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The rate is only half the decision on a car loan; the other half is how much of the on-road price the lender will fund.

Car loan rates today
8.5 – 12% p.a.

New cars. Used-car financing prices materially higher.

as of 2026-08-15· Lender rate cardsreported

A lender at a slightly higher rate that funds 90% of on-road cost — including insurance and registration — can be substantially better for cash flow than a cheaper lender funding 80% of ex-showroom only.

By Nishit Kumar, Founder & Editor
Updated 17 August 2026

Beyond the table

Dealer-arranged finance is convenient and frequently not the cheapest — the dealership earns on the referral, and that comes from somewhere. Get one sanction from your own bank before you walk in. Even if you take the dealer's offer, having a competing letter changes the conversation.

Remember what you are financing. A car depreciates immediately and steeply, so a long tenure on a large loan leaves you owing more than the car is worth for much of the term. If a seven-year loan is the only way the EMI works, the honest reading is that the car is too expensive, not that the tenure is too short.

Your numbers

₹50 L
₹10,000₹50,00,000₹20 Cr
18.5%36
120 years30
Monthly EMI
₹43,391
  • Principal48%
  • Interest52%
Principal
₹50,00,000
Total interest
₹54,13,879
Total payable
₹1,04,13,879
Interest as % of principal
108.28%
Growth over time
₹0₹27.3 L₹54.7 L₹82 L₹1.09 CrYr 1Yr 4Yr 7Yr 10Yr 13Yr 16Yr 19Yr 20
ValueAmount you put in

What this means.Over 20 years you repay more in interest than you borrowed. Cutting the tenure or prepaying early changes this sharply.

View the full breakdown (20 rows) →
YearPrincipal paidInterest paidBalance
1₹99,511₹4,21,182₹49,00,489
2₹1,08,307₹4,12,387₹47,92,181
3₹1,17,881₹4,02,813₹46,74,300
4₹1,28,300₹3,92,394₹45,46,000
5₹1,39,641₹3,81,053₹44,06,359
6₹1,51,984₹3,68,710₹42,54,375
7₹1,65,418₹3,55,276₹40,88,957
8₹1,80,039₹3,40,655₹39,08,918
9₹1,95,953₹3,24,741₹37,12,965
10₹2,13,274₹3,07,420₹34,99,691
11₹2,32,125₹2,88,569₹32,67,566
12₹2,52,643₹2,68,051₹30,14,923
13₹2,74,974₹2,45,720₹27,39,949
14₹2,99,279₹2,21,415₹24,40,670
15₹3,25,733₹1,94,961₹21,14,937
16₹3,54,525₹1,66,169₹17,60,412
17₹3,85,862₹1,34,832₹13,74,550
18₹4,19,968₹1,00,726₹9,54,582
19₹4,57,090₹63,604₹4,97,492
20₹4,97,492₹23,202₹0

At ₹50,00,000 over 20 years, Bank of Baroda holds the lowest advertised floor on our board.

Only these figures travel with you.

See Bank of Baroda’s terms

Questions

What is a good car loan interest rate in India?

Around 8.5–9.5% is competitive for a new car with a strong credit score. Used-car loans typically price several percentage points higher because the collateral is harder to value and depreciates faster.

Should I take dealer finance or bank finance?

Get a bank sanction first, then compare. Dealer finance is quicker and sometimes carries a genuine manufacturer subvention, but it also carries a referral economics you are ultimately paying for. Compare the all-in cost including processing fee and any bundled add-ons.

How much of the car price will a lender fund?

Commonly 80–90%, though whether that percentage is of ex-showroom or on-road price varies by lender and makes a large difference to your down payment. Ask which base they are using.

Related reading

Sources

Every figure on this page is traced to the document it came from. Where a claim rests on a regulator or an institution’s own rate card, that is the link below — not a summary of it.

  1. [3]Home, personal, vehicle and education loan rate cards — August 2026— Lender published rate cardsas of 15 August 2026
Worth knowing.Rates, fees and terms change frequently and vary by applicant. Everything here is general information, not personalised advice. Confirm the current terms directly with the institution before you apply. How we research and rate.