Car Loan

Car Loan in India

On-road pricing, depreciation, loan tenure, and foreclosure — all in plain English. No jargon. No fine print.

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On-Road Pricing

Ex-showroom · RTO · Insurance · Accessories

Ex-showroom price, RTO, insurance, and accessories — the true cost of a car and what your loan is actually financing.

Depreciation

Year-1 depreciation · Used car · Resale value

How a new car loses 20–30% of its value in year one — and how this affects your loan, resale value, and whether you should buy new or used.

Loan Tenure & EMI

1–7 year tenure · EMI · New vs used

Typical car loan tenures of 1–7 years — how tenure affects EMI, total interest paid, and what lenders typically offer for new vs used cars.

Foreclosure

Foreclosure charge · Process · Interest saved

Paying off a car loan early — foreclosure charges, process, and how much you actually save by clearing the loan ahead of schedule.

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EMI Calculator

Car loan EMI — principal, interest rate, and tenure in seconds.

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Frequently asked questions

What is the typical interest rate for a car loan in India?

New car loan rates range from about 7.5% to 13% p.a. as of 2026, depending on the lender, your credit score, and whether the car is from a captive financier. Used car loans are typically 2–4% higher. Public sector banks often offer the lowest rates.

What is the maximum car loan tenure?

Most lenders offer 1–7 years for new cars and up to 5 years for used cars. A longer tenure reduces EMI but increases total interest paid. For example, a ₹10 lakh loan at 9% p.a. costs ₹1.56 lakh in total interest over 7 years versus ₹78,000 over 3 years.

What are the foreclosure charges on a car loan?

Most lenders charge 3–6% of the outstanding principal as foreclosure penalty if you pay off the loan in the first year. After the first year, floating-rate car loans typically have no foreclosure penalty under RBI guidelines.

Should I take a new car loan or a personal loan to buy a car?

A car loan is cheaper — interest rates are 2–5% lower than personal loans because the car is collateral. A personal loan makes sense for a used car from a private seller where the lender will not finance the purchase.

Sources: Reserve Bank of India (RBI) car loan guidelines (rbi.org.in) · SIAM (Society of Indian Automobile Manufacturers) on-road price data · HDFC, ICICI, SBI car loan pages · Income Tax Act 2025. Rates verified 2026-10-07. Last reviewed by FinWiz24 Research Desk.