Car finance in India is one of the fastest growing trends in India that has been developing with leaps and bounds for past 10 years. But with this, a major quandary has also taken birth and that is “how does car loan interest work in India”. A dozen of private sector banks and mortgage lending firms have taken up auto loans as a prime sector for revenue earning in the form of interest. In India, car manufacturers collaborate with auto loans financiers to come up with a customized offer to woo the buyers to crack the deal with different car loan interest rates.
Considering the interest charged on the car loans, we have major car makers who have come up with marginal interest rate policies. Say, Hyundai launched a promotion 5.99% interest rate on car loans with Nissan giving an equal challenge with 5.98% interest rate. Car finance in India works as a promotional gimmick nowadays since the competition level in automobile sector is intense and neck-to-neck. They only provide solutions to “how does car loan interest work in India” for adding to the competitive edge. To give you an estimate, banks provide car loan interest between the range of 10%-13% per annum. But these rates are dipping as manufacturers have started providing subsidized car loans in terms of lower discounts.
With fuel prices soaring and interest rate bands getting stiff, one should always analyse all the car loan options provided by the bank and finance agencies. Almost all companies are offering car loan interest rates between 7%-14% per annum depending on the demand for the automobile. Before making a final purchase call, finalise the car model, the amount of down payment and the EMIs and then the car loan interest rates come into scene. If you do a role reversal and go by the interest rates first and then decide the car model, things might turn on a disappointment chart for you.
Remember, with private car dealers, there is always a scope of bringing down the interest rates. Check the quotation with at least 3-4 dealers and examine the trend in the bank loan rates for having an upper hand in taking up an auto loan from banks. On analysing how does car loan interest works in India, experts have streamlined buyers according to income levels for taking up auto loans. For salaried employees between age group of 21-60 years, around 6% interest rate is suitable while for self-employed and HUF’s, the interest rate till 8% will do well. Make sure you get hold of the best offer the car finance market in India has got.
