Majority of the car loans offered in Vadodara are floating-rate loans wherein the benchmark rate of the lender or the MCLR (Marginal Cost of funds-based Lending Rate) determine the interest rate applicable to the loan. In case you are looking to purchase a new four-wheeler in Vadodara, a new car loan can be an attractive option, while pre-owned car loans are ideal for those who wish to purchase a second hand car in Vadodara.
The repayment tenure for new car loans is generally longer, extending up to 7 years or 84 months. The repayment tenure for a loan for the purchase of a second hand vehicle, however, is relatively shorter at 5 years or 60 months. It is mandatory for all cars to be hypothecated to the bank from which the car loan is availed.
Here are some of the best banks in Vadodara, Gujarat offering car loans, along with their interest rates and processing fees:
| Bank | Interest Rate for New Cars (p.a.) | Interest Rate for Used Cars | Processing Fee |
|---|---|---|---|
| Bank of Baroda | 8.60% | Rs.500 (flat fee) | |
| 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 | |
| Union Bank of India | 9.05% | 12.05% | Rs.1,000 (flat fee) |
| State Bank of India | 8.80% to 9.50% | 10.50% to 12% | 0.51% of the loan amount |
| 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 |
| 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 |
| 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 |
| 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 |
| 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 |
| 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 |
Besides a thorough comparison of the different car loan schemes offered by various banks, there are a few other ways through which you can avail the lowest interest rates on your car loan in Vadodara. Here they are:
A number of lenders across Vadodara offer lower interest rates to customers whose credit scores are above 750. A lower credit score would mean that the interest rate offered to you could be quite high. A higher credit score, on the other hand, ensures relatively favourable terms and conditions.
The interest rate offered to customers who wish to purchase second hand cars is relatively high in comparison with the interest rates offered for the purchase of new cars. Certain lenders offer the same interest rates for both new car loans as well as used car loans. The down payment or margin to be paid by the applicant is also quite high for used car loans in comparison with new car loans. The margin for used cars can be as high as 40%, while the margin for new cars can range from 10% to 25%. In case you are going in for a used car loan, you must take into consideration several factors such as the down payment, the interest rates, and the vehicle’s age.
The interest rates offered to salaried applicants is usually lower in comparison with the interest rates offered to self-employed individuals. This applies not only to car loans but all other kind of loans. The reason for this is that salaried applicants derive a fixed income each month, thereby making the less risky in comparison with self-employed individuals whose income varies each month.
A number of banks in Vadodara offer lower interest rates on car loans to female borrowers. Although the difference between the rates offered to women and men is marginal, the amount of money that can be saved on interest is quite significant. If you are a woman seeking a car loan in Vadodara, you can find several banks and financial institutions that will offer you the amount you require for a slightly lower interest rate.
If the main factor you take into consideration when applying for a car loan is the interest rate, you can go for a longer repayment tenure as the longer the tenure, the lower the interest rate. Another advantage of taking a loan with a longer repayment tenure is that the EMIs are also smaller. The issue with longer tenures, however, is that you end up paying a lot by way of interest. If you wish to save on the money you would otherwise pay as interest, a shorter tenure would work best for you, but the EMIs will be higher so make sure you can afford to make the payment each month before you sign on the dotted line.
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| Eligibility Parameters | Eligibility Criteria |
|---|---|
| Minimum and Maximum Age |
|
| Minimum annual income | Rs.1.80 lakh and above |
| Employment requirement |
|
The documents you will have to submit at the time of availing a car loan in Vadodara 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 Vadodara:
| 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 |
Yes, it is possible to apply for a car loan online. Most major banks and financial institutions have online application forms that must be filled and submitted along with your documents when applying for a car loan online. Make sure you double-check with your preferred bank if they accept online applications.
No, you do not require any additional collateral or security when applying for a car loan. The car itself will act as a collateral and in case borrowers are unable to repay the loan, the bank has the authority to seize the vehicle. However, you will have to ensure that the car’s registration certificate is endorsed with the bank.
Yes, majority of the banks and financial institutions allow you to prepay your car loan. While some banks allow you to prepay the car loan without charging you any additional fees, some banks charge a prepayment fees in case you wish to prepay your loan.
It depends from bank to bank. Some banks tend to offer special offers to their long-standing customers who have a good relationship with them. However, it is essential to ensure that your credit score is excellent if you wish to ask your bank for lower rates.
The maximum amount that you can borrow would depend on the bank from which you are taking the loan. Each bank has its own limits and caps, but usually, you can expect to avail 80% to 90% of the value of the vehicle as a car loan.
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