A car loan is a type of finance that enables you to set aside money to buy a car (two or four wheeler). The buyer’s payment is made directly to the dealer by the lender, and the loan amount can be paid back over a predetermined period of time in equal monthly installments (EMIs). The car itself serves as security for this kind of secured loan.
Types of Vehicle Loan
Vehicle Loan: As the name implies, a vehicle loan can be used to buy a brand-new vehicle of your choice. Up to 80–90% (varying) of the vehicle’s on-road price may be financed; the remaining balance must be made up in cash. Throughout the loan term, the loan amount must be returned in equal monthly installments. A car loan’s typical repayment period is seven years. You can, however, select a duration that best suits your needs.
Two-Wheeler Loan: A two-wheeler loan helps you arrange the required funds for any type of two-wheeler vehicle (including geared motorcycles and non-geared scooters). Also commonly known as a bike loan, this financing option allows you to avail a loan for up to 100% (conditions applicable) of the on-road price of the vehicle. Similar to a car loan, you can apply online to avail a two-wheeler loan as well.
Used Car Loan: Also referred to as a second-hand car loan, this type of auto financing enables you to purchase a pre-owned car without having to pay the entire amount up front. Up to 75% (again, variable) of the car’s total worth may be financed.
Read also: Latest Home Loan Interest rates of every bank – Nov 2023
Loan Features
High-value financing: LTV, or Loan to Value ratio, is the ratio of the loan amount against the market value of the car that you are going to purchase. Many bank offers the best possible LTV ratio on every type of vehicle loan so that you do not have to worry about making a hefty down payment.
Best Interest Rates: When it comes to various vehicle loan kinds, such as new car loans, used car loans, and two-wheeler loans, small finance banks has the most affordable interest rates.
Quick Loan Disbursals: We make sure that your loan amount gets disbursed in no time once your loan application gets approved. This allows you to purchase and register your vehicle without any delay.
Hassle-free documentation: Gone are the days when applying for a loan used to be a complicated and time-consuming process. we give you the option to apply for a car or a 2-wheeler loan online and provide scanned copies of your ID, address, and other documents.
Eligibility Criteria
The eligibility criteria for a vehicle loan can vary depending on the type of loan you are applying for i.e. car loan, bike loan, used car loan, etc. However, in order to become eligible for availing a vehicle loan, an individual should have a stable source of income and a good credit score.
Read Also: Home Loan : All You Need to Know About Getting Home Loans
Required Documents
The essential documents for a vehicle/car loan that you need to keep handy while applying are: –
- Proof of Income – Form 16, salary slips, Income Tax Return documents
- Proof of Identity – Aadhar card, Driving Licence, Passport or PAN card
- Bank Statement of three to six months
- Proof of Age – Matriculation Certificate or Aadhar Card or Birth Certificate
- Proof of Address – Aadhar card or Driving Licence or Ration Card (Family Card) or Passport or Voter ID
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Car Loan Interest Rate for All Banks as on 29th Jan 2024
| Bank Name | Interest Rates | EMI per Rs. 1 lakh for 7 Years |
| Axis Bank | 8.50% – 11.25% | Rs. 1,584 – Rs. 1,725 |
| Bank Of Baroda | 7.35% – 9.10% | Rs. 1,526 – Rs. 1,614 |
| Bank of Maharashtra | 7.70% – 8.45% | Rs. 1,544 – Rs. 1,581 |
| Canara Bank | 7.30% – 9.90% | Rs. 1,524 – Rs. 1,655 |
| Central Bank of India | 7.25% – 7.50% | Rs. 1,522 – Rs. 1,534 |
| Corporation Bank | 7.40% – 7.50% | Rs. 1,529 – Rs. 1,534 |
| HDFC Bank | 8.80% – 10.00% | Rs. 1,599 – Rs. 1,660 |
| ICICI Bank | 8.82% – 12.75% | Rs. 1,600 – Rs. 1,806 |
| IDBI Bank | 8.40% – 9.00% | Rs. 1,579 – Rs. 1,609 |
| Indian Bank | 8.20% – 8.55% | Rs. 1,569 – Rs. 1,586 |
| Union Bank Of India | 7.40% – 7.50% | Rs. 1,529 – Rs. 1,534 |
| Punjab National Bank | 9.40% – 9.90% | Rs. 1,629 – Rs. 1,655 |
| State Bank of India | 7.95% – 8.70% | Rs. 1,556 – Rs. 1,594 |
| UCO Bank | 7.70% – 9.30% | Rs. 1,544 – Rs. 1,624 |
| Bank of India | 7.35% – 7.95% | Rs. 1,526 – Rs. 1,556 |
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