Most banks in Maharashtra offer floating interest rate packages on their car loans, although some offer fixed rates as well. Floating interest rates are often either linked to MCLR (Marginal Cost of funds-based Lending Rate) or RLLR (Repo Linked Lending Rate).
Choose from a new car loan and a pre-owned/used car loan. New car loans usually come with a loan tenure up to 7 years and used car loans usually come with tenures up to 5 years. Also, for a pre-owned car loan, the age of the car should not exceed 5 years. Some banks do not finance cars older than 3 years.
Here are the interest rates and processing fees for new as well as used cars offered by top banks in Maharashtra:
|Bank||Interest Rate for New Cars (p.a.)||Interest Rate for Used Cars||Processing Fee|
|Bank of Maharashtra(Maha Super Car Loan/Mahabank Vehicle Loan Scheme for Old Car)||8.85% to 9.60%||Contact the bank||0.25% of loan amount (min. Rs.500) **waived until 15 November 2019 for new car loans|
|State Bank of India (Auto Loans)||8.80% to 9.50%||10.50% to 12%||Contact the bank|
|Bank of India(BOI Star Vehicle Loan)||8.60% to 9.20%||8.60% to 9.20%||0.25% of loan amount (min. Rs.1,000; max. Rs.5,000) **waived until 31 December 2019|
|HDFC Bank(New Car Loan/Pre-owned Car Loan)||9.75% to 10.60% (rack interest)||13.75% to 16% (rack interest)||0.40% of loan amount (min. Rs.3,000; max. Rs.10,000)|
|Punjab National Bank (Vehicle Loans)||RLLR linked: 8.55% to 9% MCLR linked: 9.20%||RLLR linked: 8.55% to 9% MCLR linked: 9.20%||Loan amount up to Rs.6 lakh: Rs.1,000 Loan amount above Rs.6 lakh: Rs.1,500|
|Union Bank of India (Vehicle Loan/Union Miles)||9.05%||12.05%||Flat fee of Rs.1,000|
|Yes Bank||9.50% to 13.97% (contact PNB for updated rates)||9.50% to 13.97% (contact PNB for updated rates)||New Cars: Up to 1% of loan amount or Rs.10,000 Used Cards: Up to 2% of loan amount or Rs.6,000|
|ICICI Bank (New/Pre-Owned Car Loan)||9.30% to 12.85%||14.25%||New Cars: Rs.3,500 to Rs.8,500 Used Cars: 2% of loan amount or Rs.15,000|
|Axis Bank (New/Pre-owned Car Loan)||9.025% to 11.30%||14.80% to 16.80%||New Cars: Rs.3,500 to Rs.5,500 Used Cars: 1% of loan amount or Rs.6,000|
|IDBI Bank (Auto Loan)||8.85% to 9.45%||Contact the bank||Rs.1,000 + tax|
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The easiest way to get low interest rates may be to compare rates offered by different banks in Thane on third-party websites. Apart from this, there are several other ways to fetch the lowest interest rates on car loans:
Many banks offer different rates of interest to applicants with varying credit scores. This is because your credit score is also a measure of your risk of defaulting on the loan. A high score (usually 750+) indicates a lower risk of default and a low score (below 700) indicates a higher risk.
For instance, IDBI Bank offers lowest rates to applicants with credit scores above 800. They do not offer loans to applicants with a score below 700. Similarly, Bank of Maharashtra offers lowest rate to customers with a credit score of 750 and above.
If you do not have a credit score, you will not enjoy low rates. So, it is advisable to first build credit history before applying for an auto loan.
If you are a woman or you work for the government, you could enjoy concessional rates on your car loan. Punjab National Bank (PNB) offers a lower rate for such applicants, also, they do not take your credit score into consideration while offering you your rate of interest. For instance, if you are married, then you could take the car loan along with your wife to enjoy lower rates.
Some banks offer a lower interest rate on loan tenures below 5 years. For example, if you apply for an SBI car loan for a loan tenure under 5 years, you will get a concession of 0.1% on the rate. Also, if you are a woman, you will get a concession of 5 basis points if your credit score is between 600 and 649.
On the other hand, some banks could charge a higher rate on short-term loans compared to long-term ones. However, in any case, short-term loans lead to higher interest savings because you are paying interest for a shorter duration. But your equated monthly instalments (EMIs) will be higher. Long-term car loans require smaller EMIs but the interest you pay will be more.
Let’s take an example here: Let’s say the car loan charges 8.85% p.a. interest for a loan of Rs.5 lakh and tenure of 4 years. The interest charged will be Rs.95,533 and the EMI will be Rs.12,407. Now, keeping all other parameters constant, let’s say you’ve taken the loan for 7 years. The interest charged will be Rs.1,72,548 and the EMI will be Rs.8,007.
You can see from the example above that a change in 3 years can lead to interest savings of Rs.77,015.
If you wish to calculate your EMIs and interest payments on your car loan, you could use the BankBazaar Car Loan EMI Calculator.
If you have been a customer of a bank and have maintained a good relationship, you may be offered preferential rates. They may not always be advertised but you could request your bank for further details. Bank of Maharashtra, however, offers a discount of 0.25% on car loan interest rates for maintaining a minimum of 1-year relationship with the bank.
Salaried employees have steady income coming in every month. This ensures that they can service their EMIs, making them low-risk customers of the bank. Self-employed individuals, on the other hand, pose a higher risk due to the nature of their employment, i.e. uncertainty of consistent income.
Due to this reason, some banks charge higher interest rates on car loans from self-employed individuals. Bank of Maharashtra, for example, charges 0.5% more interest from self-employed individuals. This percentage may seem insignificant now but based on the loan quantum and tenure, it can lead to significant savings.
So, if you are self-employed, you will need to do more research to find lenders who offer the same rate to both, salaried and self-employed.
|Eligibility Parameters||Eligibility Criteria|
|Minimum annual income||Starting from around Rs.2 lakh|
A duly completed and signed car loan application form is the first document that you need to submit. Apart from this, there are certain mandatory documents that need to be submitted for your application to be considered. You may be required to submit one or more documents from each of the below-mentioned categories in the table:
|Documents||Salaried employees||Self-employed individuals|
|ID proof||Passport, Aadhaar card, Election ID card, PAN card, Driving License, Photo Credit Card, other govt. issued card||Passport, Aadhaar card, Election ID card, PAN card, Driving License, Photo Credit Card, other govt. issued card|
|Age proof/Date of Birth Proof||School leaving certificate, Birth Certificate, LIC policy, Driving License, Passport, other govt. issued card||School leaving certificate, birth certificate, LIC policy, Driving License, Passport, other govt. issued card|
|Address proof or Office/Business proof||Utility bill, Ration Card, Passport, Driving License, Aadhaar card, other govt. issued card||Office utility bill, Sales Tax RC, Current Account Statement, MSME or SSI Registration Certificate, Shop & Establishment Act Certificate|
|Signature Verification||Banker’s verification, Passport, PAN||Banker’s verification, Passport, PAN|
|Income documents||Salary slips, ITR for up to 2 years, Form 16, bank statements||Income statement, balance sheet, profit and loss statement, ITR for at least 2 years, bank statements|
|Other documents||Passport size photographs||Passport size photographs, Copy of partnership|
Most banks offer up to 90% financing for new cars and up to 100% financing for pre-owned/used cars. There may or may not be a cap placed on the loan amount offered by the lender.
The easiest way to apply for a car loan is to do it online. You can compare different car loan products offered by banks and financiers and apply conveniently on BankBazaar. Alternatively, you can also apply with the lender directly through online and offline methods.
No. New and used car loans are especially meant for usage of the vehicle for personal reasons only. If you wish to obtain financing for a car for the purpose of ferrying/hiring passengers, then you must apply for a commercial vehicle loan. Many banks offer this loan as a separate loan product.
For those engaged in agriculture and allied activities, banks usually take into consideration the disposable/ascertainable income along with land held for said purpose. For example, Bank of Maharashtra considers disposable income and requires at least 5 acres of land for agricultural/allied activities to be maintained to be eligible for their Maha Super Car Loan Scheme.
Most banks offer Standing Instructions and ECS (Electronic Clearance Service) options to make repayments on the car loan. To pay by other methods, you can contact the bank directly.
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