These days, if you are planning to buy a car and want to take a loan for it, then first of all it is important for you to know who is giving the loan at what interest rate. State Bank of India i.e. SBI is currently offering car loan at 9.10% annual interest. Whereas the interest rate of Union Bank of India starts from 7.90%. We are telling you at what interest rate the major banks of the country are giving car loans… If you take a loan for a longer period, you have to pay more interest. The loan should be taken for as short a period as possible, the loan should not be stretched for too long. Generally, a car loan can be taken for a maximum period of 8 years, but if the loan is taken for a longer period, i.e. 7 to 8 years, then the loan is given at a higher interest rate. This interest rate can be up to 0.50% more than the interest rate of short term loan (3 to 4 years). Loan interest rate also depends on credit score. Car loan interest rate also depends on your credit score. If the credit score is good then there is a possibility of getting loan easily and at low interest rate. Apart from this, banks usually give loans at low interest rates to those with regular income sources. While taking a loan, keep these 4 things in mind: 1. Avoid making less down payment. Initially, making less down payment seems quite attractive, because more cash is left in the bank account. But less down payment directly means bigger loan. The higher the loan amount, the more interest you will have to pay and the higher your EMI will also be. 2. Pay attention to pre-closure penalty: While taking a car loan, you should check whether the bank from which you are taking the loan charges pre-closure penalty. Pre closing means paying the loan amount before the tenure. Penalty rates are not the same for all banks. Therefore, choose your bank wisely. Consider banks that either don’t charge penalties or charge very little. 3. Check the processing fees Almost every bank charges a certain amount to process the car loan application. Sometimes it is also seen that, where some banks and agencies give car loans at low interest rates, but they charge very high processing fees while giving the loan. Therefore, before taking a loan, one should find out from the bank how much processing fee it will charge for processing the loan. 4. Special Offers and Schemes Most banks offer special offers on car loans during festive seasons or certain periods of the year. One should take advantage of such offers. These offers include waiver on processing fees and pre-closure penalties, 100% funding on the vehicle, low or 0% interest rates, special gift vouchers, etc. People who have a good credit profile can get the best deal.
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Car loan is available at less than 8% interest: Union Bank is giving loan at 7.50%, keep its tenure in mind while taking the loan.
