Car Loan

For new cars, banks typically finance up to 85–90% of the on-road price. For used cars, it's typically 70–80% of the assessed market value. The remaining amount (down payment) must come from your own funds. Some dealers partner with banks for 100% on-road financing offers.

Yes! Most banks offer used car loans. The vehicle should ideally be less than 5 years old for best rates, though some lenders go up to 10 years. The loan amount is based on the bank's assessed market value of the car, not the listed price.

Car loan tenures typically range from 1–7 years. Most borrowers opt for 5 years to balance EMI affordability with total interest cost. At 7 years, monthly EMI is lower but total interest paid is higher.

For personal use vehicles, car loan interest is NOT tax deductible. However, if the car is used for business purposes, the interest paid can be claimed as a business expense under income tax rules. Consult your CA for specifics.

Yes, most lenders allow foreclosure after 6–12 months. Foreclosure charges typically range from 2–5% of the outstanding principal. SBI charges no foreclosure fee on car loans with floating interest rates.

The car serves as hypothecated collateral for the loan. If you default, the bank has the legal right to repossess the vehicle. The bank then sells the car to recover dues. Maintaining timely payments is critical — missing even 3 EMIs can trigger repossession action.

Car loans are secured (car is the collateral), so lenders are slightly more flexible than personal loans. A score of 650+ is generally acceptable. Below 650, you may still get a loan with a larger down payment. NBFC lenders like Mahindra Finance specialize in flexible car financing.

Dealers offer convenience but often channel you to their partner NBFC which may have higher rates. Going directly to a bank or applying through ProperPaisa gives you transparent rate comparison. We compare 10+ car loan lenders to find your best rate — at zero cost.