Which Bank Offers the Cheapest Car Loan? Here’s the Key to Lower EMIs

New Delhi: The desire for a new shiny car resides in everyone's heart, but the question of budget comes into focus. Choosing the cheapest car loan is the key that can lighten your monthly EMIs and open the door to savings of thousands of rupees over the entire tenure. Government and private banks are offering attractive rates between 8 to 9 percent in the market, but everything depends on your credit history, income and banking relationship. We've compared major banks so you can make the right decision—to bring home your dream car without breaking the bank.

What are the interest rates of major banks?

If you're looking for a car loan, consider the numbers. The country's largest bank SBI is offering a range of 8.70 to 9.70 percent on new cars, which is a stable and reliable option. Private sector giant HDFC Bank is offering 8.50 to 10.00 percent, where premium customers get to avail special discounts. In ICICI Bank this range is from 8.75 to 10.50 percent, which comes with the facility of digital processing. Public sector PNB has rates ranging from 8.65 to 9.90 percent, while BOB is offering loans at the most attractive 8.60 to 9.50 percent—with additional rebates especially to women and government employees. These rates are floating, which are linked to the repo rate, so check timely.

What is the role of CIBIL score and income?

A car loan is not magic—it is a mirror of your CIBIL score. A strong score above 750 can get you the lowest rates, as banks consider the risk low. Customers with salaried jobs or high monthly income also get preference, where the EMI is kept below 50 percent of your income. If you choose a public sector bank like SBI, BOB or PNB, you usually get the cheapest deal. At the same time, HDFC or ICICI private banks prove to be better for faster approval and online processes. Here's the tip—compare offers from multiple banks, and also don't ignore the processing fees (0.5-1%) and foreclosure charges.

What things should be kept in mind while taking a car loan?

Competition is hot in the market, but don't be hasty. Rates vary depending on car model (new or used), loan amount (up to 70-90% of on-road price) and tenure (3-7 years). Simulate the EMI with an online calculator—for example, on a loan of Rs 10 lakh at 8.5%, the EMI over 5 years will be around Rs 20,500. If you are taking a loan for the first time, take advantage of the banking relationship (salary account). Remember, a cheap loan not only saves money but also reduces stress. Which bank will be your choice? Comparison is your biggest weapon.