Those looking to take a car loan must shop around for the lender who is ready to give you the right amount of loan at the lowest interest rate. Here are the car loan interest rates of State Bank of India (SBI),
, HDFC Bank and Bank of Baroda.
SBI car loan
According to the SBI website, to avail an SBI Car Loan, you should be an individual aged 21 to 67 years. For regular employees, the maximum amount sanctioned will be 48 times of the Net Monthly Income. Minimum Net Annual Income of applicant or co-applicant if any, together with should be a minimum of Rs 3,00,000, as per SBI website.
For professionals, self-employed and businessmen the maximum amount sanctioned will be 4 times Net Profit or Gross Taxable income as per ITR after adding back depreciation and repayment of all existing loans. For persons engaged in agriculture and allied activities, the maximum amount will be 3 times of Net Annual Income.
New car loans with a fixed interest rate are available from ICICI Bank. The interest rate on a car loan with a fixed interest rate will remain constant during the loan’s term. The interest rate varies between 7.50-9% depending on tenure and other factors. Interest rates on new cars are determined by factors such as automobile segment, CIBIL score, customer relationship, loan tenure, and so on, according to ICICI bank website.
Bank of Baroda
Bank of Baroda provides financing of up to 90%, according to its website. The interest rate varies between 7% and 9.75%. Customers who do not purchase credit insurance coverage will be charged a risk premium of 0.05 percent, as per current norms.
Within six months of receiving the car loan, no foreclosure is permitted for HDFC Bank Car loan customers. According to the HDFC Bank website, preclosures within one year of the 7th EMI would be charged 6% of the Principal Outstanding. Preclosure within 13-24 months of the first EMI, 5% of the principal outstanding and 3% of outstanding principal for preclosures after 24 months from the first EMI.
Your car loan eligibility is determined by your current income, the value of the car, and an assessment of your repayment capacity based on your current expenses. The loan amount and interest rate may vary from bank to bank. In most situations, financial institutions like banks lend up to 80% of the car’s on-road price. Some lenders claim to lend up to 100% of the car’s cost.
When availing car loan, it is critical that you select equated monthly instalments (EMIs) that are appropriate for your repayment ability. Do not choose a lower EMI and a longer loan term simply because you have the option; do so only if it is something you can afford. This is because a lower EMI and a longer loan term will result in unnecessarily higher interest outgo. Regardless of the amount borrowed, make sure your EMIs are manageable and do not put a strain on your resources. On the other hand, you should avoid opting for higher EMIs at the cost of sacrificing monthly contributions towards crucial financial goals. Regardless of the amount borrowed, you must first ensure that your EMIs are easily payable and not a strain on your finances.
Loan providers typically provide new car loans with terms ranging from one to seven years. You have the option of selecting the loan term that best suits your needs.
When applying for a car loan, many banks charge a processing fee. Before choosing a loan, make sure to evaluate the processing fees. Some banks offer to waive processing costs or even lower their present rates over the festive season.