“CARS”. In ancient times having a car was considered a luxury item. In today’s time owning a car has become a necessity for families for transportation and also defines a social and professional status.
Thanks to car loans now you can fulfil your dreams and own your desired car. Car loans are available from luxury cars to economy class cars to used cars. All you need is to provide the banks with proof of your income and other documentation. There are multiple financial institutions and banks in India which provide car loans.
The term "car loan" refers to a personal loan that is taken to buy a car. The borrower borrows money from the bank to purchase the car, just like with any other sort of loan, and is required to pay back the loan amount plus interest. This payment is made on a monthly basis over a determined period of time.
How to get the best car loan ?
To select the best car loan in India, one should keep certain factors in mind, such as:
The Interest Rate: Interest rate is a major factor to consider when applying for a car loan. The banks or financial institutions provide a customer with both a fixed and variable interest rate ranging from 8.65% - 11%.
Processing fees and time: This is also an important factor when applying for a car loan. The charges of processing fees are majorly 0.5% of the actual amount of the loan.
Time period: An individual can get a car loan for a maximum of 7 years. The amount of EMI decreases with the tenure but the interest increases.
Loan Amount: An individual needs to consider the loan amount that is offered by the bank. Sometimes the banks provide 100% finance of the ex-showroom price. The individuals need to pay additional charges such as duty, RTO passing charges and insurance amount.
Top 5 car loans in 2022
SBI car loan
SBI is one of the largest public sector banks which offer car loans. SBI offers finance up to 85% of the on road price of the car. SBI does not charge any pre-closure amount. The features of the SBI car loan are as follows:
Eligibility: 21-60 years of age
Interest rate: 9.25% floating rate
Pre-closure charges: NIL
Loan Tenure: 7 years
Processing fees: NIL
Maximum loan amount: 85% of the on road price
HDFC bank car loan
HDFC bank is one of the largest private sector banks in India which provides car loans. With fast loan approval, HDFC bank offers car loans with attractive interest rates and very minimal documentation. The key features of HDFC bank car loan are:
Eligibility: 21 - 60 years of age
Interest Rate: 9 - 10.25% floating rate
Pre-closure charges: NIL after 2 years
Tenure of loan: 7 years
Documentation Charges: ₹600
Maximum loan amount: Up to 100% of the ex-showroom price
Axis bank car loan
Axis bank offers car loans at higher interest rates but offers fast processing period and quick loan disbursement. They provide finance of up to 95% of the ex-showroom price. The key features of the Axis bank car loan are as follows:
Eligibility: 21 - 70 years of age at loan maturity
Interest Rate: 9.05% - 11.30%
Pre-closure charges: 5% of the outstanding principal amount
Tenure of loan: 7 years
Processing fees: ₹3000 - ₹3500
Documentation Charges: ₹300
Maximum loan amount: Up to 95% of the ex-showroom price
ICICI bank car loan
ICICI bank offers car loans on new cars, used cars and also loans against cars. The loan repayment term is flexible. ICICI bank offers a loan amount of up to 100% of the ex-showroom price of the car. Important features of the ICICI bank car loan are:
Eligibility: 23 - 70 years of age
Interest Rate: 12.85% up to 3 years, 9.3% for 3 to 7 years
Pre-closure charges: 5% of the outstanding principal amount
Tenure of loan: 7 years
Processing fees: ₹3000 - ₹3500
Documentation Charges: ₹300
Maximum loan amount: Up to 95% of the ex-showroom price
Punjab National Bank bank car loan
PNB provides car loans for all kinds of vehicles such as cars, jeeps, vans, multi utility and sports utility vehicles. PNB provides car loans with the lowest interest rates in the financial industry. PNB also provides a flexible loan tenure. The key features of PNB car loan are:
Eligibility: Minimum monthly income of ₹20000
Interest Rate: Depends on the individual’s credit score
Pre-closure charges: NIL
Tenure of loan: 7 years
Processing fees: 0.5% of the loan amount
Maximum loan amount: Up to 85% of the on road price
What are the benefits of a car loan ?
The following are the benefits of car loans.
It helps you in purchasing a car even if you do not have all of the money needed.
The majority of car loans will cover the vehicle's on-road cost.
Some car loans will even pay for the entire on-road cost. This means no down payment.
Your options for cars are not limited because some banks offer loans in the crores.
The majority of available car loans in India are secured loans. This suggests that the car is used as collateral or security for the loan.
When compared to other loan products, obtaining a car loan is fairly simple. Individuals with even less credit score can also apply.
In India, options for fixed interest rates on car loans are common. This means that you are always guaranteed a fixed sum that must be paid back each month.
Your credit score will be used by many lenders to determine your interest rate, therefore a good score will result in a lower loan.
Car loans aren't just for brand-new cars. You can purchase a used car with the help of a used car loan.
This festive season, get a car of your choice for your family and yourself by getting a car loan for you. Through this article, we have intended to list the best car loans available for you. Compare all the available car loans options and choose the best for yourself before making a purchase.
Happy driving !