Are you thinking of purchasing a car this year? If yes, then about the different car loans offered by the banks or Non-Banking Financial Companies (NBFCs). Every bank gives its car loan interest rate as per loan amount, tenure, credit score and the type of interest rate. Card loans start from 8.70% p.a. Well, the process to apply for a car loan is very simple with every bank. Just the car loan interest rate is the thing that you should consider. Here is the list of interest from the different banks.
Best Car Loan Interest Rates in 2024:-
Here are the best car loan interest rates offered by leading banks across India:
State Bank of India
- Interest Rate: 8.75% p.a. onwards
- EMI for Rs.1 lakh for 7 years: Rs.1,596 onwards
Indian Overseas Bank
- Interest Rate: 8.85% p.a. onwards
- EMI for Rs.1 lakh for 7 years: Rs.1,601 onwards
Jammu Kashmir Bank
- Interest Rate: RLLR + 0.75% p.a. onwards (floating), RLLR + 0.25% p.a. onwards (fixed)
- EMI for Rs.1 lakh for 7 years: Contact the bank
Canara Bank
- Interest Rate: 8.70% p.a. onwards
- EMI for Rs.1 lakh for 7 years: Rs.1,594 onwards
HDFC Bank
- Interest Rate: 8.95% p.a. onwards (Rack Interest)
- EMI for Rs.1 lakh for 7 years: Rs.1,608 onwards
ICICI Bank
- Interest Rate: 9.10% p.a. onwards
- EMI for Rs.1 lakh for 7 years: Rs.1,614 onwards
Karur Vysya Bank
- Interest Rate: 9.55% p.a. onwards
- EMI for Rs.1 lakh for 7 years: Rs.1,637 onwards
South Indian Bank
- Interest Rate: Fixed: 8.75% p.a. onwards, Floating: 9.27% p.a. onwards
- EMI for Rs.1 lakh for 7 years: Rs.1,596 onwards(Fixed), Rs.1,623 onwards(Floating)
IDBI Bank
- Interest Rate: 8.80% p.a. onwards (floating), 8.80% p.a. onwards (fixed)
- EMI for Rs.1 lakh for 7 years: Rs.1,599 onwards
Karnataka Bank
- Interest Rate: 8.88% p.a. onwards
- EMI for Rs.1 lakh for 7 years: Rs.1,611 onwards
Federal Bank of India
- Interest Rate: 8.85% p.a. onwards
- EMI for Rs.1 lakh for 7 years: Rs.1,601 onwards
Tamilnadu Mercantile Bank
- Interest Rate: 10.70% p.a. onwards
- EMI for Rs.1 lakh for 7 years: Rs.1,697 onwards
Punjab National Bank
- Interest Rate: Floating: 8.75% p.a. onwards, Fixed: 9.75% p.a. onwards
- EMI for Rs.1 lakh for 7 years: Rs.1,596 onwards (Floating), Rs.1,647 onwards(Fixed)
Union Bank of India
- Interest Rate: 8.70% p.a. onwards
- EMI for Rs.1 lakh for 7 years: Rs.1,594 onwards
Axis Bank
- Interest Rate: 9.25% p.a. onwards
- EMI for Rs.1 lakh for 7 years: Rs.1,619 onwards
Bank of Baroda
- Interest Rate: Fixed: 8.80% p.a. onwards, Floating: 8.80% p.a. onwards
- EMI for Rs.1 lakh for 7 years: Rs.1,599 onwards
Bank of India
- Interest Rate: 8.75% p.a. onwards
- EMI for Rs.1 lakh for 7 years: Rs.1,596 onwards
Types Of Car Loans:
As you see, banks provide an interest rate for fixed and floating car loans. There are two types of car loans: fixed and floating (or variable). Here’s an overview of each type:
Fixed Interest Rate Car Loan
- In this car loan, the interest rate remains constant throughout the loan tenure.
- The borrower knows the exact amount they have to pay every month to the bank. It is easy to make the budget.
- These types of car loans provide stability and protection against interest rate fluctuation in the market.
- If the market interest rate decreases, the borrower misses the chance to potentially save some amount.
Floating Interest Rate Car Loan
- In this car loan, the interest rate is tied to a benchmark interest rate, such as the repo rate set by the central bank.
- The interest rate fluctuates periodically as per the benchmark rate. There is no fixed amount to pay through the loan tenure.
- There is profit in the floating car loan when the market interest rate decreases. Hence, floating-rate loans may benefit from lower interest costs and reduced monthly payments.
- If the market interest rates rise, it means higher interest costs and increased monthly payments.
- It offers potential savings when the market interest rates decrease.
Choosing between a fixed car loan or a floating card loan is very confusing. Although, it is an individual’s personal choice to tolerate the risk or not. One who wants a stable monthly payment then chooses a fixed interest rate car loan.
Factors Affecting Car Loan Interest Rates
1. Credit Score:
The person must make sure that he has a good credit score and qualifies for the eligibility criteria specified by the bank, as the bank can reject the loan application if you do not have a good credit score or history. A higher credit score is also linked to a lower interest rate because it shows your financial reliability.
2. Regular payments:
The first payment is the amount paid by the customer as a percentage of the total amount of the car to be purchased, and this payment affects the comprehensive interest and monthly amounts due, i.e. the cost of the loan. The monthly payments are what the person must pay regularly for the coming years, and he must ensure that there is no difficulty in making those payments regularly.
3. Interest Rate:
 Interest rates on a car loan may vary, so you should make sure to make a good comparison between different banks or lenders before making the final decision, as interest rates can affect the final price of the car, noting that interest is applied to long-term loans, and it is best to limit The loan term is in a shorter period.
4. Loan Period:
You can choose to pay the loan over different periods, which is an option that the lender provides to the customer. Generally, the payment period can vary from one to six years, and the cost of the loan must be calculated based on the period that the borrower chooses, and by his financial capabilities and ability to repay.
5. Closure Penalties:
 You should check whether the bank has any fees for closing or early repayment of the loan before applying for financing, as this is the only way to know if there are any hidden fees associated with the loan.
6. New transaction fees:
Loan applications can be accompanied by new processing fees imposed by banks, so it is best to choose a bank that charges low fees, and other fees, such as late payment fees, should also be checked.
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