What you need to know
The down payment (margin) is the part of the on-road price the bank does not finance. Some banks fund up to 100% of on-road price on select models; others keep a 10% – 20% margin. A bigger down payment lowers the EMI, the interest and the risk of owing more than the car is worth.
Down payment vs EMI and interest
| Down payment | You pay upfront | Loan | EMI | Total interest |
|---|---|---|---|---|
| 0% | ₹0 | ₹10,00,000 | ₹20,758 | ₹2,45,501 |
| 10% | ₹1,00,000 | ₹9,00,000 | ₹18,683 | ₹2,20,951 |
| 20% | ₹2,00,000 | ₹8,00,000 | ₹16,607 | ₹1,96,401 |
| 30% | ₹3,00,000 | ₹7,00,000 | ₹14,531 | ₹1,71,851 |
| 40% | ₹4,00,000 | ₹6,00,000 | ₹12,455 | ₹1,47,301 |
On-road price ₹10,00,000 at 9.00% for 5 years. Each extra 10% down saves about ₹24,550 of interest. Down payment guide →
Funding limits by bank
| Lender | Funding / loan limit |
|---|---|
| Canara Bank Car Loan | No upper loan limit; up to 90% of price |
| Bank of Baroda Car Loan | Up to 90% of on-road price (bob Digital Car Loan up to 93%) |
| PNB Car Loan | Up to ₹1 crore or 25 × gross monthly salary; 85% funding (90% with manufacturer tie-ups) |
| Union Bank of India Car Loan | No ceiling on loan amount |
| HDFC Bank Car Loan | Up to 100% of on-road price (select vehicles) |
| ICICI Bank Car Loan | Up to 100% of on-road price |
| SBI Car Loan | Up to 100% of on-road price (select models) |
| Axis Bank Car Loan | Up to 100% of on-road price |
RBI does not set a loan-to-value cap for car loans — each bank sets its own margin. Where funding is quoted on on-road price, it can cover road tax, registration and insurance.
Tips
- Aim for at least 20% of the on-road price
- Pay road tax and insurance from savings if the bank funds only ex-showroom value
- Do not break an emergency fund for a larger down payment
- Remember the 1% TCS on cars above ₹10 lakh is paid upfront but is claimable against your tax
Down payment calculator
Frequently asked questions
Is a zero down payment car loan a good idea?
It lets you buy now, but the EMI and interest are higher and the loan may exceed the car’s resale value for the first years.
For information and comparison only. Loan terms, rates and rules change — confirm with the lender and read the Key Facts Statement before borrowing.