Vehicle Loan Rules Revised: Only 60% Loan-to-Value, Except for Replacement Vehicles

Published on September 27, 2025

The Nepal Rastra Bank (NRB) has tightened rules for vehicle financing as part of its post-crisis restructuring policy. Under the new directive, banks and financial institutions can only provide up to 60% loan-to-value (LTV) ratio for purchasing vehicles. This applies to both electric and personal-use vehicles, ensuring that buyers contribute at least 40% equity when acquiring new vehicles.

However, there is a key exemption: for businesses and enterprises directly affected by the Gen Z Movement and related disruptions, banks may finance up to 80% LTV when the loan is used to replace vehicles damaged or destroyed during the unrest. This special provision aims to support transport and logistics-dependent businesses in resuming operations quickly without facing excessive financial strain.

By lowering the general LTV to 60%, NRB intends to curb over-leveraging in consumer loans and discourage speculative vehicle purchases, while the targeted exemption provides relief for enterprises needing urgent replacement of damaged commercial assets. This balanced approach protects financial stability while helping businesses recover from crisis-related losses.

Loan Restructuring for Gen Z Movement-Affected Businesses

The NRB has announced targeted loan restructuring and rescheduling measures for businesses and borrowers directly impacted by the Gen Z Movement and trade disruptions. Relief measures include restructuring by Poush 2082, concessional interest rates (base +0.5%), higher LTV for vehicles, subsidized salary loans, and export-linked incentives. These initiatives aim to revive businesses, protect jobs, and stabilize Nepal’s economy.