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Car Loan FAQs

Loan for cars ranges from small & compact cars to super premium cars, SUVs and MUVs. Car loan schemes of each bank differ in terms of interest rates and other factors like maximum loan amount, loan tenure, EMI, processing fees and prepayment fees. There are lots of benefits which are now available to the customer when availing of a car loan such as preferred pricing for existing customers, less documentation, plenty of repayment options, door-step service, faster processing time, etc. Some lenders even offer special rates of interest to their existing customers and those having good credit score.

Car Loan FAQs

Banks can offer a car loan upto 100% on ex-showroom value of the car or they can require some margin. The car finance amount usually is based on the car purchased as well as the profile | credit score of the applicant.

There are 4 stages involved in availing a car loan, which are:

  1. Submitting a Loan Application
  2. Processing of application
  3. Approval of the loan
  4. Disbursement of loan amount
Banks generally do not provide loan for any accessory except it is a standard fitting.
The car loans offered by banks are available for a period ranging from 5 years to 7 years. This period also varies on the basis of purchase of new car or used car.
It generally takes about 1-7 working days for processing the loan and getting it sanctioned after submission of all the required documents.
No. Its requirement is based on multiple factors like the customer financials, good credit score, loan amount etc.

Following documents need to be provided on termination:

  • The Loan Termination letter
  • The No-Objection letter addressed to the RTO
  • Insurance Endorsement Cancellation letter
There are multiple repayment options available which are flexible as well for repayment of car loan such as monthly EMI, EMI in arrears, Advance EMI, Auto Debit from bank account, ECS (Electronic Clearing Services), Standing instruction, PDCs (Post Dated Cheques), etc.
Ex-showroom price is that price of the car which includes excise duty but excludes local duties and statutory charges.
On-road price the sum total of the ex-showroom price and cost of registration, municipal tax, insurance, octroi, road tax and cost of accessories. This price more than the ex-showroom price by around 15% to 25%. It also varies from city to city.
If the borrower pays the EMI at the beginning of the month, it is called advance EMI.
If the borrower pays the EMI at or after the end of the month, it is known as EMI in arrears. It is the standard method of paying EMI.
When the interest is paid on the entire principal amount of car loan till maturity, it is known as a flat rate EMI.
When the interest is paid on the outstanding amount each month, it is called reducing balance EMI. The main advantage here is that with each EMI, the balance principal amount keeps reducing. The EMI in this case is comparatively 10% to 15% less than that of a flat rate EMI.
Generally, banks do not charge any penalty a borrower for missing one or two EMI instalments. After missing 1 or 2 EMIs, the borrower is called a defaulter. In such case, bank has the right to seize his car. Also, on default on the payment, his credit score is also negatively affected resulting in less chances of loan eligibility in the future for him.
This is a scheme where the borrowers have the convenience of repaying the loan without any interest. This means that borrowers don't have to spend extra money on the interest, which is charged on other types of car loans. For this purpose, the car maker has to keep up his profit margin on the sales of the car and this profit is used to pay back as interest. Point to note is that the cars under the zero percent schemes are sold at higher prices and borrowers cannot negotiate in the price of the car. This scheme usually includes short term loan duration ranging from 12 months to 15 months.
Yes, it can be combined with his|her income in order to increase car loan eligibility so that he|she can get higher loan amount.
If you have a good credit score then the loan will be offered at the most competitive interest rates and other lenient terms.
Pre-payment means that you want to repay our outstanding loan amount before loan tenure. In car loans, the borrower is not allowed to make part payments, hence if he wants, he can pre-pay the entire loan after 6 months to 1 year as per the rules of the bank in this regard. However, the banks charge a penalty of 2% to 5% on the outstanding loan amount in case of prepayment.

Get Banks Loan Interest Rates

Abhyudaya Cooperative Bank LimitedAhmedabad Mercantile Cooperative Bank
Akola Urban Coop Bank Allahabad Bank
Allahabad Up Gramin BankAmanath Cooperative Bank Ltd. Bangalore
Andhra BankAndhra Pradesh Grameena Vikas Bank
Andhra Pragathi Grameena BankApna Sahakari Bank Limited
Arunachal Pradesh Rural BankAssam Gramin Vikash Bank
Au Small Finance Bank LimitedAxis Bank
Bandhan Bank LimitedBangiya Gramin Vikash Bank
Bank Of BarodaBank Of India
Bank Of MaharashtraBaroda Gujarat Gramin Bank
Baroda Rajasthan Kshetriya Gramin BankBaroda Up Gramin Bank
Bassein Catholic Cooperative Bank LimitedBharat Cooperative Bank (mumbai) Ltd., Mumbai
Bharati Sahakari BankBharatiya Mahila Bank Limited
Bihar Gramin BankBombay Mercantile Co Op Bank Ltd
Canara BankCapital Small Finance Bank Limited
Catholic Syrian Bank LimitedCentral Bank Of India
Central Madhya Pradesh Gramin BankChaitanya Godavari Grameena Bank
Chhattisgarh Rajya Gramin BankCitizen Credit Cooperative Bank Limited
City Union Bank LimitedCorporation Bank
Dcb Bank LimitedDena Bank
Dena Gujarat Gramin BankDhanalakshmi Bank
Dombivli Nagari Sahakari Bank LimitedEllaquai Dehati Bank
Equitas Small Finance Bank LimitedEsaf Small Finance Bank Limited
Export Import Bank Of IndiaFederal Bank
Fincare Small Finance Bank LtdG P Parsik Bank
Gramin Bank Of AryavartHdfc Bank
Himachal Pradesh Gramin BankIcici Bank Limited
Idbi BankIdfc Bank Limited
Indian BankIndian Mercantile Cooperative Bank Ltd.
Indian Overseas BankIndusind Bank
Jalgaon Janata Sahakari Bank LimitedJammu And Kashmir Bank Limited
Jammu And Kashmir Grameen BankJanakalyan Sahakari Bank Limited
Janalaxmi Coop Bank Janata Sahakari Bank Ltd
Jharkhand Gramin BankKallappanna Awade Ichalkaranji Janata Sahakari Bank Limited
Kalupur Commercial Cooperative BankKalyan Janata Sahakari Bank
Kapol Cooperative Bank LimitedKarnataka Bank Limited
Karnataka Vikas Grameena BankKarur Vysya Bank
Kashi Gomti Samyut Gramin BankKaveri Grameena Bank
Kerala Gramin BankKhamgaon Urban Co Op Bank Ltd
Kotak Mahindra Bank LimitedLangpi Dehangi Rural Bank
Laxmi Vilas BankMadhya Bihar Gramin Bank
Madhyanchal Gramin BankMahanagar Cooperative Bank
Maharashtra Gramin BankMalwa Gramin Bank
Manipur Rural BankMeghalaya Rural Bank
Mizoram Rural BankNagaland Rural Bank
Nagar Urban Co Operative BankNagpur Nagarik Sahakari Bank Limited
Narmada Jhabua Gramin BankNasik Merchants Cooperative Bank Ltd.
New India Cooperative Bank LimitedNkgsb Cooperative Bank Limited
North East Small Finance Bank LimitedNutan Sahakari Bank Ltd
Odisha Gramya BankOriental Bank Of Commerce
Pallavan Grama BankPandyan Grama Bank
Paschim Banga Gramin BankPragathi Krishna Gramin Bank
Prathama BankPravara Sahakari Bank Ltd
Puduvai Bharathiar Grama BankPunjab And Maharshtra Cooperative Bank
Punjab And Sind BankPunjab Gramin Bank
Punjab National BankPurvanchal Gramin Bank
Rajarambapu Sahakari Bank LtdRajasthan Marudhara Gramin Bank
Rajkot Nagrik Sahakari Bank LimitedRbl Bank Limited
Rupee Cooperative Bank Ltd.Sangli Urban Co Op Bank Ltd Sangli
Saptagiri Grameena BankSaraswat Cooperative Bank Limited
Sardar Bhiladwala Pardi Pepls Co BkSarva Haryana Gramin Bank
Sarva Up Gramin BankSaurashtra Gramin Bank
Shikshak Sahakari Bank LimitedSolapur Janata Sahakari Bank Limited
South Indian BankState Bank Of Bikaner And Jaipur
State Bank Of HyderabadState Bank Of India
State Bank Of MysoreState Bank Of Patiala
State Bank Of TravancoreSuryoday Small Finance Bank
Sutlej Kshetriya Gramin BankSyndicate Bank
Tamilnad Mercantile Bank LimitedTelangana Grameena Bank
The A.p. Mahesh Cooperative Urban Bank LimitedThe Akola Janata Commercial Cooperative Bank Ltd., Akola.
The Cosmos Co Operative Bank LimitedThe Goa Urban Co Op Bank Ltd
The Greater Bombay Cooperative Bank LimitedThe Jalgaon Peopels Cooperative Bank Limited
The Kapol Cooperative Bank LimitedThe Karad Urban Cooperative Bank Limited
The Mapusa Urban Coop Bank Of Goa LtdThe Mehsana Urban Cooperative Bank
The Nainital Bank LimitedThe Shamrao Vithal Cooperative Bank
The Surath Peoples Cooperative Bank LimitedThe Thane Bharat Sahakari Bank Limited
The Zoroastrian Cooperative Bank LimitedTjsb Sahakari Bank Ltd
Tripura Gramin BankUco Bank
Ujjivan Small Finance Bank LimitedUnion Bank Of India
United Bank Of IndiaUtkal Grameen Bank
Utkarsh Small Finance BankUttar Banga Kshetriya Gramin Bank
Uttar Bihar Gramin BankUttarakhand Gramin Bank
Vananchal Gramin BankVidharbha Konkan Gramin Bank
Vijaya BankYes Bank
Zila Sahakari Bank Ltd