Car Loan Calculator — Pakistan
Calculate your monthly car finance installment in PKR — conventional auto finance or Islamic Ijarah. Current SBP-linked rates, tenure and down-payment rules. No signup.
Enter a car price, a down payment of 0–90%, a rate between 0% and 100%, and a term above zero to see results.
Current Pakistan auto finance rates (April 2026)
| Type | Typical rate (p.a.) | Notes |
|---|---|---|
| Conventional auto finance | 16% – 19% | SBP policy rate 11.5% + bank markup |
| Islamic Ijarah (lease) | 16% – 19% effective | Shariah-compliant, fixed rental |
| Max tenure | up to 7 years | SBP cap |
The SBP policy rate is 11.5% (held unchanged at the Monetary Policy Committee meeting of 14 September 2026); auto finance typically sits about 4.5–7.5 percentage points above that. The SBP also sets tenure and down-payment limits, which differ for locally assembled vs imported vehicles.
Major Pakistan auto finance providers
- Meezan Bank — Car Ijarah, the largest Islamic auto lease
- HBL — HBL CarLoan, conventional financing
- Bank Alfalah — conventional and Islamic options
- UBL — UBL Drive auto financing
- Al Baraka / BankIslami — Islamic Ijarah alternatives
The real cost of a PKR 4,000,000 car
Example: PKR 4,000,000 car, 30% down (PKR 1,200,000), financing PKR 2,800,000 at 17% for 5 years.
- Monthly installment: ≈ PKR 69,580
- Total paid on the financed amount: ≈ PKR 4.17 million
- Total markup / interest: ≈ PKR 1.37 million
- Effective price (car + markup): ≈ PKR 5.37 million vs PKR 4.0M sticker.
Tip: A bigger down payment or shorter tenure noticeably reduces total markup. Compare conventional vs Ijarah on effective cost, not just the label.
A real-data rate check: car financing in Pakistan (2026)
Pakistan's car financing rates stayed elevated through 2026 even as the State Bank of Pakistan (SBP) policy rate was held at 11.5% at the SBP's 14 September 2026 Monetary Policy Committee meeting. Per the SBP's own published interbank data, 1-month KIBOR stood at 11.90% (bid) / 11.90% (offer) on 7 September 2026, and most conventional bank car loans are priced as KIBOR plus a spread of roughly 2.5 to 5.25 percentage points, so effective markup rates for conventional auto loans in 2026 generally run from the high teens to the low twenties depending on the bank, tenure, and applicant profile.
On the Islamic financing side, Meezan Bank's official Car Ijarah rate card (as published on the bank's site in 2026) lists fixed profit rates that fall as tenure lengthens: 22.26% for a 1-year Ijarah, down to 18.00% for 4 years and 16.50% for the maximum 7-year term (with a variable-rate, non-lien option quoted at 24.49%). Other major lenders publish similarly wide bands: HBL's conventional car loan has been quoted in the 13.5-15.5% fixed range depending on new-to-bank vs. existing/repeat customer status, while BankIslami's Diminishing Musharakah car product and JS Bank's car finance have both been reported in the 14-19% range through 2026.
A more realistic example: on a PKR 2,500,000 net financing amount at Meezan's published 16.50% 7-year fixed Ijarah rate, the monthly reducing-balance formula M = P·r·(1+r)^n / ((1+r)^n − 1) with a monthly rate r = 0.1650/12 = 0.01375 and n = 84 months gives a monthly rental/installment of approximately PKR 50,370. Over the full 7-year term that totals roughly PKR 4,231,000, meaning the profit/markup paid on top of the financed amount is about PKR 1,731,000 — roughly 69% of the amount borrowed, even before accounting for security deposit, insurance, or tracker costs.
Two regulatory details often missed: since a 2022 State Bank circular (BPRD Circular Letter No. 19 of 2022), maximum auto-financing tenure is capped at 5 years for vehicles up to 1000cc and just 3 years for anything larger — a restriction still in force in 2026, confirmed directly on Faysal Bank's current product page. Total financing is also capped at PKR 3,000,000 per loan (minimum PKR 250,000). Faysal Bank's own Diminishing Musharakah product (a joint-ownership structure distinct from Meezan's lease-based Ijarah) prices new-car financing for salaried applicants at 12-month KIBOR plus a 5% spread — with KIBOR at roughly 12.33% in September 2026, that works out to about 17.33%, requiring a 30% minimum equity contribution.
Frequently Asked Questions
What is the current car finance rate?
Roughly 16%–19% p.a. (April 2026 reference), built on the SBP policy rate of 11.5% (September 2026) plus a bank markup.
What are the SBP rules?
Max 7-year tenure plus down-payment and financing limits that differ for local vs imported cars.
Conventional vs Ijarah?
Conventional charges interest; Ijarah is a lease with a fixed monthly rental and no riba. Meezan and Al Baraka are common.
How much down payment?
Commonly 20–30% of the price; more down means a lower installment and less total markup.
Why are Pakistani car loan/Ijarah rates so much higher than in countries like the US or UK?
Pakistan's auto financing rates track the State Bank of Pakistan's policy rate and KIBOR (Karachi Interbank Offered Rate), which have been in the low-to-mid teens through 2025-2026 due to inflation-control policy. Banks then add a spread of roughly 2.5 to 5.25 percentage points on top of KIBOR for conventional loans, or publish a separate fixed profit-rate card for Islamic Ijarah products, so effective annual rates commonly land between 14% and 22% depending on the lender, tenure, and vehicle type.
Does a shorter car loan tenure always mean a lower rate in Pakistan?
Not necessarily. Meezan Bank's published Car Ijarah rate card, for example, actually quotes a higher fixed profit rate for a 1-year term (22.26%) than for a 7-year term (16.50%). Shorter tenures can carry higher headline rates because bank margins and fixed costs are spread over fewer years, so always compare the total cost and monthly installment, not just the quoted annual rate, when choosing a tenure.
Related calculators
Sources
State Bank of Pakistan, policy rate (MPC decision of 14 September 2026, rate held at 11.5%): sbp.org.pk. State Bank of Pakistan, official KIBOR rates (7 September 2026): SBP KIBOR rate sheet showing 1-month KIBOR at 11.90%. Meezan Bank, Car Ijarah product page (2026): official fixed profit rates by tenure (1-7 years). Faysal Bank, Faysal Islami Car Finance page (2026): Diminishing Musharakah pricing, financing limits and tenure caps. State Bank of Pakistan, BPRD Circular Letter No. 19 of 2022: auto-financing tenure restrictions. See our methodology and editorial policy for how we source and update this data.