How to Finance or Take a Loan for Buying an Electric Vehicle in India (2025 Guide)
Switching to an electric vehicle (EV) is not just eco-friendly, it’s a smart financial move with the right support. As banks and lenders compete to offer easy and affordable EV loans, the process has never been simpler. This article answers every common question on how to finance or take a loan for buying an electric vehicle in India, with step-by-step guidance.
Why Finance Your Electric Vehicle?
Financing lets you buy a new EV by paying in easy monthly installments (EMIs), spreading the cost across several years. With specially designed “Green Loans,” low interest rates, and tax benefits exclusive to electric vehicle in India, buyers can own their EV now often with no or minimal down payment needed.
What Are the Benefits of an EV Loan in India?
- Lower Interest Rates: Many banks now offer reduced interest rates for EVs compared to petrol/diesel cars. Public sector bank rates start as low as 8.15% (Indian Overseas Bank), while major private banks like HDFC, ICICI, and SBI also offer special green car loan programs.
- High Loan Amount: Up to 90-100% of the on-road price can be financed.
- Flexible Repayment: Choose tenure from 1 to 7 years as per your comfort.
- Fewer Fees: Many banks waive or lower processing and prepayment charges for EV loans, increasing affordability.
- Tax Benefits: Section 80EEB of the Income Tax Act lets you claim up to ₹1.5 lakh interest paid on the EV loan.
How to Apply for an Electric Vehicle Loan in India?
- Choose the Right Electric Vehicle:
Start by selecting an EV eligible for loans, most two-wheelers, cars, and even commercial EVs qualify. Request a quote or pro-forma invoice from the dealer. - Check Eligibility Criteria:
Most banks require:- Age: 21–65 years
- Minimum annual income: ₹3 lakh (for salaried or business owners)
- Good CIBIL/credit score (preferably 700+)
- Employment proof (two years with current employer for salaried; two years business continuity for self-employed).
- Collect Documents:
Standard paperwork includes:- Identity proof (Aadhaar, PAN, passport)
- Address proof
- Income proof (salary slips, bank statements, ITR)
- Quotation from an authorized EV dealer.
- Compare Lenders & Interest Rates:
Compare rates and offers across public and private banks, NBFCs, and digital loan providers.- Top banks in 2025: Indian Overseas Bank (8.15%+), PNB (8.75%+), SBI (8.60%+), HDFC (9.10%+), ICICI (9.10%+), Bank of Maharashtra, Axis Bank, Central Bank, and DMI Finance.
- Apply Online or In-Branch:
Then just fill the form, upload required documents, and wait until you get approval. Many banks offer same-day approvals, especially through online portals. - Get Loan Approval and Disbursement:
Once approved, the bank pays directly to the dealer. Take delivery of your new EV!
Which Banks Offer Best EV Loans in India 2025?
- Indian Overseas Bank: From 8.15% p.a., up to 90% financing.
- PNB Green Car Loan: From 8.75% p.a., up to 100% of the ex-showroom price.
- HDFC, ICICI, SBI: 8.60%–9.20% p.a.; up to 100% on select models.
- Bank of Maharashtra: No processing/foreclosure fees for green auto loans.
- DMI Finance, Axis Bank, Central Bank, Union Bank: Also offer green auto finance with user-friendly application processes.
What Documents Are Required for an EV Loan?
- ID Proof: Aadhaar, Voter ID, PAN Card
- Address Proof: Utility bill, passport, rent agreement
- Income Proof: Salary slips, bank statement, IT returns
- Vehicle Details: Dealer’s quotation/pro-forma invoice
- Photographs: Passport-size
- Others: Business proof (for self-employed), co-applicant details if needed.
Are There Any Special Offers or Government Programs for EV Loans?
Yes! Many loan providers offer reduced rates, zero processing fees, and longer repayment tenure for electric vehicle in India Government-backed programs and some state EV policies may also offer additional financial incentives, such as lower registration charges or state-specific EV loan schemes through nodal agencies.
Can I Get 100% Financing for My Electric Vehicle?
Yes, several banks, especially public sector and leading private banks, now offer up to 100% financing of the ex-showroom or on-road price for new electric vehicles. Always check the fine print and eligibility criteria.
FAQs
Q1: Can first-time buyers get an EV loan in India?
Yes, as long as you meet the age, income, and credit criteria. Some lenders even have special schemes for first-time car buyers.
Q2: How is loan eligibility decided?
Based on income, job stability, credit score, and the cost of the vehicle. Having a higher CIBIL score greatly increases approval chances.
Q3: Is the interest rate on EV loans lower than regular car loans?
Typically, yes. Many banks offer “green” or “eco” loan products with slightly lower interest rates for EVs.
Q4: What is the maximum tenure for electric car loans?
Repayment tenures usually range from 12 up to 84 months (1–7 years).
Q5: Will the bank finance used electric vehicles?
Some banks do finance select used EVs, but with stricter conditions and typically at slightly higher rates.