You can take a look at the following table that gives a general overview of car loan interest rates, processing fee, and other car loan features.
|Latest Car Loan Interest Rates for Top Banks 2018|
|Bank name||Car loan interest rates||Tenure (Min-Max)|
|Axis Bank||8.60% (1 year MCLR)||Up to 36 months|
|9.25% to 11.50% (Effective ROI)||More than 36 months|
|Dena Bank||9.25%||Term loan|
|9.15% (for women)||Term loan|
|Federal Bank||9.15%||Up to 84 months|
|HDFC Bank||9% to 10.25% (rack interest rate) based on vehicle segment||12 months to 84 months|
|ICICI Bank||12.75%||Up to 23 months|
|12%||24 months to 35 months|
|10%||36 months to 84 months|
|Jammu and Kashmir Bank||Fixed - 11.25% Floating - Base rate + 1% (0.25% rebate on interest rate may be offered to women borrowers)||12 months to 84 months|
|Oriental Bank of Commerce||For male borrowers - 9.15% For female borrowers - 9.05% *0.5% concession in interest rate is available to loyal and captive customers||When loan amount is equal to or less than Rs.25 lakh - 100 EMIs When loan amount is more than Rs.25 lakh - 120 EMIs|
Have you always dreamt of purchasing a car in your own name? You can make this dream come true by taking an auto loan offered by several banks and NBFCs. You can choose a car that will suit your budget and then fix your loan amount accordingly. You will be required to repay your loan amount with an interest. The interest needs to be paid as the lender is offering the money to you to buy your car. This interest rate will be fixed by your lender according to your loan amount, tenure, type of automobile that you are interested in, and many other factors. We will now look into a few points to understand how car loan interest works.
The table given above shows a broad range for the interest rates and fees of car loans provided by various banks and non-banking financial corporations (NBFCs) in India.
|Car Loan Interest Rates Details|
|Car Loan Interest Rate Particulars||Details|
|Interest rate||8.25% - 15% p.a.|
|Processing fee||0 to 2% of car loan amount + Applicable Service Tax (One-time fee)|
|Type of interest rate||Fixed or floating|
|Loan amount||Rs.25,000 to Rs.2 crore|
|Loan tenure||1 to 7 years|
|Preferred credit score||750 or above|
|Pre-closure fee||NIL to 6% of principal outstanding car loan amount|
Have you wondered how banks and non-banking financial corporations fix your effective car loan interest rates? Your lender will decide your auto loan rate by taking many factors into consideration. It is very important for you to be aware of the aspects that determine your car loan interest rate. This will assist you in preparing properly before you apply for a car loan. This will help you get an attractive interest rate for your car loan. You can purchase your dream car at an affordable interest rate.
Let us now understand the basis for arriving at the various effective interest rates as seen by lenders:
|Lowest Car Loan Interest Rate for All Banks 2018|
|Bank name||Tenure (Min-Max)||Car loan interest rates|
|Axis Bank||Up to 36 months||9.25% to 11.50% (Effective Rate Of Interest)|
|More than 36 months||9.25% to 11.50% (Effective Rate Of Interest)|
|Andhra Bank||Up to 84 months||9.25%|
|Bank of Maharashtra||Up to 84 months||When CIBIL score is 750 and above - 9.25% When the CIBIL score is between 700 and 749 - 9.50% When the CIBIL score is between 600 and 699 - 10% When CIBIL score is -1 or 0 - 9.50%|
|Bank of India||Up to 7 years||9.4%|
|Bank of Baroda||Up to 84 months||From (One-year MCLR + 0.25% + Strategic Premium) to (One-year MCLR + 2% + Strategic Premium) based on the risk rating of the borrower|
|Central Bank of India||Up to 84 months||For fixed and floating rates of interest - 8.90%|
|Canara Bank||Up to 84 months||For women borrowers with vehicles registered in their names - 8.90% to 9.45% For other borrowers - 8.95% to 9.55%|
|Corporation Bank||Up to 84 months||Vehicles used for personal purposes (up to Rs.50 lakh) - 9.50% Vehicles used for personal purposes (above Rs.50 lakh) - 10% State and Central government employees and defense personnel (up to Rs.50 lakh) - 8.85% (1-year MCLR)|
|Federal Bank||Up to 84 months for salaried borrowers||9.15%|
|HDFC Bank||12 months to 84 months||9% to 10.25% (rack interest rate) based on vehicle segment|
|Indian Bank||Up to 84 EMIs with no holiday period||9.50%|
|ICICI Bank||Up to 23 months||12.85%|
|24 months to 35 months||12.85%|
|36 months to 84 months||9.30%|
|Kotak Bank||Between 12 months and 84 months||Flexible interest rate based on 1-year MCLR (8.95%)|
|IDBI Bank||Up to 7 years||For CIBIL score 801 and above - 8.90% For CIBIL score between 751 and 800 - 9% For CIBIL score between 701 and 750 - 9.10% For CIBIL score between 651 and 700 - 9.50%|
|IndusInd Bank||Between 1 year and 4 years. The tenure can be increased based on the customer’s relationship with the bank||Based on 1-year MCLR (9.55%) and discounts offered by authorized dealers|
|Punjab National Bank||84 EMIs||For women borrowers, PNB PRIDE and Corporates (irrespective of CIC score) - 9.05%
For other borrowers,
|Oriental Bank of Commerce||When loan amount is equal to or less than Rs.25 lakh - 100 EMIs When loan amount is more than Rs.25 lakh - 120 EMIs||For male borrowers - 9.15% For female borrowers - 9.05% *0.25% concession in interest rate is available to loyal and captive customers|
|Syndicate Bank||84 months||For salaried and non-salaried individuals when salary is not credited to the bank - 9.40% For salaried individuals when the minimum CIBIL score is 700 and salary is credited to the bank - 9.15%|
|UCO Bank||Up to 84 EMIs||8.95%|
|Union Bank of India||Up to 7 years||For BSNL employees,
|SBI||84 months||Between 9.20% and 9.70% There is a relaxation in the car loan interest rate for loyal customers|
|Tamilnad Mercantile Bank||5 years||Between 10.35% and 11.60%|
|Dena Bank||Term loan||9.25%|
|Term loan||9.15% (for women)|
|United Bank of India||For pensioners - Maximum of 72 months For other borrowers - Maximum of 84 months||For women borrowers - 9.05% For others - 9.10%|
Car loans are beneficial as they help you in buying your dream car. Without a car loan, you may have to struggle a lot to make the purchase on your own. Doing this will land you in deep financial trouble. Also, if you end up spending all your money on buying the car, you may not have any money for other purposes. Hence, taking a car loan makes perfect sense.
However, you should check the interest rate of your car loan very carefully. Without proper research on the interest rates, your car loan may get very expensive. You may find your car loan monthly installments very affordable. However, your overall loan expenses can go up if you are not watchful, especially if you have chosen a floating interest rate. Therefore, you should have a clear understanding of how your car loan interest rate works and the other fees associated with it, before you make such a big financial decision.
When you think of getting a car loan, you are bound to get confused as to which car loan option to choose from the wide variety of options. By investing time in research, you can choose the perfect car loan option.
When you are interested in applying for a car loan from any bank or NBFC, you will need to meet certain eligibility criteria to get your loan application approved. Each bank and each NBFC will have different eligibility criteria for its car loan borrowers. The eligibility conditions that are common across all lenders include age, income, insurance proof, identity proof, car model, etc. Apart from individuals, a business firm or organisation can also apply for a car loan.
|Car Loan Eligibility Conditions|
|Minimum age||18 to 21 years|
|Maximum age||70 to 75 years|
|Employment status||Salaried or self-employed|
|Minimum income||Rs.10,000 per month|
|Type of car||Old or new. The loan interest rate will be determined according to the type of car.|
|Number of years of work experience for loan applicant||Total of 3 years of experience in company or business and at least 2 years in present profession or business or position|
|Value of car||This has an impact on the loan amount that will be approved and the loan interest rate.|
|Area of residence||Urban or semi-urban or rural. Your car loan interest rate will be fixed accordingly.|
|Car model||Only approved car models|
|Income eligibility proof||Latest salary slips, Form 16, or latest income returns|
|Insurance proof||Your bank or NBFC may ask you to show your car insurance policy before approving your car loan.|
|Credit report and credit score||Your lender will review your credit report thoroughly to understand your previous credit behaviour. If you have a good credit score, you will be eligible for your car loan.|
|Co-applicant||If your credit score is very low, your lender may require you to have a reliable co-applicant to approve your car loan application.|
|Identity proof||In order to prevent fraud or theft, you will need to furnish accurate proof of identity while applying for a car loan.|
Apart from comparing the various car loan products and their features (interest rates, processing fee, pre-payment fee, time taken for disbursal, etc.), you can also check your car loan eligibility when you apply online.
All you need to do is key in your basic personal details such as name, age, residential address, contact number, date of birth, income details, employment details, make and model of the car that you are interested in, your car loan tenure, bank account details, ex-showroom price of car, etc. After you enter every detail, you will need to click on check eligibility. The online tool will provide you with exact details about your car loan eligibility. It will specify if you are eligible or not and will also explain the reasons for your result appropriately.
When you are aware if you are eligible or not, you can take the next step accordingly. If you get to know that you are not eligible, you can take necessary steps to enhance your eligibility or you can also approach another lender. If you get to know that you are eligible, then you can decide your loan amount, your lender, and your loan tenure by utilising the EMI calculator which is available online.
When you apply for a car loan online, you will also be able to enjoy the advantages of the online car loan EMI calculator. In India, most third-party financial websites and official banking websites have an online car loan EMI calculator. It can be used by anybody and does not need the user to have any specific technical knowledge. You only need to know your car loan amount, car loan tenure, interest rate, processing fee, which is a certain percentage of your loan amount, and your pre-payment details.
You can check out the advanced BankBazaar car loan EMI calculator in order to arrive at your installment amounts for different months. You will be able to find it under the Main Menu under the ‘Finance Tools’ section. Here, you can click on the drop-down feature and select the EMI Calculator. Under this calculator, you will need to drag a particular slider to enter different car loan details.
First, you will need to drag the slider to choose your loan amount. Next, you have to select the loan tenure by dragging the slider. You can then key in the interest rate in the box in the form of percentage. Next, you will need to key in the processing fee in percentage. Next, you will need to specify if you want to make a pre-payment or not. You can click on ‘Yes’ or ‘No’. If you click ‘Yes’, you will be required to key in the pre-payment frequency, pre-payment fee, and the pre-payment amount. You will also have to click on ‘Pre-payment applies to’. Here, you will have to choose ‘Final pre-payment made’, ‘Sum of pre-payment made during the previous loan year’, and ‘Sum of every pre-payment’.
You will arrive at the monthly car loan EMI. For all-inclusive information about your car loan, you can check your amortisation details which give a debt repayment schedule for fixed intervals. It will be represented in a bar diagram and you can view the principal paid, unsettled loan balance, and interest paid.
You can also view the break-up of the full amount that you need to pay for your car loan by checking out the pictorial graph that will be visible on your screen.
After you complete checking your loan eligibility and calculating your car loan EMIs, you can fix your loan amount and loan tenure as per your interest rate and processing fee. Depending on your financial requirement, prevailing financial condition, existing debts, car’s price, and other monthly expenses, you can finalise your car loan amount.
You will need to choose your lender, enter your details, and submit documents for proof online. If the website that you have chosen requires hard copies of documents, you can take a printout of the online application acknowledgement and then submit only the documents at the nearest bank branch. With this, your online car loan application process will be completed in a jiffy.
Are you planning to finance your car purchase? Before you approach a lender for a car loan, you should prepare a checklist. This checklist is very important so that you do not miss out on any significant queries while applying for the loan. It helps you avoid having any regrets after you finish meeting your car loan lender. Some of the key questions include:
When you are planning to take a car loan, it is essential that you are aware of the different car loan jargon in order to make a sensible decision. Knowledge about the car loan lingo will help you stay conscious and help you avoid getting cheated or scammed. Let us take a look at some of the car loan terminologies that you must know:
Yes, car loans can be availed for the purchase of second hand cars, and the interest rate offered for such a loan shall depend upon the car you wish to purchase. The loan amount offered to you will only cover the cost of the vehicle itself. Other costs such as registration or transfer will have to be borne by the customer.
There is no need to place another asset as collateral when availing a car loan. Since the money is being borrowed to purchase a car, it is a secured loan and the car acts as the collateral in this case. However, the registration certificate of the car will have to be endorsed with the bank, and the endorsement will be cancelled once you have fully repaid the loan. The bank has the option to cease the car if you do not pay the EMIs towards the car loan.
The maximum amount of money that is sanctioned to customers who seek car loans ranges from 80% to 90% of the on-road cost of the car. There are banks that also lend 100% of the showroom price of the car. The interest rate offered on the car loan will depend upon the financial history of the borrower and whether you wish to purchase a new car or going in for a second hand vehicle.
Car loans are usually granted for tenures ranging from one year to five year. The interest rate payable will depend upon the tenure, as the shorter the tenure, the higher the interest rate applicable to the loan and vice versa. There are certain banks that offer car loans for tenures ranging up to seven years as well.
Most banks and financial institutions that offer car loans to their customers do not have a minimum salary requirement. However, there are chances that your loan application may be rejected if you earn a salary that is lower than the predetermined threshold level specified by the lender. In cases like these, you can apply with a co-borrower as it will increase your chances of qualifying for the loan.
Co-borrowers or loan guarantors are only needed in case an individual cannot meet the eligibility requirements of the bank, such as credit score, age or monthly income. If an individual meets all the eligibility criteria, there is no need for a co-borrower or guarantor.
Car loans, unlike home loans, do not offer any tax benefits.
In case of a floating rate car loan, the rate of interest applicable to the loan will vary based on the decision of the lender, whereas the rate of interest remains unchanged for the entire tenure of the loan under a fixed rate car loan. While one option guarantees a stable EMI payment for the customer, the payments in the other option can change from time to time.
Yes, customers may negotiate the rate of interest applicable to their car loan. To do so, you will have to have a good credit history and ensure that you enjoy a strong relationship with the institution from which you wish to borrow. If you have taken loans previously and ensured that your EMI payments were made on time and have cleared your loan within the tenure, you can ask the bank to lower the interest rate it charges you for a car loan.
No. Car loans will only cover the cost of purchase of the vehicle, and not registration or insurance of the car. Since car insurance is compulsory for all cars, you will have to buy it separately and pay for it out of your own pocket. The same applies to the registration of the car. However, you can find a few banks that will cover the registration as well as insurance of your vehicle.
You will not be allowed to sell your car unless you have repaid the loan in full. The bank will have to give you a No Objection Certificate if you are to sell the car, and the same will be given to you only once you have completed the repayment in full.
In case you fail to make EMI payments on time, the bank shall consider you as a defaulter and charge you a penalty fee for late payment. You will be asked to be more regular with your payments and after several warnings if you still find it hard to pay your EMIs on time, you are at risk of losing your vehicle as the bank or lender can legally repossess the car. Moreover, your credit score will be negatively affected, leaving you with complications with future loan applications.
Zero percent financing is an option that is made available by very few lenders. Under this concept, the manufacturer of the vehicle and the bank from which you borrow collaborate and the customer will only have to pay the amount borrowed in EMIs. The interest rate applicable to the loan will be paid by the manufacturer.
Some of the banks with the lowest rate of interest on car loans include Axis Bank, Federal Bank, Dena Bank, ICICI Bank, HDFC Bank, Jammu and Kashmir Bank, Oriental Bank of Commerce, Sundaram Finance, etc.
Yes, most of the banks and financial institutions that offer car loans allows customers to pre-pay the same. However, there will be some terms and conditions for pre-payment of car loans. For instance, you will have to have completed a certain part of the tenure before you will be allowed to pre-pay the loan. There are prepayment charges applicable as well. Usually, the bank charges 1% to 4% of the loan amount as prepayment charges. Make sure you confirm all the charges applicable to prepayment before taking out the loan.
You can apply for a car loan online through the bank’s website or through a third party comparison portal in no time. Later, the baking executive will get in touch with you to process the loan depending on your eligibility.
Most banks offer up to 90% of your car’s ex-showroom price. Some banks even finance up to 100% of the vehicle’s ex-showroom price.
You would be asked by your lender to submit the following documents:
Just like a home loan, you can avail either fixed rate of interest or floating rates of interest on your car loan.
Banks also provide loans for pre-owned vehicles and the interest rates would be comparably higher than loans for new vehicles. Other factors such as repayment capacity, car value, loan tenure, etc. remain the same.
Banks allow borrowers to transfer their existing car loan to a new lender for better an interest rate or loan tenure. Transferring a car loan from an existing lender to a new one is called balance transfer. Banks charge a balance transfer fee for such an allowance. So, before making a balance transfer, it is important to find out if it is worth it to transfer your car loan. Find out how to make a car loan balance transfer and how to find out if it is beneficial to you. Using an online car loan EMI calculator, you can find out if a balance transfer reduces or increases your interest savings. Balance transfer is allowed for almost all types of loans including car loans but not many borrowers take advantage of such an option. Here you can find out how to transfer your car loan to get the maximum benefits. Read More...
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Everyone who buys a car has to go through the inevitable and time-consuming process of getting their vehicle registered. As mandated by the Central Government of India, all vehicles running on the roads of the country must have a valid registration according to the Motor Vehicles Act, 1988. However, due to the complex process of vehicle registration, many a car buyers often ask their car dealers or an agent to complete this work for them for a predetermined price. While opting for either of these options might save you some time, the dealers and agents usually charge a hefty amount of money for this service. By arming yourself with the knowledge of the vehicle registration process, you will not only be able to navigate the system with ease, but will also able to save money on an unnecessary expenditure. Learn about the steps you should follow along with the documents that you have to carry to the Regional Transport Office (RTO) in order to get your car registered. Read More...
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