Punjab & Sind Bank offers the lowest rate – 7.1 % on a car loan of Rs 10,00,000 with a tenure of 7 years, as per data from Bankbazaar. Central Bank of India is 2nd on the list of the cheapest car loan lenders with 7.25 %. The list is dominated by public sector banks and no private lender figures in the list. When a bank’s interest rate becomes low in India, it becomes easier to borrow funds to meet their various needs.
BankBazaar has considered interest rates on car loans for all Bombay stock exchange-listed public and private sector banks for data compilation. Banks for which data is not available on their online sites have not been considered. Data collected from the respective bank’s website is as of Dec 10, 2020. Banks are listed in ascending order based on the interest rate, that is, the bank offering the lowest interest rate on a car loan of Rs 10,00,000 is placed at the top and the highest at the bottom. EMI is calculated based on the interest rate mentioned in the table for an Rs10-lakh loan with a tenure of 7 years.
Non-banking financial companies are losing market share to public sector banks in vehicle financing and are shifting their focus to used cars, two-wheelers, and commercial vehicles instead. A combination of capital constraints among non-banking financial companies and renewed interest rate of public sector banks has led to this situation, said auto financiers. In an offer to grow their retail portfolio, public sector banks are offering auto loans at 7.2 percent to 7.7 percent compared to non-banking financial companies whose rates range from 8.75 percent to 11 percent.
As per the data of BankBazaar the bank providing the cheapest car loans are Punjab and Sind bank with 7.10% interest rate, Central bank with 7.25% interest rate, Canara bank 7.30% interest rate, Punjab national bank with 7.30% interest rate, Bank of India with 7.35% interest rate, Bank of Baroda with 7.35% interest rate, Union bank with 7.40% interest rate, Bank of Maharashtra with 7.50% interest rate, Indian overseas bank with 7.55% interest rate, and UCO bank with 7.70% interest rate. The interest rate mentioned in their list is indicative and it may vary depending on the bank’s terms and conditions.
