Buying an all-new car with wonderful interiors and exteriors is no longer a dream owing to a large number of banks and non-banking finance companies (NBFCs) providing you the penny needed to do so. All you need is a handsome income and a spotless credit record to get the car in your house and maintain a high social status thereof. But don’t buy a car just because you want it. Yes, you guessed it right! You need to factor in the cost and the impact it can have on your pocket.
The cost would be the loan EMI and the interest you end up paying to the lender over the course of a debt. All that hinges on the interest rates you are charged on a loan. Being unaware on the loan repayment front can not only cause financial turmoil but also sucks you mentally. Therefore, it’s necessary to make a car loan interest rate comparison to enjoy a safe and long ride. Let’s compare car loan interest rates of different lenders and choose a best one for us.
Car Loan Interest Rate SBI
Arguably the largest and the most preferred of all, State Bank of India (SBI) brings to you the all-new cars at an interest rate of 8.90%-9.40% per annum. On segregating the interest rates, you can find 8.90% rate applicable to corporate salary account holders. Non- corporate salary account holders with a credit score of 750 and above would be given the same 8.90%, as is the case with corporate salary account holders.
For those having a score between 700-749, an interest rate of 9.10% would be applicable. While those languishing below 700 would have to deal with the top limit of 9.40%. On the other hand, the state-owned lender finances the old cars at 12.80% interest rate, irrespective of the customer type, credit score, etc.
Car Loan Interest Rate HDFC
Like SBI, HDFC Bank is also busy cheering the car loan buyers with attractive finance schemes for a wide range of vehicles. The Mumbai-headquartered private lender finances new cars at an interest rate of 9%-10.25%, depending on the chosen vehicle. The old cars will come at a higher 11.50%-17.50% interest rate.
Car Loan Interest Rate Axis Bank
Axis Bank disburses car loans at 8.50%-11.25% per annum for new cars. The interest rates vary according to the loan tenure you opt for. Loan up to 3 years and more than that will attract 10.75%-11.25% and 8.50%-10.25% per annum, respectively.
Car Loan Interest Rate ICICI Bank
ICICI Bank offers a car loan at an interest rate of 10%-12.75% per annum, according to the tenure of a debt. Loans up to 23 months, 24-35 months and 36-84 months are serviced at 12.75%, 12% and 10%, respectively. On the other hand, old vehicles are financed at 15% interest rate.
Car Loan Interest Rate Comparison Calculator
To make an effective interest rate comparison, you need to be aware of the EMI, which stands for Equated Monthly Installment, payable every month. The EMI can be calculated using loan amount, tenure and the rate of interest. So, pick out these variables and test them across the banks to find the best alternative for you. However, if you fail to do such a due diligence, you could end up paying a lot more in terms of interest. Although a new car loan can be given for as long as 7 years, you better not choose such a period as interest liability is likely to be a lot more compared to when the loan is taken for a relatively shorter period. Yes, the EMI will rise with a shorter tenure but with the prospects of saving interest looms large with a the same. And so, a shorter tenure is advisable provided you can pay off the resultant EMI every month.
Apply Only When Car Loan Interest Rate Comparison is Done
After you are done with interest rate comparison, the next step is to apply for a loan at a lender you think the best of the lot. You can apply either online or offline. Well, the online option is more convenient of the two as you can do it in a matter of few minutes. But then it’s your choice. Be ready with necessary documents which include proofs of identity, residence, income, vehicle, etc.