Overview of vehicle loans in India
A vehicle loan lets you buy a car, bike or scooter and pay for it over time. The lender pays the seller, and the vehicle serves as security, which is why rates are lower than on a personal loan. If you stop paying, the lender can repossess the vehicle after following the process in your agreement.
The right loan depends on what you buy. A new car loan funds more and runs longer than a used car loan, which is based on valuation. Two-wheeler loans are small and quick, and electric vehicles add questions about GST, battery warranty and incentives. On this page you can compare options and find the specific loan for your vehicle.
Types of vehicle loans
| Loan | Security | In brief |
|---|---|---|
| Car Loan | Secured | A car loan is a secured loan that finances a new or used car, with the car hypothecated to the lender until you repay. |
| Electric Car Loan | Secured | An electric car loan finances a battery-electric passenger car, and works like a new car loan with EV-specific points. |
| Two Wheeler Loan | Secured | A two wheeler loan is a small secured loan that finances a motorcycle, scooter or moped, with the vehicle hypothecated to the lender. |
| Scooter Loan | Secured | A scooter loan finances a gearless two-wheeler, usually priced between about ₹70,000 and ₹1.8 lakh. |
| Electric Two Wheeler Loan | Secured | An electric two wheeler loan finances an e-scooter or e-motorcycle that is registered for road use. |
| Commercial Vehicle Loan | Secured | A commercial vehicle loan finances goods carriers, passenger vehicles and utility vehicles bought to earn money, not for personal use. |
| Truck Loan | Secured | A truck loan finances a goods-carrying truck, from a small pickup to a multi-axle heavy truck, with the vehicle hypothecated to the lender. |
| Bus Loan | Secured | A bus loan finances a school bus, staff bus, tourist coach or mini bus, with the bus hypothecated to the lender. |
| Taxi Loan | Secured | A taxi loan finances a car bought to run as a cab, whether on a city taxi permit or with a fleet or ride-hailing platform. |
| Auto Rickshaw Loan | Secured | An auto rickshaw loan finances a three-wheeler passenger or cargo vehicle, whether petrol, CNG, diesel or electric. |
EMI calculators for vehicle loans
Each calculator is set up for how that loan is really repaid, with typical rates, a repayment schedule and the fees that change the true cost.
How to choose between vehicle loans
- Match the loan to the vehicle. New, used and electric vehicles are financed differently. Funding share, tenure and rates differ, so start from the page that fits what you plan to buy and what the lender will accept.
- Compare the APR and total cost. The Key Fact Statement shows the annual percentage rate, fees and total repayment. Compare these across lenders. A low EMI on a long tenure can cost much more overall than a shorter loan.
- Keep a real down payment. Vehicles lose value quickly. A down payment of 10% to 25% lowers your EMI and reduces the period when you owe more than the vehicle is worth, which protects you if you need to sell.
- Check flat versus reducing rates. Two-wheeler loans in particular are sometimes quoted at a flat rate, which costs far more than a reducing-balance rate of the same number. Ask for the APR before you compare.
- Read prepayment and insurance terms. Fixed-rate vehicle loans may charge for early closure, and lenders require comprehensive insurance. Check both before you sign, so you know what it costs to close early or change lender.
Estimate your EMI
Example values only. Replace them with the figures in your own offer.
Reducing-balance method. Excludes processing fees, GST, insurance and other charges.
Vehicle loans by lender and by brand
Compare 21 banks and NBFCs using figures from their own websites, or start from your car or bike brand.
Lenders
Car and bike brands
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Vehicle Loans: frequently asked questions
What are vehicle loans in India?
Vehicle loans are secured loans used to buy a car, two-wheeler or commercial vehicle. The lender funds a share of the price and records its hypothecation on the registration certificate. You repay through EMIs, and the lender removes its name after you clear the loan.
How much down payment is needed for a vehicle loan?
It depends on the vehicle and lender. Cars often need 10% to 20% of the on-road price, and two-wheelers can need less, sometimes 5% to 20%. Used vehicles usually need more because the loan is based on the lender's valuation.
Which has a lower interest rate, a new or used vehicle loan?
New vehicle loans usually have lower rates, because the vehicle has a clearer value and a longer life. Used vehicle loans often cost several points more and run for shorter terms. Your credit score and income also affect the rate you get.
Can I get a vehicle loan with a low credit score?
It may be possible, especially for small two-wheeler loans, but terms are usually less favourable. Expect a higher rate, a bigger down payment or a co-applicant. Approval depends on the lender's assessment of your income, history and existing debt.
Do I need insurance for a vehicle loan?
Yes. Third-party insurance is a legal requirement, and lenders usually require comprehensive cover while the loan runs because the vehicle is their security. If you let it lapse, the lender may buy a policy and add the cost to your dues.
Can I prepay or foreclose a vehicle loan?
Usually yes, but fixed-rate vehicle loans may charge a fee on part or full prepayment, and some have a lock-in period. Check the clause in your agreement. After closure, collect the no-objection certificate and get hypothecation removed from the RC.
Explore other loan categories
Official sources and further reading
These guides are written from Reserve Bank of India rules and official scheme pages. Rules, rates and scheme terms change, so check the current position on these sites and in your lender's Key Fact Statement before you apply.
- RBI: Key Facts Statement (KFS) for loans and advances. The Reserve Bank of India notification that tells lenders to give every borrower a plain-language statement of the full cost of a loan.
- RBI Complaint Management System. Where to take a complaint against a bank, NBFC or other regulated lender if the lender does not resolve it.
- RBI (Pre-payment Charges on Loans) Directions, 2025. Bars pre-payment charges on floating-rate loans taken by individuals for non-business purposes, for loans sanctioned or renewed from 1 January 2026.
- Reserve Bank - Integrated Ombudsman Scheme, 2021. The single complaint scheme for customers of banks, NBFCs and other RBI-regulated lenders.
- RBI: Free Annual Credit Report to Individuals. Credit bureaus must give you one free full credit report with score every calendar year.
- RBI Financial Education. Consumer guidance from the Reserve Bank of India on borrowing, fraud and your rights as a customer.
Edited by Hemant Kumar. Rates on this site are indicative ranges, not offers.
General information only. Rates and terms are indicative and vary by lender and applicant.