Cheapest Car Loan:The prices of vehicles are going to increase in the new year, so buying a new car at the end of the current year can be a good option. Discounts are also available on many vehicles, which can be beneficial for you. Before entering the new year, if you want to take your family on a trip in a new car but the budget is limited. If you want to knock on the door of the bank to arrange funds due to shortage, then we are sharing a list of banks here. In the list, details of the car loan and the interest rate being charged by the bank were given. Apart from this, details are also given about how much monthly installment i.e. EMI will be made on car loan up to Rs 5 lakh and how much is the processing charge. You can apply for a car loan by considering these important aspects.
Where is the cheapest car loan available?
These days, banks are offering loans at annual rates between 8.45 to 13 percent to buy a new car. If we talk about cheapest car loan up to Rs 5 lakh for 5 years, UCO Bank is at the forefront. This bank is offering car loan at a starting rate of 8.45 per cent per annum, followed by banks like Union Bank of India, Canara Bank and Bank of Maharashtra at 8.70 per cent per annum. Similarly, Punjab National Bank and South Indian Bank are offering car loans at an initial rate of 8.75 percent per annum.
The processing fee for car loan in Union Bank of India, Canara, UCO, SBI and Bank of Maharashtra included in the above list is zero. In other banks, processing charge is taken according to the loan amount. EMI for car loan up to Rs 5 lakh for 5 years is different in different banks. You can check in the list below.
| New Car Loan Rates, EMI and Processing Fees | |||
| bank name | interest rate (%) | What will be the EMI on a loan of Rs 5 lakh for 5 years? | processing fee (% according to loan amount) |
| Union Bank of India | 8.70 – 10.45 | 10,307 – 10,735 | Nil |
| Punjab National Bank | 8.75 – 10.60 | 10,319 – 10,772 | Up to 0.25% (Rs. 1,000 – Rs. 1,500) |
| Bank of Baroda | 9.00 – 12.70 | 10,379 – 11,300 | Up to Rs 750 |
| Canara Bank | 8.70 – 12.70 | 10,307 – 11,300 | Nil |
| Bank of India | 8.85 – 12.10 | 10,343 – 11,148 | 0.25% (Rs. 1,000 – Rs. 5,000) (Processing charges are waived off for individuals having CIBIL personal score 700 and above or -1/0) |
| UCO Bank | 8.45 – 10.55 | 10,246 – 10,759 | Nil |
| State Bank of India | 9.10-10.15 | 10,403-10,660 | Nil |
| IDBI Bank | 8.90-9.70 | 10,355 – 10,550 | Rs 2,500 |
| Bank of Maharashtra* | 8.70 – 13.00 | 10,307 – 11,377 | Nil |
| Indian Overseas Bank** | 8.85 – 12.00 | 10,343 – 11,122 | 0.50% (Rs 500 – Rs 5,000) |
| ICICI Bank | 9.10 onwards | 10,403 onwards | Up to 2% |
| HDFC Bank | 9.20 onwards | 10,428 onwards | Up to 1% (Rs 3,500 – Rs 9,000) |
| Karnataka Bank | 9.13-11.61 | 10,411 – 11,024 | 0.60% (Rs 3,000 – Rs 11,000) |
| Federal Bank | 8.85 onwards | 10,343 onwards | Rs 2,000 – Rs 4,500 |
| Punjab and Sind Bank*** | 8.85 – 10.25 | 10,343 – 10,685 | 0.25% (Rs 1,000-Rs 15,000) |
| South Indian Bank | 8.75 onwards | 10,319 onwards | 0.75% (Max: Rs 10,000) |
| IDFC First Bank | 9.99 onwards | 10,621 onwards | Up to Rs 10,000 |
| City Union Bank | 10.00-11.80 | 10,624-11,072 | 1.25% (Min: Rs 1,000) |
| Rates and charges as of 26th December 2024 | |||
,Note: The list related to car loan interest rates has been prepared by Paisa Bazaar.com. The details of all the banks included in the list are till December 26, 2024. Before deciding to take a car loan, confirm the exact information related to the interest rate from the official website and branch of the bank because vehicle companies keep changing the prices from time to time, due to which banks also keep changing the auto loan rates.)
Also read: FD Rates: Want to earn good income by investing money in FD, these small finance banks are giving interest up to 9.5%
You can benefit from better credit score
Keep in mind that the loan interest rate depends on the credit score of the applicants. If your credit score is above 750 i.e. it is better, then you are more likely to get a loan at a lower interest rate.
Some banks offer a concession of 0.25% in car loan interest rate to existing housing loan customers and corporate salary account holders.
Punjab and Sind Bank is offering up to 50% concession on processing fees to car buyers under the PSB Apna Vahan Sugam scheme.
Also read: EPFO: Government is going to launch ELI scheme soon, if UAN number is not activated by this date, then you will not get the benefit.
Keep these things in mind while taking a loan
While taking a loan, definitely compare the interest rates or other offers of different banks. There is no need to ask anyone or take a loan from the same bank in which you have an account. Choose the bank where there is a better offer.
While taking a car loan, ‘Zero Down Payment’ is an offer which easily attracts all the customers. But try to stay away from this. Without giving down payment, the loan will cost you more and you will have to pay more interest on it.
Taking loan for long term is not a good idea. Here your interest keeps increasing. Tenure of 3 to 5 years is right. Try to finish the loan soon.
After purchasing a car, customers often get it modified as per their needs. Such as better music system, new types of accessories. In today’s era, many banks and NBFCs also give loans for such expenses after purchasing a car, but this is not a good option.
