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Introduction

Owning a car, whether a hatchback or an SUV, a manual transmission or auto drive, diesel version or petrol; these things are easy to decide as you have a lot of resources online. However, deciding the best lender with the most affordable car loan is the real challenge. India has 100s of lenders offering various car loan products that give you enticing features. But one must be prudent and weigh in all the factors before deciding to go with a lender.

Buying a car is a dream for many families. So a lot of thought and consideration goes in before the purchase is made. Though it is easy to find a suitable car for your family, it takes more work to find the best lender for your Car Loan.

ICICI Bank Car Loans come with one of the best interest rates on the market while giving you a comfortable repayment tenure of up to 7 years. What’s more? You can even get up to 100% of the ex-showroom price of the car as your loan amount. ICICI Bank also offers a convenient online application process for your car loan to avoid the hassle of visiting the branch.

Snapshot of ICICI Bank Car Loan

Icici Bank Car Loan Interest Rates

Features

New Car Loan

Used Car Loan

Interest rates

7.50% - 14.00%

10.00% - 18.00%

Loan tenure

Up to 7 years

Up to 5 years

Processing fee

Starting from Rs.3500

2% of the loan amount or Rs.15,000, whichever is lower

Loan amount

Up to 100% of the ex-showroom price

Up to 80% of the car’s valuation

Prepayment charges

5% on principal outstanding or interest outstanding for unexpired period of loan, whichever is lower

ICICI Bank Car Loan Eligibility Criteria

Eligibility Criteria

Eligibility Details

Age

18 years - 65 years

Loan Tenure

7 years

Loan to Value Ratio

100% of ex - showroom price

Minimum Annual Income

Salaried: Rs. 2.50 Lakhs

Self Employed Professionals: Rs. 2 Lakhs

Self Employed Businessmen: Rs. 2 Lakhs

ICICI Car Loan Fees and Charges

Car Loan Processing Charges

New Cars

Asset Segment/ Price Band

Processing Fee

Entry /C

Rs.  3,500

Mid Lower/ B

Rs.  4,500

Mid Upper / B+

Rs.  6,500

Premium /A

Rs.  7,000

Luxury / A+

Rs.  8,500

Used Cars

2% of loan amount or Rs. 15,000 whichever is lower

Prepayment Charges

5% on principal outstanding or interest outstanding for unexpired period of loan, whichever is lower

Part Pre payment charges

6 % + GST on the sum of the prepaid portion, subject to the following conditions:

Minimum prepayment would be equal to 1 EMI

Entire prepayment amount would be equal to 25% of the remaining principal

Prepayment is approved only twice in a 12-month gap over the entire tenure of the loan

Why should you opt for ICICI Bank Car Loans?

ICICI Bank offers an array of benefits and unique features to its car loan customers.

  • Get up 100% of the ex-showroom price of the car as loan amount
  • Apply online and get instant approval, avoiding the hassle of visiting the branch
  • Get loan to purchase of new passenger cars, used cars, electric cars, Multi Utility Vehicles (MUVs) and SUVs
  • Get repayment tenures of up to 7 years to comfortably repay the loan
  • Get instant car loan of up to 80% for used car purchases
  • Pre-approved and pre-qualified car loans for existing customers.
  • Easy and simple documentation process

Factors affecting your ICICI Bank Car Loan Interest Rates

The bank doesn't give every borrower the same interest rate. ICICI 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 ICICI Bank:

Credit Score

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 creditworthiness. This greatly changes the eligibility of your loan amount and your interest rate.

Income

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.

However, note that despite having a higher income if you have already taken several other loans and have a huge debt-to-income ratio, then you may not enjoy the best possible interest rates on your car loan.

Your Age

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 ICICI 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 ICICI 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 ICICI 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.

How to negotiate for the best car loan interest rates with ICICI Bank?

ICICI Bank Car Loans come with affordable interest rates and longer repayment tenures. They are also one of the lenders offering up to 100% of ex-showroom value with the lowest processing fees in the car loan market. Still, there are a few factors one should consider before settling in for a Car Loan:

Be up to date with your Credit Score: As stated earlier, credit score plays an important role in getting the best loan terms. Higher the credit score, lower the interest rate. Know the different credit score ranges and the corresponding interest rates offered by the lender. This allows you to plan ahead and improve your credit score beforehand to take advantage of the best loan offers.

EMI Payments: Finding out the approximate monthly EMI for the expected loan amount gives clarity on your monthly budgeting. Your Car Loan EMI will include your principal and interest components. You can use CredtiMantri’s Car Loan EMI Calculator to determine the approximate monthly EMI so that you can determine your repayment affordability.

Cost of Car Insurance: It is a must to get annual car insurance for every car in India. Car Insurance premium is determined on various factors like the make, model and year of manufacturing of the vehicle. Car Insurance is a costly affair and you should find out beforehand the approximate annual car insurance premium so that you can get your finances in line.

Maintenance and Repairs: As some people joke, ‘A Car is a White Elephant’, meaning, it takes quite an amount of money for its regular maintenance and repairs. Find out the warranty and maintenance options available for your vehicle. You can negotiate for longer warranty or free maintenance offers with the dealer to reduce this particular burden.

ICICI Bank Car Loan Interest Rates FAQs

1. What is the lowest EMI per lakh on ICICI Bank car loan?

With a low interest rate of 7.5% p.a, the lowest EMI you can get per lakh is Rs.1534, for a 7-year tenure.

2. Will part pre-payments affect my ICICI Bank car loan interest rate?

No, part prepayments don’t have any effect on your interest rate. However, they might reduce the number of EMIs remaining.

3. 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 ICICI Bank Car Loan. Also, a reputed employer can get you additional preference.

4. What is the minimum & maximum tenure of ICICI Bank car loans?

ICICI Bank car loans come with a flexible repayment tenure starting from 12 months and up to 7 years.

5. What are the documents required to apply for an ICICI Bank car loan?

These are the important documents required to apply for ICICI Bank Car Loans:

  • Application form
  • KYC
  • Photographs
  • Identity Proof
  • Address Proof
  • Age Proof
  • Bank Statements
  • Signature Verification
  • Income Proof
  • Latest Salary Slip / Form 16
  • Income Tax returns of 2 previous financial years along with a complete financial/audit report.
  • Income Tax Returns of 2 previous financial years.
  • Other Documentation
  • Business Stability proof / Ownership proof
  • Employment Stability Proof
  • Partnership deed and Letter signed by all partners authorising one partner
  • Companies and Societies: Resolution by Board of Directors (or such managing body) and Memorandum and Articles of Association

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