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Gone are the days when people would dip into their cash reserves and savings to buy cars. Almost all – both individuals and companies – prefer to buy vehicles on installments, because that allows them the liberty of not having to invest a huge amount upfront. That’s the need gap being filled by almost all banks and financial institutions, who now offer auto loans on lucrative terms to consumers, egging them to fulfill their dreams and aspirations, just by paying some extra interest. According to industry estimates, in the last few years alone, 60% of cars were bought through finance deals. Two-wheelers, being cheaper, had a smaller share in the auto loans market.
With more and more attractive car and two wheeler brands and models jostling for the consumer’s attention, banks and financial institutions, are also falling over each other to offer the most customer-friendly loan schemes, which can suit even the most humble earnings. That’s what creates an embarrassment of riches – a confusion over which bank to choose and which loan to opt for.

Here are some handy tips and comparisons, which will help you decide whom to go to and for what, depending on your needs and priorities.

Tips to Follow Before You Go for Auto Finance

Step 1:- Choose A Car :- The first step that is essential is to choose a car of your choice and find out its manufacturer, model. Also, don’t forget to find out the nearest distributor for your convenience.

Step 2:- How Much Can I Afford? :- Cars look jazzy on websites and in showrooms. But can you afford it with your income? Make a fair assessment about how much money will you able to pay back each month if you were to go for an auto loan. This would prepare you to approach auto finance companies. Don’t forget your car’s running expenses though. Fuel isn’t cheap anymore!

Step 3:- What’s the Cost of My Dream Car? :- You may love the car your neighbor drives, but its price tag may just be too hot for you. Settle for a bunch of options, whose price tag is within your reach. Don’t forget, there are a whole set of paraphernalia expenses involved in the purchase of a car, which can sometimes throw your budget out of gear.

Step 4:- What Are My Priorities? :- You may be able to afford an auto loan of Rs 5 lacs, but paying an equated monthly installment (EMI) of more than Rs 12,000 could be stressful. On the other hand, you may want to save on interest rates, even if the EMI is a bit steep, because you stand to gain in the long run. Figure out what’s more important – convenience of payment terms or lower interest rates?

Step 5:- You are Ready to Explore :- Now that you have made up your mind that you will take your loved ones out for a spin within a week, check out who offers what, and which one is best suited for you. Click on this table to find more.

Step 6:- Few Things to Remember :- Add Extra Expenses to Cost of Vehicle. Do not forget to add the charges for car maintenance, fuel, interest and insurance rates to the cost of vehicle. The gross is what the vehicle costs you.

Car Loan Interest Rates:

Banks Tenure Margin Interest Rate Processing Fee
Abhyuday Co-op Bank Ltd. 3 years 25% 13.5 1.2% of the loan amount
ABN Amro 3 years 10%-30% 15.0 Rs 500- Rs 1000
Allahabad Bank 3 years 15% 11.25-10.75 For Salaried Persons: Nil, For Others: 1% of loan amount, minimum Rs 2,000/-
Andhra Bank 3 years 10% 12.75 Rs 250- Rs 1000
Apna Sahakari Bank Ltd 3 years 25% 14.0 0.5% of loan amount
Axis Bank 3 years 15% 15.5-11.0 NA
Bank of Baroda 3 years NA 10.5 0.75% of loan amount, max Rs 6000
Bank of India 3 years 30% 9.75 1.10% of the loan amount Min. Rs.750/-, Max. Rs.2500/-
Bank of Maharashtra 3 years 10% 11.25 Rs 2000/-
Canara Bank 3 years 10% 11.0 0.1% on the loan amount with a minimum of Rs.250/- and maximum of Rs.500/-
Catholic Syrian Bank 3 years 20% 14.25 0.25% of loan amount, minimum Rs 250
Central Bank of India 3 years 15% 10.0 1%
City Union Bank 3 years 10% 13.5 1% of loan amount
Corporation Bank 3 years 15% 10.5 1% of loan amount or min Rs 1000
Dena Bank 3 years 20% 11.0 Rs 500
Dhanalakshmi Bank Ltd 3 years 25% 13.5 0.5% of loan amount
Federal Bank 3 years 10% 12.0 NA
HDFC Bank 3 years 0% 12.75-12.25 NA
ICICI Bank 3 years 5% 14.25 NA
Indian Bank 3 years 10% 11.75 Rs 250 per lakh or part thereof
Indian Overseas Bank 3 years 10% 12.0 upto Rs. 2 lakh- Rs. 134/-, above Rs. 2 lakh- Rs. 134/- per Rs. 1 lakh
J&K Bank 3 years 10%-20% 12.0 0.25% of loan amount, min Rs 500
Karnataka Bank 3 years NA 13.0 0.25% of loan amount
Karur Vysya Bank 3 years 20% 12.0 0.3% of loan amount
Lakshmi Vilas Bank 3 years 20% 14.25 1% of the loan amount
Oriental Bank of Commerce 3 years 15% 11.0 0.50%
Punjab & Sind Bank 3 years 10% 12.75 Rs 500
Punjab National Bank 3 years 20% 11.0-10.5 0.50%
Saraswat Bank 3 years 20% 13.0 0.5% of the loan amount
State Bank of Bikaner& Jaipur 3 years 15%-30% 11.5 0.60% of loan amount
State Bank of Hyderabad 3 years 15%-30% 11.25 Nil
State Bank of Indore 3 years 15% 12.0 0.50% of loan amount
State Bank of Mysore 3 years 15%-30% 11.0 NA
State Bank of Patiala 3 years 15% 11.5 0.50% of loan amount
State Bank of Travancore 3 years 15% 11.25 0.50% of the loan amount
Syndicate Bank 3 years 5% 12.5 NA
Tamilnad Mercantile Bank Ltd 3 years 15% 12.75 0.5% of loan amount
The Kapol Co-op Bank Ltd 3 years 20% 10.5 Upto Rs 5 lakh- 0.25% of loan amount, above Rs 5 lakh - 0.5% of loan amount
The Ratnakar Bank 3 years 25% 12.5 Rs 500 per lac
UCO Bank 3 years 25% or Rs 7.5 lakh whichever is lower 11.75 1%
Union Bank of India 3 years 20% 11.0 Rs 500 - Rs 1000
United Bank of India 3 years 10% 12.0 0.50% of loan amount
Vijaya Bank 3 years 20% 11.25 NA


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