Auto Loans Across Pakistan
Why drive to every bank branch when you can compare car financing from your phone? See rates, tenure options, and downpayment requirements from dozens of lenders—all in one place.
How Car Financing Actually Works in Pakistan
Buying a car on credit isn't like paying cash. Pakistani lenders—banks, leasing firms, modarabas—each structure deals differently. Some advertise low monthly installments but lock you into seven-year contracts. Others demand 30% upfront, which shrinks your total markup but drains your savings today.
Here's what changes from lender to lender:
- Markup rate: The percentage added to your principal (think interest, but structured for Islamic and conventional finance).
- Tenure: How many years you're repaying. Longer = lower monthly payment, but more total markup.
- Downpayment: The chunk you pay upfront. Higher downpayment often unlocks better rates.
- Processing fees: One-time charges that add hundreds (or thousands) to your first payment.
- Vehicle age restrictions: Some lenders won't finance cars older than five years.
Instead of calling each provider individually, use KarloCompare to filter by your budget, preferred tenure, and city. Every listed loan shows the full cost—no surprises buried in fine print.
Where to Get Auto Loans in Pakistan
Commercial Banks
HBL, UBL, MCB, and others offer both conventional and Islamic auto finance. Rates vary by credit score and downpayment. Expect processing times of 7-14 days once documentation is complete.
Leasing Companies
Orix, SGAFL, and similar firms specialize in vehicle financing. They often approve applications faster than banks—sometimes within 48 hours—but may charge slightly higher markup.
Modarabas
Islamic-compliant financiers like First Habib Modaraba structure deals as diminishing musharaka (partnership). You're not paying interest—you're buying out the lender's share of the car over time.
New Car vs. Used Car Financing
New Vehicle Loans
Financing a brand-new car (2025-2026 models) usually gets you:
- Lower markup rates (some banks go as low as 12-14% annually)
- Longer tenure options (up to 7 years)
- Minimum downpayment (often 15-20%)
The catch? New cars lose value fast. If you sell within three years, you might owe more than the car's worth.
Used Vehicle Loans
Buying a 2019 or 2020 model? Expect:
- Higher markup (16-20% is common)
- Shorter tenure (most lenders cap at 5 years for used cars)
- Bigger downpayment (25-30%)
- Vehicle inspection requirements before approval
Pro tip: If the car's older than five years, many banks won't finance it at all. Modarabas sometimes make exceptions.
Quick Loan Estimate
Auto Loans by City
Karachi
Pakistan's financial hub hosts every major lender. Easy loan in Lahore seekers can find similar options here. Competition keeps rates competitive, but traffic means branch visits take longer.
Lahore
Personal loan in Lahore and auto finance run parallel—many banks bundle both. MCB, HBL, and Faysal Bank have strong presence. Processing times average 10 days.
Islamabad
Government employees often get preferential rates here. Some lenders offer reduced markup for federal staff.
Other Cities
Faisalabad, Multan, Peshawar, and Rawalpindi all have access to national lenders. Smaller cities may see fewer local branches but can still apply online.
Common Questions About Auto Loans
What's the lowest markup on personal loan vs. auto loan?
Personal loans typically run 18-25% markup, while auto loans (secured by the vehicle) start around 12-16%. The car itself acts as collateral, so lenders take less risk.
Can I get a loan in Pakistan without a salary slip?
Self-employed borrowers can apply using business registration, tax returns, or bank statements. Some modarabas accept asset declarations.
How long does approval take?
Banks: 7-14 days. Leasing companies: 2-5 days. Final approval depends on document completeness and credit checks.
What if I want to pay off early?
Most lenders allow early settlement but charge a fee (1-3% of remaining balance). Always check the fine print.
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