Sales of cars sales are one of the significant indicators of the state of the economy in most countries. The reason: a car contains hundreds of parts that are made of steel, plastics, electricals, ACs, lamps, tyres and the fortune of these industries are also linked to the sales of cars. Automotive sales are inextricably linked to the availability of loans from banks.
Car loans are usually a form of secured loan. In order to get an auto loan sanctioned, the applicant must produce proof of income in the form of salary slips for the past few months and standard KYC documents. The applicant also must have a good credit rating to be eligible for a loan. Let’s see what some of the big banks are charging on auto loans.
SBI car loan rates
The biggest bank in the country with more than 50 crore customers charges 9.15% to 10.10% interest rate on auto loans (new cars). This rate is for ICE (Internal Combustion Engine) cars. The rate applicable for loans to buy electric cars is 9.05% to 9.75%.
HDFC Bank car loan
The biggest private sector bank in the country, HDFC Bank, charges interest rates that vary between 8.5% and 11.8% annually for new cars. These rates have been offered between April and June 2024 – Q1 of FY25. The average rate stood at 9.45% in this time window.
ICICI Bank car loan
The minimum interest rate that ICICI Bank charges on new cars is 10.20%. These rates are applicable if the repayment tenure is between 12 and 25 months. If the repayment period becomes 36 to 84 months, the minimum interest rate becomes 9.10%. The applicable rate is calculated on the basis of credit score of the applicant and the segment of vehicle that he/she buys.
Axis Bank car loan
The interest rate that Axis Bank charges its customers floats between 9.30% and 14.10%. Add documentation charges of Rs 700 and processing fee of Rs 3,500-12,000.
Most banks levy premature closure charges on auto loans, processing fees, documentation charges and delayed instalment payment charges that can be as high as 18% per annum. One should verify all these before choosing a lender.
One of the biggest enabling factors for brisk sales of passenger cars in India is easy financing options. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
