Car loan borrowers would now have to pay an extra Rs 100 as EMI on a loan amount of Rs 4,00,000 for a period of 36 months.
This rate increase would be the second for this type in this fiscal. The earlier rate hike was effected in April.
The present car loan rate lies in the range of 9.5% to 12.5%. Presently, 70% of the cars are purchased via loans.
Sumit Bali, CEO of Kotak Mahindra Prime, said, “We will review interest rates on auto loans next week and are looking at raising it by at least 25 basis points, which will be a marginal increase over the exiting rates of 9.75 per cent”,.
Manju Srivatsa, president (retail), Axis Bank said, interest rates rely on many factors and there is likelihood for one more hike from next week. “The bank has already taken a hike of 25-50 basis points two months ago and this will be the second hike in four months of the ongoing financial year.”
VG Ramakrishnan, senior director (automotive practice), Frost &Sullivan said, “Even if banks decide to hike interest rates after the RBI decision, it will not impact the purchasing decision of Indian car buyers. However, we may see overall growth moderating to 15-18 per cent as against over 30 per cent that we have been seeing since January this year, as the pent-up demand has been met with several new launches in the passenger car category in the past”.
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