With Society of Indian Automobile Manufacturers (SIAM) forecasting a revival in automobile sales post the decline of the second wave COVID-19, demand for car loans, too, is likely to go up. Low interest rates prevailing in the system will also further the automobile sector’s cause. Industry bodies say retail demand for vehicles in the month of June exceeded expectations. According to Federation of Automobile Dealers Association (FADA), this is due to vaccination drives in the country, low auto loan rates and a forecasts of normal monsoon, among others. Automobile companies are predicting a sharp rebound as they expect pent-up demand to push up June 2021 sales.
Interest rates on a car loan with a repayment tenure of seven years start at 6.80 percent, which is comparable to home loan interest rates.
As in case of other loan categories, public sector banks dominate the list of top ten cheapest car loan deals, with Punjab & Sind Bank leading the chart.
A note on the table
Interest rate on car loan for all listed (BSE) public and private sector banks have been considered for data compilation. Banks for which data is not available on their websites have not been considered. Data collected from respective banks’ websites as on June 17, 2021. Banks are listed in ascending order on the basis of interest rate i.e. bank offering lowest interest rate on car loan (loan amount being Rs 10 lakh) is placed at top and highest at the bottom. Lowest interest rate offered by the banks on loan of Rs 10 lakh is shown in the table. EMI is calculated on the basis of Interest rate mentioned in the table for Rs-10 lakh loan with tenure of seven years (processing and other charges are assumed to be zero for EMI calculation); Interest rates mentioned in the table are indicative and may vary depending on banks’ terms and conditions.
