Key things to consider when taking out a car loan; Check the lowest interest rates and EMIs
The end of the year is the best time to buy a new car. This is when deep discounts are offered on vehicles to customers before new stock hits showrooms. If you’re planning to buy a new car, now might be the best time to ask for rebates from automakers.
Once you have selected a car based on your budget and comfort, the second thing that comes to mind is financing. Often people need a car loan to buy their favorite vehicles. Here are some things to consider when deciding 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 give you a good loan deal. A good credit rating assures lenders that lending to you is less risky. Keep your credit score at healthy levels as it can earn you benefits like fast approvals, pre-approved offers, and more.
The repayment term is essential. If you choose a longer duration, your EMIs will be weaker. However, you will pay higher interest. On the other hand, if you choose a shorter term, although the EMIs are higher, you will be able to repay the loan early. Lenders generally charge a lower interest rate on the car loan if you choose a shorter term.
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Amount of the loan
The loan amount should be chosen carefully to avoid excessive financial burden and loan repayment problems. The higher the loan amount, the higher your EMIs will be. You may need to keep your loan term longer to avoid paying high EMI amounts.
Existing lenders will have all your contact details and you might also have a good relationship. Lenders may provide auto loans at lower interest rates, and they may also consider waiving some of the additional fees you may otherwise incur with the lender you have no relationship with.
If your income is good, you will have no financial problem repaying your loans. It’s easy for lenders to assess your eligibility and provide you with a loan quickly. Take the loan based on your income and repayment capacity to avoid financial hassles later.
The table below compares the interest rates of more than 20 banks, including SBI, HDFC Bank and ICICI Bank, as well as EMIs. You can make a decision based on your needs.
Interest Rate and EMI on New Car Loan
Compiled by BankBazaar.com
Note: Interest rates on car loans for all listed public and private banks (ESB) taken into account for the compilation of data (excluding small financial banks and EV loans); Banks whose data is not available on their website are not taken into account. Data collected from the respective bank’s website as of November 1, 2022. Banks are listed in ascending order based on interest rate, i.e. the bank offering the lowest interest rate on the car loan is placed at the top and the highest at the bottom. The lowest interest rate offered by banks regardless of the loan amount is shown in the table. The EMI is calculated on the basis of the interest rate mentioned in the table for a Rs 10-Lakh loan with a term of 7 years (the processing fee and other charges are assumed to be zero for the calculation of the EMI ); The interest mentioned in the table is indicative and may vary depending on the general conditions of the bank.