New Delhi2 minutes ago
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If you are planning to buy a car this Diwali and want to take a loan for it, then first of all it is important for you to know which bank is giving the loan at what interest rate. State Bank of India i.e. SBI is currently giving car loan at 8.95% annual interest. We are telling you at what interest rate the major banks of the country are giving car loans.
You have to pay more interest if you take a loan for a longer period
You should take a loan for as short a period as possible, the loan should not be stretched too long. Usually a car loan can be taken for a maximum of 8 years, but if you take a loan for a longer period, i.e. 7 to 8 years, you are given a loan at a higher interest rate. This interest rate can be up to 0.50% higher than the interest rate of a short-term loan (3 to 4 years).
The loan interest rate also depends on the credit score
The interest rate of a car loan also depends on your credit score. If the credit score is good then there is a possibility of getting a loan easily and at a lower interest rate. Apart from this, banks usually give loans at a lower interest rate to those with a regular income source.
Keep these 3 things in mind while taking a loan
1. Pay attention to pre-closure penalties
While taking a car loan, you should check whether the bank from which you are taking the loan charges a pre-closure penalty. Pre-closing means paying the loan amount before the tenure. The penalty rates are not the same for all banks. So choose the bank wisely. Consider banks that either do not charge a penalty or charge a very low amount.
2. Check the processing fees
Almost every bank charges a certain amount for processing a car loan application. Sometimes it is also seen that, while some banks and agencies offer car loans at low interest rates, they charge a very high processing fee while giving the loan. Therefore, before taking a loan, one should find out from the bank how much processing fee it will charge for processing the loan.
3. Special offers and schemes
Most banks offer special offers on car loans during the festive season or a certain period of the year. Such offers should be taken advantage of. These offers include waiver on processing fees and pre-closure penalty, 100% funding on the vehicle, low or 0% interest rates, special gift vouchers, etc. People who have a good credit profile can get the best deals.
