The most eagerly awaited People’s car may come in expensive for the common man. Banks may plan to charge differential interest rates for Nano than those available for normal car loans. The world’s cheapest car Nano is expected to launch on March 23. The booking finance for this car may be higher than normal car loans.
“This is because during the pre-delivery period, the bank does not have any security and thus, it is like a clean loan. However, post-delivery, the car would be mortgaged to the bank and thus the rates will come down,” said a senior Bank of India official. Bank of India is the latest banker which has tied up with Tata Motors to offer financing for the car.
The normal car loan rates from Bank of India are 10-11 percent which are applicable once the automobile is hypothecated to the bank. However, in case of Nano the bank will charge interest rate of 12 – 12.5 percent as there is no security against the loan. Bank of India has already decided on its finance rates. Interest rates offered by private banks are around 11.75 to 13 percent for new cars.