
| Kotak Mahindra Bank | 7.50% – 9.10% | Up to 7 years | 1% of loan amount |
These rates are based on applicants’ credit scores, income bracket, loan amount, and whether the car is new or pre-owned.
Eligibility Criteria for Car Loans in 2025
To apply under the Car Loan Interest Rates India 2025 programs, applicants must meet certain eligibility conditions. Banks conduct due diligence on repayment ability, age, and employment history before approving any loan.
Basic eligibility includes:
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Salaried individuals aged between 21 and 60 years
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Self-employed professionals/business owners up to 65 years
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Minimum monthly income of ₹20,000 (varies by city and bank)
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Stable employment for at least 1 year or business vintage of 2+ years
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A CIBIL score of 700+ for best interest rate offers
Many banks also offer special schemes for women applicants, first-time car buyers, and EV buyers under government-linked financing plans.
Documents Required for Car Loan Application
Applying for a car loan has now become more convenient, with most banks accepting online applications through paperless KYC. Still, some key documents are required for verification and final approval.
Common documents include:
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PAN Card and Aadhaar Card
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Passport-size photograph
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Salary slips or IT returns (past 2 years for self-employed)
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Latest bank statements (3–6 months)
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Address proof (utility bill, rental agreement, etc.)
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Car quotation/invoice from authorized dealership
Processing times are now faster with most applications getting approved within 24–48 hours, especially if submitted through digital platforms.
Tips to Get the Lowest Car Loan Interest Rate
While many offers seem attractive, the actual rate you receive depends heavily on your financial profile. Here’s how to ensure you get the best deal under the bank interest 2025 offers:
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Maintain a CIBIL score above 750
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Opt for a shorter tenure (3–5 years) for lower interest
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Make a higher down payment to reduce loan amount
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Choose festive season offers for better discounts
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Compare loans on official bank portals and use EMI calculators
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Avoid multiple loan inquiries in a short time to protect your credit score
By taking these steps, you can reduce your overall cost and get favorable terms under the ongoing car loan India schemes.
FAQs
What is the current car loan interest rate in India 2025?
As of now, interest rates range from 7.25% to 9.25% p.a. depending on the bank, applicant profile, and loan tenure.
Which bank offers the lowest car loan rate in 2025?
Punjab National Bank currently offers one of the lowest starting rates at 7.25% per annum for eligible applicants.
Can I get a car loan with a low CIBIL score?
Yes, but the interest rate will likely be higher. A CIBIL score above 700 is recommended for better offers.
How long can I take to repay a car loan in 2025?
Most banks allow a tenure of up to 7 years, though shorter durations attract lower interest rates.
Are there any zero-processing fee offers in 2025?
Yes, some banks offer limited-time schemes with waived or reduced processing charges, especially during festive seasons.
Can I apply for a car loan online in 2025?
Absolutely. Almost all major banks now offer digital application processes with eKYC, document upload, and real-time approval tracking.
Click here to know more.