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Car Loan Interest Rates

New-car rates cluster tightly between lenders, so the differentiator is rarely the headline number — it is the processing fee, the funding percentage and whether the quoted rate is subvented by the manufacturer for a specific model and month.

Typical new car loan rate
8.5 – 12% p.a.

Manufacturer-subvented schemes can sit below this for specific models.

as of 2026-08-15· Lender rate cardsreported
By Nishit Kumar, Founder & Editor
Updated 17 August 2026

Beyond the table

Subvented schemes are real but conditional. A manufacturer funds a rate buy-down on a particular model, usually to clear inventory, and it often cannot be combined with the cash discount you were also being offered. Ask explicitly what the price is with the subvented rate versus with the discount and your own bank's finance — they are frequently close, and occasionally the "special rate" is the more expensive option.

Electric vehicles attract concessional rates from several lenders under green-loan programmes. Worth asking for by name, since it is not always offered unprompted.

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

Which bank has the lowest car loan interest rate?

Rates cluster closely across major lenders for new cars, so the cheapest option depends on your profile, the model and whether a manufacturer subvention applies that month. Compare the all-in cost including processing fee and GST rather than the headline rate.

Is a used car loan more expensive?

Yes, typically by several percentage points, with a shorter tenure and a lower funding percentage. Lenders also cap the vehicle age at maturity, which limits how old a car they will finance at all.

Can I prepay a car loan?

Usually, subject to a lock-in and a foreclosure charge that varies by lender. Check the sanction letter — car loans are frequently written at fixed rates, where the RBI protection on floating-rate loans does not apply.

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.