Car Loan: Fulfill your dream of owning a new car; loans are available starting at 7.35%—where can you find the lowest EMI?

Car Loan: If you are planning to buy a new car on EMI, you should carefully check the interest rates offered by various banks. Doing so could help you save up to ₹1 lakh. Find out where the cheapest loans are available.

Car Loan Interest Rate: If you are considering a loan to buy a new car, do not make a hasty decision. Comparing interest rates across different banks can lead to significant savings. Currently, some banks are offering car loans with starting interest rates as low as 7.35% per annum.

It is important to note that the interest rate offered to you will depend on factors such as your credit score, employment status, income, loan amount, and loan tenure. Consequently, the interest rate may vary from customer to customer.

According to information provided by Policybazaar...

UCO Bank is offering car loans with the lowest starting interest rate of 7.35%.
This is followed by Canara Bank and Bank of Maharashtra, starting at 7.45%.
Meanwhile, Union Bank of India, Punjab & Sind Bank, and Indian Bank are offering car loans starting at 7.50%.

If you take a loan of ₹5 lakh for a tenure of 5 years, your EMI at the lowest interest rate would be approximately ₹9,983. In contrast, at a higher interest rate, the EMI could go up to ₹11,634. This means you might end up paying an extra ₹1,651 per month. Over the full 5-year tenure, this difference amounts to nearly ₹99,000. In short, simply choosing the right bank can significantly reduce the total cost of the loan.

As for private sector banks...

HDFC Bank: 8.15%
ICICI Bank: 8.40%
Federal Bank: 7.65%
Karnataka Bank: 8.14%
And IDFC FIRST Bank is offering car loans with a starting interest rate of 8.99%.

However, the interest rate offered to each customer depends on their specific profile. If you have a good credit score and a stable income, your chances of securing a lower interest rate increase.

Check the Processing Fees Too

When taking out a car loan, consider not just the interest rate but also the processing fees. Some banks charge lower fees, while others base their charges on the loan amount. Many banks are currently offering discounts on both processing fees and interest rates. Additionally, check whether the bank levies any prepayment charges for paying off the loan early.

Before finalizing a car loan, thoroughly compare interest rates, EMIs, processing fees, prepayment charges, and other loan terms. A little prudence and choosing the right bank can save you thousands of rupees over the loan tenure and make realizing your dream of owning a new car much easier.