The cheaper option is the one with the lower total interest and fees on your own quotes, not just the lower equated monthly instalment (EMI). The table compares Gurpreet's car loan quote with a personal loan over 60 months.
| Option over 60 months, illustrative rates | EMI (Rs.) | Total interest (Rs.) |
|---|
| Car loan quote of Rs. 7.2 lakh at 9.5% | 15,121 | 1,87,280 |
| Personal loan of Rs. 7 lakh at 13% | 15,927 | 2,55,629 |
Last updated: 21st October, 2026
A personal loan can still suit you if you need to fund insurance and accessories too, or want to avoid hypothecation. Ask each lender for its Key Fact Statement before you choose.
Worked example: Gurpreet in Patiala
Gurpreet is 37 and works as a salaried agricultural bank manager in Patiala. He earns Rs. 1,20,000 a month and has a CIBIL score of 779. His new car costs Rs. 9 lakh on the road, and he has a car loan quote of Rs. 7.2 lakh. He also prices a Rs. 7 lakh personal loan at an illustrative 13% per annum.
EMI = P × R × (1 + R)^N ÷ [(1 + R)^N − 1]. P is the loan amount in rupees, R is the annual rate divided by 12 and by 100, and N is the tenure in months. The formula spreads the principal and interest into equal monthly payments, so early EMIs carry more interest and later ones more principal. All figures are rounded to the nearest rupee.
| Personal loan tenure | Monthly EMI (Rs.) | Total interest (Rs.) | EMI as share of salary (%) |
|---|
| 48 months (4 years) | 18,779 | 2,01,404 | 15.6 |
| 60 months (5 years) | 15,927 | 2,55,629 | 13.3 |
Last updated: 21st October, 2026
The 60-month option lowers the EMI by Rs. 2,852 but adds Rs. 54,225 in interest. The processing fee on Rs. 7 lakh is up to Rs. 28,910. Gurpreet takes the car loan, since it costs less, and uses savings for accessories.
What can delay approval: a CIBIL score below 650 or existing EMIs that take up a large share of your income. Names or addresses that do not match across documents, and more than one loan application in the same month, can also slow it down.
Prefer not to hypothecate your car with a car loan? With a Bajaj Finance Personal Loan, you can borrow Rs. 40,000 to Rs. 75 lakh, subject to eligibility. Check your loan offer with your phone number and a one-time password (OTP) → apply online → receive funds within 24 hours* of approval.
