The year-end is the best time to buy a new car. It is when heavy discounts are offered on the vehicles to customers before the new stock comes to showrooms. If you are planning to buy a new car, this could be the best time to ask for discounts from car companies.
Once you select a car based on your budget and comfort, the second thing that comes to mind is funding. Often people need a car loan to purchase their favourite vehicles. Here are a few things you must take into consideration when you decide to apply for a car loan.
Your credit score is essential. If you have a credit score of 750 and above, lenders will be keen to offer you a good loan deal. A good credit score ensures lenders that lending to you is less risky. Keep your credit score at healthy levels, as it can fetch you benefits such as quick approvals, pre-approved offers, etc.
The repayment tenure is vital. If you opt for a longer term, your EMIs will be lower. However, you will pay higher interest. On the other hand, if you choose a shorter tenure, though the EMIs are higher, you will be able to repay the loan early. Lenders typically charge a lower interest rate on the car loan if you choose a shorter tenure.
A loan amount must be chosen carefully to avoid too much financial burden and issues in loan repayment. The higher the loan amount, the higher your EMIs will be. You may have to keep your loan tenure longer to avoid paying high amounts EMIs.
Existing lenders will have all your details, and you might also have a good relationship. Lenders may give car loans at lower interest rates, and they might also consider waiving off some of the additional charges that you might have to pay otherwise with the lender with whom you have no relationship.
If your income is good, you will not have any financial issues repaying your loans. It is easy for lenders to assess your eligibility and offer you a loan quickly. Take the loan based on your income and repayment capacity to avoid financial hassle later.
The table below compares the interest rates of more than 20 banks, including SBI, HDFC Bank and ICICI Bank, along with EMIs. You can take a decision based on your requirements.
Interest Rates & EMIs on New Car Loan
Compiled by BankBazaar.com
Note: Interest rate on Car Loan for all listed (BSE) Public & Pvt Banks considered for data compilation (Excluding small finance banks and EV loan); Banks for which data is not available on their website are not considered. Data collected from respective bank’s website as on 01 Nov 2022. Banks are listed in ascending order on the basis of interest rate i.e. bank offering lowest interest rate on Car loan is placed at top and highest at the bottom. Lowest interest rate offered by banks irrespective of the loan amount is shown in the table. EMI is calculated on the basis of the interest rate mentioned in the table for a Rs 10-Lakh Loan with a tenure of 7 years (processing and other charges are assumed to be zero for EMI calculation); Interest mentioned in the table is indicative and it may vary depending on the bank’s T&C.