Car ownership can be a synonym to a person who is successful in their professional life. It symbolizes independence in convenience, and ease of use. Let’s understand the complete process of getting car loan on lowest interest rates. The process of acquiring their dream vehicle is about getting through the complexities of loans for cars. We’ll explore the most important factors of financing your car and the ways it could pave the way for your hassle-free car loan with lowest interest rates and maximum finance.
Age
To apply for car loan at lowest interest rates the age of probable customer would be between 21 to 60 for Salaried class & 21 to 65 for working professional like Doctors, Engineers, Advocates, CA, Self-Employed Business man. However, it is observed that, many banks and financial institutions may provide car loan up to the age of 75 years depending upon profile of the customer and its relation with the banks.
Income
Average salary or monthly income should be minimum 25,000.00 (Twenty-Five Thousand only). {If you are car enthusiastic person then you should go for car loan with this minimum salary} . Otherwise, team Credit Bajar suggest, to enjoy the car luxury your monthly net income should be more than 40,000/-
Down payment or Margin Money
Down payment or margin money varies from bank to bank. Currently many banks offers 100% finance on lowest interest rates. Generally banks consider only, car’s Ex-Showroom price plus RTO plus Insurance amount. However, there are many banks which finance on 80-90% of on road price.
Components consider for Car Loan
Many banks and financial institutions consider Car’s Ex-Showroom price plus RTO plus Insurance amount for considering the car loan quantum amount. Generally, banks did not consider the Extended warranty offered by the showrooms, Accessories cost etc.,
Sources of Income
It is observed that permeant nature of income like salary, business, working professional are preferred by the banks.
Deduction Norms
If Mr. A is salaried person in private limited company at Mumbai, having monthly salary gross salary of Rs. 1,00,000/- (One Lakh). However, as per his salary slip there are some mandatory deductions like, Provident Fund, Professional Fund, Income Tax, Insurance Premium, etc which is 20,000/-
Now, many banks have deductions norms up to 65% to 70% on gross salary of the applicant, in this case let’s say 65% total deduction norms. Therefore, including proposed EMI, existing other loan installments if any & current mandatory deductions from salary slips bank can maximum deduct 65,000/-.
| A | Gross Salary | 1,00,000/- |
| B | Salary Mandatory Deductions | 20,000/- |
| C | Total Permissible Deductions | 65,000/- |
| D | Other Loans EMI like Personal, Housing Loan | 30,000/- |
| E | Total Deductions (B+D) | 50,000/- |
| F | Amount available for proposed Housing EMI (C-E) | 15,000/- |
This deduction norms are not applicable to self-Employed Business, working professional, there net income in the balance sheet is already calculated by deducting salary wages, admin expenses, etc.
Credit Score
The most crucial factor when determining the rate of interest for the car loan. It also checks your creditworthiness. In general, CIBIL score of greater than 700 will be recognized in all banks and NBFC. The greater your CIBIL score, the lower your rate that is applicable to you. This is inverse proportion to the CIBIL score.
Our team strongly recommends that you keep the good CIBIL score to avail car loan at lowest interest rate.
Interest Rate
Public Sector Banks Interest Rates on Car Loan
| Bank Name | ROI (Interest Rates Starts from) | Loan Tenure |
| Bank of Baroda | 8.75 % | 84 months |
| Punjab National Bank | 8.80% | 84 months |
| Punjab & Sind Bank | 8.95% | 84 months |
| State Bank of India | 8.65% | 84 months |
| Union Bank of India | 8.86% | 84 months |
| Bank of India | 8.85% | 84 months |
| UCO Bank | 8.90% | 84 months |
| Bank of Maharashtra | 8.70% | 84 months |
| Canara Bank | 8.70% | 84 months |
| Indian Overseas Bank | 8.85% | 84 months |
Private Sector Banks Car Loan Interest Rates
| Name of Private Banks | ROI (Interest Rates Starts from) | Loan Tenure |
| HDFC Bank Ltd. | 8.70% | 84 months |
| Kotak Mahindra Bank | 7.70 to 25% | 84 months |
| ICICI Bank | 9.00% | 96 months |
| Axis Bank | 9.15 % | 84 months |
| Karur Vysya Bank | 9.35% | 84 months |
| Bandhan Bank | 10.oo% | 84 months |
| RBL Bank | 10.75% | 84 months |
| IDFC first Bank | 9% | 84 months |
In the light of aforementioned comparison SBI car loan has lowest interest rate in the Public Sector Banks category. And in case of Private sector banks HDFC car loan has lowest interest rate with easily availability.
It is observed that, many bank offers 0,20% to 0.25% concession in applicable ROI to its existing housing loan borrower/ salary account holder/ business loan borrower. Which satisfices your requirement of availing car loan on lowest interest rate. Team Credit Bajar request to check concession offered by different banks before availing car loan.
Eligibility for car loan
You requires last 2 financial years of Form no 16/ITR for salaried class public with minimum annual income of Rs. 3 lakhs. For Business/ Working professional you require last 2 financial years ITR with balance sheet.
Loan Processing Fees
It varies from bank to bank, generally processing fees waives for salary account holders of the bank and existing housing loan/ business loan borrower of the bank.
Loan Application
Many banks are using digital platforms for car loans it saves time and physical documentation. However, readers are requested to visit the branch to avail concession in ROI and processing fee offers by banks.
Conclusion
When you enter the world of buying an automobile, keep in mind that the decision goes beyond the showroom. It’s an opportunity to experience new ease, freedom and maybe even some luxury. Make sure you research as well as explore your requirements. If it’s the sleek design of an automobile or the space of an SUV, make sure that the choice you make is compatible not only with your present lifestyle, but also your goals for the future. Consider carefully the options for financing, negotiating costs, and evaluating the total cost of the ownership. In the end, choosing the perfect car isn’t only about the car itself but also the experiences and memories that it will help you create. We’re looking forward to finding your ideal car and the thrilling experiences that lie ahead out on the road!”
