Car Loan Interest Rate- Compare and Check Loan Interest Rate Online
Owning a car is not tough in today’s world with many financial institutions offering car loans at competitive interest rates. Loans are available for both used as well as new cars. Moreover, lenders provide an online loan calculator which help borrowers to calculate the interest rates, loan tenure, and EMIs quickly. The interest rate is of utmost concern while availing a car loan as it affects the borrower in more than one way. Here are some details of the car loan interest rate, and how it affects the choice of a loan scheme.
Car Loan
Borrowers must avail the loan only as much as they can repay. Repayment is done through EMI. EMI (equated monthly installments) is a fixed amount that the borrower has to pay to the lender every month without fail. The major factors affecting EMI are loan amount, tenure, and interest rate. Higher the loan amount; higher will be the EMI. Higher the car loan interest rate; higher will be the EMI. Longer the loan tenure; lower will be the EMI. Here is the list of eligibility criteria required by most of the lenders.
Age: 18 to 65 years of age
Loan amount: Maximum loan amount varies from Rs.50 lakhs to Rs.1 crore.
CIBIL score:700or more
Net monthly income: Minimum Rs.18000 per mont
Employment type: Salaried, self-employed or business person
Minimum work experience: Minimum 1 year for a salaried individual; and a minimum of 5 years of business existence for self-employed with ITR of at least 2 years.
Compare Car Loan Interest Rate in India
It is crucial to compare the interest rates of car loans offered by various financial institutions before finalizing one. This will help an applicant get the best offers and lower EMIs based on his/her eligibility. The interest rate must be the first thing a borrower must check and compare; as it is directly proportional to the EMI. Another thing an applicant must compare is the processing fee. Most banks charge a processing fee between Rs.250 and Rs.20,000. Here are the interest rates of popular banks:
SBI car loan interest rate: 9.30%
HDFC car loan interest rate: 9.25%
ICICI car loan interest rate: 8.65%
Interest rates can be fixed or floating. For example, HDFC car loan interest rate is fixed and does not vary a lot from one borrower to another. A floating interest rate indicates that the interest rates may change or depends on the borrower’s eligibility. For easier comparison, here is a table which lists the interest rates and processing fees offered by the banks.
Bank | Interest rate | Processing fees |
SBI | 9.30% (floating) | 0.51% of loan amount+ ST Min: Rs.1020 Max: Rs.10200 |
HDFC Bank | 9.25% (fixed) | 0.40% of the loan amount Rs.2825 – Rs.5150 |
ICICI Bank | 8.65% (fixed) | Min: Rs.2500 Max: Rs.5000 |
Axis Bank | 9.25% (fixed) | Min: Rs.3500 Max: Rs.5500 |
Bank of India | 9.50% (floating) | 1% of the loan amount Min: Rs.500 Max: Rs.10000 |
PNB | 8.75% (floating) | 1% of the loan amount Max: Rs.6000 |
IDBI Bank | 9.00% (fixed) | Nil |
Induslnd Bank | 10.65% (fixed) | 1% of the loan amount Min: Rs.2500 |
Kotak Bank | 11.50% (fixed) | 0% of the loan amount Min: Rs.3300 Max: Rs.4750 |
Union Bank of India | 9.20% (floating) | Nil |
Central Bank of India | 9.00% (floating) | 0.50% of the loan amount Min: Rs.2000 Max: Rs.20000 |
Andhra Bank | 9.40% (fixed) | Nil |
Federal Bank | 9.15% (fixed) | 0% of the loan amount Min: Rs.1500 Max: Rs.2500 |
Bank of Maharashtra | 9.25% (floating) | 0.25% of the loan amount Min: Rs.1000 Max: Rs.15000 |
Corporation Bank | 9.60% (floating) | 1% of the loan amount Min: Rs.1000 |
Indian Bank | 9.50% (floating) | 0.22% of the loan amount Max: Rs.10191 |
Bank of Baroda | 8.90% (floating) | 0.75% of the loan amount Max: Rs.10000 |
OBC | 9.05% (floating) | 0.50% of the loan amount Min: Rs.500 |
United Bank of India | 9.10% (floating) | 0.59% of the loan amount Min: Rs.500 Max: Rs.10000 |
Syndicate Bank | 10.10% (floating) | Up to Rs.2 lakhs: Rs.1.25 per thousand, Min: Rs.125, Above Rs.2 lakh is Rs.200 per lakh |
How to Get the Lowest Car Loan Interest Rate Online?
Here are some of the things borrowers must and mustn’t do to get the lowest and best car loan interest rate.
Compare the Rates based on the Car Loan Amount
Some banks provide lower interest rates for a higher loan amount. The loan amount depends on the car used to calculate LTV. There is a significant difference in the loan amount offered; as some banks use the ex-showroom price as the value of the car, while others use the on-road price.
Do not Apply with many Banks
Multiple applications get recorded in an individual’s CIBIL report. Hence applying with several banks can hurt one’s chances of getting a loan.
Check for the Best Offers and Discounts
Never forget to check the offers, discounts, and the current car loan interest rates offered by the large reputed companies to the employees.
Apply for the Loan Amount Only Within the Eligibility Range
A loan application might get rejected if one applies for an amount higher than one’s eligibility.
Decide on the Type of Insurance Wisely
There are many types of insurances such as third party, zero dep, and comprehensive insurance. Check each and compare their coverage, cost, and claim settlement ratio carefully.
Do not Rely Completely on the Dealer
The loan offered by the dealer might not be the lowest or the best interest rate. Therefore, an individual needs to evaluate other options, check with the bank where you have your salary account for discounts, compare the offers and car loan interest rate for all banks.
Apart from the car loan interest rate; applicants must also enquire about the prepayment (partial prepayment of the loan amount before time), foreclosure (payment of the entire loan amount before time), and down payment (partial amount that needs to be paid by the borrower which can range from 0% to 20% of on-road / ex-showroom price) of the loan. Before apply for loan check car loan emi calculator to check emi, interest rate, tenure. After finalizing the loan and the lender, borrowers can apply for the car loan online in a hassle-free manner.