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Buying a car is an ardent desire for a lot of people. So much thought and planning goes into it before the purchase is made. While it's easy to find the right vehicle for your family, more effort is needed to find the best lender for your car loan.
Deciding whether you should go for a hatchback or an SUV, a manual transmission or an auto-drive, a diesel or petrol variant, is easy as there are many tools to help you select the right car that suits your and your family’s needs. However, settling on the right lender for the most affordable car loan is a real challenge. India has 100s of lenders selling different car loan products that give you attractive features. Yet, one needs to be patient and evaluate all the considerations before agreeing to go for the lender.
HDFC Bank offers car loans to consumers to buy their dream car. Customers can avail up to 100% of the vehicle's on-road price, up to a limit of Rs.3 crores, on a wide variety of car types and brands. You will also get a flexible repayment term of up to 7 years. The New Car Loans can be used to buy new cars, vans, jeeps, SUVs or MUVs for private use, while used car loans allow you to purchase an old car or jeep that is not more than 5 years old.
About HDFC Bank Car Loan Interest Rates
New Car Loan
Used Car Loan
7.50% - 15.56%
9.40% - 22.68%
Up to 7 years
Up to 5 years
1% of Loan Amount subject to minimum of Rs.5000 and maximum of Rs.10000
Up to 100% of the ex-showroom price subject to a maximum of Rs.3 crores
Up to 100% of the car’s valuation subject to a maximum of Rs.2.5 crores
No foreclosure allowed within 6 months from date of availing the car loan
6% of Principal Outstanding for pre-closures within 1 year from 7th EMI
5% of Principal Outstanding for pre-closures within 13-24 months from 1st EMI
3% of Principal Outstanding for pre-closures post 24 months from 1st EMI
No foreclosure allowed within 6 months from date of availing the loan
Part Pre Payments
Part-payment is allowed subject to completion of 12 EMIs
Part payment will be allowed twice only during loan tenure. Part payment is allowed only once a year. At any point of time, part payment will not increase beyond 25% of Principal Outstanding.
5% on the part payment amount in case part prepayment is within 13-24 months from 1st EMI
3% on the part payment amount in case part prepayment is post 24 months from 1st EMI
Part-payment will be allowed only twice during the loan tenure, and is allowed only once per year. At any point of time, part-payment will not increase beyond 25% of Principal Outstanding
5% of the part-payment amount in case part prepayment in within 13-24 months from 1st EMI
3% on the part-payment amount in case part prepayment is post 24 months from 1st EMI
HDFC Bank Car Loans are available for the following people:
Self Employed Individuals and Professionals (Sole Proprietorship):
Self Employed Individuals and Professionals (Partnership Firms):
Self-employed Individuals and Practitioners (Private Limited Companies):
Self Employed Individuals (Public Limited Companies):
The bank doesn't give every borrower the same interest rate. HDFC Bank Car Loan interest rates differ on the basis of a few factors, such as age, income, employer, credit score, etc. Here is a look at the most significant factors that impact the interest rates for your car loan at HDFC Bank:
Your credit report is a major factor in determining your car loan interest rate. A good credit score means that your history of repayment is good. Higher loan amounts and lower interest rates are guaranteed. A higher credit score is used by banks as an indication of the creditworthiness. This greatly changes the eligibility of your loan amount and your interest rate.
A higher salary means that the debt is repaid on time. Banks offer better lending rates to persons with higher incomes. Banks still prefer salary earners over self-employed people, since wages mean that the account gets daily cash flow. However, self-employed professionals have an edge over salaried workers since they earn more than they do.
The age of the borrower plays an important role during the car loan application process. The younger the creditor, the greater the number of years he would have to repay the loan. Car loans will be made available to people who are 21 years of age. Unlike older candidates, loan sums and interest rates are very favourable for younger-generation applicants.
Vehicle Model and Age
In the event of a car loan, the vehicle will serve as collateral. In the event of not getting the EMIs, the bank or NBFC will seize the car. The model and age of the vehicle are then weighed when setting interest rates. New cars from a reputable manufacturer have lower interest rates relative to older models. Used cars often come with high interest rates as the value of the car depreciates with age.
Type of Employment & Employer
Employment with a reputable company would certainly get you a decent deal on interest rates on your HDFC Bank Car Loan. In authorizing the loan, several banks have a list of accredited employers and reputable bodies to which they refer. Employment in these companies guarantee the security of work and the flow of income to bankers. You are also allowed to seek an offer of higher car loan amounts and lower interest rates.
Relationship with the lender
Preference is often extended to bank clients with a long-term relationship, relying on the fact that their credit record is easier to view. If you are an old HDFC Bank customer, the bank will be able to review your account history, any recent credit or credit card charges and your general financial status. Therefore, on deposits, the committed customer is granted preferential interest rates.
Adding a co-applicant
If you have another earning member of the family, you can add them to the loan as a co-applicant so that their income is also taken into account while processing your application for car loans. If both of your income is entered, the result is a higher repayment potential and thus a lower interest rate.
Amount of down payment
While HDFC Bank gives you up to 100% of the vehicle's ex-showroom cost as a loan value, if you can make a higher down payment, you can negotiate better interest rates. Higher down payments mean lower debt balances and greater repayment potential. Banks are actively searching for low-cost lending consumers to reduce their default credit risk. So when you offer a higher down payment, you have a shot at having a lower interest rate.
Existing liabilities and investments
Last but not least, your current loans and obligations play an important part in assessing the eligibility of your car loan and interest rates. If you have current obligations, the repayment potential would be limited. This is perceived to be a high risk plan for the lender. It would also place more pressures on the cash flow. Therefore, an individual with a very low or no current liability is a preferred candidate for any bank.
1. Is there any benefit by adding my wife, who is an employee with a reputed MNC, as my co-applicant on the car loan application?
Very much. Adding a co-applicant increases your chance of getting competitive interest rates on your HDFC Bank Car Loan. Also, a reputed employer can get you additional preference.
2. Can I foreclose my HDFC Bank Car Loan?
Yes, you can foreclose your HDFC Bank Car Loan without any prepayment penalty. You can also make part pre-payments into your HDFC Bank Car Loan account for a nominal fee.
3. Does HDFC Bank ask for any collateral or guarantee to sanction a car loan?
Hypothecation of the purchased vehicle and bank’s charge registered with the RTO serves as the primary security for car loans. So there is no need for any additional security or collateral. However, it finally depends on the discretion of the bank.
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