Check which lenders are offering the best interest rates on new car loans

MUMBAI: When you negotiate the price of a car, the dealership has to ask you if you want a loan? If you do, the dealership representative will take you to the loan office, where you can usually get a loan from two or three different lenders.

Most buyers end up taking out a car loan from a lender who has partnered with the dealership. It is convenient that all the services that a buyer is looking for are available under one roof. However, before you take out the loan from the lender who partnered with the dealership, check to see if you can get a cheaper rate elsewhere.

Even a 1% difference in the loan can help you save money. Suppose you want a ??Loan of 7 lakh. The dealer offers it at 8% for five years. Your equivalent monthly payment (EMI) will turn out to be ??14,194, and the total expenditure will be ??8,51,609.

If your loan is 0.5% cheaper, your IME will be ??14,027, and the total loan amount will be ??8 41 594.

If the loan is 1% cheaper, the EMI and the total loan amount will be ??13 861 and ??8 31 650, respectively.

Interest rates are a part; processing fees added to the total expense can make a more significant difference.

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Public sector banks (PSBs) are generally less expensive than private sector lenders, as in many other loan categories

Public sector banks (PSBs) are generally less expensive than private sector lenders, as in many other categories of loans. Currently, Punjab & Sind Bank offers the lowest rate at 6.8%, Bank of Baroda at 7%, Union Bank of India at 7.15%, Canara Bank at 7.3%, according to the data. from The lowest rate offered by the State Bank of India is 7.5%.

In private banks, ICICI Bank and HDFC Bank respectively offer 7.9% and 7.95% as their lowest rates.

Some of the banks that offer lower processing fees include Union Bank of India ( ??1000), IDBI Bank ( ??2500), and the Federal Bank ( ??1,500 – 2,500).

Therefore, when you are evaluating loan offers, consider interest rates as well as other fees.

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About Galen A. Williams

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