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

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

CategoryIncome CriteriaMaximum Loan AmountDocumentation
Regular employee of Central / State Government, Public Sector Undertaking, Private Company or a reputed firmMinimum annual income for applicant and co-applicant, if any, is kept at Rs 3 lakhs48 times of net monthly salaryBank statements for last 6 months 2 passport size photographs Identity Proof- Passport/ PAN Card/ Voters ID card/ Driving License Address Proof-Ration card/Driving License/Voter ID Card/Passport /Telephone Bill/ Electricity bill/Life Insurance Policy Income Proof: Latest Salary Slip, Form 16 I.T Return or Form 16 for the last 2 years.
Professionals, self-employed, businessmen, proprietary/partnership firms (All have to be income tax assesses)Net profit or gross taxable income of Rs. 4,00,000 per annum (income of co-applicant can be clubbed together4 times net profit or gross taxable income as per the Income Tax Return (ITR) after adding back depreciation and repayment of all existing loansBank statements for last 6 months 2 passport size photographs Identity Proof- Passport/ PAN Card/ Voters ID card/ Driving License Address Proof-Ration card/Driving License/Voter ID Card/Passport /Telephone Bill/ Electricity bill/Life Insurance Policy Income Proof: ITR for last 2 years I.T. Return or Form 16 for the last 2 years. Audited Balance Sheet, P&L statement for 2 years, Shop & Establishment Act Certificate / Sales Tax Certificate / SSI Registered Certificate / Copy of Partnership
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Table showing interest rates, EMIs at SBI

Loan AmountTenureInterest RateEMI
Rs 5,00,00039.85%Rs.16087-16098
Rs 5,00,00049.85%Rs.12633-12645
Rs 5,00,00059.85%Rs.10574-10587
Rs 5,00,00069.85%Rs 9213-9225
Rs 5,00,00079.85%Rs.8249-8262

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

CategoryIncome CriteriaMaximum Loan AmountDocumentation
Regular employee of Central / State Government, Public Sector Undertaking, Private Company or a reputed firmMinimum salary of Rs 20,000 per month25 times net monthly salary to a maximum amount of Rs 25 lacsBank statements for last 6 months 2 passport size photographs Identity Proof- Passport/ PAN Card/ Voters ID card/ Driving License Address Proof-Ration card/Driving License/Voter ID card/Passport /Telephone Bill/ Electricity bill/Life Insurance Policy Income Proof: Latest Salary Slip, Form 16 I.T Return or Form 16 for the last 2 years.
Professionals, self-employed, businessmen, proprietary/partnership firmsMinimum net monthly salary of Rs 20,00025 times net monthly salary to a maximum amount of Rs 25 lacsBank statements for last 6 months 2 passport size photographs Identity Proof- Passport/ PAN Card/ Voter ID card/ Driving License Address Proof-Ration card/Driving License/Vote ID Card/Passport /Telephone Bill/ Electricity bill/Life Insurance Policy Income Proof: ITR for last 2 years I.T. Return or Form 16 for the last 2 years. Audited Balance sheet, P&L statement for 2 years, Shop & Establishment Act Certificate / Sales Tax Certificate / SSI Registered Certificate / Copy of Partnership
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Table showing interest rates, EMIs at PNB

Loan AmountTenureInterest RateEMI
Rs 5,00,00039.75%Rs.16,050 -16065
Rs 5,00,00049.75%Rs 12,610-12,630
Rs 5,00,00059.75%Rs 10,554-10,575
Rs 5,00,00069.75%Rs 9,200-9210
Rs 5,00,00079.75%Rs 8,235-Rs 8,255

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

CriteriaSalariedSelf-Employed
Age21-60 years21-65 years
ExperienceJob experience of at least 2 years, with a minimum of 1 year with current employerExisting in the business for at least 2 years
Salary/IncomeMinimum annual income of Rs 1.8 lakhsEarn a minimum annual income of Rs. 60,000 for people looking to buy a standard car and at least Rs. 1,50,000 per annum for mid-sized and high-end cars Have a minimum turnover of Rs. 4,50,000 per annum
DocumentationIdentity Proof-Passport, PAN Card, Voter Id , Driving Licence( Laminated, Recent, Legible)Identity Proof-Passport, PAN Card, Voter Id , Driving Licence( Laminated, Recent, Legible)
Income Proof-Latest salary slip with form 16Income Proof-Latest ITR
Address Proof- Ration Card/Driving Licence/Voter Card/Passport Copy/Telephone Bill/ Electricity Bill/Life Insurance Policy/PAN CardAddress Proof- Ration Card/Driving Licence/Voter Card/Passport Copy/Telephone Bill/ Electricity Bill/Life Insurance Policy PAN Card
Bank statement for last 6 monthsBank statement for last 6 months
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Table showing interest rates, EMIs at HDFC Bank

Loan AmountTenureInterest RateEMI
Rs 5,00,000310-12.5%Rs16,134-16,727
Rs 5,00,000410-12.5%Rs12,681-13,290
Rs 5,00,000510-12.5%Rs10,624-11,249
Rs 5,00,000610-12.5%Rs 9,263-9,906
Rs 5,00,000710-12.5%Rs 8,301-8,961

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

CriteriaSalariedSelf-Employed
Age25-58 years28-65 years
Job ExperienceTotal job experience has to be over 2 years, with minimum period of 1 year in the current organisationBeen in the business for at least 3 years
Salary/IncomeMinimum gross salary of Rs 2.5 lakhsGross annual income of at least Rs 2 lakhs
DocumentationIdentity Proof-Passport, PAN Card, Voters Id , driving license( Laminated, Recent, Legible) Income Proof-Latest salary slip and Form 16/I-T returns of last two years Address Proof- Ration card/Driving license/Voters card/passport copy/telephone bill/ electricity bill/Life insurance policy PAN Card  Identity Proof-Passport, PAN Card, Voters Id , driving license( Laminated, Recent, Legible)   Income Proof-I-T returns of last two years     Address Proof- Ration card/Driving license/Voters card/passport copy/telephone bill/ electricity bill/Life insurance policy PAN Card

Table showing interest rates, EMIs at ICICI Bank

Loan AmountTenureInterest RateEMI
Rs 5,00,000310.75%-12.75%Rs 16,310-16,787
Rs 5,00,000410.75%-12.75%Rs 12862-13,352
Rs 5,00,000510.75%-12.75%Rs10,809-11,313
Rs 5,00,000610.75%-12.75%Rs 9,453-9,971
Rs 5,00,000710.75%-12.75%Rs 8,496-9,028

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

(Updated on:16 November,2016)

Personal Loan Interest Rates December 2017
Bajaj Finserv 10.99% - 16.00%
Fullerton India 14.00% - 33.00%
HDFC Bank 10.99% - 20.70%
ICICI Bank 10.99% - 18.40%
IndusInd Bank 12.99% - 20.00%
Kotak Bank 10.99% - 17.99%
RBL 14.00% - 18.00%
Standard Chartered Bank 10.99% - 14.49%
Tata Capital 11.49% - 18.00%
Home Loan Interest Rates December 2017
State Bank of India/SBI 8.30% - 8.60%
HDFC 8.35% - 8.95%
Bank of Baroda 8.30% - 9.30%
LIC Housing 8.35% - 8.70%
PNB Housing Finance 8.35% - 8.70%
ICICI Bank 8.35% - 8.85%
Axis Bank 8.35% - 8.75%
Citibank 8.60% - 9.35%
Indiabulls Housing Finance Limited 8.35% - 8.55%
Kotak Bank 8.35%
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