Car Loan

Interest Rates and Charges of HDFC Bank Car Loan

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The Housing Development Finance Corporation Limited (HDFC) Bank offers competitive car loan options for its customers.  A wide range of loan options are available for applicants to choose from where the interest rates are customised as per the applicant’s financial history. HDFC Bank is known as one of the most customer-friendly banks and the applicant can get his car loan approved at low interest rates in a matter of few minutes.

Most banks offer similar interest rates on car loans for a specified tenure but HDFC Bank offers highly flexible interest rates and tenure period. As a matter of fact, HDFC Bank offers the highest tenure of 84 months to its customers to repay the car loan. Let us peruse the interest rates and charges for the HDFC Bank car loan.


HDFC Car Loan Interest Rates and Fees*

Loan Features Rates
Interest Rate Starting from 9.35%
Processing Fees Rs 10,000 or 0.4% of the sanctioned car loan, whichever is lower
Foreclosure Charges 3-6% depending on the period of the loan (no foreclosure for car loans sanctioned less than 6 months before)
Documentation Fees Rs 600 every time
Penalty for Late Payment 2% each month
Financing Quantum Up to 100% of the on-road price of your car depending on the customer’s profile.

 *The facts and figures provided above are indicative and liable to change periodically.


Car Loan Amount

The amount sanctioned by the bank for buying the car is known as the car loan amount. This amount depends on the income of the applicant and the net on-road price of the car. The car loan interest rates vary from one customer to another.

On new cars, the bank provides the loan amount of up to 100% of the on-road price which can be up to 6 times the annual income of the applicant and up to Rs 1.5 Crores.

For pre-owned cars, loans of up to 80% of the price of the car can be sanctioned that can be up to a maximum of Rs 50 Lakhs.


HDFC Bank New Car Loans Interest Rates & Charges

Charges New Car Loans
Documentation Charges* Rs. 600 per case
Foreclosure charges* No foreclosure is allowed before 6 months of sanctioning of the loan.
6% of the outstanding loan amount for preclosures within an year from 7th EMI
5% of the outstanding loan amount for preclosures within 13-24 months from 1st EMI
3% of the outstanding loan amount for preclosures after 24 months from 1st EMI
Part-Payment charges* Part-payment is applicable once 12 EMIs have successfully been paid.
Part payment is applicable twice only during the complete loan tenure and at most once in a year. The part payment will not be more than 25% of outstanding loan amount in any case.
5% on the part-payment sum in case part-prepayment is within 13-24 months from 1st EMI
3% on the part-payment sum in case part-prepayment is after 24 months from 1st EMI
Processing fees* (Non- refundable) 0.4% of Loan Amount or Rs 10,000, whichever is lower
Loan cancellation In case of cancellation, the customer shall pay the interest on the loan amount from disbursement date till the refund of disbursement amount. Processing Fee, Stamp duty and Documentation Charges are non-refundable and would not be waived off.
Collateral Charges* Rs 450 per case
Loan Reschedulement charges/ Rebooking charges Rs 1,000/- will be charged. If changes are to be made on RC, refundable Security Deposit – non-interest bearing of Rs 5,000 is necessary. The borrower has to provide the transferred Registration Certificate to the bank.
LPG/ CNG NOC/ Other Special NOC Rs 500/-
Late Payment Penalty 2% per month
Rack interest rate 11.50% to 13.75% depending on the segment in which the vehicle lies
Stamp Duty (Non-refundable) The original cost
Amortisation Schedule Charges The customer can download the schedule from E-Delight for free. Rs. 200/- per schedule would be charged at the customer service desk.


Interest Rates

The rate of interest on the car loan varies from 9.35% to 14.29% in case of new cars. The rate of interest is however, higher for pre-owned cars and it varies from 14.50% to 17.50%, depending on the segment in which the car lies. All interest rates are calculated on the monthly reducing balance.

These rates and charges are some of the lowest charges among all banks providing car loans. It is necessary to go through the loan procedure and understand all the requirements, terms and conditions and obligations before opting for the loan.

HDFC Bank car loans are quick to get sanctioned and require very less amount of paperwork. The interest rates are highly competitive and the quote by the bank is worth considering. Taking into account the features and ease with which these car loans get sanctioned, the HDFC car loan is probably, one of the best car loan on offer today.


Procedure to get used car loan from HDFC

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Pre-owned cars are a great option if you want the convenience of a four wheeler without spending too much. In fact nowadays banks and lending institutions are offering loans for pre-owned cars so that you do not have to shell out a large amount of money in a single go. HDFC bank is one of the reputed private banks and it offers used car loan with really simple terms and conditions . Even the interest charged on the loan is quite affordable and the repayment terms are flexible. Let us look at the different features of an HDFC used car loan.


You can enjoy triple benefits with  a used car loan from HDFC bank:

  • Faster loan processing – the loan sanction and disbursal process of this bank is one of the fastest along with easy documentation and doorstep service.
  • Competitive pricing – The loan interest rates and charges are very affordable and competitive
  • Transparency – There is complete clarity on the loan process and no hidden charges exist. The consumers are given an update on the status of the application of loan at every stage

Features and Benefits of HDFC pre-owned car loans

Managing the money to buy a used car is not easy all the time, but with reputable and reliable banks like HDFC taking a loan for this purpose has got easier. With this bank you can get a loan of about 3 to 6 times of your annual income for all models of cars. This bank also helps you to opt for a good quality car at competitive price from a wide range of used cars uploaded by reliable dealers all over India.

You will be able to get some exclusive features and benefits with an HDFC pre-owned car loan

  • You can choose any car within a certain age and manufactured within the country
  • You can get a loan of up to 80% of the quoted price.
  • The repayment options are quite flexible as you can repay from 12 to 60 months
  • You can borrow up to 3-6 times of your annual income
  • The loan is available for all models of cars
  • The EMIs are easy to pay
  • You can also fast track your loan with the plan that is suitable for you
  • You can get an additional loan based on your existing bank auto loan
  • Special privileges are offered to account holders of this bank
  • The maximum used car loan is up to 50 lakhs

Eligibility and Documentation

First check the category that you fit into. It depends on the kind of work that you do, because the requirements of the bank to give you a loan will depend on that

  • Minimum age of salaried employees is 21 years and one should be less than 60 years of age at the end of the loan tenure
  • You should be employed for at least the last 2 years and a minimum of 1 year with your current employer
  • The annual income should be at least 1,00,000 including the income of your spouse
  • You should have a telephone at your residence

Documents Required

  • Age proof – any one of the passport copy, voter’s ID card, PAN card, photo driving license with birth date, photo ration card with DOB, employer certificate/ID, school/college leaving certificate
  • Proof of identity – Any one of this would work. PAN card, passport, photo driving license with DOB, voter’s ID card etc.
  • Income proof – Latest salary slip with latest form 16/latest ITR. HDFC bank corporate salary account statement for salary credit above Rs. 8000 for three months
  • Address proof – Any one of photo driving license with DOB, photo ration card with DOB, passport copy, electricity bill, telephone bill, credit card statement with copy of credit card, Employer certificate/ID
  • Signed verification proof – Any one of it is required. Photo driving license with DOB, photo ration card with DOB, banker’s verification, credit card statement with credit card copy, copy of margin money paid to bank.

Online Tool for Car Loan EMI Calculator

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Equated Monthly Instalments (EMIs) are monthly payments that are made to repay a loan. This is a convenient way for someone to pay off their debt without worrying too much about the total size of the loan amount. It also gives an applicant a lot of flexibility in terms of how they wish to go about paying off their debt.


A question that applicants often wonder is how EMIs are calculated. The EMI amount depends on three factors. They are:

  • Principal Amount: This is the actual loan amount. The interest and other payments are calculated based on this amount.
  • Rate of Interest: This is the rate at which a bank charges interest. Interest, of course, is the amount that is charged by the bank. It is the profit that a bank earns on a loan. The rate of interest is presented as a percentage and is applied on the total loan amount to arrive at the total interest. Another point that must be noted is the type of interest rate that is being offered. Interest rates may be fixed or floating. In the case of a fixed rate of interest, the EMI amount will remain the same. But on a floating rate, the EMI amount will fluctuate. There are forms of floating interest where the EMI is kept fixed, but these ‘floating’ rates are predetermined and not true floating rates which fluctuate based on market conditions.
  • Duration: This is the total time for which the loan is being availed. It is also called the tenure or loan repayment period. The longer the duration, the more the number of EMIs that an individual would have to pay. However, longer tenures also mean a lower EMI amount.

In case loans where part prepayments are allowed, the EMIs will be affected. With part prepayments, the total loan amount will decrease and hence, the amount of interest charged on the remaining loan amount goes down. This will work to the benefit of the applicant, as long as the prepayment charges are not too high.

Calculating the EMI yourself used to be a real pain. Fortunately, these days, there are many tools available online that give people the option of calculating their own EMIs at the click of a button. Most banks today provide this facility on their websites, as do many online financial aggregators. An individual needs to do is visit the bank’s official website and search for the EMI calculator tool. There, they can fill out the principal loan amount and the duration for which they require the loan. The rest of the information such as interest rate and processing fee would already have been filled out by the bank. Now, all they need to do is press the calculate button and within seconds, the EMI amount is in front of them. If you use an EMI calculator on a financial aggregator, you may have to put the rate of interest in yourself or if you are calculating the EMI for a particular product or bank, it will be automatically filled in. These websites that offer financial services may also allow you to compare the EMIs of different products and banks.

The EMI calculator tool is been provided with the intent of making banking seamless and feasible for customers. You can easily calculate EMIs for car loans, for instance. Now, the customer feels like a part of the system as they now know how the EMI amount is calculated. It empowers the applicant and gives them a clear picture about how they should go about paying off their debt.

The various benefits of a car loan EMI calculator have been briefly listed here.

  • Saves Time: EMI calculators save time as a loan applicant does not have to visit a bank in order to ascertain their EMI amount.
  • Transparency: The process of loan payment and interest calculation is made more transparent. The applicant is in the loop when it comes to calculating the EMI amount. There is no more guesswork or fear that they are being swindled.
  • Planning: Once an applicant knows the amount they have to pay, they can plan their monthly budget accordingly. Further, they can know ahead of time if they will be able to afford the EMI. If it is too high, they can avoid applying altogether.
  • Comparison: The EMI calculator can be used to compare the car loans from different banks with varying rates of interest. This can help the applicant decide which bank or type of loan is the best for them. The applicant can go over all the available options and would be in a position to make a wise decision.

What are some tips and tricks for managing a car loan?

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If you are looking forward to purchasing a car, it has to be done in the right time or else you may miss the opportunity. It may not be solely possible to contribute the whole amount for the car in the first go but if you have some money and know that you can manage to pay the rest in installments, you should definitely go for car loan. This is easy to apply for and get and there are quite less hassles compared to other loans one may think of.


There are few tips that will help you manage a car loan better and make payment easy.

  • While applying for the car loan, make sure to pay as much money as possible in the form of down payment. Down payment will reduce the remaining balance and your total interest will be lower. If you don’t have much, pay as much as possible. It is not a good idea to pay more installments and less as down payment. You can even reduce the number of years required for payment in case you make good down payment. Monthly burden for a long time is not going to give you any relief.
  • Keep the loan term short as that will help you stay worry free. If you are taking a loan for four years instead of five years, you can have a year free of worries. The car will depreciate in value with each passing year and after five years it may not be as good as you want it. You may think of buying a new car at that point of time but if you have the loan going on, you will lose interest and may have to continue with the old one with quite less advantages.
  • Take insurance for your vehicle but don’t get swayed by the add-ons. Add-ons definitely have some advantages but they increase the amount of premium. While some add-ons are beneficial, some are not. You shall not go for any such extra benefits without judging how frequently they are used. This is mandatory for every insurance holder.
  • Choosing your car smartly will reduce your burden. There are some cars that are more prone to damage while some are not quite vulnerable. It is important to do proper market study before making the purchase. This will cause lesser depreciation and you will have lesser trouble while paying the car loan. Don’t just go for a luxurious car without thinking of the cost of maintenance and the high EMI. Take a car within your reach.
  • Make a proper schedule for the EMIs to be paid. Automatic transfer from the bank is the best thing that you can do as that will make sure that the EMIs are paid every month without fail. The date shall be just 2 to 3 days after your payday. This will make sure that the installment is paid and you don’t have any impact on your credit score.
  • It is very important to manage your expenses well if you have a loan to pay off. You have to make sure that you don’t use it for occasions you can do without them. You shall also take care of its maintenance so that you don’t have to pay much on the damage.

All You Need to Know about SBI’s Used Car Loan Scheme

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SBI or State Bank of India, one of the leading financiers in India, offers special car loan scheme to allow customers to purchase a second-hand car with ease. You can use this loan scheme for the purchase of any second-hand SUVs, MUVs that are not older than 5 years. On top of that SBI Used Car Loan interest rate is comparatively lower and has easy repayment options as well which make this one of the most popular loan schemes of this category.

SBI Car Loan

Features and Benefits of this SBI Loan

This used car loan offers:-

  1. Easy payment options
  2. The SBI car loan interest rate is very affordable
  3. Zero advanced EMI
  4. Flexibility to pay the EMI anytime in a month
  5. Mere 2% of pre-payment penalty
  6. Interest Calculated on Daily Reducing Balance
  7. Optional SBI Life cover available to applicants
  8. 7 years of longest repayment tenure
  9. LTV up to 85% of the car’s on-road price including registration, insurance, and accessory items of up to Rs 25, 000
  10. Processing fee is also low and equals 0.51% of loan amount sanctioned

Eligibility Criteria for the Scheme

Private and public sector employee

  1. Gross yearly earnings of the applicant and co-applicant (if any) for SBI car loan should be not less than Rs. 3,00,000/-
  2. The maximum loan amount should be 48 times of the Net Monthly Income

Self-employed, businessmen, proprietor

  1. Gross income (taxable) of the applicant should be Rs. 4 lakhs at least (the income of co-applicant cannot be combined).
  1. The maximum car loan amount sanctioned should be 4 times gross income (taxable) as per ITR after repaying all the existing loans

Person engaged in agricultural and allied activities

  1. Gross Annual income of the applicant and co-applicant collectively should be not be less than Rs. 4,00,000/-
  2. The maximum loan amount should be 3 times of Net Annual Income

Documents Required For This Loan


  1. Bank statement of the previous 6 months
  2. A copy any Government identity proof is mandatory for car loan
  3. 2 passport-size photographs
  4. IT Returns or form 16 of last 2 years
  5. A copy of Driving License/ Ration card/ Passport / Voters ID card/Telephone Bill/ Electricity bill/Life Insurance policy as an address proof
  6. Recent salary slips or form 16 as an income proof


  1. Bank statement of the last 6 months is required for SBI used car loan
  2. Identity proof – a copy of PAN Card/ Voters ID card/ Passport/ Driving License etc.
  3. Address proof – a copy of Driving License/ Ration card/Voters ID card/Passport /Telephone Bill/ Electricity bill/Life Insurance policy, etc.)
  4. 2 passport size photographs
  5. Income Proof: ITR for last 2 years
  6. T. Returns or Form 16 for the last 2 years
  7. Audited Balance sheet, SSI registered certificate / sales tax certificate / shop & establishment act certificate/ a copy of partnership

Person engaged in Agriculture and allied services (Dairy, Poultry, and Plantation)

  1. Bank statement of the last 6 months
  2. Identity proof – a copy of Passport/ Voters ID card/ PAN Card/Driving License, etc.
  3. Address proof – a copy of Ration card/Voter ID card/ Driving License/Telephone or Electricity Bill/Passport /Life Insurance policy, etc.
  4. 2 passport size photographs
  5. A proof of direct agricultural activity (crop cultivation) showing a cropping pattern and land holding with a photograph.
  6. All land should be on an ownership basis and ownership proof to be in the name of the person applying for the car loan.
  7. Written proof of managed activities.

Repayment: The loan offers the longest repayment period of 84 months to the customer. This means borrowers can enjoy lower EMIs and pay the loan debt without overburdening them.

Processing Fee: SBI charges a flat processing fee on car loans equaling 0.51% of the sanctioned amount in case of second-hand cars.

SBI Used Car Loan Interest rates: The State Bank of India charges 0.45% of over base rate for applicants who are men and for women, the bank charge over the base rate of 0.40% on its used car loans. Interest rates differ widely on loans in case of certified used cars and for loan tenure that exceed 3 years.

5 Tips to Manage a Car Loan

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A majority of Indians rely on bank loans to buy a car. Barring a home loan, repayment of a car loan is considered as one of the largest financial responsibilities that the average Indian commits to. If you are one of them, it takes around five to seven years to pay off the entire amount. To help you in this context below are 5 ways you can manage your car loan debt easily:-


  1. Pay more than the minimum: As the general rule goes, the longer you take to repay the loan amount the more interest the bank will charge and you’ll end up shelling out more money from your pocket. To put an end to this practice, it is wise to pay at least 2-3% more than the outstanding balance. Let’s suppose if your monthly loan EMI is Rs. 10, 000/-, try to pay the double of it or more. Streamline your normal expenses. It will be easy by making a few sacrifices like if you give up your happy hour drinks, rely on home cooked food and eliminate desserts.
  2. Make one large extra payment per year: Make a habit of making one large payment each year. Though it seems tough to make a single lump sum payment at one go, but once you make it a routine, you will be more than happy to pay off your car loan easily by saving your interest rate significantly. But before making one large extra payment, make sure to discuss this with the bank as there are some banks which do not provide this facility to the customers and might penalise you for such extra payments or paying off the loan balance early.
  3. Never skip payments: Some banks may allow you to skip your payment at leave once or even twice a year. But it is advised not to get tempted with this facility as it may give you leniency for the initial month but in return, it will lengthen your loan term and cost you more in terms of total interest payouts.
  4. Refinance your loan: You can even take new credit to pay off the original loan. Refinancing is done to provide lender the facility to obtain a better loan term and lower car loan interest rate. This way you can take a new loan, negotiate a new monthly payment and a new pay-off date for your new loan. Do this only if the bank provides a lower monthly payment and sooner pay off date for your new loan. Otherwise refinancing your loan will be of no benefit as you will end up paying the same principal and at increased interest rates.
  5. Find extra money: If all the aforementioned plans fail to work, you can cash out your savings and investments and use the money to pay off your car loan faster. Though this may sound a strange idea at once but is considered a shrewd way to pay off car loan debts without spending much and saving big on the interest payouts instead.

The bottom line is that managing your car loan astutely by paying off the debt early will save you money that is otherwise spent on paying the interest amount especially if your car loan interest rate is floating instead of fixed. Also, it will decrease the overall term of the loan significantly. Just imagine what you can do with your extra money: save for retirement, renovate your home, and much more to ensure a happy life in future without worrying about the loan debts and burden of EMIs that keep dragging on for years.