If you plan to buy a new car on loan, don’t just go for a lender, which has a tie-up with the dealer. Do check other lenders before taking a loan from the bank executive sitting at the dealer’s showroom.
Typically, public sector banks are slightly cheaper than private lenders. But they also tend to lend to their existing customers.
One of the key things that you need to keep in mind is the processing fee. Lenders have different ways in which they charge it. Some charge a percentage of the loan amount, but have a minimum and maximum cap. Others have a flat fee, depending on the loan amount.
Some also offer a discount on the processing fee if the borrower applies online or via their app.
The maximum tenure for a car loan is, typically, seven years.
Some lenders offer better rates and higher repayment tenure for electric vehicles. State Bank of India, for example, offers a rate concession of 0.20% upon purchase of an electric vehicle (called a green car loan). The repayment tenure is of up to eight years, according to data from Paisabazaar.com.
Here are the car loans from different lenders and their processing charges: