Vehicle loans
A vehicle loan pays for a car, two-wheeler or other personal vehicle, with the vehicle itself as security. The lender’s name stays on the registration until the loan is repaid. New-vehicle, used-vehicle and two-wheeler loans differ a lot in how much is funded, the rate and the tenure.
We explain what lenders usually ask for and help you get your papers in order — the first call is free.
Estimate your EMI
EMI calculator (estimate only)
Enter the amount, the yearly interest rate and the number of months. The estimate uses the reducing-balance method that most banks use for term loans.
Estimate only. Your lender sets the actual rate, EMI and charges.
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Details
What lenders usually check
- Income and existing EMIs.
- Credit report and score.
- The vehicle: model, price, and for a used vehicle, age, condition and valuation.
- The dealer’s quotation or proforma invoice.
- For used vehicles: ownership history and insurance status.
Documents to keep ready
- Identity and address proof.
- Income proof: salary slips or ITR, and bank statements.
- Dealer quotation or proforma invoice for a new vehicle.
- For a used vehicle: registration certificate, insurance, valuation report and the seller’s papers.
- Driving licence, where the lender asks.
Repayment
Fixed EMIs over one to seven years for cars; usually shorter for two-wheelers and used vehicles. A longer tenure lowers the EMI but raises the total interest.
Interest and charges
Usually fixed. Ask about processing fee, documentation charges, foreclosure charges and whether insurance or extended warranty is being added to the loan amount.
Security or own contribution
The vehicle is hypothecated to the lender. Lenders fund a share of the on-road or ex-showroom price; you pay the rest as a down payment. Used vehicles get a smaller share.
How to prepare
Get a written on-road price. Decide your down payment. Compare the total cost of the loan across the tenure, not just the EMI. Check whether the dealer’s "bundled" offer includes charges you did not ask for.
Questions about vehicle loans
How much of the price will a lender fund?
A share of the ex-showroom or on-road price; the rest is your down payment. New vehicles get a larger share than used ones.
Is the rate fixed or floating?
Usually fixed for vehicle loans, but confirm.
Can I get a loan for a used car?
Yes, with a lower funded share, shorter tenure and often a higher rate. The vehicle’s age limit at the end of the loan matters.
What is hypothecation?
The lender’s charge on the vehicle, noted on the registration certificate. After you repay, you get a no-objection certificate and have it removed.
Can I sell the vehicle during the loan?
Only after clearing the loan or with the lender’s consent.
What if I miss EMIs?
Late charges, credit-bureau reporting and, after repeated default, the lender can repossess the vehicle after due notice.
Is insurance compulsory?
Third-party insurance is compulsory by law for any vehicle on the road; lenders usually require comprehensive cover during the loan.
What we do here: we explain what lenders usually ask for and help you get your documents in order. We do not lend, arrange loans or take commission. The first call is free. See what we do.
