If you are planning to buy a car and want to take a loan from the bank for this, then the first concern is that how much monthly EMI will have to be paid and what will be the interest rate. Big private banks of India like HDFC, ICICI, Axis etc. provide car loans to the customers at affordable rates, but the interest rate and EMI structure of each bank is different.
A rough idea of taking a car loan
Nowadays, most of the customers choose a car loan of up to Rs 7 lakh for a period of 5 years, so that not only can they easily buy a car with a low amount, but the monthly installments are also not high. Banks usually offer loans at interest rates ranging from 8% to 11% per annum. In such a situation, if you take a loan of Rs 7 lakh, then the EMI can be up to Rs 14,000-15,000 every month, which also includes the interest amount.
Interest rates and EMI of major banks
The minimum interest rate on car loan in institutions like HDFC Bank, ICICI Bank, Axis Bank starts from 8.40%, which can increase depending on the CIBIL score, profile and loan tenure of the customer. For example, if a car loan of Rs 7 lakh is taken from HDFC Bank at 8.5%, then the EMI for 5 years will be around Rs 14,365 per month. Whereas in ICICI or Axis Bank these rates may be slightly higher or lower. Every bank also adds processing fees and other charges, so proper comparison is important.
Bank Name Interest Rate (Annual) Estimated EMI in 5 years (at Rs 7 lakh)
,
HDFC Bank 8.5% | ₹14,365 [1] ,
ICICI Bank 8.75% ~₹14,457 [1] ,
Axis Bank | 9.10% ~₹14,571 [1] ,
How to choose the right car loan?
While choosing a loan, it is important to look not only at the EMI but also the interest rate, processing fee and other conditions. Customers can get the right deal by improving their credit history and using EMI calculators on the websites of various banks. To get good interest rates, keep your CIBIL score high and increase the down payment as much as possible.