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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.
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 |
Apart from comparing the car loans offered by different banks, there are other ways to the fetch the lowest interest rates in Vijayawada:
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.
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.
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.
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.
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 Parameters | Eligibility Criteria |
|---|---|
| Age |
|
| Minimum annual income | Starting from Rs.1.80 lakh |
| Employment requirement |
|
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 |
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.
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.
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.
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.
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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