Planning to take a car loan? Some lenders have waived processing fee

Topics car loan | loan rates

  • Interest rates on new car loans start from as low as 8.4 per cent and go as high as 12.25 per cent. 
  • On a loan of Rs 9 lakh taken for a tenure of five years at 8.4 per cent, the borrower would pay an EMI of Rs 18,422. His total interest cost would be Rs 2,05,292.
  • If the borrower were to take the same loan at a rate of 12.25 per cent, his EMI would be Rs 20,134. The total interest cost he would pay would be Rs 3,08,033.
  • In other words, his interest burden would rise by as much as Rs 1,02,741.    
  • This example underlines the importance of comparing rates of different players.
  • Having a good credit score can also help. Players like Bank of Baroda will charge you zero or a lower strategic premium if you have a good score. 
  • With the onset of the festival season, many players have reduced their processing fees on this loan. Some have even waived it altogether

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