Private vs PSU Banks: Where you can get car loan at low interest rates

Last Updated : Feb. 28, 2020, 3:16 p.m.

Owning a car is a dream come true for many of us as it represents style and fashion statement for the people in India. In order to get into the elite class of car owners, we do a lot of things. But we fail to get the ownership of car. Even if we manage to achieve it sometimes, the deal turn out to be expensive in the absence of necessary data to compare the car loans offered by banks across India. One needs to consider a variety of things like interest rates, processing fees, prepayment charges while applying for car loan . Today, we will showcase the car loan data along with eligibility criteria and documentation required by public and private sector banks of India. Let’s discuss the common features of car loan followed in most banks across India.

General features of car loan

• 85-90% financing on road price
• Repayment period ranges within 3-7 years
• Minimum annual income required in the range of Rs 2.4-3 lacs per annum
• Repayment can be converted into easy EMIs as per your convenience

Aspects like processing fee, prepayment and foreclosure charges vary from banks to banks. We will discuss all those later. First start with public sector banks.

State Bank of India (SBI)

• Processing fee of 0.50% of the loan amount
• No prepayment charges
• Loan tenure up to 7 years
• Approval for loan within 30 minutes

Please refer the table to know the eligibility criteria across different categories of professionals

Eligibility Criteria and documentation

Table showing interest rates, EMIs at SBI

Punjab National Bank (PNB)

• Punjab National Bank offers car loan with a repayable period of 1-7 years.
• Loan tenure for new cars is 7 years, and decreases to 5 years for old vehicles
• Minimum loan amount is Rs 1 lakh, and maximum Loan amount depends upon the price of car, varies with car model, profile of the customer etc
• Maximum loan amount is up to 90% of the ex-showroom price of the car
• Loans are approved within 24 hours after the documentation process
• Prepayment is allowed after 6 months from the disbursement of the loan
• Prepayment charges at 2% of the loan amount
• Minimum processing fee of 1 per cent of the loan amount
• Maximum processing fee is Rs 6,000

Table showing eligibility criteria and documentation

Table showing interest rates, EMIs at PNB

Now look at the private sector counterparts starting with HDFC Bank

HDFC Bank

• HDFC Bank offers loan for a variety of cars as well as multi-utility vehicle sin India
• Repayment tenure ranges within 1-7 years
• Easy loans up to Rs 1.5 cr
• Car loan approval takes 30 minutes
• Interest is 10%-12.5%
• Attractive EMI repayment options
• Processing fee between Rs 2,825-5,150
• 5% on the part payment amount in case part prepayment is within 13-24 months from 1st EMI
• 3% on the part payment amount in case part prepayment after 24 months from 1st EMI
• Late payment penalty of 2%
• Foreclosure charges:-No foreclosure allowed within 6 months from date of availing the car loan. 6% of Principal Outstanding for preclosures within 1 year from 7th EMI. 5% of Principal Outstanding for preclosures within 13-24 months from 1st EMI. 3% of Principal Outstanding for pre closures post 24 months from 1st EMI

Eligibility Criteria and Documentation

Table showing interest rates, EMIs at HDFC Bank

ICICI Bank

• Car loans of up to 90 % ex-showroom price of vehicle
• Repayment tenure of up to 7 years
• Interest rate of 10.75%-12.75%
• Processing fees are charged at 2% of the loan amount or Rs 6,000 whichever is lower
• Documentation charges of Rs 350
• Prepayment charges are calculated at 5% of outstanding principal or interest outstanding for unexpired period of the loan

Eligibility criteria and documentation

Table showing interest rates, EMIs at ICICI Bank

Now you can choose banks for your car loan based on the data mentioned above

(Updated on:16 November,2016)