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The interest rates offered on car loans are determined by the MCLR (Marginal Cost of funds-based Lending Rate) or the benchmark rate set by the lender. Most of the car loans in Meerut are floating-rate loans. A new car loan is a great option for those who are looking to purchase a new car in Meerut, while pre-owned car loans can be ideal for those who want to buy a second-hand or used car.
New car loans usually come with longer repayment tenures that extend up to 7 years or 84 months. Used car loans, on the other hand, come with relatively lower repayment tenures of 5 years or 60 months. When you avail a car loan from a certain bank, it is necessary for your vehicle to be hypothecated to said bank.
Here are the details of some of the top banks that offer car loans in Meerut, Uttar Pradesh:
| Bank | Interest Rate for New Cars (p.a.) | Interest Rate for Used Cars | Processing Fee |
|---|---|---|---|
| State Bank of India | 8.80% to 9.50% | 10.50% to 12% | 0.51% of the loan amount |
| Punjab National Bank | RLLR + 0.75% onwards | Rs.1,000 for loan amounts up to Rs.6 lakh and Rs.1,500 for loan amounts above Rs.6 lakh | |
| Axis Bank | 9.25% onwards | 14.80% onwards | Rs.3,500 to Rs.5,500 for new cars and 1% of loan amount subject to a maximum of Rs.6,000 for used cars |
| UCO Bank | 1-year MCLR + 0.40% | 1-year MCLR + 1.50% if purchased from a certified dealer, and 1-year MCLR + 2% if purchased from other dealers | 1% of the loan amount subject to a maximum of Rs.1,500 |
| HDFC Bank | 8.40% | 0.40% of the loan amount subject to a minimum of Rs.3,000 and a maximum of Rs.10,000 | |
| Bank of India | 8.60% to 9.20% | 8.60% to 9.20% | 0.25% of the loan amount subject to a minimum of Rs.1,000 and a maximum of Rs.5,000 |
| Indian Overseas Bank | 8.95% | 9.95% to 10.95% | 0.50% or 0.60% of loan amount subject to a minimum of Rs.500 and a maximum of Rs.10,000 |
| Canara Bank | 8.75% to 11.30% | 8.75% to 11.30% | 0.25% of the loan amount subject to a minimum of Rs.1,000 and a maximum of Rs.5,000 |
| Corporation Bank | 9.30% for loan amounts up to Rs.50 lakh 9.80% for loan amounts above Rs.50 lakh | 9.30% for loan amounts up to Rs.50 lakh 9.80% for loan amounts above Rs.50 lakh | 1% of loan amount subject to a minimum of Rs.1,000 |
| ICICI Bank | 9.30% to 12.85% | 14.25% | Rs.3,500 to Rs.8,500 for new cars and 2% of loan amount subject to a maximum of Rs.15,000 for used cars |
One of the best ways to find lenders that offer low interest rates involves a thorough comparison of the different car loan schemes offered by various banks. Apart from comparing the loans offered by lenders, you can also push for a lower interest rate on your car loan in Meerut by following these simple tips:
One of the easiest ways to qualify for a car loan with a low interest rate is to ensure that your credit score is above 750. Most lenders tend to relax the terms and conditions of a loan for customers with excellent credit history, and this applies not only to car loans, but pretty much all kinds of credit. A high credit score reflects your credit history, and lenders are usually flexible with the interest rates and loan amounts if your credit score is 750 or above.
The interest rates applicable to new car loans are relatively lower in comparison with the interest rates applicable to used car loans. A few lenders tend to offer the same interest rates for the purchase of new cars as well as old cars. Even the margin or down payment associated with used car loans are relatively high in comparison with new car loans. For instance, the margin for new cars can range between 10% and 25% of the price of the car, but for old cars, the margin can be as high as 40%. If you wish to avail a used car loan, make sure you consider various factors such as the age of the vehicle, the interest rates applicable to the loan, and the down payment to be made.
Salaried applicants are usually offered slightly lower interest rates in comparison with self-employed applicants. Most forms of credit, be it car loans, home loans or personal loans, can be availed for lower interest rates by salaried customers. The reason why banks and financial institutions offer lower rates to salaried individuals is that they earn a fixed income each month, thereby ensuring that they can make repayments consistently. Self-employed applicants, on the other hand, earn variable income, which makes them slightly more risky customers to the lender in comparison with salaried applicants.
Women applicants in Meerut can avail lower interest rates on car loans when compared to male borrowers. The difference between the interest rates applicable to men and those applicable to women is not too steep, but the discount in rates can help women borrowers save a lot of money in the long run. If you are a woman who is seeking a car loan in Meerut, there are several different banks and financial institutions that offer discounted rates, thereby making it easier for you to achieve your dream of owning your own car.
The interest rate applicable to a loan is one of the most important factors that are taken into consideration by those who apply for a loan. Usually, a longer tenure translates to lower interest rates. One of the main advantages to taking a loan with a longer tenure is that your EMIs will be smaller, but the problem with longer tenures is that the amount of money you pay towards the interest component of the loan is quite significant.
| Eligibility Parameters | Eligibility Criteria |
|---|---|
| Minimum and Maximum Age |
|
| Minimum annual income | Rs.1.80 lakh and above |
| Employment requirement |
|
The documents you must furnish at the time of availing a car loan in Meerut will depend on your employment type. Here are the documents required for both salaried applicants as well as self-employed individuals when applying for a car loan in Meerut:
| Documents | Salaried employees | Self-employed individuals |
|---|---|---|
| ID proof | PAN, Aadhaar, Voter ID, Passport, Driving License, any other ID issued by the government | PAN, Aadhaar, Voter ID, Passport, Driving License, any other ID issued by the government |
| Address proof or Office/Business proof | Aadhaar Card, Passport PAN, Utility bill, Ration Card, Driving License, any other ID issued by the government | Electricity/Telephone bill, VAT or Sales Tax Certificate, Shop & Establishment Act Certificate, Registered Lease with other utility bills, MSME or SSI Registration Certificate, Current Account Statement |
| Proof of date of birth | Birth certificate, passport, Aadhaar with full DOB, any other ID issued by the government | Birth certificate, passport, Aadhaar with full DOB, any other ID issued by the government |
| Signature Verification | Passport, Banker’s verification, PAN | Passport, Banker’s verification, PAN |
| Income documents | Salary slips, Income tax returns, Latest Form 16 | Income tax returns, Audited Balance Sheet and Profit and Loss Statement for at least two years |
| Other documents | Passport size photographs | Passport size photographs |
No, you do not require a collateral to apply for a car loan because the car itself will work as a collateral in this case. In case you default on your EMIs, the bank has the authority to seize your vehicle.
In most cases, you do not require a co-borrower or a guarantor to apply for a car loan. However, in case you are unable to meet the eligibility criteria set by the bank, you may be requested to apply with a guarantor.
Your car loan application could be rejected by the lender in case your credit score is poor, or if you have defaulted on repayments in the past, or applied for loans several times and been rejected. Your application could also be rejected in case you fail to meet the eligibility criteria set by the bank, such as the age, the income level, the credit score, your relationship with the bank, etc.
Fixed rate loans, as the term suggests, are those that are offered with a fixed interest rate for the entire tenure of the loan. The EMIs will remain the same for the entirety of the loan tenure. Floating interest car loans, on the other hand, are those wherein the interest rate is subject to change from time to time depending upon market conditions. The EMIs under floating rate loans are subject to change from time to time.
Yes, you can negotiate with your lender to avail a favourable interest rate. However, to negotiate, you must ensure that your credit score is excellent and that you have a good long-term relationship with your bank.
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