car loan: SBI vs ICICI Bank vs HDFC Bank vs Bank of Baroda: car loan interest rates from major banks

For many, owning a car is no longer a luxury, rather it has become a necessity. And buying a car would probably be the second most expensive purchase a person will make in their lifetime right after buying a house. Many finance this car purchase by taking out a loan. Among the financial institutions that offer car loans are 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 amount of loan at the lowest interest rate. Here are the State Bank of India (SBI) car loan interest rates,

, HDFC Bank and Bank of Baroda.

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 the net monthly income. The minimum annual net income of the applicant or co-applicant, if any, must be at least Rs 3,00,000, according to the SBI website.

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

ICICI Bank

New car loans with a fixed interest rate are available from ICICI Bank. The interest rate on a fixed rate car loan will remain constant for the life 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 car segment, CIBIL score, customer relationship, loan term, etc., according to the bank’s website ICICI.

Bank of Baroda

Bank of Baroda offers up to 90% financing, according to its website. The interest rate varies between 7% and 9.75%. Customers who do not take out credit insurance will be charged a risk premium of 0.05%, in accordance with the standards in force.

HDFC Bank

Within six months of receiving the car loan, no foreclosures are allowed for HDFC Bank car loan customers. According to the HDFC Bank website, pre-closings within one year of the 7th EMI would be charged at 6% of the outstanding principal. Pre-closing within 13 to 24 months of the first EMI, 5% of the outstanding principal and 3% of the outstanding principal for pre-closings after 24 months from the first EMI.

Eligibility

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

EMI payments

When you get a car loan, it’s essential that you select equivalent monthly payments (EMI) that match your ability to repay. Don’t choose a lower EMI and longer loan term just because you can; only do it if it’s something you can afford. This is because a lower EMI and longer loan term will lead to unnecessarily higher interest expense. Regardless of the amount borrowed, make sure your EMIs are manageable and don’t strain your resources. On the other hand, you should avoid opting for higher EMIs at the cost of sacrificing monthly contributions to crucial financial goals. Regardless of the amount borrowed, you must first ensure that your EMIs are easily repayable and do not strain your finances.

Mandate

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

Processing fee

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