Top 15 Banks Car Loans In India?
Introduction to Car Loans
Are you dreaming of owning a new set of wheels but don’t have the full amount saved up? Car loans might be the answer you’re looking for. Banks and several NBFCs offer car loans at competitive rates of interest, making it easier for you to drive home your dream car.
Car loans have become an integral part of the automobile industry, allowing millions of people to afford vehicles they might otherwise struggle to purchase outright. Whether you’re eyeing a brand or a pre-loved vehicle , there’s likely a car loan option tailored to your needs.
Types of Car Loans
New Car Loans
New car loans are designed for those looking to purchase a brand-new vehicle. Here are some key features:
- Financing up to 100% of the on-road price
- Lower interest rates compared to used car loans
- Longer repayment tenures, often up to 7-8 years
- No collateral security typically required
- Public Sector Banks (PSBs) usually require a 10% margin
Used Car Loans
If you’re considering a pre-owned vehicle, used car loans are available with slightly different terms:
- Financing typically available for 80-85% of the car’s value
- Applicable for cars up to 5 years old
- Slightly higher interest rates compared to new car loans
- Collateral security may be required in some cases
Key Features of Car Loans
- Eligibility: Most lenders require borrowers to be between 21 and 65-70 years old.
- Interest Rates: Rates vary between lenders, with PSBs generally offering lower rates.
- Repayment Tenure: Can range from 1 to 8 years, depending on the lender and loan type.
- Processing Speed: NBFCs typically process loans faster than PSBs.
- Pre-closure Charges: PSBs usually don’t levy pre-closure charges, but NBFCs might.
- Interest Calculation: Many lenders calculate interest on daily reducing balances.
Top Car Loan Providers in India.
Top 15 Banks Car Loans In India?
Here is a table format summarizing the Car Loans Rates & Charges:
| Name of Lender | Interest Rates (%) | EMI (Rs.):Loan Amount 5 lakhs Tenure 5 years | Processing Fee |
|---|---|---|---|
| Union Bank of India | 8.70 – 10.45 | 10,307 – 10,735 | Rs. 1,000 |
| Punjab National Bank | 8.75 – 10.60 | 10,329 – 10,772 | 0.25% (Rs. 1,000 – Rs. 1,500) |
| Bank of Baroda | 8.95 – 12.70 | 10,367 – 11,300 | Up to Rs. 2,000 |
| Canara Bank | 8.70 – 12.70 | 10,307 – 11,300 | 0.25% (Max Rs. 2,500) |
| Bank of India | 8.85 – 12.10 | 10,343 – 11,148 | 0.25% (Rs. 1,000 – Rs. 5,000) |
| UCO Bank | 8.45 – 10.55 | 10,246 – 10,759 | Nil |
| State Bank of India | 9.05 – 10.10 | 10,391 – 10,648 | Nil – Rs. 12.00 |
| IDBI Bank | 8.80 – 9.65 | 10,331 – 10,294 | Rs. 2,500 |
| Bank of Maharashtra | 8.70 – 13.00 | 10,307 – 11,377 | 0.25% (Rs. 1,000 – Rs. 15,000) |
| Indian Overseas Bank | 8.85 – 12.00 | 10,343 – 11,122 | 0.50% (Rs. 500 – Rs. 5,000) |
| ICICI Bank | 9.10 onwards | 10,403 onwards | Up to 2% |
| HDFC Bank | 9.20 onwards | 10,428 onwards | Up to 0.50% (Rs. 3,500 – Rs. 8,000) |
| Karnataka Bank | 8.88 – 11.37 | 10,350 – 10,964 | 0.60% (Rs. 3,000 – Rs. 11,000) |
| Federal Bank | 8.85 onwards | 10,343 onwards | Rs. 2,000 – Rs. 4,500 |
| South Indian Bank | 8.75 onwards | 10,319 onwards | 0.75% (Max Rs. 10,000) |
| IDFC Bank | 9.00 onwards | 10,379 onwards | Up to Rs. 10,000 |
| City Union Bank | 9.90 – 11.50 | 10,599 – 10,996 | 1.25% (Min Rs. 1,000) |
Documents Required for Car Loans.
To apply for a car loan, you’ll typically need to provide the following documents:
- Proof of Identity:
- Aadhar Card
- Voter ID Card
- Passport
- PAN Card
- Income Proof: For Salaried Individuals:
- Bank statements for the last 6 monthsSalary slips for the previous 6 monthsForm 16IT Returns for the last 2 years
- IT Returns for the last 2 years
- Financial statements of the business for the last 2 years
- Vehicle Information:
- Quotation or receipt for the vehicle to be purchased
- Additional Documents:
- Proof of insurance coverage
- Valid driving license
Tips for Choosing the Right Car Loan
- Compare Interest Rates: Shop around and compare rates from multiple lenders. Even a small difference in interest rate can lead to significant savings over the loan tenure.
- Check the Loan Tenure: Longer tenures mean lower EMIs but higher overall interest payments. Choose a tenure that balances affordable EMIs with reasonable total interest.
- Understand the Terms and Conditions: Pay attention to pre-closure charges, processing fees, and other hidden costs.
- Consider Your Credit Score: A higher credit score can help you negotiate better interest rates. Check your credit score for free
- Look Beyond Banks: NBFCs and online lenders might offer competitive rates and faster processing.
- Negotiate: Don’t hesitate to negotiate with lenders, especially if you have a good credit history or are a loyal customer.
- Read the Fine Print: Understand all aspects of the loan agreement before signing.
Conclusion
Car loans have made vehicle ownership more accessible than ever before. With a variety of options available from banks and NBFCs, you can find a loan that fits your budget and needs. Remember to compare offers, read the terms carefully, and choose a loan that aligns with your financial goals.
Whether you’re eyeing a new car, considering a used vehicle, or need a loan against your existing car, understanding the nuances of car loans will help you make an informed decision. Happy car shopping!
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