Union Bank Offers Car Loans at 8.70% Interest: Low Rates Under 9%

Planning to Buy a Car This Diwali? Know the Latest Loan Interest Rates

If you’re considering purchasing a car this Diwali and need a loan, it’s essential to first understand the interest rates offered by different banks. Currently, the State Bank of India (SBI) is offering car loans at an annual interest rate of 8.95%. We’ll guide you through the interest rates offered by major banks in the country.

Opt for Shorter Loan Tenures to Save on Interest

It’s advisable to take a car loan for the shortest possible tenure. While car loans can typically be taken for up to 8 years, opting for a longer duration, such as 7 to 8 years, will result in higher interest rates. These rates could be 0.50% higher than those for shorter-term loans (3 to 4 years).

Interest Rates Also Depend on Your Credit Score

The interest rate for a car loan is also influenced by your credit score. A higher credit score increases the chances of securing a loan at a lower interest rate. Additionally, banks generally offer lower interest rates to individuals with a stable source of income.

Key Factors to Consider When Taking a Car Loan

1. Check for Pre-Closure Penalties Before finalizing a car loan, ensure you check if the bank charges a pre-closure penalty. Pre-closure refers to paying off your loan before the end of its term. Not all banks have the same penalty rates, so it’s crucial to choose a bank wisely. Look for banks that either do not charge a penalty or impose a minimal fee for early repayment.
2. Review the Processing Fees Most banks charge a processing fee to handle your car loan application. Sometimes, banks and financial institutions may offer lower interest rates but charge a high processing fee. Before taking a loan, inquire about the processing fee with the bank to avoid unexpected costs.
3. Take Advantage of Special Offers and Schemes Banks often roll out special offers on car loans during festive seasons or at specific times of the year. These offers might include reduced or zero processing fees, lower or 0% interest rates, full financing on the vehicle, and special gift vouchers. Those with a strong credit profile can benefit from the best deals available.