Home loan and car loan rates are low enough to attract potential customers. The present car loan rates are as low as 7.1% to start with. Public sector banks are on top, offering lower car loan rates. Based on the credit rating, one can avail a car loan, financing up to 100% of the road price of the car.
Car loan rates can be fixed or floating in nature. As these loans help one create an asset, they are in the good loan category. Purchasing a car could be inevitable for many customers as a necessity and not merely as a luxury.
Both home and car loans are in the benign interest rate regime and fall in retail loan category and hence the benefit is obvious. Table showing the top ten cheapest car loans from public sector banks is given below. Punjab & Sind Bank offers 7.1%, and it is the lowest interest rate for the past many months. Central bank offers a car loan at 7.25%.
| Bank | Interest | EMI * |
|---|---|---|
| Punjab & Sind Bank | 7.10% | 15,142 |
| Central Bank of India | 7.25% | 15,215 |
| Canara Bank | 7.30% | 15,240 |
| Punjab National Bank | 7.30% | 15,240 |
| Bank of Baroda | 7.35% | 15,264 |
| Union Bank of India | 7.40% | 15,289 |
| Bank of India | 7.45% | 15,314 |
| Bank of Maharashtra | 7.50% | 15,338 |
| IDBI Bank | 7.50% | 15,338 |
| Indian Overseas Bank | 7.55% | 15,363 |
- *For a new car loan of Rs.10lakh with a seven-year tenure, data as on February 18, 2021.
- Source: BankBazaar.com
- While reading the above table, please note the following points-
- For data compilation, interest rates on car loans for all listed public and private sector banks have been considered.
- Name of the banks are put in an ascending order of interest rate. The bank with the lowest rate is placed on the top of the table and so on. Lowest interest rate offered by the banks on loan of Rs.10 lakh is shown.
- Banks for which data is not available on their websites, are not considered.
- EMI is calculated based on the interest rate mentioned in the table for Rs.10 lakh loan with tenure of seven years.
- Processing and the other charges are assumed to be zero for EMI calculation purposes.
- Interest rates are indicative and may vary based on the terms and conditions offered by the different banks.
Smrutirekha Bhoi