Best Car Loan in India – In good old days car was considered as a luxuries item. However, today car has become necessity even for the middle-class families. Not having a car restricts you and your family in multiple ways in your social & professional life.
Thanks to the car loan. Now you can fulfill your dream of buying car easily. Car Loan is available for new cars well as used car. You just need to provide income proof to avail a car loan. There are multiple financial institution and banks in India that provides car loan facility. Among the range of financial institutions and banks, here is a list of 7 Best Car Loan in India 2020 and How to select best car loan in India.
How to select Best Car Loan in India?
In order to select best car loan in India you need to consider following factors.
Interest Rate – Interest rate is one of the key differentiation while selecting a car loan. It is available with fixed and floating rate. It is always advisable to go for floating rate car loan with reducing balance. The floating rate interest varies from 8.5% to 11.50%.
Processing Fees and Time – The processing fees and time for processing car loan is another important factor of consideration. The processing charge is around 0.5% of the loan amount. However, few bank charges higher amount up to Rs.10000.
Loan Amount – You also need to consider maximum loan amount that is offered by bank. Most of the bank ask to make down payment of 5% to 10%. This amount is also called as margin. Some banks provide 100% finance of the ex-show room price. You need to pay additional amount such as duty, RTO passing charges and insurance amount.
Loan Tenure – The maximum loan tenure is 7 years. Your EMI will be low if you opt for longer period loan but you need to pay higher interest amount.
Prepayment or Foreclosure charges – Prepayment charges applicable on car loan varies from bank to bank. The charges are in range of 5-8%. You need to check prepayment charges applicable on car loan. Additionally, also look at the foreclosure charges.
Special Features – Many bank offers special features on these types of loan. You can check available features before taking a loan.
Also Read – Car Insurance Policy – Unusual Things you should know
7 Best Car Loan in India 2020
#1 SBI Car Loan
SBI is one of the largest public sector bank offering car loan. SBI provide finance up to 85% of the on road price. One of the major advantage of SBI car loan is processing charge is NIL. In addition to that SBI does not impose any pre-closure charges. Key features of SBI car loan are given below.
| Eligibility | Anyone from Age 21 years to 60 years |
| Interest rate | 9.25% floating |
| Pre-closure charges | NIL |
| Loan Term | 7 years |
| Processing Fees | NIL |
| Maximum Loan amount | Up to 85% of the on road price |
#2 HDFC Bank Car Loan
HDFC Bank is one of the largest private sector bank in India. HDFC offers range of services to customer including car loan. The car loan offered by HDFC is with attractive interest rate and minimum documentation. The loan approval process is very fast. Key features associated with HDFC Bank Car Loan are given below.
| Eligibility | Anyone from Age 21 years to 60 years |
| Interest rate | 9 to 10.25% floating |
| Pre-closure charges | NIL after 2 years |
| Loan Term | 7 years |
| Documentation Charges | Rs.600 |
| Maximum Loan amount | Up to 100% of the ex-show room price |
#3 Axis Bank Car Loan
Axis Bank Car Loan is next in the list of best car loan. Axis bank offers car loan at the higher rate compared to other bank. However, they offer faster loan processing and quick disbursement. They provide finance up to 95% of the ex-show room price. Key features of Axis Bank Car Loan are given below.
| Eligibility | Age 21 years to 70 years at loan maturity |
| Interest rate | From 9.05% to 11.3% |
| Pre-closure charges | 5% of the principal outstanding |
| Loan Term | 7 years |
| Processing fees | Rs.3500 to Rs.5500 |
| Documentation Charges | Rs.300 |
| Maximum Loan amount | Up to 95% of the ex-show room price |
#4 ICICI Bank Car Loan
ICICI Bank is leading private sector bank. ICICI Bank offers car loan for new as well as pre-owned cars. The loan repayment term is flexible. The loan amount is up to 100% of the ex-show room price. Few important features of ICICI Bank Car Loan are given below.
| Eligibility | Age 23 years to 70 years |
| Interest rate | 12.85% up to 3 years, 9.3% for 3 years to 7 years |
| Pre-closure charges | 5% of the principal outstanding |
| Loan Term | 7 years |
| Processing fees | Rs.3500 to Rs.5500 |
| Documentation Charges | Rs.300 |
| Maximum Loan amount | Up to 95% of the ex-show room price |
#5 PNB Bank Car Loan
PNB provides car loan for all types of vehicles such as car, jeep, van, multi utility and sport utility vehicle. Car Loans from PNB comes with one of the lowest interest rate in the industry. The loan tenure is also flexible. Key features of PNB Bank Car Loan are given below.
| Eligibility | Individual with minimum monthly income of Rs.20000 |
| Interest rate | Variable based on credit score |
| Pre-closure charges | NIL |
| Loan Term | 7 years |
| Processing fees | 1% of the loan amount |
| Documentation Charges | 1% of the loan amount |
| Maximum Loan amount | Up to 85% of the ex-show room price |
#6 Bank of Baroda Car Loan
Bank of Baroda offers loan for all types of vehicle including luxury cars. Bank offers loan up to 1 Cr including NRI. No prepayment or foreclosure charges applicable on Bank of Baroda Car Loan. Key features of Bank of Baroda Car Loan are given below.
| Eligibility | Age 21 years to 70 years |
| Interest rate | Starts from 8.9% |
| Pre-closure charges | NIL |
| Loan Term | 7 years |
| Processing fees | 0.5% of the loan amount |
| Maximum Loan amount | Up to 85% of the on road price |
#7 Central Bank of India Car Loan
Central Bank of India is public sector bank. It is one of the oldest commercial banks. This bank offers loan up to 75 Lakh. Car Loan from Central bank is available at very low interest rate. Key features of Central Bank of India car loan is given below.
| Eligibility | Age 18 years to 65 years |
| Interest rate | Starting from 8.7% |
| Loan Term | 7 years |
| Maximum Loan amount | Up to 90% of the on road price |
Over to you
The list given above is prepared based on the information available online. Use the list given above as a reference while you are opting for car loan. Make sure to compare all available options while opting for car loan.
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