Car & Vehicle Loan — Rates, LTV & Eligibility

A car, the asset a vehicle loan is secured against

Who it suits

Vehicle Loan, in one paragraph.

Anyone buying a new or used vehicle who would rather not liquidate savings for it. Rates sit well below unsecured lending because the vehicle is hypothecated to the lender — but the asset depreciates fast, which is why lenders cap the tenure.

Salaried and self-employed applicants alike; the vehicle carries the risk.
Buyers able to put down 15–20%+, which unlocks a better slab.
Used-vehicle buyers, though at higher rates and shorter tenures.
Poor fit for anyone planning to sell within a year or two.

Key parameters

The numbers that shape the offer.

8.75–14% Indicative rate p.a., reducing balance

80–95% On-road cost funded, new vehicles

1–7 yrs Tenure for a new car

Indicative only, sourced from public lender information as of July 2026. Your actual rate, tenure and sanctioned amount are set by the lender based on your profile.

Eligibility & documents

What you need before you apply.

Most rejections at this stage are paperwork failures, not credit failures.

Eligibility criteria

Age 21 to 65 at loan maturity.
Minimum net monthly income, commonly ₹20,000–₹30,000.
Bureau score of 700+ for mainstream bank rates.
Valid driving licence and proof of residence.
Used vehicles: typically under 8–10 years old at loan maturity.

Documents required

PAN, Aadhaar and photographs.
Last 3 months of payslips and 6 months of bank statements.
Form 16 or the last 2 years of ITRs.
Proforma invoice or quotation from the dealer.
Used vehicles: RC, insurance, and a valuation report.

EMI calculator

See the monthly number before you commit.

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Loan amount ₹

₹1 lakh to ₹1 crore

Rate of interest (p.a.) %

7% to 20%. New vehicles price better than used

Loan tenure Yr

1 to 7 years

Monthly EMI ₹0

Principal: ₹0
Total interest: ₹0
Total payable: ₹0

Indicative only, on a reducing-balance basis. Excludes processing fees, insurance and statutory charges. KredExperts does not set rates; final terms come from the lender.

Vehicle Loan FAQs

The questions that come up first.

How much down payment should I make?

The minimum is often as little as 5–20%, but the minimum is rarely the right number. Putting down 20% or more lowers your loan-to-value, which typically moves you into a better rate slab and protects you from owing more than the vehicle is worth after the first year of depreciation.

Is a used-car loan much more expensive?

Yes, usually by 2–5 percentage points, with a shorter tenure and a lower funded share. The lender is securing against a depreciating asset with an uncertain history, and prices accordingly. A valuation report is almost always required.

What does hypothecation mean for me?

The lender is recorded as the hypothecatee on the registration certificate until the loan closes. You cannot sell or transfer the vehicle until you repay and obtain a no-objection certificate, then file for removal of the hypothecation endorsement with the RTO.

Should I take the dealer's finance offer?

Sometimes — manufacturer-subvented schemes can genuinely beat the market. But dealer finance is a commission channel, so compare the offer against at least two direct lender quotes on an all-in basis, including the processing fee and any bundled insurance.

Can I prepay a vehicle loan?

Usually yes, though foreclosure charges of roughly 3–6% of the outstanding are common, and some lenders impose a lock-in of 6–12 months. Check both before you sign, particularly if you expect a bonus or a windfall.

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The down payment decides the rate.