Car Loan Interest Rate, Types, Influencing Factors, Prepayment and Foreclosure

Updated: Aug 30,2019 17:02 IST

Car Loan Interest Rate is the rate of interest charged by the lending institution for the amount provided as car loan. Car Loan Interest Rate varies from bank to bank. More detailed information on Car Loan Interest Rate, rate of interest comparison with other banks and related details are given in this article.

Information on Car Loan Interest Rates

Car Loan Schemes provided by various banks and other financial institutions help the people to own a desired car and change a part of their life as a luxurious one. Since the loan amount can be repaid in monthly EMI payments, it is not a big burden to the people. Car loans come with  certain charges and interest rates which vary from bank to bank. Most of the banks provide easy procedure to obtain car loan and convenient rate of interests. The below table will give you updated details related to Car Loan Interest Rate and other charges related to Car Loans for most of the banks. 

Car Loan Interest Rate

9%-15%

Processing Charges

Upto Rs.10000(varies according to banks)

Late Payment Charges

Upto 2%

Loan Tenure

1-7 years

Pre-closure Charges

Varies with different banks

Prepayment Charges

0%-5%

How much is the Car Loan Interest Rate charged by Different Banks ?

Normally in India, each bank charge their own interest rates according to the base loan rates. The car loan interest rates are charges between 9%-15%. Banks provide two types of Car Loan Interest Rate. They are fixed rate and floating rate of interest. Car Loan Interest Rate with fixed rate of interest has the meaning in its own name. The rate of interest is fixed throughout the loan tenure. The EMI is fixed every month and does not change due to any market conditions. Whereas, Car Loan Interest Rate with floating rate of interest changes according to the decisions taken by the car loan lenders. The Car Loan Interest Rate changes according to the market fluctuations. Check the Car Loan Interest Rate of different banks and other financial institutions in the below table.
 

Banks or Other Financial Institutions

Car Loan Interest Rate

AXIS Bank

11%-12%

Bank of India

9.25%

Federal Bank

9.15%-9.45%

HDFC Bank

8%-13%

ICICI Bank

10.75%-15.50%

IDBI Bank

9.95%-12.05%

SBI

9.05%-12.6%

Syndicate Bank

9.10%

Sundaram Finance

8.75%

What are the Other Charges related to the Car Loan ?

Car Loan Interest Rate is the main charges which is associated with the car loan. All the charges related to the Car Loan vary from bank to bank. Apart from the Car Loan Interest Rate, the other charges which come along the car loan are processing charges, pre-closure or foreclosure charges, documentation charges and late payment charges. Some banks a charge named loan cancellation charge, if their customers even cancel their loans at the time of processing or at the later stage. Processing charges are levied by all the banks for verification and processing of the car loan. The process of application of car loan is involved with a meagre amount of charge levied as processing charge. It may be charged upto Rs.10000. Some money lenders waive and provide discounts on processing charges and financial institutions provide reduction in the rate of interest for car loan during festive periods.When a borrower pays back a partial amount or full loan amount before the due date, he/ she is charged with a prepayment or foreclosure charges. Prepayment means the part of loan is paid in advance before the tenure by the customer. Foreclosure is the completion of the car loan amount before the end of the tenure. Both the prepayment and foreclosure attract charges which is a certain percentage calculated on the amount being paid off. This charges varies from bank to bank. Some banks charge documentation charges. It is advisable to repay the car loan on time. To eliminate the delay in EMI payment, banks levy late payment charges.Most of the banks charge 2% on the loan amount for the month when a person has not paid the EMI amount. To avoid penalty charges, it is advisable to pay the EMI on time. Prepayment charges related to the car loan apart from the car loan interest rate of top two banks are given in the below table.
 

HDFC Bank

Prepayment charge









 
  • no prepayment is allowed for upto 12 months
  • 5% of loan amount for a period of 13-24 months
  • 3% of loan amount for a period above 24 months

ICICI Bank

Prepayment charge









 
  • no prepayment is allowed for upto 6 months
  • 6% of loan amount for a period of 7-12 months
  • 5% of loan amount for a period of 13-24 months
  • 3% of loan amount for a period above 24 months

 

What is the Car Loan Eligibility Criteria?

Car Loans are opted by majority of the people. Days have passed when the car was a luxury, but now it has turned out to be a necessity. Like other loans car loans doesn’t have much of strict eligibility criteria but few basic eligibility to avail a car loan.One should satisfy all the car loan eligibility criteria which is listed below.
  • The applicant for car loan must be draw a regular income in order to obtain the car loan.
  •  Applicant must be an Indian or an NRI holding Indian passport. 
  • The applicant must be of minimum 21 years of age and must not exceed 65 years. 
  • Proper salary certificates in case salaried people and bank records in case of self employed people must be submitted for availing the bank loan.
  • In the same business for one year or two years in the same business
  • Get a pay that can make minimum repayment every month

What is the Car Loan Interest Rate for Pre-owned Car Loans ?

Purchasing a used car or pre-owned car is common now. One should consider few aspects when purchasing a pre-owned car from a third party. It should be checked the car which is to be bought is not a stolen one. Also the condition of the used car must be good, otherwise it is not worth applying loan for a pre-owned car. The loan amount provided is always lesser for the pre-owned car than the new car. Also the car loan interest rate for pre-owned cars would at a rise due to the risks involved. The car loan interest rate of few banks for used or pre-owned car loans are provided in the below table.
 

Banks

Car loan interest rate

HDFC Bank

13% fixed

SBI Bank

12.6% floating

ICICI Bank

15.5% fixed

Kotak Bank

17% fixed

Union Bank of India

12% floating

How much Amount does Banks Provide as Car Loan?

The maximum amount approved by the banks vary from bank to bank. Mostly banks approve 80% to 90% of cars on road price. The fund provided by the banks depend on price and type of the car, also whether it is a new car or pre owned car. Rarely, some banks provide 100% of the car’s showroom price. In India, the young salaried people who apply for the car loan are in a rise. The car loan amount depends upon your repayment capacity and the monthly income. Since car is a depreciating asset, it is not advisable to take high amount as car loan. It would be feasible to repay the loans if the monthly EMI do not exceed 20% of your monthly income. It is wise to consider all the aspects before applying for the car loan.

Which are the Top Banks and other Financial Institutions that provide Car Loans ? 

The banks and financial institution are in a big number like how there is a high demand for purchasing of the cars through car loans. All the banks provide different schemes for car loans at varied rate of interest and charges. Few banks does not levy any extra charges to attract the borrowers. Consider and compare the car loan interest rate of all the banks before applying for car loan. Some of the top banks providing car loans are given as follows.
  • HDFC Bank
  • ICICI Bank
  • SBI
  • AXIS Bank
  • Magma Fincorp
  • Federal Bank

Is it possible to negotiate Car Loan Interest Rate ?

It is possible to negotiate the car loan interest rates. The applicant may have had repaid the earlier loans on time. The credit history reflecting correct payment may help the applicants to obtain the car loan easily and also at low rate of interest. Person with very good credit history, better income and repayment capacity can always try to negotiate for lower car loan interest rates. Auto refinancing is one of the option to reduce the car loan interest rates. One can new loans at lower rate of interest to pay off the old loans. This ultimately reduces the monthly EMI payment. Try to negotiate the car loan interest rate with the lender before submitting the documents. This would provide you a chance to re-consider the other bank if the car loan interest rates are not feasible.  There are always several choices to be made as many number of banks and financial institutions waive offers and festive discounts frequently. 

What are the Factors Influencing Car Loan Interest Rate ?

When the income level of the applicant for car loan is high, then possibly he/she will be able to repay the loan amount easily, thus the rate of interest would be low. The applicants’ earlier loan history and their creditworthiness is high, then the bank might charge low rate of interest. The other factors also influence the loan amount equally.
There are certain factors that have a greater influence over the car loan interest rate. The factors are listed below.
  • Loan amount
  • Income of the applicant
  • Tenure
  • Car model and age
  • Credit worthiness of the applicant

What are the Documents to be Submitted for Availing a Car Loan ?

Every loan that is being processed requires few documentation process and paperworks. The documents required when applying for car loan are
  • Signed application form along with the photograph of the applicant
  • Photo ID proof
  • Age proof
  • Residential proof
  • Income proof for Salaried
  • Salary Slip of last three months
  • Form 16 or Income Tax Returns
  • Income proof for Self-Employed
  • Income Tax Returns of Last three months
  • Last three years’ Balance sheet and Profit and Loss Account certified by a C.A.
  • Documents with Vehicle Information
  • A copy of Vehicle Motor Insurance and your Driving License 

General Related News

Aadhar Card Update - How to Update/Correction Aadhaar Card Name, Address, DOB, Mobile Number Details Online at UIDAI

22 days ago
Aadhar Card Update or Update Aadhaar: Know detailed Aadhar Card Update Procedure about How to Update/Correction Aadhaar Card Name, Address, DOB, Mobile Number Details Online at ....

Sardar Patel Scholarship 2020 - Apply Online for Sardar Vallabhai Patel Scholarship 2020 for Student Pursuing Graduation

65 days ago
Sardar Patel Scholarship 2020 for Students Pursuing Graduation: Buddy4Study India Foundation’s Sardar Patel Scholarship 2020 for Student Pursuing Graduation should be applied ....

Aadhar Card - Latest Aadhaar Card Updates and Complete Aadhaar Card Information, Number Online

72 days ago
Aadhar Card - Aadhaar Card is the unified national identity issued by UIDAI for every Indian resident. Aadhar Card has become essential for every single process and transactions, ....

Aadhar Card Download: How to Download Aadhaar Card Online and Print out e-Aadhaar at UIDAI.gov.in

79 days ago
Aadhar Card Download - Step by Step Procedure to Download Aadhaar Card by Name, DOB, Entrollment Number, Mobile Number or Without Mobile Number at UIDAI Website. UIDAI is an easier ....

Check Aadhar Card Status Online at UIDAI, Enquiry Aadhar Card Update Status

83 days ago
Aadhar Card Status: Aadhaar Card Status reveals the position of your Aadhar Card application, Check Aadhar Card Update Status by Name, Phone Verification Online and any time after ....

Chandra Grahan 2020: Chandra Grahan Lunar Eclipse on June 5, Chandra Grahan Date, Timing in India

115 days ago
Chandra Grahan 2020: The second 2020 Chandra Grahan Lunar Eclipse is set to take place on June 05. The first lunar eclipse took place on 10th January earlier year. On 5th June ....

OSBCL Odisha Liquor Home Delivery Order Online at osbc.co.in - How to order liquor online in Odisha

116 days ago
OSBCL Online Delivery: Odisha State Beverage Corporation(OSBC) Limited resumed its work on Saturday to restart sales of online liquor delivery in Odisha. Liquor home delivery in ....

Aadhar Card for Children. How to Apply Online and Offline Mode and Other Details

118 days ago
Aadhar Card for Children as well as an adult is a voluntary process and can be enrolled for even a newborn baby. Aadhar Card for Children can be got with the proof of address and ....

Aadhar Virtual ID for Aadhar Authentication How to generate VID, Retrieve and More

118 days ago
Aadhar Virtual ID is the 16 digit number which can be generated only by the Aadhar card holders. Aadhar Virtual ID is outlined along with the Aadhar number for the privacy and ....

How to Lock and Unlock Biometrics in Your Aadhar Card Different Methods in Detail

118 days ago
UIDAI had set up a feature for locking and unlocking the cardholders' biometric information. Aadhar Lock and Unlock Biometrics information in Aadhar Card can be done through ....

Trending News

MkvCinemas 2020: MkvCinemas Illegal Bollywood, Hollywood HD Movies Download Website, MKV Cinemas News - Fresherslive

2 days ago
MkvCinemas 2020 - MkvCinemas is a popular torrent website that offers movies to download Illegally, Mkv Cinemas website provides its users the latest movies avaiable in Hollywood, ....

Moviescounter 2020: Illegal Bollywood, Hollywood HD Movies Download Movies counter Website, Moviescounter Latest News

2 days ago
Moviescounter 2020 - Moveiscounter is a public torrent website to download Movies Counter Illegal huge collection of Hollywood, Kollywood and Tollywood movies from Moveiscounter ....

Putlocker 2020: Watch and Download Illegal HD Movies Putlocker Website for Free, Television Series, Putlocker Latest News

2 days ago
Putlocker 2020: Putlocker is a hosting website for piracy files and streaming Movies, Television Series for Free to Users. The Putlocker platform operates under various URLs and ....

GoMovies 2020: GoMovies Illegal Hollywood, Bollywood, Malayalam HD Movies Download Website, Latest GoMovies News

2 days ago
GoMovies 2020: GoMovies is an Illegal website to download Hollywood, Netflix Movies or TV series, Gomovies Malayalam Movies download for Free and Find Latest GoMovies website movies, ....

Soap2day 2020: Soap2day Illegal HD Movies Download Website, Latest Soap2day Movies News - Fresherslive

2 days ago
Soap2day 2020: Soap2day is a torrent website to download Hollywood movies and shows and watch Soap 2 day Movies Free Online from soapgate org. The Soap2day platform offers users ....

Wapking 2020: Free Bollywood Movies MP3 Songs Download, Wapking Illegal HD Movies Download

2 days ago
Wapking 2020: WapKing is an illegal website Which allows users to download Wapking MP3 Songs, Ringtone for free. WapKing com consists of songs from all over the country. WapKing ....

Filmy4wap 2020: Filmy4wap Illegal HD New Bollywood Movies Download, Latest Filmy4wap Movies News

2 days ago
Filmy4wap 2020: Filmy4Wap is a piracy websites which allow users to download Movies Online Illegally from Filmy4wap xyz. Filmy4Wap Leaks to download New Bollywood Movies, English, ....

Movieswood 2020 - Movies wood Download Illegal Tamil HD Movies, Telugu HD Movies, HD MP4, Latest Movies wood com Website Movies News

2 days ago
Movieswood 2020 - Movieswood is a popular website offering an extensive Movies Wood collection of Tamil HD Movies and Telugu Movies wood films from Movies wood com. On top of this, ....

Cinemavilla 2020: Illegal HD Bollywood, Hollywood Movies Download Cinemavilla Website, Latest Movies News at Cinemavilla com

2 days ago
Cinemavilla 2020: Cinemavilla is a piracy website that falls under the torrent websites which incorporate all Bollywood, Cinemaviilla Hollywood, and south Indian movies. Cinema ....

PagalMovies 2020 - PagalMovies Illegal Download Bollywood, Hollywood, English, Bengali HD Movies at Pagalmovies in, Latest PagalMovies Website News

2 days ago
Pagalmovies 2020: Pagalmovies in, Pagalmovies com is an infamous piracy site that makes copyrighted content available to the users before or during the release of new films in ....

Home Loan


FreshersLive - No.1 Job site in India. Here you can find latest 2020 government as well as private job recruitment notifications for different posts vacancies in India. Get top company jobs for both fresher and experienced. Job Seekers can get useful interview tips, resume services & interview Question and answer. Practice online test free which is helpful for interview preparation. Register with us to get latest employment news/rojgar samachar notifications. Also get latest free govt and other sarkari naukri job alerts daily through E-mail.