Top 5 Car Loans in terms of rates, benefits and features

Over the time, Cars have increasingly become a necessity. With the help of Banks and other finance companies, owning a car has become easier. In India, many lenders are providing Car Loans at affordable rates. In this article, we will discuss about the various types of Car Loans offered by the financiers and present the five famous car loans offered to the borrowers in 2014. While selecting the best lender for Car Loan, you should not only pay attention to the rate offered by that financier but should also compare other features and benefits. The other features include schemes and flexibility in repaying the loan, faster processing of your loan, maximum loan offered, pre-payment and foreclosure charges.

Before buying a car, you always evaluate whether to buy a new car or a used car. While making this decision, you should consider the cost of loan on used car vs. new car also.

Before looking at the detailed comparison, let us first look at the USP of each car loan offered by various financiers:

1. HDFC Bank: HDFC Bank offers 3 different loans related to Cars i.e. New Car Loan, Used Car Loan and Loan Against Car. The best thing about HDFC Bank is its faster processing and higher loan ticket size. HDFC Bank provides Car Loan up to 3 times of your annual income if you are salaried and up to 6 times if you are self-employed. It offers a maximum loan tenure of up to 7 years with fixed rate of interest. Not only this, HDFC Bank has gone a step forward to help its borrowers in finding the right car through its website http://hdfcbank.gaadi.com/ . This portal help the car lovers to compare cars, research information, read reviews about cars by users and experts, locate dealers and a lot more. Once, you select your dream car online, then you can proceed to avail loan from HDFC Bank.

2. ICICI Bank: ICICI Bank boasts of processing time of as low as 24 hours for approving your loan application. It offers up to 100% loan on the ex-showroom price of the car. The interest rate is calculated on monthly reducing balance. The lender, however, is strict on the minimum age required to avail Car Loan. You have to be at least 25 years of age if you are salaried and at least 28 years of age if you are self-employed and want to avail loan from ICICI Bank.

3. Axis Bank: Similar to HDFC Bank, the Axis Bank also provide automobile information service to its borrowers. The information is available on http://axis2.gaadi.com/- to help the borrowers to select the best car suitable as per their requirements. It offers special schemes and rates to its existing Bank customers.

4. State Bank of India: SBI is the best lender if you want to avail loan from any public sector bank. It has flexible repayment mode. There is no fixed date of EMI payment and the borrower can choose to repay any time of the month. The rate is floating rate of interest and is calculated on Daily Reducing Balance.  Also, the Bank offers a loan up to 85% of ‘On Road price’ of the car. The schemes and rates are attractive but the processing time for loan approval is relatively higher than existing private players in the market.

5. Kotak Mahindra Prime Limited: This lender offers Pre-Approved car loans to its existing customers. It has flexible schemes of repayment that include Margin Money Scheme, Step Up Scheme (Increase in EMI after every year, six months or quarter depending upon your needs), low EMI balloon scheme (10%-25% of the cost of the car to be paid as last EMI) and advance EMI scheme (Repay your loan much faster with the advance installments). The borrower can select the best scheme as per their requirements.

Following is the rate comparison of these famous lenders that will allow you to pick the best car loan scheme for you:

Lender	New Car Loan Rate	Used Car Loan Rate	Part Pre payment Charges	Foreclosure Charges	LTV	Processing Fees
HDFC Bank

11.50% to 13.75% depending on the segment of vehicle14.50% to 17.50% depending on the segment and age of vehicle5 % on the part payment amount in case part prepayment is within 13-24 months from 1st EMI; 3% post 24 months from 1st EMI; Part-payment is allowed subject to completion of 12 months (i.e., Post payment of 12 EMIs); It is allowed only twice; At any point of time, part payment not allowed to increase beyond 25% of Principal OutstandingNo foreclosure allowed within 6 months from date of availing the car loan; 6% of Principal Outstanding for pre closures within 1 year from 7st EMI; 5% of Principal Outstanding for pre closures within 13-24 months from 1st EMI; 3% of Principal Outstanding for pre closures post 24 months from 1st EMIUp to 100% of ex-showroom price of the carRs.2865- Rs.5150ICICI Bank

10.75%- 15% depending on the segment of vehicle and tenure selected13.75%- 17% depending on the segment of vehicleNot Allowed5% of principal outstanding or
Interest outstanding for unexpired period of the loan (whichever is lower).Up to 100% of ex-showroom price of the carRs.2500-Rs.5000Axis Bank

11.50%Used car Loan not offered by Axis Bank5% of the Part Payment amount after 180 days from date of disbursement; 10% of the Part Payment amount up to 180 days from date of disbursement5% of the Principal Outstanding after 180 days from date of disbursement; 10 % of the Principal Outstanding up to 180 days from date of disbursementUp to 95% of the ex-showroom price on select modelsRs.3500-Rs.5500SBI

10.95%16.00%-17.50%No pre-payment penalty;No pre-payment penalty;Up to 85% of On Road Price of carRs.500/- per application.Kotak Mahindra Prime Limited (KMPL)

11.50%-13.50%17%- 20%Part Pre-payment is not allowed5.75% of principal outstandingUp to 90% of the ex-showroom priceRs.3300- Rs.4750

 

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