Car loans from HDFC Bank and Kotak Mahindra Prime are expected to go up due to the hike in prime lending rates (PLR) by the banks.
A top official of HDFC Bank said that the bank might be increasing the car loan rates by 50 basis points over the next few days. Ashok Khanna, HDFC Bank’s senior executive vice president and business head for vehicle loans said, “The rates need to climb because cost of deposits has already been increased across the industry”.
He also said, “Demand is very robust and waiting periods for cars is on the rise. A 50 bps hike in rates is not going to affect demand”.
Presently the bank is the biggest player in the car finance space.
Kotak Mahindra Prime is also planning to hike the rates of car loans from next week by 50 basis points. Current rate on the NBFC’s car loans is 9.5 to 10.25%.
Axis Bank would also change its car loan rates on Monday, according to a senior official of the bank.
Sumit Bali, CEO, Kotak Mahindra Capital said, “There are a number of reasons why the market for auto loans is doing well. The auto industry is doing well and penetration of car finance among customers is also picking up. Another factor is that the ticket size of loans is also increasing”.
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