If you are planning to buy a car these days and want to take a loan for it, then first of all it is important for you to know which bank is giving loan at what interest rate. State Bank of India i.e. SBI is currently giving car loan at 9.10% annual interest. At the same time, the interest rate of Union Bank of India starts from 7.90%. We are telling you at what interest rate the major banks of the country are giving car loans… More interest has to be paid on taking a loan for a longer period
The loan should be taken 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 on taking 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 loan with a short duration (3 to 4 years). The interest rate of the loan also depends on the credit score
The interest rate of the 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 low interest rate. Apart from this, banks usually give loans at low interest rates to those with regular income sources.
Keep these 3 things in mind while taking a loan 1. Pay attention to pre-closure penalty
While taking a car loan, you should check whether the bank from which you are taking a loan charges a pre-closure penalty. Pre-closing means paying the loan amount before the tenure. Penalty rates are not the same for all banks. So choose the bank wisely. Consider those banks which either do not charge a penalty or charge a very low amount. 2. Check processing fees
Almost every bank charges a certain amount to process the car loan application. Sometimes it is also seen that, while some banks and agencies give car loans at low interest rates, but while giving loans, they charge a very high processing fee. 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.
