Car Loan Interest Rates 2025

Whether you are looking to buy a luxury sedan or a budget-friendly hatchback, understanding car loan interest rates can help you make an informed decision. With many options, getting the best interest rates for car loans requires research. In this blog, we look at the latest car interest rates, application processes, and factors affecting the current interest rates for car loans in India.

Types of Car Loan Interest Rate in India

Car loan interest rates in India are classified into two main types:

• Fixed Interest Rates: Fixed interest rates remain constant throughout the loan tenure. This ensures predictable monthly instalments. These rates are unaffected by market swings.
• Floating Interest Rates: Floating interest rates vary with market trends and the Reserve Bank of India’s (RBI) policy rates. While they might start lower, they can increase over time based on economic conditions.

List of Car Loan Interest Rates for All Banks

Car loan interest rates in India vary across banks and are subject to change based on economic conditions and individual borrower profiles. Here are the best car loan interest rates from famous banks across India. However, it would be prudent to check with individual banks for the current rate that they may offer.

Car Loan Application Process in India

Applying for a car loan on CASHe is a simple process.

Step 1: Visit the CASHe mobile app to check if you meet the eligibility criteria for a car loan.

Step 2: Fill out the online application form with details as asked.

Step 3: Upload the required documents such as ID proof, address proof, income proof, and bank statements.

Step 4: Once your application is submitted, CASHe will review it and notify you upon loan approval.

Here are a few things that you should consider: You must be an Indian citizen and at least 18 years of age. You must not only have an active bank account but must also draw a minimum salary of ₹40,000 per month

Factors Affecting Car Loan Interest Rates

Several factors determine the interest rates for car loans. Here’s what you need to know:

• Credit Score: A higher credit score often results in lower car interest rates as lenders look at you as a low-risk borrower.
• Loan Amount and Tenure: Longer loan terms come with higher interest rates because they represent a greater risk to lenders. Hence, selecting a plan that will provide you with an appropriate term becomes crucial.
• Income Stability: Your income level and job stability influence lenders’ confidence in your repayment capacity thereby affecting the rate offered. Working for a reputed company is an added bonus.
• Age: Loan amounts and interest rates are much lower for applicants who are young as compared to older ones. The younger the creditor, the more time they have to repay the loan.
• Vehicle Type: The make and model of the car, along with its resale value, also play a role in determining the car loan interest you are eligible for.
• Downpayment: Making a larger down payment reduces the loan amount and improves repayment capacity. It helps borrowers negotiate lower interest rates while reducing the lender’s credit risk.
• Existing Liabilities and Investments: If you have limited existing debts, lenders see you as a low-risk borrower. However, if you already have debts, your repayment capacity may be considered to be lower, making lenders believe your application is a higher risk.

Conclusion

Studying about car loan interest rates helps you stay informed and make strategic decisions. With CASHe, securing the best car loan rates is within your reach, with interest rates ranging from 2.79% to 3% (reducing balance interest) on the loan amount.

Apply for a car loan of up to₹3 lakh with CASHe today and enjoy quick approvals, low interest rates, and a hassle-free process.