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With the festive season approaching, both car manufacturers and banks are offering attractive deals for customers looking to buy a new car. According to data from BankBazaar.com, various banks are offering car loans with interest rates ranging from 7.80% to 9.99% for a loan amount of ₹10 lakh over a 5-year term. However, it’s important to note that the actual interest rate depends on the customer's credit profile, income, and loan amount.

Cheapest Car Loan Rates Offered by Government Banks

Among government banks, Punjab National Bank (PNB) is currently offering the most affordable car loan. A ₹10 lakh loan for five years at PNB will attract an interest rate of 7.80%, with an EMI of approximately ₹20,181.

• Union Bank of India offers a car loan at an interest rate of 7.90%, with an EMI of ₹20,229.

• Canara Bank offers an interest rate of 8.25%, resulting in an EMI of ₹20,396.

• Bank of Baroda offers a loan at 8.40%, with an EMI of ₹20,468.

• State Bank of India (SBI), India’s largest government bank, offers loans at an interest rate of 9.00%, with an EMI of ₹20,758.

Private Banks Offering Competitive Car Loan Rates

Several private banks are also offering competitive car loan rates:

• IDBI Bank offers a car loan at 8.30%, with an EMI of ₹20,420.

• Axis Bank offers an interest rate of 8.90%, with an EMI of ₹20,710.

• ICICI Bank offers a loan at 9.15%, with an EMI of ₹20,831.

• HDFC Bank offers an interest rate of 9.40%, resulting in an EMI of ₹20,953.

• IDFC First Bank is offering the highest rate among the private banks, with an interest rate of 9.99% and an EMI of ₹21,242.

Key Points to Consider Before Taking a Car Loan

While it’s tempting to opt for the lowest interest rate, financial experts recommend looking beyond just the interest rate. Here are a few factors to keep in mind:

• Processing Fees: Check the processing fees, as some banks may charge higher fees even with lower interest rates.

• Prepayment Penalties: Understand the penalties associated with early loan repayment.

• Impact of Credit Score: Your credit score plays a crucial role in determining the final interest rate.

• Loan Term and EMI: Ensure the loan term and EMI structure suit your financial capacity.

Experts suggest that while this festive season may seem like the perfect time to buy a car, it’s important to weigh all factors before making a final decision.

Conclusion

With many banks offering attractive interest rates on car loans this festive season, it’s crucial to evaluate the complete loan package before committing. Whether you choose a government or private bank, take the time to understand the terms of the loan, and don’t forget to consider factors like processing fees, penalties, and your ability to repay the EMI.

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