Best Bank for Car Loan in India 2018
- MyLoanCare
- Car Loan
- Car Loan Interest Rate
Car Loan Interest Rates
Car Loan Interest Rates
Last Updated 07th Dec 2021
| Interest Rate | 8.65% |
| Processing Fee | Min 0.20% of loan amount |
| Loan Tenure | 3 years to 7 years |
| Prepayment charges | NIL to 5% |
| Loan to Value | Upto 100% of ex-showroom price |
- Maximum loan amount depends upon either on road price or ex-showroom price of the car
- Popular Banks offering car loan are HDFC Bank, Axis Bank, ICICI Bank, SBI and PNB
- Car loan interest rate is based on factors such as loan amount, occupation, employment type and cibil score. Higher the loan amount, lower will be the interest rate.
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Compare Car Loan Interest Rate for All Banks
| Bank | Car Loan Interest Rates | Lowest EMI per lakh for Max Tenure | Maximum Loan Amount |
|---|---|---|---|
| HDFC Bank Car Loan Rates ⊕ Compare | 13.75% Fixed | ₹ 1,860 for 7 years | 100% of ex-showroom price |
| SBI Car Loan Rates ⊕ Compare | 7.25% Floating | ₹ 1,522 for 7 years | 85% of on-road price |
| ICICI Bank Car Loan Rates ⊕ Compare | 7.90% Fixed | ₹ 1,554 for 7 years | 100% of ex-showroom price |
| Axis Bank ⊕ Compare | 7.45% Fixed | ₹ 1,531 for 7 years | 100% of on-road price |
| IndusInd Bank ⊕ Compare | 7.00% Fixed | ₹ 1,980 for 5 years | 85% of ex-showroom price |
| Kotak Bank ⊕ Compare | 6.50% Fixed | ₹ 1,957 for 5 years | 90% of ex-showroom price |
| PNB ⊕ Compare | 6.65% Floating | ₹ 1,492 for 7 years | 85% of on-road price |
| Union Bank of India ⊕ Compare | 7.40% Floating | ₹ 1,529 for 7 years | 85% of on-road price |
| Central Bank of India ⊕ Compare | 7.25% Floating | ₹ 1,522 for 7 years | 90% of on-road price |
| Andhra Bank ⊕ Compare | 7.40% Fixed | ₹ 1,529 for 7 years | 85% of on-road price |
| IDBI Bank ⊕ Compare | 7.35% Fixed | ₹ 1,526 for 7 years | 90% of ex-showroom price |
| Federal Bank ⊕ Compare | 8.50% Fixed | ₹ 1,584 for 7 years | 95% of ex-showroom price |
| Bank of India ⊕ Compare | 6.85% Floating | ₹ 1,502 for 7 years | 85% of on-road price |
| Bank of Maharashtra ⊕ Compare | 7.30% Floating | ₹ 1,524 for 7 years | 90% of on-road price |
| Corporation Bank ⊕ Compare | 7.40% Floating | ₹ 1,529 for 7 years | 85% of ex-showroom price |
| Indian Bank ⊕ Compare | 9.65% Floating | ₹ 1,642 for 7 years | 85% of on-road price |
| OBC ⊕ Compare | 6.65% Floating | ₹ 1,492 for 7 years | 85% of on-road price |
| Bank of Baroda ⊕ Compare | 7.00% Floating | ₹ 1,509 for 7 years | 90% of on-road price |
| United Bank of India ⊕ Compare | 8.60% Floating | ₹ 1,589 for 7 years | 85% of on-road price |
Lowest Car Loan Rates
As per the current rates, Kotak Bank offers car loans at a lowest rate of 6.50 %. The rates at which you get a car loan depends on various factors such as loan amount, net monthly income, work experience, and CIBIL score. Typically banks charge a lower car loan rate for higher loan amount and for employees working with reputed organisations. Other banks which provide lowest car loan rates are OBC, PNB and Bank of India.
List of banks that provide car loans ranging from 6.50% to 18.00% are as follows:
| Bank Name | Interest Rate | Loan Amount |
|---|---|---|
| Kotak Bank | 6.50% - 20.00% | 90% of ex-showroom price |
| OBC | 6.65% - 7.50% | 85% of on-road price |
| PNB | 6.65% - 7.50% | 85% of on-road price |
| Bank of India | 6.85% - 8.55% | 85% of on-road price |
| IndusInd Bank | 7.00% - 18.00% | 85% of ex-showroom price |
Bank SBI
Interest Rates @7.25%
Lowest EMI Per Lakh ₹ 1,522 for 7 Years
Customer Rating 4.3/5.0
Bank HDFC Bank
Interest Rates @13.75%
Lowest EMI Per Lakh ₹ 1,860 for 7 Years
Customer Rating 4.5/5.0
Car Loan - Fee and Charges
- Processing fees – Most banks charge processing fees of ₹ 250 to up to ₹ 20,000. To get the lowest fee, compare the fees of all banks as you apply for car loan through MyLoanCare.
- Insurance premium – It is mandatory to take a car insurance policy to cover any damages to the car in case of an accident. However, the coverage and premium of various insurance policies can be different from each other. The insurance policy bundled with your car purchase might not necessarily be the best insurance policy. Hence, it is advisable to compare the insurance terms, before choosing an insurance policy for your car.
- Prepayment and foreclosure – When you want to repay a partial amount of loan before time, it is called part prepayment. In case you decide to pay the entire loan amount before time, it is called foreclosure. Car loans at a floating rate of interest do not come with any prepayment charge; however, banks may charge a prepayment penalty ranging from Nil to upto 5% of the loan amount in case of a fixed rate of interest. So, check carefully if the low interest rate car loan you get comes with high prepayment or foreclosure charges. Note that some loans cannot be repaid before time.
- Down payment – Banks offer car loans either at 80% of on-road price or 100% of ex-showroom price. However, 80% on-road is almost equivalent to 95% of ex-showroom price. You are advised to fund maximum down payment as it reduces your burden of high monthly payments.
Car Loan Interest Calculation and Formula
You can calculate the car loan interest using the mathematical formula as mentioned below:
- Flat Rate Method: Interest is calculated on the entire principal amount throughout the loan tenure.
EMI = (Principal + total interest payable) / loan tenor in month
Where Total Interest Payable = Principal x Interest Rate x Loan Tenure/100) - Reducing Balance Method: Interest is calculated on the outstanding loan amount
EMI= [P x R x (1+R)^N]/[(1+R)^ (N-1)]
Where P = Principal Amount
R = Rate of Interest
N = Loan Tenure in months
The functioning of the above-mentioned methods can be understood with the help of the following table:
| Parameters | Flat Rate Method | Reducing Balance Method |
|---|---|---|
| Loan Amount | ₹ 1,00,000 | ₹ 1,00,000 |
| Tenure | 60 Months | 60 Months |
| Rate Of Interest | 10% | 10% |
| Monthly EMI | ₹ 2,500 | ₹ 2,198 |
| Total Interest Payout | ₹ 1,50,000 | ₹ 1,31,900 |
| Savings | - | ₹ 18,100 |
Factors that affect Car Loan Interest Rate
There are a number of factors that affect car loan interest rates. These are listed below:
- Credit score : A credit score of 700 and above is considered a good CIBIL score to avail car loan. In case of a relatively low credit score, you may either get a car loan at a high rate of interest or your application for a car loan may get rejected.
- Income : Income is another factor that ensures the lender of your loan repayment ability. Thus, the higher the income, the lower would be the car loan interest rate.
- Occupation : The rate of interest varies for both salaried and self-employed borrowers. Banks generally have a high rate of interest for self-employed professionals as compared to salaried individuals.
- Existing relationship with the bank : In case you are an old customer of the lender via a savings or investment account, then it is likely that you will be offered a lower interest rate from that bank.
- Your organization's reputation : The reputation of the organization you are currently working for plays an important role in helping you grab a car loan at a lower interest rate.
How to get Best Interest Rate Car Loan?
To get the best interest rate car loan you must follow the tips as mentioned below:
- Check the best discount and offers : Always check current offers and cheapest car loan interest rates offered to employees of large reputed companies.
- Compare car loan rates based on loan amount : Some banks offer the lowest interest rate for car loans for high loan amounts. Loan amount can vary by the value of the car used for calculating LTV.
- Do not apply for a loan amount more than what you are eligible for : Applying for an amount higher than your eligibility may lead to rejection of your loan application.
- Do not apply with multiple banks : Simultaneous loan applications get recorded in your CIBIL report and can hurt your chances of getting a loan.
- Carefully decide on which type of insurance would be necessary : Check and compare the cost, coverage and claim settlement ratio of car insurance. You must avail of comprehensive, third Party, or zero dep insurance.
Car Loan Repayment Scheme
You can choose to repay the EMI of your car using any of the repayment schemes:
- EMI in arrears scheme – This is a standard method of paying EMI where the interest for a month and principal repayment is payable at or after the end of the month.
- Advance EMI scheme – Under this scheme, you pay interest and EMI at the beginning of the month. So, each month, you pay interest on the amount that you have already repaid to the bank at the beginning of the month. In case your bank charges EMI in advance, the EMI amount should be about 1% lower than that in case of EMI in arrears. For instance, , EMI per ₹ 1 Lakh loan amount on a 5 year car loan at 10% rate of interest as per EMI in arrears method comes to ₹ 2,125 while that as per EMI in advance method comes to ₹ 2,107.
- Zero interest scheme (also called 0% finance scheme) – This is one of those free lunches schemes that actually doesn't exist. So, beware of schemes that claim to offer zero interest. It is likely that the car company is offering a subsidy scheme whereby the interest is paid by it to the bank upfront. Now, you could always ask the car dealer for the same amount as a cash discount. It's like padding up the price of the car for the interest amount and marketing it under a nice name.
Car Loan Balance Transfer Rates
In case you are paying higher interest to your current lender, you can switch to another lender to pay your outstanding balance of car loan by availing of the car loan balance transfer facility starting at 6.50%. As per the current rates, Kotak Bank,OBC and PNB offer lowest rates for balance transfer.
FAQs
✅What are the extra charges on Car Loan?
Apart from rate of interest, there are two types of charges being charged by the banks.
- Car loan processing fee: This is charged when you apply for the loan. Banks charge processing fees of ₹ 3,300 of the loan amount and could be reduced depending upon your eligibility and profile.
- Car loan pre-closure fee: This is charged when you close your loan before the completion of loan tenure. Prepayment penalty charges range from nil to 5% of the outstanding amount. However, car loans at floating rate of interest do not come with any prepayment charges.
✅What are the main factors that affect car loan interest rate?
Interest on car loans depends on factors like down payment, loan tenure, credit report and your net income. High income with good CIBIL and maximum down payment can lend you a loan at low interest rate. The interest rates on a car loan, may vary from one lender to another.
✅What is a good interest rate for a car loan?
The good interest rate for a car loan is the interest rate which is lower than the average car loan interest rate. Presently, the average rate for a new & used car loan is 4.12% and 8.70% and may vary across all car loan lenders.
✅What is the current Car Loan rate of interest?
The present car Loan interest rates range between 6.50% to 20.00%. Currently, Kotak Bank offers the lowest car loan rate of 6.50%. Other banks offering lowest car loan rates are OBC, PNB and Bank of India.
✅Which bank gives the lowest interest rate for Car Loan?
As per the latest rates,Kotak Bank provides lowest car loan starting at 6.50%. Kotak Bank offers car loan up to 90% of the pricing of the car with a processing fee of ₹ 3,300.
✅Can I get the lowest interest Car Loan even if my credit score is bad?
It is difficult to get a car loan at the lowest Interest rate if your credit score is bad. However, you can bring a co-applicant to get a car loan. However, note that the co-applicant must have a good cibil score with a stable source of income, failure to repay the car loan may impact both applicants severely.
✅Can banks change the interest rate during the loan tenure for a Car Loan?
Yes, if you have availed the car loan at a floating rate of interest, banks can change the interest rate with a change in external benchmarking such as MCLR Rate. In case of fixed rate, the rate of a car loan remains the same.
Car Loan Reviews 4.3/5 by 29 customers
Sellamuthu P, Namakkal
Reviewed on 08th Sep 2018
4 / 5 stars
HDFC Bank Car Loan Availed in Aug 2018
Nimish Goswami,
Reviewed on 19th Jul 2018
5 / 5 stars
HDFC Bank Car Loan Availed in Jul 2018
Sinto Jacob, Trichur
Reviewed on 23rd May 2018
5 / 5 stars
HDFC Bank Car Loan Availed in May 2018
Shiv Machaiah, Bangalore
Reviewed on 16th Mar 2018
5 / 5 stars
Axis Bank Car Loan Availed in Jan 2017
Arnav, Ghaziabad
Reviewed on 07th Jan 2018
4 / 5 stars
SBI Car Loan Availed in Dec-18
Krishna Yadav, Guwahati
Reviewed on 30th Nov 2017
3 / 5 stars
ICICI Bank Car Loan Availed in Oct-18
Mohamed Yunus, Pondicherry
Reviewed on 22nd Nov 2017
5 / 5 stars
HDFC Bank Car Loan Availed in Nov 2017
jagmal singh makwana, Banswara
Reviewed on 02nd Nov 2017
5 / 5 stars
HDFC Bank Car Loan Availed in Oct-17
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IndusInd Bank has revised car loan rates by 1 per cent. The new car loan rates now start at 7 per cent.
*Terms and conditions apply. Credit at sole discretion of lender, which is subject to credit appraisal, eligibility check, rates, charges and terms. Information displayed is indicative and collected from public sources. MyLoanCare is an independent professional service provider and is not related to the government or government bodies or any regulator or any credit information bureau in any way. Information carried at this website is not and should not be construed as an offer or solicitation or invitation to borrow or lend. The Company does not undertake any liability with respect to the correctness of the content, information and calculations. Information is subject to change without notice. By submitting your query or using any tools or calculators, you authorize MyLoanCare to share your information with lender(s), consent for such lender(s) to access your credit information report and contact you regarding your query overriding your number being in National Do Not Call Registry. This is a free service and no charges are payable by the borrower to MyLoanCare. The Company may receive remuneration from lenders for services provided to them. Read More Read Less
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Best Bank for Car Loan in India 2018
Source: https://www.myloancare.in/car-loan/interest-rates/