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Best Car Loans in India 2026

Get pre-approved for the best car loan. Compare rates, fees & tenure from 25+ banks.

Updated: March 2026

Our Top Picks

Fastest Approval
#2 Pick
HDFC Bank
8.75 - 9.50% p.a.

Approval in 30 minutes for existing customers. Up to 90% funding with flexible repayment options. Wide dealer network.

  • Max tenure: 7 years
  • Processing fee: 0.50% of loan amount
  • Max amount: ₹1 Crore
  • EMI for ₹8 Lakh: ₹16,510/mo
Get Pre-Approved →
Zero Prepayment
#3 Pick
State Bank of India
8.85 - 9.55% p.a.

Trusted public sector bank with zero prepayment charges after 6 months. Low processing fee and up to 7-year tenure.

  • Max tenure: 7 years
  • Processing fee: 0.50% of loan amount + GST
  • Max amount: ₹1 Crore
  • EMI for ₹8 Lakh: ₹16,549/mo
Get Pre-Approved →

All Car Loan Options — Full Comparison

EMI calculated for ₹8 Lakh at default tenure. Sorted by interest rate (lowest first).

Bank Interest Rate EMI (₹8 Lakh) Max Tenure Processing Fee
Bank of Baroda 8.65 - 10.90% ₹16,471 7 yrs ₹1,500 + GST Get Pre-Approved →
Axis Bank 8.70 - 12.50% ₹16,490 7 yrs 0.50% of loan amount Get Pre-Approved →
Kotak Mahindra Bank 8.70 - 12.00% ₹16,490 7 yrs 0.50% of loan amount Get Pre-Approved →
Union Bank 8.70 - 10.70% ₹16,490 7 yrs ₹1,000 + GST Get Pre-Approved →
HDFC Bank 8.75 - 9.50% ₹16,510 7 yrs 0.50% of loan amount Get Pre-Approved →
ICICI Bank 8.75 - 9.60% ₹16,510 7 yrs 0.50% of loan amount Get Pre-Approved →
Canara Bank 8.75 - 10.50% ₹16,510 7 yrs 0.50% + GST Get Pre-Approved →
IDFC First Bank 8.75 - 11.50% ₹16,510 7 yrs Up to 2% of loan amount Get Pre-Approved →
Indian Bank 8.80 - 10.30% ₹16,529 7 yrs ₹1,500 + GST Get Pre-Approved →
IDBI Bank 8.80 - 11.00% ₹16,529 7 yrs 0.50% + GST Get Pre-Approved →
Federal Bank 8.80 - 12.50% ₹16,529 7 yrs 0.50% + GST Get Pre-Approved →
SBI 8.85 - 9.55% ₹16,549 7 yrs 0.50% of loan amount + GST Get Pre-Approved →
PNB 8.85 - 10.30% ₹16,549 7 yrs 0.50% + GST Get Pre-Approved →
Bank of India 8.85 - 10.85% ₹16,549 7 yrs 0.50% + GST Get Pre-Approved →
Central Bank 8.90 - 10.90% ₹16,568 7 yrs 0.50% + GST Get Pre-Approved →
Tata Capital 8.95 - 13.00% ₹16,587 7 yrs 1% of loan amount + GST Get Pre-Approved →
IndusInd Bank 9.00 - 13.50% ₹16,607 7 yrs 0.50% of loan amount Get Pre-Approved →
South Indian Bank 9.00 - 12.00% ₹16,607 7 yrs 0.50% + GST Get Pre-Approved →
Bajaj Finserv 9.00 - 13.00% ₹16,607 7 yrs Up to 2% of loan amount Get Pre-Approved →
Karur Vysya Bank 9.10 - 12.00% ₹16,646 7 yrs 0.50% + GST Get Pre-Approved →
Yes Bank 9.25 - 13.00% ₹16,704 7 yrs 1% of loan amount Get Pre-Approved →
Bandhan Bank 10.00 - 14.00% ₹16,998 5 yrs 1% + GST Get Pre-Approved →
Mahindra Finance 10.00 - 18.00% ₹16,998 7 yrs Up to 2.50% of loan amount Get Pre-Approved →

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Frequently Asked Questions

Which bank offers the lowest car loan interest rate in 2026?

Axis Bank and Kotak Mahindra Bank offer the lowest car loan rates starting from 8.70%. SBI follows closely at 8.85%. Rates vary based on the car model, loan amount, and your credit profile.

How much car loan can I get?

Most banks fund up to 80-90% of the car's ex-showroom price. Some banks like Axis Bank offer up to 100% on-road price funding for select models. Your eligibility depends on income, credit score, and existing loans.

Should I take a car loan from a bank or the dealer?

Bank loans usually offer lower interest rates (8.70-10%) compared to dealer financing (9-12%). However, dealers may offer special schemes or cashbacks. Always compare both options before deciding.

What is the ideal tenure for a car loan?

A 3-5 year tenure offers the best balance between affordable EMI and total interest cost. Avoid 7-year tenures as you'll pay significantly more interest and the car depreciates faster than you repay.

Can I prepay my car loan early?

Yes, most banks allow car loan prepayment. SBI charges nil after 6 months, while some private banks may charge 2-5% of outstanding. Part-prepayment is a great way to save on interest.

Disclaimer: Interest rates and loan details shown on this page are sourced from official bank websites and are for reference only. Actual rates may vary based on your credit profile, income, loan amount, and bank's internal policies. We may earn a referral commission when you apply through links on this page, at no extra cost to you. This does not affect our rankings or recommendations. Last verified: March 2026.