If you really think about it, it's easier getting a loan for a car than a loan for bus fare!
  • Car Loan BYTES FROM OUR KITCHEN

    Chennai Car Loan

    If you are living in Chennai and wish to own a car to drive around the city, a car loan can make that wish come true. Lenders understand that owning a car is desired by many who wish to enjoy the convenience of driving around in Chennai and hence offer car loans at affordable rates of interest. Car loans in Chennai also require minimal documentation, are quickly approved, and the application process is also simple.

    Interest Rates Offered by Top Lenders on Car Loans in Chennai

    Bank Interest rates Processing fee Minimum income
    HDFC Bank 9.75% to 10.60% 0.4% of the loan amount Rs.3 lakh p.a.
    Canara Bank 8.95% to 9.60% 0.25% of the loan amount Rs.3 lakh p.a.
    State Bank of India 9.30% to 12.45% Nil Rs.2.5 lakh p.a. to Rs.4 lakh p.a.
    ICICI Bank 9.30% to 12.85% Rs.3,500 to Rs.8,500 _
    Axis Bank 9.25% onwards Rs.3,500 to Rs.5,500 1.8 lakh p.a. to Rs.2.4 lakh p.a.
    Punjab National Bank 9.05% onwards Rs.1,000 to Rs.1,500 Rs.20,000 per month
    Bank of Baroda 1-year MCLR + Strategic premium + 0.25% p.a. Rs.1,000 to Rs.2,500 + GST _
    IndusInd Bank 10.65% onwards 0.5% of the loan amount Rs.2 lakh to Rs.2.5 lakh
    United Bank of India 9.15% onwards 0.59% of the sanctioned loan amount Rs.25,000 per month
    Federal Bank 9.20% onwards N/A Rs.20,000 per month
     

    How to Fetch the Lowest Interest Rates on Car Loans in Chennai

    In Chennai, car loans can be availed at low interest rates if you bear the following things in mind:

    • Shop Around – If you want to avail a car loan at low interest rates in Chennai, remember to shop around and check for the interest rates, along with other benefits, offered by various lenders. This will help you pick a lender that suits your pocket. You will find the option to compare the benefits offered by various lenders on the BankBazaar website under the ‘Car Loan’ section which will go a long way in helping you make an informed decision.
    • Keep your credit score in check – Having a credit score of more than 750 will give confidence to lenders to give you a loan at lower interest rates and hence, it is advisable to keep your credit score healthy. A low credit score will have a low chance of securing a loan in the first place and even if some lenders do agree to give a loan, they will charge high interest rates on them. Also, ensure that you regularly check your credit score on the BankBazaar site under the ‘Free Credit Section’. Checking your credit scores will help you assess if you have a score that is enough to avail a car loan and if you don’t you can take corrective steps to improve it.
    • Choose a shorter repayment tenure - Lenders feel confident to offer car loans at lower interest rates to applicants who choose short repayment tenures as it reflects the higher repayment capacity of applicants. On the other hand, choosing a longer repayment tenure will make lenders doubt your repayment capacity which may prompt them to increase the interest rates on them. Hence, it is recommended that you opt for shorter repayment tenures if you wish to enjoy lower interest rates on car loans.
    • Maintain a low debt-to-income ratio - A low debt-to-income ratio is a reflection of the applicant’s high repayment ability and hence, lenders are likely to offer low interest rates to those with a low debt-to-income ratio. The debt-to-income ratio is an estimate of the percentage of the applicant’s income that is spent on repaying loans.
     

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    Eligibility for availing a car loan in Chennai

    When it comes to eligibility criteria, it may vary from lender to lender and hence, applicants are advised to check for the same by visiting the websites of the lenders. However, the basic eligibility criteria for most of the banks/lenders will be the same and they are given below:

    Criteria Salaried individuals Self-employed individuals
    Age
    • Minimum age: 21 years
    • Maximum age: Between 60 years and 70 years at the time of loan maturity
    • Minimum age: Between 18 years and 21 years
    • Maximum age: Between 65 years and 75 years at the time of loan maturity
    Income Between 2.5 lakh p.a. and Rs.3 lakh p.a. Between Rs.1.8 lakh p.a. and Rs.3 lakh p.a.
    Income Status Should have been continuously employed for 2 years and at least 1 year with the current employer Should have been in the same line of business for at least 2 years
     

    Documents Required

    While applying for a car loan in Chennai, lenders will expect you to submit the below-mentioned documents:

    • Proof of Identity (Aadhaar, Voter’s ID, Passport, Driving License, etc.)
    • Age proof (PAN Card, Passport, Aadhaar, etc.)
    • Address Proof (Passport, Aadhaar, Driving License, etc.)
    • Recent bank statements
    • Rate list or proforma invoice
    • Income proof (Form 16, IT returns)
    • Application form filled and duly signed

    Lenders in Chennai may require some additional documents for a car loan and this will depend on the applicant’s occupation, age, income, etc.

    FAQs

    What kind of cars can be financed by a car loan?

    You can avail a car loan to purchase any kind of passenger vehicles which include hatchbacks, Sports Utility Vehicles (SUVs), sedans, and Multi-Utility Vehicles (MUVs). Car loans can also be availed to purchase vehicles for commercial use. Some financial institutions also offer finance for the purchase of construction equipment, tractors, trucks, etc.

    Are the interest rates on car loans negotiable?

    Yes. Some lenders will allow you to negotiate on the car loan interest rates provided you have a good repayment history with them and are a loyal customer of the bank. You can also negotiate with the lenders to offer you a good deal on the interest rates if you have a credit score of more than 750.

    Will I be charged any penalty if I fail to make the EMI payments?

    Missing out on making EMI payments may result in a poor credit rating and lower your chances of securing a loan in the future. One or two missed EMI payments may be allowed by many lenders but beyond that, you will be considered as a defaulter. In such cases, the lender will have the authority to seize your vehicle and auction it to recover the outstanding loan.

    Can I choose the type of interest rate charged on my car loan?

    Banks offer two types of interest rates on car loans – fixed and floating from which you can choose. Shop around to figure out which bank offers the kind of interest rate you are looking for and opt for it.

    Do I need to provide any security to avail a car loan?

    You do need to provide any security or collateral to avail a car loan as the vehicle itself will be considered as a security. The vehicle will be hypothecated to the lender until the loan amount is paid by the borrower and in cases where the borrower defaults, the lender can seize the vehicle and recover the loan amount.

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