Car Loan interest rates are one of the key factors if you are considering taking a vehicle loan. Car Loans have gained immense popularity in India over the past decade, with a growing trend of people seeking these loans. You can apply for a Car Loan either offline at an Axis Bank branch, or online from the comfort of your house. You can get up to 100% for the model of your choice, be it a budget-friendly entry-level hatchback, a sedan for your family, an SUV that can take on rugged terrain on your weekend trips or a luxury vehicle to match your financial status.
Government employees often enjoy lower interest rates based on the loan amount and other criteria. The interest rate on Car Loans depends on factors such as the loan amount, type of vehicle, your credit history, and more. Use the Car Loan EMI calculator to know your exact monthly outgo. This will help you plan your finances better.
Types of Car Loan Finance Interest Rates
There are two types of vehicle loan interest rates:
1. Fixed Car Loan interest rate: A fixed interest rate remains constant throughout the loan tenure. It is unaffected by any fluctuations in the financial markets. Fixed interest rates are a go-to choice when one expects financial instability in the market.
2. Floating Car Loan interest rate: These interest rates fluctuate in sync with changes in the financial market's trends causing alterations in the base rate. If the interest rate rises or falls, your car loan EMIs may increase or decrease respectively.
Car Loan Interest Rates and Charges
For New Car Loans with tenure up to 36 months
| 1 Yr MCLR | Spread over MCLR | Effective ROI Range | Reset | Processing Fee | Documentation Charges |
|---|
| 9.30% | 0.0%-4.80% | 9.30%-14.10% | No Reset | Rs. 3500 - Rs. 12000 | Rs. 700 |
For New Car Loans with tenure over 36 months
| Effective ROI Range | Processing Fee | Documentation Charges |
|---|
| 9.30%-14.10% | Rs. 3500 - Rs. 12000 | Rs. 700 |
New Car Loan Charges
A New Car Loan is a type of financing banks offer for purchasing a new car. Banks provide up to 85% of the car's total value under this type of car finance. If you take a New Car Loan, the car acts as collateral, and you need to make regular EMIs to repay the loan within tenure.
In the event of EMI defaults, banks have the right to repossess the car as security. The Car Loan interest rate starts at 9.2% and the loan processing fee can range between Rs 3500 and Rs 12000 with a Car Loan stamp duty charge of Rs 700.
Banks have streamlined the entire Car Loan application process for your convenience. From application to approval and disbursement, everything can now be done online, eliminating the need for physical visits to banks.
| Sr. no | Type | Charges |
|---|
| 1 | Cheque/ECS/NACH Bounce / Instrument Return Charges | Rs. 339 per instance |
| 2 | Cheque / Instrument Swap Charges | Rs. 500 per instance |
| 3 | Duplicate Statement Issuance Charges | Rs. 250 per instance |
| 4 | Duplicate Repayment Schedule Issuance Charges | Rs. 250 per instance |
| 5 | Penal Charges | ^Financial Default: 8% p.a. above applicable interest rate on the overdue amount (subject to the aggregate not exceeding 24% per instance) |
| 6 | Loan Cancellation / Re-booking | Rs. 550/- per case |
| 7 | Foreclosure/Part Payment Closure | 5% of the Principal Outstanding |
| 8 | Stamp Duty | At actuals |
| 9 | Issuance of Credit Report | Rs. 50/- per instance |
| 10 | Documentation Charge | Rs 700/- |
| 11 | Registration Certification Collection Charge | Rs 250/ per instance |
*Goods and Services tax (GST) will be charged extra as per the applicable rates, on all the charges and fees (wherever GST is applicable).^Financial Default includes all types of payment or financial defaults/irregularities with respect to your Loan Account. There shall be no capitalisation of Penal Charges. Pre-Payment charges are not applicable for fixed rate loans up to 50 lakhs to Micro and Small Enterprise (MSE)
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Here's a breakdown of the application process:
- Fill out an application form with your details and register yourself online.
- Once the application is submitted, upload the necessary documents mandated by the bank.
- After the verification of the document and subject to your repayment capacity, the loan is typically approved within 2 days.
- After approval, the bank disburses the loan amount, which covers a percentage of the car's purchase price.
- The interest rate on your vehicle loan can vary depending on your situation.
Here are the top five factors that can influence your auto loan interest rate:
1. Income: Higher earnings suggest a better ability to repay the loan promptly. If you have a substantial income, you can secure more favourable lending rates from banks. Banks offer loans to salaried as well as self-employed individuals.
2. Loan tenure: The duration of your loan term is directly related to the interest rate you will be offered. Longer loan terms tend to come with higher interest rates and pose a higher risk to the banks. Hence selecting the loan term is a key criterion for meeting your repayment capabilities.
3. Relationship with the bank: Having an established, long-term relationship with the bank can work in your favour when applying for a car loan. Banks can easily assess your credit history and recent financial transactions, and confirm your financial stability if you are an existing customer.
4. Employment status: Working for a well-established and reputable company can enhance your chances of securing a favourable car loan interest rate. Some banks maintain lists of approved employers and businesses you can trust when granting loans.
5. Down payment: Making a substantial down payment can help you to negotiate a lower interest rate. While banks may offer loans covering up to 100% of the vehicle's ex-showroom price, a larger down payment reduces the loan amount and enhances your repayment potential.
