Interest Rate
7.45% to 14% p.a. for new cars. Used car loans are slightly higher (9-16% p.a.). Rate depends on model, tenure, CIBIL score, and employer category.
Car Loan — Affordable Vehicle Finance with Safe EMI Planning
Need a car for work or family but worried about existing debt? A structured car loan from a bank offers the lowest interest rates of any consumer loan — and the car itself serves as collateral, so approval is easier even with moderate CIBIL scores.
- Interest rates starting from just 7.45% p.a. — lowest among personal finance options
- Up to 100% on-road financing for new cars, 80% for used vehicles
- Tenure up to 7 years for comfortable EMIs that fit your budget
Car Loan at a Glance
Everything you need to know before applying.
Loan Amount
Up to ₹1,00,00,000 for new vehicles. Used car financing available up to ₹50 lakhs depending on the car's age, condition, and market value.
Tenure
12 to 84 months (up to 7 years). Longer tenure means lower EMI, but you pay more total interest. We help you find the right balance.
LTV Ratio
Up to 100% financing on ex-showroom price for new cars (select lenders). Used cars typically get 80% of current market value.
Eligibility Criteria
- Age: 21 to 65 years (loan maturity before 70)
- Employment: Salaried or self-employed with stable income proof
- Minimum Income: ₹15,000/month (salaried) or ₹2.5 lakh/year (self-employed)
- CIBIL Score: 650+ for most lenders; 700+ for premium rates
- Existing EMIs: Total obligations must stay within 50-60% of income
- Down Payment: 10-20% of on-road price typically required
Documents Required
Identity: PAN Card + Aadhaar Card or Driving License
Address: Aadhaar, Utility Bill, or Passport
Income: 3 months salary slips + 6 months bank statements
Vehicle: Proforma invoice from dealer (new) or RC + insurance (used)
Other: Passport-size photographs, existing loan statement (if any)
Check EligibilityKey Benefits of a Structured Car Loan
Better than borrowing for a vehicle through informal channels.
Secured Loan = Lower Rates
Car loans are secured by the vehicle — rates are 7-14% vs. 18-24% for personal loans. This is the cheapest way to finance a car.
New & Used Car Options
Finance brand-new vehicles or quality pre-owned cars (up to 5-7 years old) from certified dealers with full RTO transfer support.
Builds Asset + Credit
Unlike app loan money that vanishes, a car is a tangible asset. Plus, regular EMI payments rebuild your CIBIL score over time.
Fast Approval
Most car loans are approved within 24-48 hours. Digital verification and dealer tie-ups ensure quick processing with minimal paperwork.
Tax Benefits
Self-employed individuals and businesses can claim interest deduction on car loans used for business purposes under Section 80C and depreciation benefits.
Balance Transfer
Already have a car loan at high interest? Transfer to a lower-rate lender. Most banks offer car loan balance transfer with zero or minimal charges.
Frequently Asked Questions
Can I get a car loan while paying off app loan debts?
Yes, if your total EMI burden (including the new car loan) stays within 50-60% of your income and your CIBIL score is 650+. Since car loans are secured by the vehicle, lenders are more flexible than with unsecured loans. We recommend clearing high-interest app loans first if possible.
Is it better to buy a new or used car when recovering from debt?
A quality used car (2-4 years old) costs 30-50% less than new, meaning lower loan amount and EMI. Many certified pre-owned programs offer warranty and quality assurance. This is often the smarter choice during financial recovery to keep EMIs manageable.
How much down payment do I need?
Typically 10-20% of the on-road price. Some lenders offer 100% financing on the ex-showroom price for premium profiles with 750+ CIBIL scores. A larger down payment means lower EMI and less total interest paid.
What happens if I miss car loan EMIs?
Unlike app loans, car loan recovery follows a regulated process. After 90 days of default, the lender may initiate repossession of the vehicle. However, regulated lenders must send proper notices and follow RBI-mandated fair practices. Communication with the lender can often lead to restructuring before repossession.
Can I prepay or foreclose the car loan early?
Yes. For floating-rate car loans, RBI mandates zero prepayment penalty. For fixed-rate loans, a foreclosure charge of 2-5% may apply. Prepaying when you have surplus funds helps reduce total interest cost significantly.
Do you provide the car loan directly?
No. MudraTrust Finance connects you with the best-fit banks and NBFCs for your car loan. We compare offers, help with documentation, and ensure you get the most competitive rates. All loans are processed and disbursed by RBI-regulated institutions.