auto credit: SBI vs ICICI Bank vs HDFC Bank vs Bank of Baroda: interest rates of the best banks on car loans

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For many, owning a car is no longer a luxury, it is rather a necessity. And buying a car would probably be the second most expensive purchase a person will make right after buying a home. Many finance this car purchase by taking out a loan. Among the financial institutions that offer cars, the loans are the banks. As with any other loan, a key factor to consider when taking out a car loan is the interest rate offered on the loan.

Those looking to take out a car loan should look for the lender who is willing to give you the right loan amount at the lowest interest rate. Here are the State Bank of India (SBI) auto loan interest rates,

, HDFC Bank and Baroda Bank.

SBI car loan

According to the SBI website, to qualify for an SBI car loan, you must be a person between the ages of 21 and 67. For regular employees, the maximum sanctioned amount will be 48 times net monthly income. The minimum annual net income of the applicant or co-applicant, if applicable, must be at least Rs 3,000,000, according to the SBI website.

For professionals, freelancers and businessmen, the maximum sanctioned amount will be 4 times net profit or gross taxable income according to ITR after adding amortization and repayment of all existing loans. For people engaged in agriculture and related activities, the maximum amount will be 3 times the annual net income.

Sbi-carloan2

ICICI Bank

New car loans at fixed interest rates are available from ICICI Bank. The interest rate on a fixed rate auto loan will remain constant during the term of the loan. The interest rate varies between 7.50 and 9% depending on seniority and other factors. Interest rates on new cars are determined by factors such as auto segment, CIBIL score, customer relationship, length of loan, and more, according to the ICICI bank website.

ICICI-carloan

Baroda Bank

Bank of Baroda provides funding of up to 90%, according to its website. The interest rate varies between 7% and 9.75%. Customers who do not purchase credit insurance coverage will be charged a risk premium of 0.05%, in accordance with applicable standards.

BOB-auto-ready

HDFC Bank

Within six months of receiving the car loan, no foreclosure is allowed for HDFC Bank car loan customers. According to the HDFC Bank website, pre-closings in the year following the 7th IME would be billed at 6% of the principal outstanding. Pre-closing within 13-24 months of the first IME, 5% of the principal unpaid and 3% of the principal unpaid for pre-closures after 24 months from the first IME.

HDFC-loan-car

Eligibility

Your auto credit eligibility is determined by your current income, the value of the car, and an assessment of your repayment capacity based on your current expenses. The loan amount and the interest rate may vary from bank to bank. In most situations, financial institutions like banks lend up to 80% of the cost of the car on the road. Some lenders claim to lend up to 100% of the cost of the car.

IME payments

When using a car loan, it is essential that you choose an Equivalent Monthly Payment (EMI) that matches your repayment capacity. Don’t choose a lower IME and a longer loan term just because you have the option; only do this if it’s something you can afford. This is because a lower EMI and longer loan term will result in unnecessarily higher interest expenses. Whatever amount you borrow, make sure your IMEs are manageable and don’t strain your resources. On the other hand, you should avoid going for higher IMEs at the cost of sacrificing monthly contributions for crucial financial goals. Regardless of the amount you borrow, you first need to make sure that your IMEs are easily payable and don’t strain your finances.

Mandate

Loan providers typically offer new car loans with terms ranging from one to seven years. You have the flexibility to choose the loan term that best suits your needs.

Processing fee

When applying for a car loan, many banks charge application fees. Before choosing a loan, be sure to assess the processing costs. Some banks are offering to waive processing fees or even lower their current rates during the holiday season.

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