Top 5 Best Banks for Vehicle Loan in India


In the bustling landscape of India’s economic evolution, the automobile industry has risen to prominence, making car ownership a tangible aspiration for a diverse spectrum of individuals. As roads wind through urban sprawls and countryside vistas, the demand for cars has surged, underscoring the significance of accessible and advantageous car financing options. The year 2023 ushers in a promising era, where prominent banks are engaged in a spirited competition to offer not just car finance services, but pathways to personal mobility dreams. Amidst this dynamic setting, each financial institution exudes its unique set of benefits, accompanied by competitive interest rates that invite potential car owners to embrace a world of opportunities

As we navigate the offerings of these banks, we’ll immerse ourselves in their array of benefits, absorbing the essence of their promises. Each institution conducts its own symphony of advantages, crafting harmonious notes that resonate with individual aspirations. This exploration of financial foresight and customer-centric values reveals how State Bank of India, HDFC Bank, ICICI Bank, Axis Bank, and Kotak Mahindra Bank are crafting distinct experiences in car finance, accompanied by interest rates that echo affordability and opportunity.

Best Banks for Vehicle Loans in India

These are the options available in India that will give you the best vehicle loan in 2023.

Banks NameInterest Rate (p.a.)Processing Fee
State Bank of India8.80%p.a. onwards1% of the loan amount
HDFC Bank8.85% p.a. onwards1% of the loan amount
ICICI Bank8.85% p.a. onwards2% of the loan amount
Axis Bank9.10% p.a. onwards1% of the loan amount
Kotak Mahindra Bank7.70% p.a. onwards2% of the loan amount
PNB7.55% p.a. onwards1% of the loan amount
Canara Bank7.35% p.a. onwards0.25% of the loan amount
Bank of Baroda8.70% p.a. onwards0.5% of the loan amount
Union Bank Of India7.40% p.a. onwards1% of the loan amount
Table for Interest Rates of all the banks (p.a. onwards)

Eligibility Criteria and Documents Required

Eligibility Criteria Documents Required
Age Requirement (21 to 65 years old).Identity Proof (Aadhar card, passport, or driver’s license).
Income Stability.Address Proof.
Credit Score.Income Proof.
Employment History.Employment Proof.
Minimum Income.Passport-sized Photographs.
Loan Amount.Car Quotation.
Loan Tenure.Down Payment Proof.
Debt-to-Income Ratio.Bank Statements.
Down Payment.Signature Proof.
Documentation.Proof of Income Stability.
Residential Status.Credit History.
Employer Category. Declaration of Assets and Liabilities.
Existing Loans.Loan Application Form.
Table for eligibility criteria and documents Required for Car Loans

What are the benefits of a Car Loan?

There are several benefits to buy a car on loan that makes it a popular choice among many customers. One of the key advantages is the ability to own a car without needing the full purchase amount upfront. Instead of paying the entire cost at once, you can spread it out over manageable monthly installments. This makes car ownership more accessible, especially if you’re unable to pay a lump sum immediately.

 benefits of a Car Loan

And there are potential benefit related to income tax when you buy a car through a loan. The benefit is not a direct reduction in income tax, but rather it’s linked to the interest component of the car loan repayment. The interest paid on the car loan can be eligible for tax deduction under certain circumstances.

In many countries, including India, the interest paid on a car loan can be claimed as a deduction under the Income Tax Act. However, there are conditions that need to be met to obtain the benefits:

Business Usage:

If you’re using the car for business purposes, you may be able to claim a portion of the interest paid on the loan as a business expense, which could reduce your taxable income.

Self-Employed Individuals:

Self-employed individuals might be able to claim the interest paid on a car loan as a business expense, again leading to a reduction in taxable income.

Employee for Whom a Car is Essential:

Some employees might be eligible for a car loan as a part of their employment agreement. In such cases, if having a car is considered essential for their job, the interest on the car loan might be partially deductible.

Usage Percentage:

If the car is used partly for business or work-related purposes, the interest corresponding to that usage can be considered for deduction.

Top 5 Best Option For Vehicle Loan

1. State Bank of India (SBI)

Car Loan in SBI

SBI, India’s largest public sector bank, its vehicle loans come with an array of benefits, including attractive interest rates that starts from 8.80% (For Electric Cars it starts from 8.65% to 9.35%), flexible repayment up to 7 years, and the convenience of online applications. By requesting a few documents and streamlining the application process, they ensure fast loan approvals. Additionally, SBI vehicle loans have low processing fees, which makes them more affordable for applicants.

To apply for Car Loan in SBI: click here

2. HDFC Bank

 Car Loan in  HDFC Bank

HDFC Bank is the one of the largest bank in India and it has big contribution in Indian economy. They also provide vehicle loan services and diverse range of financial products. A popular option for customers, they offers vehicle loans at affordable interest rates starting at 8.85%. The bank’s efficient loan approval process, minimal documentation requirements, and user-friendly online application platform streamline the borrowing experience are the advantages and they also provide part-payment and foreclosure alternatives, ensuring you can manage your loan efficiently.

To apply for Car Loan in HDFC Bank: click here

3. ICICI Bank


Securing a vehicle loan from ICICI Bank accompanies striking advantages and competitive interest rates i.e. 8.85%. The bank offers a consistent application process, frequently requiring negligible documentation, guaranteeing simplicity and comfort for borrowers. With adaptable reimbursement residencies, you can pick a course of events that lines up with your monetary limit. ICICI Bank habitually gives appealing loan fees, assisting you with dealing with the general expense of the advance.

Car Loan in ICICI Bank

Their client driven approach stretches out to offering particular proposals for existing clients, improving the acquiring experience. By opting for a vehicle loan from ICICI Bank, you not only gain access to financing but also avail yourself of a range of facilities designed to make your journey towards vehicle ownership smoother.

To apply for Car Loan in ICICI Bank: click here

4. Axis Bank

 Car Loan in Axis Bank

Opting for a vehicle loan from Axis Bank brings multiple advantages. They offer competitive interest rates (starting from 9.10% p.a. onwards) that can help you save money over the loan tenure, making repayments more manageable. With a straightforward application process and quick loan approval, you can swiftly get behind the wheel of your desired vehicle. Axis Bank’s flexible repayment options allow you to choose an EMI plan that suits your financial situation.

To apply for Car Loan in Axis Bank: click here

5. Kotak Mahindra Bank

Vehicle loan in Kotak Mahindra Bank

Opting for a vehicle loan from Kotak Mahindra Bank brings several advantages. With competitive interest rates (starting from 7.70% p.a. onwards), the bank ensures that your loan repayment remains affordable. They offer flexible repayment tenures, allowing you to tailor the loan to your financial capabilities. The bank’s streamlined application process minimizes hassles, while their comprehensive customer support guides you through the loan journey. Whether you’re eyeing a new or used vehicle, Kotak Mahindra Bank extends its financing options.

To apply for Car Loan in Kotak Mahindra Bank: click here


In the dynamic landscape of car financing in India, these are the top 5 banks i.e. State Bank of India, HDFC Bank, ICICI Bank, Axis Bank, and Kotak Mahindra Bank — keep on being at the front because of their customer-centric philosophy, competitive interest rates, and a variety of advantages. As the automobile industry is developing, these banks also simplifying the vehicle buying journey from customers across the nation. Potential car buyers are encouraged to thoroughly explore the latest offerings from these banks, ensuring that they find a car finance solution that perfectly aligns with their individual needs and preferences.

To learn about Credit cards: click here

Anjan Boro
Anjan Boro
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