HDFC Car Loan Interest Rates and Charges

Updated: 21-06-2022 09:31:08 AM

 

HDFC Bank Car Loan Interest Rate and Fees

Features	New Car Loan	Old/Used Car Loan
Interest Rate	8.25% – 14.26% (Avg 9.40%)	10.16% – 16.95% (Avg 13.70%)
Documentation Fees	Rs. 630 per case	Rs. 630 per case
Loan Amount	100% of the car value	85% of the car value
Stamp Duty	At Actuals	At Actuals
Processing Fees	0.4% of loan amount, maximum of Rs. 10,000	1.5% of loan amount, maximum of Rs. 5,000
Cheque/ECS swapping charges	Rs. 500/- per instance	Rs. 500/- per instance
Collateral Charges	Rs. 475 per case	Rs. 475 per case
Late Payment Penalty	2% per month	2% per month

HDFC Bank offers Car Loan to both salaried and self-employed persons based on their age, income and employment experience. Whether it is a new car loan, a used car or even a loan against a car, HDFC Bank offers low-interest rates and flexible loan tenure on all its car loan products. In addition to this, HDFC Bank car loans come with numerous benefits, like, fast approvals, personalized service and total transparency from loan application to repayment.

HDFC Bank Car Loan Scheme are of the following types:

1. New Car Loans
2. Pre-owned Car Loans
3. Loan Against Car

HDFC Bank Car Loan Interest Rates Offered

HDFC bank offers financial reimbursement for different categories of four-wheelers, and the interest rates on car loan vary according to the car loan scheme you apply for. The interest rate on a new car is comparatively much lower than that of pre-owned or used car. The reason for this difference is that high risk is involved in case of a pre-owned car. If the borrower defaults on loan repayment for a new car, the lender can sell the car to meet the loss. However, in case of a pre-owned car loan, the chances of selling it are low as no buyer might be interested to buy a second-hand car. Therefore, if you compare the rate of interest of a new car with a pre-owned car, the interest rate of a new car would be much lower than that of a pre-owned car.

Further, auto loan interest rates provided by HDFC bank also depend upon the segment of the car in case of a new car loan. For a pre-owned car loan, the interest rates, or in a sense the total interest amount depends upon the segment and age of the car.

Rate of interest on Car Loan in HDFC (new car) offered to customers

	Bank IRR
Product	Min IRR	Max IRR	Avg IRR
Car Loan	8.25%	14.26%	9.40%

	APR
Product	Min IRR	Max IRR	Avg IRR
Car Loan	8.26%	14.60%	9.50%

Rate of interest on Car Loan in HDFC (pre-owned car) offered to customers

	Bank IRR
Product	Min IRR	Max IRR	Avg IRR
Used Car Loan	10.16%	16.95%	13.70%

	APR
Product	Min IRR	Max IRR	Avg IRR
Used Car Loan	10.22%	17.88%	13.89%

How to Calculate Your Car Loan EMI using Formula?

EMI or Equated Monthly Installments makes the repayment of the loan easier as the borrower has to pay back the borrowed amount in parts. EMI is the amount that the borrower pays each month in order to pay back the borrowed loan amount. The loan amount plus the accrued interest makes the principal amount. This amount is then distributed equally over the loan tenure. If the interest rate applicable on the car loan is of a fixed type, then the EMIs of the loan is also fixed, whereas if floating rate of interest is applicable on the loan then the EMIs keep fluctuating.

Here is how you can calculate EMI of a car loan using the mathematical formula:

Let us take an example to understand the process properly. Suppose, you took a car loan of Rs. 5,00,000 from HDFC bank at an interest rate of 9.00% for a tenure of 5 years (60 months).

Mathematical formula to calculate the EMI of the loan: EMI = [P x R x (1+R)^N]/[(1+R)^ (N-1)]

Here,
P: Principal Amount, in this case, it will Rs. 5,00,000.
R: Interest Rate, in this case, it is 9% per year or 0.75% per month.
N: Loan Tenure, in this case, it is 60 months.

Hence,
EMI = [5,00,000 x 0.75/100 x (1+0.75/100) ^ 60 / [(1+0.75/100) ^ 60 – 1)
EMI = Rs. 10,379

Car Loan EMI Calculator

Car loan EMI calculator is an online tool which is available on Bank or financial websites. This EMI calculator can be used to calculate the EMI. Calculating EMI before taking a loan has two benefits, firstly the borrower gets to know the EMI which he will have to pay every month and secondly he is able to assess his repayment capacity. The calculator tools can be used any number of times to reach an EMI which can be comfortably paid by the borrower every month. To use the EMI calculator, you will need to have a blue print of the loan which you want to take, such as the loan amount, tenure of the loan and the interest rate applicable on it. These three loan variables are required for calculating the loan EMI. Once these variables are entered into the Car loan EMI calculator it instantly displays the EMI.

HDFC Bank car loan EMI calculator can be found on HDFC Bank website. You can also calculate your car loan EMI using PaisaBazaar’s loan EMI calculator. Check your eligibility, get the best loan offers and also gather information regarding documentation and other loan features at PaisaBazaar.

You must check your eligibility for HDFC Bank car loan before applying for it so that you know whether you are eligible for the loan or not. HDFC Bank car loan eligibility calculator tool can be used to check your eligibility for the loan before you apply for HDFC Bank car loan. Also check the documents required for HDFC Bank car loan and the term and condition on HDFC Bank car loan, so that you are well-prepared in advance and your loan sanction process is hassle-free.

Factors that affect Car Loan Interest Rates

The interest rates offered to the customers in car loan by HDFC Bank depends on the following factors:

• CIBIL Score: CIBIL score is a measure of the creditworthiness of a person. CIBIL Score helps loan providers to assess your financial stability. A good score will help you avail a loan at a better interest rate. Whereas, if your score is low you might be denied a loan or offered a loan at a higher interest rate.
• Age of vehicle: The interest rate on the auto loan also varies as per the age of the car. The interest rate on a new car is comparably lower than on a used car. As higher risk is involved in financing a pre-owned car, car loan rates are higher in case of a pre-owned car.
• Debt to income ratio: The repayment capacity of the borrower is determined by this ratio. If debt-to-income ratio is good then you might get a chance to avail a better interest rate.
• Loan term: Interest rates on car loan are usually higher for a loan for shorter tenure as compared to longer one.
• Down payment: If you make a high down payment for your car, you can avail a lower interest rate as the loan amount will be reduced, and will bring down the total interest paid on the loan.