Car loan interest rates in Pakistan are between about 14.5% and 18% a year in November 2026. Most banks charge 1-year KIBOR (13.03% on 2 November 2026) plus a spread of 3% to 5%, while HBL offers a fixed 13.50% to 15.50%. On a Rs 20 lakh loan over 3 years, the difference between the cheapest and the most expensive bank is about Rs 3,436 a month.
Last updated: 3 November 2026 by Ahmed.
This guide compares car loan interest rates at every major bank, shows the monthly instalment each rate means, and explains how KIBOR changes your payments. To get exact figures for your car, use our car loan calculator, which compares all banks side by side.
Car loan interest rates by bank (November 2026)
| Bank | Pricing | Rate today | Instalment: Rs 20 lakh, 3 years |
|---|---|---|---|
| HBL CarLoan (existing customer) | Fixed | 14.50% fixed | Rs 68,648 |
| Bank AL Habib (6+ month customer) | 1YK + 3% / 3.5% / 4% | 16.03% to 17.03% | Rs 70,839 |
| Allied Bank (ABL salaried customer) | 1YK + 3% | 16.03% | Rs 70,344 |
| MCB Car4U (account holder) | 1YK + 4% | 17.03% | Rs 71,335 |
| Bank Alfalah | 1YK + 3.5% / 4% / 4.5% | 16.53% to 17.53% | Rs 71,335 |
| UBL Drive (existing customer) | 1YK + 4.25% / 4.75% | 17.28% to 17.78% | Rs 71,584 |
| Faysal Islami Car Finance | KIBOR + 4.5% | 17.53% | Rs 71,834 |
1YK = 1-year KIBOR, 13.03% on 2 November 2026. Where a bank has different spreads by period, the 3-year rate is used for the instalment. These car loan interest rates are from each bank’s website or Key Fact Statement, checked on 3 November 2026.
Not in the table: BankIslami (6-month KIBOR + a spread it does not publish), Bank of Punjab (fixed or variable, spread not published), Askari Bank (its offer page still shows a 2024 offer of 12-month KIBOR + 3%) and Meezan Bank, whose Islamic Car Ijarah is covered in our Meezan car calculator.
Monthly instalment at different car loan interest rates
Use this table to see what a quoted rate means for you, for a 3-year loan (the maximum for cars above 1000cc).
| Loan amount | 14.5% | 15.5% | 16.5% | 17.5% | 18.5% |
|---|---|---|---|---|---|
| Rs 10,00,000 | Rs 34,421 | Rs 34,911 | Rs 35,404 | Rs 35,902 | Rs 36,404 |
| Rs 15,00,000 | Rs 51,631 | Rs 52,366 | Rs 53,107 | Rs 53,853 | Rs 54,606 |
| Rs 20,00,000 | Rs 68,842 | Rs 69,821 | Rs 70,809 | Rs 71,804 | Rs 72,807 |
| Rs 25,00,000 | Rs 86,052 | Rs 87,277 | Rs 88,511 | Rs 89,755 | Rs 91,009 |
| Rs 30,00,000 | Rs 1,03,263 | Rs 1,04,732 | Rs 1,06,213 | Rs 1,07,706 | Rs 1,09,211 |
And for a 5-year loan, which SBP allows only for cars up to 1000cc:
| Loan amount | 14.5% | 15.5% | 16.5% | 17.5% | 18.5% |
|---|---|---|---|---|---|
| Rs 10,00,000 | Rs 23,528 | Rs 24,053 | Rs 24,585 | Rs 25,122 | Rs 25,666 |
| Rs 15,00,000 | Rs 35,292 | Rs 36,080 | Rs 36,877 | Rs 37,683 | Rs 38,499 |
| Rs 20,00,000 | Rs 47,057 | Rs 48,106 | Rs 49,169 | Rs 50,244 | Rs 51,332 |
| Rs 25,00,000 | Rs 58,821 | Rs 60,133 | Rs 61,461 | Rs 62,806 | Rs 64,166 |
| Rs 30,00,000 | Rs 70,585 | Rs 72,160 | Rs 73,754 | Rs 75,367 | Rs 76,999 |
Fixed vs variable car loan interest rates
A variable rate is reset (usually once a year) to the new 1-year KIBOR plus the same spread. A fixed rate never changes. Here is what happens to a Rs 20 lakh, 3-year loan at KIBOR + 4% if KIBOR moves:
| 1-year KIBOR | Your rate | Instalment | Change a month |
|---|---|---|---|
| 11.03% | 15.03% | Rs 69,360 | −Rs 1,975 |
| 12.03% | 16.03% | Rs 70,344 | −Rs 991 |
| 13.03% (today) | 17.03% | Rs 71,335 | No change |
| 14.03% | 18.03% | Rs 72,335 | +Rs 1,000 |
| 15.03% | 19.03% | Rs 73,342 | +Rs 2,007 |
This is why comparing car loan interest rates only on today’s number can mislead you: a cheaper variable rate can end up costing more than a fixed rate if KIBOR rises.
These figures assume the new rate applies for the whole loan. In practice the change starts from the next reset, so the real effect is a bit smaller. A fixed rate like HBL’s 14.50% removes this risk completely.
What decides car loan interest rates for you
Banks do not give everyone the same deal. These five things decide which of the car loan interest rates above you will actually be offered.
- KIBOR. The base rate for almost every variable car loan. It follows the SBP policy rate.
- Being an existing customer. HBL, MCB, UBL, Bank AL Habib and Allied Bank all charge less if you already have an account with them.
- Loan period. Bank Alfalah, Bank AL Habib and UBL charge a higher spread for 4 to 5 year loans.
- New or used car. Bank Alfalah charges KIBOR + 5% for used cars.
- Your profile. UBL adds 1% for any deviation from policy; Faysal charges self-employed business people more.
SBP rules that limit every car loan
- Minimum down payment: 30% of the car price.
- Maximum car financing per person: Rs 30 lakh from all banks together.
- Maximum period: 3 years above 1000cc, 5 years up to 1000cc.
- Total loan payments: at most 40% of your income.
- No financing for imported cars.
How to get the lowest car loan interest rate
- Open an account with the bank a few months before you apply. Bank AL Habib, for example, gives a lower spread after 6 months.
- Pay a bigger down payment. A smaller loan means less markup, and some banks lower the spread for 35% or more down.
- Choose 3 years or less if you can. Spreads are lower and total markup falls sharply.
- Compare the fixed rate with today’s variable rate plus the risk of KIBOR rising.
- Ask for the Key Fact Statement and compare the APR, not only the headline rate.
Frequently asked questions
What is the car loan interest rate in Pakistan today?
About 14.5% to 18% a year. Variable rates are 1-year KIBOR (13.03% on 2 November 2026) plus 3% to 5%. HBL offers fixed rates of 13.50% to 15.50%.
Which bank has the lowest car loan interest rate?
HBL’s fixed 14.50% for existing customers is the lowest standard rate today. Among variable rates, Allied Bank (KIBOR + 3% for its salaried customers) and Bank AL Habib (KIBOR + 3% for 1-2 years) are the lowest.
Is KIBOR going to change my car loan instalment?
Yes, if your rate is variable. When the bank resets your rate, usually once a year, the instalment is recalculated at the new KIBOR plus your spread.
How much is the instalment on a Rs 20 lakh car loan?
Rs 71,305 a month over 3 years at 17%, or Rs 68,648 at 14.50% fixed with HBL.
Are Islamic car financing rates lower?
Not necessarily. Islamic banks also price on KIBOR. Faysal Islami Car Finance, for example, is KIBOR + 4.5% for salaried customers buying a new car.
Pakistan mein car loan par kitna interest hai?
14.5% se 18% salana. Variable rate 1 saal ka KIBOR (2 November 2026 ko 13.03%) + 3% se 5% hota hai, jabke HBL fixed rate 13.50% se 15.50% deta hai.
20 lakh car loan ki qist kitni banti hai?
Rs 71,305 mahana 3 saal ke liye 17% rate par, ya HBL ke 14.50% fixed rate par Rs 68,648 mahana.
Sab se sasta car loan kaun sa bank deta hai?
14.50% fixed rate HBL mein maujooda customers ke liye sab se kam hai. Variable rate mein Allied Bank aur Bank AL Habib (KIBOR + 3%) sab se kam hain.
Related guides
- Car loan calculator Pakistan (all banks)
- HBL car loan 2026
- MCB car loan 2026
- UBL car loan 2026
- Car Ijarah vs car loan
- Bank profit rates in Pakistan
- Car loan banks in Pakistan (full list)
- Alto on installment: all banks compared
- Car registration tax calculator (filer vs non-filer)
- Bank Alfalah car loan 2026