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Stop Dreaming, Start Driving.
Car loan policies have shifted toward digital-first processing and eco-friendly incentives. Whether you are buying a petrol vehicle or an EV, the market is highly competitive with flexible repayment structures.
Types of Car Loans :
Types of Car Loans :
New Car Loan ( EV Loans )
Used Car Loan ( Loan Against Car )
New Car Loan
Fill Fresh & give your tension to attention with your Brand New Car.
Key Features:
High Financing: offer up to 90%–100% financing on the on-road price (which includes registration and insurance), rather than just the ex-showroom price.
Flexible Tenures: Repayment periods typically range from 1 to 7 years, though some private lenders have extended this to 8 or 10 years for high-value vehicles.
Green Car Loans: Specialized "Eco-loans" for Electric Vehicles (EVs) often come with 0.50% to 1% lower interest rates and waived processing fees.
Instant Digital Sanction: With "In-principle" approval, many banks provide loan offers in minutes based on your PAN and credit score before you even visit the dealership.
No Prepayment Penalties: Most floating-rate loans (and some fixed-rate ones after 2 years) now allow you to pay off the loan early without extra charges.
Critical "Fine Print" Points:
Fixed vs. Floating Rates:
Fixed: Your EMI remains the same throughout. Best if you expect market interest rates to rise.
Floating: Linked to the RBI Repo Rate. Your EMI may decrease if the central bank cuts rates.
Reducing Balance Method: Ensure your interest is calculated on a daily or monthly reducing balance. This ensures you only pay interest on the remaining principal, saving you money over time.
Processing Fees: These usually range from 0.5% to 2% of the loan amount. Always ask for a waiver during festive seasons or if you have a high credit score.
Foreclosure Terms: Check the "lock-in period." Some banks won't let you close the loan within the first 6–12 months without a penalty.
Used Car Loan
If a new car loan is about the dream, a used car loan is about value. The market for pre-owned vehicle financing is more robust than ever, though the rules are slightly stricter than for new cars.
Key Features:
Funding Limit (LTV): Typically, lenders fund 70% to 90% of the car’s valuation (not necessarily the price you are paying).
Interest Rates: Usually 2% to 4% higher than new car loans, currently ranging from 10.5% to 15% depending on your credit score.
The "Valuation" Rule: Unlike new cars, where the invoice sets the price, banks use AI-driven valuation tools or physical inspectors to decide what the car is worth. If you buy a car for ₹6 Lakh but the bank values it at ₹5 Lakh, your loan is based on the lower amount.
Critical Key Points:
Tenure: Usually capped at 5 years (compared to 7 for new cars).
RC Transfer: The loan is only fully disbursed once the Hypothecation (bank's name) is added to the new Registration Certificate (RC).
Insurance: You must switch the insurance to your name and ensure it has a "Long-term" or "Comprehensive" cover; third-party only is rarely accepted.
Foreclosure: Check for penalties. Many used car loans charge 3%–6% if you close the loan within the first 12 months.
Ownership History: Loans are easier to get for cars with only one previous owner. Vehicles with 3+ previous owners are often rejected or charged much higher rates.
Max Vehicle Age: Most banks won't finance a car that is older than 10–12 years at the end of the loan term.
Example: If you buy a 7-year-old car, you might only get a 3-year loan tenure.
Choose your Car, Calculate your Emi & Book Today.
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