• Vijayawada Car Loan

    Car Loans in Vijayawada – Overview

    Most car loans in Vijayawada are floating-rate loans where the interest rates are often pegged to the bank’s MCLR (Marginal Cost of funds-based Lending Rate) or the bank’s benchmark rate. Customers have a choice between applying for a new car loan (purchase of a new car) and a used car loan (purchase of a used car).

    New car loans usually offer a longer repayment tenure, often up to 84 months or 7 years. Used car loans on the other hand, usually offer a maximum repayment tenure of 60 months or 5 years. All car loans require the hypothecation of the vehicle to the bank.

    Interest Rates Offered by Top Lenders on Car Loans in Vijayawada

    Find below the top banks in Vijayawada, Andhra Pradesh 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
    Andhra Bank (Loans for 4 Wheelers) 9% 11.75% 1% of loan amount (min. Rs.1,000; max. Rs.25,000 + GST)
    State Bank of India (Auto Loans) 8.80% to 9.50% 10.50% to 12% Contact the bank
    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
    Syndicate Bank (Synd Vahan) 8.85% or 9.10% Not applicable Above Rs.25,000 to Rs.2 lakh: Rs.1.25 per Rs.1,000 (min. Rs.125) Above Rs.2 lakh: Rs.200 per lakh
    Canara Bank (Canara Vehicle) 8.75% to 11.30% 8.75% to 11.30% 0.25% of loan amount (min. Rs.1,000; max. Rs.5,000)
    Indian Overseas Bank (Vehicle Loans – Pushpaka) 8.95% 9.95% to 10.95% 0.50% or 0.60% of loan amount (min. Rs.500; max. Rs.10,000)
    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
    Corporation Bank (Corp Vehicle Scheme) Loan up to Rs.50 lakh: 9.30% Loan above Rs.50 lakh: 9.80% Loan up to Rs.50 lakh: 9.30% Loan above Rs.50 lakh: 9.80% 1% of loan amount (min. Rs.1,000)
    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
    Union Bank of India (Vehicle Loan/Union Miles) 9.05% 12.05% Flat fee of Rs.1,000

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

    Apart from comparing the car loans offered by different banks, there are other ways to the fetch the lowest interest rates in Vijayawada:

    1. Maintain a high credit score
    2. Several banks including SBI, Canara Bank, and Bank of India offer the best rates to applicants who maintain high credit scores. A credit score of 750 and above is considered a high score. Highest interest rates are offered to applicants with lowest credit scores, followed by those with no credit history.

    3. New car loan come with lower interest rates
    4. Used car loans always have a higher interest rate compared to new car loans (as you can see from the table). Some banks such as Canara Bank and BOI offer the same rates on both loans. The margin or down payment that you have to pay is also much higher for used car loans when compared to new car loans. For a used car, the margin can go up to 40% compared to 10%-25% for new cars.

      So, if you’re looking to save more by applying for a used car loan, there are several factors that you need to consider, especially the high interest rates, the down payment, and the age of the car.

    5. Salaried employees get lower rates compared to self-employed
    6. Salaried employees often get get lower interest rates on not just car loans, but also other loans when compared to self-employed individuals. This is because salaried employees have a fixed income that they earn every month, thereby, posing a lower risk than self-employed applicants who earn variable income. Bank of India (BOI) is one such bank that offers lower rates to salaried customers.

    7. Lower interest rates based on Gender
    8. Some banks offer lower interest rates to female applicants compared to their male counterparts. The difference in interest rate in most cases is 0.05% p.a. Though the percentage appears negligible, the savings from interest can be significant.

      For example, the interest payments alone on a Rs.5 lakh car loan for 5 years at an interest rate of 9% p.a. is around Rs.1,22,751. Keeping all other parameters constant, the interest payment at a rate of 9.50% p.a. is Rs.1,30,056. The difference in savings is Rs.7,305.

    9. Longer tenures usually come with lower interest rates
    10. If the interest on your car loan is your only consideration, then choosing a longer repayment tenure will offer you the lowest rates. There’s also the added bonus of smaller EMIs (equated monthly instalments). The drawback here is that longer tenures also charge higher interest. If you’re looking for interest savings rather than a low interest rate, then choose a shorter tenure. But do so only if you can afford to pay a larger EMI.

      For example, the EMI for a Rs.5 lakh car loan at an interest of 9.50% p.a. for 5 years is Rs.10,501. The total interest payable is Rs.1,30,056. So essentially, you’re repaying Rs.6,35,056. Now if you have the financial capacity to repay more and choose a tenure of 3 years, then your EMI will be Rs.16,061. The total interest payable will be Rs.76,593 and the overall repayment towards the loan will be Rs.5,81,593. The interest savings alone on this loan are Rs.53,463, all for choosing a shorter loan tenure. Note: A 1% processing fee is added to the calculations.

      If you wish to calculate your EMIs and total interest payable on your car loan, you can use the BankBazaar Car Loan EMI Calculator.

    Eligibility for Availing a Car Loan in Vijayawada

    Eligibility Parameters Eligibility Criteria
    Age
    • Minimum age: 21 years
    • Maximum age: 70 years
    Minimum annual income Starting from Rs.1.80 lakh
    Employment requirement
    • Salaried: Minimum continuous employment of 1 year
    • Self-employed: Must be in business for at least 2-3 years

    Documents Required

    Based on your employment type, you will be required to produce certain documents along with your application form when applying for a car loan. A minimum of one document per category will be required as follows:

    Documents Salaried employees Self-employed individuals
    ID proof Aadhaar, PAN, Passport, Driving License, Voter ID, other govt. issued ID Aadhaar, PAN, Passport, Driving License, Voter ID, other govt. issued ID
    Address proof or Office/Business proof Utility bill, Ration Card, Aadhaar, PAN, Passport, Driving License, other govt. issued ID Shop & Establishment Act Certificate, Electricity/Telephone bill, Registered Lease with other utility bills, MSME or SSI Registration Certificate, VAT or Sales Tax Certificate, Current Account Statement
    Date of birth/age proof Birth certificate, Aadhaar with full DOB, Passport, other govt. issued ID Birth certificate, Aadhaar with full DOB, Passport, other govt. issued ID
    Signature verification Banker’s verification, Passport, PAN Banker’s verification, Passport, PAN
    Income documents Salary slips, Latest Form 16, IT Returns ITR, Audited Balance Sheet, Profit and Loss Statement, for at least 2 years
    Other documents Passport size photographs Passport size photographs

    Frequently Asked Questions for Car Loans in Vijayawada

    1. Can I apply for a car loan online?
    2. Yes. Most popular banks allow you to fill in the application form and submit your documents for your car loan application online. However, it is advisable to check with the respective bank if online applications are accepted.

    3. Can I apply for a car loan for a repayment tenure of over 7 years?
    4. Most banks offer a maximum repayment tenure of 7 years. However, Axis Bank is a popular bank that offers a repayment tenure of up to 8 years on select schemes.

    5. Can I prepay my car loan?
    6. Yes. Most banks allow you to prepay your car loan. However, some banks may charge a prepayment penalty while others don’t. For example, ICICI Bank charges a prepayment penalty of 5% of the outstanding balance or the interest outstanding on the remaining tenure, the lower of the two. SBI on the other hand does not charge a prepayment penalty on closing the loan early.

    7. If I already have a salary account with a bank, will I be offered lower interest rates?
    8. This will depend on the bank. Not all banks state this but may offer a lower rate to applicants maintaining a good relationship with the bank due to the lower risk of default. Syndicate Bank is one such bank offering a lower interest rate to salaried applicants who maintain a salary account with the bank and have a credit score of 700 and above. Such applicants will pay 0.25% lower than other applicants.

    9. Can NRIs apply for a car loan in Vijayawada?
    10. Yes. Banks such as Bank of India and Federal Bank, among others offer car loans to NRIs. However, note that a guarantee from an Indian resident will be required in most cases. Also, you will have to submit additional documents including a certified copy of your passport, your visa, work permit, and ID card.

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