The Indian economy is on the rise and so is the sale of automobiles. The young salaried consumers in India want their own set of wheels as soon they land up in a good job.
Understandably, fuelling this penchant for automobiles is the banking system which is more than happy extending loans to the customer.
State Bank and HDFC BankBSE 0.03 % are leaders in this segment, but there are many choices for the discerning customer to choose from.
To decide on which Bank for the best car loan, the customer must compare:
1. Rate of Interest
A customer should scout for the lowest rate of interest from as many banks as possible before taking a call.
Current Car loan interest rate table:
1. Rate of Interest
A customer should scout for the lowest rate of interest from as many banks as possible before taking a call.
Current Car loan interest rate table:
| BANK | RoI | CONDITION |
| HDFC Bank | 11.50% -13.75% | Depending on vehicle segment |
| ICICI Bank | 10.75% - 15.00% | For new car loans |
| Axis Bank | 11.50% | |
| SBI Car Loan | 10.40% - 10.45% | For Women & Men respectiv .. |
2. Processing fee
It's a one-time fee, but a customer should try to opt for a Bank which charges the lowest fee.
3. Prepayment Charges
Some Banks charge 4-5 percent of the total loan amount on prepayment of Car loans whereas some levy 0 percent prepayment charges. If you think you can prepay the car loan, one must opt for zero as that will reduce the total interest rate.
It's a one-time fee, but a customer should try to opt for a Bank which charges the lowest fee.
3. Prepayment Charges
Some Banks charge 4-5 percent of the total loan amount on prepayment of Car loans whereas some levy 0 percent prepayment charges. If you think you can prepay the car loan, one must opt for zero as that will reduce the total interest rate.
4. How much?
Car loans are given up to 85 percent of the car value and also based on your repayment capacity, i.e. your Income. So, if you plan to buy a Mercedes then your monthly income should be good enough to be able to service EMIs.
Even after proper due diligence, borrowers are often confused as to how much to borrow. Well, one needs to understand that the Car is a depreciating asset, so taking a bigger loan is not a very smart thing to do.
The bi ..
Car loans are given up to 85 percent of the car value and also based on your repayment capacity, i.e. your Income. So, if you plan to buy a Mercedes then your monthly income should be good enough to be able to service EMIs.
Even after proper due diligence, borrowers are often confused as to how much to borrow. Well, one needs to understand that the Car is a depreciating asset, so taking a bigger loan is not a very smart thing to do.
The bi ..
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